What changed in this filing

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Item 1. Business

2024-03-26 compared with 2023-03-31 · 109 added, 142 removed, 33 unchanged (88% of the section changed)

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(the “Company”) has been a technology company focused on emerging technologies in renewable energy, biofuels, and lignin.

early 2018, the Company’s chief executive officer (“CEO”) Ben Slager invented a new technology system referred to as

Cellulose-to-Sugar or CTS, and the Company filed a process patent application for this technology.

Slager has since further developed

the system with laboratory personnel.

The CTS patent was awarded in 2021 in the United States (U.S.

10,994,255) and also in

The Company also filed an application for this patent in other major jurisdictions of the world including the European Patent

Organization, Australia, Brazil, China, Japan, the African Regional Intellectual Property Organization, and the Russian Federation.

patent applications are currently pending in all of these international jurisdictions.

early 2018, the Company’s chief executive officer (“CEO”) Ben Slager invented a new reactor technology with a

higher yield and a continuous throughput in the Cellulose-to-Sugar process, or CTS, and the Company filed a process patent

application for this technology.

Slager has since further developed the system with the technical staff of the Company.

patent was awarded in 2021 in the United States (U.S.

10,994,255) and has subsequently been granted in Japan and El

The Company also filed this patent in other major jurisdictions of the world including the European Patent Organization,

Australia, Brazil, China, the African Regional Intellectual Property Organization, and the Russian Federation.

applications are currently pending in all of these international jurisdictions.

In addition to this patent, the Company has received

one additional patent (for which it has also applied for in all the above mentioned jurisdictions), one continuation patent pending,

and provisional patent applications for two additional patents that are currently pending.

one additional patent in the United States (U.S.

11,484,858B2), for which it has also applied in all the above-mentioned

jurisdictions.

Further, the company has filed for 6 other patents in the United States which are currently pending.

Slager has since further developed the system with the technical staff of the Company.

The patented CTS process is a continuous mechanical/chemical

dry process for converting cellulose material into sugar and lignin, as compared to the prior batch process that the Company previously

The CTS process creates molecular contact between two reactive solid components instead of other systems where the reaction

takes place between two liquid or gas components in a batch process.

The reactants are (1) the feedstock, which is broken down into its

components being sugars and lignin;

(2) a catalyst, which is cost effective and abundantly available in the market from regular suppliers;

it is separated from reactor components and reused.

The CTS mechanical/chemical process allows for exact process control to ensure that

all the material passing through it does so on the optimum reaction parameters through which optimal efficiency is achieved.

is different from other commercial processes that are used to convert cellulose into sugar.

Other processes use enzymatic batch reactors

that take up to weeks to convert cellulose to sugars.

CTS can convert any cellulosic material – including grasses and agricultural

waste – into sugars in less than a minute of conversion time.

The sugars are subsequently processed into biofuels using off-the-shelf

technologies.

CTS is environmentally friendly in that it recycles the water and catalyst, and it has a near zero carbon footprint:

amount of added atmospheric carbon created by burning the biofuels produced by the CTS system was absorbed by the plant-based feedstock

while growing and is merely released back into the atmosphere.

No extra CO2 is released into the atmosphere in our system.

be distinguished from fossil fuels because new CO2 is released when fossil fuels are burned.

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, and potentially into bio chemicals.

has different co-products than other processes.

Our primary co-product is pure lignin.

Other industries like the paper industry produce

lignin that is contaminated by chemicals like sulfur.

Other cellulosic ethanol processes do not yield chemically clean high purity lignin

because their processes chemically alter or contaminate the lignin.

Most ethanol producers use corn, not cellulose, and the co-products

of corn ethanol production are distillers grains animal feed and corn oil.

Our lignin can potentially be used in ion exchange resins

or specialty chemicals.

Lignin can also be burned as a renewable fuel.

a commercial scale, our management expects to be able to produce ethanol at a lower cost per gallon than existing commercial corn or

cellulosic ethanol producers due to the fact that the CTS process is robust, uncomplicated and efficient, and is expected to use low-cost

feedstocks and have a potentially high value by-product.

