ALLIANCE BIOENERGY PLUS, INC.
ALLIANCE BIOENERGY PLUS, INC. details
Ticker:ALLM
Employees:
Filing
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended September 30, 2022
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 000-54942
BLUE BIOFUELS, INC.
(Exact name of small Business Issuer as specified in its charter)
Nevada 45-4944960
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
3710 Buckeye Street, Suite 120
Palm Beach Gardens, FL 33410
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (888) 607-3555
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
Common Stock par value $0.001 BIOF OTCQB
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
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. Yes ☒ No ☐
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). Yes ☒ No ☐
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 ☐ Non-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 ☒ No
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 $24,775,191.
State the number of shares outstanding of the registrant’s $.001 par value common stock as of the close of business on the latest practicable date (November 4 , 2022): 282,268,575 .
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 19
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 24
ITEM 4. Controls and Procedures 24
PART II—OTHER INFORMATION
ITEM 1. Legal Proceedings 25
ITEM 1A. Risk Factors 25
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 25
ITEM 3. Defaults Upon Senior Securities 26
ITEM 4. Mine Safety Disclosures 26
ITEM 5. Other Information 26
ITEM 6. Exhibits 26
Signatures 27
PART I – FINANCIAL INFORMATION
TABLE OF CONTENTS
Index to Financial Statements Page
Condensed Consolidated Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021 4
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021 (unaudited) 5
Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2022 and 2021 (unaudited) 6
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021 (unaudited) 7
Notes to Condensed Consolidated Financial Statements (unaudited) 8
Blue Biofuels, Inc.
Formerly known as Alliance Bioenergy Plus, Inc.
Financial Statements
Period Ended September 30, 2022
UNAUDITED FINANCIAL STATEMENTS
OF
BLUE BIOFUELS, INC.
Blue Biofuels, Inc.
CONSOLIDATED BALANCE SHEETS
(unaudited)
September 30, 2022 December 31, 2021
ASSETS
Current assets
Cash and cash equivalents $ 505,010 $ 1,164,664
Prepaid expenses 86,780 45,051
TOTAL CURRENT ASSETS $ 591,790 $ 1,209,715
Other assets
Property and equipment, net of accumulated depreciation and amortization of $111,484 and $273,852 at September 30, 2022 and December 31,2021, respectively. 359,439 377,645
Security deposits 30,276 30,276
Right of Use Assets, net of accumulated amortization 167,158 65,853
Patents 197,259 154,758
TOTAL OTHER ASSETS $ 754,132 $ 628,532
TOTAL ASSETS $ 1,345,922 $ 1,838,247
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable $ 13,744 $ 11,059
Accounts payable - Related Party 72,670 $ 72,670
Deferred wages and director’s fees - Related party 301,1 06 $ 240,795
Lease Liability - Current 92,111 $ 72,346
Chapter 11 Settlement 50,000 50,000
Interest Payable - Related Party 69,426 49,291
TOTAL CURRENT LIABILITIES $ 599,057 $ 496,161
Long term liabilities
Right of Use Lease Liability, net of current portion 110,697 -
Notes Payable — Related Party 2,521,562 2,521,562
Notes Payable — Other 216,570 216,570
TOTAL LONG TERM LIABILITIES $ 2,848,829 $ 2,738,132
TOTAL LIABILITIES $ 3,447,886 $ 3,234,293
STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock; $0.001 par value; 10,000,000 shares authorized; zero shares issued and outstanding - -
Common stock; $0.001 par value; 1,000,000,000 shares authorized; 281,815,770 issued and outstanding at September 30, 2022, and 274,003,883 shares issued and outstanding at December 31, 2021. 281, 817 274,004
Additional paid-in capital 49,822,662 47,151,353
Accumulated deficit (52,206,443 ) (48,821,403 )
Total stockholders’ equity (deficit) $ (2,101,964 ) $ (1,396,046 )
TOTAL EQUITY (DEFICIT) $ (2,101,964 ) $ (1,396,046 )
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $ 1,345,922 $ 1,838,247
Blue Biofuels, Inc
CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited)
Three Months Ended Nine Months Ended
30-Sep 30-Sep
2022 2021 2022 2021
Revenues $ - $ - $ - $ -
Operating expense:
General and administrative 178,512 215,966 1,223,083 815,614
Research & Development 404,157 22 9,923 2,070,789 744,783
Loss on disposal of assets - - 40,099 33,484
Total operating expenses 582,669 445,889 3,333,971 1,593,881
Loss from operations: (582,669 ) (445,889 ) (3,333,971 ) (1,593,881 )
Other (income) expense:
Loan Forgiveness - - - (66,330 )
Interest expense - related party 6,711 6,711 20,135 20,372
Interest expense - other 29,313 1,598 30,934 5,394
Total other (income) expense 36,02 4 8,309 51,069 (40,564 )
