PROSPECTUS
SUMMARY
|
1
|
||
SUMMARY
FINANCIAL DATA
|
3
|
||
RISK
FACTORS
|
4
|
||
FORWARD-LOOKING
STATEMENTS
|
8
|
||
USE
OF PROCEEDS
|
8
|
||
DETERMINATION
OF OFFERING PRICE
|
9
|
||
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
|
9
|
||
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
OPERATIONS
|
11
|
||
DESCRIPTION
OF BUSINESS
|
17
|
||
LEGAL
PROCEEDINGS
|
24
|
||
MANAGEMENT
|
24
|
||
EXECUTIVE
COMPENSATION
|
26
|
||
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
|
33
|
||
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
34
|
||
DESCRIPTION
OF SECURITIES
|
36
|
||
DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
|
37
|
||
SELLING
STOCKHOLDERS
|
37
|
||
PLAN
OF DISTRIBUTION
|
39
|
||
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS
|
40
|
||
LEGAL
MATTERS
|
40
|
||
EXPERTS
|
41
|
||
ADDITIONAL
INFORMATION
|
41
|
FEL-1
|
FEL-2
|
FEL-3
|
||
* Material Balance
|
* Preliminary Equipment Design
|
* Purchase Ready Major Equipment Specifications
|
||
* Energy Balance
|
* Preliminary Layout
|
* Definitive Estimate
|
||
* Project Charter
|
* Preliminary Schedule
|
* Project Execution Plan
|
||
* Preliminary Estimate
|
* Preliminary 3D Model
|
|||
* Electrical Equipment List
|
||||
* Line List
|
||||
* Instrument Index
|
Common
Stock Being Offered By Selling Stockholders
|
2,500,000
shares of Common Stock.
|
|
Initial
Offering Price
|
The
initial offering price for shares of our Common Stock will be determined
by prevailing prices established on the OTCBB or as negotiated in private
transactions, or as otherwise described in “Plan of
Distribution.”
|
Terms
of the Offering
|
The
Selling Stockholders will determine when and how they will sell the Common
Stock offered in this prospectus.
|
|
Termination
of the Offering
|
The
offering will conclude upon the earliest of (i) such time as all of
the Common Stock has been sold pursuant to the registration statement,
(ii) two years or (iii) such time as all of the Common Stock become
eligible for resale without volume limitations pursuant to Rule 144 under
the Securities Act of 1933, as amended (the “Securities Act”), or any
other rule of similar effect.
|
|
Use
of Proceeds
|
We
are not selling any shares of Common Stock in this offering and, as a
result, will not receive any proceeds from this
offering.
|
|
OTCBB
Trading Symbol
|
“BFRE.OB”
|
|
Risk
Factors
|
The
Common Stock offered hereby involves a high degree of risk and should not
be purchased by investors who cannot afford the loss of their entire
investment. See “Risk Factors” beginning on page
4.
|
STATEMENT OF OPERATIONS :
|
For the year ended
December 31,
|
For the Three Months
Ended March 31,
|
Period from
March 28,
2006
(Inception)
to
March,
31
|
|||||||||||||||||
2009
|
2008
|
2010
|
2009
|
2010
|
||||||||||||||||
Revenues
|
$
|
4,318,213
|
$
|
1,075,508
|
$
|
288,062
|
$
|
58,165
|
$
|
5,730,783
|
||||||||||
Total
operating expenses
|
3,527,258
|
15,671,513
|
896,453
|
886,889
|
32,170,285
|
|||||||||||||||
Operating
income (loss)
|
790,955
|
(14,596,005
|
)
|
(608,391
|
)
|
(828,724
|
)
|
(26,439,502
|
)
|
|||||||||||
Net
Income (loss)
|
$
|
1,136,092
|
$
|
(14,370,594
|
)
|
$
|
1,279,754
|
$
|
(626,039
|
)
|
$
|
(27,786,663
|
)
|
|||||||
Basic
and diluted earnings (loss) per common share
|
$
|
0.04
|
$
|
(0.51
|
)
|
0.05
|
$
|
(0.02
|
)
|
|||||||||||
Weighted
average common shares outstanding basic and diluted
|
28,159,629
|
28,064,572
|
28,264,793
|
28,100,881
|
BALANCE SHEET :
|
At March
31,
2010
|
At December
31,
2009
|
||||||
Cash
and cash equivalents
|
$
|
2,010,237
|
$
|
2,844,711
|
||||
Current
assets
|
$
|
2,353,043
|
$
|
3,102,881
|
||||
Total
assets
|
$
|
2,690,593
|
$
|
3,420,876
|
||||
Current
liabilities
|
$
|
445,095
|
$
|
580,941
|
||||
Total
liabilities
|
$
|
831,797
|
$
|
2,855,334
|
||||
Total
stockholders’ equity
|
$
|
1,858,796
|
$
|
565,542
|
·
|
the
availability and adequacy of our cash flow to meet our
requirements,
|
·
|
economic,
competitive, demographic, business and other conditions in our local and
regional markets,
|
·
|
changes
or developments in laws, regulations or taxes in the ethanol or energy
industries,
|
·
|
actions
taken or not taken by third-parties, including our suppliers and
competitors, as well as legislative, regulatory, judicial and other
governmental authorities,
|
·
|
competition
in the ethanol industry,
|
·
|
the
failure to obtain or loss of any license or
permit,
|
·
|
success
of the Arkenol Technology,
|
·
|
changes
in our business and growth strategy (including our plant building strategy
and co-location strategy), capital improvements or development
plans,
|
·
|
the
availability of additional capital to support capital improvements and
development, and
|
·
|
other
factors discussed under the section entitled “Risk Factors” or elsewhere
in this registration statement.
|
Quarter ended
|
Low Price
|
High Price
|
||||||
September
30, 2006
|
$
|
1.35
|
$
|
6.80
|
||||
December
31, 2006
|
$
|
1.47
|
$
|
4.00
|
||||
March
31, 2007
|
$
|
3.99
|
$
|
7.70
|
||||
June
30, 2007
|
$
|
5.40
|
$
|
7.15
|
||||
September
30, 2007
|
$
|
3.30
|
$
|
6.40
|
||||
December
31, 2007
|
$
|
3.15
|
$
|
5.01
|
||||
March
31, 2008
|
$
|
3.00
|
$
|
4.15
|
||||
June
30, 2008
|
$
|
3.05
|
$
|
4.40
|
||||
September
30, 2008
|
$
|
2.05
|
$
|
4.15
|
||||
December
31, 2008
|
$
|
0.55
|
$
|
2.15
|
||||
March
31, 2009
|
$
|
0.51
|
$
|
1.00
|
||||
June
30, 2009
|
$
|
0.55
|
$
|
1.60
|
||||
September
30, 2009
|
$
|
0.80
|
$
|
1.20
|
||||
December
31, 2009
|
$
|
0.85
|
$
|
1.25
|
||||
March
31, 2010
|
$
|
0.34
|
$
|
1.00
|
Plan category
|
Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights and
number of shares of
restricted stock
|
Weighted average
exercise price
of outstanding
options, warrants
and rights (2)
|
Number of securities
remaining available for
future issuance
|
|||||||||
Equity
compensation plans approved by security holders under the Amended and
Restated Plan
|
3,630,571
|
(1)
|
$
|
2.48
|
6,349,429
|
|||||||
Equity
compensation not pursuant to a plan
|
845,203
|
(3)
|
$
|
3.80
|
||||||||
Total
|
4,475,774
|
Period
|
Total
number of
shares
purchased
|
Average
price paid
per share
|
Total number of
shares
purchased as
part of publicly
announced
plans or
programs
|
Maximum
number (or
approximate
dollar value)
of shares that
may yet be
purchased
under the plans
or programs
|
||||||||||||
4/1/08
– 4/30/08
|
9,901
|
$
|
3.48
|
0
|
0
|
|||||||||||
5/1/08
– 5/31/08
|
0
|
0
|
0
|
|||||||||||||
6/1/08
– 6/30/08
|
0
|
0
|
0
|
|||||||||||||
7/1/08
– 7/31/08
|
7,525
|
$
|
3.60
|
0
|
0
|
|||||||||||
8/1/08
– 8/31/08
|
3,000
|
$
|
2.64
|
0
|
0
|
|||||||||||
9/1/08
– 9/30/08
|
11,746
|
$
|
2.73
|
0
|
0
|
|||||||||||
Total
|
32,172
|
$
|
3.16
|
0
|
0
|
(1)
|
The
Company implemented a stock repurchase program effective April 1, 2008
with the intent to repurchase BlueFire shares in accordance with SEC Rule
10b-18. As of May 20, 2010, the Company repurchased a total of 32,172
shares at a cost of approximately $101,581. Under the stock repurchase
program, the Company is not obligated to repurchase any additional shares
of common stock.
