BIOF 10-Q
Blue Biofuels, Inc. (BIOF)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the Quarter ended
Commission File Number:
(Exact name of small Business Issuer as specified in its charter)
| (State or other jurisdiction | (IRS Employer | |
| of incorporation or organization) | Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area
code:
n/a
Former name or former address if changed since last report
Securities registered pursuant to Section 12(b) of the Act: None.
Securities registered pursuant to Section 12(g) of the Exchange Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| OTCQB |
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 aggregate market value of the voting stock held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter was $14,698,207.
State the number of shares outstanding of the registrant’s $ par value common stock as of the close of business on the latest practicable date (November 1, 2024): .
TABLE OF CONTENTS
| Page | ||
| PART I—FINANCIAL INFORMATION | ||
| ITEM 1. | Condensed and Consolidated Financial Statements (unaudited) | 4 |
| ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 16 |
| ITEM 3. | Quantitative and Qualitative Disclosures About Market Risk | 21 |
| ITEM 4. | Controls and Procedures | 21 |
| PART II—OTHER INFORMATION | ||
| ITEM 1. | Legal Proceedings | 22 |
| ITEM 1A. | Risk Factors | 22 |
| ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 22 |
| ITEM 3. | Defaults Upon Senior Securities | 23 |
| ITEM 4. | Mine Safety Disclosures | 23 |
| ITEM 5. | Other Information | 23 |
| ITEM 6. | Exhibits | 23 |
| Signatures | 24 |
| 2 |
PART I – FINANCIAL INFORMATION
TABLE OF CONTENTS
| 3 |
Blue Biofuels, Inc.
Financial Statements
Period Ended September 30, 2024
UNAUDITED FINANCIAL STATEMENTS
OF
BLUE BIOFUELS, INC.
Blue Biofuels, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
| September 30, 2024 | December 31, 2023 | |||||||
| 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 and Trademarks | ||||||||
| TOTAL OTHER ASSETS | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities | ||||||||
| Accounts Payable | $ | $ | ||||||
| Accounts Payable - Related Party | ||||||||
| Deferred Wages and Directors Fees - Related Party | ||||||||
| Right of Use Lease Liability - Current | ||||||||
| Convertible Notes Payable — Other | ||||||||
| Convertible Notes Payable — Related Party | ||||||||
| Interest Payable - Related Party | ||||||||
| TOTAL CURRENT LIABILITIES | ||||||||
| Long Term Liabilities | ||||||||
| Right of Use Lease Liability - Long Term | ||||||||
| Notes Payable – Related Party | ||||||||
| Convertible Notes Payable — Related Party | ||||||||
| Convertible Notes Payable — Other | ||||||||
| Legacy Notes Payable — Related Party | ||||||||
| Legacy Notes Payable — Other | ||||||||
| TOTAL LONG TERM LIABILITIES | ||||||||
| TOTAL LIABILITIES | ||||||||
| COMMITMENTS AND CONTINGENCIES (Note 8) | ||||||||
| STOCKHOLDERS’ DEFICIT | ||||||||
| Preferred stock; $ par value; shares authorized; shares issued and outstanding | ||||||||
| Common stock; $ par value; shares authorized; issued and outstanding at September 30, 2024, and shares issued and outstanding at December 31, 2023. | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL STOCKHOLDERS’ DEFICIT | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | $ | ||||||
The accompanying notes to the Condensed Consolidated Financial Statements are an integral part of these statements.
| 4 |
Blue Biofuels, Inc
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30 | September 30 | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Operating expense: | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Research and development | ||||||||||||||||
| Loss on disposal of assets | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations: | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other (income) expense: | ||||||||||||||||
| Grants income | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gain on extinguishment of debt | ( | ) | ( | ) | ||||||||||||
| 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 basic share | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Net income (loss) per share, fully diluted | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Weighted average common shares outstanding | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
The accompanying notes to the Condensed Consolidated Financial Statements are an integral part of these statements.
