What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-03-31 compared with 2022-02-25 · 371 added, 397 removed, 535 unchanged (59% of the section changed)

14 unchanged sentences

Biofuels, Inc.

on the Consolidated Financial Statements

We have audited the accompanying consolidated

balance sheets of Blue Biofuels, Inc.

(Formerly known as Alliance BioEnergy Plus, Inc.) (the Company) as of December 31, 2021 and 2020,

and the related consolidated statement of operations, stockholders’ equity, and cash flows for the years then ended, and the related

notes (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present

fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the results

of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United

States of America.

Going Concern

The accompanying consolidated financial statements

have been prepared in conformity with accounting principles generally accepted in the United States, which contemplate continuation of

the Company as a going concern.

As described in Note 2 to the consolidated financial statements, the Company has not generated any significant

revenue since inception and has incurred losses since inception.

As of December 31, 2020, the Company has incurred accumulated losses

of $48,821,403.

On October 22, 2018, the Company filed for Chapter 11 bankruptcy.

On September 18, 2019, the judge confirmed the Company’s

Chapter 11 Plan, and on October 25, 2019, the bankruptcy case was closed.

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

about the ability of the Company to continue as a going concern.

Continuation as a going concern is dependent on the ability to raise

additional capital and financing, though there is no assurance of success.

Management’s plans in regard to these matters are also

described in Note 2 to the accompanying consolidated financial statements.

Basis for Opinion

These consolidated financial statements are the

responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial

statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United

States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and

the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated

financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were

we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an

understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of

the Company’s internal control over financial reporting.

on the Financial Statements

have audited the accompanying consolidated balance sheets of Blue Biofuels, Inc.

(the Company) as of December 31, 2022 and 2021, and

the related consolidated statements of operations, stockholders’ equity, and cash flows for the years then ended, and the related

notes (collectively referred to as the consolidated the financial statements).

In our opinion, the consolidated financial statements

present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2022 and 2021, and the

results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in

the United States of America.

accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the

United States, which contemplate continuation of the Company as a going concern.

As described in Note 2 to the consolidated financial

statements, the Company has not generated any significant revenue since inception and has incurred losses since inception.

As of December

31, 2022, the Company has incurred losses of $52,781,586.

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 about the ability

of the Company to continue as a going concern.

Continuation as a going concern is dependent on the ability to raise additional capital

and financing, though there is no assurance of success.

Management’s plans in regard to these matters are also described in Note

2 to the accompanying consolidated financial statements.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion

on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public

Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance

with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing

an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess

the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the

consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made

by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide

a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is

a matter arising from the current period audit of the financial statements that were communicated or required to be communicated to the

audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially

challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on

the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing

separate opinions on the critical audit matters or on the accounts or disclosures to which it relates.

We determined that there are no critical audit

Prager Metis CPA’s LLC

We have served as the Company’s auditor

audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether

due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Audit Matters

critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated

or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

determined that there are no critical audit matters.

Prager Metis CPAs, LLC

We have served as the Company’s auditor since 2020.

Our Auditor Firm ID is 273 .

Hackensack, New Jersey

February 18, 2022

March 31, 2023

Biofuels, Inc.

1 unchanged sentence

BALANCE SHEETS

and cash equivalents

December 31, 2022

December 31, 2021

Current assets

and equipment, net of accumulated depreciation and amortization of $ 273,852 and $ 231,739 at December 31, 2021 and December 31,2020,

of Use Assets, net of accumulated amortization

AND STOCKHOLDERS’ DEFICIT

payable - Related Party

wages and director’s fees - Related party

Liability - Current

11 Settlement

Debentures — Related Party

Payable - Related Party

Cash and cash equivalents

Prepaid expenses

TOTAL CURRENT ASSETS

Property and equipment, net of accumulated depreciation and amortization of $ 127,178 and $ 273,852 at December 31, 2022 and December 31,2021, respectively

Security deposits

Right of Use Assets, net of accumulated amortization

TOTAL OTHER ASSETS

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities

of Use Lease Liability, net of current portion

Protection Program SBA loan

11 Settlement

Payable — Related Party

Payable — Other

debenture, payable from future profits — Related Party

Accounts payable

Accounts payable - Related Party

Deferred wages and director’s fees - Related party

Right of Use Lease Liability - Current

Chapter 11 Settlement

Interest Payable - Related Party

TOTAL CURRENT LIABILITIES

Long term liabilities

Right of Use Lease Liability, net of current portion

Notes Payable — Related Party

Notes Payable — Other

TOTAL LONG TERM LIABILITIES

TOTAL LIABILITIES

STOCKHOLDERS’

EQUITY (DEFICIT)

STOCKHOLDERS’ EQUITY (DEFICIT)

Preferred stock;

$ 0.001 par value;

1 unchanged sentence

zero shares issued and outstanding

Common stock;

$ 0.001 par value;

1,000,000,000 shares authorized;

274,003,883 issued and outstanding at December 30, 2021, and 241,721,947

shares issued and outstanding at December 31, 2020.

paid-in capital

289,941,623 issued and outstanding at December 30, 2022, and 274,003,883 issued and outstanding at December 30, 2021.