|
FEL-1
|
FEL-2
|
FEL-3
|
||
*
Material Balance
|
*
Preliminary Equipment Design
|
*
Purchase Ready Major Equipment Specifications
|
||
*
Energy Balance
|
*
Preliminary Layout
|
*
Definitive Estimate
|
||
*
Project Charter
|
*
Preliminary Schedule
|
*
Project Execution Plan
|
||
*
Preliminary Estimate
|
*
Preliminary 3D Model
|
|||
*
Electrical Equipment List
|
||||
*
Line List
|
||||
|
|
*
Instrument Index
|
·
|
Obtain
additional operating capital from joint venture partnerships, Federal or
State grants or loan guarantees, debt financing or equity financing to
fund our ongoing operations and the development of initial biorefineries
in North America. Although the Company is in discussions with
potential financial and strategic sources of financing for their
planned biorefineries no definitive agreements are in
place.
|
·
|
The
Energy Policy Act of 2005 (“EPAct 2005”) provides for grants and loan
guarantee programs to incentivize the growth of the cellulosic ethanol
market. These programs include a Cellulosic Biomass Ethanol and Municipal
Solid Waste Guarantee Program under which the U.S. Department of Energy
(“DOE”) could provide loan guarantees up to $250 million per qualified
project. BlueFire plans to pursue all available opportunities within
EPAct 2005.
|
·
|
The
2008 Farm Bill, Title IX (Energy Title) provides grants for demonstration
scale Biorefineries, and loan guarantees for commercial scale
Biorefineries that produce advanced Biofuels (i.e., any fuel that is not
corn-based). Section 9003 includes a Loan Guarantee Program under
which the U.S.D.A. could provide loan guarantees up to $250 million
to fund development, construction, and retrofitting of commercial-scale
refineries. Section 9003 also includes a grant program to assist in
paying the costs of the development and construction of
demonstration-scale biorefineries to demonstrate the commercial
viability which can potentially fund up to 50% of project costs. BlueFire
plans to pursue all available opportunities within the Farm
Bill.
|
·
|
Utilize
proceeds from reimbursements under the Department of Energy
contract.
|
|
|
·
|
As
available and as applicable to our business plans, applications for public
funding will be submitted to leverage private capital raised by
us.
|
·
|
A
biorefinery that will process approximately 190 tons of green waste
material annually to produce roughly 3.9 million gallons of ethanol
annually. On November 9, 2007, we purchased the facility site which
is located in Lancaster, California for the BlueFire Ethanol Lancaster
project (“Lancaster Biorefinery”). Permit applications were filed on
June 24, 2007 to allow for construction of the Lancaster Biorefinery. On
or around July 23, 2008, the Los Angeles Planning Commission approved
the use permit for construction of the plant. However, a subsequent appeal
of the county decision, which BlueFire overcame, combined with the
waiting period under the California Environmental Quality Act, pushed the
effective date of the now nonappealable permit approval to December
12, 2008. On February 12, 2009 we were issued our Authority to Construct
permit by the Antelope Valley Air Quality Management District. We
have completed the detailed engineering and design on the project and are
seeking funding in order to build the facility. We estimate the total
cost including contingencies to be in the range of approximately $100
million to $125 million for this first plant. This amount
is significantly greater than our previous estimations communicated
to the public. This is due in part to a combination of significant
increases in materials costs on the world market from the last
estimate until now, and the complexity of our first commercial deployment.
At the end of 2008 and early 2009, prices for materials have
declined, and we expect, that items like structural and specialty steel
may continue to decline in price in 2010 with other materials of
construction following suit. The cost approximations above do not reflect
any decrease in raw materials or any savings in construction cost. We
are currently in discussions with potential sources of financing for this
facility but no definitive agreements are in
place.
|
·
|
A
biorefinery proposed for development and construction in conjunction with
the U.S. DOE , previously located in Southern California, and now
located in Fulton Mississippi, which will process approximately 700
metric dry tons of woody biomass, mill residue, and other cellulosic waste
annually to produce approximately 19 million gallons of ethanol
annually ("DOE Biorefinery"). We have received an Award from the DOE of up
to $40 million for the Facility. On or around October 4, 2007, we
finalized Award 1 for a total approved budget of just under $10,000,000
with the DOE. This award is a 60%/40% cost share, whereby 40% of
approve costs may be reimbursed by the DOE pursuant to the total $40
million award announced in February 2007. December 4, 2009, the DOE
announced that the award for this project has been increased to a maximum
of $88 million under the American Recovery and Reinvestment Act of
2009 (“ARRA”) and the Energy Policy Act of 2005. As of March 31, 2010,
BlueFire has been reimbursed approximately $5,700,000 from the DOE
under this award. On or around February 23, 2010, we announced that we
submitted an application for a $250 million dollar loan guarantee for
this planned biorefinery. The application, filed under the DOE Program
DE-FOA-0000140, which provides federal loan guarantees for projects
that employ innovative energy efficiency, renewable energy, and advanced
transmission and distribution technologies, was submitted on February
15th, 2010 and serves as a phase one application in a two phase approval
process. If approved, the loan guarantee will secure the financing
for the remainder of the costs to construct the facility. We are in
the detailed engineering phase for this project and expect to have all
necessary permits for this facility by this summer, putting the
Company on a path to commence construction by the end of 2010. The
remainder of financing for this project is yet to be
determined.
|
·
|
Several
other opportunities are being evaluated by us in North America but no
definitive plans have been made. Discussions with various landfill
owners are underway to duplicate our proposed facility throughout North
America although no definitive agreements have been
reached.
|
For the
Three
Months
ended
March
31,
|
For the
Three
Months
ended
March
31,
|
For the
Twelve
Months
ended
December
31,
|
For the
Twelve
Months
ended
December
31,
|
|||||||||||||
2010
|
2009
|
2009
|
2008
|
|||||||||||||
Revenues:
|
||||||||||||||||
Consulting
Fees
|
$
|
13,071
|
$
|
14,570
|
$
|
19,570
|
$
|
-
|
||||||||
Department
of Energy Grant
|
274,991
|
43,595
|
4,298,643
|
1,075,508
|
||||||||||||
Total
revenues
|
288,062
|
58,165
|
4,318,213
|
1,075,508
|
||||||||||||
Operating
expenses:
|
||||||||||||||||
Project
development, including stock based compensation of $0, $0, $0,
and $2,078,356, respectively
|
482,739
|
309,905
|
1,307,185
|
10,535,278
|
||||||||||||
General
and administrative, including stock based compensation
of $13,500, $0, $232,292, and $1,690,921,
respectively
|
413,714
|
576,984
|
2,220,073
|
4,136,235
|
||||||||||||
Related
party license fee
|
-
|
-
|
-
|
1,000,000
|
||||||||||||
Total
operating expenses
|
896,453
|
886,889
|
3,527,258
|
15,671,513
|
||||||||||||
Operating
loss
|
(608,391
|
)
|
(828,724
|
)
|
790,955
|
(14,596,005
|
)
|
|||||||||
Other
income and (expense):
|
||||||||||||||||
Other
income
|
1,888,145
|
202,685
|
8,059
|
225,411
|
||||||||||||
Financing
related charge
|
-
|
-
|
-
|
-
|
||||||||||||
Amortization
of debt discount
|
-
|
-
|
-
|
-
|
||||||||||||
Interest
expense
|
-
|
-
|
-
|
-
|
||||||||||||
Related
party interest expense
|
-
|
-
|
(518
|
)
|
-
|
|||||||||||
Loss
on extinguishment of debt
|
-
|
-
|
||||||||||||||
Net
Income (loss)
|
$
|
1,279,754
|
$
|
(626,039
|
)
|
$
|
1,136,092
|
$
|
(14,370,594
|
)
|
||||||
Basic
and diluted loss per common share
|
$
|
0.05
|
$
|
(0.02
|
)
|
$
|
0.04
|
$
|
(0.51
|
)
|
||||||
Weighted
average common shares outstanding, basic and diluted
|
28,264,793
|
28,100,881
|
28,159,629
|
28,064,572
|
FEL-1
|
FEL-2
|
FEL-3
|
||
*
Material Balance
|
*
Preliminary Equipment Design
|
*
Purchase Ready Major Equipment Specifications
|
||
*
Energy Balance
|
*
Preliminary Layout
|
*
Definitive Estimate
|
||
*
Project Charter
|
*
Preliminary Schedule
|
*
Project Execution Plan
|
||
*
Preliminary Estimate
|
*
Preliminary 3D Model
|
|||
*
Electrical Equipment List
|
||||
*
Line List
|
||||
|
|
*
Instrument Index
|
·
|
Create
new jobs and save existing ones
|
·
|
Spur
economic activity and invest in long-term
growth
|
·
|
Foster
unprecedented levels of accountability and transparency in government
spending
|
·
|
Providing
$288 billion in tax cuts and benefits for millions of working families and
businesses
|
·
|
Increasing
federal funds for education and health care as well as entitlement
programs (such as extending unemployment benefits) by $224
billion
|
·
|
Making
$275 billion available for federal contracts, grants and
loans
|
·
|
Requiring
recipients of Recovery funds to report quarterly on how they are using the
money. All the data is posted on Recovery.gov so the
public can track the Recovery
funds.
