Blue Biofuels, Inc.: Form 10-Q for the period ended Jun 30, 2026

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.

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.

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.

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.

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.

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.