Income (Loss) before provisions for income taxes $ (618,693 ) $ (454,198 ) $ (3,385,040 ) $ (1,553,317 )
Provisions for income taxes - -
Net Income / (Loss): $ (618,693 ) $ (454,198 ) $ (3,385,040 ) $ (1,553,317 )
Net income (loss) per share $ (0.002 ) $ (0.002 ) $ (0.012 ) $ (0.006 )
Weighted average common shares outstanding
Basic 277,416,282 268 ,508,643 277,416,282 268 ,508,643
Blue Biofuels, 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, 2021 274,003,883 $ 274,004 - - $ 47,151,353 $ (48,821,403 ) $ (1,396,046 )
Issuance of common stock for services 447,781 $ 448 - - $ 70,852 - $ 71,300
Employee stock options exercised 150,000 $ 150 - - $ 7,350 - $ 7,500
Vesting of 10,560,000 options under the employee, director plan - - $ 1,316,277 - $ 1,316,277
Net Income (Loss) (2,040,957 ) $ (2,040,957 )
Balance as of March 31, 2022 274,601,664 $ 274,602 - - $ 48,545,832 $ (50,862,360 ) $ (2,041,926 )
Issuance of common stock for services 78,600 $ 79 - - $ 16,071 - $ 16,150
Employee stock options exercised 200,000 200 - - 8,200 - 8,400
Vesting of 800,000 options under the employee, director plan - - 99,106 - 99,106
Issuance of common stock and warrants for cash through PPM 4,499,999 4,500 - - 670,500 - 675,000
Net Income (Loss) (725,390 ) (725,390 )
Balance as of June 30, 2022 279,380,263 $ 279,381 - - $ 49,339,709 $ (51,587,750 ) $ (1,968,660 )
Issuance of common stock for services 168,842 $ 169 - - $ 28,981 - $ 29,150
Vesting of 825,000 options under the employee, director plan - - - 110,922 - 110,922
Issuance of 37,333 warrants for services - - 5,317 - 5,317
Issuance of common stock and warrants for cash through PPM 2,266,665 2,267 - - 337,733 - 340,000
Net Income (Loss) (618,693 ) $ (618,693 )
Balance as of September 30, 2022 281,815,770 $ 281,817 - - $ 49,822,662 $ (52,206,443 ) $ (2,101,964 )
Balance as of December 31, 2020 241,721,947 $ 241,722 - - $ 43,103,607 $ (46,682,093 ) $ (3,336,764 )
Issuance of common stock for services 223,000 $ 223 - - $ 46,707 - $ 46,930
Issuance of 1,166,667 warrants for services - - - 72,090 - 72,090
Warrants exercised 13,455,009 13,455 - - 1,289,362 - 1,302,817
Issuance of common stock and warrants for cash through PPM 9,243,331 9,243 - - 1,926,507 - 1,935,750
Issuance of common stock in exchange for debt 7,080,000 7,080 - - 271,920 - 279,000
Issuance of 10,000 vested options under the employee, director plan - 1,215 1,215
Employee stock options exercised 350,000 350 - - 12,550 - 12,900
Cashless exercise of stock options 177,778 178 - - (178 ) - (0 )
Net Income (Loss) (613,584 ) $ (613,584 )
Balance as of March 31, 2021 272,251,065 $ 272,251 - - $ 46,723,780 $ (47,295,677 ) $ (299,646 )
Issuance of common stock and warrants for cash through PPM 60,000 $ 60 $ 14,940 $ 15,000
Issuance of 200,000 vested options under the employee, director plan $ 11,443 $ 11,443
Net Income (Loss) (485,535 ) $ (485,535 )
Balance as of June 30, 2021 272,311,065 $ 272,311 - - $ 46,750,163 $ (47,781,212 ) $ (758,738 )
Issuance of common stock for services 78,000 $ 78 - - $ 19,422 - $ 19,500
Issuance of common stock and warrants for cash through PPM 100,000 100 - - 24,900 - 25,000
Cashless exercise of stock options 160,118 $ 160 (160 ) -
Net Income (Loss) (454,198 ) (454,198 )
Balance as of September 30, 2021 272,649,183 $ 272,649 - - $ 46,794,325 $ (48,235,410 ) $ (1,168,436 )
Blue Biofuels, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Nine Months Ended For the Nine Months Ended
30-Sep-22 30-Sep-21
Cash flows from operating activities
Net Income (Loss) $ (3,385,040 ) $ (1,553,317 )
Reconciliation of net loss to net cash used in operating activities
Depreciation and amortization 102,711 89,658
Stock based compensation for services 116,600 66,430
Net Issuance of options and warrants for services 1,531,622 84,748
Loss on Disposal of assets 40,099 33,484
Changes in operating assets and liabilities
Prepaid expenses (41,729 ) (32,691 )
Accrued interest - related party 20,135 (56,689 )
Accounts payable and accrued liabilities 62,996 (529,335 )
Forgiveness of PPP Loan - (66,330 )
Right of use lease (33,647 ) (59,284 )
Net cash used in operating activities (1,586,253 ) (2,023,326 )
Cash flows from investing activities
Net Purchase of property and equipment (61,800 ) (178,803 )
Security deposits - -
Patent Costs (42,501 ) (16,742 )
Net cash from (used in) investing activities (104,301 ) (195,545 )
Cash flows from financing activities
Proceeds from exercise of warrants and options 15,900 1,315,717
Net proceeds from issuance of common stock 1015,000 1,975,750
Net cash provided by financing activities 1,030,900 3,291,467
Net increase (decrease) in cash and cash equivalents (659,653 ) 1,072,596
Cash and cash equivalent at beginning of the period 1,164,664 286,579
Cash and cash equivalent at end of the period $ 505,010 $ 1,359,175
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 $ - $ 28,000
Conversion of convertible debenture to common stock $ - $ 279,000