Additional paid-in capital

Accumulated deficit

( 52,781,586 )

( 48,821,403 )

stockholders’ equity (deficit)

Total stockholders’ equity (deficit)

$ ( 2,356,917 )

$ ( 1,396,046 )

EQUITY (DEFICIT)

TOTAL EQUITY (DEFICIT)

$ ( 2,356,917 )

$ ( 1,396,046 )

LIABILITIES AND STOCKHOLDERS’ DEFICIT

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

accompanying notes are an integral part of these consolidated financial statements

2 unchanged sentences

STATEMENT OF OPERATIONS

and administrative

& Development

on disposal of assets

operating expenses

Operating expense:

General and administrative

Research & Development

Loss on disposal of assets

Total operating expenses

Loss from operations:

( 3,932,276 )

( 2,171,868 )

Other (income)

Loan Forgiveness

expense - related party

expense - other

Other (income) expense:

(Loss) before provisions for income taxes

Loan Forgiveness

Common Stock Recission

Interest expense - related party

Interest expense - other

Total other (income) expense

Income (Loss) before provisions for income taxes

$ ( 3,960,183 )

$ ( 2,139,310 )

for income taxes

Income / (Loss):

Provisions for income taxes

Net Income / (Loss):

$ ( 3,960,183 )

$ ( 2,139,310 )

income (loss) per share

Weighted average common shares

Net income (loss) per share

Weighted average common shares outstanding

accompanying notes are an integral part of these consolidated financial statements

1 unchanged sentence

known as Alliance Bioenergy Plus, Inc.

STATEMENTS OF STOCKHOLDERS’ EQUITY

Stockholder’s

as of December 31, 2020

STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

Preferred Stock

Additional Paid-in

Total Stockholder’s

Balance as of December 31, 2021

$ ( 48,821,403 )

$ ( 1,396,046 )

Issuance of common stock for

Issuance of 1,166,667 warrants

Issuance of common stock for services

Issuance of 77,333 warrants for services

Warrants exercised

Issuance of common stock and

warrants for cash through PPM

Issuance of common stock in

exchange for debt

Vesting of 460,000 options

under the employee, director plan

Issuance of common stock and warrants for cash through PPM

Issuance of common stock in exchange for debt

Vesting of 12,560,000 options under the employee, director plan

Employee stock options exercised

Cashless exercise of stock options

Income (Loss)

Stock Recinded

Net Income (Loss)

( 3,960,183 )

$ ( 3,960,183 )

as of December 31, 2021

Balance as of December 31, 2022

$ ( 52,781,586 )

$ ( 2,356,917 )

as of December 31, 2019

Balance as of December 31, 2020

$ ( 46,682,093 )

$ ( 3,336,764 )

Issuance of common stock for

Issuance of common stock and

warrants for cash through PPM

Issuance of common stock in

exchange for debt

Issuance of 11,000,000 vested

options under the employee, director plan

Issuance of common stock for services

Issuance of 1,166,667 warrants for services

Issuance of warrants for services

Warrants exercised

Issuance of common stock and warrants for cash through PPM

Issuance of common stock in exchange for debt

Vesting of 460,000 options under the employee, director plan

Vesting of options under the employee, director plan

Employee stock options exercised

Cashless exercise of stock options

Income (Loss)

Net Income (Loss)

( 2,139,310 )

$ ( 2,139,310 )

as of December 31, 2020

Balance as of December 31, 2021

$ ( 48,821,403 )

4 unchanged sentences

STATEMENTS OF CASH FLOWS

the Year Ended

from operating activities

Income (Loss)

For the Year Ended

Cash flows from operating activities

Net Income (Loss)

$ ( 3,960,183 )

$ ( 2,139,310 )

Reconciliation

of net loss to net cash used in operating activities

and amortization

based compensation for services

of options and warrants for services

Disposal of assets

in operating assets and liabilities

interest - related party

payable and accrued liabilities

cash used in operating activities

Reconciliation of net loss to net cash used in operating activities

Depreciation and amortization

Stock based compensation for services

Recission of stock

Net Issuance of options and warrants for services

Loss on Disposal of assets

Changes in operating assets and liabilities

Prepaid expenses

Accrued interest - related party

Accounts payable and accrued liabilities

Forgiveness of PPP Loan

Right of use lease

Net cash used in operating activities

( 2,036,143 )

from investing activities

of property and equipment

cash from (used in) investing activities

from financing activities

from PPP Loan

from exercise of warrants and options

proceeds from issuance of common stock

cash provided by financing activities

(decrease) in cash and cash equivalents

and cash equivalent at beginning of the period

and cash equivalent at end of the period

disclosure of cash flow information

during the period for

schedule of non-cash activities

Conversion of convertible

debenture to common stock

( 2,465,250 )