| 5 |
Blue Biofuels, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited)
| Common Stock | Additional Paid-in | Accumulated | Total Stockholder’s | |||||||||||||||||
| Shares | Amount | Capital | Deficit | (Deficit) | ||||||||||||||||
| Balance as of December 31, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Issuance of common stock for services | $ | $ | $ | |||||||||||||||||
| Issuance of common stock and warrants for cash through PPM | ||||||||||||||||||||
| Warrants exercised | ||||||||||||||||||||
| Vesting of options under the employee, director plan | - | |||||||||||||||||||
| Net Income (Loss) | - | $ | ( | ) | $ | ( | ) | |||||||||||||
| Balance as of March 31, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Issuance of common stock for services | ||||||||||||||||||||
| Vesting of options under the employee, director plan | - | |||||||||||||||||||
| Issuance of common stock and warrants for cash through PPM | ||||||||||||||||||||
| Issuance of | - | |||||||||||||||||||
| Warrants exercised | ||||||||||||||||||||
| Net Income (Loss) | - | ( | ) | ( | ) | |||||||||||||||
| Balance as of June 30, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Issuance of | - | |||||||||||||||||||
| Issuance of common stock and warrants for cash through PPM | ||||||||||||||||||||
| Net Income (Loss) | ( | ) | ( | ) | ||||||||||||||||
| Balance as of September 30, 2023 | $ | $ | ( | ) | $ | ( | ) | |||||||||||||
| Balance as of December 31, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Issuance of common stock for services | ||||||||||||||||||||
| Issuance of | - | |||||||||||||||||||
| Vesting of options and repricing of options under the employee, director plan | - | |||||||||||||||||||
| Net Income (Loss) | - | ( | ) | ( | ) | |||||||||||||||
| Balance as of March 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Issuance of common stock for services | ||||||||||||||||||||
| Issuance of | - | |||||||||||||||||||
| Issuance of | - | |||||||||||||||||||
| Cancelling | - | ( | ) | ( | ) | |||||||||||||||
| Vesting of options and repricing of options under the employee, director plan | - | |||||||||||||||||||
| Net Income (Loss) | - | ( | ) | ( | ) | |||||||||||||||
| Balance as of June 30, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Issuance of | - | |||||||||||||||||||
| Issuance of | - | |||||||||||||||||||
| Repricing of warrants for services | - | |||||||||||||||||||
| Vesting of options under the employee, director plan | ||||||||||||||||||||
| Issuance of shares on the conversion of debt | ||||||||||||||||||||
| Net Income (Loss) | - | |||||||||||||||||||
| Balance as of September 30, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
The accompanying notes to the Condensed Consolidated Financial Statements are an integral part of these statements.
| 6 |
Blue Biofuels, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Nine Months Ended | ||||||||
| September 30, 2024 | September 30, 2023 | |||||||
| Cash flows from operating activities | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Reconciliation of net income (loss) to net cash used in operating activities | ||||||||
| Depreciation and amortization | ||||||||
| Stock based compensation for services | ||||||||
| Issuance of warrants for interest | ||||||||
| Gain on extinguishment of debt | ( | ) | ||||||
| Loss on disposal of assets | ||||||||
| Changes in operating assets and liabilities | ||||||||
| Prepaid expenses | ( | ) | ||||||
| Grants receivable | ( | ) | ||||||
| Interest payable - related party | ||||||||
| Accounts payable and accrued liabilities | ( | ) | ( | ) | ||||
| Deferred wages and directors’ fees — related party | ||||||||
| Right of use lease | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Net purchase of property and equipment | ( | ) | ||||||
| Patent and trademark costs | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Repayment of debt | ( | ) | ||||||
| Proceeds from exercise of warrants and options | ||||||||
| Proceeds from the issuance of convertible notes - RP | ||||||||
| Proceeds from the issuance of convertible notes - other | ||||||||
| Proceeds from issuance of common stock | ||||||||
| Net cash provided by financing activities | ||||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at beginning of the period | ||||||||
| Cash and cash equivalents at end of the period | $ | $ | ||||||
| Non-cash Financing and Investing Activities | ||||||||
| Recognition of Operating lease liability and right-of-use asset | $ | $ | ||||||
| Conversion of convertible debenture to common stock | $ | $ | ||||||
The accompanying notes to the Condensed Consolidated Financial Statements are an integral part of these statements.
| 7 |
Blue Biofuels, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 – ORGANIZATION
Blue Biofuels, Inc., was incorporated in Nevada on March 28, 2012, as Alliance Media Group Holdings, Inc. Since December 2013, Blue Biofuels, Inc. (the “Company”) has been a technology company focused on emerging technologies in renewable energy, biofuels, and lignin.
NOTE 2 – GOING CONCERN
The accompanying condensed 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 September 30, 2024,
the Company has incurred accumulated losses of $
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, or 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.
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The condensed consolidated financial statements do not include all disclosures required of annual consolidated financial statements and, accordingly, should be read in conjunction with our consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
| 8 |
Operating results for the nine months ended September 30, 2024, may not be indicative of full year 2024 results.
In management’s opinion, the accompanying condensed consolidated financial statements contain all adjustments necessary for a fair statement of our financial position as of September 30, 2024, and our results of operations, changes in stockholders’ equity (deficit) and cash flows for the nine months ended September 30, 2024 and 2023.
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 Financial Accounting Standards Codification (“ASC”) Topic 718, “Stock Compensation”. Share-based payments to consultants, service providers and other non-employees are accounted for in accordance with ASC Topic 718. Forfeitures are recognized as they occur.
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 instrument. 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.
Research and Development
The Company expenses all research and development
costs as incurred. For the three and nine months ended September 30, 2024, the amounts charged to research and development expenses were
$
Basic net earnings per share amounts have been calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted earnings per share has been calculated using the weighted-average number of common shares plus the potentially dilutive effect of securities such as common stock that potentially could be issued upon the conversion of convertible notes or upon the exercise of outstanding options and warrants. The computation of potential common shares has been performed using the treasury stock method.