|
NAME
|
|
AGE
|
|
POSITION
|
|
OFFICER AND/OR DIRECTOR
SINCE
|
Arnold
Klann
|
58
|
President,
CEO and Director
|
June
2006
|
|||
Necitas
Sumait
|
50
|
Secretary,
SVP and Director
|
June
2006
|
|||
Christopher
Scott
|
35
|
Chief
Financial Officer
|
March
2007
|
|||
John
Cuzens
|
58
|
SVP,
Chief Technology Officer
|
June
2006
|
|||
Chris
Nichols
|
44
|
Director
|
June
2006
|
|||
Victor
Doolan
|
69
|
Director
|
July
2007
|
NAME
AND
PRINCIPAL
POSITION
|
YEAR
|
SALARY
($)
|
BONUS
($)
|
STOCK
AWARDS
($)
|
OPTIONS
AWARDS
($) (2)
|
NON-
EQUITY
INCENTIVE
PLAN
COMPENSATION
($)
|
CHANGE
IN PENSION
VALUE AND
NONQUALIFIED
DEFERRED
COMPENSATION
EARNINGS
($)
|
ALL OTHER
COMPENSATION
($)
|
TOTAL
($)
|
|||||||||||||||
Arnold
Klann
Director
and President
|
2009
|
226,000
|
-
|
5,250
|
(1)
|
-
|
231,250
|
|||||||||||||||||
2008
|
226,000
|
24,600
|
(1)
|
250,600
|
||||||||||||||||||||
Necitas
Sumait
Director,
Secretary and VP
|
2009
|
180,000
|
-
|
5,250
|
(1)
|
185,250
|
||||||||||||||||||
2008
|
176,500
|
24,600
|
(1)
|
201,100
|
||||||||||||||||||||
John
Cuzens
Treasurer
and VP
|
2009
|
180,000
|
-
|
-
|
180,000
|
|||||||||||||||||||
2008
|
175,250
|
175,250
|
||||||||||||||||||||||
Christopher
Scott
Chief
Financial Officer
|
2009
|
155,833
|
-
|
-
|
155,833
|
|||||||||||||||||||
2008
|
163,750
|
-
|
163,750
|
|||||||||||||||||||||
Chris
Nichols
Director
|
2009
|
5,000
|
5,250
|
(1)
|
10,250
|
|||||||||||||||||||
2008
|
5,000
|
24,600
|
(1)
|
29,600
|
||||||||||||||||||||
Joseph
Emas
Director
|
2009
|
5,000
|
5,250
|
(1)
|
10,250
|
|||||||||||||||||||
2008
|
5,000
|
24,600
|
(1)
|
29,600
|
||||||||||||||||||||
Victor
Doolan
Director
|
2009
|
5,000
|
5,250
|
(1)
|
10,250
|
|||||||||||||||||||
2008
|
5,000
|
24,600
|
(1)
|
29,600
|
(1)
|
Reflects
value of shares of restricted common stock received as compensation as
Director. See notes to consolidated financial statements for
valuation.
|
(2)
|
Valued
based on the Black-Scholes valuation model at the date of grant, see note
to the consolidated financial
statements.
|
ESTIMATED FUTURE PAYOUTS
UNDER NON-EQUITY
INCENTIVE PLAN AWARDS
|
ESTIMATED FUTURE PAYOUTS
UNDER EQUITY INCENTIVE
PLAN AWARDS
|
||||||||||||||||||||||||||
Name
|
Grant
Date
|
Approval
Date
|
Number
of Non-
Equity
Incentive
Plan
Units
Granted
(#)
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
All
Other
Stock
Awards:
Number
of
Shares
of Stock
or Units
(#)
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
|
Exercise
or Base
Price of
Option
Awards
($ / SH)
|
Closing
Price on
Grant
Date
($ /SH)
|
||||||||||||||
Arnold
Klann
|
None
|
||||||||||||||||||||||||||
Necitas
Sumait
|
None
|
||||||||||||||||||||||||||
Christopher
Scott
|
None
|
||||||||||||||||||||||||||
John
Cuzens
|
None
|
||||||||||||||||||||||||||
Chris
Nichols
|
None
|
||||||||||||||||||||||||||
Joseph
Emas
|
None
|
||||||||||||||||||||||||||
Victor
Doolan
|
None
|
OPTION
AWARDS
|
STOCK
AWARDS
|
||||||||||||||||||||||
NAME
|
NUMBER
OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS
(#)
EXERCISABLE
|
NUMBER
OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS
(#)
UNEXERCISABLE
|
EQUITY
INCENTIVE
PLAN
AWARDS:
NUMBER
OF
SECURITIES
UNDERLYING
UNEXERCISED
UNEARNED
OPTIONS
(#)
|
OPTION
EXERCISE
PRICE
($)
|
OPTION
EXPIRATION
DATE
|
NUMBER
OF
SHARES
OR
UNITS
OF
STOCK
THAT
HAVE
NOT
VESTED
(#)
|
MARKET
VALUE
OF
SHARES
OR
UNITS
OF
STOCK
THAT
HAVE
NOT
VESTED
($)
|
EQUITY
INCENTIVE
PLAN
AWARDS:
NUMBER
OF
UNEARNED
SHARES,
UNITS
OR
OTHER
RIGHTS
THAT
HAVE
NOT
VESTED
(#)
|
EQUITY
INCENTIVE
PLAN
AWARDS:
MARKET
OR
PAYOUT
VALUE
OF
UNEARNED
SHARES,
UNITS
OR
OTHER
RIGHTS
THAT
HAVE
NOT
VESTED
($)
|
||||||||||||||
Arnold
Klann
|
1,000,000
|
-
|
2.00
|
12/14/11
|
|||||||||||||||||||
28,409
|
-
|
3.52
|
12/20/12
|
||||||||||||||||||||
125,000
|
(1)
|
125,000
|
(1)
|
3.20
|
12/20/12
|
||||||||||||||||||
Necitas
Sumait
|
450,000
|
-
|
2.00
|
12/14/11
|
|||||||||||||||||||
118,750
|
(1)
|
87,500
|
(1)
|
3.20
|
12/20/12
|
||||||||||||||||||
John
Cuzens
|
450,000
|
-
|
2.00
|
12/14/11
|
|||||||||||||||||||
118,750
|
(1)
|
87,500
|
(1)
|
3.20
|
12/20/12
|
||||||||||||||||||
Christopher
Scott
|
118,750
|
(1)
|
87,500
|
(1)
|
3.20
|
12/20/12
|
|||||||||||||||||
Chris
Nichols
|
|||||||||||||||||||||||
Joseph
Emas
|
|||||||||||||||||||||||
Victor
Doolan
|
|
OPTION AWARDS
|
STOCK AWARDS
|
||||||||||||||
|
Number of Shares
Acquired on Exercise
(#)
|
Value Realized
on Exercise
($)
|
Number of Shares
Acquired on Vesting
(#)
|
Value Realized
on Vesting
($)
|
||||||||||||
Arnold
Klann
|
||||||||||||||||
Necitas
Sumait
|
||||||||||||||||
Christopher
Scott
|
||||||||||||||||
John
Cuzens
|
||||||||||||||||
Chris
Nichols
|
||||||||||||||||
Joseph
Emas
|
||||||||||||||||
Victor
Doolan
|
NAME
|
PLAN NAME
|
NUMBER OF YEARS
CREDITED SERVICE
(#)
|
PRESENT VALUE OF
ACCUMULATED BENEFIT
($)
|
PAYMENTS DURING
LAST FISCAL YEAR
($)
|
||||||||||||
Arnold
Klann
|
||||||||||||||||
Necitas
Sumait
|
||||||||||||||||
Christopher
Scott
|
||||||||||||||||
John
Cuzens
|
||||||||||||||||
Chris
Nichols
|
||||||||||||||||
Joseph
Emas
|
||||||||||||||||
Victor
Doolan
|
NAME
|
EXECUTIVE
CONTRIBUTION IN
LAST FISCAL
YEAR
($)
|
REGISTRANT
CONTRIBUTIONS IN
LAST FISCAL YEARS
($)
|
AGGREGATE
EARNINGS IN
LAST
FISCAL YEAR
($)
|
AGGREGATE
WITHDRAWALS /
DISTRIBUTIONS
($)
|
AGGREGATE
BALANCE AT
LAST
FISCAL
YEAR-END
($)
|
|||||||||||||||
Arnold
Klann
|
||||||||||||||||||||
Necitas
Sumait
|
||||||||||||||||||||
Christopher
Scott
|
||||||||||||||||||||
John
Cuzens
|
||||||||||||||||||||
Chris
Nichols
|
||||||||||||||||||||
Joseph
Emas
|
||||||||||||||||||||
Victor
Doolan
|
NAME
|
Year
|
FEES
EARNED
OR PAID
IN CASH
($)
|
STOCK
AWARDS
($) (1)
|
OPTION
AWARDS
($)
|
NON-EQUITY
INCENTIVE
PLAN
COMPENSATION
($)
|
CHANGE IN
PENSION
VALUE AND
NONQUALIFIED
DEFERRED
COMPENSATION
EARNINGS
($)
|
ALL OTHER
COMPENSATION
($)
|
TOTAL
($)
|
|||||||||
Necitas
Sumait
|
2009
|
5,250 | 5,250 | ||||||||||||||
Chris
Nichols
|
2009
|
5,000 | 5,250 | 10,250 | |||||||||||||
Joseph
Emas
|
2009
|
5,000 | 5,250 | 10,250 | |||||||||||||
Victor
Doolan
|
2009
|
5,000 | 5,250 | 10,250 | |||||||||||||
Arnold
Klann
|
2009
|
5,250 | 5,250 |
(1)
|
Reflects value of shares of
restricted common stock received as compensation as Director. See notes to
consolidated financial statements for
valuation.