Cash flows from investing activities

Net purchase of property and equipment

Security deposits

Net cash from used in investing activities

Cash flows from financing activities

Proceeds from exercise of warrants and options

Net proceeds from issuance of common stock

Net cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalent at beginning of the period

Cash and cash equivalent at end of the period

Supplemental disclosure of cash flow information

Cash paid during the period for

Supplemental schedule of non-cash activities

Conversion of convertible debenture to common stock

accompanying notes are an integral part of these consolidated financial statements

2 unchanged sentences

1 – ORGANIZATION

Biofuels, Inc (the “Company”) is a technology company focused on emerging technologies in the renewable energy, biofuels,

and bioplastics technologies sectors.

In early 2018, the Company’s CEO invented a new technology system it calls Cellulose-to-Sugar

2.0 or CTS 2.0, and a patent application was filed and later obtained (U.S.

In addition to this patent, the Company

has filed provisional patent applications for six additional patents that are currently pending.

Biofuels, Inc (the “Company”) is a technology company focused on emerging technologies in renewable energy, biofuels, and

In early 2018, the Company’s CEO invented a new technology system it calls Cellulose-to-Sugar or CTS, and a patent application

was filed and later obtained (U.S.

In addition to this patent, the Company has obtained an additional patent

and has one continuation patent pending and has filed provisional patent applications for two additional patents that are currently pending.

CTS is a mechanical/chemical dry process for converting cellulose material into sugar for use in the biofuels industry.

convert any cellulosic material – like grasses, wood, paper, farm waste, yard waste, forestry products, energy crops like hemp

or King Grass, and the cellulosic portion of municipal solid waste – into sugars and lignin, and subsequently into biofuels and

The CTS 2.0 system produces sugar and chemically unmodified lignin among other by-products.

The sugar can then be further

converted into biofuels and the lignin into bioplastics.

CTS can convert

any cellulosic material – like grasses, wood, paper, farm waste, yard waste, forestry products, energy crops like hemp or King

Grass, and the cellulosic portion of municipal solid waste – into sugars and lignin.

The CTS system produces sugar and chemically

unmodified lignin among other by-products.

The sugar can then be further converted into biofuels like ethanol and sustainable aviation

Company’s focus is to commercialize its CTS technology.

The Company has recently finalized its 4 th generation testing

and has begun to develop its 5 th generation system which is expected to be semi-commercial in size.

The Company is in the process of completing the buildout of a pilot plant

that is designed to show successful volume production and scalability.

Company is now doing the engineering work to commercialize its CTS technology.

Company intends to raise additional capital and continue engineering work and scaling up towards a full-scale commercial size CTS 2.0

modular unit.

At that point, and to minimize dilution to shareholders, the Company will seek project-based financing to build (or acquire

and retrofit) or joint venture with existing ethanol producers to produce cellulosic ethanol and lignin/bioplastics from its patented

CTS 2.0 system.

Once the first plant is profitable, the Company intends to grow with additional plants both in the United States and

internationally.

Company intends to raise additional capital and continue engineering work and scaling up towards a full-scale commercial size CTS modular

At that point, and to minimize dilution to shareholders, the Company will seek project-based financing to build a full scale plant

(or acquire and retrofit) or joint venture with existing ethanol producers to produce cellulosic ethanol and lignin from its patented

Once the first plant is profitable, the Company intends to grow with additional plants both in the United States and internationally.

Company has a strategy that includes the following:

Selling sugar or ethanol

either direct or in combination with joint ventures, mergers, and/or acquisitions of existing businesses in the renewable energy

Selling low-cost high purity

lignin, or using that lignin to produce ion exchange resins, specialty chemicals, or biodegradable plastics, or making biodegradable

bioplastics products and selling them under our own brand.

Producing and selling sugar

to ethanol producers;

Producing and selling ethanol

either directly or in combination with joint ventures, mergers, and/or acquisitions of existing businesses in the renewable energy

Producing and selling sustainable

aviation fuel (SAF).

Producing and selling low-cost

high purity lignin, or using that lignin to produce ion exchange resins or specialty chemicals and sell those.

2 – GOING CONCERN

4 unchanged sentences

As of December 31, 2022, the Company has incurred accumulated losses of $ 52,781,586 .

On October 22, 2018, the Company filed

for Chapter 11 bankruptcy.

On September 18, 2019, the judge confirmed the Company’s Chapter 11 Plan, and on October 25, 2019, the

bankruptcy case was closed.

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 factors, among others, raise substantial doubt about the Company’s ability to continue as

a going concern.

These financial statements do not include any adjustments related to the recoverability and classifications of recorded

asset amounts, or amounts and classifications of liabilities that might result from this uncertainty.