Dilutive options and warrants totaling and for the three and nine months ended September 30, 2024, respectively, were included in diluted weighted average shares due to various options and warrants having their exercise prices lower than the average trading price of the Company’s common stock for the periods. For the three and nine months ended September 30, 2023, due to net losses, all potential dilutive securities are antidilutive.
Grant Income
Government grants income is recognized in earnings on a systematic basis in a manner that mirrors the manner in which the Company recognizes the underlying costs for which the grant is intended to compensate. A grant receivable is recognized for expenses or losses already incurred but for which grant funding has not yet been received. Grant funding received in excess of expenses or losses incurred is recognized as deferred revenue.
| 9 |
The Company has adopted the disclosure requirements of Accounting Standards Codification (“ASC”) 832 Government Assistance.
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.
NOTE 4 – PROPERTY AND EQUIPMENT
| PROPERTY AND EQUIPMENT | Life | September 30, 2024 | December 31, 2023 | |||||||
| Building and Improvements | $ | $ | ||||||||
| Machinery and Equipment | ||||||||||
| Furniture and Fixtures | ||||||||||
| Computer Equipment | ||||||||||
| $ | $ | |||||||||
| Less Accumulated Depreciation | ( | ) | ( | ) | ||||||
| Property and Equipment | $ | $ | ||||||||
Total depreciation expense was $
NOTE 5 – PATENTS AND TRADEMARKS
The Company has been granted one patent on its technology
and one continuation patent, has filed for three others that are pending, and has also applied for international patents. The Company
has capitalized the legal and filing fees of $
NOTE 6 – DEBT
Convertible Notes Payable – Related Parties
During 2023, the Company entered into several convertible note agreements with Chris Kneppers, a director of the Company, that had a combined balance of $460,000 as of December 31, 2023. These notes bore interest at 10% and were convertible into shares of the Company’s common stock at rates that ranged from $0.13 to $0.25 per share. A portion of the notes were due to be paid or automatically converted in 2024. The remaining were to be paid if the Company completed a capital raise of at least $5.0 million.
In the first half of 2024, the Company borrowed an additional $680,000 from Mr. Kneppers. These notes were non-interest bearing and were initially due 13 months after issuance. On June 22, 2024, the terms of all of the convertible notes due to Mr. Kneppers were modified. Under the modification, the notes are now payable on the earliest of the date on which the Company (1) uplists to the Nasdaq or NYSE; (2) receives $5 million in equity financing; or (3) begins generating revenue from its first facility.
Accrued interest on Mr. Kneppers notes was $35,151 at December 31, 2023. An additional $11,500 was recognized during the three months ended March 31, 2024 and the payable balance is $46,651 at September 30, 2024. In connection with modification of the terms of all of Mr. Kneppers notes, interest stopped accruing on March 31, 2024. In lieu of interest, the Company will pay Mr. Kneppers 100% of the outstanding loan balance due him contingent upon the financing of the first plant. All interest and loan amounts automatically come due upon a change of control of the Company or if the Company files for bankruptcy under Chapter 11 or Chapter 7.
| 10 |
On November 11, 2023, and also on July 7, 2023, the Company entered into two long-term convertible notes with board member Edmund Burke, with a total principal balance of $15,000 and $25,000, respectively, that are to be repaid when the Company receives an equity investment of at least $3 million. Otherwise, the notes accrue warrants, with a strike price of 15 cents and an expiration of 5 years, at the rate of 50,000 and 30,000 respectively every 12 months instead of interest, with a minimum of 80,000 warrants. The notes may convert into common stock at $0.13/share at the option of the holder for a total of 307,692 shares.
In April 2023, the Company entered into a long-term convertible note with board member Edmund Burke, with a principal balance of $150,000, that is to be repaid when the Company receives an equity investment of at least $1.5 million. Otherwise, the note accrues warrants, with a strike price of 15 cents and an expiration of 5 years, at the rate of 100,000 every 6 months instead of interest. The note may convert into common stock at $0.13/share at the option of the holder for a total of 1,153,846 shares.
Legacy Notes Payable – Related Party
On May 31, 2019, the Company entered into an agreement with Chris and Pamela Jemapete such that its debt of $100,630 shall be repaid by the Company out of future gross revenues, subject to the bankruptcy court’s acceptance of the Company’s plan of reorganization, which was confirmed by the Court on September 18, 2019. The debt bears no interest.
On May 20, 2019, the Company entered into an agreement with Steven Sadaka such that the $100,000 owed to him shall be repaid out of future gross revenues, subject to the bankruptcy court’s acceptance of the Company’s plan of reorganization. The Plan was confirmed on September 18, 2019.
