STOCK TITAN

Blue Biofuels (OTCQB: BIOF) posts H1 2026 loss amid high debt and cash strain

(Moderate)
(Neutral)
Form Type
10-Q

Rhea-AI Filing Summary

Blue Biofuels, Inc. is a development-stage renewable fuels technology company focused on its Cellulose-to-Sugar (CTS) process and related biofuel pathways. It has not generated material revenue and remains pre-commercial.

For the six months ended June 30, 2026, the company reported a net loss of $1,414,596 and accumulated deficit of $61,544,958. Operating cash outflow was $687,359. Cash and cash equivalents were only $22,040 at June 30, 2026, with a working capital deficit of $3,341,277 and stockholders’ deficit of $4,058,672. Management states that these conditions, along with continued expected losses, raise substantial doubt about its ability to continue as a going concern.

Total liabilities were $5,379,631, including significant related-party obligations: $2,859,070 of deferred wages and directors’ fees and $1,345,000 of related-party notes, plus related-party and third-party convertible notes. During the first half of 2026, the company raised $702,000 through equity, warrant exercises, and notes, and settled $100,630 of legacy notes with shares, while continuing to invest in CTS commercialization and maintaining extensive option and warrant programs for management and directors.

Positive

  • None.

Negative

  • Substantial doubt about going concern: recurring losses, minimal cash of $22,040, and a working capital deficit of $3,341,277 raise significant uncertainty about ongoing viability.
  • Persistent losses with no revenue: six-month net loss of $1,414,596 and accumulated deficit of $61,544,958 while the company remains pre-revenue.
  • Highly leveraged balance sheet: total liabilities of $5,379,631 versus assets of $1,320,959, resulting in a stockholders’ deficit of $4,058,672.
  • Large related-party obligations: deferred wages and directors’ fees of $2,859,070 and related-party notes of $1,345,000 concentrate financial risk with insiders.

Filing Explained

The filing adds conditional dilution exposure through options and notes beyond 323.5 million shares outstanding at June 30, 2026.

The filing reports 323,518,980 common shares outstanding at June 30, 2026, plus 25,810,000 unvested options already issued; these instruments create additional, conditional share-issuance exposure for existing common holders.

On June 24, 2026, the board modified options covering 40,628,913 shares so they vest based on continued service rather than performance, generally over two years. The company also committed to issue future options when equity is issued or convertible instruments convert, targeting fully diluted ownership positions of 10%, 7%, 4%, and 2.5% through the next $50 million of equity raised.

The filing says $400,000 of convertible notes would convert into 3,561,538 common shares if converted under their terms; those shares are potential issuance, not shares already issued. It also identifies 87,671,907 shares tied to potentially dilutive warrants, options, and note conversions at June 30.

After quarter-end, the filing reports a further $30,000 related-party note, a $60,000 note, 50,000 shares issued from warrant exercise, and 600,000 shares issued for services.

The quantity of future anti-dilution options will be determined when each financing or conversion closes, while the convertible notes’ stated conversion dates and pricing terms determine whether and how those additional shares are issued.

Cash and cash equivalents $22,040 Balance as of June 30, 2026
Net loss H1 2026 $1,414,596 Six months ended June 30, 2026
Accumulated deficit $61,544,958 Since inception, as of June 30, 2026
Working capital deficit $3,341,277 As of June 30, 2026
Total liabilities $5,379,631 As of June 30, 2026
Stockholders’ deficit $4,058,672 As of June 30, 2026
Deferred wages and directors’ fees $2,859,070 Related-party liability at June 30, 2026
Shares outstanding 323,518,980 Common shares as of June 30, 2026
going concern financial
"These factors, among others, raise substantial doubt as to the Company’s ability to continue as a going concern."
Going concern is the accounting assumption that a company will keep operating and meeting its obligations for the foreseeable future. The phrase matters most when a company or its auditors disclose substantial doubt about it, a formal warning that the business may not have enough resources to continue without raising money, restructuring, or selling assets. That language in a filing or press release signals elevated financial risk.
Cellulose-to-Sugar (CTS) technical
"a new technology system referred to as Cellulose-to-Sugar or CTS, and, to date, the Company filed, and received, three patents"
Small Business Innovation Research (SBIR) grant regulatory
"awarded a Small Business Innovation Research (“SBIR”) grant by the U.S. Department of Energy (DOE) in the amount of $1.15 million"
right-of-use lease asset financial
"classified as operating lease right-of-use (“ROU”) assets and operating lease liabilities in the Company’s condensed balance sheet."
A right-of-use lease asset is the amount a company records on its balance sheet to show the value of its contractual right to use leased property or equipment over the lease term. Think of it like the recorded value of a long-term rental agreement—paired with a matching lease liability—and it matters to investors because it affects reported assets, debt levels, and profit timing, which influence assessments of a company’s financial strength and cash flow needs.
anti-dilution option package financial
"the Board approved an anti-dilution option package for officers Ben Slager and Anthony Santelli and managers"
Section 9003 Loan Guarantee Program regulatory
"applied for two USDA loan guarantees through its Section 9003 Loan Guarantee Program: one for a $149 million loan guarantee"

AI-generated analysis. How Rhea-AI works. Not financial advice.

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FAQ

What were Blue Biofuels (BIOF) revenues and profits for the quarter ended June 30, 2026?

Blue Biofuels reported no revenue and a net loss of $750,795 for the quarter ended June 30, 2026. For the six months ended June 30, 2026, the net loss was $1,414,596, reflecting ongoing development-stage operations without commercial sales.

Does Blue Biofuels (BIOF) face going concern risks in its June 30, 2026 report?

Yes. Management discloses substantial doubt about the company’s ability to continue as a going concern due to recurring losses, an accumulated deficit of $61,544,958, minimal cash, and the need for additional financing to meet obligations and fund operations.

What is Blue Biofuels’ (BIOF) cash position and working capital as of June 30, 2026?

As of June 30, 2026, Blue Biofuels held $22,040 in cash and cash equivalents and had a working capital deficit of $3,341,277. Total current liabilities were $3,375,368, significantly exceeding current assets of $34,091.

How is Blue Biofuels (BIOF) funding its operations in early 2026?

During the six months ended June 30, 2026, Blue Biofuels raised $702,000 from financing activities, including $347,000 from private placements, $125,000 from warrant exercises, and $230,000 from new related-party and third-party notes and convertible notes.

What is Blue Biofuels’ (BIOF) core technology and commercialization status?

Blue Biofuels is developing its patented Cellulose-to-Sugar (CTS) process to convert plant-based feedstock into sugars for cellulosic ethanol and other biofuels. It has completed pilot plant upscaling and is finalizing design and cost estimates for a first commercial-scale system.