There are no assurances that the

Company will continue as a going concern.

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 factors, among others, raise substantial

doubt about the Company’s ability to continue as a going concern.

These financial statements do not include any adjustments related

to the recoverability and classifications of recorded asset amounts, or amounts and classifications of liabilities that might result

from this uncertainty.

There are no assurances that the Company will continue as a going concern.

believes that the Company’s future success is dependent upon its ability to achieve profitable operations, generate cash from operating

15 unchanged sentences

by adversely affecting our ability to raise capital,

and by adversely affecting the supply chain of laboratory equipment and various parts of upgrades to our CTS 2.0 system, which slowed

the development of our prototypes.

The extent to which our operations may be further impacted by the COVID-19 pandemic will depend largely

on future developments, which are highly uncertain and cannot be accurately predicted.

We may experience additional operating costs due

to increased challenges with our workforce (including as a result of illness, absenteeism or government orders), access to supplies,

capital, and fundamental support services (such as shipping and transportation).

Even after the COVID-19 pandemic has subsided, we may

experience materially adverse impacts to our business due to any resulting economic recession or depression.

Furthermore, the effects

of a potential worsening of global economic conditions and the continued disruptions to and volatility in the financial markets remain

and by adversely affecting the supply chain of laboratory equipment and various parts of upgrades to our CTS system, which slowed the

development of our prototypes.

Supply chain issues also delayed the delivery of various parts of our pilot plant.

The extent to which

our operations may be further impacted by the COVID-19 pandemic will depend largely on future developments, which are highly uncertain

and cannot be accurately predicted.

We may experience additional operating costs due to increased challenges with our workforce (including

as a result of illness, absenteeism or government orders), access to supplies, capital, and fundamental support services (such as shipping

and transportation).

Even after the COVID-19 pandemic has subsided, we may experience materially adverse impacts to our business due

to any resulting economic recession or depression.

Furthermore, the effects of a potential worsening of global economic conditions and

the continued disruptions to and volatility in the financial markets remain unknown.

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

47 unchanged sentences

in the years ended December 31, 2022, and December 31, 2021:

OF BLACK-SCHOLES OPTION PRICING MODELS FOR WARRANT-BASED STOCK COMPENSATION

interest rate

stock fair value

SCHEDULE OF BLACK-SCHOLES OPTION PRICING MODELS FOR WARRANT-BASED STOCK COMPENSATION

interest rate

stock fair value

Risk-free interest rate

Expected life

Expected dividends

Expected volatility

BIOF common stock fair value

and Equipment

11 unchanged sentences

expected life of the patent(s).

Since the Company’s primary end product is sugar converting to ethanol, which are in wide use,

the Company has determined that it is reasonable to capitalize the patent costs associated with its CTS process.

Since the Company’s primary end products are expected to be sugar, ethanol, and SAF, which are

in wide use, the Company has determined that it is reasonable to capitalize the patent costs associated with its CTS process.

and Development

49 unchanged sentences

(For example, when a debenture

converts at a discount to market based on the stock price on the date of conversion.

In such instances, the embedded conversion option

of the convertible debentures is bifurcated from the host contract and recorded at their fair value.

In accounting for derivatives, the

Company records a liability representing the estimated present value of the conversion feature considering the historic volatility of

the Company’s stock, and a discount representing the imputed interest associated with the beneficial conversion feature.

is then amortized over the life of the debenture and the derivative liability is adjusted periodically according to stock price fluctuations.

converts at a discount to market based on the stock price on the date of conversion.) The Company analyzes the embedded conversion option

of the convertible debentures to determine if it should be bifurcated from the host contract and recorded at their fair value.

In accounting

for derivatives, the Company records a liability representing the estimated present value of the conversion feature considering the historic

volatility of the Company’s stock, and a discount representing the imputed interest associated with the beneficial conversion feature.

The discount is then amortized over the life of the debenture and the derivative liability is adjusted periodically according to stock

price fluctuations.

At the time of conversion, any remaining derivative liability is charged to additional paid-in capital.

For purposes of determining derivative

liability, the Company uses Black-Scholes modeling for computing historic volatility.

As of December 31, 2021, the Company has no derivative

of determining derivative liability, the Company uses Black-Scholes modeling for computing historic volatility.

As of December 31, 2022,

the Company has no derivative instruments.

Stock Purchase Warrants and Other Derivative Financial Instruments

83 unchanged sentences

4 – PROPERTY AND EQUIPMENT

OF PROPERTY AND EQUIPMENT

AND EQUIPMENT

SCHEDULE OF PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

December 31, 2022

December 31, 2021

Building and Improvements

1 unchanged sentence

Furniture and Fixtures

and Equipment, Gross

Accumulated Depreciation

Computer Equipment

Property and Equipment, gross

Less Accumulated Depreciation

$ ( 127,178 )

$ ( 273,852 )

and Equipment

depreciation expense was $ 52,692 and $ 40,124 for the years ended December 31, 2021, 2020, respectively.

