BIOF 10-K & 10-Q changes, risk factors and insider trading

This annual report contains forward-looking statements and information relating to the Company that are based on the beliefs of its management as well as assumptions made by, and information currently available to, its management. When used in this report, the words “believe,” “anticipate,” “expect,” “estimate,” “intend”, “plan” and similar expressions, as they relate to the Company or its management, are intended to identify forward-looking statements. These statements reflect management’s current view of the Company concerning future events and are subject to certain risks, uncertainties and assumptions, including among many others: a general economic downturn; a downturn in the securities markets; federal or state laws or regulations having an adverse effect on proposed transactions that the Company desires to effect; Securities and Exchange Commission regulations which affect trading in the securities of “penny stocks”; and other risks and uncertainties. Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this report as anticipated, estimated or expected. The accompanying information contained in this registration statement, including, without limitation, the information set forth under the heading “Management’s Discussion and Analysis and Plan of Operation — Risk Factors”10-K, 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.

In early 2018, our chief executive officer (“CEO”) Ben Slager invented a new technology system referred to as Cellulose-to-Sugar or CTS, andand, to date, the Company filed, and received, twothree patents for this technology. The CTS process is a continuous mechanical/chemical dry 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 addition, the Company has licensed the Vertimass Process to convert ethanol into sustainable aviation fuel (SAF) and other renewable biofuels including bio-gasoline. The license agreement with Vertimass is the subject to a confidentiality agreement between the parties.

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 1010-25 million gallons of Sustainable Aviation Fuel (SAF) and related products,, and then expand SAF and related product production to approximately 70 million gallon per year. VertiBlue Fuels plans to initially convert sugarcane ethanol, and then, whenas soon as the Company’s first CTS technology factory is fullyfinalized, commercialized,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.

A Low Carbon Fuel Standard Credit (LCFS) is offered by various states (primarily California) for any amount of reduced CO2 in the production lifecycle of transportation fuels as compared to the amount of CO2 emitted in the production lifecycle of fossil fuels. The production lifecycle includes transportation costs to the point of use. California is currently offering around $57$71 per metric ton of CO2 reduction. When it is closer to commercial production, the Company plans to analyzeanalyse the cost effectiveness of applying for these LCFS credits to determine in which state it could earn the most credits.

The Company believes that its management and consultants have significant experience in the development of technologies from concept to commercialization. As of this date, the Company has generated $194,319 in revenue,revenue not including government grants, however it has not generated any revenues from its core business.

For the year ended December 31, 2024,2025, the Company has a net loss of $1,418,981,$2,874,601 as compared to a net loss of $3,055,194$1,418,981 in 2023.2024. This was primarily attributed to a gain on extinguishment of debt of $2,417,502.$2,417,502 in 2024.

For the year ended December 31, 2024,2025, the Company’s general and administrative expenses increaseddecreased by $386,317$316,313 to $1,726,106$1,409,793 from $1,339,789$1,726,106 in 2023.2024. This increasedecrease is primarily due to higher professional fees and stock-based compensation recognized in 2024 which was $535,395 compared to $169,382 in 2023.2024.

Interest expense expense- related party decreased in the year ended December 31, 31,2025 by $30,270 from $54,747 in 2024 by $33,175 to $64,604 from $97,779$24,477 in 2023.2025.

For the year ended December 31, 2024, the Company was awarded a grant valued at $1,150,000 ,$1,150,000, of which $285,000$865,000 was recognized as grant income incomein 2025 versus $285,000 in 2024,versus $233,500 in 2023.2024. The grant money in 2024both years comes from the Department of Energy SBIR Phase II grant, and in 2023 comes from the Department of Energy SBIR Phase I grant.

The Company expenses all research and development costs as incurred. For the years ended December 31, 2024,2025, and 2023,2024, the amounts charged to research and development expenses were $2,329,413$2,305,340 and $1,849,967,$2,329,413, respectively. The increasedecrease is largely due to the vesting and expensing of options in 20242025 valued at $1,114,160,$606,837, versus $467,646$1,114,160 in 2023.2024 offset by bonuses of $514,265 in 2025 versus $4,500 in 2024.

As of December 31, 2024,2025, the Company had $48,797$65,200 in cash and stockholders’ deficit of $2,845,903.As$3,706,083 ofversus December 31, 2023, the Company had $41,008 in cash$48,797 and stockholders’$2,845,903 deficitin 2024. of $3,561,082. At December 31, 2024, totalTotal current liabilities is $2,212,115$2,984,402 compared to $1,503,169$2,212,115 at December 31, 2023.2024. This increase is primarily attributable to deferred wages and bonuses of management and deferred directors fees. Long-term liabilities at December 31, 20242025 total $2,023,375$2,129,060 as compared to $3,088,132$2,023,375 in 2023.2024. The decreaseincrease is attributable to the$185,000 discharging ofadditional notes payable withto balancesrelated of $2,417,502 as of September 18, 2024 in accordance with the Company’s 2019 bankruptcy, offset by additional borrowings of $930,000.parties.

During the fiscal year ended December 31, 2024,2025, the Company’s investing activities used $115,791$137,345 in cash versus $320,505$115,791 in 2023.2024. This decreaseincrease can be attributed to $287,828$50,000 deposit on land and $68,898 used to purchase machinery and equipment and $32,677 in patent costs in 20232025 versus $71,138 andin 2024, as well as $18,447 spent on patents in 2025 versus $44,653 respectively in 2024.