Blue Biofuels, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 – ORGANIZATION
Blue Biofuels, Inc (the “Company”) is 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 technology system referred to as Cellulose-to-Sugar or CTS, and the Company filed a patent application for this technology. The CTS patent was awarded in 2021 in the United States (US10994255) and also in El Salvador. The Company also filed an application for this patent in other major jurisdictions of the world including the European Patent Organization, Australia, Brazil, China, Japan, 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 two filed patents pending and one provisional patent application for a total of three additional patents that are currently in process. These patents broaden the scope and protection of the CTS technology. The CTS process and related patent and patent applications represent the results of our continued development of the CTS process towards commercialization.
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 converting cellulose material into sugar and lignin, as compared to the prior batch process that the Company previously licensed. The CTS process creates molecular contact between two reactive solid components instead of other systems where the reaction takes place between two liquid or gas components in a batch process. The reactants are (1) the feedstock, which is broken down into its components being sugars and lignin; (2) a catalyst, which is cost effective and abundantly available in the market from regular suppliers; it is separated from reactor components and reused. 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.
CTS is different from other commercial processes that are used to convert cellulose into sugar. Other processes use enzymatic batch reactors that take weeks to convert cellulose to sugars. CTS can convert any cellulosic material – including grasses and agricultural waste – into sugars in less than a minute. The sugars are subsequently processed into biofuels using off-the-shelf technologies. CTS is environmentally friendly in that it recycles the water and catalyst, and has a near zero carbon footprint in that the amount of added atmospheric carbon created by burning the biofuels produced by CTS is reabsorbed by the plant-based feedstock used in the CTS system in the next harvest.
At a commercial scale, our management expects to be able to produce ethanol at a lower cost per gallon than existing commercial corn or cellulosic ethanol producers due to the fact that the CTS process is uncomplicated and efficient, and is expected to use low-cost feedstocks and have high value by-products. We believe a significant difference between CTS and corn ethanol is the wide range of abundantly available feedstocks that CTS 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 corn kernels are used, CTS uses the whole plant or its waste products, meaning it could obtain higher yields per acre. Estimated yields for corn are about 400-600 gallons of ethanol per acre per year and for king grass in conjunction with our CTS process it could be up to 3000-3500 gallons per acre per year. The Company also expects to potentially receive a highly valued D3 RIN for each gallon of ethanol it produces.
The then new CTS technology made it worthwhile to financially restructure the Company through Chapter 11 in 2018. 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 has built several prototypes of the CTS system to further develop the process. The Company finalized its parameter optimization when it was able to convert 99% of the cellulosic material into soluble sugars suitable for further processing into cellulosic ethanol. 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. The Company has begun successful testing on Komarek machines at a throughput processing rate of 2.5 tons per day, and anticipates having early volume testing completed in Q1 2023.
The Company expects to engage an engineering firm to design a semi-commercial scale pilot plant that integrates a larger CTS system into the pre-processing and post-processing elements of the plant. It is anticipated that the pilot plant will have the capacity to produce sugar at a rate sufficient to make around 500,000 – 1,000,000 gallons of ethanol per year. The goal of the pilot plant is to show successful volume production and scalability, and to provide operating cost estimates of a full commercial volume system.
The CTS system converts plant-based feedstock into two product streams, soluble sugars and lignin, each of which can be converted into multiple products as follows: (1) sugars can be further processed into cellulosic ethanol and other biofuels like jet fuel, and potentially into bio chemicals; and (2) Lignin can be used in ion exchange resins, specialty chemicals, or to create bioplastics. Lignin can also be burned as a renewable fuel.
