BIOF 10-Q/A
Blue Biofuels, Inc. (BIOF)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
First Amendment
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the Quarter ended
Commission
File Number:
(Exact name of small Business Issuer as specified in its charter)
| (State or other jurisdiction of | (IRS Employer | |
| incorporation or organization) | Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s
telephone number, including area code: (
| ALLIANCE BIOENERGY PLUS, INC. |
| Former name or former address if changed since last report |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) |
Name of each exchange on which registered | ||
| Not applicable. |
Check
whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer ☐ | Accelerated Filer ☐ | Emerging
Growth Company | |
| Smaller
reporting company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised accounting standards provided to Section 7(a)(2)(B) of the Securities Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
☐ Yes ☒
The number of the registrant’s shares of common stock outstanding were as of August 12, 2021.
Explanatory Note
TABLE OF CONTENTS
| Page | ||
| PART I—FINANCIAL INFORMATION | ||
| ITEM 1. | Consolidated Financial Statements (unaudited) | 4 |
| ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 18 |
| ITEM 3. | Quantitative and Qualitative Disclosures About Market Risk | 22 |
| ITEM 4. | Controls and Procedures | 22 |
| PART II—OTHER INFORMATION | ||
| ITEM 1. | Legal Proceedings | 24 |
| ITEM 1A. | Risk Factors | 24 |
| ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 24 |
| ITEM 3. | Defaults Upon Senior Securities | 26 |
| ITEM 4. | Mine Safety Disclosures | 26 |
| ITEM 5. | Other Information | 26 |
| ITEM 6. | Exhibits | 27 |
| Signatures | 28 |
| 2 |
PART I – FINANCIAL INFORMATION
TABLE OF CONTENTS
| 3 |
Blue Biofuels, Inc.
Formerly known as Alliance Bioenergy Plus, Inc.
Financial Statements
Period Ended June 30, 2021
UNAUDITED FINANCIAL STATEMENTS
OF
BLUE BIOFUELS, INC.
Blue Biofuels, Inc.
Formerly known as Alliance Bioenergy Plus, Inc.
CONSOLIDATED BALANCE SHEETS
(unaudited)
| June 30, 2021 | December 31, 2020 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Prepaid expenses | ||||||||
| TOTAL CURRENT ASSETS | $ | $ | ||||||
| Other assets | ||||||||
| Property and equipment, net of accumulated depreciation and amortization of $ | ||||||||
| Security deposits | ||||||||
| Right of Use Assets, net of accumulated amortization | ||||||||
| Patents | ||||||||
| TOTAL OTHER ASSETS | $ | $ | ||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accounts payable - Related Party | $ | |||||||
| Deferred wages and director’s fees - Related party | $ | |||||||
| Lease Liability - Current | $ | |||||||
| Convertible Debentures — Related Party | - | |||||||
| Interest Payable - Related Party | ||||||||
| TOTAL CURRENT LIABILITIES | $ | $ | ||||||
| Long term liabilities | ||||||||
| Right of Use Lease Liability, net of current portion | ||||||||
| Paycheck Protection Program SBA loan | - | |||||||
| Chapter 11 Settlement | ||||||||
| Notes Payable — Related Party | ||||||||
| Notes Payable — Other | ||||||||
| Convertible debenture, payable from future profits — Related Party | - | |||||||
| TOTAL LONG TERM LIABILITIES | $ | $ | ||||||
| TOTAL LIABILITIES | $ | $ | ||||||
| STOCKHOLDERS’ EQUITY (deficit) | ||||||||
| Preferred stock; $ par value; shares authorized; shares issued and outstanding | - | - | ||||||
| Common stock; $ par value; shares authorized; issued and outstanding at June 30, 2021, and shares issued and outstanding at December 31, 2020. | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | $ | ( | ) | $ | ( | ) | ||
| TOTAL EQUITY (DEFICIT) | $ | ( | ) | $ | ( | ) | ||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | $ | ||||||
| 4 |
Blue Biofuels, Inc
Formerly known as Alliance Bioenergy Plus, Inc.
CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| 30-Jun | 30-Jun | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Operating expense: | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Research & Development | ||||||||||||||||
| Loss on disposal of assets | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations: | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other (income) expense: | ||||||||||||||||
| Loan Forgiveness | ( | ) | ( | ) | ||||||||||||
| Interest expense - related party | ||||||||||||||||
| Interest expense - other | ||||||||||||||||
| Total other (income) expense | ( | ) | ( | ) | ||||||||||||
| Income (Loss) before provisions for income taxes | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Provisions for income taxes | ||||||||||||||||
| Net Income / (Loss): | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net income (loss) per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average common shares outstanding | ||||||||||||||||
| Basic | ||||||||||||||||
| 5 |
Blue Biofuels, Inc.
Formerly known as Alliance Bioenergy Plus, Inc.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited)
| Common Stock | Preferred Stock | Additional Paid-in | Accumulated | Total Stockholder’s | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amt | Capital | Deficit | (Deficit) | ||||||||||||||||||||||
| Balance as of December 31, 2019 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| Issuance of common stock for services | - | |||||||||||||||||||||||||||
| Issuance of common stock and warrants for cash through PPM | - | |||||||||||||||||||||||||||
| Issuance of vested options under the employee, director plan | - | |||||||||||||||||||||||||||
| Net Income (Loss) | ( | ) | $ | ( | ) | |||||||||||||||||||||||
| Balance as of June 30, 2020 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| Balance as of December 31, 2020 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| Issuance of common stock for services | $ | - | $ | $ | ||||||||||||||||||||||||
| Issuance of | - | |||||||||||||||||||||||||||
| Warrants exercised | - | |||||||||||||||||||||||||||
| Issuance of common stock and warrants for cash through PPM | - | |||||||||||||||||||||||||||
| Issuance of common stock in exchange for debt | - | |||||||||||||||||||||||||||
| Issuance of vested options under the employee, director plan | ||||||||||||||||||||||||||||
| Employee stock options exercised | - | |||||||||||||||||||||||||||
| Cashless exercise of stock options | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Net Income (Loss) | ( | ) | $ | ( | ) | |||||||||||||||||||||||
| Balance as of June 30, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| 6 |
Blue Biofuels, Inc.
Formerly known as Alliance Bioenergy Plus, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Six Months Ended | For the Six Months Ended | |||||||
| 30-Jun-21 | 30-Jun-20 | |||||||
| Cash flows from operating activities | ||||||||
| Net Income (Loss) | $ | ( | ) | $ | ( | ) | ||
| Reconciliation of net loss to net cash used in operating activities | ||||||||
| Depreciation and amortization | ||||||||
| Stock based compensation for services | ||||||||
| Net Issuance of options and warrants for services | ||||||||
| Loss on Disposal of assets | - | |||||||
| Changes in operating assets and liabilities | ||||||||
| Prepaid expenses | ( | ) | ||||||
| Accrued interest - related party | ( | ) | ||||||
| Accounts payable and accrued liabilities | ( | ) | ||||||
| Forgiveness of PPP Loan | ( | ) | - | |||||
| Right of use lease | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Security deposits | - | - | ||||||
| Patent Costs | ( | ) | ( | ) | ||||
| Net cash from (used in) investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from PPP Loan | - | |||||||
| Proceeds from exercise of warrants and options | - | |||||||
| Net proceeds from issuance of common stock | ||||||||
| Net cash provided by financing activities | ||||||||
| Net increase (decrease) in cash and cash equivalents | ||||||||
| Cash and cash equivalent at beginning of the period | ||||||||
| Cash and cash equivalent at end of the period | $ | $ | ||||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid during the period for | ||||||||
| Interest | $ | $ | ||||||
| Taxes | $ | $ | ||||||
| Supplemental schedule of non-cash activities | ||||||||
| Cashless conversion of warrants/options | $ | $ | ||||||
| Conversion of convertible debenture to common stock | $ | $ | ||||||
| 7 |
Blue Biofuels, Inc.