Between November 30, 2018 and December 14, 2018, the Company entered into agreements to renegotiate various debts owed to founders and related parties. These agreements were subject to the Bankruptcy Court’s plan confirmation (the Plan). The Plan, which was confirmed by the Court on September 18, 2019, indicated that the debt to Mark Koch shall be $240,990; the debt to Animated Family Films $579,942; and the debt to Steven Dunkle, CTWC, & Wellington Asset Holdings $1.5 million. In accordance with the terms of the Plan, all these notes were discharged on the five year anniversary of the Court’s confirmation - September 18, 2024. The Company recognized a gain on the extinguishment of debt of $2,417,502 during the three and nine month periods ended September 30, 2024. No balance associated with these notes remains due.
Convertible Notes Payable – Other
In the first half of 2024, the Company had issued convertible notes to 4 different individuals totaling $250,000. These notes carry no interest and may be prepaid at anytime, but are convertible, at the option of the lender, into common shares of the Company at 8 cents per share plus a warrant with a strike price of 10 cents per share and a 5-year expiration for a total of 3,125,000 shares and warrants. During the three-month period ended September 30, 2024, $225,000 of these notes converted into 2,812,500 shares of the Company’s common stock and 2,812,500 warrants (see Note 7).
In December 2023, the Company issued a convertible note to one individual for $50,000. This note carries no interest and may be prepaid at anytime, but are convertible, at the option of the lender, into common shares of the Company at 8 cents per shares plus a warrant with a strike price of 10 cents per share and a 5-year expiration for a total of 625,000 shares and warrants.
At September 30, 2024, the balance of convertible notes payable – other is $75,000. The notes are due in the first quarter of 2025, or automatically convert in accordance with terms if not paid.
| 11 |
Legacy Notes Payable – Other
On March 19, 2019, the Company entered into an agreement with Lucas Hoppel, such that its combined debt on two notes shall be reduced to $100,000 without interest. The sum shall be repaid by the Company out of 5% of future gross revenues, within 30 days after the end of the first calendar quarter in which the Company has revenue. This agreement was subject to the bankruptcy court’s acceptance of the Company’s plan of reorganization. The Plan was confirmed by the Court on September 18, 2019.
On March 27, 2019, the Company entered into an agreement with another creditor, 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.
On November 30, 2018, the Company entered into an agreement with a third party such that its debt will be reduced to $96,570 to be paid with no interest out of 50% of the future net profits of the Company. The Company’s Plan of reorganization confirmed by the bankruptcy Court on September 18, 2019, stipulated that this debt is discharged to the extent unpaid five years from the date of Plan confirmation, or on September 18, 2024.
A summary of all debts indicated in the Notes above is as follows:
| Notes Payable | September 30, 2024 | December 31, 2023 | ||||||
| Short Term Convertible Note – Related Party | $ | $ | ||||||
| Short Term Convertible Notes — Other | ||||||||
| Long Term Convertible Notes — Other | ||||||||
| Long Term Convertible Notes Payable – Related Party | ||||||||
| Long-Term Notes Payable – Related Party | ||||||||
| Long Term Notes Payable from future revenue — Related Party | ||||||||
| Long Term Notes Payable from future revenue — Other | ||||||||
| Long-Term Notes Payable expiring on September 18, 2024 — Related Party | ||||||||
| Long Term Notes Payable expiring on September 18, 2024 — Other | ||||||||
| TOTAL NOTES | $ | $ | ||||||
Of the $1,725,630 payable as of September 30, 2024, none is payable in cash at a specific point in time. $1,330,000 is due only after achieving certain milestones. $320,630 is due out of future revenue with no specific due date. $75,000 of short-term notes due to unrelated parties automatically converts into equity if not repaid within 13 months of issue.
At September 30, 2024, there are $265,000 in convertible notes that, if converted, would convert into 2,399,038 shares and 937,500 warrants.
| 12 |
NOTE 7 – STOCKHOLDERS’ EQUITY
The total number of shares of capital stock, which
the Company has authority to issue, is
During the nine months ended September 30, 2024 and
2023, the Company issued an aggregate of and shares, respectively, of its common stock for services with a fair value
based on the trading price of the Company’s stock on the date of issuance of $
During the nine months ended September 30, 2024 in
connection with the conversion of debt with a balance of $
Warrants:
During the nine-month period ended September 30, 2024
and 2023, the Company issued and warrants for services with a fair value of $
| Warrants | ||||
| Outstanding, December 31, 2022 | ||||
| Issued in connection with: | ||||
| Services | ||||
| Debt-related interest and financing costs | ||||
| Private Placement | ||||
| Exercised | ( | ) | ||
| Expired or cancelled | ( | ) | ||
| Outstanding December 31, 2023 | ||||
| Issued in connection with: | ||||
| Services | ||||
| Debt-related interest and financing costs | ||||
| Debt conversion | ||||
| Exchanged for stock option | ||||
| Expired or cancelled | ( | ) | ||
| Outstanding, September 30, 2024 | ||||
Warrants outstanding at September 30, 2024 have a weighted average exercise price of $ and a weighted average remaining term of years.
