Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Apr. 05, 2017 | Jun. 30, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | Bluefire Renewables, Inc. | ||
Entity Central Index Key | 1,370,489 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-Known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 515,271 | ||
Entity Common Stock, Shares Outstanding | 408,203,492 | ||
Trading Symbol | BFRE | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 161,991 | $ 26,922 |
Prepaid expenses | 977 | 9,291 |
Total current assets | 162,968 | 36,213 |
Property and equipment, net of accumulated depreciation of $82,323 and $107,897, respectively | 109,384 | |
Total assets | 162,968 | 145,597 |
Current liabilities: | ||
Accounts payable | 1,162,788 | 899,887 |
Accrued liabilities | 1,549,200 | 730,759 |
Notes payable | 420,000 | 420,000 |
Line of credit, related party | 240,924 | 45,230 |
Note payable to a related party | 200,000 | 200,000 |
Convertible notes payable, net of discount of $3,889 and $0, respectively | 21,111 | |
Derivative liability | 27,104 | |
Outstanding warrant liability | 199 | |
Total current liabilities | 3,621,127 | 2,296,075 |
Convertible notes payable, net of discount of $0 and $32,886, respectively | 20,084 | |
Derivative liability | 290,092 | |
Total liabilities | 3,621,127 | 2,606,251 |
Commitments and contingencies (Note 7) | ||
Redeemable noncontrolling interest | 860,980 | 865,614 |
Stockholders' deficit: | ||
Preferred stock, no par value, 1,000,000 shares authorized; 51 and 51 shares issued and outstanding as of December 31, 2016 and 2015, respectively | ||
Common stock, $0.001 par value; 500,000,000 shares authorized; 408,235,664 and 308,163,005 shares issued and 408,203,492 and 308,130,833 outstanding, as of December 31, 2016 and 2015, respectively | 408,236 | 308,163 |
Additional paid-in capital | 17,068,865 | 16,967,128 |
Treasury stock at cost, 32,172 shares | (101,581) | (101,581) |
Accumulated deficit | (21,694,659) | (20,499,978) |
Total stockholders' deficit | (4,319,139) | (3,326,268) |
Total liabilities and stockholders' deficit | $ 162,968 | $ 145,597 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Property, plant and equipment, accumulated depreciation | $ 82,323 | $ 107,897 |
Convertible notes payable current, discount | 3,889 | 0 |
Convertible note payable, net of discount noncurrent | $ 0 | $ 32,886 |
Preferred stock, no par value | ||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 51 | 51 |
Preferred stock, shares outstanding | 51 | 51 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 408,235,664 | 308,163,005 |
Common stock, shares outstanding | 408,203,492 | 308,130,833 |
Treasury stock, shares | 32,172 | 32,172 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues: | ||
Consulting fees | ||
Department of Energy grant revenues | 911,458 | |
Total revenues | 911,458 | |
Cost of revenue | ||
Consulting revenue | ||
Gross margin | 911,458 | |
Operating expenses: | ||
Project development | 288,062 | 608,679 |
General and administrative, including stock based compensation of $144 and $0, respectively | 956,193 | 1,250,008 |
Total operating expenses | 1,244,255 | 1,858,687 |
Operating loss | (1,244,255) | (947,229) |
Other income and (expense): | ||
Regulatory settlement | (25,000) | |
Amortization of debt discounts | (53,977) | (201,682) |
Interest expense | (64,378) | (42,176) |
Related party interest expense | (16,441) | (5,503) |
Gain on sale of land | 66,220 | |
Gain on settlement of accounts payable and accrued liabilities | 16,785 | 235,919 |
Change in fair value of warrant liability | 199 | 16,368 |
Change in fair value of derivative liabilities | 160,789 | (22,849) |
Loss on excess fair value of derivative liabilities | (36,317) | (312,212) |
Total other income and (expense) | 47,880 | (332,135) |
Loss before provision for income taxes | (1,196,375) | (1,279,364) |
Provision for income taxes | 2,940 | 2,543 |
Net loss | (1,199,315) | (1,281,907) |
Net income (loss) attributable to noncontrolling interest | (4,634) | 747 |
Net loss attributable to controlling interest | $ (1,194,681) | $ (1,282,654) |
Basic and diluted loss per common share attributable to controlling interest | $ 0 | $ (0.01) |
Weighted average common shares outstanding, basic and diluted | 395,628,640 | 248,518,121 |
Consolidated Statements of Ope5
Consolidated Statements of Operations (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Stock based compensation | $ 144 | |
General And Administrative Expenses [Member] | ||
Stock based compensation | $ 144 | $ 0 |
Consolidated Statement of Stock
Consolidated Statement of Stockholder's Deficit - USD ($) | Series A Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Treasury Stock [Member] | Total |
Balance at Dec. 31, 2014 | $ 226,891 | $ 16,584,847 | $ (19,217,324) | $ (101,581) | $ (2,507,167) | |
Balance, shares at Dec. 31, 2014 | 226,858,107 | |||||
Value of common shares issued for cash pursuant to S-1 in 2015 at a price of $0.03 per share | $ 20,000 | 127,000 | 147,000 | |||
Common shares issued for cash pursuant to S-1 in 2015 at a price of $0.03 per share, Shares | 20,000,000 | |||||
Value of common shares issued for conversion of notes and accrued interest at a price of $0.0006 to $0.0012 per share | $ 61,272 | $ 57,117 | $ 118,389 | |||
Common shares issued for conversion of notes and accrued interest at a price of $0.0006 to $0.0012 per share, share | 61,272,726 | |||||
Common shares returned in May 2016 due to legal settlement at a price of $0.0018 per share, share | ||||||
Common shares issued pursuant to Director's Agreements in September 2016 at a price of $0.0020 per share | ||||||
Issuance of Series A Preferred stock, shares | 51 | |||||
Extinguishment of derivative liabilities associated with convertible notes | $ 198,164 | $ 198,164 | ||||
Net loss attributable to controlling interest | (1,282,654) | (1,282,654) | ||||
Balance at Dec. 31, 2015 | $ 308,163 | 16,967,128 | (20,499,978) | (101,581) | (3,326,268) | |
Balance, shares at Dec. 31, 2015 | 51 | 308,130,833 | ||||
Value of common shares issued for conversion of notes and accrued interest at a price of $0.0006 to $0.0012 per share | $ 105,742 | (33,045) | 72,697 | |||
Common shares issued for conversion of notes and accrued interest at a price of $0.0006 to $0.0012 per share, share | 105,741,400 | |||||
Common shares returned in May 2016 due to legal settlement at a price of $0.0018 per share | $ (5,741) | (4,593) | (10,334) | |||
Common shares returned in May 2016 due to legal settlement at a price of $0.0018 per share, share | (5,740,741) | |||||
Common shares issued pursuant to Director's Agreements in September 2016 at a price of $0.0020 per share | $ 72 | 72 | 144 | |||
Common shares issued pursuant to Director's Agreements in September 2016 at a price of $0.0020 per share, share | 72,000 | |||||
Extinguishment of derivative liabilities associated with convertible notes | 139,303 | 139,303 | ||||
Net loss attributable to controlling interest | (1,194,681) | (1,194,681) | ||||
Balance at Dec. 31, 2016 | $ 408,236 | $ 17,068,865 | $ (21,694,659) | $ (101,581) | $ (4,319,139) | |
Balance, shares at Dec. 31, 2016 | 51 | 408,203,492 |
Consolidated Statement of Stoc7
Consolidated Statement of Stockholder's Deficit (Parenthetical) - $ / shares | May 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2016 |
Issuance of common stock for conversion of notes price per share | $ 0.03 | |||
Return of common share settlement due, per share | $ 0.0018 | |||
Share issued, per share | $ 0.0020 | |||
Minimum [Member] | ||||
Issuance of common stock for conversion of interest notes price per share | $ 0.0006 | 0.0007 | ||
Maximum [Member] | ||||
Issuance of common stock for conversion of interest notes price per share | $ 0.0012 | $ 0.003 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (1,199,315) | $ (1,281,907) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Change in fair value of warrant liability | (199) | (16,368) |
Change in fair value of derivative liability | (160,789) | 22,849 |
Loss on excess fair value of derivative liability | 36,317 | 312,212 |
Gain on settlement of accounts payable and accrued liabilities | (16,785) | (235,919) |
Gain on sale of land | (66,220) | |
Share-based compensation | 144 | |
Amortization | 53,977 | 201,682 |
Depreciation | 275 | 894 |
Excess fair value of common stock issued for accrued interest | 7,200 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 8,314 | (3,017) |
Accounts payable | 269,353 | 173,216 |
Accrued liabilities | 831,775 | 549,146 |
Net cash used in operating activities | (235,953) | (277,212) |
Cash flows from investing activities: | ||
Proceeds from sale of land | 175,328 | |
Net cash used in investing activities | 175,328 | |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 147,000 | |
Proceeds from convertible notes payable | 155,000 | |
Repayment of notes payable | (20,000) | |
Proceeds from related party line of credit/notes payable | 195,694 | |
Net cash provided by financing activities | 195,694 | 282,000 |
Net increase in cash and cash equivalents | 135,069 | 4,788 |
Cash and cash equivalents beginning of year | 26,922 | 22,134 |
Cash and cash equivalents end of year | 161,991 | 26,922 |
Supplemental disclosures of cash flow information | ||
Interest | 13,216 | |
Income taxes | 2,939 | 2,400 |
Supplemental schedule of non-cash investing and financing activities: | ||
Conversion of non-secured convertible notes payable | 52,950 | 118,389 |
Interest converted to common stock | 12,547 | |
Derivative liability reclassified to additional paid-in capital | 139,303 | 198,164 |
Note payable issued for services | 25,000 | |
Discount on convertible notes payable | 153,196 | |
Gain on settlement of shares | $ 10,335 |
Organization and Business
Organization and Business | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | NOTE 1 – ORGANIZATION AND BUSINESS BlueFire Ethanol, Inc. (“BlueFire” or the “Company”) was incorporated in the state of Nevada on March 28, 2006. BlueFire was established to deploy the commercially ready and patented process for the conversion of cellulosic waste materials to ethanol (“Arkenol Technology”) under a technology license agreement with Arkenol, Inc. (“Arkenol”). BlueFire’s use of the Arkenol Technology positions it as a cellulose-to-ethanol company with demonstrated production of ethanol from urban trash (post-sorted “MSW”), rice and wheat straws, wood waste and other agricultural residues. The Company’s goal is to develop and operate high-value carbohydrate-based transportation fuel production facilities in North America, and to provide professional services to such facilities worldwide. These “biorefineries” will convert widely available, inexpensive, organic materials such as agricultural residues, high-content biomass crops, wood residues, and cellulose from MSW into ethanol. On September 30, 2015, the Company filed an amendment to the Company’s articles of incorporation with the Secretary of State of the State of Nevada, which, among other things, established the designation, powers, rights, privileges, preferences and restrictions of the Series A Preferred Stock, no par value per share (the “Series A Preferred Stock”). Among other things, each one (1) share of the Series A Preferred Stock shall have voting rights equal to(x) 0.019607 multiplied by the total issued and outstanding shares of common stock of the Company eligible to vote at the time of the respective vote (the “Numerator”), divided by (y) 0.49, minus (z) the Numerator. For purposes of illustration only, if the total issued and outstanding shares of common stock of the Company eligible to vote at the time of the respective vote is 5,000,000, the voting rights of one share of the Series A Preferred Stock shall be equal to 102,036 (0.019607 x 5,000,000) / 0.49) – (0.019607 x 5,000,000) = 102,036). The Series A Preferred Stock has no dividend rights, no liquidation rights and no redemption rights, and was created primarily to be able to obtain a quorum and conduct business at shareholder meetings. All shares of the Series A Preferred Stock shall rank (i) senior to the Company’s common stock and any other class or series of capital stock of the Company hereafter created, (ii) pari passu with any class or series of capital stock of the Company hereafter created and specifically ranking, by its terms, on par with the Series A Preferred Stock and (iii) junior to any class or series of capital stock of the Company hereafter created specifically ranking, by its terms, senior to the Series A Preferred Stock, in each case as to distribution of assets upon liquidation, dissolution or winding up of the Company, whether voluntary or involuntary. The Board is currently evaluating strategic alternatives which include, among other things, merging or selling the Company, if needed, in order to obtain additional capital sufficient to continue operating and meet both our operating and financial obligations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Going Concern The Company has historically incurred recurring losses. Management has funded operations primarily through loans from its Chairman/Chief Executive Officer, the private placement of the Company’s common stock in December 2007 for net proceeds of approximately $14,500,000, the issuance of convertible notes with warrants in July and in August 2007, various convertible notes, and Department of Energy reimbursements from 2009 to 2015. The Company may encounter further difficulties in establishing operations due to the time frame of developing, constructing and ultimately operating the planned bio-refinery projects. As of December 31, 2016, the Company has negative working capital of approximately $3,458,200. Management has estimated that operating expenses for the next 12 months will be approximately $750,000, excluding engineering costs related to the development of bio-refinery projects. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Throughout 2017, the Company intends to fund its operations with any additional funding that can be secured in the form of equity or debt. As of April 3, 2017, the Company expects the current resources available to them will only be sufficient for a period of less than one month unless significant additional financing is received. Management has determined that the general expenditures must be reduced and additional capital will be required in the form of equity or debt securities. In addition, if we cannot raise additional short term capital we may consume all of our cash reserved for operations. There are no assurances that management will be able to raise capital on terms acceptable to the Company or at all. If we are unable to obtain sufficient amounts of additional capital, we may be required to reduce the scope of our planned development, which could harm our business, financial condition and operating results. The financial statements do not include any adjustments that might result from these uncertainties. As of December 31, 2010, the Company completed the detailed engineering on our proposed Fulton Project (Note 3), procured all necessary permits for construction of the plant, and began site clearing and preparation work, signaling the beginning of construction. All site preparation activities have been completed, including clearing and grating of the site, building access roads, completing railroad tie-ins to connect the site to the rail system, and finalizing the layout plan to prepare for the site foundation. As of December 31, 2013, the construction-in-progress through such date was deemed impaired due to the discontinuance of future funding from the DOE further described in Note 3. We estimate the total construction cost of the bio-refineries to be in the range of approximately $300 million for the Fulton Project. These cost approximations do not reflect any increase/decrease in raw materials or any fluctuation in construction cost that would be realized by the dynamic world metals markets or inflation of general costs of construction. The Company is currently in discussions with potential sources of financing for these facilities but no definitive agreements are in place. The Company cannot continue significant development or furtherance of the Fulton project until financing for the construction of the Fulton plant is obtained. Principles of Consolidation The consolidated financial statements include the accounts of BlueFire Renewables, Inc., and its wholly-owned subsidiary, BlueFire Ethanol, Inc. BlueFire Ethanol Lancaster, LLC, BlueFire Fulton Renewable Energy LLC (excluding 1% interest sold), and SucreSource LLC are wholly-owned subsidiaries of BlueFire Ethanol, Inc. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported periods. Actual results could materially differ from those estimates. Significant estimates include, but are not limited to, DOE Grant reimbursements, valuation of warrants and derivative liabilities, and impairment of long-lived assets. Cash and Cash Equivalents For purpose of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Debt Issuance Costs Debt issuance costs are capitalized and amortized over the term of the debt using the effective interest method, or expensed upon conversion or extinguishment when applicable. Costs are capitalized for amounts incurred in connection with proposed financings. In the event the financing related to the capitalized cost is not successful, the costs are immediately expensed (see Note 5). Accounts Receivable Accounts receivable are reported net of allowance for expected losses. It represents the amount management expects to collect from outstanding balances. Differences between the amount due and the amount management expects to collect are charged to operations in the year in which those differences are determined, with an offsetting entry to a valuation allowance. As of December 31, 2016 and 2015, the Company has no reserve allowance. Intangible Assets License fees acquired are either expensed or recognized as intangible assets. The Company recognizes intangible assets when the following criteria are met: 1) the asset is identifiable, 2) the Company has control over the asset, 3) the cost of the asset can be measured reliably, and 4) it is probable that economic benefits will flow to the Company. Property and Equipment Property and equipment are stated at cost. The Company’s fixed assets are depreciated using the straight-line method over a period ranging from three to five years, except land which is not depreciated. Maintenance and repairs are charged to operations as incurred. Significant renewals and betterments are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in operations. During the year ended December 31, 2010, the Company began to capitalize costs in connection with the construction of its Fulton plant, and continued to do so in 2013 until it was determined that the project should be impaired. A portion of these costs were reimbursed under the Department of Energy grant discussed in Note 3. The reimbursable portion was treated as a reduction of those costs. Impairment of Long-Lived Assets The Company regularly evaluates whether events and circumstances have occurred that indicate the carrying amount of property and equipment may not be recoverable. When factors indicate that these long-lived assets should be evaluated for possible impairment, the Company assesses the potential impairment by determining whether the carrying value of such long-lived assets will be recovered through the future undiscounted cash flows expected from use of the asset and its eventual disposition. If the carrying amount of the asset is determined not to be recoverable, a write-down to fair value is recorded. Fair values are determined based on quoted market values, discounted cash flows, or external appraisals, as applicable. The Company regularly evaluates whether events and circumstances have occurred that indicate the useful lives of property and equipment may warrant revision. There was no impairment as of December 31, 2016 or 2015. Revenue Recognition The Company will recognize revenues from 1) consulting services rendered to potential sub licensees for development and construction of cellulose to ethanol projects, 2) sales of ethanol from its production facilities when (a) persuasive evidence that an agreement exists; (b) the products have been delivered; (c) the prices are fixed and determinable and not subject to refund or adjustment; and (d) collection of the amounts due is reasonably assured. As discussed in Note 3, the Company received a federal grant from the United States Department of Energy, (“DOE”). The grant generally provided for payment in connection with related development and construction costs involving commercialization of our technologies. Grant award reimbursements were recorded as either contra assets or as revenues depending upon whether the reimbursement is for capitalized construction costs or expenses paid by the Company. Contra capitalized cost and revenues from the grant were recognized in the period during which the conditions under the grant had been met and the Company had made payment for the related asset or expense. The Company recognized DOE unbilled grant receivables for those costs that had been incurred during a period but not yet paid at period end, were otherwise reimbursable under the terms of the grant, and were expected to be paid in the normal course of business. Realization of unbilled receivables is dependent on the Company’s ability to meet their obligation for reimbursable costs. Project Development Project development costs are either expensed or capitalized. The costs of materials and equipment that will be acquired or constructed for project development activities, and that have alternative future uses, both in project development, marketing or sales, will be classified as property and equipment and depreciated over their estimated useful lives. To date, project development costs include the research and development expenses related to the Company’s future cellulose-to-ethanol production facilities. During the years ended December 31, 2016 and 2015, research and development costs included in project development were approximately $288,000 and $609,000, respectively. Convertible Debt Convertible debt is accounted for under the guidelines established by Accounting Standards Codification (“ASC”) 470-20 “Debt with Conversion and Other Options”. ASC 470-20 governs the calculation of an embedded beneficial conversion, which is treated as an additional discount to the instruments where derivative accounting (explained below) does not apply. The amount of the value of warrants and beneficial conversion feature may reduce the carrying value of the instrument to zero, but no further. The discounts relating to the initial recording of the derivatives or beneficial conversion features are accreted over the term of the debt. The Company calculates the fair value of warrants and conversion features issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing employee options for purposes of ASC 718 “Compensation – Stock Compensation”, except that the contractual life of the warrant or conversion feature is used. Under these guidelines, the Company allocates the value of the proceeds received from a convertible debt transaction between the conversion feature and any other detachable instruments (such as warrants) on a relative fair value basis. The allocated fair value is recorded as a debt discount or premium and is amortized over the expected term of the convertible debt to interest expense. The Company accounts for modifications of its BCF’s in accordance with ASC 470-50 “Modifications and Extinguishments”. ASC 470-50 requires the modification of a convertible debt instrument that changes the fair value of an embedded conversion feature and the subsequent recognition of interest expense or the associated debt instrument when the modification does not result in a debt extinguishment. Income Taxes The Company accounts for income taxes in accordance with ASC 740 “Income Taxes” requires the Company to provide a net deferred tax asset/liability equal to the expected future tax benefit/expense of temporary reporting differences between book and tax accounting methods and any available operating loss or tax credit carry forwards. This Interpretation sets forth a recognition threshold and valuation method to recognize and measure an income tax position taken, or expected to be taken, in a tax return. The evaluation is based on a two-step approach. The first step requires an entity to evaluate whether the tax position would “more likely than not,” based upon its technical merits, be sustained upon examination by the appropriate taxing authority. The second step requires the tax position to be measured at the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company does not have any uncertain positions which require such analysis. Fair Value of Financial Instruments Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value: Level 1. Observable inputs such as quoted prices in active markets; Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The Company did not have any Level 1 financial instruments at December 31, 2016 and 2015. As of December 31, 2016 and 2015, the warrant liability and derivative liability are considered Level 2 items, see Notes 5, 6, and 9. As of December 31, 2016 and 2015, the Company’s redeemable noncontrolling interest is considered a Level 3 item and changed during 2015 and 2016 due to the following: Balance as of January 1, 2016 $ 865,614 Net loss attributable to noncontrolling interest (4,634 ) Balance at December 31, 2016 $ 860,980 See Note 8 for details of valuation and changes during the years 2016 and 2015. The carrying amounts reported in the accompanying consolidated financial statements for current assets and current liabilities approximate the fair value because of the immediate or short term maturities of the financial instruments. Risks and Uncertainties The Company’s operations are subject to new innovations in product design and function. Significant technical changes can have an adverse effect on product lives. Design and development of new products are important elements to achieve and maintain profitability in the Company’s industry segment. The Company may be subject to federal, state and local environmental laws and regulations. The Company does not anticipate non-compliance with such laws and does not believe that regulations will have a material impact on the Company’s financial position, results of operations, or liquidity. The Company believes that its operations comply, in all material respects, with applicable federal, state, and local environmental laws and regulations. Concentrations of Credit Risk The Company maintains its cash accounts in a commercial bank and in an institutional money-market fund account. The total cash balances held in a commercial bank are secured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000, per insured bank. At times, the Company has cash deposits in excess of federally insured limits. In addition, the Institutional Funds Account is insured through the Securities Investor Protection Corporation (“SIPC”) up to $500,000 per customer, including up to $250,000 for cash. At times, the Company has cash deposits in excess of federally and institutional insured limits. As of December 31, 2015, the Department of Energy made up 100% of Grant Revenues. We had no such concentration in 2016. The Company is currently investigating alternative sources of funding. As of December 31, 2016 and 2015, four vendors made up approximately 82% and 78% of accounts payable, respectively. Loss per Common Share The Company presents basic loss per share (“EPS”) and diluted EPS on the face of the consolidated statements of operations. Basic loss per share is computed as net loss divided by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock options, warrants, and other convertible securities. For the years ended December 31, 2016 and 2015, the Company had no options and 0 and 23,528,571 warrants outstanding, respectively, for which all exercise prices were in excess of the trading price of the Company’s common stock during the respective periods. Due to the net loss in the periods presented, the effects of the warrants would be antidilutive and are, therefore, excluded from diluted EPS calculations. Share-Based Payments The Company accounts for stock options issued to employees and consultants under ASC 718 “Share-Based Payment”. Under ASC 718, share-based compensation cost to employees is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the employee’s requisite vesting period. The Company measures compensation expense for its non-employee stock-based compensation under ASC 505 “Equity”. The fair value of the option issued or committed to be issued is used to measure the transaction, as this is more reliable than the fair value of the services received. The fair value is measured at the value of the Company’s common stock on the date that the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. The fair value of the equity instrument is charged directly to stock-based compensation expense and credited to additional paid-in capital. Derivative Financial Instruments We do not use derivative financial instruments to hedge exposures to cash-flow risks or market-risks that may affect the fair values of our financial instruments. However, under the provisions ASC 815 – “Derivatives and Hedging” certain financial instruments that have characteristics of a derivative, as defined by ASC 815, such as embedded conversion features on our convertible notes, that are potentially settled in the Company’s own common stock, are classified as liabilities when either (a) the holder possesses rights to net-cash settlement or (b) physical or net-share settlement