10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2014

OR

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File No. 000-52361

 

BLUEFIRE RENEWABLES, INC.

(Exact name of registrant as specified in its charter)

Nevada	20-4590982
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

31 Musick

Irvine, CA 92618

(Address of principal executive offices)

(949) 588-3767

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files. Yes [X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	[  ]	Accelerated filer	[  ]
Non-accelerated filer	[  ]	Smaller reporting company	[X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]

As of August 11, 2014, there were 181,242,551 shares outstanding of the registrant’s common stock.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.	F-1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	3
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	9
Item 4. Controls and Procedures.	9
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.	9
Item 1A. Risk Factors.	10
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds.	10
Item 3 Defaults Upon Senior Securities.	10
Item 4. Mine Safety Disclosures.	10
Item 5. Other Information.	10
Item 6. Exhibits.	10
Signatures	11

2

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

BLUEFIRE RENEWABLES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	June 30, 2014			December 31, 2013
ASSETS
Current assets:
Cash and cash equivalents	$	41,120		$	46,992
Accounts receivable		76,723			-
Department of Energy grant receivable		103,356			-
Costs of financing		-			1,031
Prepaid expenses		20,034			4,636
Total current assets		241,233			52,659
Property, plant and equipment, net of accumulated depreciation of $106,492 and $106,041, respectively		110,789			111,240
Total assets	$	352,022		$	163,899
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	832,916		$	1,108,684
Accrued liabilities		183,383			272,910
Convertible notes payable, net of discount of $1,250 and $75,695, respectively		98,750			322,385
Notes payable, net of discount of $32,699 and $0, respectively		347,301			-
Line of credit, related party		51,230			11,230
Note payable to a related party		200,000			200,000
Derivative liability		87,500			122,309
Total current liabilities		1,801,080			2,037,518
Outstanding warrant liability		296			58
Total liabilities		1,801,376			2,037,576
Redeemable noncontrolling interest		858,417			856,044
Stockholders’ deficit:
Preferred stock, no par value, 1,000,000 shares authorized; none issued and outstanding		-			-
Common stock, $0.001 par value; 500,000,000 shares authorized; 156,704,560 and 73,486,861 shares issued; and 156,672,388 and 68,910,395 outstanding, as of June 30, 2014 and December 31, 2013, respectively		156,704			68,943
Additional paid-in capital		16,395,771			16,123,744
Treasury stock at cost, 32,172 shares at June 30, 2014 and December 31, 2013		(101,581	)		(101,581	)
Accumulated deficit		(18,758,665	)		(18,820,827	)
Total stockholders’ deficit		(2,307,771	)		(2,729,721	)
Total liabilities and stockholders’ deficit	$	352,022		$	163,899

See accompanying notes to consolidated financial statements

F-1

BLUEFIRE RENEWABLES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the Three Months ended June 30, 2014			For the Three Months ended June 30, 2013			For the Six Months ended June 30, 2014			For the Six Months ended June 30, 2013
Revenues:
Consulting fees	$	128,705		$	-		$	214,225		$	2,020
Department of Energy grant revenue		323,917			551,828			849,503			617,939
Total revenues		452,622			551,828			1,063,728			619,959
Cost of revenue
Consulting revenue		12,369			-			12,369			-
Gross margin		440,253			551,828			1,051,359			619,959
Operating expenses:
Project development		201,548			128,301			415,473			246,688
General and administrative		181,676			176,263			475,028			398,602
Total operating expenses		383,224			304,564			890,501			645,290
Operating income (loss)		57,029			247,264			160,858			(25,331	)
Other income and (expense):
Amortization of debt discount		(34,323	)		(44,513	)		(84,541	)		(125,616	)
Interest expense		(20,896	)		(19,386	)		(36,552	)		(76,447	)
Related party interest expense		(1,417	)		(462	)		(1,754	)		(919	)
Gain on settlement of accounts payable and accrued liabilities		-			-			95,990			-
Gain / (loss) from change in fair value of warrant liability		174			7,736			(238	)		21,855
Gain / (loss) from change in fair value of derivative liability		86,527			90,236			(67,737	)		59,505
Loss on excess of derivative over face value		-			(28,507	)		-			(28,507	)
Total other income and (expense)		30,065			5,104			(94,832	)		(150,129	)
Income (loss) before income taxes		87,094			252,368			66,026			(175,460	)
Provision (benefit) for income taxes		(252	)		(355	)		1,491			751
Net income (loss)	$	87,346		$	252,723		$	64,535		$	(176,211	)
Net income (loss) attributable to non-controlling interest		1			(685	)		2,373			(2,742	)
Net income (loss) attributable to controlling interest	$	87,345		$	253,408		$	62,162		$	(173,469	)
Basic and diluted income (loss) per common share	$	0.00		$	0.01		$	0.00		$	(0.00	)
Weighted average common shares outstanding, basic and diluted		155,680,081			35,699,485			133,116,512			34,807,751