How many shares are outstanding for Blue Biofuels (BIOF) and what is the equity position?

As of June 30, 2026, Blue Biofuels had 323,518,980 common shares outstanding and no preferred shares. Stockholders’ deficit totaled $4,058,672, reflecting liabilities exceeding assets and cumulative operating losses.
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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 June 30, 2026

 

or

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

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

 

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

 

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 (August 9, 2026): 324,168,980.

 

 

 

 
 

 

TABLE OF CONTENTS

 

    Page
  PART I—FINANCIAL INFORMATION 3
     
ITEM 1. Condensed Financial Statements (unaudited) 4
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 15
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 18
ITEM 4. Controls and Procedures 18
     
  PART II—OTHER INFORMATION 19
     
ITEM 1. Legal Proceedings 19
ITEM 1A. Risk Factors 19
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 19
ITEM 3. Defaults Upon Senior Securities 20
ITEM 4. Mine Safety Disclosures 20
ITEM 5. Other Information 20
ITEM 6. Exhibits 20
  Signatures 21

 

2

 

 

PART I – FINANCIAL INFORMATION

 

TABLE OF CONTENTS

 

Index to Financial Statements   Page
Condensed Balance Sheets as of June 30, 2026, and December 31, 2025 (unaudited)   4
     
Condensed Statements of Operations for the Three and Six Months Ended June 30, 2026 and 2025 (unaudited)   5
     
Condensed Statements of Stockholders’ Deficit for the Six Months Ended June 30, 2026 and 2025 (unaudited)   6
     
Condensed Statements of Cash Flows for the Six Months Ended June 30, 2026 and 2025 (unaudited)   7
     
Notes to Condensed Financial Statements (unaudited)   8

 

3

 

 

Blue Biofuels, Inc.

Financial Statements

 

UNAUDITED FINANCIAL STATEMENTS

OF

BLUE BIOFUELS, INC.

 

Blue Biofuels, Inc.

CONDENSED BALANCE SHEETS

(unaudited)

 

 

   June 30, 2026   December 31, 2025 
ASSETS          
Current Assets          
Cash and Cash Equivalents  $22,040   $65,200 
Prepaid Expenses   12,051    11,551 
TOTAL CURRENT ASSETS  $34,091   $76,751 
Other Assets          
Property and Equipment, net of accumulated depreciation and amortization of $541,850 and $482,578 at June 30, 2026 and December 31, 2025, respectively  $529,719    555,109 
Security Deposits   100,276    80,276 
Right of Use Assets, net of accumulated amortization   325,282    365,414 
Patents and Trademarks, net of accumulated amortization   331,591    329,829 
TOTAL OTHER ASSETS  $1,286,868   $1,330,628 
TOTAL ASSETS  $1,320,959   $1,407,379 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
Current Liabilities          
Accounts Payable   56,157    154,897 
Accounts Payable - Related Parties   13,569    48,570 
Deferred Wages and Directors Fees - Related Parties   2,859,070    2,525,135 
Right of Use Lease Liability - Current   85,088    79,316 
Convertible Notes Payable — Other   125,000    - 
Convertible Notes Payable — Related Parties   85,000    - 
Interest Payable - Related Parties   151,484    176,484 
TOTAL CURRENT LIABILITIES  $3,375,368   $2,984,402 
Long Term Liabilities          
Right of Use Lease Liability   249,263    293,430 
Notes Payable — Related Parties   1,345,000    1,325,000 
Convertible Notes Payable — Related Parties   190,000    190,000 
Legacy Notes Payable — Other   220,000    320,630 
TOTAL LONG TERM LIABILITIES  $2,004,263   $2,129,060 
TOTAL LIABILITIES  $5,379,631   $5,113,462 
           
COMMITMENTS AND CONTINGENCIES (Note 8)   -    - 
           
STOCKHOLDERS’ 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; 323,518,980 and 317,872,112 issued and outstanding at June 30, 2026 and December 31, 2025, respectively.   323,519    317,872 
Additional paid-in capital   56,977,636    56,106,407 
Obligation to issue shares   185,131    - 
Accumulated deficit   (61,544,958)   (60,130,362)
TOTAL STOCKHOLDERS’ DEFICIT  $(4,058,672)  $(3,706,083)
           
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT  $1,320,959   $1,407,379 

 

The accompanying notes to the Condensed Financial Statements are an integral part of these statements.

 

4

 

 

Blue Biofuels, Inc

CONDENSED STATEMENTS OF OPERATIONS

(unaudited)

 

                 
   Three Months Ended   Six Months Ended 
   June 30   June 30 
   2026   2025   2026   2025 
Revenues  $-   $-   $-   $- 
Operating expense:                    
General and administrative   397,408    431,134    671,993    769,232 
Research and development   431,198    471,470    816,111    822,176 
Gain on extinguishment of accounts payable   (97,500)        (97,500)     
Total operating expenses   731,106    902,604    1,390,604    1,591,408 
                     
Loss from operations:   (731,106)   (902,604)   (1,390,604)   (1,591,408)
                     
Other (income) expense:                    
Grants income   -    -    -    (444,970)
Interest expense - related parties   19,689    18,148    23,992    18,147 
Total other (income) expense   19,689    18,148    23,992    (426,823)
                     
Income (Loss) before provisions for income taxes  $(750,795)  $(920,752)  $(1,414,596)  $(1,164,585)
Provisions for income taxes   -    -    -    - 
Net Income (Loss):  $(750,795)  $(920,752)  $(1,414,596)  $(1,164,585)
                     
Net income (loss) per basic share  $(0.002)  $(0.003)  $(0.004)  $(0.004)
                     
Net income (loss) per share, fully diluted  $(0.002)  $(0.003)  $(0.004)  $(0.004)
                     
Weighted average common shares outstanding                    
Basic and diluted   321,219,999    310,047,521    320,658,983    309,300,452 

 

The accompanying notes to the Condensed Financial Statements are an integral part of these statements.

 

5

 

 

Blue Biofuels, Inc.