Formerly known as Alliance Bioenergy Plus, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 – ORGANIZATION
Blue
Biofuels, Inc (the “Company”) is a technology company focused on emerging technologies in the renewable energy, biofuels,
and new technologies sectors. In early 2018, our chief executive officer Ben Slager invented a new technology system it calls Cellulose-to-Sugar
2.0 or CTS 2.0, and a patent was granted in April 2021. Three additional patents pertaining to the technology have been filed in 2021.
The
The new technology made it worthwhile to financially restructure the Company through Chapter 11. The Company voluntarily filed for Chapter 11 on October 22, 2018, in the U.S. Bankruptcy Court in the Southern District of Florida. The Company exited Chapter 11 on September 18, 2019, while keeping all classes, including shareholders, unimpaired. The bankruptcy case was closed on October 25, 2019.
The Company’s focus is to commercialize its wholly owned CTS 2.0 technology. The Company is currently working with its 4th generation prototype and anticipates having a 5th generation semi-commercial scale system by the beginning of 2022.
Plan of Operation
The Company is now doing the engineering work to commercialize its 100% owned CTS 2.0 technology.
The Company has a strategy to diversify its product portfolio to potentially include the following:
| 1) | Producing and selling sugar or ethanol either direct or in combination with joint ventures, mergers, and/or acquisitions of existing businesses in the renewable energy space; | |
| 2) | Producing and selling low-cost high purity lignin, or using that lignin to produce biodegradable bioplastics, or making biodegradable bioplastics products and selling them under our own brand. | |
| 3) | Producing and selling other co-products like nanocellulose and specialty chemicals. |
NOTE 2 – GOING CONCERN
The
accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles, which
contemplate continuation of the Company as a going concern, which assumes the Company will realize its assets and discharge its liabilities
in the normal course of business. The Company has not generated any significant revenue since inception and has incurred losses since
inception. As of June 30, 2021, the Company has a working capital surplus of $
| 8 |
Management believes that the Company’s future success is dependent upon its ability to achieve profitable operations, generate cash from operating activities and obtain additional financing. There is no assurance that the Company will be able to generate sufficient cash from operations, sell additional shares of stock or borrow additional funds. The Company’s inability to obtain additional cash could have a material adverse effect on its financial position, results of operations, and its ability to continue in existence. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.
The Company intends to raise additional capital and continue engineering work and scaling up towards a full-scale commercial size CTS 2.0 modular unit. At that point, and to minimize dilution to shareholders, the Company will seek project-based financing to build (or acquire and retrofit) or joint venture with existing ethanol producers to produce cellulosic ethanol and lignin/bioplastics from its patented CTS 2.0 system. Once the first plant is profitable, the Company intends to grow with additional plants both in the United States and internationally.
Currently, the US government gives a D3 RIN to incentivize the production of renewable fuels from cellulosic materials. The value of the D3 RIN fluctuates, but as of this filing, it is around $3.06 per gallon of ethanol on top of the market price of ethanol.
The Company believes that its CTS 2.0 process can produce ethanol profitably at the market price, and with the D3 RIN should generate substantial profits and cash flow in amounts sufficient to cover the Company’s operating expenses and debt service.
Our business, results of operations, and financial condition may be adversely impacted by the COVID-19 pandemic.
The COVID-19 pandemic has negatively affected the U.S. and global economies, disrupted global supply chains, resulted in significant travel and transport restrictions, including mandated closures and orders to “shelter-in-place,” and created significant disruption of the financial markets. We are closely monitoring the impact of the COVID-19 pandemic on all aspects of our business, including how it will impact our customers, employees and supply chain. Given the critical nature of the products that we provide, our office and lab have remained open during the pandemic. The extent to which our operations may be impacted by the COVID-19 pandemic will depend largely on future developments, which are highly uncertain and cannot be accurately predicted. We may experience additional operating costs due to increased challenges with our workforce (including as a result of illness, absenteeism or government orders), access to supplies, capital, and fundamental support services (such as shipping and transportation). Even after the COVID-19 pandemic has subsided, we may experience materially adverse impacts to our business due to any resulting economic recession or depression. Furthermore, the impacts of a potential worsening of global economic conditions and the continued disruptions to and volatility in the financial markets remain unknown.
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated financial statements of the Company were prepared in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”) and include the assets, liabilities, revenues and expenses of the Company’s majority-owned subsidiaries over which the Company exercises control.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries, after elimination of intercompany accounts and transactions. Investments in business entities in which the Company lacks control but has the ability to exercise significant influence over operating and financial policies are accounted for using the equity method. All material intercompany transactions and balances were eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates presented and reported amounts of revenues and expenses during the reporting periods presented. Significant estimates inherent in the preparation of the accompanying Consolidated Financial Statements include estimates of impairment assessment of identifiable intangible assets and valuation allowance for deferred tax assets. Estimates are based on past experience and other considerations reasonable under the circumstances. Actual results may differ from these estimates.
| 9 |
Cash and Cash Equivalents
All highly liquid investments with maturities of three months or less at the date of purchase are considered to be cash equivalents.
The Company recognizes the cost of all share-based payments under the relevant authoritative accounting guidance. Share-based payments include any remuneration paid by the Company in shares of the Company’s common stock or financial instruments that grant the recipient the right to acquire shares of the Company’s common stock. For share-based payments to employees, which consist only of awards made under the stock option plan described below, the Company accounts for the payments in accordance with the provisions of ASC Topic 718, “Stock Compensation” (formerly referred to as SFAS No. 123(R)). Share-based payments to consultants, service providers and other non-employees are accounted for in accordance with ASC Topic 718, ASC Topic 505, “Equity Payments to Non-Employees” or other applicable authoritative guidance.
Stock-based Compensation Valuation Methodology
Stock-based compensation resulting from the issuance of common stock is calculated by reference to the valuation of the stock on the date of issuance, the expense being recognized as the compensation is earned. Stock-based compensation expenses related to employee options and warrants granted to non-employees are recognized as the stock options and warrants are earned. The fair value of the stock options or warrants granted is estimated at the grant date, using the Black-Scholes option-pricing model, and the expense is recognized on a straight-line basis over the shorter of the period over which services are to be received or the life of the option or warrant. The grant date fair value of employee share options and similar instruments is estimated using the Black-Scholes option-pricing model on the basis of the fair value of the underlying common stock on the measurement date, adjusted for the unique characteristics of those equity instruments, using the assumptions noted in the table below. The fair value of the common stock is determined by the then-prevailing closing market price. Expected volatility was based on the historical volatility of the Company’s closing day market price per share. The expected term of options and warrants was based upon the life of the option, and the risk-free rate used was based on the U.S. Treasury Daily Yield Curve Rate.
| 1/5/21 | 5/18/21 | |||||||
| Risk-free interest rate | % | % | ||||||
| Expected life | years | years | ||||||
| Expected dividends | % | % | ||||||
| Expected volatility | % | % | ||||||
| ALLM common stock fair value | $ | $ | ||||||
Property and Equipment
Property
and equipment are stated at cost less accumulated depreciation. Depreciation is provided for on a straight-line basis over the useful
lives of the assets, generally
Patent Capitalization
If
a product is currently under research and development and is not currently approved for market, costs incurred in connection with patent
applications should generally be expensed in the income statement because there is uncertainty as to the future economic benefit of the
asset. Conversely, if a product is approved for market (as is the case of the end product ethanol), or if future economic benefit is
probable, or if an alternative future use is available to the Company, then such patent costs can be capitalized and amortized over the
expected life of the patent(s). Since the Company’s primary end product is sugar converting to ethanol, which are in wide use,
the Company has determined that it is reasonable to capitalize the patent costs associated with its CTS process, which were $
Research and Development
The
Company expenses all research and development costs as incurred. For the six months ended June 30, 2021, and June 30, 2020, the amounts
charged to research and development expenses were $
| 10 |
Revenue Recognition
The Company follows FASB ASC 606 “Revenue Recognition” and recognizes revenue when it is realized or realizable and earned. The Company’s revenues will be derived principally from joint ventures, royalties and eventually corporate owned plants. However, no sales have occurred through those revenue streams to date. The Company considers revenue realized or realizable and earned when all of the following criteria are met:
| 1. | persuasive evidence of an arrangement exists; | |
| 2. | the product has been shipped or the services have been rendered to the customer; | |
| 3. | the sales price is fixed or determinable; and, | |
| 4. | collectability is reasonably assured. |
Common Stock Purchase Warrants and Other Derivative Financial Instruments
The Company classifies as equity any contracts that require physical settlement or net-share settlement or provide it with a choice of net-cash settlement or settlement in the Company’s own shares (physical settlement or net-share settlement) provided that such contracts are indexed to its own stock as defined in ASC 815-40 (“Contracts in Entity’s Own Equity”). The Company classifies as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses the classification of its common stock purchase warrants and other free-standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required.