is not within our control. In such instances, net-cash settlement is assumed for financial accounting and reporting purposes, even when the terms of the underlying contracts do not provide for net-cash settlement. Derivative financial instruments are initially recorded, and continuously carried, at fair value each reporting period. The value of the embedded conversion feature is determined using the Black-Scholes option pricing model. All future changes in the fair value of the embedded conversion feature will be recognized currently in earnings until the note is converted or redeemed. Determining the fair value of derivative financial instruments involves judgment and the use of certain relevant assumptions including, but not limited to, interest rate risk, credit risk, volatility and other factors. The use of different assumptions could have a material effect on the estimated fair value amounts. Lines of Credit with Share Issuance Shares issued to obtain a line of credit are recorded at fair value at contract inception. When shares are issued to obtain a line of credit rather than in connection with the issuance, the shares are accounted for as equity, at the measurement date in accordance with ASC 505-50 “Equity-Based Payments to Non-Employees.” The issuance of these shares is equivalent to the payment of a loan commitment or access fee, and, therefore, the offset is recorded akin to debt issuance costs. The deferred fee is amortized using the effective interest method, or a method that approximates such over the stated term of the line of credit, or other period as deemed appropriate. Redeemable - Noncontrolling Interest Redeemable interest held by third parties in subsidiaries owned or controlled by the Company is reported on the consolidated balance sheets outside permanent equity. As these redeemable noncontrolling interests provide for redemption features not solely within the control of the issuer, we classify such interests outside of permanent equity in accordance with ASC 480-10, “Distinguishing Liabilities from Equity”. All redeemable noncontrolling interest reported in the consolidated statements of operations reflects the respective interests in the income or loss after income taxes of the subsidiaries attributable to the other parties, the effect of which is removed from the net loss available to the Company. The Company accretes the redemption value of the redeemable noncontrolling interest over the redemption period using the straight-line method. New Accounting Pronouncements The Financial Accounting Standards Board (“FASB”) issues Accounting Standard Updates (“ASU”) to amend the authoritative literature in ASC. There have been a number of ASUs to date that amend the original text of ASC. The Company believes those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to the Company or (iv) are not expected to have a significant impact on the Company. On February 25, 2016, the Financial Accounting Standards Board (FASB) issued authoritative guidance intended to improve financial reporting about leasing transactions. The new guidance requires entities to recognize assets and liabilities for leases with lease terms of more than 12 months. The new guidance also requires qualitative and quantitative disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases. The new guidance is effective for the Company beginning January 1, 2019. The Company is evaluating the impact of the standard on its consolidated financial statements. In November 2015, the FASB issued authoritative guidance related to balance sheet classification of deferred taxes. The new guidance requires entities to present deferred tax assets (DTAs) and deferred tax liabilities (DTLs) as noncurrent in a classified balance sheet. It thus simplifies the current guidance, which requires entities to separately present DTAs and DTLs as current or noncurrent in a classified balance sheet. Netting of DTAs and DTLs by tax jurisdiction is still required under the new guidance. The new authoritative guidance is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016. Early adoption is permitted. The guidance is not expected to have a material impact on the consolidated financial statements. In May 2014, FASB issued authoritative guidance that provides principles for recognizing revenue for the transfer of promised goods or services to customers with the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires that reporting companies disclose the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. On July 9, 2015, FASB agreed to delay the effective date by one year and, accordingly, the new standard is effective for the Company beginning in the first quarter of fiscal 2018. Early adoption is permitted, but not before the original effective date of the standard. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. The Company has not yet selected a transition method nor has it determined the impact of the new standard on its consolidated financial statements. Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements. |
Development Contract
Development Contract | 12 Months Ended |
Dec. 31, 2016 | |
Development Contract | |
Development Contract | NOTE 3 – DEVELOPMENT CONTRACT Department of Energy Awards 1 and 2 In February 2007, the Company was awarded a grant for up to $40 million from the U.S. Department of Energy’s (“DOE”) cellulosic ethanol grant program to develop a solid waste biorefinery project at a landfill in Southern California. During October 2007, the Company finalized Award 1 for a total approved budget of just under $10,000,000 with the DOE. This award was a 60%/40% cost share, whereby 40% of approved costs may be reimbursed by the DOE pursuant to the total $40 million award announced in February 2007. In December 2009, as a result of the American Recovery and Reinvestment Act, the DOE increased the Award 2 to a total of $81 million for Phase II of its Fulton Project. This is in addition to a renegotiated Phase I funding for development of the biorefinery of approximately $7 million out of the previously announced $10 million total. This brought the DOE’s total award to the Fulton project to approximately $88 million. In September 2012, Award 1 was officially closed. Since 2009, our operations had been financed to a large degree through funding provided by the DOE. We rely on access to this funding as a source of liquidity for capital requirements not satisfied by the cash flow from our operations. If we are unable to access government funding our ability to finance our projects and/or operations and implement our strategy and business plan will be severely hampered. On December 23, 2013, the Company received notice from the DOE indicating that the DOE would no longer provide funding under Award 2 due to the Company’s inability to comply with certain deadlines related to providing certain information to the DOE with respect to the Company’s future financing arrangements for the Fulton Project. On March 17, 2015, the Company received a letter from the DOE stating that because of the upcoming September 2015 expiration date for expending American Recovery and Reinvestment Act (ARRA) funding, it cannot reconsider its decision, and the Company considers such decision to be final. In June of 2015, the DOE obligated additional funds totaling $873,332 for costs incurred but not reimbursed prior to September 30, 2014 as well as for program required compliance audits for years 2011-2014. As of September 30, 2015, the Company submitted all final invoices and final documents related to the termination of the grant by the Department of Energy. The Company considers the grant closed out and completed. As of December 31, 2016, the Company has received reimbursements of approximately $14,164,964 under these awards. |
Composition of Certain Balance
Composition of Certain Balance Sheet Accounts | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Composition of Certain Balance Sheet Accounts | NOTE 4 – COMPOSITION OF CERTAIN BALANCE SHEET ACCOUNTS Property and Equipment Property and equipment consist of the following: December 31, 2016 December 31, 2015 Land $ - $ 109,108 Office equipment 53,361 63,367 Furniture and fixtures 28,962 44,806 Property and equipment - Gross 82,323 217,281 Accumulated depreciation (82,323 ) (107,897 ) Property and equipment - Net of depreciation $ - $ 109,384 On December 29, 2016, the Company sold the land for a total sale price of $195,000 and net proceeds of $175,328 to the Company. Depreciation expense for the years ended December 31, 2016 and 2015 was $275 and $894, respectively. During the years ended December 31, 2016 and 2015, the Company invested $0 in construction activities at our Fulton Project and the construction costs through 2013 were deemed impaired due to the discontinuance of the DOE Grant described in Note 3. Accrued liabilities December 31, 2016 December 31, 2015 Payroll and related benefits $ 1,345,208 $ 614,795 Accrued interest 52,017 46,033 Accrued interest – related party 61,709 45,268 Other 90,266 24,663 Total $ 1,549,200 $ 730,759 |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 5 – NOTES PAYABLE Convertible Notes Payable From time-to-time, the Company enters into convertible notes with Vis Vires Group, Inc. and Asher Enterprises, Inc. Under the terms of these notes, the Company is to repay any principal balance and interest, at 8% per annum at a given maturity date which is generally less than one year. The Company has the option to prepay the convertible promissory notes prior to maturity at varying prepayment penalty rates specified under the agreement. The convertible promissory notes are convertible into shares of the Company’s common stock after six months as calculated by multiplying 58% (42% discount to market) by the average of the lowest three closing bid prices during the 10 days prior to the conversion date. For the below convertible notes to Vis Vires Group, the Company determined that since the conversion prices are variable and do not contain a floor, the conversion feature represents a derivative liability upon the ability to convert the loan after the six month period specified above. Since the conversion feature is only convertible after six months, there is no derivative liability upon issuance. However, the Company accounts for the derivative liability upon the passage of time and the note becoming convertible if not extinguished. On May 12, 2015, the Company issued a convertible note in favor of Vis Vires Group, Inc. in the principal amount of $59,000 with a $4,000 on-issuance discount pursuant to the terms identified above, with a maturity date of February 14, 2016. In accordance with the terms of the note, the note became convertible on November 8, 2015. The Company calculated the derivative liability using the Black-Scholes pricing model for the note upon the initial date the note became convertible and recorded the fair market value of the derivative liability of approximately $53,195, resulting in a discount to the note. The discount was being amortized over the term of the note and accelerated as the note was converted. As of December 31, 2015, the entire discount was amortized to interest expense, with no remaining unamortized discount and the note was fully converted into 26,072,727 shares of common stock. Using the Black-Scholes pricing model, with the range of inputs listed below, we calculated the fair market value of the conversion feature upon it being effective (as applicable), at each conversion event, and at each reporting period. The Company recognized a loss of $0 and $12,911 during the years ended December 31, 2016 and 2015 based on these valuations which is included in the accompanying consolidated statements of operations. December 31, 2016 December 31, 2015 Annual dividend yield 0 % 0 % Expected life (years) - 0.08 - 0.16 Risk-free interest rate 0 0.14 – 0.29% Expected volatility 0 216 % On-issuance discounts applicable to the above notes are amortized over the term of such notes. JMJ Convertible Note On April 2, 2015, the Company issued a convertible note in favor of JMJ Financial in the principal amount of $100,000 out of a total of a possible $250,000, with a maturity date of April 1, 2017 (the “JMJ Note”). The JMJ Note was issued with a 10% original issue discount, and is convertible at any time. The $10,000 on-issuance discount will be amortized over the life of the note. The Company was to repay any principal balance due under the note including a one-time charge of 12% interest on the principal balance outstanding if not repaid within 90 days. The Company had the option to prepay the JMJ Note prior to maturity. The JMJ Note was convertible into shares of the Company’s common stock as calculated by multiplying 60% of the lowest trade price in the 25 trading days prior to the conversion date. Due to the variable conversion feature of the note, derivative accounting is required. The Company valued the derivative upon issuance, at each reporting period, and at the conversion date as indicated below. The initial value of the derivative liability was $412,212, resulting in a day one loss $312,212. The discount on the convertible note was being amortized over the life of the note and accelerated as the note was converted. For the years ended December 31, 2016 and 2015, amortization of the discount was $32,886 and $77,114, respectively, with $0 remaining as of December 31, 2016. Final Conversion April 5, 2016 (excluding inception) December 31, 2015 Annual dividend yield - - Expected life (years) 0.99 1.25 – 2.00 Risk-free interest rate 0.56 % 0.61 – 1.06 % Expected volatility 188 % 282 - 304 % During the year ended December 31, 2016, the Company issued 105,741,400 shares of common stock for the conversion of $52,950 of principal and $12,550 of interest. The note was fully converted on April 5, 2016. AKR Promissory Note On April 8, 2014, the Company issued a promissory note in favor of AKR Inc, (“AKR”) in the principal aggregate amount of $350,000 (the “AKR Note”). The AKR Note was originally due on April 8, 2015; however, the Company received an extension through December 31, 2017. The AKR Note requires the Company to (i) incur interest at five percent (5%) per annum; (ii) issue on April 8, 2014 to AKR warrants allowing them to buy 7,350,000 common shares of the Company at an exercise price of $0.007 per common share, such warrants to expire on April 8, 2016 (“AKR Warrant A”); (iii) issue on August 8, 2014 to AKR warrants allowing them to buy 7,350,000 common shares of the Company at an exercise price of $0.007 per common share, such warrants to expire on April 8, 2016 (“AKR Warrant B”); and (iv) issue on November 8, 2014 to AKR warrants allowing them to buy 8,400,000 common shares of the Company at an exercise price of $0.007 per common share, such warrants to expire on April 8, 2016 (“AKR Warrant C”, together with AKR Warrant A and AKR Warrant B the “AKR Warrants”). The Company may prepay