CONDENSED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(Unaudited)

 

   Shares                
   Common Stock   Obligation to   Additional Paid-in   Accumulated   Total Stockholder’s 
   Shares   Amount   Issue Shares   Capital   Deficit   (Deficit) 
Balance as of December 31, 2025   317,872,112   $317,872   $                    0   $56,106,407   $(60,130,362)  $   (3,706,083)
Issuance of common stock for services   10,000   $10        $1,240    -   $1,250 
Issuance of 30,000 warrants for interest   -    -         4,303    -    4,303 
Issuance of common stock and warrants for cash in Private Placement   1,816,000    1,816         225,184    -    227,000 
Issuance of common stock for the exercise of warrants   1,250,000    1,250         123,750    -    125,000 
Stock based compensation recognized under the employee, director plan   -    -         75,605    -    75,605 
Net Income (Loss)             -         (663,801)   (663,801)
Balance as of March 31, 2026   320,948,112   $320,948   $0   $56,536,489   $(60,794,163)  $(3,936,726)
Issuance of common stock for services   800,000    800         79,200    -    80,000 
Issuance of 200,000 warrants for interest   -    -         19,689    -    19,689 
Issuance of common stock and warrants for cash through private placements   1,100,000    1,100         118,900    -    120,000 
Issuance of common stock on the settlement of legacy debt   670,868    671         99,959    -    100,630 
Stock based compensation recognized under the employee, director plan   -    -         123,399    -    123,399 
Restricted shares to be issued to officers and directors   -    -    185,131    -         185,131 
Net Income (Loss)   -    -         -    (750,795)  $(750,795)
Balance as of June 30, 2026   323,518,980   $323,519   $185,131   $56,977,636   $(61,544,958)  $(4,058,672)
                               
Balance as of December 31, 2024   307,960,508   $307,961    -    $54,101,897   $(57,255,761)  $(2,845,903)
Employee director stock options exercised on a cashless basis   44,000    44         (44)   -    - 
Issuance of common stock and warrants on the conversion of notes   625,000    625         49,375    -    50,000 
Stock based compensation recognized under the employee, director plan   -    -         88,165    -    88,165 
Net Income (Loss)             -         (243,833)   (243,833)
Balance as of March 31, 2025   308,629,508   $308,630    -    $54,239,393   $(57,499,594)  $(2,951,571)
Issuance of common stock for services   415,975    416         41,181    -    41,597 
Issuance of 250,000 warrants for services   -    -         22,936    -    22,936 
Issuance of 200,000 warrants for interest   -    -         18,149    -    18,149 
Employee director stock options exercised on a cashless basis   106,687    106         (106)   -    - 
Warrants exercised   125,000    125         6,125         6,250 
Stock based compensation recognized under the employee, director plan   -    -         351,322    -    351,322 
Issuance of common stock and warrants for cash through private placements   2,600,000    2,600         257,400    -    260,000 
Net Income (Loss)   -    -    -     -    (920,752)   (920,752)
Balance as of June 30, 2025   311,877,170   $311,877    -    $54,936,400   $(58,420,346)  $(3,172,069)

 

The accompanying notes to the Condensed Financial Statements are an integral part of these statements.

 

6

 

 

Blue Biofuels, Inc.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

 

         
   For the Six Months Ended 
   June 30, 2026   June 30, 2025 
Cash flows from operating activities          
Net income (loss)  $(1,414,596)  $(1,164,585)
Reconciliation of net income (loss) to net cash used in operating activities          
Depreciation and amortization   61,429    96,023 
Stock based compensation   465,385    465,557 
Issuance of warrants for interest   23,992    18,149 
Gain on extinguishment of accounts payable   (97,500)   - 
Changes in operating assets and liabilities          
Prepaid expenses   (500)   (300)
Accounts payable and accrued liabilities   (1,240)   31,495 
Accounts payable and accrued liabilities — related party   (35,001)   - 
Deferred wages and directors’ fees — related party   333,935    251,561 
Interest payable - related party   (25,000)   - 
Right of use lease   1,737    3,377 
Net cash used in operating activities   (687,359)   (298,723)
           
Cash flows from investing activities          
Purchase of property and equipment   (33,882)   (136,151)
Payment of deposit on property   (20,000)   (50,000)
Payment of patent and trademark costs   (3,919)   (7,147)
Net cash used in investing activities   (57,801)   (193,298)
           
Cash flows from financing activities          
Proceeds from exercise of warrants   125,000    6,250 
Proceeds from the issuance of notes payable – related party   20,000    185,000 
Proceeds from the issuance of convertible notes – related party   85,000    - 
Proceeds from the issuance of convertible notes - other   125,000    - 
Proceeds from issuance of common stock and warrants   347,000    260,000 
Net cash provided by financing activities   702,000    451,250 
           
Net increase (decrease) in cash and cash equivalents   (43,160)   (40,771)
           
Cash and cash equivalents at beginning of the period   65,200    48,797 
Cash and cash equivalents at end of the period  $22,040   $8,026 
           
Non-cash Financing and Investing Activities          
Issuance of common stock for patent and trademark costs  $-   $38,463 
Issuance of common stock on the settlement of legacy debt  $100,630   $50,000 

 

The accompanying notes to the Condensed Financial Statements are an integral part of these statements.

 

7

 

 

Blue Biofuels, Inc.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 1 – ORGANIZATION

 

Blue Biofuels, Inc., was incorporated in Nevada on March 28, 2012, as Alliance Media Group Holdings, Inc. Since December 2013, Blue Biofuels, Inc. (the “Company”) has been a technology company focused on emerging technologies in renewable energy, biofuels, and lignin.

 

NOTE 2 – GOING CONCERN

 

The accompanying condensed financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern, which assumes the Company will realize its assets and discharge its liabilities in the normal course of business. The Company has not generated any significant revenue since inception and has incurred losses since inception. As of June 30, 2026, the Company has incurred accumulated deficit of $61,544,958. The Company expects to incur significant additional losses and liabilities in connection with its start-up and commercialization activities. These factors, among others, raise substantial doubt as to the Company’s ability to continue as a going concern. 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 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, or sell additional shares of stock or borrow additional funds. The Company’s inability to obtain additional cash could have a material adverse effect on its financial position, results of operations, and its ability to continue in existence.

 

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The condensed financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The condensed financial statements do not include all disclosures required of annual financial statements and, accordingly, should be read in conjunction with our financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

 

8

 

 

Operating results for the three and six months ended June 30, 2026, may not be indicative of full year 2026 results.

 

In management’s opinion, the accompanying condensed financial statements contain all adjustments necessary for a fair statement of our financial position as of June 30, 2026, and our results of operations, changes in stockholders’ deficit and cash flows for the three and six months ended June 30, 2026 and 2025.

 

Net Income (Loss) per Common Share:

 

Basic net earnings per share amounts have been calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted earnings per share has been calculated using the weighted-average number of common shares plus the potentially dilutive effect of securities such as common stock that potentially could be issued upon the conversion of convertible notes or upon the exercise of outstanding options and warrants. The computation of potential common shares has been performed using the treasury stock method.