See accompanying notes to consolidated financial statements

F-2

BLUEFIRE RENEWABLES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Six Months Ended			For the Six Months Ended
	June 30, 2014			June 30, 2013
Cash flows from operating activities:
Net income (loss)	$	64,535		$	(176,211	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Change in the fair value of warrant liability		238			(21,855	)
Change in fair value of derivative liability		67,737			(59,505	)
Loss on excess fair value of derivative liability		-			28,507
Gain on settlement of accounts payable and accrued liabilities		(95,990	)		-
Share-based compensation		46,711			9,075
Amortization		87,600			154,439
Depreciation		451			1,989
Changes in operating assets and liabilities:
Accounts receivable		(76,723	)		(93,294	)
Department of Energy grant receivable		(103,356	)		-
Prepaid expenses and other current assets		(15,398	)		(4,608	)
Accounts payable		(86,423	)		127,993
Accrued liabilities		(87,754	)		(124,860	)
Net cash used in operating activities		(198,372	)		(158,330	)
Cash flows from investing activities:
Construction in progress		-			3,892
Net cash provided by investing activities		-			3,892
Cash flows from financing activities:
Proceeds from convertible notes payable		35,000			110,000
Repayment of convertible notes payable		(262,500	)		-
Proceeds from notes payable		380,000			-
Proceeds from related party line of credit/notes payable		40,000			-
Net cash provided by financing activities		192,500			110,000
Net decrease in cash and cash equivalents		(5,872	)		(44,438	)
Cash and cash equivalents beginning of period		46,992			59,603
Cash and cash equivalents end of period	$	41,120		$	15,165
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest	$	98,179		$	-
Income taxes	$	-		$	751
Supplemental schedule of non-cash investing and financing activities:
Conversion of convertible notes payable into common stock	$	32,500		$	101,000
Interest converted to common stock	$	1,300		$	4,040
Discount on fair value of warrants issued with note payable	$	42,323		$	-
Derivative liability reclassed to additional paid-in capital	$	-		$	86,187
Liabilities settled in connection with the Liabilities Purchase Agreement	$	133,935		$	-

See accompanying notes to consolidated financial statements

F-3

BLUEFIRE RENEWABLES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND BUSINESS

BlueFire Renewables, Inc. (“BlueFire” or the “Company”) was incorporated in the State of Nevada on March 28, 2006 (“Inception”). 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 July 15, 2010, the board of directors of BlueFire, by unanimous written consent, approved the filing of a Certificate of Amendment to the Company’s Articles of Incorporation with the Secretary of State of Nevada, changing the Company’s name from BlueFire Ethanol Fuels, Inc. to BlueFire Renewables, Inc. On July 20, 2010, the Certificate of Amendment was accepted by the Secretary of State of Nevada.