Company has obtained one patent and has applied for six more patents on its technology, and has also applied for international patents.

The Company has capitalized the legal and filing fees in the amount of $ 154,758 .

of each debt, including those that have been paid off or renegotiated during 2021, are indicated below.

Debentures Related Party

March 12, 2019, the Company entered into a convertible promissory note with Edmund J Burke for a total of $25,000.

The note was due on

March 12, 2021, and carried no interest.

To the extent unpaid five years after September 18, 2019, it is discharged.

At the option of

the noteholder, the note is convertible into common stock at $0.025/share.

On January 22, 2021, Edmund Burke elected to convert this

Note into common stock.

March 12, 2019, the Company entered into a convertible promissory note with Chris Jemapete for a total of $25,000.

The note had a maturity

date of March 12, 2021, and carried no interest.

To the extent unpaid five years after September 18, 2019, it would be discharged.

the option of the noteholder, the note was convertible into common stock at $0.025 per share.

On August 5, 2020, Chris Jemapete elected

to convert the note into common stock.

Jemapete is a greater than 5% stockholder of the Company.

March 12, 2019, the Company entered into a convertible promissory note with AES Capital Partners, LP, for a total of $50,000.

was due on March 12, 2021, and bore 15% interest.

To the extent unpaid five years after September 18, 2019, it is discharged.

option of the noteholder, the note is convertible into common stock at $0.025/share.

Upon conversion, all interest shall be forgiven.

On January 22, 2021, AES Capital Partners, LP, elected to convert this Note into common stock.

Protection Program SBA Loan

May 2020, the Company received a loan in the amount of $66,330 under the Payroll Protection Program (“PPP Loan”).

accrues interest at a rate of 1% and has an original maturity date of two years which can be extended to five years by mutual agreement

of the Company and SBA.

The PPP loan contains customary events of default relating to, among other things, payment defaults and breaches

of representations and warranties.

the terms of the loan, a portion or all of the loan is forgivable to the extent the loan proceeds are used to fund qualifying payroll,

rent and utilities during a designated twenty-four week period.

Payments are deferred until the SBA determines the amount to be forgiven.

The Company has utilized the proceeds of the PPP loan in a manner which enabled qualification as a forgivable loan.

On April 21, 2021,

the Company received notice that the entire amount is forgiven.

Property and Equipment

depreciation expense was $ 55,601 and $ 52,692 for the years ended December 31, 2022, and 2021, respectively.

the fiscal year ended December 31, 2022, The Company disposed of laboratory equipment and machinery that was no longer in use for a total

of $ 1,185 that originally was purchased for $ 240,898 and that had accumulated depreciation of $ 199,614 , thereby taking a loss of $ 40,099

on the disposal of assets.

In fiscal year ended December 31, 2021, the Company disposed of laboratory equipment and machinery purchased

for $ 44,063 and that had accumulated depreciation of $ 10,579 , taking a loss on disposal of assets of $ 33,484 .

Company has obtained two patents and has applied for three more patents on its technology, and has also applied for international patents.

The Company has capitalized the legal and filing fees in the amount of $ 222,109 as of December 31, 2022.

of each remaining debt, including those that have been paid off or renegotiated during 2022, are indicated below.

Payable — Chapter 11 Settlement

6 unchanged sentences

The bankruptcy judge ordered mediation, and a settlement was reached that paid Lenaburg $13,650

upon Plan Confirmation and a $50,000 claim payable out of post-confirmation net profits over 3 years, plus 1.5 million common stock warrants

with a strike price of $0.30/share and a ten year expiration period.

The $50,000 is due on September 18, 2022.

upon Plan Confirmation and a $50,000 claim payable no later than three years after the Plan effective date, plus 1.5 million common stock

warrants with a strike price of $0.30/share and a ten-year expiration period.

The $50,000 claim was fully paid in Q1 2023.

Nothing remains

due on this Settlement.

Payable – Related Parties

July 2016, the Company issued six (6) short-term notes payable to related parties in conjunction with the Company’s

acquisition of the remaining 49 %

of AMG Energy Group.

These notes had a value of $2,002,126 and

accrued interest at a rate of six percent (6 %)

As of December 31, 2018, and December 31, 2017, the total interest accrued on the notes was $278,795 and

$176,460 respectively.

July 2016, the Company issued six (6) short-term notes payable to related parties in conjunction with the Company’s acquisition

of the remaining 49% of AMG Energy Group.

These notes had a value of $2,002,126 and accrued interest at a rate of six percent (6%) per

As of December 31, 2018, and December 31, 2017, the total interest accrued on the notes was $278,795 and $176,460 respectively.

All of the notes were due on August 4, 2017 and then were in default.

However, the notes were held by related parties with the

understanding that the notes were not to be paid until the Company begins generating profit.