Non-controlling interest in consolidated subsidiaries
The
accompanying consolidated financial statements include the accounts of Blue Biofuels, Inc. and those subsidiaries that the Company has
the ability to control either through voting rights or means other than voting rights. For these subsidiaries, the Company records
Investments in non-consolidated affiliates
Investments in non-consolidated affiliates are accounted for using the equity method or cost basis depending upon the level of ownership and/or the Company’s ability to exercise significant influence over the operating and financial policies of the investee. When the equity method is used, investments are recorded at original cost and adjusted periodically to recognize the Company’s proportionate share of the investees’ net income or losses after the date of investment. When net losses from an investment are accounted for under the equity method exceed its carrying amount, the investment balance is reduced to zero and additional losses are not provided for. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company’s share of that net income exceeds the share of net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred.
Impairment of Long-Lived Assets
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable, the Company compares the carrying amount of the asset group to future undiscounted net cash flows, excluding interest costs, expected to be generated by the asset group and their ultimate disposition. If the sum of the undiscounted cash flows is less than the carrying value, the impairment to be recognized is measured by the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Assets to be disposed of are reported at the lower of the carrying amount or fair value, less costs to sell.
| 11 |
Income Taxes
The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.
ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has no material uncertain tax positions for any of the reporting periods presented.
Basic profit (loss) per share amounts have been calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted loss per share has been calculated using the weighted-average number of common shares plus the potentially dilutive effect of securities such as outstanding options and warrants. The computation of potential common shares has been performed using the treasury stock method. The warrants and options are antidilutive for all periods presented. When net loss is reported, diluted and basic net loss per share amounts are the same as the impact of potential common shares is antidilutive.
Fair Value Measurements
The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.
The estimated fair value of certain financial instruments, payables to related parties, and accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.
ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:
Level 1 — quoted prices in active markets for identical assets or liabilities
Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable
Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions)
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting. The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations, and cash flows when implemented.
| 12 |
NOTE 4 – ASSETS
Patents
The
Company has been granted one patent on its technology, has filed for three others that are pending, and has also applied for international
patents. The Company has capitalized the legal and filing fees in the amount of $
NOTE 5 – DEBT
Paycheck Protection Program SBA Loan
In May 2020, the Company received a loan in the amount of $66,330 under the Payroll Protection Program (“PPP Loan”). The loan accrues interest at a rate of 1% and has an original maturity date of two years which can be extended to five years by mutual agreement of the Company and SBA. The PPP loan contains customary events of default relating to, among other things, payment defaults and breaches of representations and warranties.
Under the terms of the loan, a portion or all of the loan is forgivable to the extent the loan proceeds are used to fund qualifying payroll, rent and utilities during a designated twenty-four-week period. Payments are deferred until the SBA determines the amount to be forgiven. On April 21, 2021, the Company received notice that the entire amount is forgiven.
Notes Payable – Chapter 11 Settlement
On July 18, 2018, the Company’s former Controller Dennis Lenaburg sued the Company for $2,694,577 dollars plus stock warrants in the Circuit Court of the 15th Judicial Circuit in Palm Beach County, Florida. That lawsuit was moved to the Bankruptcy Court when the Company entered Chapter 11 on October 22, 2018. The Company filed a Complaint against Lenaburg on November 16, 2018, in the bankruptcy court in the Southern District of Florida. The bankruptcy judge ordered mediation, and a settlement was reached that paid Lenaburg $13,650 upon Plan Confirmation and a $50,000 claim payable out of post-confirmation net profits over 3 years, plus 1.5 million common stock warrants with a strike price of $0.30/share and a ten-year expiration period. The $50,000 is due on September 18, 2022.
Notes Payable – Related Parties
In July 2016, the Company issued six (6) short-term notes payable to related parties in conjunction with the Company’s acquisition of the remaining 49% of AMG Energy Group. These notes had a value of $2,002,126 and accrued interest at a rate of six percent (6%) per annum. As of December 31, 2018, and December 31, 2017, the total interest accrued on the notes was $278,794.68 and $176,460 respectively. All of the notes were due on August 4, 2017 and then were in default. However, the notes were held by related parties with the understanding that the notes were not to be paid until the Company begins generating profit. The Company renegotiated some of these notes during its Chapter 11 proceedings, whereas others failed to submit a claim and were discharged upon the Court’s Confirmation Order approving the Company’s Chapter 11 Plan on September 18, 2019. The renegotiated amounts, as per the Plan Confirmation are all to be paid from 50% of the future net profits and discharged to the extent unpaid five years after the Plan effective date of September 18, 2019. These amount are 1) Mark Koch $240,990 plus 6% interest on any portion not repaid within 12 months of the Company’s first reported quarterly net profit; 2) Animated Family Films $579,942 out of the Company’s net profits plus 6% interest; 3) Steven Dunkle, CTWC, & Wellington Asset Holdings $1.5 million plus 6% interest once there is positive quarterly EBITDA from the first plant of Company, or, at its option, may convert that into an equity investment in the first plant of the Company, measured by a percentage of the total cost to build, subject to a minimum equity interest of 1.25% in said plant.
On February 28, 2018, the Company entered into a short-term loan with Steven Sadaka, with a principal balance of $100,000 due and payable on May 1, 2018. The note does not accrue interest, however the Company provided 2,000,000 inducement shares to secure the note. These inducement shares were valued at $84,000 and are being amortized over the life of the note. The note’s maturity date was extended to 7/1/2018. If the note is not repaid at maturity, then an additional 5,000,000 shares of common stock will be due. The note was renegotiated during the Company’s Chapter 11 proceedings, and as per the Plan Confirmation, it is agreed that $100,000 is to be paid out of future gross revenues to satisfy this note in full, with no additional shares to be issued.
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On May 15, 2018, the Company entered into a short-term loan with Christopher Jemapete, with a principal balance of $50,000 due and payable on May 16, 2019. The note carried an interest rate of 5% plus the company issued 1,250,000 inducement shares to secure the note as well as 1,000,000 warrants with a $0.10 strike price and with a 5-year expiration. These inducement shares were valued at $36,250 and are being amortized over the life of the note; the warrants had a value of $24,449. On August 25, 2018, this note was restructured to remove the warrants. As of June 30, 2018 accrued interest on this note is $315. The note was renegotiated during the Company’s Chapter 11 proceedings, and as per the Plan Confirmation, it is agreed that $50,315.07 is to be paid out of future gross revenues.
On May 15, 2018, the Company entered into a short-term loan with Pamela Jemapete, with a principal balance of $50,000 due and payable on May 16, 2019. The note carried an interest rate of 5% plus the company issued 1,250,000 inducement shares to secure the note as well as 1,000,000 warrants with a $0.10 strike price and with a 5-year expiration. These inducement shares were valued at $36,250 and are being amortized over the life of the note; the warrants had a value of $24,449. On August 25, 2018, this note was restructured to remove the warrants. As of June 30, 2018 accrued interest on this note is $315. The note was renegotiated during the Company’s Chapter 11 proceedings, and as per the Plan Confirmation, it is agreed that $50,315.07 is to be paid out of future gross revenues.