On November 25, 2013, the Company filed an amendment to the Company’s articles of incorporation with the Secretary of State of the State of Nevada, to increase the Company’s authorized common stock from one hundred million (100,000,000) shares of common stock, par value $0.001 per share, to five hundred million (500,000,000) shares of common stock, par value $0.001 per share.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Management’s Plans

Going Concern

The Company has incurred losses since Inception. Management has funded operations primarily through proceeds received in connection with the reverse merger, loans from its majority shareholder, 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 throughout 2009 to 2014. 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 June 30, 2014, the Company has negative working capital of approximately $1,560,000. Management has estimated that operating expenses for the next 12 months will be approximately $1,700,000, 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 the remainder of 2014, the Company intends to fund its operations with remaining reimbursements under the Department of Energy contract as available, as well as seek additional funding in the form of equity or debt. The Company’s ability to get reimbursed under the DOE contract is dependent on the availability of cash to pay for the related costs and the availability of funds remaining under the contract after the discontinuance of the Department of Energy contract further disclosed in Note 3. As of August 11, 2014, the Company expects the current resources available to them will only be sufficient for a period of approximately 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. 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.

F-4

Additionally, the Company’s Lancaster plant is currently shovel ready, except for the air permit which the Company will need to renew and only requires minimal capital to maintain until funding is obtained for the construction. This project shall continue once we receive the funding necessary to construct the facility.

As of December 31, 2010, the Company completed the detailed engineering on our proposed Fulton Project, procured all necessary permits for construction of the plant, and began site clearing and preparation work, signaling the beginning of construction. As of June 30, 2014, 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 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 and approximately $100 million to $125 million for the Lancaster Biorefinery. 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.

Basis of Presentation

The accompanying unaudited consolidated interim financial statements have been prepared by the Company pursuant to the rules and regulations of the United States Securities Exchange Commission. Certain information and disclosures normally included in the annual financial statements prepared in accordance with the accounting principles generally accepted in the Unites States of America have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these financial statements have been included. Such adjustments consist of normal recurring adjustments. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2013. The results of operations for the three and six months ended June 30, 2014 are not necessarily indicative of the results that may be expected for the full year.

In July 2014, the Company elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allows the company to remove the inception to date information and all references to development stage.

Principles of Consolidation

The consolidated financial statements include the accounts of BlueFire Renewables, Inc., and its wholly-owned subsidiaries, BlueFire Ethanol, Inc., and Sucre Source LLC. BlueFire Ethanol Lancaster, LLC, and BlueFire Fulton Renewable Energy LLC (excluding 1% interest sold) 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.

F-5

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 three and six-months ended June 30, 2014 and 2013, research and development costs included in Project Development were approximately $202,000, $128,000, $415,000, and $247,000, 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.

Equity Instruments Issued with Registration Rights Agreement

The Company accounts for these penalties as contingent liabilities, applying the accounting guidance of ASC 450 “Contingencies”. This accounting is consistent with views established in ASC 825 “Financial Instruments”. Accordingly, the Company recognizes damages when it becomes probable that they will be incurred and amounts are reasonably estimable.

In connection with the Company signing the $2,000,000 Equity Facility with TCA on March 28, 2012, the Company agreed to file a registration statement related to the transaction with the Securities and Exchange Commission (“SEC”) covering the shares that may be issued to TCA under the Equity Facility within 45 days of closing. Although under the Registration Rights Agreement the registration statement was to be declared effective within 90 days following closing, it was not declared effective. The Company was working with TCA to resolve this issue and, on April 11, 2014, the Equity Facility was canceled and related convertible note repaid in full. No penalties were incurred as part of the repayment.

F-6

Fair Value of Financial Instruments

The Company follows the guidance of ASC 820 – “Fair Value Measurement and Disclosure”. 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 June 30, 2014 or December 31, 2013.

As of June 30, 2014, the Company’s warrant liability and derivative liability are considered level 2 items (see Notes 4 and 5).

As of June 30, 2014 and December 31, 2013 the Company’s redeemable non-controlling interest is considered a level 3 item and changed during the six months ended June 30, 2014 as follows.