The Company renegotiated some of these

notes during its Chapter 11 proceedings, whereas others failed to submit a claim and were discharged upon the Court’s

Confirmation Order approving the Company’s Chapter 11 Plan on September 18, 2019.

renegotiated amounts, as per the Plan Confirmation are all to be paid from 50% of the future net profits and discharged to the

extent unpaid five years after the Plan effective date of September 18, 2019.

amount are 1) Mark Koch $240,990 plus 6% interest on any portion not repaid within 12 months of the Company’s first reported

However, the notes were held by related parties with the understanding

that the notes were not to be paid until the Company begins generating profit.

The Company renegotiated some of these notes during its

Chapter 11 proceedings, whereas others failed to submit a claim and were discharged upon the Court’s Confirmation Order approving

the Company’s Chapter 11 Plan on September 18, 2019.

The renegotiated amounts, as per the Plan Confirmation are all to be paid

from 50% of the future net profits and discharged to the extent unpaid five years after the Plan effective date of September 18, 2019.

These amount are 1) Mark Koch $240,990 plus 6% interest on any portion not repaid within 12 months of the Company’s first reported

quarterly net profit;

2) Animated Family Films $579,942 out of the Company’s net profits plus 6% interest;

3) Steven Dunkle,

CTWC, & Wellington Asset Holdings $1.5 million plus 6% interest once there is positive quarterly EBITDA from the first plant of

Company, or, at its option, may convert that into an equity investment in the first plant of the Company, measured by a percentage

of the total cost to build, subject to a minimum equity interest of 1.25% in said plant.

3) Steven Dunkle, CTWC,

& Wellington Asset Holdings $1.5 million plus 6% interest once there is positive quarterly EBITDA from the first plant of Company,

or, at its option, may convert that into an equity investment in the first plant of the Company, measured by a percentage of the total

cost to build, subject to a minimum equity interest of 1.25% in said plant.

February 28, 2018, the Company entered into a short-term loan with Steven Sadaka, with a principal balance of $100,000 due and payable

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Plan was confirmed by the Court on September 18, 2019.

Debentures – Related Parties

November 8, 2018, the Company entered into a convertible promissory note with Edmund J Burke for a total of $175,000.

There is no interest,

and it is payable out of 20% of the net profits of Company.

The note is convertible into common stock at $0.05/share.

Upon conversion,

Burke shall receive an additional 4,450,148 warrants at a strike price of $0.005/share that expire on November 8, 2023.

4,450,148 shares of Burke’s common stock were cancelled.

On January 22, 2021, Edmund Burke elected to convert this Note into common

November 8, 2018, the Company entered into a convertible promissory note with Steven Sadaka for a total of $24,000.

There is no interest,

and it is payable out of 2.5% of the net profits of Company.

The note is convertible into common stock at $0.05/share.

Upon conversion,

Sadaka shall receive an additional 1,000,000 warrants at a strike price of $0.005/share that expire on November 8, 2023.

1,000,000 shares of Sadaka’s common stock were cancelled.

On January 15, 2021, Steven Sadaka elected to convert this Note into

common stock.

November 8, 2018, the Company entered into a convertible promissory note with Annie Bindler for a total of $2,500.

There is no interest,

and it is payable out of 0.5% of the net profits of Company.

The note is convertible into common stock at $0.05/share.

Upon conversion,

Annie Bindler shall receive an additional 100,000 warrants at a strike price of $0.005/share that expire on November 8, 2023.

100,000 shares of Annie Bindler’s common stock were cancelled.

On January 13, 2021, Annie Bindler elected to convert this Note

into common stock.

November 8, 2018, the Company entered into a convertible promissory note with Zac Bindler for a total of $2,500.

There is no interest,

and it is payable out of 0.5% of the net profits of Company.

The note is convertible into common stock at $0.05/share.

Upon conversion,

Zac Bindler shall receive an additional 100,000 warrants at a strike price of $0.005/share that expire on November 8, 2023.

100,000 shares of Zac Bindler’s common stock were cancelled.

On January 13, 2021, Zac Bindler elected to convert this Note into

common stock.

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

OF NOTES PAYABLE

Term Chapter 11 Settlement

Term Convertible Debentures Related Party

Chapter 11 Settlement

Paycheck Protection Program SBA loan

Notes Payable from future revenue — Related Party

Notes Payable from future revenue — Other

Note Payable from future profits — Related Party

Note Payable from future profits — Other

Term Convertible Debentures — Related Party

SCHEDULE OF NOTES PAYABLE

Notes Payable

December 31, 2022

December 31, 2021

Short Term Chapter 11 Settlement

Long Term Notes Payable from future revenue — Related Party

Long Term Notes Payable from future revenue — Other

Long Term Note Payable from future profits — Related Party

Long Term Note Payable from future profits — Other

the $2,788,132 due as of September 30, 2022, $2,738,132 is due out of future revenue or future profits.

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model, these were valued at $ 9,773 .