We believe a significant difference between CTS ethanol and corn ethanol is

the wide range of abundantly available feedstocks that CTS can process compared to just corn as the feedstock.

The CTS feedstocks are

nonfood and have much lower costs than corn.

In addition, while in corn ethanol only the corn kernels are used, CTS uses the whole plant

or its waste products, meaning it could obtain much higher yields per acre.

Estimated yields for corn are about 400-600 gallons of ethanol

per acre per year and for king grass in conjunction with our CTS process it could be up to 3000-3500 gallons per acre per year.

also expects to potentially receive a highly valued D3 RIN for each gallon of ethanol it produces.

promise of the then newly developed CTS technology made it worthwhile to financially restructure the Company through Chapter 11 in 2018.

Prior management had taken on various “toxic” notes other debts that the Company could not pay at that time.

The Company’s

new board and management determined that a chapter 11 bankruptcy filing was its only plausible alternative to save the company as a going

concern for the benefit of creditors and stockholders.

The Company voluntarily filed for Chapter 11 on October 22, 2018, in the U.S.

dry process for breaking down cellulosic material for conversion into biofuels.

CTS can break down any cellulosic material – including

grasses and agricultural waste.

The CTS mechanical/chemical process allows for exact process control to ensure that all the material

passing through it does so on the optimum reaction parameters through which optimal efficiency is achieved.

new technology made it worthwhile to financially restructure the Company through Chapter 11.

The Company voluntarily filed for Chapter

11 on October 22, 2018, in the U.S.

Bankruptcy Court in the Southern District of Florida.

Management fought, eliminated, and restructured millions in debts and disputed

debts, and exited Chapter 11 on September 18, 2019, while keeping all classes, including the shareholders, unimpaired.

The Company’s

debts were either voided, renegotiated down and paid off, or renegotiated to be paid out of future revenues ($1,820,630) or renegotiated

to be paid out of future profits ($917,502).

These are reflected on the Company’s financial statements.

A complete copy of the

Plan of Reorganization was filed as Exhibit 2(a) of the Company’s 2020 financial statements.

Having paid all debts that needed

to be paid, the bankruptcy case was closed on October 25, 2019.

Company has built several prototypes of the CTS system to further develop the process.

The Company finalized its parameter optimization

when it was able to convert 99% of the cellulosic material into soluble sugars suitable for further processing into cellulosic ethanol.

In 2022, the Company partnered with K.R.

The Company exited Chapter 11 on September

18, 2019, while keeping all classes, including shareholders, unimpaired.

The bankruptcy case was closed on October 25, 2019.

is environmentally friendly in that it recycles the water and catalyst, and it has a low carbon footprint:

the amount of added atmospheric

carbon created by burning the biofuels produced by the CTS system was absorbed by the plant-based feedstock while growing and is merely

released back into the atmosphere.

No extra CO2 is released into the atmosphere when our biofuels are burned.

This is to be distinguished

from fossil fuels because new CO2 is released when fossil fuels are burned.

Company believes a significant difference between CTS cellulosic ethanol and corn ethanol is the wide range of abundantly available feedstocks

that CTS can process compared to just corn as the feedstock.

The CTS feedstocks are nonfood and have much lower costs than corn.

while in corn ethanol only the corn kernels are used, CTS uses the whole plant or its waste products, meaning it could obtain much higher

yields per acre.

2022, the Company partnered with K.R.

Komarek to build its CTS machines going forward.

Komarek is an industry leading manufacturing

company that builds briquetting machines and compaction/granulation systems with throughput capacities up to 50 tons per hour.

Company has begun successful testing on a Komarek-made machine at a throughput processing rate of 2.5 tons per day.

The Company has designed

a pilot plant around that machine and is in the process of completing the buildout of the plant.

The Company anticipates having the pilot

plant completed in Q1, 2023 and anticipates to continue testing it and optimizing parameters and sugar production in the first half of

This pilot plant is designed to show successful volume production and scalability.

Company expects to engage an engineering firm to design a semi-commercial scale pilot plant that integrates a larger CTS system into

the pre-processing and post-processing elements of the plant.