|
NAME
|
YEAR
|
PERQUISITES
AND
OTHER
PERSONAL
BENEFITS
($)
|
TAX
REIMBURSEMENTS
($)
|
INSURANCE
PREMIUMS
($)
|
COMPANY
CONTRIBUTIONS
TO
RETIREMENT
AND 401(K)
PLANS
($)
|
SEVERANCE
PAYMENTS/
ACCRUALS
($)
|
CHANGE IN
CONTROL
PAYMENTS
/
ACCRUALS
($)
|
TOTAL
($)
|
||||||||||||||||||||||||
Arnold
Klann
|
||||||||||||||||||||||||||||||||
Necitas
Sumait
|
||||||||||||||||||||||||||||||||
Christopher
Scott
|
||||||||||||||||||||||||||||||||
John
Cuzens
|
||||||||||||||||||||||||||||||||
Chris
Nichols
|
||||||||||||||||||||||||||||||||
Joseph
Emas
|
||||||||||||||||||||||||||||||||
Victor
Doolan
|
NAME
|
YEAR
|
PERSONAL USE OF
COMPANY
CAR/PARKING
|
FINANCIAL
PLANNING
LEGAL
FEES
|
CLUB DUES
|
EXECUTIVE
RELOCATION
|
TOTAL PERQUISITES
AND OTHER
PERSONAL
BENEFITS
|
||||||||||||||||||
Arnold
Klann
|
||||||||||||||||||||||||
Necitas
Sumait
|
||||||||||||||||||||||||
Christopher
Scott
|
||||||||||||||||||||||||
John
Cuzens
|
||||||||||||||||||||||||
Chris
Nichols
|
||||||||||||||||||||||||
Joseph
Emas
|
||||||||||||||||||||||||
Victor
Doolan
|
NAME
|
BENEFIT
|
BEFORE CHANGE
IN CONTROL
TERMINATION
W/O
CAUSE OR FOR
GOOD REASON
|
AFTER CHANGE
IN
CONTROL
TERMINATION
W/O
CAUSE OR
GOOD
REASON
|
VOLUNTARY
TERMINATION
|
DEATH
|
DISABILITY
|
CHANGE
IN
CONTROL
|
||||||||||||||||||||
Arnold
Klann
|
Full
comp. first 2 months, 50%
of
comp. next 4 months
|
||||||||||||||||||||||||||
Necitas
Sumait
|
Full
comp. first 2 months, 50%
of
comp. next 4 months
|
||||||||||||||||||||||||||
Christopher
Scott (1)
|
Full
comp. first 2 months, 50%
of
comp. next 4 months
|
||||||||||||||||||||||||||
John
Cuzens
|
Full
comp. first 2 months, 50%
of
comp. next 4 months
|
||||||||||||||||||||||||||
Chris
Nichols
|
N/A
|
||||||||||||||||||||||||||
Joseph
Emas
|
N/A
|
||||||||||||||||||||||||||
Victor
Doolan
|
N/A
|
Title of
Class
|
Name of Beneficial Owner (1)
|
Number of
shares
|
Percent of
Class (2)
|
|||||||
Common
|
Arnold
Klann, Chairman and Chief Executive Officer
|
14,073,909 | (4) | 47.60 | % | |||||
Common
|
Necitas
Sumait, Senior Vice President and Director
|
1,786,750 | (5) | 6.16 | % | |||||
Common
|
John
Cuzens, Chief Technology Officer and Senior Vice President
|
1,752,250 | (6) | 6.05 | % | |||||
Common
|
Chris
Scott, Chief Financial Officer
|
128,750 | (7) | * | ||||||
Common
|
Chris
Nichols, Director
|
10,000 | * | |||||||
Common
|
Victor
Doolan, Director
|
17,000 | * | |||||||
Common
|
Quercus
Trust (3)
|
8,611,210 | (8) | 25.35 | % | |||||
|
||||||||||
|
All officers and directors as a
group (6 persons)
|
17,768,659 | 57.63 | % | ||||||
|
All officers, directors and 5%
holders as a group (7 persons)
|
26,379,870 | 72.49 | % |
(1)
|
Beneficial ownership is
determined in accordance with Rule 13d-3(a) of the Exchange Act and
generally includes voting or investment power with respect to
securities.
|
(2)
|
Figures may not add up due to
rounding of percentages.
|
(3)
|
David Gelbaum and Monica Chavez
Gelbaum are co-trustees of The Quercus Trust. Each of David
Gelbaum and Monica Chavez Gelbaum, acting alone, has the power to exercise
voting and investment control over the shares of common stock owned by the
Trust.
|
(4)
|
Includes options to purchase
1,153,409 shares of common stock vested at May 20, 2010.
|
(5)
|
Includes options to purchase
568,750 shares of common stock vested at May 20, 2010.
|
(6)
|
Includes options to purchase
568,750 shares of common stock vested at May 20, 2010.
|
(7)
|
Includes options and warrants to
purchase 128,750 shares of common stock vested at May 20, 2010.
|
(8)
|
Includes a warrant to purchase
5,555,555 shares of common
stock.
|
DATE ISSUED:
|
OPTIONEE NAME
|
NUMBER
OF OPTIONS
|
TYPE
|
PRICE
|
EXPIRATON
DATE
|
||||||||
December
20, 2007
|
28,409 |
ISO
|
(1)
|
$ | 3.52 |
December
20, 2012
|
|||||||
December
20, 2007
|
Arnold
Klann, Officer and Director
|
250,000 |
NSO
|
(2)
|
$ | 3.20 |
December
20, 2012
|
||||||
December
20, 2007
|
31,250 |
ISO
|
(1)
|
$ | 3.20 |
December
20, 2012
|
|||||||
December
20, 2007
|
Necitas
Sumait, Officer and Director
|
175,000 |
NSO
|
(2)
|
$ | 3.20 |
December
20, 2012
|
||||||
December
20, 2007
|
|
31,250 |
ISO
|
(1)
|
$ | 3.20 |
December
20, 2012
|
||||||
December
20, 2007
|
John
Cuzens, Officer
|
175,000 |
NSO
|
(2)
|
$ | 3.20 |
December
20, 2012
|
||||||
December
20, 2007
|
31,250 |
ISO
|
(1)
|
$ | 3.20 |
December
20, 2012
|
|||||||
December
20, 2007
|
Chris
Scott, Officer
|
175,000 |
NSO
|
(2)
|
$ | 3.20 |
December
20, 2012
|
||||||
December
20, 2007
|
31,250 |
ISO
|
(1)
|
$ | 3.20 |
December
20, 2012
|
|||||||
December
20, 2007
|
Bill
Davis, Employee
|
175,000 |
NSO
|
(2)
|
$ | 3.20 |
December
20, 2012
|
||||||
December
20, 2007
|
31,250 |
ISO
|
(1)
|
$ | 3.20 |
December
20, 2012
|
|||||||
December
20, 2007
|
Rigel
Stone, Employee
|
150,000 |
NSO
|
(2)
|
$ | 3.20 |
December
20, 2012
|
||||||
December
20, 2007
|
Barbi
Rios, Employee
|
5,000 |
ISO
|
(1)
|
$ | 3.20 |
December
20, 2012
|
||||||
December
20, 2007
|
Scott
Olson, Outside Consultant
|
10,000 |
NSO
|
(3)
|
$ | 3.20 |
December
20, 2012
|
||||||
December
20, 2007
|
Aleshia
Knickerbocker, Outside Consultant
|
2,500 |
NSO
|
(3)
|
$ | 3.20 |
December
20, 2012
|
||||||
December
20, 2007
|
Bill
Orr, Outside Consultant
|
10,000 |
NSO
|
(3)
|
$ | 3.20 |
December
20, 2012
|
||||||
December
20, 2007
|
Elsa
Ebro, Outside Consultant
|
5,000 |
NSO
|
(3)
|
$ | 3.20 |
December
20, 2012
|
||||||
Totals
|
1,317,159 |
(1)
|
These Incentive Stock Options
(“ISO”) vested immediately
|
(2)
|
These Non-Qualified Stock Options
(“NSO”) vest as follows:
|
|
a.