Notes Payable – Other
In July 2016, the Company issued a short-term note payable to a third party in conjunction with the Company’s acquisition of the remaining 49% of AMG Energy Group. The note had a principal balance of $96,570 and accrued interest at a rate of six percent (6%) per annum. As of December 31, 2018, and December 31, 2017, the total interest accrued on the note was $14,382.2 and $8,588 respectively. The note was due on August 4, 2017 and was then in default. The Company renegotiated this note during its Chapter 11 proceedings, and as per the Plan Confirmation, now the $96,570 is to be paid with no interest out of the same 50% of the future net profits of the Company as the notes mentioned above, if any, or discharged to the extent unpaid five years after September 18, 2019.
In November 2017, the Company entered into a convertible debenture with Lucas Hoppel, with a principal balance of $143,000 due and payable on May 30, 2018. The note carries an 8% one-time interest charge, a $43,000 original issue discount and a 35% conversion discount to the lowest trade price in the prior twenty-five trading days, after 180 days, in whole or in part at the option of the holder. In addition, the Company provided 500,000 inducement shares to secure the note, and may have to provide additional shares on the note’s 6-month anniversary if the Company’s share price declines. These inducement shares were valued at $39,500 and were amortized over the life of the note. The note can be repaid, without prepayment penalties, within the first 90 days. Thereafter, the note will incur a 120% prepayment penalty of the then outstanding principal and interest due. In May 2018, the company made two principal payments totaling $40,000. The note went into default on June 1, 2018 and incurred a 40% penalty of the outstanding balance immediately prior to the default event. On August 30, 2018, Hoppel sued the Company in Superior Court of the State of California County of San Diego Central District. That case was staid on October 22, 2018 when the Company filed for Chapter 11 protection in the US Bankruptcy Court in the Southern District of Florida. Negotiations took place and a settlement was reached on this note and a subsequent note, and confirmed as part of the Plan Confirmation Order, that Hoppel would be paid a total of $100,000 out of 5% of the future gross revenue of the Company.
In February 2018, the Company entered into a convertible debenture with Lucas Hoppel, with a principal balance of $165,000 due and payable on September 21, 2018. The note carries an 8% one-time interest charge, a $15,000 original issue discount and a 40% conversion discount to the lowest trade price in the prior twenty-five trading days, after 180 days, in whole or in part at the option of the holder. In addition, the Company provided 500,000 inducement shares to secure the note. These inducement shares were valued at $14,500, and were amortized over the life of the note. The note can be repaid, without prepayment penalties, within the first 90 days. Thereafter, the note will incur a 120% prepayment penalty of the then outstanding principal and interest due. The Note went into default on June 1, 2018, through a cross default provision with another Note to Hoppel, and incurred a 40% penalty of the outstanding balance immediately prior to the default event. On August 30, 2018, Hoppel sued the Company in Superior Court of the State of California County of San Diego Central District. That case was staid on October 22, 2018 when the Company filed for Chapter 11 protection in the US Bankruptcy Court in the Southern District of Florida. Negotiations took place and a settlement was reached on this note and a prior note, and confirmed as part of the Plan Confirmation Order, that Hoppel would be paid a total of $100,000 out of 5% of the future gross revenue of the Company to settle both notes.
On March 27, 2019, the Company entered into an agreement with Partiz and Company, P.A. such that its debt will be reduced from $32,000 to $20,000 payable out of future gross revenues, upon the bankruptcy court’s acceptance of the Company’s plan of reorganization. The Plan was confirmed by the Court on September 18, 2019.
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A summary of all debts indicated in the Notes above is as follows:
| Notes Payable | June 30, 2021 | December 31, 2020 | ||||||
| Short Term Convertible Debentures Related Party | $ | $ | ||||||
| Long Term Chapter 11 Settlement | $ | $ | ||||||
| Long Term Paycheck Protection Program SBA loan | $ | $ | ||||||
| Long Term Notes Payable from future revenue — Related Party | $ | $ | ||||||
| Long Term Notes Payable from future revenue — Other | $ | $ | ||||||
| Long Term Note Payable from future profits — Related Party | $ | $ | ||||||
| Long Term Note Payable from future profits — Other | $ | $ | ||||||
| Long Term Convertible Debentures — Related Party | $ | $ | ||||||
| TOTAL NOTES | $ | $ | ||||||
Of the $2,788,132 due as of June 30, 2021, $2,738,132 is due out of future revenue or future profits. $2,417,502 of the $2,788,132 will be discharged if not paid by September 18, 2024, which is 5 years after the Company exited Chapter 11. The remaining debt that would not be discharged or forgiven is $370,630, consisting of $200,630 due to related parties, $120,000 due to other, and a $50,000 Chapter 11 settlement.
NOTE 6 – STOCKHOLDERS’ EQUITY
The
total number of shares of capital stock, which the Company has authority to issue, is
For
the six months ended June 30, 2021, the Company issued an aggregate of shares of its common stock for services valued at $
For
the six months ended June 30, 2021, the Company raised $
For
the six months ended June 30, 2021, warrants were executed at an average price of $
For
the six months ended June 30, 2021, the Company issued an aggregate of
For
the six months ended June 30, 2021,
For
the six months ended June 30, 2021, employee stock options were exercised for proceeds of $
For the six months ended June 30, 2021, warrants expired.
For the six months ended June 30, 2021, the Company issued employee stock options, of which were vested.
For
the six months ended June 30, 2021, $
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NOTE 7 – SEGMENT INFORMATION
The
Company operates in
NOTE 8 - COMMITMENTS AND CONTINGENCIES
Litigation
The Company is subject, from time to time, to litigation, claims and suits arising in the ordinary course of business.
On June 21, 2018, Power Up Lending Group Ltd., sued both the Company and four of its managers, ex-managers, and directors of the Company in the United States District Court for the Eastern District of New York. The case was dropped against the Company and the claim discharged by the bankruptcy court upon Plan Confirmation on September 18, 2019. Power Up has continued a tort case against the individuals. The D&O insurance has agreed to cover the CEO Ben Slager, CFO Anthony Santelli, as well as ex-Controller Dennis Lenaburg, in this case. Management believes the Complaint is frivolous and has filed a motion to dismiss which is pending before the Court as of the date of this filing.
Leases
The
Company consolidated its premises into one location on November 1, 2019, and currently leases office and laboratory space in Palm Beach
Gardens, FL, that is classified as operating lease right-of-use (“ROU”) assets and operating lease liabilities in the Company’s
consolidated balance sheet. ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments
over the lease term at the commencement date for leases exceeding 12 months.
ASC 842 was effective for us beginning January 1, 2019. The adoption had a material impact on our consolidated balance sheets, but did not have a material impact on our consolidated income statements. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases.
Rent
expense for the six months ending June 30, 2021, and 2020, were $
The Company recognized the following related to leases in its Consolidated Balance Sheet:
| YEAR ENDED | June 30, 2021 | December 31, 2020 | ||||||
| Right of Use Lease Liabilities | ||||||||
| Current portion | ||||||||
| Long-term portion | ||||||||
| TOTAL | ||||||||
As of June 30, 2021, the total future minimum lease payments in respect of leased premises are as follows:
| YEAR ENDED | MINIMUM DUE | |||
| 2021 | ||||
| 2022 | ||||
| 2023 | ||||
| TOTAL | $ | |||
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NOTE 9 – RELATED PARTY TRANSACTIONS
Related Party Transactions
The Company follows FASB ASC subtopic 850-10, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions. Pursuant to ASC 850-10-20, related parties include: a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.
| 1) | Short-term notes payable, convertible notes, and contingent liabilities issued to related parties are described in NOTE 5. | |
| 2) | A board resolution was passed on February 13, 2020, that pledged the patents and pending patents to secure the back pay claims of Ben Slager, CEO, Anthony Santelli, CFO, and Charles Sills, Director. This was done to ensure the continued involvement of management to build the Company while they continue to receive less than full salaries. |
The officers and directors for the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interest. The Company has not formulated a policy for the resolution of such conflicts.