It is anticipated that the semi-commercial plant will have the capacity

to produce sugar at a rate sufficient to make around 500,000 – 1,000,000 gallons of ethanol per year.

The goal of the semi-commercial

plant is to provide operating cost estimates of a full commercial volume system.

Due to its mechanical nature and modularity, we anticipate

that one plant would have multiple modular CTS systems, and that the semi-commercial plant would contain one such module.

expects to have the semi-commercial system ready in 2024.

commercial production will require project financing.

The project financing will either be for bolting on our CTS system into an existing

ethanol facility of a future potential joint venture partner, or for acquiring an ethanol facility and converting that to cellulosic

ethanol production using our CTS system, or for setting up a production facility for converting ethanol into jet fuel using the Vertimass

Process that the Company has licensed.

Company has licensed the Vertimass Process to convert ethanol (from the CTS process) into sustainable aviation fuel (SAF).

up-front or annual fee until we are converting ethanol into SAF.

The license agreement with Vertimass is the subject of a confidentiality

agreement between the parties.

The Company aims to start engineering of a first pilot plant to convert up to 500,000 gallons of ethanol

into jet fuel and other fuels.

Company’s strategy is to diversify its product portfolio to include a number of product lines.

These potentially include (1) biofuels

– such as ethanol, or converting ethanol into higher biofuels like sustainable aviation fuel and the like;

(2) selling sulfur-free

lignin to ion exchange resin producers;

and (3) making specialty chemicals from lignin.

We believe these, and other markets, could potentially

provide for highly profitable products.

believes that retrofitting existing plants with the CTS technology or delivering cellulosic sugar to existing ethanol plants to enable

them to make cellulosic ethanol, may achieve more rapid commercialization than building new plants.

After its first plant is profitable,

the Company intends to grow with additional plants in the United States and explore international growth by either licensing the technology

or forming joint ventures with foreign domestic partners to build plants.

ethanol industry is competitive with over 200 ethanol plants in the United States alone.

Currently, the vast majority use corn as the

Their profitability depends highly on the fluctuations between the price of corn and the price of ethanol.

Since the Company

does not plan to use corn, and plans on having long-term purchase agreements with cellulosic suppliers, we anticipate that our profitability

will be more consistent.

Komarek is an industry leading manufacturing company

that builds briquetting machines and compaction/granulation systems with throughput capacities up to 50 tons per hour.

2023, the Company completed the build-out of a pilot plant based on a modified Komarek machine and is in the process of further testing

and optimizing the plant.

The Company believes that it can optimize the pre and post processing elements at this pilot scale plant to

finalize design and operational parameters to provide operating cost estimates of a full-scale commercial volume system.

Due to its mechanical

nature and modularity, we anticipate that one plant would have multiple modular CTS systems.

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.

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

from feedstock to fermentable cellulosic sugars (CTS)

the cellulosic sugars into cellulosic ethanol.

the ethanol into SAF and related products.

This third step happens with the Vertimass technology which the Company has licensed.

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 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, when the Company’s CTS technology is fully commercialized, to build commercial CTS and ethanol facilities on the front-end

to produce cellulosic SAF and generate the large D7 RIN and other government credits.

Commencing commercial production will require project

new biofuels plant that is built would require various government permits.

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project-based financing.

ethanol industry is competitive with over 200 ethanol plants in the United States alone.

Currently, the vast majority use corn as feedstock.

Their profitability depends highly on the fluctuations between the price of corn and the price of ethanol.

Since the Company does not

plan to use corn, and plans on having long-term purchase agreements with cellulosic feedstock suppliers, we anticipate that our profitability

will be more consistent.

Further, cellulosic biofuels yield much higher incentives than non-cellulosic biofuels.

Energy Policy Act of 2005, which included the Renewable Fuel Standard Program enforced by the US Environmental Protection Agency (EPA),

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D3 is the code for renewable ethanol that comes from cellulosic materials.

EPA’s current RIN volume targets for cellulosic ethanol include 720 million gallons for 2023, 1.42 billion gallons for 2024, and

2.13 billion gallons for 2025 (the D3 mandate).