Plan of Operation
The Company expects to have the CTS pilot plant built and functioning in the second half of 2023. The plan is to run sufficient testing to prove the viability of producing a commercial size CTS system. However, commencing commercial production will require project financing of a full-scale CTS commercial system. The project financing will either be for bolting on our CTS system into an existing ethanol facility of a future potential joint venture partner, for acquiring an ethanol facility and converting that to cellulosic ethanol production using our CTS system, or for setting up a production facility for converting ethanol into jet fuel using the Vertimass Process.
The Company has licensed the Vertimass Process to convert ethanol (from the CTS process) into sustainable aviation fuel. There is no up-front or annual fee until we are converting ethanol into SAF. The license agreement with Vertimass is the subject of a confidentiality agreement between the parties. Since we are not yet producing ethanol on a commercial scale, it is too preliminary to discuss details.
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 sustainable aviation fuel and the like; (2) selling sulfur-free lignin to ion exchange resin producers; (3) making specialty chemicals from lignin; and, (4) potentially making nanocellulose. We believe these, and other markets, could potentially provide for highly profitable products.
Management believes that retrofitting existing plants with the CTS 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.
The ethanol industry is competitive with over 200 ethanol plants in the United States alone. Currently, the vast majority use corn as the 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 suppliers, we expect that our profitability will potentially be more consistent.
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 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 mandate for cellulosic ethanol is for 770 million gallons for 2022 (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 quantities than they are now. The RFS mandate for 2022 calls for 20.77 billion gallons of total renewable fuel, 15 billion from conventional biofuels (corn ethanol) and 5.77 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 may make 15% blending available year around. Converting our cellulosic ethanol to sustainable aviation fuel avoids the blend wall. The value of the D3 RIN fluctuates, but as of this filing, it is approximately $2.19 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 .
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 September 30, 2022, the Company has incurred accumulated losses of $ 52,206,443 . The Company expects to incur significant additional losses and liabilities in connection with its start-up and commercialization activities. 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. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments related to the recoverability and classifications of recorded asset amounts, or amounts and classifications of liabilities that might result from this uncertainty. There are no assurances that the Company will continue as a going concern.
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 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.
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.
Stock Compensation
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.
The stock compensation issued for services during the 9 months ended September 30, 2022, was valued on the date of issuance. The following assumptions were used in calculations of the Black-Scholes option pricing models for option and warrant-based stock compensation issued in the nine months ended September 30, 2022:
4/19/22 6/21/22 9/30/22
Risk-free interest rate 2.93 % 3.38 % 4.06 %
Expected life 10 years 5 years 5 years
Expected dividends 0 % 0 % 0 %
Expected volatility 133.42 % 134.52 % 128.59 %
BIOF common stock fair value $ 0.165 $ 0.167 $ 0.167
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 5 to 10 years. Expenditures for additions and improvements are capitalized; repairs and maintenance are expensed as incurred.
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 of the CTS process), 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 $ 197,259 as of September 30, 2022 and $ 154,758 as of December 31, 2021.
Research and Development
The Company expenses all research and development costs as incurred. For the nine months ended September 30, 2022, and September 30, 2021, the amounts charged to research and development expenses were $ 2,070,789 , and $ 744,783 , respectively.
Revenue Recognition
Under ASC 606, Revenue from Contracts with Customers (“ASC 606”), the Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the five-step model prescribed under Accounting Standards Update (“ASU”) 2014-09:
1. Identify contract(s) with a customer;
2. Identify the performance obligations in the contract;
3. Determine the transaction price;
4. Allocate the transaction price to the performance obligations in the contract; and,
5. Recognize revenues when (or as) we satisfy the performance obligation.
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.
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.
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.
Profit (Loss) per Common Share :
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.
NOTE 4 – 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 $ 197,259 as of September 30, 2022.
NOTE 5 – DEBT
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 15 th 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 was due on September 18, 2022, and is expected to be paid in Q4 , 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.
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 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.
A summary of all debts indicated in the Notes above is as follows:
September 30, December 31,
Notes Payable
2022 2021
Short Term Chapter 11 Settlement $ 50,000 $ 50,000
Long Term Notes Payable from future revenue — Related Party $ 1,700,630 $ 1,700,630
Long Term Notes Payable from future revenue — Other $ 120,000 $ 120,000
Long Term Note Payable from future profits — Related Party $ 820,932 $ 820,932
Long Term Note Payable from future profits — Other $ 96,570 $ 96,570
TOTAL NOTES $ 2,788,132 $ 2,788,132
Of the $2,788,132 due as of September 30, 2022, $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 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 1,010 million, 1 billion of which are designated as common stock at $ 0.001 par value (the “Common Stock”) and 10 million of which are designated as preferred stock par value $ 0.001 (the “Preferred Stock”). As of September 30, 2022, the Company had 281,815,770 shares of Common Stock issued and outstanding and no shares of Preferred Stock were issued. Holders of shares of Common stock shall be entitled to cast one vote for each share held at all stockholders’ meetings for all purposes, including the election of directors. The Common Stock does not have cumulative voting rights. No holder of shares of stock of any class shall be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of shares of stock of any class, or of securities convertible into shares of stock of any class, whether now hereafter authorized or whether issued for money, for consideration other than money, or by way of dividend. The Company has yet to designate any rights, preferences and privileges for any of its authorized Preferred Stock.