 

For the three and six months ended June 30, 2026 and 2025, all potentially dilutive securities were excluded from the computation of diluted net loss per share because the Company was in a net loss position and their effect would have been antidilutive. As of June 30, 2026, the potentially dilutive securities excluded from the computation totaled 87,671,907 common shares issuable upon the exercise of outstanding warrants and vested options and the conversion of outstanding convertible notes.

 

Recent Accounting Pronouncements

 

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disclosure about the types of costs and expenses included in certain expense captions presented on the income statement. The new disclosure requirements are effective for the Company’s annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted, and may be applied either prospectively or retrospectively. The Company is currently evaluating the ASU to determine its impact on our consolidated financial statements and disclosures.

 

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.

 

9

 

 

NOTE 4 – PROPERTY AND EQUIPMENT

  

   Life  June 30, 2026   December 31, 2025 
Building and Improvements  15  $9,370   $9,370 
Construction and Engineering  10   171,817    171,817 
Machinery and Equipment  10   864,961    831,079 
Furniture and Fixtures  5   13,596    13,596 
Computer Equipment  3   11,825    11,825 
Property and Equipment, gross      1,071,569    1,037,687 
Less Accumulated Depreciation     $(541,850)  $(482,578)
Property and Equipment     $529,719   $555,109 

 

Total depreciation expense was $28,974 and $59,272 for the three and six months ended June 30, 2026 and $30,198 and $60,053 for the three and six months ended June 30, 2025.

 

NOTE 5 – PATENTS AND TRADEMARKS

 

The Company has obtained three patents and has applied for six more patents on its technology, and has also applied for international patents. The Company has obtained one trademark and has four more pending. The following is a summary of the Company’s patents and trademarks at June 30, 2026 and December 31, 2025:

  

   June 30, 2026   December 31, 2025 
Trademarks issued  $8,340   $8,340 
Patents issued   86,259    86,259 
Patents and trademarks issued, at cost   94,599    94,599 
Accumulated amortization   (27,317)   (25,161)
Net balance of issued patents and trademarks  $67,282   $69,438 
Patents and trademarks pending   264,309    260,391 
TOTAL PATENTS AND TRADEMARKS  $331,591   $329,829 

 

Amortization expenses for patents and trademarks for the three and six months ended June 30, 2026, were $1,078 and $2,157 and for 2025 were $35,970 and $35,970, respectively. Estimated amortization expense for the years subsequent to June 30, 2026, is as follows:

  

Year ending December 31,    
2026 remaining  $2,157 
2027   4,313 
2028   4,313 
2029   4,313 
2030   4,313 
Thereafter   39,533 
TOTAL  $58,942 

 

10

 

 

NOTE 6 – DEBT

 

Notes Payable – Related Party

 

From 2023 to 2025, the Company borrowed a total of $1,325,000 from board member Chris Kneppers. The notes are now payable on the earliest of the date on which the Company (1) uplists to the Nasdaq or NYSE; (2) receives $5 million in equity financing; or (3) begins generating revenue from its first facility. In lieu of interest, the Company will pay Mr. Kneppers 100% of the outstanding loan balance due him contingent upon the financing of the first plant. All interest and loan amounts automatically come due upon a change of control of the Company or if the Company files for bankruptcy under Chapter 11 or Chapter 7. During the six-month period ended June 30,2026, the Company borrowed an additional $20,000 from Mr. Kneppers with the same terms. The total debt due as of June 30, 2026, is $1,345,000. At June 30, 2026 and December 31, 2025, accrued interest payable to Mr. Kneppers is $46,651, and $46,651, respectively.

 

Convertible Notes Payable – Related Party

 

In May and June 2026, the Company entered into three convertible notes with board members for a total of $85,000. They convert into shares of common stock in 6-months from the date of issue at $0.10 per share or a lower price if the Company has an equity financing at a lower price during the 6-month period.

 

In June and November 2023, the Company entered two long-term convertible notes with board member Edmund Burke with principal amounts of $25,000 and $15,000, respectively, to be repaid when the Company receives an equity investment of at least $3 million. The notes may convert into common stock at $0.13/share at the option of the holder for a total of 307,692 shares. Until repayment, the note agreement requires the Company to issue to Mr. Burke 80,000 warrants having a strike price of $0.15 and an expiration of 5 years every twelve months in lieu of interest. During the six months ended June 30, 2026 and 2025, 30,000 and 0 warrants with a fair value of $4,303 and $0, respectively, were issued to Mr. Burke (see Note 7). The fair value of these warrants is included in interest expense – related parties on the statement of operations.

 

In April 2023, the Company entered a separate long-term convertible note with board member Mr. Burke, with a principal balance of $150,000, to be repaid when the Company receives an equity investment of at least $1.5 million. The notes may convert into common stock at $0.13/share at the option of the holder for a total of 1,153,846 shares. Until repayment, the note agreement requires the Company to issue to Mr. Burke 100,000 warrants having a strike price of $0.15 and an expiration of 5 years every six months in lieu of interest. During the six months ended June 30, 2026 and June 30, 2025, 200,000 and 200,000 warrants with a fair value of $19,689 and $18,149 respectively, were issued to Mr. Burke (see Note 7). The fair value of these warrants is included in interest expense – related parties on the statement of operations.

 

Convertible Notes Payable – Other

 

The Company received $125,000 from an unrelated party in exchange for two notes. The first note, with principal amount of $100,000 dated April 22, 2026, is due 12 months from the date of issuance and provides for a $10,000 premium payable at maturity in addition to the principal. At the option of the holder, in lieu of repayment and premium, the holder may elect to convert into shares at $0.10 per share or a lower price if a subsequent equity raise over the term of the loan is at a lower price. The second note for $25,000 is dated May 28, 2026, and automatically converts into shares at $0.10 per share at the end of six months or a lower price if a subsequent equity raise over the 6-months is done at a lower price.

 

Legacy Notes Payable – Other

 

Pursuant to the Company’s Chapter 11 Plan of Reorganization confirmed on September 18, 2019, the Company restructured several outstanding notes payable and convertible debentures into fixed settlement obligations. Under the terms of the confirmed Plan, the original terms, interest rates, and conversion features were terminated in exchange for a combined settlement of $320,630, payable solely out of the Company’s future gross revenues or a percentage thereof. In May, 2026, the Company negotiated to payoff $100,630 for 670,868 shares at the trading price of $0.15 per share. As of June 30, 2026, and December 31, 2025, the remaining aggregate balance of these obligations is $220,000 and $320,630, respectively.