|
50%
vested immediately
|
b.
|
25%
vest on BlueFire closing remainder of funding for Lancaster
Project
|
|
c.
|
25%
vest at start of construction of Lancaster Project
|
(3)
|
These NSO’s vested monthly over
12 months (1/12th monthly
vesting)
|
No. of Shares
owned
prior to the
|
No. of Shares
included in
|
Shares Owned After
The
Offering
|
||||||||||||||
Selling Stockholder
|
Offering (1)
|
Prospectus
|
Number
|
Percentage
|
||||||||||||
RCR
Trust I (5)
|
14,073,909 | 2,000,000 | 12,073,909 | 42.50 | % | |||||||||||
Necitas Sumait (6) | 1,786,750 | 250,000 | 1,536,750 | 5.41 | % | |||||||||||
John
Cuzens (7)
|
1,752,250 | 250,000 | 1,502,250 | 5.29 | % | |||||||||||
|
||||||||||||||||
Total
|
2,500,000 |
|
●
|
ordinary brokerage transactions
and transactions in which the broker-dealer solicits
purchasers;
|
|
●
|
block trades in which the
broker-dealer will attempt to sell the shares as agent, but may position
and resell a portion of the block as principal to facilitate the
transaction;
|
|
●
|
purchases by a broker-dealer as
principal and resale by the broker-dealer for its
account;
|
|
●
|
an exchange distribution in
accordance with the rules of the applicable
exchange;
|
|
●
|
privately negotiated
transactions;
|
|
●
|
short sales after this
registration statement becomes
effective;
|
|
●
|
broker-dealers may agree with the
Selling Stockholders to sell a specified number of such shares at a
stipulated price per share;
|
|
●
|
through the writing of options on
the shares;
|
|
●
|
a combination of any such methods
of sale; and
|
|
●
|
any other method permitted
pursuant to applicable law.
|
Consolidated
Balance Sheets
|
F-1
|
Consolidated
Statements of Operations
|
F-2
|
Consolidated
Statements of Cash Flows
|
F-3
|
Notes
to Consolidated Financial Statements
|
F-4
|
March 31,
2010
|
December 31,
2009
|
|||||||
(unaudited)
|
(audited)
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 2,010,237 | $ | 2,844,711 | ||||
Accounts
receivable
|
13,071 | - | ||||||
Department
of Energy grant receivable
|
274,991 | 207,380 | ||||||
Prepaid
expenses
|
54,744 | 50,790 | ||||||
Total
current assets
|
2,353,043 | 3,102,881 | ||||||
Debt
issuance costs
|
175,000 | 150,000 | ||||||
Property,
plant and equipment, net of accumulated depreciation of $50,359 and
$44,130 respectively
|
162,550 | 167,995 | ||||||
Total
assets
|
$ | 2,690,593 | $ | 3,420,876 | ||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 270,208 | $ | 335,547 | ||||
Accrued
liabilities
|
174,887 | 245,394 | ||||||
Total
current liabilities
|
445,095 | 580,941 | ||||||
Long
term stock warrant liability
|
386,702 | 2,274,393 | ||||||
Total
liabilities
|
831,797 | 2,855,334 | ||||||
Stockholders’
equity:
|
||||||||
Preferred
stock, no par value, 1,000,000 shares authorized; none issued and
outstanding
|
- | - | ||||||
Common
stock, $0.001 par value; 100,000,000 shares authorized; 28,334,465
and 28,296,965 shares issued; and 28,302,293 and 28,264,793
outstanding, as of March 31, 2010 and December 31, 2009,
respectively
|
28,334 | 28,296 | ||||||
Additional
paid-in capital
|
14,047,254 | 14,033,792 | ||||||
Treasury
stock at cost, 32,172 shares at March 31, 2010
|
(101,581 | ) | (101,581 | ) | ||||
Deficit
accumulated during the development stage
|
(12,115,211 | ) | (13,394,965 | ) | ||||
Total
stockholders’ equity
|
1,858,796 | 565,542 | ||||||
Total
liabilities and stockholders’ equity
|
$ | 2,690,593 | $ | 3,420,876 |
|
For the
Three
Months
Ended
March 31,
|
|
|
For the
Three
Months
Ended
March 31,
|
|
|
From
March 28,
2006
(inception)
Through
March 31,
|
|
||||
|
2010
|
|
|
2009
|
|
|
2010
|
|
||||
Revenues:
|
||||||||||||
Consulting
fees
|
$
|
13,071
|
$
|
14,570
|
$
|
81,641
|
||||||
Department
of Energy grant
|
274,991
|
43,595
|
5,649,142
|
|||||||||
Total
revenues
|
288,062
|
58,165
|
5,730,783
|
|||||||||
Operating
expenses:
|
||||||||||||
Project
development including stock based compensation of $-0-, $-0-, and
$4,468,490, respectively
|
482,739
|
309,905
|
17,721,941
|
|||||||||
General
and administrative including stock based compensation of $13,500, $-0- and
$6,097,332
|
413,714
|
576,984
|
13,448,344
|
|||||||||
Related
party license fee
|
-
|
-
|
1,000,000
|
|||||||||
Total
operating expenses
|
896,453
|
886,889
|
32,170,285
|
|||||||||
Operating
loss
|
(608,391
|
)
|
(828,724
|
)
|
(26,439,502
|
)
|
||||||
Other
income and (expense):
|
||||||||||||
Gain
from change in fair value of warrant liability
|
1,887,691
|
196,983
|
2,455,152
|
|||||||||
Other
income
|
454
|
5,702
|
255,627
|
|||||||||
Financing
related charge
|
-
|
-
|
(211,660
|
)
|
||||||||
Amortization
of debt discount
|
-
|
-
|
(676,982
|
)
|
||||||||
Interest
expense
|
-
|
-
|
(56,097
|
)
|
||||||||
Related
party interest expense
|
-
|
-
|
(64,966
|
)
|
||||||||
Loss
on extinguishment of debt
|
-
|
-
|
(2,818,370
|
)
|
||||||||
Loss
on the retirement of warrants
|
-
|
-
|
(146,718
|
)
|
||||||||
Total
Other income or (expense)
|
1,888,145
|
202,685
|
(1,264,014
|
)
|
||||||||
Income
(loss) before income taxes
|
1,279,754
|
(626,039
|
)
|
(27,703,516
|
)
|
|||||||
Provision
for income taxes
|
-
|
-
|
83,147
|
|||||||||
Net
Income (loss)
|
$
|
1,279,754
|
$
|
(626,039
|
)
|
$
|
(27,786,663
|
)
|
||||
Basic
and diluted loss per common share
|
0.05
|
(0.02
|
)
|
|||||||||
Weighted
average common shares outstanding, basic and diluted
|
28,264,793
|
28,100,881
|
|
For the Three
Months Ended
March 31,
|
For the Three
Months Ended
March 31,
|
From March 28,
2006 (inception)
Through March 31,
|
|||||||||
2010
|
2009
|
2010
|
||||||||||
Cash
flows from operating activities:
|
||||||||||||
Net
income (loss)
|
$
|
1,279,754
|
$
|
(626,039
|
)
|
$
|
(27,786,663
|
)
|
||||
Adjustments
to reconcile net income (loss) to net cash used in operating
activities:
|
||||||||||||
Founders’
shares
|
-
|
-
|
17,000
|
|||||||||
Costs
associated with purchase of Sucre Agricultural Corp
|
-
|
-
|
(3,550
|
)
|
||||||||
Interest
expense on beneficial conversion feature of convertible
notes
|
-
|
-
|
676,983
|
|||||||||
Loss
on extinguishment of convertible debt
|
-
|
-
|
2,718,370
|
|||||||||
Loss
on retirement of warrants
|
-
|
146,718
|
||||||||||
Gain
from change in the fair value of warrant liability
|
(1,887,691
|
)
|
(196,983
|
)
|
(2,455,152
|
)
|
||||||
Common
stock issued for interest on Convertible notes
|
-
|
-
|
55,585
|
|||||||||
Discount
on sale of stock associated with private placement
|
-
|
-
|
211,660
|
|||||||||
Share-based
compensation
|
13,500
|
-
|
11,351,629
|
|||||||||
Depreciation
|
6,229
|
5,789
|
50,363
|
|||||||||
Changes
in operating assets and liabilities:
|
-
|
|||||||||||
Accounts
receivable
|
(13,071
|
)
|
(14,570
|
)
|
(13,071
|
)
|
||||||
Department
of Energy grant receivable
|
(67,611
|
)
|
648,419
|
(274,991
|
)
|
|||||||
Prepaid
fees to related party
|
-
|
-
|
-
|
|||||||||
Prepaid
expenses and other current assets
|
(3,954
|
)
|
18,562
|
(54,746
|
)
|
|||||||
Accounts
payable
|
(65,339
|
)
|
(1,257,608
|
)
|
270,206
|
|||||||
Accrued
liabilities
|
(70,507
|
)
|
(925
|
)
|
174,889
|
|||||||
Net
cash used in operating activities
|
(808,690
|
)
|
(1,423,355
|
)
|
(14,914,770
|
)
|
||||||
Cash
flows from investing activities:
|
||||||||||||
Acquisition
of property and equipment
|
(784
|
)
|
-
|
(212,912
|
)
|
|||||||
Cash
flows from financing activities:
|
||||||||||||
Repurchases
of common stock held in treasury
|
-
|
-
|
(101,581
|
)
|
||||||||
Cash
received in acquisition of Sucre Agricultural Corp.