This mandate has increased every year and is statutorily mandated to increase in the

future and become a larger portion of the full renewable fuels mandate, if and when cellulosic biofuels can be produced profitably in

larger quantities than they are now.

The RFS mandate for 2022 called for 20.77 billion gallons of total renewable fuel, 15 billion from

conventional biofuels (corn ethanol) and 5.77 billion from advanced biofuels, including cellulosic biofuels.

The “blend wall”

(or upper limit to the amount of ethanol that can be blended into U.S.

gasoline and automobile performance and comply with the Clean

Air Act) of limiting ethanol content in gasoline to 10%, limits the total amount of ethanol consumed in the United States.

Recent proposals

may make 15% blending available year around.

The value of the D3 RIN fluctuates, but as of this filing, it is approximately $1.95 per

gallon of ethanol.

To profit from these incentives, the Company plans to apply for these D3 RIN credits as it brings its first plant

into commercial operation.

EPA’s final D3 RIN volume mandates for cellulosic biofuel include 840 million gallons for 2023, 1.09 billion gallons for 2024,

and 1.38 billion gallons for 2025 (the D3 mandate).

This mandate has increased every year and is statutorily mandated to increase in

the future and become a larger portion of the full renewable fuels mandate, if and when cellulosic biofuels can be produced profitably

in larger and larger quantities.

The RFS mandate for 2024 calls for 21.54 billion gallons of total renewable fuel, 15 billion from conventional

biofuels (corn ethanol) and 6.54 billion from advanced biofuels, including cellulosic biofuels.

The “blend wall” (or upper

limit to the amount of ethanol that can be blended into U.S.

gasoline and automobile performance and comply with the Clean Air Act) of

limiting ethanol content in gasoline to 10%, limits the total amount of ethanol consumed in the United States.

Recent proposals have

make 15% blending available year around in some states.

The value of the D3 RIN fluctuates, but as of this filing, it is approximately

$3.06 per gallon of ethanol.

For comparison, the D6 RIN for corn ethanol is $0.43.

To profit from these incentives, the Company plans

to apply for these D3 RIN credits as it brings its first plant into commercial operation.

45Z of the Inflation Reduction Act passed on August 16, 2022, offers a Clean Fuel Production Credit (CFPC) per gallon of transportation

fuel produced with a base amount of 20 cents per gallon or up to $1 per gallon for a qualified facility (depending on its carbon index)

that was built while paying at least prevailing wages and which met apprenticeship requirements.

For sustainable aviation fuel, those

figures are 35 cents and $1.75 per gallon respectively.

The Company plans to apply for CFPC credits when it begins building its commercial

The CFPC currently does not apply to transportation fuel sold after December 31, 2027.

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 $66 per metric ton of CO2 reduction.

When it is closer to commercial production, the Company plans to analyze the cost effectiveness of applying for these LCFS credits to

determine in which state it could earn the most credits.

commercial scale, management expects to be able to earn substantial renewable fuel credits and produce sustainable ethanol, sustainable

aviation fuel, and other sustainable biofuels more profitably than they could be from existing commercial corn ethanol producers.

ethanol comes with a much more valuable D3 RIN credit as compared to the D6 RIN allocated to corn ethanol;

cellulosic SAF comes with

a very valuable D7 RIN, and cellulosic bio-gasoline comes with a valuable D3 RIN.

The Company also expects to receive Clean Fuel Production

Credits related to section 45Z of the Inflation Reduction Act, and the Company also plans to pursue Low Carbon Fuel Standard Credits.

its first plant is profitable, the Company intends to grow with additional plants in the United States and explore international growth

by either licensing the CTS technology or forming joint ventures with foreign domestic partners to build plants.

Company believes that its management and consultants have significant experience in the development of technologies from concept to commercialization.

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Each share of Company Common Stock is entitled to one (1) vote per share.

company currently employs seven full-time employees, three part-time employee and seventeen consultants.

company currently employs five full-time employees, one part-time employee and seven consultants.

The Company plans to hire additional

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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 1. Business