 

A summary of all Notes that remain including those indicated in the Notes above is as follows:

  

Notes Payable  June 30, 2026   December 31, 2025 
Current Convertible Notes — Related Party  $85,000   $- 
Current Convertible Notes — Other   125,000    - 
Long Term Convertible Notes Payable – Related Party   190,000    190,000 
Long-Term Notes Payable – Related Party   1,345,000    1,325,000 
Long Term Legacy Notes Payable from future revenue   220,000    320,630 
TOTAL NOTES  $1,965,000   $1,835,630 

 

As of June 30, 2026, any note that is due at a specific point in time automatically converts into equity. $220,000 will be paid from future gross revenues.

 

At June 30, 2026, there are $400,000 in convertible notes that, if converted, would convert into 3,561,538 shares.

 

11

 

 

NOTE 7 – STOCKHOLDERS’ EQUITY

 

During the six months ended June 30, 2026, the Company issued an aggregate of 810,000 shares of common stock for services, consisting of 750,000 shares issued to a related party and 60,000 shares issued to unrelated parties. During the six months ended June 30, 2025, the Company issued 415,975 shares of common stock for services to unrelated parties. These shares were valued at $81,250 and $41,597, respectively, based on the trading price of the Company’s common stock on the respective dates of issuance.

 

During the six-months ended June 30, 2026, and 2025, in connection with the exercise of warrants, the Company issued 1,250,000 and 125,000 shares, respectively, of its common stock for $125,000 and $6,250, respectively.

 

During the six-months ended June 30, 2026, and 2025, the Company issued 2,916,000 and 2,600,000 shares and warrants in private placements, respectively, for proceeds of $347,000 and $260,000.

 

During the six-months ended June 30, 2026, and 2025, the Company issued 670,868 and 0 shares, respectively, for the settlement of legacy notes valued at $100,630 and $0, using a trading price on the date of settlement of $0.15 per share.

 

During the six-months ended June 30, 2026, and 2025, the Company issued 0 and 150,687 shares, respectively, for the exercise of stock options on a cashless basis.

 

Warrants:

 

During the six-month period ended June 30, 2026 and 2025, the Company issued 230,000 and 200,000 warrants for interest with a fair value of $23,992 and $18,149 respectively.

 

A summary of warrant activity for the year ended December 31, 2025 and six months ended June 30, 2026 is as follows:

  

  

Number of

Warrants

  

Weighted
Average

Exercise Price

 
         
Balance, December 31, 2024   27,446,495   $0.21 
Issued in connection with:          
Common stock units sold for cash   6,830,000    0.16 
Services   266,000    0.12 
Debt-related interest   250,000    0.15 
Debt conversion   625,000    0.10 
Expired   (500,000)   0.20 
Exercised   (750,000)   0.09 
Balance, December 31, 2025   34,167,495    0.20 
Issued in connection with:          
Common stock units sold for cash   2,916,000    0.17 
Services   50,000    0.15 
Debt-related interest   230,000    0.15 
Exercised   (1,250,000)   0.10 
Expired   (2,600,000)   0.20 
Balance, June 30, 2026   33,513,495    0.20 

 

Warrants outstanding at June 30, 2026 have a weighted average exercise price of $0.20 and a weighted average remaining term of 2.7 years.

 

12

 

 

Stock Options:

 

During the six-month period ended June 30, 2026 and 2025, the Company recognized $199,004 and $439,487 of stock based compensation, respectively. Of this amount, $39,856 (2025: $238,134) was classified as general and administrative expense and $159,148 (2025: $201,353) was classified as research and development expenses.

 

A summary of option activity for the year ended December 31, 2025, and six months ended June 30, 2026, is as follows:

  

  

Number of

Options

  

Weighted
Average

Exercise Price

 
Balance, December 31, 2024   88,971,571   $0.13 
Options granted   12,774,470    0.12 
Options expired   (3,658,335)   0.15 
Options exercised   (650,000)   0.06 
Balance, December 31, 2025   97,437,706    0.13 
Options granted   25,810,000    0.12 
Options expired   (10,000)   0.15 
Options exercised   -    - 
Balance, June 30, 2026   123,237,706    0.13 
Vested, June 30, 2026   50,596,874    0.13 

 

The weighted average remaining life of outstanding and vested options is 6.7 years and 5.6 years, respectively. At June 30, 2026, outstanding vested options had an intrinsic value of $345,076, and the total intrinsic value of all options is $812,665.

 

At June 30, 2026, remaining compensation to be recognized as future vesting of stock options is approximately $6 million of which approximately $1.6 million will vest in 2026, $4.4 in subsequent years.

 

Modification of performance-based options. On June 24, 2026, the Board of Directors modified all outstanding unvested stock options held by the Company’s officers and managers that vested based on performance conditions so that they instead vest solely based on continued service, generally in equal quarterly installments over two years. Vesting of these performance-based awards had not previously been considered probable, and no compensation cost had been recognized for them prior to the modification. Because the awards were not expected to vest immediately before the modification but are expected to vest following it, the Company measured the modified awards at their fair value on the modification date and recognizes that cost over the remaining service period. The modification affected options covering 40,628,913 shares with an aggregate modification-date fair value of $3,315,576.

 

Anti-dilution option commitment. Under the same June 24, 2026 Board action, the Company is committed to grant additional options to its officers and managers (Ben Slager, Anthony Santelli, Kevin Hissem, and Eric Libra) upon each future issuance of equity, or conversion of convertible instruments, in order to maintain their fully-diluted ownership percentages of 10%, 7%, 4%, and 2.5%, respectively, through the next $50 million of equity raised. Any such options will have an exercise price equal to the fair market value of the common stock on the closing date of the related financing and will vest in equal quarterly installments over two years. Because the number of options to be issued is not determinable until each financing closes, no compensation cost has been recognized for these future grants, which will be measured and recognized as the awards are granted.

 

Black Scholes Model Variables:

 

The fair value associated with warrants and options issued during the six months ended June 30, 2026, and 2025, were valued on the date of issuance or modification.

 

The following assumptions were used in calculations of the Black-Scholes option pricing models for option and warrant-based stock compensation issued in the six months ended June 30, 2026, and 2025:

  

    June 30, 2026      June 30, 2025   
Exercise price  $ 0.115 - 0.15     $ 0.110.13   
Risk-free interest rate   3.74% - 4.17 %   3.81% - 4.54 %
Expected term (in years)   5.0 to 10.0      5.0 to 10.0 
Expected share price volatility   83.75 - 102.26 %    107.75 - 109.69 %
Expected dividend yield    0.0% - 0.0%      0.0% - 0.0%   

 

NOTE 8 - COMMITMENTS AND CONTINGENCIES

 

Litigation

 

The Company is subject, from time to time, to litigation, claims and suits arising in the ordinary course of business. The Company is not in any litigation at this time.