For the nine months ended September 30, 2022, the Company issued an aggregate of 695,223 shares of its common stock for services valued at $ 116,600 .
For the nine months ended September 30, 2022, the Company issued an aggregate of 6,766,664 shares of its common stock for cash valued at $ 1,015,000 .
For the nine months ended September 30, 2022, 350,000 employee stock options were exercised for proceeds of $ 15,900 .
For the nine months ended September 30, 2022, 37,333 warrants were granted. Using the Black-Scholes option pricing valuation method, these were valued at $ 5,317 .
For the nine months ended September 30, 2022, 2,000,000 unvested warrants were issued.
For the nine months ended September 30, 2022, 837,500 warrants expired.
For the nine months ended September 30, 2022, 2,604,466 options expired.
For the nine months ended September 30, 2022, 12,185,000 stock options vested.
For the nine months ended September 30, 2022, 2,000,000 unvested options were issued.
NOTE 7 - 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 subject to any litigation as of September 30, 2022.
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. The lease period was originally for twenty-four (24) months from November 1, 2019, to October 31, 2021. This had been extended for one year until October 31, 2022, and now has a second extension until October 31, 2024. Annual rent commenced at $ 84,100 per annum and increased 3 % per year. The latest amendment put the annual rent at $ 102,950 . Tenant is also required to cover operating costs that, as of January 1, 2022, are estimated at $ 3,379 per month. Operating lease expense is recognized on a straight-line basis over the lease term and is included in General & Administrative expenses.
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 nine months ending September 30, 2022, and 2021, were $ 106,631 and $ 95,169 , respectively.
The Company recognized the following related to leases in its Consolidated Balance Sheet:
September 30, December 31,
PERIOD ENDED
2022 2021
Right of Use Lease Liabilities
Current portion 92,111 72,346
Long-term portion 110,697 0
TOTAL 202,808 72,346
As of September 30, 2022, the total future minimum lease payments in respect of leased premises are as follows:
MINIMUM
YEAR ENDED
DUE
2022 21,653
2023 95,172
2024 85,983
TOTAL $ 202,808
NOTE 8 – 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 continued 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 9 – 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 September 30, 2022, to the date of this filing, the Company issued 82,805 shares for services.
From September 30, 2022, to the date of this filing, the Company issued 370,000 shares in a private placement for proceeds of $ 55,500 .
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 renewable energy, biofuels, and lignin.
In early 2018, the Company’s Chief Executive Officer (“CEO”) Ben Slager invented a new technology system referred to as Cellulose-to-Sugar or CTS, and the Company filed a patent application for this technology. The CTS patent was awarded in 2021 in the United States (US10994255) and also in El Salvador. The Company also filed an application for this patent in other major jurisdictions of the world including the European Patent Organization, Australia, Brazil, China, Japan, 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 two filed patents pending and one provisional patent application for a total of three additional patents that are currently in process. These patents broaden the scope and protection of the CTS technology. The CTS process and related patent and patent applications represent the results of our continued development of the CTS process towards commercialization.
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 converting cellulose material into sugar and lignin, as compared to the prior batch process that the Company previously licensed. The CTS process creates molecular contact between two reactive solid components instead of other systems where the reaction takes place between two liquid or gas components in a batch process. The reactants are (1) the feedstock, which is broken down into its components being sugars and lignin; (2) a catalyst, which is cost effective and abundantly available in the market from regular suppliers; it is separated from reactor components and reused. 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.
CTS is different from other commercial processes that are used to convert cellulose into sugar. Other processes use enzymatic batch reactors that take weeks to convert cellulose to sugars. CTS can convert any cellulosic material – including grasses and agricultural waste – into sugars in less than a minute. The sugars are subsequently processed into biofuels using off-the-shelf technologies. CTS is environmentally friendly in that it recycles the water and catalyst, and has a near zero carbon footprint in that the amount of added atmospheric carbon created by burning the biofuels produced by CTS is reabsorbed by the plant-based feedstock used in the CTS system in the next harvest.