the debt, prior to maturity with no prepayment penalty. The Company valued the AKR Warrants as of the date of the note and recorded a discount of $42,323 based the relative fair value of the AKR Warrants compared to the debt. For the years ended December 31, 2016 and 2015, the Company amortized $0 and $11,335 respectively of the discount to interest expense. As of December 31, 2016, unamortized discount of $0 remains. The Company assessed the fair value of the AKR Warrants based on the Black-Scholes pricing model. See below for variables used in assessing the fair value. April 8, 2014 Annual dividend yield - Expected life (years) of 1.41 - 2.00 Risk-free interest rate 0.40 % Expected volatility 183% - 206 % On April 24, 2014, the Company issued a promissory note in favor of AKR in the principal aggregate amount of $30,000 (“2nd AKR Note”). The 2 nd nd For the year ended December 31, 2016, the Company amortized on-issuance discounts totaling $0 with $0 remaining, and costs of financing of $0 with $0 remaining related to these notes. Tarpon Bay Convertible Notes Pursuant to a contemplated 3(a)10 transaction with Tarpon Bay Partners LLC (“Tarpon”), on August 31, 2016, the Company issued to Tarpon a convertible promissory note in the principal amount of $25,000 (the “Tarpon Initial Note”). Under the terms of the Tarpon Initial Note, the Company shall pay Tarpon $25,000 on the date of maturity which was February 28, 2017. This note is convertible by Tarpon into the Company’s common shares at a 50% discount to the lowest closing bid price for the common stock for the twenty (20) trading days ending on the trading day immediately before the conversion date. The above note was issued without funds being received. Accordingly, the note was issued with a full on-issuance discount that was amortized over the term of the note. During the year ended December 31, 2016, amortization of $21,111, was recognized to interest expense related to the discount on the note. As of December 31, 2016, a discount of $3,889 remained which is being amortized through the maturity date. Because the conversion price was variable and did not contain a floor, the conversion feature represented a derivative liability upon issuance. Accordingly, the Company calculated the derivative liability using the Black-Sholes pricing model for the notes upon inception, resulting in a day one loss of approximately $36,000. The derivative liability was marked to market each quarter and as of December 31, 2016 which resulted in a gain of approximately $9,200. The Company used the following range of assumptions for the year ended December 31, 2016: Year ended December 31, 2016 Annual dividend yield 0 % Expected life (years) 0.16 - 0.5 Risk-free interest rate 0.47 - 0.51 % Expected volatility 176 - 196 % Kodiak Promissory Note On December 17, 2014, the Company entered into the equity Purchase Agreement with Kodiak. Pursuant to the terms of the Purchase Agreement, for a period of twenty-four (24) months commencing on the date of effectiveness of the registration statement, Kodiak shall commit to purchase up to $1,500,000 of Put Shares, pursuant to Puts (as defined in the Purchase Agreement), covering the Registered Securities (as defined in the Purchase Agreement). See Note 9 for more information. As further consideration for Kodiak entering into and structuring the Purchase Agreement, the Company issued Kodiak a promissory note in the principal aggregate amount of $60,000 (the “Kodiak Note”) that bears no interest and had maturity date of July 17, 2015. The Company is currently in default of the Kodiak Note. As of December 31, 2016, the balance outstanding on the Kodiak Note was $40,000. No funds were received from the Kodiak Note. Because the Kodiak Note was issued for no cash consideration, there was a full on-issuance discount, of which $60,000 was amortized as of December 31, 2016, and $0 remains to be amortized. |
Outstanding Warrant Liability
Outstanding Warrant Liability | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Outstanding Warrant Liability | NOTE 6 – OUTSTANDING WARRANT LIABILITY The Company assesses the fair value of the warrants quarterly based on the Black-Scholes pricing model. See below for variables used in assessing the fair value. The Company issued 428,571 warrants to purchase common stock in connection with a Stock Purchase Agreement entered into in 2011 with Lincoln Park Capital, LLC. These warrants are accounted for as a liability under ASC 815. The Company assesses the fair value of the warrants quarterly based on the Black-Scholes pricing model. See below for variables used in assessing the fair value. These warrants expired on January 19, 2016. January 19, 2016 December 31, 2015 Annual dividend yield - - Expected life (years) 0 0.05 Risk-free interest rate 0.21 % 0.14 % Expected volatility 179 % 216 % In connection with these warrants, the Company recognized a gain on the change in fair value of warrant liability of $199 and $16,368 during the years ended December 31, 2016 and 2015, respectively. Expected volatility is based primarily on historical volatility. Historical volatility was computed using weekly pricing observations for recent periods that correspond to the expected life of the warrants. The Company believes this method produces an estimate that is representative of our expectations of future volatility over the expected term of these warrants. The Company currently has no reason to believe future volatility over the expected remaining life of these warrants is likely to differ materially from historical volatility. The expected life is based on the remaining term of the warrants. The risk-free interest rate is based on U.S. Treasury securities rates. The warrants expired on January 19, 2016. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 7 – COMMITMENTS AND CONTINGENCIES Board of Director Arrangements On November 12, 2015, the Company renewed all of its existing Directors’ appointment, and accrued $5,000 to both of the two outside members. Pursuant to the Board of Director agreements, the Company’s “in-house” board members (CEO and Vice-President) waived their annual cash compensation of $5,000. Fulton Project Lease On July 20, 2010, the Company entered into a 30 year lease agreement with Itawamba County, Mississippi for the purpose of the development, construction, and operation of the Fulton Project. At the end of the primary 30 year lease term, the Company shall have the right for two additional 30 year terms. The current lease rate is computed based on a per acre rate per month that is approximately $10,300 per month. The lease stipulates the lease rate is to be reduced at the time of the construction start by a Property Cost Reduction Formula which can substantially reduce the monthly lease costs. The lease rate shall be adjusted every five years to the Consumer Price Index. The below payout schedule does not contemplate reductions available upon the commencement of construction and commercial operations. Future annual minimum lease payments under the above lease agreements, at December 31, 2016 are as follows: Years ending December 31, 2017 $ 125,976 2018 125,976 2019 125,976 2020 125,976 2021 125,976 Thereafter 2,400,064 Total $ 3,029,944 Rent expense under non-cancellable leases was approximately $123,000 and $123,000 during the years ended December 31, 2016 and 2015, respectively. As of December 31, 2016 and 2015, $298,468 and $174,964 of the monthly lease payments were included in accounts payable on the accompanying consolidated balance sheets. The Company has received notice from the County of Itawamba that it is currently in default of the lease due to non payment and could be subject to lease cancellation if it cannot make payments or other arrangements. As of December 31, 2016, the Company has accrued $34,903 of default interest, at a rate of 10% per annum, due to the nonpayment of the lease. The Company is working with the County of Itawamaba to resolve this issue and hopefully ensure continued access to the potential project site. SEC Notice and Settlement On May 2, 2016, the Company received a written notice from the SEC, as further described elsewhere in this annual report. In connection with such notice, on August 1, 2016, the Company entered into a settlement with the SEC. Pursuant to the settlement, the Company agreed to pay a civil penalty of $25,000 to the SEC. On July 29, 2016, the Company made an initial payment of $5,000 to the SEC. The remaining $20,000 balance will be paid to the SEC over a nine-month period ending on or about June 30, 2017. The Company has accrued the balance on the accompanying consolidated financial statements for such settlement. Legal Proceedings We are currently not involved in litigation that we believe will have a materially adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our company’s or our company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision is expected to have a material adverse effect. |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interest | 12 Months Ended |
Dec. 31, 2016 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interest | NOTE 8 – REDEEMABLE NONCONTROLLING INTEREST On December 23, 2010, the Company sold a one percent (1%) membership interest in its operating subsidiary, BlueFire Fulton Renewable Energy, LLC (“BlueFire Fulton” or the “Fulton Project”), to an accredited investor for a purchase price of $750,000 (“Purchase Price”). The Company maintains a 99% ownership interest in the Fulton Project. In addition, the investor received a right to require the Company to redeem the 1% interest for $862,500, or any pro-rata amount thereon. The redemption is based upon future contingent events based upon obtaining financing for the construction of the Fulton Project. The third party equity interests is reflected as redeemable noncontrolling interests in the Company’s consolidated financial statements outside of equity. The Company accreted the redeemable noncontrolling interest for the total redemption price of $862,500 through the forecasted financial close, estimated to be the end of the third quarter of 2011. Net income (loss) attributable to the redeemable noncontrolling interest during the year ended December 31, 2016 and 2015 was $(4,634) and $747, respectively, which netted against the value of the redeemable non-controlling interest in temporary equity. The allocation of net income was presented in the consolidated statements of operations. |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Deficit | NOTE 9 – STOCKHOLDERS’ DEFICIT Series A Preferred Stock We have authorized the issuance of a total of 1,000,000 shares of our Series A Preferred Stock. See Note 1 for rights and preferences. Stock Options As of December 31, 2016, and 2015 there were no options that remained outstanding. Shares Issued for Services During the year ended December 31, 2016, the Company issued a total of 72,000 shares to the Board of Directors, pursuant to stock compensation due to them under their Director Agreements. The Company issued no shares of stock for services provided in 2015. Warrants See Notes 5, 6, 9 and 10 for warrants issued with debt and equity financings. There were no warrant issuances for the years ended December 31, 2016 and 2015. There were no warrant exercises for the years ending December 31, 2016 and 2015. A summary of the status of the warrants for the years ended December 31, 2016 and 2015 changes during the periods are presented as follows: Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Outstanding and exercisable at December 31, 2014 23,528,571 $ 0.01 1.4 Issued during the year - - Exercised during the year - - Expired during the year - - Outstanding and exercisable at December 31, 2015 23,528,571 $ 0.01 0.4 Issued during the year - - Exercised during the year - - Expired during the year 23,528,571 - Outstanding and exercisable at December 31, 2016 - $ - - Kodiak Purchase Agreement and Registration Rights Agreement On December 17, 2014, the Company entered into the equity Purchase Agreement with Kodiak. Pursuant to the terms of the Purchase Agreement, for a period of twenty-four (24) months commencing on the date of effectiveness of the registration statement, Kodiak shall commit to purchase up to $1,500,000 of Put Shares, pursuant to Puts (as defined in the Purchase Agreement), covering the Registered Securities (as defined below). The “Registered Securities” means the (a) Put Shares, and (b) any securities issued or issuable with respect to any of the foregoing by way of exchange, stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise. As to any particular Registered Securities, once issued such securities shall cease to be Registered Securities when (i) a Registration Statement has been declared effective by the SEC and such Registered Securities have been disposed of pursuant to a Registration Statement, (ii) such Registered Securities have been sold under circumstances under which all of the applicable conditions of Rule 144 are met, (iii) such time as such Registered Securities have been otherwise transferred to holders who may trade such shares without restriction under the Securities Act or (iv) in the opinion of counsel to the Company, which counsel shall be reasonably acceptable to Investor, such Registered Securities may be sold without registration under the Securities Act or the need for an exemption from any such registration requirements and without any time, volume or manner limitations pursuant to Rule 144(b)(i) (or any similar provision then in effect) under the Securities Act. As further consideration for Kodiak entering into and structuring the Purchase Agreement, the Company issued Kodiak a promissory note in the principal aggregate amount of $60,000 (the “Kodiak Note”) that bears no interest and had maturity date of July 17, 2015. As of December 31, 2016, the balance outstanding on the Kodiak Note was $40,000. The Company is currently in default of the Kodiak Note. Because the note was issued for no cash consideration, there was a full on-issuance discount, of which $0 and $55,714 was amortized during the years ended December 31, 2016 and 2015, and $0 and $0 remains to be amortized, respectively. Concurrently with the Purchase Agreement, on December 17, 2014, the Company also entered into a registration rights agreement (the “Registration Rights Agreement”) with Kodiak. Pursuant to the terms of the Registration Rights Agreement, the Company was obligated to file a registration statement (the “Registration Statement”) with the SEC to cover the Registered Securities, within thirty (30) days of closing, and must use its commercially reasonable efforts to cause the Registration Statement to be declared effective by the SEC. The Registration was filed, on January 2, 2015, and declared effective on February 11, 2015. As of December 31, 2016, the Purchase Agreement with Kodiak has been terminated. Return of Shares and Settlement On May 6, 2016, the Company reached a settlement with James G. Speirs and James N. Speirs in regards to the lawsuit filed in Orange County Superior Court and subsequently appealed by the Company. Under the settlement agreement, James G. Speirs and James N. Speirs have returned the 5,740,741 shares to the Company and they have been subsequently retired to treasury. The case was dismissed with prejudice on May 12, 2016 and the matter closed. Board of Directors Common Stock Issuance The Company issued 18,000 shares of common stock to each of its Board Members, which the Company valued at $144 based on the closing market price of the Company’s common stock on the date of grant. See Note 7 for additional information. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 10 – RELATED PARTY TRANSACTIONS Technology Agreement with Arkenol, Inc. On March 1, 2006, the Company entered into a Technology License agreement with Arkenol, Inc. (“Arkenol”), in which the Company’s Chairman/Chief Executive Officer and other family members hold an interest. Arkenol has its own management and board separate and apart from the Company. According to the terms of the agreement, the Company was granted an exclusive, non-transferable, North American license to use and to sub-license the Arkenol technology. The Arkenol Technology, converts cellulose and waste materials into Ethanol and other high value chemicals. As consideration for the grant of the license, the Company shall make a onetime payment of $1,000,000 at first project construction funding and for each plant make the following payments: (1) royalty payment of 4% of the gross sales price for sales by the Company or its sub licensees of all products produced from the use of the Arkenol Technology (2) and a one-time license fee of $40 per 1,000 gallons of production capacity per plant. There are no amounts currently due under this agreement. Asset Transfer Agreement with ARK Energy, Inc. On March 1, 2006, the Company entered into an Asset Transfer and Acquisition Agreement with ARK Energy, Inc. (“ARK Energy”), which is owned (50%) by the Company’s CEO. ARK Energy has its own management and board separate and apart from the Company. Based upon the terms of the agreement, ARK Energy transferred certain rights, assets, work-product, intellectual property and other know-how on project opportunities that may be used to deploy the Arkenol technology (as described in the above paragraph). In consideration, the Company has agreed to pay a performance bonus of up to $16,000,000 when certain milestones are met. These milestones include transferee’s project implementation which would be demonstrated by start of the construction of a facility or completion of financial closing whichever is earlier. The payment is based on ARK Energy’s cost to acquire and develop 19 sites which are currently at different stages of development. As of December 31, 2016 and 2015, the Company had not incurred any liabilities related to the agreement. Related Party Lines of Credit On November 10, 2011, the Company obtained a line of credit in the amount of $40,000 from its Chairman/Chief Executive Officer and, at the time, the majority shareholder to provide additional liquidity to the Company as needed, at his sole discretion. Under the terms of the note, the Company is to repay any principal balance and interest, at 12% per annum, within 30 days of receiving qualified investment financing of $100,000 or more. On April 10, 2014, the line of credit was increased to $55,000. On March 13, 2016, the line of credit was increased to $125,000, and then incrementally increased to $250,000 on October 5, 2016. As of December 31, 2016, the outstanding balance on the line of credit was approximately $240,924 with $9,076 remaining under the line. Although the Company has received over $100,000 in financing since this agreement was put into place, Mr. Klann does not hold the Company in default. As of December 31, 2016 and 2015, $31,709 and $15,268 respectively, in accrued interest is owed under this line of credit and included with accrued liabilities. Loan Agreement On December 15, 2010, the Company entered into a loan agreement (the “Loan Agreement”) by and between Arnold Klann, the Chief Executive Officer, Chairman of the board of directors and, at the time, the majority shareholder of the Company, as lender (the “Lender”), and the Company, as borrower. Pursuant to the Loan Agreement, the Lender agreed to advance to the Company a principal amount of Two Hundred Thousand United States Dollars ($200,000) (the “Loan”). The Loan Agreement requires the Company to (i) pay to the Lender a one-time amount equal to fifteen percent (15%) of the Loan (the “Fee Amount”) in cash or shares of the Company’s common stock at a value of $0.50 per share, at the Lender’s option; and (ii) issue the Lender warrants allowing the Lender to buy 500,000 common shares of the Company at an exercise price of $0.50 per common share, such warrants expired on December 15, 2013. The Company has promised to pay in full the outstanding principal balance of any and all amounts due under the Loan Agreement within thirty (30) days of the Company’s receipt of investment financing or a commitment from a third party to provide One Million United States Dollars ($1,000,000) to the Company or one of its subsidiaries (the “Due Date”), to be paid in cash or shares of the Company’s common stock, at the Lender’s option. As of December 31, 2016 and 2015, $200,000 remained outstanding on this loan. Accrued Salaries of Company Officers As of December 31, 2016 and 2015, $792,833 and $341,833, respectively, in accrued and unpaid salaries for Company officers Arnold Klann, John Cuzens, and Necitas Sumait accrued within accrued liabilities in the consolidated financial statements. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 11 – INCOME TAXES The following table presents the current and deferred tax provision for federal and state income taxes for the years ended December 31, 2016 and 2015. Year Ended December 31, 2016 2015 Current tax provision Federal $ - $ - State 2,940 2,543 Total $ 2,940 $ 2,543 Deferred tax provision (benefit) Federal (382,631 ) (227,080 ) State (76,619 ) (32,542 ) Valuation allowance 459,250 259,622 Total Total provision for income taxes $ 2,940 $ 2,543 Current taxes in 2016 and 2015 consist primarily of minimum state taxes. Reconciliations of the U.S. federal statutory rate to the actual tax rate for the years ended December 31, 2016 and 2015 are as follows: Year Ended December 31, 2016 2015 US federal statutory income tax rate 30 % 30 % State tax - net of benefit 4 % 4 % 34 % 34 % Permanent differences 2 % (14 )% Reserves and accruals (21 )% (15 )% Changes in deferred tax assets 32 % (5 )% Other (9 )% 7 % Increase in valuation allowance (38 )% (7 )% Effective tax rate 0 % 0 % The components of the Company’s deferred tax assets for federal and state income taxes as of December 31, 2016 and 2015 consisted of the following: 2016 2015 Deferred income tax assets Net operating loss carryforwards $ 7,927,043 $ 7,593,325 Reserves and accruals 321,448 195,916 Valuation allowance (8,248,491 ) (7,789,241 ) $ - $ - The Company’s deferred tax assets consist primarily of net operating loss (“NOL”) carry forwards of approximately $7,927,000 and $7,593,000 at December 31, 2016 and 2015, respectively. At December 31, 2016, the Company had NOL carry forwards for Federal and California income tax purposes totaling approximately $23.4 million and $22.2 million, respectively. At December 31, 2015, the Company had NOL carry forwards for Federal and California income tax purposes totaling approximately $22.3 million and $22.3 million, respectively. The Company’s valuation allowance increased by approximately $459,000 for the year ended December 31, 2016, and increased by approximately $260,000 for the year ended December 31, 2015. Federal and California NOL’s have begun to expire and fully expire in 2036. For federal tax purposes these carry forwards expire in twenty years beginning in 2026. Income tax reporting primarily relates to the business of the parent company Blue Fire Ethanol Fuels, Inc. which experienced a change in ownership on June 27, 2006. A change in ownership requires management to compute the annual limitation under Section 382 of the Internal Revenue Code. The amount of benefits the Company may receive from the operating loss carry forwards for income tax purposes is further dependent, in part, upon the tax laws in effect, the future earnings of the Company, and other future events, the effects of which cannot be determined. The Company has identified the United States Federal tax returns as its “major” tax jurisdiction. The United States Federal return years 2014 through 2016 are still subject to tax examination by the United States Internal Revenue Service; however, we do not currently have any ongoing tax examinations. The Company is subject to examination by the California Franchise Tax Board for the years ended 2013 through 2016 and currently does not have any ongoing tax examinations. In addition, the Company is not current in their federal and state income tax filings prior to the reverse acquisition. The Company has assessed and determined that the effect of non filing is not expected to be significant, as Sucre has not had active operations for a significant period of time. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Going Concern | Going Concern The Company has historically incurred recurring losses. Management has funded operations primarily through loans from its Chairman/Chief Executive Officer, the private placement of the Company’s common stock in December 2007 for net proceeds of approximately $14,500,000, the issuance of convertible notes with warrants in July and in August 2007, various convertible notes, and Department of Energy reimbursements from 2009 to 2015. The Company may encounter further difficulties in establishing operations due to the time frame of developing, constructing and ultimately operating the planned bio-refinery projects. As of December 31, 2016, the Company has negative working capital of approximately $3,458,200. Management has estimated that operating expenses for the next 12 months will be approximately $750,000, excluding engineering costs related to the development of bio-refinery projects. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Throughout 2017, the Company intends to fund its operations with any additional funding that can be secured in the form of equity or debt. As of April 3, 2017, the Company expects the current resources available to them will only be sufficient for a period of less than one month unless significant additional financing is received. Management has determined that the general expenditures must be reduced and additional capital will be required in the form of equity or debt securities. In addition, if we cannot raise additional short term capital we may consume all of our cash reserved for operations. There are no assurances that management will be able to raise capital on terms acceptable to the Company or at all. If we are unable to obtain sufficient amounts of additional capital, we may be required to reduce the scope of our planned development, which could harm our business, financial condition and operating results. The financial statements do not include any adjustments that might result from these uncertainties. As of December 31, 2010, the Company completed the detailed engineering on our proposed Fulton Project (Note 3), procured all necessary permits for construction of the plant, and began site clearing and preparation work, signaling the beginning of construction. All site preparation activities have been completed, including clearing and grating of the site, building access roads, completing railroad tie-ins to connect the site to the rail system, and finalizing the layout plan to prepare for the site foundation. As of December 31, 2013, the construction-in-progress through such date was deemed impaired due to the discontinuance of future funding from the DOE further described in Note 3. We estimate the total construction cost of the bio-refineries to be in the range of approximately $300 million for the Fulton Project. These cost approximations do not reflect any increase/decrease in raw materials or any fluctuation in construction cost that would be realized by the dynamic world metals markets or inflation of general costs of construction. The Company is currently in discussions with potential sources of financing for these facilities but no definitive agreements are in place. The Company cannot continue significant development or furtherance of the Fulton project until financing for the construction of the Fulton plant is obtained. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of BlueFire Renewables, Inc., and its wholly-owned subsidiary, BlueFire Ethanol, Inc. BlueFire Ethanol Lancaster, LLC, BlueFire Fulton Renewable Energy LLC (excluding 1% interest sold), and SucreSource LLC are wholly-owned subsidiaries of BlueFire Ethanol, Inc. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported periods. Actual results could materially differ from those estimates. Significant estimates include, but are not limited to, DOE Grant reimbursements, valuation of warrants and derivative liabilities, and impairment of long-lived assets. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purpose of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs are capitalized and amortized over the term of the debt using the effective interest method, or expensed upon conversion or extinguishment when applicable. Costs are capitalized for amounts incurred in connection with proposed financings. In the event the financing related to the capitalized cost is not successful, the costs are immediately expensed (see Note 5). |
Accounts Receivable | Accounts Receivable Accounts receivable are reported net of allowance for expected losses. It represents the amount management expects to collect from outstanding balances. Differences between the amount due and the amount management expects to collect are charged to operations in the year in which those differences are determined, with an offsetting entry to a valuation allowance. As of December 31, 2016 and 2015, the Company has no reserve allowance. |