Balance at December 31, 2013	$	856,044
Net income attributable to non-controlling interest		2,373
Balance at June 30, 2014	$	858,417

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 expenditures to comply 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.

Income (loss) per Common Share

The Company presents basic income (loss) per share (“EPS”) and diluted EPS on the face of the consolidated statement of operations. Basic income (loss) per share is computed as net income (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. As of June 30, 2014 and 2013, the Company had 7,778,571 and 928,571 warrants, respectively, for which all of the exercise prices were in excess of the average closing price of the Company’s common stock during the corresponding period and thus no shares are considered dilutive under the treasury stock method of accounting and their effects would have been antidilutive due to the loss in certain of the periods presented.

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.

F-7

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.

Redeemable - Non-controlling 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 non-controlling 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, “Distinguishing Liabilities from Equity”. All redeemable non-controlling 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 accreted the redemption value of the redeemable non-controlling interest over the redemption period using the straight-line method.

New Accounting Pronouncements

In June 2014, the FASB issued ASU No. 2014-10, which eliminates the concept of a development stage entity, or DSE, in its entirety from GAAP. Under existing guidance, DSEs are required to report incremental information, including inception-to-date financial information, in their financial statements. A DSE is an entity devoting substantially all of its efforts to establishing a new business and for which either planned principal operations have not yet commenced or have commenced but there has been no significant revenues generated from that business. Entities classified as DSEs will no longer be subject to these incremental reporting requirements after adopting ASU No. 2014-10. ASU No. 2014-10 is effective for fiscal years beginning after December 15, 2014, with early adoption permitted. Retrospective application is required for the elimination of incremental DSE disclosures. Prior to the issuance of ASU No. 2014-10, the Company had met the definition of a DSE since its inception. The Company elected to adopt this ASU early, and therefore it has eliminated the incremental disclosures previously required of DSEs, starting with this Quarterly Report on Form 10-Q.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

NOTE 3 – DEVELOPMENT CONTRACTS

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. The Company is currently drawing down on funds for Phase II of its Fulton Project. 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.

F-8

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. The Company is seeking to re-establish funding under Award 2 and has initiated the appeals process with the DOE. The Company shall exhaust all options available to it in order to reverse the DOE’s decision. Until the Company is notified of the outcome of its appeal, and as of August 11, 2014, we still have approximately $418,000 available under the grant prior to September 30, 2014. We cannot guarantee that we will continue to receive grants, loan guarantees, or other funding for our projects from the DOE.

As of June 30, 2014, the Company has received reimbursements of approximately $12,670,000 under these awards.

NOTE 4 – NOTES PAYABLE

On March 28, 2012 the Company entered into a $300,000 promissory note with a third party. See Note 9 for additional information.

As further described below, the Company has entered into several convertible notes with 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.

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 will account for the derivative liability upon the passage of time and the note becoming convertible if not extinguished, as defined above.

On July 31, 2012, the Company issued a convertible note of $63,500 to Asher Enterprises, Inc. pursuant to the terms above, with a maturity date of May 2, 2013. In accordance with the terms of the note, the note became convertible on January 27, 2013.

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 $47,000, resulting in a discount to the note. The discount was amortized over the term of the note and accelerated as the note was converted. As of June 30, 2014, all amounts outstanding in relation to this note have been converted to equity through the issuance of 1,642,578 shares of common stock.

On October 11, 2012, the Company issued a convertible note of $37,500 to Asher Enterprises, Inc. pursuant to the terms above, with a maturity date of July 15, 2013. In accordance with the terms of the note, the note became convertible on April 9, 2013.

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 $66,000, resulting in a discount to the note and an additional day one charge of $28,507 for the excess value of the derivative liability over the face value of the note. The excess value was recognized as an expense in the accompanying statement of operations. The discount was amortized over the term of the note. As of June 30, 2014 the note was fully converted through the issuance of 2,262,860 shares of common stock.