At a commercial scale, our management expects to be able to produce ethanol at a lower cost per gallon than existing commercial corn or cellulosic ethanol producers due to the fact that the CTS process is uncomplicated and efficient, and is expected to use low-cost feedstocks and have high value by-products. We believe a significant difference between CTS and corn ethanol is the wide range of abundantly available feedstocks that CTS 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 corn kernels are used, CTS uses the whole plant or its waste products, meaning it could obtain higher yields per acre. Estimated yields for corn are about 400-600 gallons of ethanol per acre per year and for king grass in conjunction with our CTS process it could be up to 3000-3500 gallons per acre per year. The Company also expects to potentially receive a highly valued D3 RIN for each gallon of ethanol it produces.
The then new CTS technology made it worthwhile to financially restructure the Company through Chapter 11 in 2018. 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 has built several prototypes of the CTS system to further develop the process. The Company finalized its parameter optimization when it was able to convert 99% of the cellulosic material into soluble sugars suitable for further processing into cellulosic ethanol. 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. The Company has begun successful testing on Komarek machines at a throughput processing rate of 2.5 tons per day, and anticipates having early volume testing completed in Q1 2023.
The Company expects to engage an engineering firm to design a semi-commercial scale pilot plant that integrates a larger CTS system into the pre-processing and post-processing elements of the plant. It is anticipated that the pilot plant will have the capacity to produce sugar at a rate sufficient to make around 500,000 – 1,000,000 gallons of ethanol per year. The goal of the pilot plant is to show successful volume production and scalability, and to provide operating cost estimates of a full commercial volume system.
The CTS system converts plant-based feedstock into two product streams, soluble sugars and lignin, each of which can be converted into multiple products as follows: (1) sugars can be further processed into cellulosic ethanol and other biofuels like jet fuel, and potentially into bio chemicals; and (2) Lignin can be used in ion exchange resins, specialty chemicals, or to create bioplastics. Lignin can also be burned as a renewable fuel.
Plan of Operation
The Company expects to have the CTS pilot plant built and functioning in the second half of 2023. The plan is to run sufficient testing to prove the viability of producing a commercial size CTS system. However, commencing commercial production will require project financing of a full-scale CTS commercial system. The project financing will either be for bolting on our CTS system into an existing ethanol facility of a future potential joint venture partner, for acquiring an ethanol facility and converting that to cellulosic ethanol production using our CTS system, or for setting up a production facility for converting ethanol into jet fuel using the Vertimass Process.
The Company has licensed the Vertimass Process to convert ethanol (from the CTS process) into sustainable aviation fuel. There is no up-front or annual fee until we are converting ethanol into SAF. The license agreement with Vertimass is the subject of a confidentiality agreement between the parties. Since we are not yet producing ethanol on a commercial scale, it is too preliminary to discuss details.
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 sustainable aviation fuel and the like; (2) selling sulfur-free lignin to ion exchange resin producers; (3) making specialty chemicals from lignin; and, (4) potentially making nanocellulose. We believe these, and other markets, could potentially provide for highly profitable products.
Management believes that retrofitting existing plants with the CTS 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.
The ethanol industry is competitive with over 200 ethanol plants in the United States alone. Currently, the vast majority use corn as the 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 suppliers, we expect that our profitability will potentially be more consistent.
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 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 mandate for cellulosic ethanol is for 770 million gallons for 2022 (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 quantities than they are now. The RFS mandate for 2022 calls for 20.77 billion gallons of total renewable fuel, 15 billion from conventional biofuels (corn ethanol) and 5.77 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 may make 15% blending available year around. Converting our cellulosic ethanol to sustainable aviation fuel avoids the blend wall. The value of the D3 RIN fluctuates, but as of this filing, it is approximately $2.19 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.
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
From January 1, 2022, through the date of filing, the Company issued an aggregate of 778,028 shares of its common stock for services valued at $131,300.
On April 29, 2022, the Company commenced a new offering of shares of its common stock valued at $0.15 per share. The Company sold an aggregate of 6,099,998 shares of its common stock for capital of $915,000. This offering was closed on October 3, 2022.
On October 21, 2022, the Company commended another offering of shares of its common stock valued at $0.15 per share. Through the date of filing, the Company has sold an aggregate of 1,036,666 shares of its common stock for capital of $155,500.
From January 1, 2022, through the date of filing, the Company issued unvested options to its managers and employees to purchase 2,000,000 shares of its common stock for a period between five and ten years at the exercise price of 17 cents per share. Using a Black-Scholes asset-pricing model, these agreements were valued at $319,327. None of those have vested, but 12,185,000 other options have vested, with a valuation of $1,526,305.
From January 1, 2022, through the date of filing, the Company issued unvested warrants to purchase 2,000,000 shares of its common stock for a period of 5 years at an exercise price of 18 cents per share. Using a Black-Scholes asset-pricing model, these were valued at $291,768.