NOTE 10 – SUBSEQUENT EVENTS
The Company has evaluated subsequent events through the date the financial statements were issued. Based on this evaluation, the Company has identified the following subsequent events:
From
June 30, 2021, to the date of this filing, the Company raised $
From June 30, 2021, to the date of this filing, warrants expired.
On July 26, 2021, the Company filed an Amendment to its Articles of Incorporation with the State of Nevada changing the name of the Company to Blue Biofuels, Inc, and increasing the authorized shares to from . The Company is waiting for FINRA to approve the name change and symbol change.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
The following discussion should be read in conjunction with the Company’s audited financial statements and the notes thereto.
Forward-Looking Statements
This quarterly report contains forward-looking statements and information relating to the Company that are based on the beliefs of its management as well as assumptions made by, and information currently available to, its management. When used in this report, the words “believe,” “anticipate,” “expect,” “estimate,” “intend”, “plan” and similar expressions, as they relate to the Company or its management, are intended to identify forward-looking statements. These statements reflect management’s current view of the Company concerning future events and are subject to certain risks, uncertainties and assumptions, including among many others: a general economic downturn; a downturn in the securities markets; federal or state laws or regulations having an adverse effect on proposed transactions that the Company desires to effect; Securities and Exchange Commission regulations which affect trading in the securities of “penny stocks”; and other risks and uncertainties. Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this report as anticipated, estimated or expected. The accompanying information contained in this registration statement, including, without limitation, the information set forth under the heading “Management’s Discussion and Analysis and Plan of Operation — Risk Factors” identifies important additional factors that could materially adversely affect actual results and performance. You are urged to carefully consider these factors. All forward-looking statements attributable to the Company are expressly qualified in their entirety by the foregoing cautionary statement.
Business Overview
Blue Biofuels, Inc (the “Company”) is a technology company focused on emerging technologies in the renewable energy, biofuels, and bioplastics technologies sectors.
In early 2018, our chief executive officer Ben Slager invented a new technology system we call Cellulose-to-Sugar or CTS 2.0, and the Company filed a patent application for this technology. Mr. Slager has since further developed the system with the laboratory personnel. The CTS 2.0 process is a continuous mechanical/chemical dry process for converting cellulose material into sugar and lignin, as compared to the CTS 1.0 which is a batch process. The CTS 2.0 creates molecular contact between two reactive solid components instead of a more conventional reaction which uses liquid or gas components. The reactants are (1) the cellulose, which is broken down into its components being sugars and lignin; (2) a catalyst, which is cheap and abundantly available, and recycled in the process. The CTS 2.0 machine allows for exact process control to ensure that all the material passing through it does so on the optimum reaction parameters through which optimal efficiency is achieved. The patent on the CTS 2.0 was awarded in 2021 (US10994255). In addition to this patent the Company has filed three additional patents that are currently pending. The CTS 2.0 technology and related patents represent the results of our continued development of CTS 2.0 towards commercialization.
CTS differs from other processes that seek to convert cellulose into sugar. Other processes use enzymes, or expensive chemicals like strong acids or bases. Some use high temperature or high pressure steam. CTS 2.0 can convert any cellulosic material – including grasses, wood, paper, farm waste, yard waste, forestry products, energy crops like hemp or king grass, and the cellulosic portion of municipal solid waste – into sugars and subsequently into biofuels and bioplastics without the use of enzymes or liquid acids. CTS 2.0 has a near zero carbon footprint, and recycles the water and catalyst.
At commercial scale, management expects to be able to produce ethanol at a lower cost than any competitor due to the fact that the CTS 2.0 process is uncomplicated and efficient, and has high value by-products. We believe an additional significant difference between CTS 2.0 and corn ethanol is the wide range of feedstocks that CTS 2.0 can process compared to corn. The CTS feedstocks are not food and have much lower costs than corn. In addition, while in corn ethanol only the corncobs are used, the CTS 2.0 uses the whole plant or its waste products. In the case of king grass vs corn, king grass grows so prolifically that processing king grass with the CTS 2.0 could potentially yield 3000 gallons per acre per year whereas corn only yields 600 gallons per acre per year.
The Company has proceeded with engineering and development of its technology towards commercialization. The Company built a second generation prototype in 2018, and a third generation prototype in 2019. The Company completed its 4th generation CTS 2.0 prototype system in July 2020, and upgraded it in 2021. The Company is currently testing the 4th generation CTS 2.0 to optimize various parameters towards the engineering and scale up of a commercial size reactor. The Company expects to have its 5th generation CTS prototype, along with auxiliary equipment, completed by the beginning of 2022. The Company expects that the 5th generation CTS 2.0 prototype will have around 10 times the capacity of the 4th generation system.
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The CTS system converts plant-based feedstock into two product streams, cellulose and lignin, each of which can be converted into multiple products. 1. Cellulose is broken down into sugars and nanocellulose. Nanocellulose has various uses in various industries including the pharmaceutical industry. Sugar leads to specialty chemicals and biofuels: ethanol & jet fuel. 2. Lignin can be used in ion exchange resins, specialty chemicals, or to create bioplastics. It can also be burned as a renewable fuel.
Plan of Operation
The Company’s strategy is to diversify its product portfolio to include a number of product lines. These potentially include (1) biofuels – such as ethanol, or converting ethanol into higher biofuels like jet-fuel and the like; (The Company has a license agreement in place with Vertimass, LLC, on a non-exclusive basis, to use the patented Verimass Process to convert ethanol into jet-fuel, bio-diesel, bio gasoline and further green chemical components) (2) selling sulfur-free lignin to ion exchange resin producers; (3) making bioplastics from lignin; (4) making nanocellulose. We believe these, and other markets, could potentially be highly profitable co-products.
Our goal is to develop our CTS 2.0 technology to a commercial scale and then seek to either enter into a joint venture or acquire existing corn ethanol plants to install the CTS 2.0 technology. The Company is also looking into converting ethanol to jet fuel. To minimize dilution to shareholders, we will seek project-based financing to build (or acquire and retrofit) or joint venture with existing ethanol producers to produce cellulosic ethanol and lignin/bioplastics and other specialty chemicals from our CTS 2.0 system. We believe retrofitting existing plants with the CTS 2.0 technology may achieve more rapid commercialization than building new plants. After its first plant is profitable, the Company intends to grow with additional plants in the United States and explore international growth by either licensing the technology or forming joint ventures with foreign domestic partners to build plants ourselves.
The Energy Policy Act of 2005, which included the Renewable Fuel Standard Program enforced by the US Environmental Protection Agency, mandates a certain amount of renewable fuel be blended into the transportation fuel used by all vehicles in the country. This Program provides monetary incentives to companies that produce renewable transportation fuel, and establishes Renewable Identification Numbers (RINs) or credits for each gallon of renewable transportation fuel produced in the United States, and breaks down those fuels into different D-codes depending on the source of the renewable fuel. D3 is the code for renewable ethanol that comes from cellulosic materials. (D6 is for corn ethanol). The value of the D3 RIN fluctuates, but as of this filing, it is approximately $3.13 per gallon of ethanol. To profit from these incentives, the Company plans to apply for these D3 RIN credits as it brings its first plant into commercial operation.
We believe that our CTS 2.0 process can potentially produce ethanol profitably at the market price, particularly if we include anticipated potential revenue streams from by-products, and in conjunction with the D3 RIN that we expect to potentially receive for each gallon of ethanol.
The Company believes that its management and consultants have significant experience in the development of technologies from concept to commercialization. As of this date, the Company has generated $194,319 in revenue, however it has not generated any revenues from its core business.
Capital Formation
On January 5, 2021, the Company closed a financing at 7.5 cents per share having sold 2,143,332 shares and raised $160,750 from the beginning of the year until January 5th.