Stock Options:
During the nine-month period ended September 30, 2024 and 2023, the Company recognized $ and $ of stock based compensation, respectively. Of this amount in 2024, $ related to the repricing of certain stock options to a lower exercise price.
| 13 |
| Options | ||||
| Outstanding, December 31, 2022 | ||||
| Granted | ||||
| Exercised | ( | ) | ||
| Expired or Forfeited | ( | ) | ||
| Outstanding December 31, 2023 | ||||
| Granted | ||||
| Exercised | ||||
| Exchanged for warrants | ( | ) | ||
| Expired or Forfeited | ||||
| Outstanding, September 30, 2024 | ||||
| Vested, September 30, 2024 | ||||
The weighted average exercise price of outstanding and vested options is $ and $, respectively. The weighted average remaining life of outstanding and vested options is years and years, respectively. At September 30, 2024, outstanding vested options had an intrinsic value of $, and the total intrinsic value of all options is $.
Black Scholes Model Variables:
| Date of Grant/Repricing: | 1/2/24 | 1/8/24 | 3/28/24 | 4/25/24 | 4/26/24 | |||||||||||||||
| Risk-free interest rate | % | % | % | % | % | |||||||||||||||
| Expected life | years | years | years | years | years | |||||||||||||||
| Expected dividends | % | % | % | % | % | |||||||||||||||
| Expected volatility | % | % | % | % | % | |||||||||||||||
| BIOF common stock fair value | $ | $ | $ | $ | $ | |||||||||||||||
| Date of Grant/Repricing: | 5/24/24 | 7/1/24 | 7/5/24 | 7/31/24 | 8/7/24 | 9/24/24 | ||||||||||||||||||
| Risk-free interest rate | % | % | % | % | % | % | ||||||||||||||||||
| Expected life | years | years | years | years | years | years | ||||||||||||||||||
| Expected dividends | % | % | % | % | % | % | ||||||||||||||||||
| Expected volatility | % | % | % | % | % | % | ||||||||||||||||||
| BIOF common stock fair value | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
The following assumptions were used in calculations of the Black-Scholes option pricing models for determining the fair value of warrants and stock options in the nine months ended September 30, 2023:
| 2/10/23 | 2/14/23 | 3/1/23 | 3/31/23 | 4/5/23 | 4/11/23 | |||||||||||||||||||
| Risk-free interest rate | % | % | % | % | % | % | ||||||||||||||||||
| Expected life | years | years | years | years | years | years | ||||||||||||||||||
| Expected dividends | % | % | % | % | % | % | ||||||||||||||||||
| Expected volatility | % | % | % | % | % | % | ||||||||||||||||||
| BIOF common stock fair value | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| 4/26/23 | 6/5/23 | 7/13/23 | 7/26/23 | 10/16/23 | 11/1/23 | 12/27/23 | ||||||||||||||||||||||
| Risk-free interest rate | % | % | % | % | % | % | % | |||||||||||||||||||||
| Expected life | years | years | years | years | years | years | years | |||||||||||||||||||||
| Expected dividends | % | % | % | % | % | % | % | |||||||||||||||||||||
| Expected volatility | % | % | % | % | % | % | % | |||||||||||||||||||||
| BIOF common stock fair value | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| 14 |
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. The Company is not in any litigation at this time.
Leases
The Company 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 condensed consolidated balance sheet. During the three month period ended September 30, 2024, the Company renewed
the leases when they expired. The new lease has a term of
At September 30, 2024, minimum lease payments to be paid by the Company are as follows:
| Remainder of 2024 | $ | |||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Total lease payments | ||||
| Less imputed interest | ( | ) | ||
| Present value of lease liabilities | ||||
| Current portion | ( | ) | ||
| Long term portion | $ |
NOTE 9 – RELATED PARTY TRANSACTIONS
Related Party transactions with the Company are as follows:
| 1) | Short-term notes payable, convertible notes, and legacy liabilities issued to related parties are described in NOTE 6. | |
| 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 receive less than full salaries. | |
| 3) | During the nine-month period ended September 30, 2024, the board of directors approved an increase in salaries to two officers of the Company retroactive to August 1, 2023, in light of the fact that they are again accruing unpaid salaries. CEO Ben Slager is to receive annual salary of $ | |
| 4) | In June 2024, the board of directors approved a partial anti-dilution compensation for CEO Ben Slager, CFO Anthony Santelli, and Director Chris Kneppers to be paid in restricted stock units and options of | |
| 5) | As of April 1, 2024, the board of directors approved ceasing accruing interest on back pay due to officers and on directors fees. In lieu of interest, the Company will pay an additional $ | |
6) |
As of August 28, 2024, each Director that is not an Officer shall receive 3.5% in cash and 3.5% in warrants for any investor first introduced to the Company by the Director. The warrants shall either be at the same price as any warrants being offered in the raise, or, if there are no warrants in the raise, then at the closing market price on the date in which the funds are received. All warrants will have a 5-year expiration from the date of the investment. |
NOTE 10 – GRANT INCOME
In September 2024, the Company was awarded a Small
Business Innovation Research (“SBIR”) grant by the U.S. Department of Energy (DOE) in the amount of $
During the three and nine month periods ended September
30, 2024, $
NOTE 11 – 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 October 1, 2024 to the date of this filing, the
Company issued warrants for interest to a related party. The warrants have a
| 15 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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. Some of those risks and uncertainties include the risk factors set forth in this report and our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. 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 financial statement 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., was incorporated in Nevada on March 28, 2012, as Alliance Media Group Holdings, Inc. Since December 2013, Blue Biofuels, Inc. (the “Company”) has been a technology company focused on emerging technologies in renewable energy, biofuels, and lignin.