Intangible Assets | Intangible Assets License fees acquired are either expensed or recognized as intangible assets. The Company recognizes intangible assets when the following criteria are met: 1) the asset is identifiable, 2) the Company has control over the asset, 3) the cost of the asset can be measured reliably, and 4) it is probable that economic benefits will flow to the Company. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. The Company’s fixed assets are depreciated using the straight-line method over a period ranging from three to five years, except land which is not depreciated. Maintenance and repairs are charged to operations as incurred. Significant renewals and betterments are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in operations. During the year ended December 31, 2010, the Company began to capitalize costs in connection with the construction of its Fulton plant, and continued to do so in 2013 until it was determined that the project should be impaired. A portion of these costs were reimbursed under the Department of Energy grant discussed in Note 3. The reimbursable portion was treated as a reduction of those costs. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company regularly evaluates whether events and circumstances have occurred that indicate the carrying amount of property and equipment may not be recoverable. When factors indicate that these long-lived assets should be evaluated for possible impairment, the Company assesses the potential impairment by determining whether the carrying value of such long-lived assets will be recovered through the future undiscounted cash flows expected from use of the asset and its eventual disposition. If the carrying amount of the asset is determined not to be recoverable, a write-down to fair value is recorded. Fair values are determined based on quoted market values, discounted cash flows, or external appraisals, as applicable. The Company regularly evaluates whether events and circumstances have occurred that indicate the useful lives of property and equipment may warrant revision. There was no impairment as of December 31, 2016 or 2015. |
Revenue Recognition | Revenue Recognition The Company will recognize revenues from 1) consulting services rendered to potential sub licensees for development and construction of cellulose to ethanol projects, 2) sales of ethanol from its production facilities when (a) persuasive evidence that an agreement exists; (b) the products have been delivered; (c) the prices are fixed and determinable and not subject to refund or adjustment; and (d) collection of the amounts due is reasonably assured. As discussed in Note 3, the Company received a federal grant from the United States Department of Energy, (“DOE”). The grant generally provided for payment in connection with related development and construction costs involving commercialization of our technologies. Grant award reimbursements were recorded as either contra assets or as revenues depending upon whether the reimbursement is for capitalized construction costs or expenses paid by the Company. Contra capitalized cost and revenues from the grant were recognized in the period during which the conditions under the grant had been met and the Company had made payment for the related asset or expense. The Company recognized DOE unbilled grant receivables for those costs that had been incurred during a period but not yet paid at period end, were otherwise reimbursable under the terms of the grant, and were expected to be paid in the normal course of business. Realization of unbilled receivables is dependent on the Company’s ability to meet their obligation for reimbursable costs. |
Project Development | Project Development Project development costs are either expensed or capitalized. The costs of materials and equipment that will be acquired or constructed for project development activities, and that have alternative future uses, both in project development, marketing or sales, will be classified as property and equipment and depreciated over their estimated useful lives. To date, project development costs include the research and development expenses related to the Company’s future cellulose-to-ethanol production facilities. During the years ended December 31, 2016 and 2015, research and development costs included in project development were approximately $288,000 and $609,000, respectively. |
Convertible Debt | Convertible Debt Convertible debt is accounted for under the guidelines established by Accounting Standards Codification (“ASC”) 470-20 “Debt with Conversion and Other Options”. ASC 470-20 governs the calculation of an embedded beneficial conversion, which is treated as an additional discount to the instruments where derivative accounting (explained below) does not apply. The amount of the value of warrants and beneficial conversion feature may reduce the carrying value of the instrument to zero, but no further. The discounts relating to the initial recording of the derivatives or beneficial conversion features are accreted over the term of the debt. The Company calculates the fair value of warrants and conversion features issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing employee options for purposes of ASC 718 “Compensation – Stock Compensation”, except that the contractual life of the warrant or conversion feature is used. Under these guidelines, the Company allocates the value of the proceeds received from a convertible debt transaction between the conversion feature and any other detachable instruments (such as warrants) on a relative fair value basis. The allocated fair value is recorded as a debt discount or premium and is amortized over the expected term of the convertible debt to interest expense. The Company accounts for modifications of its BCF’s in accordance with ASC 470-50 “Modifications and Extinguishments”. ASC 470-50 requires the modification of a convertible debt instrument that changes the fair value of an embedded conversion feature and the subsequent recognition of interest expense or the associated debt instrument when the modification does not result in a debt extinguishment. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC 740 “Income Taxes” requires the Company to provide a net deferred tax asset/liability equal to the expected future tax benefit/expense of temporary reporting differences between book and tax accounting methods and any available operating loss or tax credit carry forwards. This Interpretation sets forth a recognition threshold and valuation method to recognize and measure an income tax position taken, or expected to be taken, in a tax return. The evaluation is based on a two-step approach. The first step requires an entity to evaluate whether the tax position would “more likely than not,” based upon its technical merits, be sustained upon examination by the appropriate taxing authority. The second step requires the tax position to be measured at the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company does not have any uncertain positions which require such analysis. |
Fair Value of Financial Instruments | |
Risks and Uncertainties | Risks and Uncertainties The Company’s operations are subject to new innovations in product design and function. Significant technical changes can have an adverse effect on product lives. Design and development of new products are important elements to achieve and maintain profitability in the Company’s industry segment. The Company may be subject to federal, state and local environmental laws and regulations. The Company does not anticipate non-compliance with such laws and does not believe that regulations will have a material impact on the Company’s financial position, results of operations, or liquidity. The Company believes that its operations comply, in all material respects, with applicable federal, state, and local environmental laws and regulations. |
Concentrations of Credit Risk | Concentrations of Credit Risk The Company maintains its cash accounts in a commercial bank and in an institutional money-market fund account. The total cash balances held in a commercial bank are secured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000, per insured bank. At times, the Company has cash deposits in excess of federally insured limits. In addition, the Institutional Funds Account is insured through the Securities Investor Protection Corporation (“SIPC”) up to $500,000 per customer, including up to $250,000 for cash. At times, the Company has cash deposits in excess of federally and institutional insured limits. As of December 31, 2015, the Department of Energy made up 100% of Grant Revenues. We had no such concentration in 2016. The Company is currently investigating alternative sources of funding. As of December 31, 2016 and 2015, four vendors made up approximately 82% and 78% of accounts payable, respectively. |
Loss per Common Share | Loss per Common Share The Company presents basic loss per share (“EPS”) and diluted EPS on the face of the consolidated statements of operations. Basic loss per share is computed as net loss divided by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock options, warrants, and other convertible securities. For the years ended December 31, 2016 and 2015, the Company had no options and 0 and 23,528,571 warrants outstanding, respectively, for which all exercise prices were in excess of the trading price of the Company’s common stock during the respective periods. Due to the net loss in the periods presented, the effects of the warrants would be antidilutive and are, therefore, excluded from diluted EPS calculations. |
Share-Based Payments | Share-Based Payments The Company accounts for stock options issued to employees and consultants under ASC 718 “Share-Based Payment”. Under ASC 718, share-based compensation cost to employees is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the employee’s requisite vesting period. The Company measures compensation expense for its non-employee stock-based compensation under ASC 505 “Equity”. The fair value of the option issued or committed to be issued is used to measure the transaction, as this is more reliable than the fair value of the services received. The fair value is measured at the value of the Company’s common stock on the date that the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. The fair value of the equity instrument is charged directly to stock-based compensation expense and credited to additional paid-in capital. |
Derivative Financial Instruments | Derivative Financial Instruments We do not use derivative financial instruments to hedge exposures to cash-flow risks or market-risks that may affect the fair values of our financial instruments. However, under the provisions ASC 815 – “Derivatives and Hedging” certain financial instruments that have characteristics of a derivative, as defined by ASC 815, such as embedded conversion features on our convertible notes, that are potentially settled in the Company’s own common stock, are classified as liabilities when either (a) the holder possesses rights to net-cash settlement or (b) physical or net-share settlement is not within our control. In such instances, net-cash settlement is assumed for financial accounting and reporting purposes, even when the terms of the underlying contracts do not provide for net-cash settlement. Derivative financial instruments are initially recorded, and continuously carried, at fair value each reporting period. The value of the embedded conversion feature is determined using the Black-Scholes option pricing model. All future changes in the fair value of the embedded conversion feature will be recognized currently in earnings until the note is converted or redeemed. Determining the fair value of derivative financial instruments involves judgment and the use of certain relevant assumptions including, but not limited to, interest rate risk, credit risk, volatility and other factors. The use of different assumptions could have a material effect on the estimated fair value amounts. |
Lines of Credit with Share Issuance | Lines of Credit with Share Issuance Shares issued to obtain a line of credit are recorded at fair value at contract inception. When shares are issued to obtain a line of credit rather than in connection with the issuance, the shares are accounted for as equity, at the measurement date in accordance with ASC 505-50 “Equity-Based Payments to Non-Employees.” The issuance of these shares is equivalent to the payment of a loan commitment or access fee, and, therefore, the offset is recorded akin to debt issuance costs. The deferred fee is amortized using the effective interest method, or a method that approximates such over the stated term of the line of credit, or other period as deemed appropriate. |
Redeemable - Non-Controlling Interest | Redeemable - Noncontrolling Interest Redeemable interest held by third parties in subsidiaries owned or controlled by the Company is reported on the consolidated balance sheets outside permanent equity. As these redeemable noncontrolling interests provide for redemption features not solely within the control of the issuer, we classify such interests outside of permanent equity in accordance with ASC 480-10, “Distinguishing Liabilities from Equity”. All redeemable noncontrolling interest reported in the consolidated statements of operations reflects the respective interests in the income or loss after income taxes of the subsidiaries attributable to the other parties, the effect of which is removed from the net loss available to the Company. The Company accretes the redemption value of the redeemable noncontrolling interest over the redemption period using the straight-line method. |
New Accounting Pronouncements | New Accounting Pronouncements The Financial Accounting Standards Board (“FASB”) issues Accounting Standard Updates (“ASU”) to amend the authoritative literature in ASC. There have been a number of ASUs to date that amend the original text of ASC. The Company believes those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to the Company or (iv) are not expected to have a significant impact on the Company. On February 25, 2016, the Financial Accounting Standards Board (FASB) issued authoritative guidance intended to improve financial reporting about leasing transactions. The new guidance requires entities to recognize assets and liabilities for leases with lease terms of more than 12 months. The new guidance also requires qualitative and quantitative disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases. The new guidance is effective for the Company beginning January 1, 2019. The Company is evaluating the impact of the standard on its consolidated financial statements. In November 2015, the FASB issued authoritative guidance related to balance sheet classification of deferred taxes. The new guidance requires entities to present deferred tax assets (DTAs) and deferred tax liabilities (DTLs) as noncurrent in a classified balance sheet. It thus simplifies the current guidance, which requires entities to separately present DTAs and DTLs as current or noncurrent in a classified balance sheet. Netting of DTAs and DTLs by tax jurisdiction is still required under the new guidance. The new authoritative guidance is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016. Early adoption is permitted. The guidance is not expected to have a material impact on the consolidated financial statements. In May 2014, FASB issued authoritative guidance that provides principles for recognizing revenue for the transfer of promised goods or services to customers with the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires that reporting companies disclose the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. On July 9, 2015, FASB agreed to delay the effective date by one year and, accordingly, the new standard is effective for the Company beginning in the first quarter of fiscal 2018. Early adoption is permitted, but not before the original effective date of the standard. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. The Company has not yet selected a transition method nor has it determined the impact of the new standard on its consolidated financial statements. Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Redeemable Non-controlling Interest Considered Level Three | As of December 31, 2016 and 2015, the Company’s redeemable noncontrolling interest is considered a Level 3 item and changed during 2015 and 2016 due to the following: Balance as of January 1, 2016 $ 865,614 Net loss attributable to noncontrolling interest (4,634 ) Balance at December 31, 2016 $ 860,980 |