In January 2021, the company commenced a new offering of shares of its common stock valued at $0.25 per share. Through the date of filing, the Company has sold 7,160,000 shares for aggregate proceeds of $1,790,000.
From January 1, 2021, through the date of filing, the Company issued an aggregate of 223,000 shares of its common stock for services valued at $46,930.
From January 1, 2021, through the date of filing, the Company issued an aggregate of 1,166,667 warrants for services. Using a Black-Scholes asset-pricing model, these warrants were valued at $72,090. They have a 6-month term with exercise prices of 15 cents per share.
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From January 1, 2021, through the date of filing, the Company issued options to its managers and employees to purchase 20,730,000 shares of its common stock for a period between five and ten years at the exercise price of 15 to 30 cents per share. Using a Black-Scholes asset-pricing model, these agreements were valued at $2,600,409. Only 210,000 of these options have vested, with a valuation of $12,658.
From January 1, 2021, through the date of filing, 350,000 previously issued options were exercised for proceeds of $12,900. In addition, 250,000 options were exercised on a cashless basis for 177,778 shares.
From January 1, 2021, through the date of filing, warrants were exercised, for the purchase of 13,455,009 shares of common stock, at prices ranging from $0.005 to $0.25 per share for total proceeds of $1,302,817.
From January 1, 2021, through the date of filing, $279,000 of debt issued during Chapter 11 was exchange for 7,080,000 shares of stock.
Going Concern
The Company has incurred losses since inception, has a working capital deficiency, and may be unable to raise further capital. At June 30, 2021, the Company had a working capital surplus of $1,465,475 and had incurred accumulated losses of $47,781,212 since its inception. The Company expects to incur significant additional losses in connection with its continued start-up activities. As a result, there is substantial doubt about the Company’s ability to continue as a going concern based upon recurring operating losses and its need to obtain additional financing to sustain operations. The Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities when they become due and to generate sufficient revenues from its operations to pay its operating expenses.
Results of Operations
Comparison of the three and six month period ended June 30, 2021(unaudited) to June 30, 2020
For the three and six months ended June 30, 2021, the Company recognized $0 in revenue as opposed to $0 in 2020.
For the three months ended June 30, 2021, the Company’s general and administrative expenses decreased by $384,734 to $293,372 from $678,106 in 2020. This decrease is primarily the result of a $414,850 decrease in equity-based compensation and a $24,600 increase in accounting fees, partially offset by an increase in legal fees of $37,902.
For the six months ended June 30, 2021, the Company’s general and administrative expenses decreased by $278,491 to $599,649 from $878,140 in 2020. This decrease is primarily the result of a $421,281 decrease in equity-based compensation and a $31,900 decrease in accounting fees, partially offset by an increase in legal fees of $42,942 and an increase in consulting fees of $46,268 related to financings.
Interest expense decreased in the quarter ended June 30, 2021 by $27,329 to $8,708 from $36,037 in 2020. The decrease in 2021 was primarily the result of the Company’s decision in 2021 of having paid most of its back pay due, which carries an interest rate of 10% per annum.
Interest expense decreased in the six months ended June 30, 2021 by $125,785 to $17,457 from $143,242 in 2020. The decrease in 2021 was primarily the result of the Company’s decision in 2020 to pay interest on back pay due, and in 2021 of having paid most of that back pay off.
For the three and six months ended June 30, 2021 the Company recorded non-cash impairments of assets of $33,484, as compared to zero in 2020. This was the result of disposing of laboratory assets no longer in use.
Research and development (R&D) costs for the quarter ended June 30, 2021 were $249,786, a decrease of $242,331 from $492,117 in 2020. The decrease in R&D expenses is primarily the result of a reduction of $414,850 in equity-based compensation offset by an increase in payroll of $115,950 from the hiring of additional personnel to accelerate the process of commercializing the CTS 2.0 system.
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Research and development (R&D) costs for the six months ended June 30, 2021 were $514,860, a decrease of $67,873 from $582,733 in 2020. The decrease in R&D expenses is primarily the result of a reduction in $414,850 in equity based compensation offset by an increase in payroll of $220,142.
Liquidity and Capital Resources
Liquidity
As of June 30, 2021, the Company had $1,863,097 in cash, and total stockholders’ equity on June 30, 2021, was negative $758,738. As of December 31, 2020, the Company had $286,579 in cash and total stockholders’ equity at December 31, 2020 was negative $3,336,764. Total debt, including advances, accounts payable and other notes payable at June 30, 2021, together with interest payable thereon and contingent liabilities, was $3,293,541 a decrease of $935,725 from December 31, 2020, where it stood at $4,229,266. This decrease is attributable to the conversion of convertible notes, the forgiveness of the Paycheck Protection Program SBA loan, and the repayment of the majority of deferred wages. $1,820,630 of the remaining debt was renegotiated to be payable out of future revenue and $917,502 out of future profits and otherwise does not come due.
During the six months ended June 30, 2021, the Company’s operating activities decreased by $313,064 to $1,147,809 from $1,460,873. This decrease can primarily be attributed to a decrease in equity based compensation of $836,131 offset by an increase salaries and bonuses of $297,811 and an increase in professional fees of $67,843.
During the six months ended June 30, 2021, the Company’s investing activities used $129,177 in cash. This can be primarily attributed to capitalizing $14,504 in patent costs and $114,673 used to purchase machinery and equipment. During the six months ended June 30, 2020, the Company’s investing activities used $135,818. This is primarily due to the purchase of equipment of $134,718.
During the six months ended June 30, 2021, the Company generated an aggregate of $3,266,467 through its financing activities, which is an increase of $2,652,757 from $613,710 during the six months ended June 30, 2020. This increase from the prior year can primarily be attributed to $1,950,750 in the sale of common stock through the Company’s private offerings in 2021, and $1,315,717 in proceeds from the exercise of warrants and options.
Capital Resources
At this time, the Company has limited liquidity and capital resources. To continue funding its operations, the Company will need to generate revenue or obtain additional financing for current and future operations. The Company anticipates needing around $10 million to optimize and scale up its CTS 2.0 system to be commercially ready. The Company anticipates reaching this stage around 18 months after financing. There is no guarantee that we will achieve this additional funding.
As of the date of filing, the Company has raised $3,266,467 in 2021, through the issuance of common stock and the exercise of warrants and options, in addition to $10,998,234 through the end of 2020, for a total of $14,254,701, in addition to capital raised through debt or convertible notes. However, there is no guarantee that the company will be able to raise any additional capital on terms acceptable to the Company.
The inability to obtain this funding either in the near term and/or longer term will materially affect the ability of the Company to implement its business plan of operations and jeopardize the viability of the Company. In that case, the Company may need to reevaluate and revise its operations.
Equity
As of June 30, 2021, shareholders’ equity was negative $758,738.
There were 272,311,065 shares of common stock issued and outstanding as of June 30, 2021.
There were no preferred shares outstanding.
The Company has paid no dividends.
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Critical Accounting Policies
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Seasonality
The Company’s operating results are not affected by seasonality.
Inflation
The Company’s business and operating results are not affected in any material way by inflation.
Contractual Obligations
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
As required by Rule 13a-15(e) of the Exchange Act, our management has carried out an evaluation, with the participation and under the supervision of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as of the end of the period covered by this report. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as of June 30, 2021 to a reasonable assurance level because of the material weaknesses described below.
Management’s Annual Report on Internal Controls over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of June 30, 2021 using the criteria established in “Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
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A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of June 30, 2021, the Company determined that there were control deficiencies that constituted material weaknesses, as described below.
| 1. | We have inadequate cash controls. Although we have separated cash handling and accounting functions, we do not currently require dual signature on the Company’s bank accounts. |
| 2. | The Company has insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements. |
| 3. | Although the Company retains copies of all financial data and material agreements and backs them up in the cloud, the rest of the Company’s material agreements may not be. In the event of theft, misplacement, or loss due to fire or other unmitigated factors, it may not be possible for the Company to retain all of its material financial data and agreements. |
Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.