On December 21, 2012, the Company agreed to a convertible note of $32,500 to Asher Enterprises, Inc, which was funded in January 2013, such note had an interest rate of 8% per annum with a maturity date of September 26, 2013. In accordance with the terms of the note, the note became convertible on June 19, 2013.

F-9

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 $15,600, resulting in a discount to the note. The discount was amortized over the term of the note and accelerated as the note was converted. As of June 30, 2014, the note was fully converted into 4,017,599 shares of common stock.

On February 11, 2013, the Company agreed to a convertible note of $53,000 to Asher Enterprises, Inc. pursuant to the terms above, with a maturity date of November 13, 2013. In accordance with the terms of the note, the note became convertible on August 10, 2013.

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 $49,500, resulting in a discount to the note. The discount was amortized over the term of the note and accelerated as the note was converted. As of June 30, 2014, the entire discount was amortized to interest expense, with no remaining unamortized discount and the note was fully converted into 9,689,211 shares of common stock.

On June 13, 2013, the Company agreed to a convertible note of $32,500 to Asher Enterprises, Inc. pursuant to the terms above, with a maturity date of March 17, 2014. In accordance with the terms of the note, the note became convertible on December 10, 2013.

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 $28,000, resulting in a discount to the note. The discount was amortized over the term of the note and accelerated as the note was converted. As of June 30, 2014, the entire discount was amortized to interest expense, with no remaining unamortized discount and the note was fully converted into 22,207,699 shares of common stock. See below for assumptions used in valuing the derivative liability.

On December 19, 2013, the Company agreed to a convertible note of $37,500 to Asher Enterprises, Inc. which was funded and effective in January 2014 with terms identified above and a maturity date of December 23, 2014. The conversion feature was not triggered until after quarter end due to the effective date of the note being in January 2014. Subsequent to June 30, 2014, all of the principal and accrued interest outstanding in relation to this note were converted to equity through the issuance of 24,537,990 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 at inception (as applicable), at each conversion event, and at quarter end. Based on valuation conducted during the six months and at June 30, 2014 of derivative liabilities related to Asher Enterprises, Inc. notes, the Company recognized a gain on derivative liabilities of $86,527, which is included in the accompanying statement of operations within Gain (loss) from change in fair value of derivative liabilities.

During the six months ending June 30, 2014, the range of inputs used to calculate derivative liabilities noted above were as follows:

	Six months ended
	June 30, 2014
Annual dividend yield	-
Expected life (years)	0.04 - 0.18
Risk-free interest rate	0.04 - 0.07	%
Expected volatility	197	%

In addition, fees paid to secure the convertible debt were accounted for as deferred financing costs and capitalized in the accompanying balance sheet or considered an on-issuance discount to the notes. The deferred financing costs and discounts, as applicable, are amortized over the term of the notes.

As of June 30, 2014, the Company amortized on-issuance discounts totaling $1,250 with approximately $1,250 remaining.

F-10

Tarpon Bay Convertible Notes

Pursuant to a 3(a)10 transaction with Tarpon Bay Partners LLC (“Tarpon”), on November 4, 2013, 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 January 30, 2014. 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.

Also pursuant to the 3(a)10 transaction with Tarpon, on December 23, 2013, the Company issued a convertible promissory note in the principal amount of $50,000 in favor of Tarpon as a success fee (the “Tarpon Success Fee Note”). The Tarpon Success Fee Note was due on June 30, 2014. The Tarpon Success Fee Note is convertible into shares of the Company’s common stock at a conversion price for each share of Common Stock at a 50% discount from the lowest closing bid price in the twenty (20) trading days prior to the day that Tarpon requests conversion.

Each of the above notes were issued without funds being received. Accordingly, the notes were issued with a full on-issuance discount that was amortized over the term of the notes. During the six months ended June 30, 2014, amortization of approximately $51,960 was recognized to interest expense related to the discounts on the notes.