From January 1, 2022, through the date of filing, 2,604,466 options expired and 837,500 warrants expired.
From January 1, 2022, through the date of filing, 350,000 previously issued options were exercised for proceeds of $15,900.
Going Concern
The Company has incurred losses since inception, has a working capital deficiency, and may be unable to raise further capital. At September 30, 2022, the Company had a working capital deficit of $7,267 and had incurred accumulated losses of $52,206,443 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, 2022 (unaudited) to September 30, 2021
For the three and nine months ended September 30, 2022, the Company recognized $0 in revenue as opposed to $0 in 2021.
For the three months ended September 30, 2022, the Company’s general and administrative expenses decreased by $37,454 to $178,512 from $215,966 in 2021. This decrease is primarily the result of a $119,600 employee retention credit issued by the government in 2022.
For the nine months ended September 30, 2022, the Company’s general and administrative expenses increased by $407,469 to $1,223,083 from $815,614 in 2021. This increase is primarily the result of a $495,532 increase in equity-based compensation to $506,975 from $11,443 in 2021.
Interest expense increased in the quarter ended September 30, 2022 by $27,715 to $36,024 from $8,309 in 2021. Interest expense increased in the nine months ended September 30, 2022 by $25,303 to $51,069 from $25,766 in 2021. The increase is primarily related to the renewal of a lease in Q3 2022 that led to a calculatory interest of $31,631 in Q3 2022.
For the nine months ended September 30, 2022 the Company recorded non-cash impairments of assets of $40,099, as compared to $33,484 in 2021. This was the result of disposing and/or selling of laboratory assets no longer in use in each year.
Research and development (R&D) costs for the quarter ended September 30, 2022 were $404,157, an increase of $174,234 from $229,923 in 2021. The increase in R&D expenses is primarily the result of an increase in payroll of $52,933 from the hiring of additional personnel, and $99,478 in equity-based compensation from $0 in 2021 due to the vesting of options in 2022.
Research and development (R&D) costs for the nine months ended September 30, 2022 were $2,070,789, an increase of $1,326,006 from $744,783 in 2021. The increase in R&D expenses is primarily the result of an increase in payroll of $211,681 from the hiring of additional personnel, and $1,019,330 in equity-based compensation from $0 in 2021 due to the vesting of options in 2022.
Liquidity and Capital Resources
Liquidity
As of September 30, 2022, the Company had $505,010 in cash, and total stockholders’ equity on September 30, 2022, was negative $2,101,964. As of December 31, 2021, the Company had $1,164,664 in cash, and total stockholders’ equity at December 31, 2021, was negative $1,396,046. Total debt, including advances, accounts payable and other notes payable at September 30, 2022, together with interest payable thereon and contingent liabilities, was $3,447,886 an increase of $213,593 from December 31, 2021, where it stood at $3,234,293. This increase is attributable to the increases in deferred wages due to management. $1,820,630 of those liabilities has been renegotiated to be payable out of future revenue and $917,502 out of future profits and otherwise does not come due.
During the nine months ended September 30, 2022, the Company’s net cash used in operating activities decreased by $437,073 to $1,586,253 from $2,023,326 in the nine months ending September 30, 2021. This decrease can primarily be attributed to an increase in accounts payable of $62,998 in 2022, versus a reduction in accounts payable of $529,335 in 2021 mostly attributed to paying off back-pay due.
During the nine months ended September 30, 2022, the Company’s investing activities used $104,301 in cash. This can be primarily attributed to capitalizing $42,501 in patent costs and $61,800 used to purchase machinery and equipment. During the nine months ended September 30, 2021, the Company’s investing activities used $195,545. This is primarily due to the purchase of equipment of $178,803 and $16,742 in patent costs.
During the nine months ended September 30, 2022, the Company generated an aggregate of $1,030,900 through its financing activities, which is a decrease of $2,260,567 from $3,291,467 during the nine months ended September 30, 2021. This decrease from the prior year can primarily be attributed to raising $915,000, as compared to $1,975,750 raised from the sale of common stock through the Company’s private offerings in 2021, and $15,900 versus $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 build and test a semi-commercial scale pilot plant of its CTS system that is expected to prove the commercial viability of the technology. The Company anticipates reaching this stage by the end of 2023. There is no guarantee that we will achieve all of the additional funding that is needed.
As of the date of this filing, the Company has raised $1,086,4 00 in 2022, through the sale of stock and the exercise of options, in addition to $14,574,702 previously raised, 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 September 30, 2022, shareholders’ equity was negative $2,101,964.
There were 281,815,770 shares of common stock issued and outstanding as of September 30, 2022.
There were no preferred shares outstanding.
The Company has paid no dividends.
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 December 31, 2021. 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 sufficient.