Composition of Certain Balanc22
Composition of Certain Balance Sheet Accounts (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consist of the following: December 31, 2016 December 31, 2015 Land $ - $ 109,108 Office equipment 53,361 63,367 Furniture and fixtures 28,962 44,806 Property and equipment - Gross 82,323 217,281 Accumulated depreciation (82,323 ) (107,897 ) Property and equipment - Net of depreciation $ - $ 109,384 |
Schedule of Accrued Liabilities | Accrued liabilities December 31, 2016 December 31, 2015 Payroll and related benefits $ 1,345,208 $ 614,795 Accrued interest 52,017 46,033 Accrued interest – related party 61,709 45,268 Other 90,266 24,663 Total $ 1,549,200 $ 730,759 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Short-term Debt [Line Items] | |
Schedule of Fair Market Value of the Conversion Features Using the Black-Scholes Pricing Model | The Company recognized a loss of $0 and $12,911 during the years ended December 31, 2016 and 2015 based on these valuations which is included in the accompanying consolidated statements of operations. December 31, 2016 December 31, 2015 Annual dividend yield 0 % 0 % Expected life (years) - 0.08 - 0.16 Risk-free interest rate 0 0.14 – 0.29% Expected volatility 0 216 % |
JMJ Convertible Note [Member] | |
Short-term Debt [Line Items] | |
Schedule of Fair Market Value of the Conversion Features Using the Black-Scholes Pricing Model | Final Conversion April 5, 2016 (excluding inception) December 31, 2015 Annual dividend yield - - Expected life (years) 0.99 1.25 – 2.00 Risk-free interest rate 0.56 % 0.61 – 1.06 % Expected volatility 188 % 282 - 304 % |
AKR Promissory Note [Member] | |
Short-term Debt [Line Items] | |
Schedule of Fair Market Value of the Conversion Features Using the Black-Scholes Pricing Model | The Company assessed the fair value of the AKR Warrants based on the Black-Scholes pricing model. See below for variables used in assessing the fair value. April 8, 2014 Annual dividend yield - Expected life (years) of 1.41 - 2.00 Risk-free interest rate 0.40 % Expected volatility 183% - 206 % |
Tarpon Bay Convertible Note [Member] | |
Short-term Debt [Line Items] | |
Schedule of Fair Market Value of the Conversion Features Using the Black-Scholes Pricing Model | The Company used the following range of assumptions for the year ended December 31, 2016: Year ended December 31, 2016 Annual dividend yield 0 % Expected life (years) 0.16 - 0.5 Risk-free interest rate 0.47 - 0.51 % Expected volatility 176 - 196 % |
Outstanding Warrant Liability (
Outstanding Warrant Liability (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Black-Scholes Option Pricing Model Assumptions to Estimate Fair Value of Warrants | January 19, 2016 December 31, 2015 Annual dividend yield - - Expected life (years) 0 0.05 Risk-free interest rate 0.21 % 0.14 % Expected volatility 179 % 216 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Annual Minimum Lease Payments Under Above Lease Agreements | Future annual minimum lease payments under the above lease agreements, at December 31, 2016 are as follows: Years ending December 31, 2017 $ 125,976 2018 125,976 2019 125,976 2020 125,976 2021 125,976 Thereafter 2,400,064 Total $ 3,029,944 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule of Warrants Outstanding | A summary of the status of the warrants for the years ended December 31, 2016 and 2015 changes during the periods are presented as follows: Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Outstanding and exercisable at December 31, 2014 23,528,571 $ 0.01 1.4 Issued during the year - - Exercised during the year - - Expired during the year - - Outstanding and exercisable at December 31, 2015 23,528,571 $ 0.01 0.4 Issued during the year - - Exercised during the year - - Expired during the year 23,528,571 - Outstanding and exercisable at December 31, 2016 - $ - - |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Current and Deferred Tax Provision for Federal and State Income Taxes | The following table presents the current and deferred tax provision for federal and state income taxes for the years ended December 31, 2016 and 2015. Year Ended December 31, 2016 2015 Current tax provision Federal $ - $ - State 2,940 2,543 Total $ 2,940 $ 2,543 Deferred tax provision (benefit) Federal (382,631 ) (227,080 ) State (76,619 ) (32,542 ) Valuation allowance 459,250 259,622 Total Total provision for income taxes $ 2,940 $ 2,543 |
Schedule of Effective Income Tax Rate Reconciliation | Reconciliations of the U.S. federal statutory rate to the actual tax rate for the years ended December 31, 2016 and 2015 are as follows: Year Ended December 31, 2016 2015 US federal statutory income tax rate 30 % 30 % State tax - net of benefit 4 % 4 % 34 % 34 % Permanent differences 2 % (14 )% Reserves and accruals (21 )% (15 )% Changes in deferred tax assets 32 % (5 )% Other (9 )% 7 % Increase in valuation allowance (38 )% (7 )% Effective tax rate 0 % 0 % |
Schedule of Deferred Tax Assets and Liabilities | The components of the Company’s deferred tax assets for federal and state income taxes as of December 31, 2016 and 2015 consisted of the following: 2016 2015 Deferred income tax assets Net operating loss carryforwards $ 7,927,043 $ 7,593,325 Reserves and accruals 321,448 195,916 Valuation allowance (8,248,491 ) (7,789,241 ) $ - $ - |
Organization and Business (Deta
Organization and Business (Details Narrative) - $ / shares | Sep. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Preferred stock, no par value | |||
Series A Preferred Stock [Member] | |||
Preferred stock, no par value | |||
Preferred stock, voting rights | Among other things, each one (1) share of the Series A Preferred Stock shall have voting rights equal to(x) 0.019607 multiplied by the total issued and outstanding shares of common stock of the Company eligible to vote at the time of the respective vote (the Numerator), divided by (y) 0.49, minus (z) the Numerator. For purposes of illustration only, if the total issued and outstanding shares of common stock of the Company eligible to vote at the time of the respective vote is 5,000,000, the voting rights of one share of the Series A Preferred Stock shall be equal to 102,036 (0.019607 x 5,000,000) / 0.49) (0.019607 x 5,000,000) = 102,036). |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2007 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 23, 2010 | |
SignificantAccountingPoliciesLineItems [Line Items] | ||||
Proceeds from issuance of convertible debt | $ 14,500,000 | $ 155,000 | ||
Working capital deficit | 3,458,200 | |||
Estimated operating expenses | $ 1,244,255 | 1,858,687 | ||
Ownership interest | 1.00% | 1.00% | ||
Research and development costs | $ 288,000 | 609,000 | ||
Property and equipment depreciation method | The Companys fixed assets are depreciated using the straight-line method over a period ranging from three to five years, except land which is not depreciated. | |||
Impairment of Long-Lived Assets | ||||
Percentage on income tax benefit | 50.00% | |||
FDIC amount | $ 250,000 | |||
Institutional Funds Account insured through Securities Investor Protection Corporation ("SIPC") insured amount per customer | 500,000 | |||
Institutional Funds Account insured through Securities Investor Protection Corporation ("SIPC") insured amount cash | $ 250,000 | |||
Four Vendors [Member] | Accounts Payable [Member] | ||||
SignificantAccountingPoliciesLineItems [Line Items] | ||||
Concentraion of credit risk percentage | 82.00% | 78.00% | ||
Energy [Member] | Sales Revenue Net [Member] | ||||
SignificantAccountingPoliciesLineItems [Line Items] | ||||
Concentraion of credit risk percentage | 100.00% | |||
Minimum [Member] | ||||
SignificantAccountingPoliciesLineItems [Line Items] | ||||
Property and equipment, fixed assets are depreciated using the straight-line method period | 3 years | |||
Maximum [Member] | ||||
SignificantAccountingPoliciesLineItems [Line Items] | ||||
Property and equipment, fixed assets are depreciated using the straight-line method period | 5 years | |||
Warrant [Member] | ||||
SignificantAccountingPoliciesLineItems [Line Items] | ||||
Antidilutive securities | 0 | 23,528,571 | ||
Fulton Project [Member] | ||||
SignificantAccountingPoliciesLineItems [Line Items] | ||||
Estimated construction costs | $ 300,000,000 | |||
Next Twelve Months [Member] | ||||
SignificantAccountingPoliciesLineItems [Line Items] | ||||
Estimated operating expenses | $ 750,000 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies - Schedule of Redeemable Non-controlling Interest Considered Level Three (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Balance at the beginning | $ 865,614 | |
Net loss attributable to non-controlling interest | (4,634) | $ 747 |
Balance at the end | $ 860,980 | $ 865,614 |
Development Contracts (Details
Development Contracts (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Jun. 30, 2015 | Dec. 31, 2009 | Oct. 31, 2007 | Feb. 28, 2007 | Dec. 31, 2016 | Dec. 31, 2015 | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||||
Revenue from grants | $ 911,458 | |||||
Reimbursements received amount | $ 873,332 | $ 14,164,964 | ||||
Company Cost Share [Member] | ||||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||||
Department of energy awards description | This award was a 60%/40% cost share, whereby 40% of approved costs may be reimbursed by the DOE pursuant to the total $40 million award announced in February 2007. | |||||
U.S. Department Of Energy [Member] | ||||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||||
Revenue from grants | $ 88,000,000 | $ 10,000,000 | ||||
U.S. Department Of Energy [Member] | Phase II [Member] | ||||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||||
Revenue from grants | 81,000,000 | |||||
U.S. Department Of Energy [Member] | Phase I [Member] | ||||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||||
Revenue from grants | 7,000,000 | |||||
U.S. Department Of Energy [Member] | 40% Award [Member] | ||||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||||
Revenue from grants | $ 40,000,000 | |||||
U.S. Department Of Energy [Member] | Previously Announced [Member] | Phase I [Member] | ||||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||||
Revenue from grants | $ 10,000,000 | |||||
U.S. Department Of Energy [Member] | Company Cost Share [Member] | ||||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||||
Approved award, percentage | 40.00% | |||||
U.S. Department Of Energy [Member] | Maximum [Member] | ||||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||||
Revenue from grants | $ 40,000,000 |
Composition of Certain Balanc32
Composition of Certain Balance Sheet Accounts (Details Narrative) - USD ($) | Dec. 29, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Abstract] | |||
Proceeds from sale of land | $ 195,000 | $ 175,328 | |
Depreciation expense | 275 | 894 | |
Investment in construction activities | $ 0 | $ 0 |
Composition of Certain Balanc33
Composition of Certain Balance Sheet Accounts - Schedule of Property and Equipment (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Abstract] | ||
Land | $ 109,108 | |
Office equipment | 53,361 | 63,367 |
Furniture and fixtures | 28,962 | 44,806 |
Property and equipment - Gross | 82,323 | 217,281 |
Accumulated depreciation | (82,323) | (107,897) |
Property and equipment - Net of depreciation | $ 109,384 |
Composition of Certain Balanc34
Composition of Certain Balance Sheet Accounts - Schedule of Accrued Liabilities (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Abstract] | ||
Payroll and related benefits | $ 1,345,208 | $ 614,795 |
Accrued interest | 52,017 | 46,033 |
Accrued interest - related party | 61,709 | 45,268 |
Other | 90,266 | 24,663 |
Total | $ 1,549,200 | $ 730,759 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | May 12, 2015 | Apr. 02, 2015 | Dec. 17, 2014 | Nov. 08, 2014 | Aug. 08, 2014 | Apr. 24, 2014 | Apr. 08, 2014 | Aug. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 19, 2013 |
Short-term Debt [Line Items] | ||||||||||||
Percentage of debt interest rate | 8.00% | |||||||||||
Percentage of convertible debt | 58.00% | |||||||||||
Percentage of debt discount | 42.00% | |||||||||||
Amortized discount on notes | $ 20,833 | $ 0 | ||||||||||
Amortization of debt discount | 53,977 | 201,682 | ||||||||||
Loss on excess fair value of derivative liability | (36,317) | (312,212) | ||||||||||
Accrued Interest | 52,017 | 46,033 | ||||||||||
Amortization of financing costs | 0 | 51,960 | ||||||||||
Vis Vires Group, Inc. [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Fair value of derivative liability | $ 53,195 | |||||||||||
Kodiak Promissory Note [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Principal amount on notes payable | $ 60,000 | |||||||||||
Remaining value of notes, net of discount | 0 | |||||||||||
Discount on notes payable | 60,000 | |||||||||||
Commitment to purchase put shares | 1,500,000 | |||||||||||
AKR Warrants [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Amortized discount on notes | 0 | |||||||||||
Discount on notes payable | 42,323 | |||||||||||
Commitment to purchase put shares | 0 | $ 11,335 | ||||||||||
Vis Vires Group, Inc. [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Principal amount on notes payable | 59,000 | |||||||||||
Amortized discount on notes | $ 4,000 | |||||||||||
Notes payable maturity date | Feb. 14, 2016 | |||||||||||
Vis Vires Group, Inc. [Member] | Common Stock [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Note converted into stock | 26,072,727 | |||||||||||
Convertible Notes Payable [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Gain loss on derivative liability | $ 0 | $ 12,911 | ||||||||||
JMJ Convertible Note [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Percentage of convertible debt | 60.00% | |||||||||||