|
-
|
-
|
690,000
|
|||||||||
Proceeds
from sale of stock through private placement
|
-
|
-
|
544,500
|
|||||||||
Proceeds
from exercise of stock options
|
-
|
-
|
40,000
|
|||||||||
Proceeds
from issuance of common stock
|
-
|
-
|
14,360,000
|
|||||||||
Proceeds
from Convertible notes payable
|
-
|
-
|
2,500,000
|
|||||||||
Repayment
of notes payable
|
-
|
-
|
(500,000
|
)
|
||||||||
Proceeds
from related party notes payable
|
-
|
-
|
116,000
|
|||||||||
Repayment
of related party notes payable
|
-
|
-
|
(116,000
|
)
|
||||||||
Debt
issuance costs
|
(25,000
|
)
|
-
|
(175,000
|
)
|
|||||||
Retirement
of Aurarian warrants
|
-
|
-
|
(220,000
|
)
|
||||||||
Net
cash provided by financing activities
|
(25,000
|
)
|
-
|
17,137,919
|
||||||||
Net
decrease in cash and cash equivalents
|
(834,474
|
)
|
(1,423,355
|
)
|
2,010,237
|
|||||||
Cash
and cash equivalents beginning of period
|
2,844,711
|
2,999,599
|
-
|
|||||||||
Cash
and cash equivalents end of period
|
$
|
2,010,237
|
$
|
1,576,244
|
$
|
2,010,237
|
||||||
Supplemental
disclosures of cash flow information
|
||||||||||||
Cash
paid during the period for:
|
||||||||||||
Interest
|
$
|
518
|
$
|
13,700
|
$
|
57,411
|
||||||
Income
taxes
|
$
|
-
|
$
|
-
|
$
|
18,096
|
||||||
Supplemental
schedule of non-cash investing and financing activities:
|
||||||||||||
Conversion
of senior secured convertible notes payable
|
$
|
-
|
$
|
-
|
$
|
2,000,000
|
||||||
Interest
converted to common stock
|
$
|
-
|
$
|
-
|
$
|
55,569
|
||||||
Fair
Value of warrants issued to placement agents
|
$
|
-
|
$
|
-
|
$
|
725,591
|
|
March 31,
|
December 31,
|
||||||
2010
|
2009
|
|||||||
Annual
dividend yield
|
-
|
-
|
||||||
Expected
life (years) of August 2007 issuance
|
0.39
|
0.64
|
||||||
Expected
life (years) of December 2007 issuance
|
2.75
|
3.0
|
||||||
Risk-free
interest rate
|
1.82
|
%
|
2.69
|
%
|
||||
Expected
volatility of August 2007 issuance
|
117
|
%
|
101
|
%
|
||||
Expected
volatility of December 2007 issuance
|
98
|
%
|
95
|
%
|
|
Additional Paid-
in Capital
|
Deficit
Accumulated
During the
Development
Stage
|
||||||
Balances
at December 31, 2009
|
$
|
14,033,792
|
$
|
(13,394,965
|
)
|
|||
Stock
issued for services
|
13,462
|
-
|
||||||
Net
Loss
|
-
|
1,279,754
|
||||||
Balances
at March 31, 2010
|
$
|
14,047,254
|
$
|
(12,115,211
|
)
|
Report
of Independent Registered Public Accounting Firms
|
F-11
and F-12
|
|
Consolidated
Balance Sheets as of December 31, 2009 and December 31, 2008
|
F-13
|
|
Consolidated
Statements of Operations for the years ended December 31, 2009, December
31, 2008 and for the period from March 28, 2006 (Inception) to December
31, 2009
|
F-14
|
|
Consolidated
Statements of Stockholders’ Equity from March 28, 2006 (inception) to
December 31, 2009
|
F-15
-F-18
|
|
Consolidated
Statements of Cash Flows for the years ended December 31, 2009
and December 31, 2008, and for the period from March 28, 2006
(Inception) to December 31, 2009
|
F-19
- F-20
|
|
Notes
to Consolidated Financial Statements
|
|
F-21
|
|
December 31,
2009
|
|
|
December 31,
2008
|
|
|||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$
|
2,844,711
|
$
|
2,999,599
|
||||
Department
of Energy grant receivable
|
207,380
|
692,014
|
||||||
Prepaid
expenses
|
50,790
|
89,871
|
||||||
Total
current assets
|
3,102,881
|
3,781,484
|
||||||
Debt
issuance costs
|
150,000
|
-
|
||||||
Property
and equipment, net of accumulated depreciation of $44,130 and $20,761,
respectively
|
167,995
|
186,112
|
||||||
Total
assets
|
$
|
3,420,876
|
$
|
3,967,596
|
||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$
|
335,547
|
$
|
711,884
|
||||
License
fee payable to related party
|
-
|
970,000
|
||||||
Accrued
liabilities
|
245,394
|
173,618
|
||||||
Total
current liabilities
|
580,941
|
1,855,502
|
||||||
Outstanding
warrant liability
|
2,274,393
|
-
|
||||||
Total
liabilities
|
2,855,334
|
1,855,502
|
||||||
Stockholders’
equity:
|
||||||||
Preferred
stock, no par value, 1,000,000 shares authorized; none issued and
outstanding
|
-
|
-
|
||||||
Common
stock, $0.001 par value; 100,000,000 shares authorized; 28,296,965 and
28,133,053 shares issued and 28,264,793 and
28,100,881 outstanding, respectively
|
28,296
|
28,132
|
||||||
Additional
paid-in capital
|
14,033,792
|
32,388,052
|
||||||
Treasury
stock at cost, 32,172 shares
|
(101,581
|
)
|
(101,581
|
|||||
Deficit
accumulated during the development stage
|
(13,394,965
|
)
|
(30,202,509
|
)
|
||||
Total
stockholders’ equity
|
565,542
|
2,112,094
|
||||||
Total
liabilities and stockholders’ equity
|
$
|
3,420,876
|
$
|
3,967,596
|
For the year
ended
|
For the year
ended
|
From
March 28, 2006
(inception)
Through
|
||||||||||
|
December 31,
2009
|
December 31,
2008
|
December 31,
2009
|
|||||||||
Revenues:
|
||||||||||||
Consulting
fees
|
$
|
19,570
|
$
|
-
|
$
|
68,570
|
||||||
Department
of Energy grant
|
4,298,643
|
1,075,508
|
5,374,151
|
|||||||||
Total
revenues
|
4,318,213
|
1,075,508
|
5,442,721
|
|||||||||
Operating
expenses:
|
||||||||||||
Project
development, including stock based compensation of $0, $2,078,356, and
$4,468,490, respectively
|
1,307,185
|
10,535,278
|
17,239,202
|
|||||||||
General
and administrative, including stock based compensation of $232,292,
$1,690,921, and $6,097,332 respectively
|
2,220,073
|
4,136,235
|
13,034,630
|
|||||||||
Related
party license fee
|
-
|
1,000,000
|
1,000,000
|
|||||||||
Total
operating expenses
|
3,527,258
|
15,671,513
|
31,273,832
|
|||||||||
Operating
income (loss)
|
790,955
|
(14,596,005
|
)
|
(25,831,111
|
)
|
|||||||
Other
income and (expense):
|
||||||||||||
Other
income
|
8,059
|
225,411
|
255,173
|
|||||||||
Financing
related charge
|
-
|
-
|
(211,660
|
)
|
||||||||
Amortization
of debt discount
|
-
|
-
|
(676,982
|
)
|
||||||||
Interest
expense
|
-
|
-
|
(56,097
|
)
|
||||||||
Related
party interest expense
|
(518
|
)
|
-
|
(64,966
|
)
|
|||||||
Loss
on extinguishment of debt
|
-
|
-
|
(2,818,370
|
)
|
||||||||
Gain
from change in fair value of warrant liability
|
567,461
|
-
|
567,461
|
|||||||||
Loss
on the retirement of warrants
|
(146,718)
|
(146,718)
|
||||||||||
Total
other income and (expense)
|
428,284
|
225,411
|
(3,152,159)
|
|||||||||
Income
(loss) before income taxes
|
1,219,239
|
(14,370,594)
|
(28,983,270)
|
|||||||||
Provision
for income taxes
|
83,147
|
-
|
83,147
|
|||||||||
Net
income (loss)
|
$
|
1,136,092
|
$
|
(14,370,594
|
)
|
$
|
(29,066,417
|
)
|
||||
Basic
and diluted income (loss) per common share
|
$
|
0.04
|
$
|
(0.51
|
)
|
|||||||
Weighted
average common shares outstanding, basic and diluted
|
28,159,629
|
28,064,572
|
Common Stock
|
Additional
Paid-in
|
Deficit
Accumulated
During
Development
|
Stockholders'
Equity
|
|||||||||||||||||
Shares
|
Amount
|
Capital
|
Stage
|
(Deficit)
|
||||||||||||||||
Balance
at March 28, 2006 (inception)
|
- | $ | - | $ | - | $ | - | $ | - | |||||||||||
Issuance
of founder’s share at $.001 per share
|
17,000,000 | 17,000 | 17,000 | |||||||||||||||||
Common
shares retained by Sucre Agricultural Corp., Shareholders
|
4,028,264 | 4,028 | 685,972 | - | 690,000 | |||||||||||||||
Costs
associated with the acquisition of Sucre Agricultural
Corp.