As of June 30, 2014, both the Tarpon Initial Note and the Tarpon Success Fee Note were in default. Subsequent to quarter end, the Company paid the Tarpon Initial Note (See Note 10), although the Tarpon Success Fee Note is still in default as of August 11, 2014.

Because the conversion price is variable and does not contain a floor, the conversion feature represents a derivative liability upon issuance. Accordingly, the Company calculated the derivative liability using the Black-Sholes pricing mode for the notes upon inception, resulting in a day one loss of approximately $96,000. The derivative liability was marked to market as of June 30, 2014 which resulted in a loss of approximately $20,000. The Company used the following assumptions as of June 30, 2014 and December 31, 2013:

	June 30, 2014			December 31, 2013
Annual dividend yield		0	%		0	%
Expected life (years)		0.00 - 0.01			0.8
Risk-free interest rate		0.02	%		0.02	%
Expected volatility		234	%		159	%

During the six months ended June 30, 2014, the Company paid $12,500 in cash on the Tarpon Initial Note, and subsequent to June 30, 2014, the Company paid the remaining $12,500 in cash.

AKR Promissory Note

On April 8, 2014, the Company finalized a $350,000 promissory note in favor of AKR Inc (“AKR Note”). Under the terms of the agreement, the note is due on April 8, 2015, and 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”). The Company may prepay the debt, prior to maturity with no prepayment penalty.

The Company valued the warrants as of the date of the note and recorded a discount of $42,380 based the relative fair value of the warrants compared to the debt. During the six months ended June 30, 2014 the Company amortized $9,681 of the discount to interest expense. As of June 30, 2014 unamortized discount of $32,699 remains. The Company assessed the fair value of the 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	%

F-11

On April 24, 2014, the Company finalized an additional $30,000 promissory note in favor of AKR Inc (“2nd AKR Note”). Under the terms of the agreement, the note is due on July 24, 2014, although the Company and AKR Inc extended the maturity date as disclosed in Note 10. Under the terms of this note, the Company is to repay any principal balance and interest, at 5% per annum at maturity. Company may prepay the debt, prior to maturity with no prepayment penalty.

NOTE 5 – OUTSTANDING WARRANT LIABILITY

The Company issued 428,571 warrants to purchase common stock in connection with the Stock Purchase Agreement entered into on January 19, 2011 with Lincoln Park Capital, LLC (See Note 9). 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.

	June 30, 2014			December 31, 2013
Annual dividend yield		-			-
Expected life (years) of		1.55			2.05
Risk-free interest rate		0.47	%		0.38	%
Expected volatility		214	%		150	%

In connection with these warrants, the Company recognized a gain/(loss) on the change in fair value of warrant liability of $174, $7,736, ($238), and $21,855 from the change in fair value of these warrants during the three and six-months ended June 30, 2014 and 2013.

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.

NOTE 6 – COMMITMENTS AND CONTINGENCIES

Fulton Project Lease

On July 20, 2010, the Company entered into a thirty 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 thirty 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.

Rent expense under non-cancellable leases was approximately $30,900, $30,900, $61,800, and $61,800 during the three and six-months ended June 30, 2014 and 2013, respectively.

As of June 30, 2014 and December 31, 2013, $0, and $233,267 of the monthly lease payments were included in accounts payable on the accompanying balance sheets During the first half of 2014, the County of Itawamba gave the Company credit for past site preparation reimbursements provided to the County through DOE reimbursements totaling approximately $96,000 which was recorded as a gain in the accompanying statement of operations. The remaining past due balances from December 31, 2013 were paid in full.

F-12

Legal Proceedings

On February 26, 2013, the Company received notice that the Orange County Superior Court (the “Court”) issued a Minute Order (the “Order”) in connection with certain shareholders’ claims of breach of contract and declaratory relief related to 5,740,741 warrants (the “Warrants”) issued by the Company.

Pursuant to the Order, the Court ruled in favor of the shareholders on the two claims, finding that the Warrants contain certain anti-dilution protective provisions which provide for the re-adjustment of the exercise price of such Warrants upon certain events and that such exercise price per share of the Warrants must be decreased to $0.00.