 

Leases

 

The Company currently leases office and laboratory space in Palm Beach Gardens, FL, that is classified as operating lease right-of-use (“ROU”) assets and operating lease liabilities in the Company’s condensed balance sheet. The lease has a term of five years, expires on October 31, 2029, and has escalating monthly payments range from $9,100 to $10,242. At inception, the lease was classified as an operating lease and the Company recorded a ROU lease asset and liability of $452,132 and $452,132, respectively, at a discount rate of 10%. Rent expense for the three and six months ending June 30, 2026, $28,998 and $91,144, and for 2025 were $42,330 and $99,909, respectively, which is expensed as part of general and administrative expenses in the statement of operations.

 

13

 

 

At June 30, 2026, minimum lease payments to be paid by the Company are as follows:

  

     
Remainder of 2026  $56,803 
2027   116,434 
2028   119,928 
2029   102,426 
Total lease payments   395,591 
Less imputed interest   (61,240)
Present value of lease liabilities   334,351 
Current portion   (85,088)
Long term portion  $249,263 

 

NOTE 9 – RELATED PARTY TRANSACTIONS

 

Related Party transactions with the Company are as follows:

 

Deferred salaries and directors’ fees. The Company’s officers and directors have historically received less than their full salaries and fees, with the unpaid amounts accrued as deferred compensation. During 2024, the Board of Directors approved annual salaries, retroactive to August 1, 2023, of $525,000 for CEO Ben Slager and $325,000 for CFO Anthony Santelli, much of which continues to be accrued rather than paid on a consistent basis. As of June 30, 2026 and December 31, 2025, the aggregate liability for deferred wages and directors’ fees due to related parties was $2,859,070 and $2,525,135, respectively, and is reported as Deferred Wages and Directors’ Fees – Related Party in the accompanying condensed balance sheets. A board resolution passed on February 13, 2020 pledged the Company’s patents and pending patents to secure the back-pay claims of Mr. Slager, Mr. Santelli, and Director Charles Sills in order to support their continued involvement while they receive less than full salaries.

 

Interest on deferred amounts and related contingent bonuses. Effective April 1, 2024, the Board approved ceasing the accrual of interest on officer back pay and directors’ fees. In lieu of interest, the Company will pay an additional $25,000 to each director contingent upon the financing of the first commercial plant or a successful uplisting to the NYSE or Nasdaq. In addition, a performance bonus equal to 100% of the outstanding back-pay balance due to Mr. Slager and Mr. Santelli is payable contingent upon the financing of the first plant. These amounts become due automatically upon a change of control or a filing by the Company for protection under Chapter 11 or Chapter 7 of the U.S. Bankruptcy Code. Because payment of these amounts was not probable as of June 30, 2026, no liability has been recorded for them.

 

Notes and other financing. Short-term notes payable, convertible notes, and legacy liabilities issued to related parties are described in Note 6.

 

Anti-dilution compensation — restricted stock units. In June 2024, the Board approved partial anti-dilution compensation for CEO Ben Slager, CFO Anthony Santelli, and Director Chris Kneppers, payable in restricted stock units (and, for Mr. Kneppers, options) equal to 4%, 3%, and 3%, respectively, of the equity and warrants issued to investors on the next $50 million of equity raised, as consideration for deferring salary or lending funds to the Company. These units are issuable as the Company raises capital through the sale of its common stock. As of June 30, 2026, the amounts issuable were 419,440 RSUs to Mr. Slager, 314,580 RSUs to Mr. Santelli, and 314,580 RSUs and 314,580 options (five-year term) to Mr. Kneppers; none of these RSUs or options had been issued. Their fair value is $185,131, (of which $59,453 is expensed as research and development and $125,678 as general and administrative expenses), and was recognized during the six-month period ended June 30, 2026. In June 2026, the Board replaced the option portion of this arrangement with the anti-dilution option package described below, and no additional options will be issued under the prior arrangement; no compensation cost had been recognized for the replaced options.

 

Anti-dilution compensation — option package. On June 24, 2026, the Board approved an anti-dilution option package for officers Ben Slager and Anthony Santelli and managers Kevin Hissem and Eric Libra, intended to maintain their fully-diluted option positions at 10%, 7%, 4%, and 2.5%, respectively, and to retain these key members of management while they receive below-market salaries. To meet those percentages, 13,535,000, 6,205,000, 5,030,000, and 1,040,000 unvested options, respectively, were issued as of June 30, 2026, each with an exercise price of $0.115 and a ten-year term, vesting in equal quarterly installments over two years. Under the same action, the Company is committed to issue additional options upon each future equity raise or conversion to maintain these percentages through the next $50 million of equity raised, priced at the fair market value of the common stock on the applicable closing date. The Company also modified certain previously granted performance-based options to vest based on continued service. See Note 7 for the accounting for these option grants, the modification, and the future grant commitment.

 

Director introduction compensation. Effective August 28, 2024, each director who is not an officer is entitled to receive 3.5% in cash and 3.5% in warrants of the amount invested by any investor first introduced to the Company by that director. The warrants will be priced at the same price as any warrants offered in the related raise or, if there are none, at the closing market price on the date the funds are received, and will have a five-year term. No such cash or warrants had been earned as of June 30, 2026.

 

CTS production milestone bonus. On December 15, 2025, the Board approved a $500,000 bonus to Mr. Slager for achieving the milestone of producing over 500 pounds of sugar in an eight-hour day — an incentive originally offered on March 12, 2021 to upscale and commercialize the Company’s patented CTS system. This amount is accrued in Deferred Wages and Directors’ Fees – Related Party as of June 30, 2026 and December 31, 2025.

 

NOTE 10 – GRANT INCOME

 

In September 2024, the Company was awarded a Small Business Innovation Research (“SBIR”) grant by the U.S. Department of Energy (DOE) in the amount of $1.15 million to be received subject to meeting certain terms and conditions. The purpose of the grant is to support the further development of the Company’s patented CTS process and to bring it to the point of being commercially ready. Accounting for this DOE grant does not fall under Accounting Standard Codification 606, Revenue from Contracts with Customers, as the DOE does not meet the definition of a customer under this standard. During the year ended December 31, 2025, $865,000 was recognized as grant income for this grant.

 

During the six month periods ended June 30, 2025, $444,970 was recognized as grant income for this grant. None was recognized during the six month period ended June 30, 2026, as there is no additional grant money from this grant for 2026.