|
(3,550 | ) | (3,550 | ) | ||||||||||||||||
Common
shares issued for services in November 2006 at $2.99 per
share
|
37,500 | 38 | 111,962 | - | 112,000 | |||||||||||||||
Common
shares issued for services in November 2006 at $3.35 per
share
|
20,000 | 20 | 66,981 | - | 67,001 | |||||||||||||||
Common
shares issued for services in December 2006 at $3.65 per
share
|
20,000 | 20 | 72,980 | - | 73,000 | |||||||||||||||
Common
shares issued for services in December 2006 at $3.65 per
share
|
20,000 | 20 | 72,980 | - | 73,000 | |||||||||||||||
Estimated
value of common shares at $3.99 per share and warrants at $2.90 issuable
for services upon vesting in February 2007
|
- | - | 160,000 | - | 160,000 | |||||||||||||||
Share-based
compensation related to options
|
- | - | 114,811 | - | 114,811 | |||||||||||||||
Share-based
compensation related to warrants
|
- | - | 100,254 | - | 100,254 | |||||||||||||||
Net
Loss
|
- | - | - | (1,555,497 | ) | (1,555,497 | ) | |||||||||||||
Balances
at December 31, 2006
|
21,125,764 | $ | 21,126 | $ | 1,382,390 | $ | (1,555,497 | ) | $ | (151,981 | ) |
Common Stock
|
Additional
Paid-in
|
Deficit
Accumulated
During
Development
|
Stockholders’
|
|||||||||||||||||
Shares
|
Amount
|
Capital
|
Stage
|
Equity
|
||||||||||||||||
Balances
at December 31, 2006
|
21,125,764 | $ | 21,126 | $ | 1,382,390 | $ | (1,555,497 | ) | $ | (151,981 | ) | |||||||||
Common
shares issued for cash in January 2007, at $2.00 per share to unrelated
individuals, including costs associated with private placement of 6,250
shares and $12,500 cash paid
|
284,750 | 285 | 755,875 | - | 756,160 | |||||||||||||||
Amortization
of share based compensation related to employment agreement in January
2007 $3.99 per share
|
10,000 | 10 | 39,890 | - | 39,900 | |||||||||||||||
Common
shares issued for services in February 2007 at $5.92 per
share
|
37,500 | 38 | 138,837 | - | 138,875 | |||||||||||||||
Adjustment
to record remaining value of warrants at $4.70 per share issued for
services in February 2007
|
- | - | 158,118 | - | 158,118 | |||||||||||||||
Common
shares issued for services in March 2007 at $7.18 per
share
|
37,500 | 37 | 269,213 | - | 269,250 | |||||||||||||||
Fair
value of warrants at $6.11 for services vested in March
2007
|
- | - | 305,307 | - | 305,307 | |||||||||||||||
Fair
value of warrants at $5.40 for services vested in June
2007
|
- | - | 269,839 | - | 269,839 | |||||||||||||||
Common
shares issued for services in June 2007 at $6.25 per share
|
37,500 | 37 | 234,338 | - | 234,375 | |||||||||||||||
Share
based compensation related to employment agreement in February 2007 $5.50
per share
|
50,000 | 50 | 274,951 | - | 275,001 | |||||||||||||||
Common
Shares issued for services in August 2007 at $5.07 per
share
|
13,000 | 13 | 65,901 | 65,914 | ||||||||||||||||
Share
based compensation related to options
|
- | - | 4,692,863 | - | 4,692,863 | |||||||||||||||
Value
of warrants issued in August, 2007 for debt replacement services valued at
$4.18 per share
|
- | - | 107,459 | - | 107,459 | |||||||||||||||
Relative
fair value of warrants associated with July 2007 convertible note
agreement
|
- | - | 332,255 | - | 332,255 | |||||||||||||||
Exercise
of stock options in July 2007 at $2.00 per share
|
20,000 | 20 | 39,980 | - | 40,000 | |||||||||||||||
Relative
fair value of warrants and beneficial conversion feature in connection
with the $2,000,000 convertible note payable in August
2007
|
- | - | 2,000,000 | - | 2,000,000 | |||||||||||||||
Stock
issued in lieu of interest payments on the senior secured convertible note
at $4.48 and $2.96 per share in October and December 2007
|
15,143 | 15 | 55,569 | - | 55,584 | |||||||||||||||
Conversion
of $2,000,000 note payable in August 2007 at $2.90 per
share
|
689,655 | 689 | 1,999,311 | - | 2,000,000 | |||||||||||||||
Common
shares issued for cash at $2.70 per share, December 2007, net of legal
costs of $90,000 and placement agent cost of $1,050,000
|
5,740,741 | 5,741 | 14,354,259 | - | 14,360,000 | |||||||||||||||
Loss
on Extinguishment of debt in December 2007
|
- | - | 955,637 | - | 955,637 | |||||||||||||||
Net
loss
|
- | - | - | (14,276,418 | ) | (14,276,418 | ) | |||||||||||||
Balances
at December 31, 2007
|
28,061,553 | $ | 28,061 | $ | 28,431,992 | $ | (15,831,915 | ) | $ | 12,628,138 |
|
Common Stock
|
Additional
Paid-in
|
Deficit
Accumulated
During
Development
|
Treasury
|
Stockholders’
|
|
||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Stage
|
Stock
|
Equity
|
|
|||||||||||||||||
Balances
at December 31, 2007
|
28,061,553
|
$
|
28,061
|
$
|
28,431,992
|
$
|
(15,831,915
|
)
|
$
|
-
|
$
|
12,628,138
|
||||||||||||
Share
based compensation relating to options
|
-
|
-
|
3,769,276
|
-
|
-
|
3,769,276
|
||||||||||||||||||
Common
shares issued for services in July 2008 at $4.10 per share
|
30,000
|
30
|
122,970
|
-
|
-
|
123,000
|
||||||||||||||||||
Common
shares issued for services in July, September, and December 2008 at $3.75,
$2.75, and $.57 per share, respectively
|
41,500
|
41
|
63,814
|
-
|
-
|
63,855
|
||||||||||||||||||
Purchase
of treasury shares between April to September 2008 at an average of
$3.12
|
(32,172
|
)
|
-
|
-
|
-
|
(101,581
|
)
|
(101,581
|
)
|
|||||||||||||||
Net
loss
|
-
|
-
|
-
|
(14,370,594
|
)
|
-
|
(14,370,594
|
)
|
||||||||||||||||
Balances
at December 31, 2008
|
28,100,881
|
$
|
28,132
|
$
|
32,388,052
|
$
|
(30,202,509
|
)
|
$
|
(101,581
|
)
|
$
|
2,112,094
|
Common Stock
|
Additional
Paid-in
|
Deficit
Accumulated
During
Development
|
Treasury
|
Stockholders’
|
||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Stage
|
Stock
|
Equity
|
|||||||||||||||||||
Balances
at December 31, 2008
|
28,100,881
|
$
|
28,132
|
$
|
32,388,052
|
$
|
(30,202,509
|
)
|
$
|
(101,581
|
)
|
$
|
2,112,094
|
|||||||||||
Cumulative
effect of warrants reclassified
|
-
|
-
|
(18,586,588
|
)
|
18,586,588
|
-
|
-
|
|||||||||||||||||
Reclassification
of long term warrant liability
|
-
|
-
|
-
|
(2,915,136
|
)
|
-
|
(2,915,136
|
)
|
||||||||||||||||
Common
shares issued for services in June 2009 at $1.50 per share
|
11,412
|
11
|
17,107
|
-
|
-
|
17,118
|
||||||||||||||||||
Common
shares issued for services in July 2009 at $0.88 per share
|
30,000
|
30
|
26,370
|
-
|
-
|
26,400
|
||||||||||||||||||
Common
shares issued for services in August 2009 at $0.80 per
share
|
100,000
|
100
|
79,900
|
-
|
-
|
80,000
|
||||||||||||||||||
Option
to purchase Common shares for services in August 2009 at an option
price of $3.00 for 100,000 shares
|
-
|
-
|
8,273
|
-
|
-
|
8,273
|
||||||||||||||||||
