BLUEFIRE RENEWABLES, INC. (OTCMKTS:BFRE) Files An 8-K Unregistered Sales of Equity SecuritiesItem 3.02 Unregistered Sale of Equity Securities.
As previously disclosed, on September 27, 2017, BlueFire Renewables, Inc., a Nevada Corporation (the “Company”) entered into a Settlement Agreement and Stipulation (the “Settlement Agreement”) with Tarpon Bay Partners, LLC, a Florida limited liability company (“TBP”), to which the Company agreed to issue common stock to TBP in exchange for the settlement of $999,630.45 (the “Settlement Amount”) of past-due obligations and accounts payable of the Company. TBP purchased the obligations and accounts payable from certain vendors of the Company as described below.
On October 11, 2017, the Circuit Court of Leon County, Florida (the “Court”), entered an order (the “TBP Order”) approving, among other things, the fairness of the terms and conditions of an exchange to Section 3(a)(10) of the Securities Act of 1933, as amended (the “Securities Act”), in accordance with a stipulation of settlement, to the Settlement Agreement between the Company and TBP, in the matter entitled Tarpon Bay Partners, LLC v. BlueFire Renewables, Inc. (the “TBP Action”). TBP commenced the TBP Action against the Company to recover an aggregate of $999,630.45 of past-due obligations and accounts payable of the Company (the “TBP Claim”), which TBP had purchased from certain vendors of the Company to the terms of separate receivable purchase agreements between TBP and each of such vendors (the “TBP Assigned Accounts”). The TBP Assigned Accounts relate to certain contractual obligations and legal services provided to the Company. The TBP Order provides for the full and final settlement of the TBP Claim and the TBP Action. The Settlement Agreement became effective and binding upon the Company and TBP upon execution of the TBP Order by the Court on October 11, 2017.
to the terms of the Settlement Agreement approved by the TBP Order, on October 11, 2017, the Company agreed to issue to TBP shares (the “TBP Settlement Shares”) of the Company’s common stock, $0.001 par value (the “Common Stock”). The Settlement Agreement provides that the TBP Settlement Shares will be issued in one or more tranches, as necessary, sufficient to satisfy the TBP Settlement Amount through the issuance of freely trading securities issued to Section 3(a)(10) of the Securities Act. to the Settlement Agreement, TBP may deliver a request to the Company for shares of Common Stock to be issued to TBP (the “TBP Share Request”).
The parties reasonably estimate that the fair market value of the TBP Settlement Shares to be received by TBP is equal to approximately $1,666,000. In connection with the Settlement Agreement, on October 16, 2017, the Company issued 37,000,000 shares (the “Initial Settlement Shares”) of the Company’s common stock to TBP.
The Settlement Agreement provides that in no event shall the number of shares of Common Stock issued to TBP or its designee in connection with the Settlement Agreement, when aggregated with all other shares of Common Stock then beneficially owned by TBP and its affiliates (as calculated to Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations thereunder), result in the beneficial ownership by TBP and its affiliates (as calculated to Section 13(d) of the Exchange Act and the rules and regulations thereunder) at any time of more than 9.99% of the Common Stock.
As previously reported by the Company, since the issuance of the Initial Settlement Shares, TBP demonstrated to the Company’s satisfaction that it was entitled to receive another 145,609,000 shares of Common Stock (the “Additional Settlement Shares”), and that the issuance of such Additional Settlement Shares to TBP would not result in TBP exceeding the beneficial ownership limitation set forth above.
Since the Additional Settlement Shares, TBP demonstrated to the Company’s satisfaction that it was entitled to receive another 128,080,000 shares of Common Stock, and that the issuance of such 128,080,000 shares of Common Stock to TBP would not result in TBP exceeding the beneficial ownership limitation set forth above. Accordingly, on January 31, 2018, the Company issued and delivered to TBP another 63,858,000 shares of Common Stock (the “Fourth Share Issuance”) to the terms of the Settlement Agreement approved by the Order. Subsequent to the Fourth Share Issuance, on February 9, 2018 the Company issued and delivered to TBP another 64,222,000 shares of Common Stock (the “Fifth Share Issuance”) to the terms of the Settlement Agreement approved by the Order.
The issuance of Common Stock to TBP to the terms of the Settlement Agreement approved by the Order is exempt from the registration requirements of the Securities Act to Section 3(a)(10) thereof, as an issuance of securities in exchange for bona fide outstanding claims, where the terms and conditions of such issuance are approved by a court after a hearing upon the fairness of such terms and conditions at which all persons to whom it is proposed to issue securities in such exchange shall have the right to appear.
About BLUEFIRE RENEWABLES, INC. (OTCMKTS:BFRE)
BlueFire Renewables, Inc. is engaged in developing, owning and operating carbohydrate-based transportation fuel plants, or bio-refineries, to produce ethanol, and to provide professional services to bio-refineries. The Company’s bio-refineries convert organic materials, such as agricultural residues, high-content biomass crops, wood residues and cellulose from municipal solid wastes into ethanol. Its Arkenol Technology’s use ranges from producing beverage alcohol and fuel-ethanol to making citric acid and xantham gum for food uses. The process separates the biomass into two main constituents: cellulose and hemicellulose (the main building blocks of plant life), and lignin (the glue that holds the building blocks together), converts the cellulose and hemicellulose to sugars, ferments them and purifies the fermentation liquids into ethanol and other end-products. It is in the development-stage of building bio-refineries in North America.