The Company has considered these warrants exercised based on the notice of exercise received from the respective shareholders in December 2012.

On March 7, 2013, the shareholders making claims provided their request for judgment based on the Order received, which has been initially refused by the Court via a second minute order received by the Company on April 8, 2013. On April 15, 2013, the Company’s counsel submitted a proposed judgment to the Court as per the Courts request, which followed the Order and provided for no monetary damages against the Company. On May 14, 2013, this proposed judgment was approved by the Court (“Judgment”).

On June 20, 2013, the Company filed motions to vacate the Judgment, a motion for a new trial, and a motion to stay enforcement of the Judgment, all of which were denied on June 27, 2013.

On August 2, 2013, pursuant to the exercise notice of the Warrants, and the Order, the Company issued 5,740,741 shares to certain shareholders. See Note 9 for additional information.

Other than the above, 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.

NOTE 7 – RELATED PARTY TRANSACTIONS

On December 15, 2010, the Company entered into a loan agreement (the “Loan Agreement”) by and between Arnold Klann, the Chief Executive Officer (“CEO”), Chairman of the board of directors and 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.

On November 10, 2011, the Company obtained a line of credit in the amount of $40,000 from its CEO 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. During the three months ended June 30, 2014, the CEO loaned the Company an additional $40,000 under the line of credit, bringing the balance to $51,230, which is in excess of the line of credit limit, however, subsequent to June 30, 2014, the Company and the CEO amended this line of credit so that the maximum amount that could be borrowed is $55,000 (See Note 10).

F-13

NOTE 8 – REDEEMABLE NON-CONTROLLING 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 in the consolidated joint ventures are reflected as redeemable non-controlling interests in the Company’s consolidated financial statements outside of equity. The Company accreted the redeemable non-controlling interest for the total redemption price of $862,500 through the estimated forecasted financial close, originally estimated to be the end of the third quarter of 2011.

Net income (loss) attributable to the redeemable non-controlling interest during for the three and six-months ended June 30, 2014 and 2013 was $1, $(685), $2,373, and $(2,742), respectively which netted against the value of the redeemable non-controlling interest in temporary equity. The allocation of income (loss) was presented on the statement of operations.

NOTE 9 – STOCKHOLDERS’ DEFICIT

Stock-Based Compensation

During the three and six-months ended June 30, 2014 and 2013, the Company recognized stock-based compensation, including consultants, of approximately $9,700, $0, $46,700, and $9,100, to general and administrative expenses and $0, $0, $0, and $0 to project development expenses, respectively. There is no additional future compensation expense to record as of June 30, 2014 based on the previous awards.

Stock Purchase Agreement

On January 19, 2011, the Company signed a $10 million purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“LPC”), an Illinois limited liability company. The Company also entered into a registration rights agreement with LPC whereby we agreed to file a registration statement related to the transaction with the U.S. Securities & Exchange Commission (“SEC”) covering the shares that may be issued to LPC under the Purchase Agreement within ten days of the agreement. Although under the Purchase Agreement the registration statement was to be declared effective by March 31, 2011, LPC did not terminate the Purchase Agreement. The registration statement was declared effective on May 10, 2011, without any penalty. The Purchase Agreement was terminated in July 18, 2013. During the three and six-months ended June 30, 2014 and 2013 the Company drew $0, $0, $0, and $0 on the Purchase Agreement.

Upon signing the Purchase Agreement, BlueFire received $150,000 from LPC as an initial purchase under the $10 million commitment in exchange for 428,571 shares of our common stock and warrants to purchase 428,571 shares of our common stock at an exercise price of $0.55 per share. The warrants contain a ratchet provision in which the exercise price will be adjusted based on future issuances of common stock, excluding certain issuances; if issuances are at prices lower than the current exercise price (see Note 6). The warrants have an expiration date of January 2016.