Percentage of debt discount | 10.00% | |||||||||||
Principal amount on notes payable | $ 100,000 | |||||||||||
Amortized discount on notes | $ 10,000 | |||||||||||
Percentage of onetime charge of interest on principal balance outstanding | 12.00% | |||||||||||
Notes payable maturity date | Apr. 1, 2017 | |||||||||||
Note converted into stock | 105,741,400 | 35,200,000 | ||||||||||
Fair value of derivative liability | $ 412,212 | |||||||||||
Gain loss on derivative liability | $ 151,576 | $ 97,664 | ||||||||||
Amortization of debt discount | 32,886 | $ 77,114 | ||||||||||
Remaining value of notes, net of discount | 0 | |||||||||||
Loss on excess fair value of derivative liability | 312,212 | |||||||||||
Convertible note | $ 250,000 | 57,030 | ||||||||||
Debt principal amount | 52,950 | |||||||||||
Accrued Interest | 12,550 | |||||||||||
AKR Promissory Note [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Percentage of debt interest rate | 5.00% | |||||||||||
Principal amount on notes payable | $ 350,000 | |||||||||||
Notes payable maturity date | Apr. 8, 2015 | |||||||||||
Remaining value of notes, net of discount | $ 0 | |||||||||||
Amortization of financing costs | 0 | |||||||||||
AKR Promissory Note [Member] | AKR Warrant B [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Warrants maturity date | Apr. 8, 2016 | |||||||||||
AKR Promissory Note [Member] | AKR Warrant C [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Warrants to buy common shares | 8,400,000 | |||||||||||
Warrants exercise price per share | $ 0.007 | |||||||||||
Warrants maturity date | Apr. 8, 2016 | |||||||||||
AKR Promissory Note [Member] | AKR Warrant A [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Warrants to buy common shares | 7,350,000 | |||||||||||
Warrants exercise price per share | $ 0.007 | |||||||||||
Warrants maturity date | Apr. 8, 2016 | |||||||||||
AKR Promissory Note [Member] | AKR Warrant B [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Warrants to buy common shares | 7,350,000 | |||||||||||
Warrants exercise price per share | $ 0.007 | |||||||||||
Second AKR Note [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Percentage of debt interest rate | 5.00% | |||||||||||
Principal amount on notes payable | $ 30,000 | |||||||||||
Amortized discount on notes | $ 2,500 | |||||||||||
Notes payable maturity date | Jul. 24, 2014 | |||||||||||
Remaining value of notes, net of discount | $ 0 | |||||||||||
Tarpon Bay Convertible Note [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Percentage of debt discount | 50.00% | |||||||||||
Principal amount on notes payable | $ 25,000 | |||||||||||
Notes payable maturity date | Feb. 28, 2017 | |||||||||||
Gain loss on derivative liability | 9,200 | |||||||||||
Day one loss value | 36,000 | |||||||||||
Amortization of debt discount | $ 21,111 | |||||||||||
Remaining value of notes, net of discount | 3,889 | |||||||||||
Purchase Agreement With Kodiak [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Commitment to purchase put shares | 1,500,000 | |||||||||||
Kodiak Promissory Note [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Principal amount on notes payable | $ 60,000 | 40,000 | ||||||||||
Notes payable maturity date | Jul. 17, 2015 | |||||||||||
Remaining value of notes, net of discount | 0 | |||||||||||
Debt instruments maturity date | Jul. 17, 2015 | |||||||||||
Discount on notes payable | $ 60,000 | |||||||||||
Asher Note Two [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Principal amount on notes payable | $ 37,500 | |||||||||||
Fair value of derivative liability | $ 35,290 | |||||||||||
Tarpon Initial Note and the Tarpon Success Fee Note [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Day one loss value | 96,000 | |||||||||||
Convertible note | 25,000 | |||||||||||
Cash payment on Tarpon notes | 25,000 | |||||||||||
Derivative liabilities | 36,000 | |||||||||||
Additional Tarpon Note [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Convertible note | 25,000 | |||||||||||
Derivative liabilities | $ 92,000 |
Notes Payable - Schedule of Fai
Notes Payable - Schedule of Fair Market Value of the Conversion Features Using the Black-Scholes Pricing Model (Details) | Apr. 05, 2016 | Apr. 08, 2014 | Dec. 31, 2016 | Dec. 31, 2015 |
Convertible Notes Payable [Member] | ||||
Short-term Debt [Line Items] | ||||
Annual dividend yield | 0.00% | 0.00% | ||
Expected life (year) | 0 years | |||
Risk-free interest rate | 0.00% | |||
Expected volatility | 0.00% | 216.00% | ||
Convertible Notes Payable [Member] | Minimum [Member] | ||||
Short-term Debt [Line Items] | ||||
Expected life (year) | 29 days | |||
Risk-free interest rate | 0.14% | |||
Convertible Notes Payable [Member] | Maximum [Member] | ||||
Short-term Debt [Line Items] | ||||
Expected life (year) | 1 month 28 days | |||
Risk-free interest rate | 0.29% | |||
JMJ Convertible Note [Member] | ||||
Short-term Debt [Line Items] | ||||
Annual dividend yield | 0.00% | 0.00% | ||
Expected life (year) | 11 months 27 days | |||
Risk-free interest rate | 0.56% | |||
Expected volatility | 188.00% | |||
JMJ Convertible Note [Member] | Minimum [Member] | ||||
Short-term Debt [Line Items] | ||||
Expected life (year) | 1 year 3 months | |||
Risk-free interest rate | 0.61% | |||
Expected volatility | 282.00% | |||
JMJ Convertible Note [Member] | Maximum [Member] | ||||
Short-term Debt [Line Items] | ||||
Expected life (year) | 2 years | |||
Risk-free interest rate | 1.06% | |||
Expected volatility | 304.00% | |||
AKR Promissory Note [Member] | ||||
Short-term Debt [Line Items] | ||||
Annual dividend yield | 0.00% | |||
Risk-free interest rate | 0.40% | |||
AKR Promissory Note [Member] | Minimum [Member] | ||||
Short-term Debt [Line Items] | ||||
Expected life (year) | 1 year 4 months 28 days | |||
Expected volatility | 183.00% | |||
AKR Promissory Note [Member] | Maximum [Member] | ||||
Short-term Debt [Line Items] | ||||
Expected life (year) | 2 years | |||
Expected volatility | 206.00% | |||
Tarpon Bay Convertible Note [Member] | ||||
Short-term Debt [Line Items] | ||||
Annual dividend yield | 0.00% | |||
Tarpon Bay Convertible Note [Member] | Minimum [Member] | ||||
Short-term Debt [Line Items] | ||||
Expected life (year) | 1 month 28 days | |||
Risk-free interest rate | 0.47% | |||
Expected volatility | 176.00% | |||
Tarpon Bay Convertible Note [Member] | Maximum [Member] | ||||
Short-term Debt [Line Items] | ||||
Expected life (year) | 6 months | |||
Risk-free interest rate | 0.51% | |||
Expected volatility | 196.00% |
Outstanding Warrant Liability37
Outstanding Warrant Liability (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Issuance of warrants to purchase of common stock | 428,571 | |
Gain (Loss) from change in fair value of warrant liability | $ 199 | $ 16,368 |
Outstanding Warrant Liability -
Outstanding Warrant Liability - Schedule of Black-Scholes Option Pricing Model Assumptions to Estimate Fair Value of Warrants (Details) - Warrant [Member] | Jan. 19, 2016 | Dec. 31, 2015 |
Class of Warrant or Right [Line Items] | ||
Annual dividend yield | ||
Expected life (years) | 0 years | 18 days |
Risk-free interest rate | 0.21% | 0.14% |
Expected volatility | 179.00% | 216.00% |
Commitments and Contingencies39
Commitments and Contingencies (Details Narrative) - USD ($) | Jul. 29, 2016 | May 02, 2016 | Jul. 20, 2010 | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 12, 2015 |
Fulton Project Lease [Member] | ||||||
Primary lease term | 30 year | |||||
Lease rate per acre, per month | $ 10,300 | |||||
Lease rate renewal term | 5 years | |||||
Rent expense under non-cancellable leases | $ 123,000 | $ 123,000 | ||||
Accrued lease payments | 298,468 | $ 174,964 | ||||
Fulton Project Lease [Member] | Itawamba [Member] | ||||||
Accrued lease payments | $ 34,903 | |||||
Accrued default interest rate | 10.00% | |||||
SEC Notice And Settlement [Member] | ||||||
Expected settlement amount | $ 25,000 | |||||
Initial settlement payment | $ 5,000 | |||||
SEC Notice And Settlement [Member] | June 30, 2017 [Member] | ||||||
Initial settlement payment | $ 20,000 | |||||
Independent Board Member 1 [Member] | ||||||
Accrued compensation | $ 5,000 | |||||
Independent Board Member 2 [Member] | ||||||
Accrued compensation | $ 5,000 |
Commitments and Contingencies -
Commitments and Contingencies - Future Annual Minimum Lease Payments Under Above Lease Agreements (Details) | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 125,976 |
2,018 | 125,976 |
2,019 | 125,976 |
2,020 | 125,976 |
2,021 | 125,976 |
Thereafter | 2,400,064 |
Total | $ 3,029,944 |
Redeemable Non-controlling Inte
Redeemable Non-controlling Interest (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Dec. 23, 2010 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2011 | |
Noncontrolling Interest [Abstract] | ||||
Ownership interest in BlueFire Fulton Renewable Energy LLC sold | 1.00% | 1.00% | ||
Proceeds from sale of LLC Unit | $ 750,000 | |||
Ownership interest in BlueFire Fulton Renewable Energy LLC | 99.00% | |||
Redeemable noncontrolling interest | $ 862,500 | $ 860,980 | $ 865,614 | $ 862,500 |
Net income (loss) attributable to redeemable noncontrolling interest | $ (4,634) | $ 747 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | May 06, 2016 | Dec. 17, 2014 | Dec. 31, 2016 | Dec. 31, 2015 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | ||
Amortization of debt discount | $ 53,977 | $ 201,682 | ||
Amortized discount on notes | 20,833 | 0 | ||
Funds received for sales of common stock | 147,000 | |||
Board of Directors [Member] | ||||
Number of stock issued for services | 72,000 | |||
Number of common stock shares issued during the period | 18,000 | |||
Value of common stock issued during the period | $ 144 | |||
Speirs Settlement [Member] | ||||
Number of common shares returned to treasury during the period | 5,740,741 | |||
Kodiak Promissory Note [Member] | ||||
Debt instruments maturity date | Jul. 17, 2015 | |||
Promissory note principal amount | $ 60,000 | |||
Kodiak [Member] | ||||
Debt outstanding | 40,000 | |||
Amortization of debt discount | 0 | 55,714 | ||
Amortized discount on notes | $ 0 | $ 0 | ||
Purchase Agreement With Kodiak [Member] | ||||
Agreement term | 24 months | |||
Maximum purchase under purchase agreement | $ 1,500,000 | |||
Series A Preferred Stock [Member] | ||||
Preferred stock, shares authorized | 1,000,000 |
Stockholders' Deficit - Schedul
Stockholders' Deficit - Schedule of Warrants Outstanding (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Equity [Abstract] | ||
Warrants, Outstanding and exercisable, beginning balance | 23,528,571 | 23,528,571 |
Warrants, during the year | ||
Warrants, Exercised during the year | ||
Warrants, Expired during the year | 23,528,571 | |
Warrants, Outstanding and exercisable, Ending balance | 23,528,571 | |
Weighted Average Exercise Price, Outstanding and exercisable, Beginning Balance | $ 0.01 | $ 0.01 |
Weighted Average Exercise Price, Issued during the year | ||
Weighted Average Exercise Price, Exercised during the year | ||
Weighted Average Exercise Price, Expired during the year | ||
Weighted Average Exercise Price, Outstanding and exercisable, Ending Balance | $ 0.01 | |
Weighted Average Remaining Contractual Term (Years), Outstanding and exercisable, Beginning | 4 months 24 days | 1 year 4 months 24 days |
Weighted Average Remaining Contractual Term (Years), Outstanding and exercisable, Ending | 0 years | 4 months 24 days |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | Oct. 05, 2016USD ($) | Mar. 13, 2016USD ($) | Apr. 10, 2014USD ($) | Dec. 15, 2010USD ($)$ / sharesshares | Mar. 02, 2006USD ($)gal | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Nov. 10, 2011USD ($) |
Loan agreement, one-time fees payable in shares of common stock, per-share value | $ / shares | $ 0.50 | |||||||
Net proceeds from related party notes payable | $ 200,000 | |||||||
Accrued Interest | $ 52,017 | $ 46,033 | ||||||
Line of credit, amount outstanding | 240,924 | 9,076 | ||||||
Line of credit, additional borrowing | 100,000 | |||||||
Line of credit, maximum amount of credit line | $ 250,000 | $ 125,000 | ||||||
Loan agreement, one-time fees as a percentage of loan | 15.00% | |||||||
Loan agreement, warrants issued | shares | 500,000 | |||||||
Warrants exercise price | $ / shares | $ 0.50 | |||||||
Warrant expiration date | Dec. 15, 2013 | |||||||
Loan amount received from a third party | $ 1,000,000 | |||||||
Outstanding loan | 200,000 | 200,000 | ||||||
Line of Credit [Member] | ||||||||
Accrued Interest | 31,709 | 15,268 | ||||||
Chief Executive Officer [Member] | ||||||||
Line of credit, amount outstanding | $ 40,000 | |||||||
Notes, repayment of principal balance and interest | 12.00% | |||||||
Minimum amount of financing to be received for repayment of principal and interest | $ 100,000 | |||||||
Line of credit, maximum amount of credit line | $ 55,000 | |||||||
Company Officers [Member] | ||||||||
Accrued salary | $ 792,833 | $ 341,833 | ||||||
Arkenol [Member] | ||||||||
Related party license fee | $ 1,000,000 | |||||||
Technology license agreement royalty payment percentage | 4.00% | |||||||
Technology license agreement one time license fee | $ 40 | |||||||
Number of gallons | gal | 1,000 | |||||||
ARK Energy Inc [Member] | ||||||||
Asset transfer and acquisition agreement maximum performance bonus | $ 16,000,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Operating loss carry forwards | $ 7,297,000 | $ 7,593,000 |
Change in deferred tax asset valuation allowance | 459,000 | 260,000 |
Federal [Member] | ||
Operating loss carry forwards | $ 23,400,000 | 22,300,000 |
Operating loss carry forwards expiration year | 2,036 | |
California [Member] | ||
Operating loss carry forwards | $ 22,200,000 | $ 22,300,000 |
Operating loss carry forwards expiration year | 2,036 |
Income Taxes - Schedule of Curr
Income Taxes - Schedule of Current and Deferred Tax Provision for Federal and State Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Current tax provision, Federal | ||
Current tax provision, State | 2,940 | 2,543 |
Total | 2,940 | 2,543 |
Deferred tax provision (benefit), Federal | (382,631) | (227,080) |
Deferred tax provision (benefit), State | (76,619) | (32,542) |
Deferred tax provision (benefit), Valuation Allowance | 459,250 | 259,622 |
Total Provision for income taxes | $ 2,940 | $ 2,543 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
US federal statutory income tax rate | 30.00% | 30.00% |
State tax - net of benefit | 4.00% | 4.00% |
Total | 34.00% | 34.00% |
Permanent differences | 2.00% | (14.00%) |
Reserves and accruals | (21.00%) | (15.00%) |
Changes in deferred tax assets | 32.00% | (5.00%) |
Other | (9.00%) | 7.00% |
Increase in valuation allowance | (38.00%) | (7.00%) |
Effective tax rate | 0.00% | 0.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 7,927,043 | $ 7,593,325 |
Reserves and accruals | 321,448 | 195,916 |
Valuation allowance | (8,248,491) | (7,789,241) |
Total |