Common
shares issued for services in September and October 2009 at $0.89 and
$0.95 per share respectively
|
22,500
|
23
|
20,678
|
-
|
-
|
20,701
|
||||||||||||||||||
Common
shares to be issued for services in August 2009 at $0.80 per
share
|
-
|
-
|
80,000
|
-
|
-
|
80,000
|
||||||||||||||||||
Net
income
|
-
|
-
|
-
|
1,136,092
|
-
|
1,136,092
|
||||||||||||||||||
Balances
at December 31, 2009
|
28,264,793
|
$
|
28,296
|
$
|
14,033,792
|
$
|
(13,394,965
|
)
|
$
|
(101,581
|
)
|
$
|
565,542
|
|
For the
year ended
|
For the
year ended to
|
From
March 28,
2006
(Inception) to
|
|||||||||
|
|
December 31,
2009
|
December 31,
2008
|
December 31,
2009
|
|
|||||||
Cash
flows from operating activities:
|
||||||||||||
Net
income (loss)
|
$
|
1,136,092
|
$
|
(14,370,594
|
)
|
$
|
(29,066,417
|
)
|
||||
Adjustments
to reconcile net income (loss) to net cash used in operating
activities:
|
||||||||||||
Founders
shares
|
-
|
-
|
17,000
|
|||||||||
Costs
associated with purchase of Sucre Agricultural Corp
|
-
|
-
|
(3,550
|
)
|
||||||||
Interest
expense on beneficial conversion feature of convertible
notes
|
-
|
-
|
676,983
|
|||||||||
Loss
on extinguishment of convertible debt
|
-
|
-
|
2,718,370
|
|||||||||
Loss
on retirement of warrants
|
146,718
|
-
|
146,718
|
|||||||||
Gain
from change in fair value of warrant liability
|
(567,461
|
)
|
-
|
(567,461
|
)
|
|||||||
Common
stock issued for interest on convertible notes
|
-
|
-
|
55,585
|
|||||||||
Discount
on sale of stock associated with private placement
|
-
|
-
|
211,660
|
|||||||||
Share-based
compensation
|
232,491
|
3,956,131
|
11,338,129
|
|||||||||
Depreciation
|
23,373
|
20,352
|
44,134
|
|||||||||
Changes
in operating assets and liabilities:
|
||||||||||||
Accounts
receivable
|
-
|
49,000
|
-
|
|||||||||
Department
of energy grant receivable
|
484,634
|
(692,014
|
)
|
(207,380
|
)
|
|||||||
Prepaid
fees to related party
|
-
|
30,000
|
-
|
|||||||||
Prepaid
expenses and other current assets
|
39,080
|
(73,329
|
)
|
(50,792
|
)
|
|||||||
Accounts
payable
|
(376,338
|
)
|
329,205
|
335,545
|
||||||||
License
fee payable to related party
|
(970,000
|
)
|
970,000
|
-
|
||||||||
Accrued
liabilities
|
71,778
|
(94,053
|
)
|
245,396
|
||||||||
Net
cash provided by (used in) operating activities
|
220,367
|
(
9,875,302
|
)
|
(14,106,080
|
)
|
|||||||
Cash
flows from investing activities:
|
||||||||||||
Acquisition
of property and equipment
|
(5,255
|
)
|
(55,457
|
)
|
(212,128
|
)
|
For the
year ended
|
For the
year ended to
|
From
March 28,
2006
(Inception) to
|
||||||||||
|
December 31,
2009
|
December 31,
2008
|
December 31,
2009
|
|
||||||||
Cash
flows from financing activities:
|
||||||||||||
Cash
paid for treasury stock
|
-
|
(101,581
|
)
|
(101,581
|
)
|
|||||||
Cash
received in acquisition of Sucre Agricultural Corp.
|
-
|
-
|
690,000
|
|||||||||
Proceeds
from sale of stock through private placement
|
-
|
-
|
544,500
|
|||||||||
Proceeds
from exercise of stock options
|
-
|
-
|
40,000
|
|||||||||
Proceeds
from issuance of common stock
|
-
|
-
|
14,360,000
|
|||||||||
Proceeds
from convertible notes payable
|
-
|
-
|
2,500,000
|
|||||||||
Repayment
of notes payable
|
-
|
-
|
(500,000
|
)
|
||||||||
Proceeds
from related party line of credit/notes payable
|
-
|
-
|
116,000
|
|||||||||
Repayment
from related party line of credit/notes payable
|
-
|
-
|
(116,000
|
)
|
||||||||
Debt
issuance costs
|
(150,000
|
)
|
-
|
(150,000
|
)
|
|||||||
Retirement
of warrants
|
(220,000
|
)
|
-
|
(220,000
|
)
|
|||||||
Net
cash provided by (used in) financing activities
|
(370,000
|
)
|
(101,581
|
)
|
17,162,919
|
|||||||
Net
increase (decrease) in cash and cash equivalents
|
(154,888
|
)
|
(10,032,340
|
)
|
2,844,711
|
|||||||
Cash
and cash equivalents beginning of period
|
2,999,599
|
13,031,939
|
-
|
|||||||||
Cash
and cash equivalents end of period
|
$
|
2,844,711
|
$
|
2,999,599
|
$
|
2,844,711
|
||||||
Supplemental
disclosures of cash flow information Cash paid during the period
for:
|
||||||||||||
Interest
|
$
|
518
|
$
|
-
|
$
|
56,893
|
||||||
Income
taxes
|
$
|
14,896
|
$
|
2,400
|
$
|
18,096
|
||||||
Supplemental
schedule of non-cash investing and financing activities:
|
||||||||||||
Conversion
of senior secured convertible notes payable
|
$
|
-
|
$
|
-
|
$
|
2,000,000
|
||||||
Interest
converted to common stock
|
$
|
-
|
$
|
-
|
$
|
55,569
|
||||||
Fair
value of warrants issued to placement agents
|
$
|
-
|
$
|
-
|
$
|
725,591
|
December 31,
2009
|
December 31,
2008
|
|||||||
Land
|
$
|
109,108
|
$
|
109,108
|
||||
Office
equipment
|
60,341
|
55,089
|
||||||
Furniture
and fixtures
|
42,676
|
42,676
|
||||||
212,125
|
206,873
|
|||||||
Accumulated
depreciation
|
(44,130
|
)
|
(20,761
|
)
|
||||
$
|
167,995
|
$
|
186,112
|
December 31,
|
January 1,
|
|||||||
2009
|
2009
|
|||||||
Annual
dividend yield
|
-
|
-
|
||||||
Expected
life (years) of August 2007 issuance
|
.64
|
1.6
|
||||||
Expected
life (years) of December 2007 issuance
|
3.0
|
4.0
|
||||||
Risk-free
interest rate
|
2.69
|
%
|
1.55
|
%
|
||||
Expected
volatility of August 2007 issuance
|
101
|
%
|
150
|
%
|
||||
Expected
volatility of December 2007 issuance
|
95
|
%
|
150
|
%
|
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Term
(Years)
|
||||||||||
Outstanding
January 1, 2007
|
1,990,000 | $ | 2.00 | |||||||||
Granted
during the year
|
1,317,159 | 3.21 | ||||||||||
Exercised
during the year
|
(20,000 | ) | 2.00 | |||||||||
Outstanding
December 31, 2007
|
3,287,159 | $ | 2.48 | 4.40 | ||||||||
Granted
during the year
|
- | - | ||||||||||
Exercised
during the year
|
- | - | ||||||||||
Outstanding
December 31, 2008
|
3,287,159 | $ | 2.48 | 3.40 | ||||||||
Granted
during the year
|
- | - | ||||||||||
Exercised
during the year
|
- | - | ||||||||||
Outstanding
December 31, 2009
|
3,287,159 | $ | 2.48 | 2.40 | ||||||||
Options
exercisable at December 31, 2009
|
2,737,159 | $ | 2.34 | 2.40 |
Warrants
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Term
(Years)
|
||||||||||
Outstanding
January 1, 2007 (with 50,000 warrants exercisable)
|
200,000
|
$
|
5.00
|
|||||||||
Issued
during the year
|
7,186,694
|
2.96
|
||||||||||
Outstanding
and exercisable at December 31, 2007
|
7,386,694
|
$
|
3.02
|
4.60
|
||||||||
Issued
during the year
|
-
|
-
|
||||||||||
Outstanding
and exercisable at December 31, 2008
|
7,386,694
|
$
|
3.02
|
3.60
|
||||||||
Issued
during the year
|
100,000
|
3.00
|
||||||||||
Cancelled
during the year
|
(673,200
|
)
|
(2.90
|
)
|
||||||||
Outstanding
and exercisable at December 31, 2009
|
6,813,494
|
$
|
3.03
|
2.76
|