 

NOTE 11 – SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events through the date the financial statements were issued. Based on this evaluation, the Company has identified the following subsequent events:

 

The Company received $30,000 from a board member in exchange for a note with the same terms as previous notes. See Note 6, Notes Payable Related Party, above.

 

The Company received $2,500 from the exercise of warrants and issued 50,000 shares of common stock.

 

The Company received $60,000 for a note.

 

The Company issued 600,000 shares of common stock in exchange for services.

 

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Forward-Looking Statements

 

This quarterly report contains forward-looking statements and information relating to the Company that are based on the beliefs of its management as well as assumptions made by, and information currently available to, its management. When used in this report, the words “believe,” “anticipate,” “expect,” “estimate,” “intend”, “plan” and similar expressions, as they relate to the Company or its management, are intended to identify forward-looking statements. These statements reflect management’s current view of the Company concerning future events and are subject to certain risks, uncertainties and assumptions, including among many others: a general economic downturn; a downturn in the securities markets; federal or state laws or regulations having an adverse effect on proposed transactions that the Company desires to effect; Securities and Exchange Commission regulations which affect trading in the securities of “penny stocks”; and other risks and uncertainties. Some of those risks and uncertainties include the risk factors set forth in this report and our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this report as anticipated, estimated or expected. The accompanying information contained in this financial statement identifies important additional factors that could materially adversely affect actual results and performance. You are urged to carefully consider these factors. All forward-looking statements attributable to the Company are expressly qualified in their entirety by the foregoing cautionary statement.

 

Business Overview

 

Blue Biofuels, Inc., was incorporated in Nevada on March 28, 2012, as Alliance Media Group Holdings, Inc. Since December 2013, Blue Biofuels, Inc. (the “Company”) has been a technology company focused on emerging technologies in renewable energy, biofuels, and lignin.

 

In early 2018, our chief executive officer (“CEO”) Ben Slager invented a new technology system referred to as Cellulose-to-Sugar or CTS, and, to date, the Company filed, and received, three patents for this technology. The CTS process is a continuous mechanical/chemical process for converting cellulose material into sugar and lignin. Three additional patent applications have been filed and are pending.

 

The CTS system converts plant-based feedstock into one primary product, soluble sugars, which can be further processed into cellulosic ethanol and other biofuels like jet fuel, bio-gasoline, and potentially into bio chemicals.

 

In 2025, the Company finalized the upscaling, testing, and optimizing of its pilot plant and received third-party confirmation of its conversion results into sugars and ethanol. The Company is in the process of finalizing design and operational parameters for cost estimates of a full-scale commercial volume system.

 

In addition, the Company has licensed the Vertimass Process to convert ethanol into sustainable aviation fuel (SAF) and other renewable biofuels including bio-gasoline.

 

Plan of Operation

 

The total process from cellulosic feedstock to SAF consists basically of three steps:

 

  1) Conversion from feedstock to fermentable cellulosic sugars (CTS)
  2) Ferment the cellulosic sugars into cellulosic ethanol.
  3) Covert the ethanol into SAF and related products. This third step happens with the Vertimass technology which the Company has licensed.

 

In January 2024, the Company formed a 50-50 joint venture partnership with Vertimass called VertiBlue Fuels, LLC, that has the mission to build an ethanol-to-SAF facility in Florida with the initial goal to produce around 10-25 million gallons of Sustainable Aviation Fuel (SAF), and then expand SAF production to approximately 70 million gallon per year. VertiBlue Fuels plans to initially convert sugarcane ethanol, and then, as soon as the Company’s first CTS technology factory is finalized, switch to cellulosic ethanol. The plan is to build commercial CTS and ethanol facilities on the front-end of ethanol-to-SAF facilities to produce cellulosic SAF and generate the large D7 RIN and other government credits. Commencing commercial production will require project financing.

 

To obtain project financing, in September 2024 and September 2025, the Company applied for two USDA loan guarantees through its Section 9003 Loan Guarantee Program: one for a $149 million loan guarantee to build a commercial-scale facility for its CTS process; and one for a $148 million loan guarantee through its joint venture VertiBlue Fuels, LLC, to build a commercial-scale facility for the Vertimass Process. According to the USDA’s specification in its Section 9003 Loan Guarantee Program, to obtain these loan guarantees for first-of-a-kind commercial-scale renewable technology projects, companies need to complete an integrated demonstration unit for each technology and run them for 120 days using the same feedstock as anticipated in a commercial facility, and having the products meet the technical requirements outlined.

 

After its first plant is profitable, the Company intends to grow with an additional ten plants in Florida, and then explore growth in the rest of the United States, and international growth by either licensing the CTS technology or forming joint ventures with foreign domestic partners to build plants.

 

The Company believes that its management and consultants have significant experience in the development of technologies from concept to commercialization. As of this date, the Company has not generated any material revenues from its business.

 

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Capital Formation

 

From January 1, 2026, through the date of filing, the Company issued an aggregate of 810,000 shares of its common stock for services valued at $81,250.

 

From January 1, 2026, through the date of filing, the Company issued an aggregate of 230,000 warrants for interest on notes to a related party.

 

From January 1, 2026, through the date of filing, the Company issued an aggregate of 2,916,000 shares and warrants for $347,000 in a private placement.

 

From January 1, 2026, through the date of filing, the Company issued an aggregate of 1,300,000 shares for the exercise of warrants and received proceeds of $127,500.

 

From January 1, 2026, through the date of filing, 6,373,800 options vested. During the six months ended June 30, 2026, the Company recognized stock-based compensation of $337,887 in connection with the expensing of unvested options.

 

From January 1, 2026, through the date of filing, 10,000 vested options expired.

 

From January 1, 2026, through the date of filing, 2,600,000 warrants expired.

 

Going Concern

 

The Company has incurred losses since inception, has a working capital deficiency, and may be unable to raise further capital. As of June 30, 2026, the Company had a working capital deficit of $3,341,277 and had incurred accumulated losses of $61,544,958 since its inception. The Company expects to incur significant additional losses in connection with its continued start-up activities. As a result, there is substantial doubt about the Company’s ability to continue as a going concern based upon recurring operating losses and its need to obtain additional financing to sustain operations. The Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities when they become due and to generate sufficient revenues from its operations to pay its operating expenses.

 

Results of Operations

 

Comparison of the three and six month period ended June 30, 2026 to June 30, 2025

 

For the three and six months ended June 30, 2026, the Company recognized $0 in revenue as opposed to $0 in 2025.