In early 2018, the Company’s chief executive officer (“CEO”) Ben Slager invented a new reactor technology with a higher yield and a continuous throughput in the Cellulose-to-Sugar process, or CTS, and the Company filed a process patent application for this technology. Mr. Slager has since further developed the system with the technical staff of the Company. The CTS patent was awarded in 2021 in the United States (U.S. Patent No. 10,994,255) and has subsequently been granted in Japan, Canada and El Salvador. The Company also filed this patent in other major jurisdictions of the world including the European Patent Organization, Australia, Brazil, China, the African Regional Intellectual Property Organization, and the Russian Federation. The patent applications are currently pending in all of these international jurisdictions. In addition to this patent, the Company has received one additional patent in the United States (U.S. Patent No. 11,484,858B2), for which it has also applied in all the above-mentioned jurisdictions. Further, the company has filed for 3 other patents in the United States which are currently pending.
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Mr. Slager has since further developed the system with the technical staff of the Company. The patented CTS process is a continuous mechanical/chemical dry process for breaking down cellulosic material for conversion into biofuels. CTS can break down any cellulosic material – including grasses and agricultural waste. The CTS mechanical/chemical process 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 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.
CTS is environmentally friendly in that it recycles the water and catalyst, and it has a low carbon footprint: the amount of added atmospheric carbon created by burning the biofuels produced by the CTS system was absorbed by the plant-based feedstock while growing and is merely released back into the atmosphere. No extra CO2 is released into the atmosphere when our biofuels are burned. This is to be distinguished from fossil fuels because new CO2 is released when fossil fuels are burned.
The Company believes a significant difference between CTS cellulosic ethanol and corn ethanol is the wide range of abundantly available feedstocks that CTS can process compared to just corn as the feedstock. The CTS feedstocks are nonfood and have much lower costs than corn. In addition, while in corn ethanol only the corn kernels are used, CTS uses the whole plant or its waste products, meaning it could obtain much higher yields per acre.
In 2022, the Company partnered with K.R. Komarek to build its CTS machines going forward. Komarek is an industry leading manufacturing company that builds briquetting machines and compaction/granulation systems with throughput capacities up to 50 tons per hour.
In 2023, the Company completed the build-out of a pilot plant based on a modified Komarek machine and is in the process of further testing and optimizing the plant. In September 2024, the Company received a $1.15 million grant from the Department of Energy to complete the commercialization of its CTS process. The Company believes that it can optimize the pre and post processing elements at this pilot scale plant to finalize design and operational parameters to provide operating cost estimates of a full-scale commercial volume system. Due to its mechanical nature and modularity, we anticipate that one plant would have multiple modular CTS systems.
In addition, the Company has licensed the patented Vertimass Process that is a single-step process that converts ethanol into sustainable aviation fuel (SAF) and other renewable biofuels including bio-gasoline. The license agreement with Vertimass is the subject to a confidentiality agreement between the parties.
Plan of Operation
In January 2024, the Company formed a 50-50 joint venture partnership with Vertimass called VertiBlue Fuels, LLC, that has the mission to build an ethanol-to-SAF facility in Florida with the initial goal to produce around 10 million gallons of Sustainable Aviation Fuel (SAF), and then expand SAF production to approximately 70 million gallon per year. VertiBlue Fuels plans to initially convert sugarcane ethanol, and then, when the Company’s CTS technology is fully commercialized, to build commercial CTS and ethanol facilities on the front-end to produce cellulosic SAF and generate the large D7 RIN and other government credits. In any event, commencing commercial production will require project financing.
The total process from cellulosic feedstock to SAF consists basically of three steps:
| 1) | Conversion from feedstock to fermentable cellulosic sugars (CTS) | |
| 2) | Ferment the cellulosic sugars into cellulosic ethanol. | |
| 3) | Covert the ethanol into SAF and related products. This third step happens with the Vertimass technology which the Company has licensed. |
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Any new biofuels plant that is built would require various government permits. In particular, renewable fuels are subject to rigorous testing and premarket approval requirements by the EPA’s Office of Transportation and Air Quality and regulatory authorities in other countries. In the U.S., various federal, and, in some cases, state statutes and regulations also govern or impact the manufacturing, safety, storage and use of renewable fuels. The process of seeking required approvals and the continuing need for compliance with applicable statutes and regulations requires the expenditure of resources. The Company anticipates raising the necessary capital for this as a part of its project-based financing.
