| 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, 2017 the Company has negative
working capital of approximately $4,954,580. Management has estimated that operating expenses for the next 12 months will be approximately
$120,000, excluding any salary costs, for full-time or part-time employees, or 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 2018, the Company intends to fund its operations with any additional funding that can be secured in the form of equity
or debt the potential sale of Fulton Project equity ownership, and from a potential merger or sale of the Company. As of April
17, 2018, 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 remain 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, operating results,
and ability to continue operating. 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-refinery to be 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 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 or straight line 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, 2017 and 2016, 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. 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, 2017 or 2016. 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. 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, 2017 and
2016, project development were approximately $87,000 and $288,000, respectively, and consisted primarily of payroll expense. 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, 2017 and 2016. As of December 31, 2017 and 2016, the warrant
liability and derivative liability are considered Level 2 items, see Notes 5, 6, and 9. As of December 31, 2017 and 2016, the Company’s
redeemable noncontrolling interest is considered a Level 3 item and changed during 2016 and 2017 due to the following:
Balance as of January 1, 2017 $ 860,980
Net loss attributable to noncontrolling interest 1,603
Balance at December 31, 2017 $ 859,377 See Note 8 for details of valuation and changes
during the years 2017 and 2016. 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. 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, 2017 and 2016, the Company had no options and no warrants outstanding, respectively. The effects of the convertible notes payable
for the years ended December 31, 2017 and 2016 haven’t been presented as their effects would be anti-dilutive. 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 does not expect the standard to have
a material impact on its 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 does not expect the standard to have
a material impact 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. |