 

For the three months ended June 30, 2026, the Company’s general and administrative expenses decreased by $33,726 to $397,408 from $431,134 in 2025. This decrease is primarily due to a reduction in equity based compensation from $204,425 in 2025 to $165,246 in 2026.

 

For the six months ended June 30, 2026, the Company’s general and administrative expenses decreased by $97,239 to $671,993 from $769,232 in 2025. This decrease is primarily due to a reduction in equity-based compensation from $238,135 in 2025 to 165,534 in 2026.

 

Interest expense increased in the quarter ended June 30, 2026 by $1,541 to $19,689 from $18,148 in 2025.

 

Interest expense increase in the six months ended June 30, 2026, by $5,845 to $23,992 from $18,147 in 2025.

 

Research and development (R&D) costs for the quarter ended June 30, 2026, were $431,198, a decrease of $40,272 from $471,470 in 2025.

 

Research and development (R&D) costs for the six months ended June 30, 2026, were $816,111, a decrease of $6,065 from $822,176 in 2025.

 

Liquidity and Capital Resources

 

Liquidity

 

As of June 30, 2026, the Company had $22,040 in cash and cash equivalents, and total stockholders’ deficit on June 30, 2026, was $4,058,672. As of December 31, 2025, the Company had $65,200 in cash and cash equivalents, and total stockholders’ deficit at December 31, 2025, was $3,706,083. Total debt, including convertible notes, accounts payable and other notes payable at June 30, 2026, together with interest payable thereon and legacy liabilities, was $5,379,631 an increase of $266,169 from December 31, 2025, where it stood at $5,113,462. This increase is primarily attributable to an increase in deferred wages of $333,935.

 

During the six months ended June 30, 2026, the Company’s net cash used in operating activities was $687,359 compared to $298,723 in the six months ending June 30, 2025. This is primarily attributed to a higher net loss in 2026 due to grant income in 2025.

 

During the six months ended June 30, 2026, the Company generated an aggregate of $702,000 versus $451,250 through its financing activities in the six months ended June 30, 2025, which is an increase of $250,750. This increase from the prior year can primarily be attributed to net proceeds of $347,000 in a private placement and $125,000 from the exercise of warrants versus $260,000 and $6,250, respectively, for 2025.

 

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Capital Resources

 

At this time, the Company has limited liquidity and capital resources. To continue funding its operations, the Company will need to generate revenue or obtain additional financing for current and future operations. The Company anticipates needing additional funds for G&A expenses and will seek project financing for a commercial ethanol to SAF facility in addition to funds needed to complete the commercialization of its CTS system. There is no guarantee that the Company will achieve all of the additional funding that is needed.

 

As of the date of this filing, in 2026 the Company has raised $472,000 through the issuance of shares and $320,000 from the issuance of notes. The Company previously raised $17,974,375 in shares and $2,245,916 through converted notes and $1,515,000 in debt or convertible notes since inception. However, there is no guarantee that the Company will be able to raise any additional capital on terms acceptable to the Company.

 

The inability to obtain this funding either in the near term and/or longer term will materially affect the ability of the Company to implement its business plan of operations and jeopardize the viability of the Company. In that case, the Company may need to reevaluate and revise its operations.

 

Equity

 

As of June 30, 2026, shareholders’ deficit was $4,058,672.

 

There were 323,518,980 shares of common stock issued and outstanding as of June 30, 2026.

 

There were no preferred shares outstanding.

 

The Company has paid no dividends.

 

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

 

As required by Rule 13a-15(e) of the Exchange Act, our management has carried out an evaluation, with the participation and under the supervision of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as of June 30, 2026. Based upon, and as of the date of this evaluation, our chief executive officer and chief financial officer determined that our disclosure controls and procedures were effective.

 

Changes in Internal Control over Financial Reporting

 

There has been no change in our internal control over financial reporting during the quarter ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

 

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PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

The Company is subject, from time to time, to litigation, claims and suits arising in the ordinary course of business. As of the date of filing, there are no material claims or suits whose outcomes could have a material effect on the Company’s financial statements.

 

ITEM 1A. RISK FACTORS.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES

 

Below is a list of securities sold by the Company from January 1, 2026, through the date of filing which were not registered under the Securities Act.

 

Entity 

Date of

Investment

  Title of Security 

Amount of

Securities Sold

   Consideration
Larry Chimerine  01/05/26  Common Stock   200,000   Purchase @ $0.125 per share
Anthony Santelli, Sr.  01/20/26  Common Stock   625,000   Exercise of Warrants
Mark Monahan  02/04/26  Common Stock   400,000   Purchase @ $0.125 per share
Joe Galbo   02/10/26  Common Stock   10,000   Stock for Services
Anthony Santelli, Sr.  02/24/26  Common Stock   625,000   Exercise of Warrants
David Bolton  03/06/26  Common Stock   416,000   Purchase @ $0.125 per share
Anthony Santelli, Sr.  03/26/26  Common Stock   800,000   Purchase @ $0.125 per share
Chris & Pamela Jemapete  05/12/26  Common Stock   400,000   Purchase @ $0.125 per share
Chris & Pamela Jemapete  05/12/26  Common Stock   670,868   Conversion of Notes
Randall Brodsky  06/18/26  Common Stock   50,000   Stock for Services
Randall Brodsky  06/22/26  Common Stock   200,000   Purchase @ $0.10 per share
Steven Segar  06/24/26  Common Stock   500,000   Purchase @ $0.10 per share
Chris Kneppers  06/30/26  Common Stock   750,000   Stock for Services
Mark Cox  07/02/26  Common Stock   50,000   Exercise of Warrants
AG Global Partners  07/16/26  Common Stock   600,000   Stock for 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.

 

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ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

None.

 

ITEM 6. EXHIBITS

 

The exhibits listed below are filed as part of or incorporated by reference in this report.

 

Exhibit No.   Identification of Exhibit
     
3.1   Articles of Incorporation (incorporated by reference to the Company’s S-1 filed May 23, 2012)
     
3.2   Certificate of Amendment to Articles of Incorporation filed November 19, 2014 (incorporated by reference to the Company’s Form 10-Q filed on May 4, 2026)
     
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   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)
     
10.2   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
     
10.3   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)

 

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SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  Blue Biofuels, Inc.
  (Registrant)
   
  By /s/ Benjamin Slager
    Benjamin Slager
    Chief Executive Officer, (Principal Executive Officer)
     
  Date August 10, 2026
     
  By /s/ Anthony Santelli
    Anthony Santelli
    Chief Financial Officer (Principal Financial and Accounting Officer)
     
  Date August 10, 2026

 

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