As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of June 30, 2021, based on criteria established in Internal Control—Integrated Framework issued by COSO.
We intend to address the material weaknesses discussed above as soon as practicable but we can give no assurance that we will be able to do so. Designing and implementing an effective disclosure controls and procedures is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to devote significant resources to maintain a financial reporting system that adequately satisfies our reporting obligations. The remedial measures that we have taken and plan to take may not fully address the material weaknesses that we have identified, and material weaknesses in our disclosure controls and procedures may be identified in the future. Should we discover such conditions, we intend to remediate them as soon as practicable. We are committed to taking appropriate steps for remediation, as needed.
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting identified in connection with our evaluation we conducted of the effectiveness of our internal control over financial reporting as of December 31, 2020, that occurred during our fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is subject, from time to time, to litigation, claims and suits arising in the ordinary course of business. As of the date of filing, there are no material claims or suits whose outcomes could have a material effect on the Company’s financial statements.
On June 21, 2018, Power Up Lending Group Ltd., sued both the Company and four of its managers, ex-managers, and directors of the Company in the United States District Court for the Eastern District of New York. The case was dropped against the Company and the claim discharged by the bankruptcy court upon Plan Confirmation on September 18, 2019. Power Up has continued a tort case against the individuals. The D&O insurance has agreed to cover the CEO Ben Slager, CFO Anthony Santelli, as well as ex-Controller Dennis Lenaburg, in this case. Management believes the Complaint is frivolous and has filed a motion to dismiss which is pending before the Court as of the date of this filing.
ITEM 1A. RISK FACTORS.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES
Below is a list of securities sold by the Company from January 1, 2021, through the date of filing which were not registered under the Securities Act.
| Entity | Date of Investment | Title of Security | Amount of Securities Sold | Consideration | ||||||
| Mark Cox | 01/05/21 | Common Stock | 133,333 | Purchased @ $0.075 per share | ||||||
| Dave Vanchina | 01/05/21 | Common Stock | 200,000 | Purchased @ $0.075 per share | ||||||
| Pamela McKenna | 01/05/21 | Common Stock | 133,333 | Purchased @ $0.075 per share | ||||||
| Michael Bozek | 01/05/21 | Common Stock | 135,000 | Purchased @ $0.075 per share | ||||||
| Sean Edmund Burke | 01/05/21 | Common Stock | 133,334 | Purchased @ $0.075 per share | ||||||
| Jeffrey Howard | 01/05/21 | Common Stock | 200,000 | Purchased @ $0.075 per share | ||||||
| Brian Joseph Burke | 01/05/21 | Common Stock | 275,000 | Purchased @ $0.075 per share | ||||||
| Alexander C Shepard | 01/05/21 | Common Stock | 400,000 | Purchased @ $0.075 per share | ||||||
| Edmund Burke | 01/05/21 | Common Stock | 266,666 | Purchased @ $0.075 per share | ||||||
| Conner Thomas Burke | 01/05/21 | Common Stock | 133,333 | Purchased @ $0.075 per share | ||||||
| Kevin Owen Burke | 01/05/21 | Common Stock | 133,333 | Purchased @ $0.075 per share | ||||||
| Vestech Securities, Inc. | 01/05/21 | Common Stock | 10,500 | Professional Services | ||||||
| Bret Williams | 01/05/21 | Common Stock | 59,500 | Professional Services | ||||||
| Tom Camerlengo | 01/11/21 | Common Stock | 200,000 | Exercise of Options | ||||||
| Radall Brodsky | 01/11/21 | Common Stock | 333,333 | Exercise of Warrants | ||||||
| John Lucken | 01/11/21 | Common Stock | 333,334 | Exercise of Warrants | ||||||
| Mary Lucken | 01/11/21 | Common Stock | 166,667 | Exercise of Warrants | ||||||
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| The Loyalty American Companies, Inc. | 01/13/21 | Common Stock | 333,333 | Exercise of Warrants | ||||||
| Annie Bindler | 01/13/21 | Common Stock | 50,000 | Convertible Debenture | ||||||
| Zachary Bindler | 01/13/21 | Common Stock | 50,000 | Convertible Debenture | ||||||
| SLMJ Rocky Opportunity Trust | 01/15/21 | Common Stock | 480,000 | Convertible Debenture | ||||||
| Annie Bindler | 01/20/21 | Common Stock | 100,000 | Exercise of Warrants | ||||||
| Zachary Bindler | 01/20/21 | Common Stock | 100,000 | Exercise of Warrants | ||||||
| John Allen James | 01/20/21 | Common Stock | 200,000 | Purchased @ $0.25 per share | ||||||
| Randall Brodsky | 01/20/21 | Common Stock | 80,000 | Purchased @ $0.25 per share | ||||||
| John E. Lucken Revocable Trust | 01/20/21 | Common Stock | 80,000 | Purchased @ $0.25 per share | ||||||
| Edmund Burke | 01/22/21 | Common Stock | 3,500,000 | Convertible Debenture | ||||||
| Edmund Burke | 01/22/21 | Common Stock | 1,000,000 | Convertible Debenture | ||||||
| AES Capital Partners | 01/22/21 | Common Stock | 2,000,000 | Convertible Debenture | ||||||
| Frank & Joan Costabile Trust | 01/25/21 | Common Stock | 100,000 | Purchased @ $0.25 per share | ||||||
| Stacy Costabile | 01/25/21 | Common Stock | 100,000 | Purchased @ $0.25 per share | ||||||
| Randall Brodsky | 01/26/21 | Common Stock | 80,000 | Purchased @ $0.25 per share | ||||||
| Mary T. Lucken Revocable Trust | 01/26/21 | Common Stock | 80,000 | Purchased @ $0.25 per share | ||||||
| John E. Lucken Revocable Trust | 01/26/21 | Common Stock | 80,000 | Purchased @ $0.25 per share | ||||||
| Bohdan Rudawski Revocable Trust | 01/26/21 | Common Stock | 100,000 | Purchased @ $0.25 per share | ||||||
| Sam Spector | 01/26/21 | Common Stock | 100,000 | Purchased @ $0.25 per share | ||||||
| Animated Family Films, Inc | 01/26/21 | Common Stock | 100,000 | Purchased @ $0.25 per share | ||||||
| Bruce Greenburg Revocable Trust | 01/26/21 | Common Stock | 250,000 | Exercise of Warrants | ||||||
| Chris Kneppers | 01/27/21 | Common Stock | 50,000 | Exercise of Warrants | ||||||
| Bill Fitzpatrick | 01/27/21 | Common Stock | 100,000 | Professional Services | ||||||
| Audie Rolnick | 01/27/21 | Common Stock | 90,000 | Purchased @ $0.25 per share | ||||||
| Makhulu Holdings, LLC | 01/29/21 | Common Stock | 100,000 | Purchased @ $0.25 per share | ||||||
| Vecchitto FLP Valori, LLC | 01/30/21 | Common Stock | 900,000 | Exercise of Warrants | ||||||
| Annie Bindler | 02/01/21 | Common Stock | 100,000 | Exercise of Warrants | ||||||
| Zachary Bindler | 02/01/21 | Common Stock | 100,000 | Exercise of Warrants | ||||||
| Adam Langsom | 02/01/21 | Common Stock | 15,000 | Exercise of Warrants | ||||||