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, 2021, that occurred during our first fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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, 2022, through the date of filing which were not registered under the Securities Act.
Date of Title of Amount of
Entity Investment Security Securities Consideration
Sold
Tom Camerlengo 01/11/22 Common Stock 150,000 Exercise of Options
North Equities 03/05/22 Common Stock 322,581 Professional Services
Bill Fitzpatrick 03/10/22 Common Stock 100,000 Professional Services
NWBB, Inc 03/10/22 Common Stock 25,200 Professional Services
NWBB, Inc 04/22/22 Common Stock 28,600 Professional Services
Ben Slager 04/29/22 Common Stock 500,000 Purchase @ $0.15 per share
AES Capital Resource Fund 05/02/22 Common Stock 500,000 Purchase @ $0.15 per share
Chris and Angela Kneppers 05/02/22 Common Stock 2,333,333 Purchase @ $0.15 per share
Raymond Leon 05/04/22 Common Stock 500,000 Purchase @ $0.15 per share
Melvin H. Eaton II 05/23/22 Common Stock 333,333 Purchase @ $0.15 per share
Mark Monahan 05/23/22 Common Stock 333,333 Purchase @ $0.15 per share
Johan Foster 05/26/22 Common Stock 25,000 Professional Services
Caroline Libra 05/26/22 Common Stock 25,000 Professional Services
Thomas Camerlengo 05/31/22 Common Stock 200,000 Exercise of Options
Steve Paul 07/07/22 Common Stock 166,667 Purchase @ $0.15 per share
Randall Brodsky 07/11/22 Common Stock 333,333 Purchase @ $0.15 per share
NWBB, Inc. 07/12/22 Common Stock 34,000 Professional Services
Mudai Nakagawa 07/22/22 Common Stock 500,000 Purchase @ $0.15 per share
NWBB, Inc. 08/17/22 Common Stock 29,444 Professional Services
Linda Gulla 08/22/22 Common Stock 23,889 Professional Services
NWBB, Inc. 08/29/22 Common Stock 26,111 Professional Services
Bohdan Rudawski 09/02/22 Common Stock 133,333 Purchase @ $0.15 per share
Mark Cox 09/02/22 Common Stock 333,333 Purchase @ $0.15 per share
Kathleen Doherty 09/12/22 Common Stock 133,333 Purchase @ $0.15 per share
NWBB, Inc. 09/20/22 Common Stock 55,398 Professional Services
Charles McCann 10/21/22 Common Stock 666,666 Purchase @ $0.15 per share
NWBB, Inc 10/21/22 Common Stock 12,805 Professional Services
Alvian Istrate 10/21/22 Common Stock 200,000 Purchase @ $0.15 per share
Alan Catterall 10/31/22 Common Stock 170,000 Purchase @ $0.15 per share
Wingard, LLC 10/31/22 Common Stock 70,000 Professional Services
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.
ITEM 6. EXHIBITS
The exhibits listed below are filed as part of or incorporated by reference in this report.
Exhibit No. Identification of Exhibit
2.1 Chapter 11 Plan of Reorganization (incorporated by reference to the Company’s Form 10-12G/A filed on February 16, 2021)
2.2 Chapter 11 Disclosure Statement (incorporated by reference to the Company’s Form 10-12G/A filed on February 16, 2021)
3.1 Articles of Incorporation (incorporated by reference to the Company’s S-1 filed May 23, 2021)
3.2 Certificate of Amendment to Articles of Incorporation filed November 19, 2014 (incorporated by reference to the Company’s Form 10-12G/A filed on February 16, 2021)
3.3 Certificate of Amendment to Articles of Incorporation filed June 17, 2016 (incorporated by reference to the Company’s Form 10-12G/A filed on February 16, 2021)
3.4 Certificate of Amendment to Articles of Incorporation filed July 26, 2021 (incorporated by reference to the Company’s 8-K filed on July 30, 2021)
3.5 Bylaws (incorporated by reference to the Company’s Form 10-12G/A filed on February 16, 2021)
10.1 Lease Agreement (incorporated by reference to the Company’s Form 10-12G/A filed on February 16, 2021)
10.2 Employment Agreement, dated June 1, 2020, between the Company and Ben Slager (incorporated by reference to the Company’s Form 10-12G/A filed on February 16, 2021)
10.3 Employment Agreement, dated June 1, 2020, between the Company and Anthony Santelli (incorporated by reference to the Company’s Form 10-12G/A filed on February 16, 2021
10.4 2021 Employee, Director Stock Plan (incorporated by reference to definitive 14C filed with the SEC on June 24, 2021)
31.1. Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS Inline XBRL Instance Document
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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 7, 2022
By /s/ Anthony Santelli
Anthony Santelli
Chief Financial Officer (Principal Financial and Accounting Officer)
Date November 7 , 2022