The Company also issued an aggregate of 2,000,000 unvested warrants for services to be performed.

The services were not performed, and the warrants expired in 2023.

the year ended December 31, 2022, 7,000,000 warrants were exercised for proceeds of $ 105,000 .

the year ended December 31, 2022, 350,000 employee stock options were exercised for proceeds of $ 15,900 .

the year ended December 31, 2022, 11,043 shares of common stock were rescinded.

the year ended December 31, 2022, the Company issued 7,786,664 common shares for cash through private placements of $ 1,168,000 .

the year ended December 31, 2022, the Company issued options under its Employee & Directors Stock Option Plan to purchase an aggregate

of 2,000,000 shares of common stock for a period of ten years at an exercise price of $ 0.17 .

Using a Black-Scholes asset-pricing model,

these agreements were valued at $ 319,327 .

Only 100,000 of those options vested in 2022.

A total of 12,560,000 options vested.

options were valued at $ 1,565,589 .

the year ended December 31, 2021, the company issued an aggregate of 515,700 shares of its common stock for services, valued at $ 120,152 .

the year ended December 31, 2021, the Company issued an aggregate of 1,166,667 warrants for services.

Using a Black-Scholes asset pricing

model, these were valued at $ 72,090 .

the year ended December 31, 2021, 13,455,008 warrants were exercised at an average price of 9.7 cents for total proceeds of $ 1,302,817 .

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The vested options were valued at $ 32,319 .

the year ended December 31, 2020, the company issued an aggregate of 733,130 shares of its common stock for services, valued at $ 37,500 .

the year ended December 31, 2020, 6,639,344 warrants were exercised at an average price of 5.3 cents for total proceeds of $ 350,000 .

the year ended December 31, 2020, 500,000 employee stock options were exercised using the cashless exercise provision to obtain 277,778

the year ended December 31, 2020, the Company issued 13,558,462 common shares for cash of $ 887,380 .

the year ended December 31, 2020, $ 25,000 of convertible notes issued during Chapter 11 to a related party converted into 1,000,000 shares

of common stock.

the year ended December 31, 2020, the Company issued options under its Employee & Directors Stock Option Plan to purchase an aggregate

of 11,000,000 shares of common stock for a period of five to ten years at an exercise price ranging from $ 0.042 to $ 0.10 .

Using a Black-Scholes

asset-pricing model, these agreements were valued at $ 876,291 .

An additional 10,550,000 unvested options were issued.

option activity under the 2021 ESOP for the year ending December 31, 2022, is as follows:

OF STOCK OPTION ACTIVITY

Shares Outstanding

as of December 31, 2020

as of December 31, 2021

as of December 31, 2019

as of December 31, 2020

Option Shares Outstanding

Weighted Average Exercise Price

Weighted Average Remaining Contractual Term (years)

Aggregate Intrinsic Value ($0’s)

Outstanding as of December 31, 2021

Expired or Rescinded

Outstanding as of December 31, 2022

Vested as of December 31, 2022

Option Shares Outstanding

Weighted Average Exercise Price

Weighted Average Remaining Contractual Term

Aggregate Intrinsic Value ($0’s)

Outstanding as of December 31, 2020

Outstanding as of December 31, 2021

Vested as of December 31, 2021

activity for the year ending December 31, 2022, is as follows:

of Warrant Activity

Average Remaining Contractual Term (years)

Intrinsic Value ($0’s)

Outstanding as

of December 31, 2020

or received from note conversions

as of December 31, 2021

SCHEDULE OF WARRANT ACTIVITY

Warrants Outstanding

Weighted Average Exercise Price

Weighted Average Remaining Contractual Term (years)

Aggregate Intrinsic Value ($0’s)

Outstanding as of December 31, 2021

Outstanding as of December 31, 2022

Vested as of December 31, 2022

as of December 31, 2019

as of December 31, 2020

Warrants Outstanding

Weighted Average Exercise Price

Weighted Average Remaining Contractual Term (years)

Aggregate Intrinsic Value ($0’s)

Outstanding as of December 31, 2020

Awarded or received from note conversions

Outstanding as of December 31, 2021

Vested as of December 31, 2021

8 – INCOME TAXES

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effective tax rate, is as follows:

of Reconciliation Between Statutory Tax Rate and Effective Tax Rate

SCHEDULE OF RECONCILIATION BETWEEN STATUTORY TAX RATE AND EFFECTIVE TAX RATE

Statutory federal

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provisional (benefit) for income tax is summarized as follows:

of Income Tax Provision

SCHEDULE OF INCOME TAX PROVISION

$ ( 831,638 )

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are as follows:

of Tax Effects of Principal Temporary Differences That Give Rise to Deferred Tax Assets

SCHEDULE OF TAX EFFECTS OF PRINCIPAL TEMPORARY DIFFERENCES THAT GIVE RISE TO DEFERRED TAX ASSETS

Deferred tax asset

operating loss carryovers

operating loss carryovers (federal)

Total deferred tax assets

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Company files U.S.