During the fiscal year ended December 31, 2024,2025, the Company generated an aggregate of $1,127,000$998,750 through its financing activities versus $1,127,000 in fiscal year 2024, which is a decrease of $623,024 from fiscal year 2023 where it was $1,750,024.$128,250. This decrease from the prior year can be attributed to $197,000$185,000 net proceeds raised proceedsin convertible notes versus $930,000 offset by $745,000 raised in private placements as compared to $1,002,773$197,000 in 2023, offset by the issuance of $930,000 in convertible notes in 2024 versus $700,000 in 2023.2024. There was also $97,251 $68,750 received from the exercise of options and warrants in 20232025 as compared to $0 in 2024, and a $50,000 debt repayment in 2023 versus $0 in 2024.

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 betweenaround $15$90 million and $100 million to pay for its share of the VertiBlue Fuels joint venture and start commercial production of Sustainable Aviation Fuel. The Company anticipates anticipatesraising the majority of this through project financing, and generating revenue from this joint venture 18-24 months from financing. There is no guarantee that we will achieve all of the additional funding that is needed.

As of the date of filing, the Company has raised $930,000$185,000 through the issuance of convertible notes in 2024,2025, and $197,000$68,750 from the exercise of warrants, and $745,000 from the issuance of common stock.stock, in addition to $272,000 raised in 2026 thus far. The Company also was awarded a grant for $1,150,000 from the Department of Energy, $865,000 of which was received in 2025 and $285,000 of which was received in 2024. The Company raised $1,800,024$1,127,000 through a private placement, the exercise of warrants and optionsplacement and the issuance of convertible notes in 2023,2024, in addition to $16,115,852 $16,963,625 raised through the end of 20222023 through its private placement offerings, and in addition to $2,245,916 in capital raised through debtnotes orthat convertiblehave notes.been converted, in addition to other notes currently on the books. However, there is no guarantee that the company Company will be able to raise any additional capital on terms acceptable to the Company.

The Company has incurred losses since inception, and it may be unable to raise further capital. At December 31, 2024,2025, the Company had a working capital deficit of $2,130,829$2,907,651 and had incurred accumulated losses of $57,255,761$60,130,362 since its inception. The Company expects to incur significant additional losses in connection with its continued start-up and commercialization activities. As disclosed in Note 2 to the financial statements, there is substantial doubt as to 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.

In 2025, the Company finalized the upscaling, testing, and optimizing of theits 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.

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 StatesStates, and explore international growth by either licensing the CTS technology or forming joint ventures with foreign domestic partners to build plants.

From January 1, 2026, through the date of filing, 3,147,5506,373,800 options vested. During the threesix months ended MarchJune 31,30, 2026, the Company recognized stock-based compensation of $75,605$337,887 in connection with the expensing of unvested options.

The Company has incurred losses since inception, has a working capital deficiency, and may be unable to raise further capital. As of MarchJune 31,30, 2026, the Company had a working capital deficit of $3,098,898$3,341,277 and had incurred accumulated losses of $60,794,163$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.

Comparison of the three and six month period ended MarchJune 31,30, 2026 to MarchJune 31,30, 2025

For the three and six months ended MarchJune 31,30, 2026, the Company recognized $0 in revenue as opposed to $0 in 2025.

For the three months ended MarchJune 31,30, 2026, the Company’s general and administrative expenses decreased by $63,513$33,726 to $274,585$397,408 from $431,134 $338,098 in 2025. This decrease is primarily thedue resultto ofa $56,199reduction in consultingequity expensesbased compensation from $204,425 in 2025 versusto $20,744$165,246 in 2026.

ResearchFor andthe developmentsix (R&D)months costsended forJune 30, 2026, the quarterCompany’s endedgeneral Marchand 31,administrative 2026,expenses weredecreased $384,913,by an$97,239 increaseto of $34,206$671,993 from $350,707 $769,232 in 2025. The increaseThis in R&D expensesdecrease is primarily thedue resultto ofa reduction in equity-based compensation offrom $75,317$238,135 in 20262025 versusto $54,456165,534 in 2025.2026.

As of MarchJune 31,30, 2026, the Company had $8,665$22,040 in cash and cash equivalents, and total stockholders’ deficit on MarchJune 31,30, 2026, was $4,058,672. $3,936,726. As of December 31, 2025, the Company had $65,200 in cash and cash equivalents, and total stockholders’ deficit at December 31, 31, 2025, was $3,706,083. Total debt, including convertible notes, accounts payable and other notes payable at MarchJune 31,30, 2026, together with with interest payable thereon and legacy liabilities, was $5,246,366$5,379,631 an increase of $132,904$266,169 from December 31, 2025, where it stood at $5,113,462. $5,113,462. This increase is primarily attributable to an increase in deferred wages of $155,925.$333,935.

During the threesix months ended MarchJune 31,30, 2026, the Company’s net cash used in operating activities was $418,535$687,359 compared to net cash provided by operating activities of $13,416$298,723 in the three six months ending March 31,June 30, 2025. This is primarily attributed to a higher net loss in 2026 due to grant income in 2025.

During the threesix months ended MarchJune 31,30, 2026, the Company generated an aggregate of $372,000$702,000 versus $100,000$451,250 through its financing activities in in the threesix months ended MarchJune 31,30, 2025, which is an increase of $272,000.$250,750. This increase from the prior year can primarily be attributed to to net proceeds of $227,000$347,000 in a private placement and $125,000 from the exercise of warrants versus $100,000$260,000 and $6,250, respectively, for the issuance of notes payable in 2025 versus $20,000 in 2026.2025.

As of MarchJune 31,30, 2026, shareholders’ deficit was $3,936,726.$4,058,672.

There were 320,948,112323,518,980 shares of common stock issued and outstanding as of MarchJune 31,30, 2026.