The ethanol industry is competitive with over 200 ethanol plants in the United States alone. Currently, the vast majority use corn as feedstock. Their profitability depends highly on the fluctuations between the price of corn and the price of ethanol. Since the Company does not plan to use corn, and plans on having long-term purchase agreements with cellulosic feedstock suppliers, we anticipate that our profitability will be more consistent. Further, cellulosic biofuels yield much higher incentives than non-cellulosic biofuels.
The Energy Policy Act of 2005, which included the Renewable Fuel Standard Program enforced by the US Environmental Protection Agency (EPA), 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. The EPA’s final D3 RIN volume mandates for cellulosic biofuel include 840 million gallons for 2023, 1.09 billion gallons for 2024, and 1.38 billion gallons for 2025 (the D3 mandate). This mandate has increased every year and is statutorily mandated to increase in the future and become a larger portion of the full renewable fuels mandate, if and when cellulosic biofuels can be produced profitably in larger and larger quantities. The RFS mandate for 2024 calls for 21.54 billion gallons of total renewable fuel, 15 billion from conventional biofuels (corn ethanol) and 6.54 billion from advanced biofuels, including cellulosic biofuels. The “blend wall” (or upper limit to the amount of ethanol that can be blended into U.S. gasoline and automobile performance and comply with the Clean Air Act) of limiting ethanol content in gasoline to 10%, limits the total amount of ethanol consumed in the United States. Recent proposals have make 15% blending available year around in some states. The value of the D3 RIN fluctuates, but as of this filing, it is approximately $3.17 per gallon of ethanol. For comparison, the D6 RIN for corn ethanol is $0.69. To profit from these incentives, the Company plans to apply for these D3 RIN credits as it brings its first plant into commercial operation.
Section 45Z of the Inflation Reduction Act passed on August 16, 2022, offers a Clean Fuel Production Credit (CFPC) per gallon of transportation fuel produced with a base amount of 20 cents per gallon or up to $1 per gallon for a qualified facility (depending on its carbon index) that was built while paying at least prevailing wages and which met apprenticeship requirements. For sustainable aviation fuel, those figures are 35 cents and $1.75 per gallon respectively. The Company plans to apply for CFPC credits when it begins building its commercial facilities. The CFPC currently does not apply to transportation fuel sold after December 31, 2027.
A Low Carbon Fuel Standard Credit (LCFS) is offered by various states (primarily California) for any amount of reduced CO2 in the production lifecycle of transportation fuels as compared to the amount of CO2 emitted in the production lifecycle of fossil fuels. The production lifecycle includes transportation costs to the point of use. California is currently offering around $66 per metric ton of CO2 reduction. When it is closer to commercial production, the Company plans to analyze the cost effectiveness of applying for these LCFS credits to determine in which state it could earn the most credits.
At commercial scale, management expects to be able to earn substantial renewable fuel credits and produce sustainable ethanol, sustainable aviation fuel, and other sustainable biofuels more profitably than they could be from existing commercial corn ethanol producers. Cellulosic ethanol comes with a much more valuable D3 RIN credit as compared to the D6 RIN allocated to corn ethanol; cellulosic SAF comes with a very valuable D7 RIN, and cellulosic bio-gasoline comes with a valuable D3 RIN. The Company also expects to receive Clean Fuel Production Credits related to section 45Z of the Inflation Reduction Act, and the Company also plans to pursue Low Carbon Fuel Standard Credits.
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 CTS technology or forming joint ventures with foreign domestic partners to build plants.
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 not generated any material revenues from its business.
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Capital Formation
From January 1, 2024, through the date of filing, the Company issued an aggregate of 114,545 shares of its common stock for services valued at $10,094.
From January 1, 2024, through the date of filing, the Company issued an aggregate of 177,500 warrants for services valued at $11,844 and 150,000 warrants for interest with a fair value of $9,947.
From January 1, 2024, through the date of filing, 4,025,000 previously issued options vested. During the nine months ended September 30, 2024, the Company recognized additional stock-based compensation of $45,527 in connection with modification of the exercise price of 7,475,000 vested options.
From January 1, 2024, through the date of filing, 3,397,981 warrants expired or were cancelled.
Going Concern
The Company has incurred losses since inception, has a working capital deficiency, and may be unable to raise further capital. As of September 30, 2024, the Company had a working capital deficit of $1,743,047 and had incurred accumulated losses of $55,466,394 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 nine month period ended September 30, 2024 to September 30, 2023
For the three and nine months ended September 30, 2024, the Company recognized $0 in revenue as opposed to $0 in 2023.