| Marjorie A Fidler & Michael Fidler | 02/01/21 | Common Stock | 100,000 | Purchased @ $0.25 per share | ||||||
| Gregory Nacron | 02/01/21 | Common Stock | 80,000 | Purchased @ $0.25 per share | ||||||
| Alexander Dimitrief | 02/01/21 | Common Stock | 75,000 | Exercise of Warrants | ||||||
| Arthur Lehrhoff | 02/01/21 | Common Stock | 15,000 | Exercise of Warrants | ||||||
| Bernard Lehrhoff | 02/01/21 | Common Stock | 15,000 | Exercise of Warrants | ||||||
| Bradley S Schmarak Declaration of Trust | 02/01/21 | Common Stock | 45,000 | Exercise of Warrants | ||||||
| Bryan I Schwartz Revocable Trust | 02/01/21 | Common Stock | 15,000 | Exercise of Warrants | ||||||
| Daniel J Hyman | 02/01/21 | Common Stock | 15,000 | Exercise of Warrants | ||||||
| Daniel Lehrhoff and Patti Lehrhoff Trust | 02/01/21 | Common Stock | 30,000 | Exercise of Warrants | ||||||
| David Duckler | 02/01/21 | Common Stock | 30,000 | Exercise of Warrants | ||||||
| Diane S Kahan | 02/01/21 | Common Stock | 15,000 | Exercise of Warrants | ||||||
| JCH Investments, LLC | 02/01/21 | Common Stock | 75,000 | Exercise of Warrants | ||||||
| Kenneth M Berman | 02/01/21 | Common Stock | 15,000 | Exercise of Warrants |
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| Mason Phelps Revocable Trust | 02/01/21 | Common Stock | 75,000 | Exercise of Warrants | ||||||
| Michael Hochman IRA Rollover | 02/01/21 | Common Stock | 21,000 | Exercise of Warrants | ||||||
| Randy Abeles | 02/01/21 | Common Stock | 30,000 | Exercise of Warrants | ||||||
| Monique Miron | 02/03/21 | Common Stock | 50,000 | Purchased @ $0.25 per share | ||||||
| Russel L. Miron | 02/03/21 | Common Stock | 50,000 | Purchased @ $0.25 per share | ||||||
| Chris Kneppers | 02/05/21 | Common Stock | 320,000 | Exercise of Warrants | ||||||
| Tyler & Brett Properties, LLC | 02/05/21 | Common Stock | 100,000 | Purchased @ $0.25 per share | ||||||
| Matthew & Ashley Beck | 02/05/21 | Common Stock | 100,000 | Purchased @ $0.25 per share | ||||||
| Capital Consulting, Inc. | 02/05/21 | Common Stock | 100,000 | Purchased @ $0.25 per share | ||||||
| Gary Noskin | 02/05/21 | Common Stock | 100,000 | Purchased @ $0.25 per share | ||||||
| Martin Schwimmer | 02/05/21 | Common Stock | 100,000 | Purchased @ $0.25 per share | ||||||
| Steven C Paul | 02/05/21 | Common Stock | 200,000 | Purchased @ $0.25 per share | ||||||
| Vecchio Financial, LLC | 02/05/21 | Common Stock | 200,000 | Purchased @ $0.25 per share | ||||||
| PT7, LLC | 02/05/21 | Common Stock | 800,000 | Purchased @ $0.25 per share | ||||||
| Julie Kaplan | 02/05/21 | Common Stock | 100,000 | Purchased @ $0.25 per share | ||||||
| LK Dayton Investments, LLC | 02/05/21 | Common Stock | 200,000 | Purchased @ $0.25 per share | ||||||
| Randall Brodsky | 02/05/21 | Common Stock | 60,000 | Purchased @ $0.25 per share | ||||||
| 321Gold, Ltd. | 02/05/21 | Common Stock | 200,000 | Purchased @ $0.25 per share | ||||||
| Steven Nelson | 02/05/21 | Common Stock | 200,000 | Purchased @ $0.25 per share | ||||||
| Jason Walkow | 02/05/21 | Common Stock | 40,000 | Purchased @ $0.25 per share | ||||||
| ANIMATED FAMILY FILMS, INC. | 02/08/21 | Common Stock | 100,000 | Purchased @ $0.25 per share | ||||||
| Krzysztof Gozdziak | 02/08/21 | Common Stock | 140,000 | Purchased @ $0.25 per share | ||||||
| John Piper Jr. | 02/09/21 | Common Stock | 50,000 | Purchased @ $0.25 per share | ||||||
| Edward J Piper | 02/09/21 | Common Stock | 50,000 | Purchased @ $0.25 per share | ||||||
| M&K Bio LLC | 02/09/21 | Common Stock | 600,000 | Purchased @ $0.25 per share | ||||||
| Bradley S Schmarak | 02/09/21 | Common Stock | 100,000 | Purchased @ $0.25 per share | ||||||
| Evelyn Varvitsiotes | 02/09/21 | Common Stock | 40,000 | Purchased @ $0.25 per share | ||||||
| Paul M Chung Trust | 02/09/21 | Common Stock | 100,000 | Purchased @ $0.25 per share | ||||||
| Raymond L Leon | 02/10/21 | Common Stock | 250,000 | Purchased @ $0.25 per share | ||||||
| Anthony S De Leo & Paul De Leo JTWROS | 02/11/21 | Common Stock | 200,000 | Purchased @ $0.25 per share | ||||||
| Chris Kneppers | 02/11/21 | Common Stock | 130,000 | Exercise of Warrants | ||||||
| LABRYS FUND | 02/12/21 | Common Stock | 100,000 | Exercise of Warrants | ||||||
| John D Lane | 02/12/21 | Common Stock | 350,000 | Exercise of Warrants | ||||||
| John D Lane | 02/12/21 | Common Stock | 362,000 | Exercise of Warrants | ||||||
| SLMJ Rocky 2017 Opportunity Trust | 02/12/21 | Common Stock | 1,000,000 | Exercise of Warrants | ||||||
| SLMJ Rocky 2017 Opportunity Trust | 02/12/21 | Common Stock | 1,425,000 | Exercise of Warrants | ||||||
| SLMJ Rocky 2017 Opportunity Trust | 02/12/21 | Common Stock | 1,815,342 | Exercise of Warrants | ||||||
| Tom Camerlengo | 02/19/21 | Common Stock | 150,000 | Exercise of Options | ||||||
| Tom Camerlengo | 02/19/21 | Common Stock | 177,778 | Cashless Exercise of Options | ||||||
| Chris Kneppers | 02/22/21 | Common Stock | 4,500,000 | Exercise of Warrants | ||||||
| Mark Monahan | 02/22/21 | Common Stock | 200,000 | Purchased @ $0.25 per share | ||||||
| Jason Taylor | 02/24/21 | Common Stock | 200,000 | Purchased @ $0.25 per share | ||||||
| David Gross and Nancy Burgess | 02/25/21 | Common Stock | 200,000 | Exercise of Warrants | ||||||
| Vestech Securities, Inc. | 03/03/21 | Common Stock | 6,450 | Professional Services | ||||||
| Bret Williams | 03/03/21 | Common Stock | 36,550 | Professional Services | ||||||
| Max Assenheimer | 03/17/21 | Common Stock | 10,000 | Professional Services | ||||||
| Hazel Holdings, LP | 03/22/21 | Common Stock | 1,000,000 | Purchased @ $0.25 per share | ||||||
| Randall Brodsky | 04/12/21 | Common Stock | 60,000 | Purchased @ $0.25 per share | ||||||
| Mark Monahan | 08/05/21 | Common Stock | 100,000 | Purchased @ $0.25 per share |
The securities issued in the above-mentioned transactions were issued in connection with private placements exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended, pursuant to the terms of Section 4(a)(2) of that Act and Rules 504 and 506 of Regulation D.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
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ITEM 6. EXHIBITS
The exhibits listed below are filed as part of or incorporated by reference in this report.
| 27 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Blue Biofuels, Inc. | ||
| (Registrant) | ||
| By | /s/ Benjamin Slager | |
| Benjamin Slager | ||
| Chief Executive Officer, (Principal Executive Officer) | ||
| Date | August 13, 2021 | |
| By | /s/ Anthony Santelli | |
| Anthony Santelli | ||
| Chief Financial Officer (Principal Financial and Accounting Officer) | ||
| Date | August 13, 2021 | |
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