Federal and Florida tax returns that are subject to audit by tax authorities beginning with the year ended December

The Company’s policy is to classify assessments, if any, for tax and related interest and penalties as tax expense.

Federal and Florida tax returns that are subject to audit by tax authorities.

The Company’s policy is to classify

assessments, if any, for tax and related interest and penalties as tax expense.

9 - COMMITMENTS AND CONTINGENCIES

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Power Up has continued a tort case against the individuals.

director and officer insurance has agreed to cover our chief executive officer Benjamin Slager, chief financial officer Anthony Santelli,

as well as ex-controller Dennis Lenaburg, in this case.

Management believes the Complaint is frivolous.

The defendants have filed amended

answers and counterclaims as of the date of this filing, and the case has gone into the discovery phase.

D&O insurance has agreed to cover the legal defense costs for CEO Ben Slager, CFO Anthony Santelli, as well as ex-Controller Dennis

Lenaburg, in this case.

Management believed the Complaint was frivolous.

On June 28, 2022, Power Up Lending Group withdrew the lawsuit

against management.

The case is now closed.

There has been no financial cost to the Company or its Management team.

Company consolidated its premises into one location on November 1, 2019, and currently leases office and laboratory space in Palm Beach

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over the lease term at the commencement date for leases exceeding 12 months.

The lease period is for twenty-four (24) months from November

The lease period was for twenty-four (24) months from November

1, 2019, to October 31, 2021.

This had been extended for one year until October 31, 2022 .

Annual rent commences at $ 84,100 per annum

and increases 3 % per year.

Tenant is also required to cover operating costs that are estimated at $ 3,084 per month.

Operating lease expense

is recognized on a straight-line basis over the lease term and is included in General & Administrative expenses.

This had been extended for one year until October 31, 2022, and was further extended for two more years

until October 31, 2024 .

Annual rent commenced at $ 84,100 per annum and increased 3 % per year.

The latest amendment adjusted to lease

to $ 102,950 per annum and increases at 3 % per year.

Tenant is also required to cover operating costs that are estimated at $ 3,600 per

Operating lease expense is recognized on a straight-line basis over the lease term and is included in General & Administrative

842 was effective for us beginning January 1, 2019.

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Company recognized the following related to leases in its Consolidated Balance Sheet:

of Lease Consolidated Balance Sheet

SCHEDULE OF LEASE CONSOLIDATED BALANCE SHEET

December 31, 2022

December 31, 2021

Right of Use Lease Liabilities

Current portion

Long-term portion

of December 31, 2022, the total future minimum lease payments in respect of leased premises are as follows:

of Future Minimum Lease Payments

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS

10 – RELATED PARTY TRANSACTIONS

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one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

notes payable, convertible notes, and contingent liabilities issued to related parties are described in NOTE 5.

board resolution was passed on February 13, 2020, that pledged the pending patents to secure the back pay claims of Ben Slager, CEO,

Anthony Santelli, CFO, and Charles Sills, Director.

This was done to ensure the continued involvement of management to build the

Company while they continue to be owed back pay.

Short-term notes payable,

convertible notes, and contingent liabilities issued to related parties are described in NOTE 6.

A board resolution was

passed on February 13, 2020, that pledged the pending patents to secure the back pay claims of Ben Slager, CEO, Anthony Santelli,

CFO, and Charles Sills, Director.

This was done to ensure the continued involvement of management to build the Company while they

continue to be owed back pay.

officers and directors for the Company are involved in other business activities and may, in the future, become involved in other business

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the Company has identified the following subsequent events:

to December 31, 2021, 250,000 warrants expired.

to December 31, 2021, 150,000 employee stock options were exercised for proceeds of $ 7,500 .

to December 31, 2021, 2,500,000 employee stock options expired.

to December 31, 2022, the Company issued 140,000 shares for services valued at $ 24,000 .

Subsequent to December 31, 2022, 2,039,999 warrants expired.

Subsequent to December 31, 2022, 2,000,000 options expired.

to December 31, 2022, 5,450,148 warrants were exercised for total proceeds of $ 72,251 .

to December 31, 2022, 1,885,000 employee stock options vested.

These have a Black-Scholes valuation of $ 306,599 .

to December 31, 2022, 16,450,000

employee stock options were issued, 15,950,000

of which are unvested.

million of those vest upon deliverables, and all expire

in 5 or 10 years from the date of issuance with strike prices between $ 0.16

Using the Black-Scholes option pricing method, these were valued at $ 2,759,814 .

to December 31, 2022, 3,884,998 shares were issued in private placements for proceeds of $ 582,750 .

to December 31, 2022, the company issued a convertible note to a related party for $ 250,000 .

If it is not paid back by July 4, 2023,

it automatically converts into common stock at 13 cents per share for a total of 1,923,077 shares.

– CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data