For the three months ended September 30, 2024, the Company’s general and administrative expenses increased by $17,821 to $236,981 from $219,160 in 2023. This increase is primarily the result of $42,552 in accounting expenses in 2024 versus $5,500 in 2023.
For the nine months ended September 30, 2024, the Company’s general and administrative expenses decreased by $162,235 to $781,718 from $943,953 in 2023. This decrease is primarily the result of $53,262 in stock-based compensation expense in 2024 versus $169,382 in 2023, and advertising and promotion declining to $0 in 2024 from $46,579 in 2023.
Interest expense decreased in the quarter ended September 30, 2024 by $22,026 to $3,635 from $25,661 in 2023. Interest expense decreased in the nine-month period ended September 30, 2024 by $16,574 to $54,569 from $71,143.
Research and development (R&D) costs for the quarter ended September 30, 2024, were $410,805, an increase of $117,131 from $293,674 in 2023. The increase in R&D expenses is primarily the result of equity-based compensation of $127,446 in 2024 versus $0 in 2023.
Research and development (R&D) costs for the nine months ended September 30, 2024 were $1,309,829, a decrease of $431,489 from $1,741,318 in 2023. The decrease in R&D expenses is primarily the result of a decrease in bonuses to $0 from $276,930 in 2023, and equity-based compensation of $390,739 from $467,646 in 2023.
Liquidity and Capital Resources
Liquidity
As of September 30, 2024, the Company had $149,366 in cash and cash equivalents, and total stockholders’ equity on September 30, 2024, was negative $2,511,937. As of December 31, 2023, the Company had $41,008 in cash and cash equivalents, and total stockholders’ deficit at December 31, 2023, was $3,561,082. Total debt, including convertible notes, accounts payable and other notes payable at September 30, 2024, together with interest payable thereon and legacy liabilities, was $4,001,000 a decrease of $590,301 from December 31, 2023, where it stood at $4,591,301. This decrease is primarily attributable to the cancellation of $2,417,502 in legacy debt related to the Company’s restructuring, offset by an increased in deferred compensation of $718,625.
During the nine months ended September 30, 2024, the Company’s net cash used in operating activities decreased by $702,065 to $792,412 from $1,494,478 in the nine months ending September 30, 2023. This is primarily attributed to the extinguishment of debt of $2,417,502 in 2024 versus nil in 2023, offset by an increase in deferred wages to $718,625 from $366,988 in 2023.
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During the nine months ended September 30, 2024, the Company’s investing activities used $29,230 in cash, as compared to $307,782 in the first nine months of 2023. This can be primarily attributed to capitalizing $282,038 used to purchase machinery and equipment for a pilot plant in 2023, as compared to $0 in 2024.
During the nine months ended September 30, 2024, the Company generated an aggregate of $930,000 through its financing activities versus $1,675,022 in the nine months ended September 30, 2023, which is a decrease of $745,022. This decrease from the prior year can primarily be attributed to net proceeds of $1,002,772 for the issuance of common stock in 2023 and $97,250 from the exercise of warrants and options, versus $0 for both in 2024.
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 additional funds for G&A expenses and will seek project financing for a commercial ethanol to SAF facility in addition to funds needed to complete the commercialization of its CTS system. There is no guarantee that the Company will achieve all of the additional funding that is needed.
As of the date of this filing, in 2024 the Company has raised $930,000 through the issuance of convertible notes and $0 through the issuance of shares and the exercise of warrants. The Company previously raised $16,963,625 in shares and $1,970,916 through converted notes and $700,000 in debt or convertible notes since inception. 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 September 30, 2024, shareholders’ deficit was $2,511,937.
There were 305,678,008 shares of common stock issued and outstanding as of September 30, 2024.
There were no preferred shares outstanding.
The Company has paid no dividends.
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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 September 30, 2024. Based upon, and as of the date of this evaluation, our chief executive officer and chief financial officer determined that our disclosure controls and procedures were effective.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting during the quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
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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.
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, 2024, 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 | ||||||
| Vestech Securities | 01/26/24 | Common Stock | 52,500 | Professional Services | ||||||
| Tito Sanchez | 04/25/24 | Common Stock | 62,045 | Professional Services | ||||||
| Steven Sadaka | 07/01/24 | Common Stock | 312,500 | Note Conversion | ||||||
| Anthony Santelli, Sr. | 09/30/24 | Common Stock | 1,875,000 | Note Conversions | ||||||
| Mark Monahan | 09/30/24 | Common Stock | 625,000 | Note Conversion | ||||||
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.
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
The exhibits listed below are filed as part of or incorporated by reference in this report.
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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 November 4, 2024 | ||
| By | /s/ Anthony Santelli | |
| Anthony Santelli | ||
| Chief Financial Officer (Principal Financial and Accounting Officer) | ||
| Date November 4, 2024 | ||
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