Equity Facility Agreement

On March 28, 2012, BlueFire finalized a committed equity facility (the “Equity Facility”) with TCA Global Credit Master Fund, LP, a Cayman Islands limited partnership (“TCA”), whereby the parties entered into (i) a committed equity facility agreement (the “Equity Agreement”) and (ii) a registration rights agreement (the “Registration Rights Agreement”). Pursuant to the terms of the Equity Agreement, for a period of twenty-four (24) months commencing on the date of effectiveness of the Registration Statement (as defined below), TCA committed to purchase up to $2,000,000 of BlueFire’s common stock, par value $0.001 per share (the “Shares”), pursuant to Advances (as defined below), covering the Registrable Securities (as defined below). The purchase price of the Shares under the Equity Agreement is equal to ninety-five percent (95%) of the lowest daily volume weighted average price of BlueFire’s common stock during the five (5) consecutive trading days after BlueFire delivers to TCA an Advance notice in writing requiring TCA to advance funds (an “Advance”) to BlueFire, subject to the terms of the Equity Agreement. The “Registrable Securities” include (i) the Shares; and (ii) any securities issued or issuable with respect to the Shares 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 further consideration for TCA entering into and structuring the Equity Facility, BlueFire paid to TCA a fee by issuing to TCA shares of BlueFire’s common stock that equal a dollar amount of $110,000 (the “Facility Fee Shares”). It is the intention of BlueFire and TCA that the value of the Facility Fee Shares shall equal $110,000. In the event the value of the Facility Fee Shares issued to TCA does not equal $110,000 after a nine month evaluation date, the Equity Agreement provides for an adjustment provision allowing for necessary action (either the issuance of additional shares to TCA or the return of shares previously issued to TCA to BlueFire’s treasury) to adjust the number of Facility Fee Shares issued. BlueFire also entered into the Registration Rights Agreement with TCA. Pursuant to the terms of the Registration Rights Agreement, BlueFire is obligated to file a registration statement (the “Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC’) to cover the Registrable Securities within 45 days of closing. BlueFire must use its commercially reasonable efforts to cause the Registration Statement to be declared effective by the SEC by a date that is no later than 90 days following closing.

F-14

In connection with the issuance of approximately 280,000 shares for the $110,000 facility fee as described above, the Company capitalized said amount within deferred financings costs in the accompanying balance sheet as of March 31, 2012, along with other costs incurred as part Equity Facility and the Convertible Note described below. Additional costs related to the Equity Facility and paid from the funds of the Convertible Note described below, were approximately $60,000. Aggregate costs of the Equity Facility were $170,000. Because these costs were to access the Equity Facility, earned by TCA regardless of the Company drawing on the Equity Facility, and not part of a funding, they are treated akin to debt costs The deferred financings costs related to the Equity Facility were amortized over one (1) year on a straight-line basis. The Company believed this accelerated amortization, which is less than the two year Equity Facility term, was appropriate based on substantial doubt about the Company’s ability to continue as a going concern. As of December 31, 2012, the Company determined that it was not probable the Registration Statement would become effective under the original structure of the agreement and accordingly, wrote off all remaining deferred financing costs related to the Equity Agreement.

On March 28, 2012, BlueFire entered into a security agreement (the “Security Agreement”) with TCA, related to a $300,000 convertible promissory note issued by BlueFire in favor of TCA (the “Convertible Note”). The Security Agreement granted to TCA a continuing, first priority security interest in all of BlueFire’s assets, wheresoever located and whether now existing or hereafter arising or acquired. On March 28, 2012, BlueFire issued the Convertible Note in favor of TCA. The maturity date of the Convertible Note was March 28, 2013, and the Convertible Note bore interest at a rate of twelve percent (12%) per annum with a default rate of eighteen percent (18%) per annum. The Convertible Note was convertible into shares of BlueFire’s common stock at a price equal to ninety-five percent (95%) of the lowest daily volume weighted average price of BlueFire’s common stock during the five (5) trading days immediately prior to the date of conversion. The Convertible Note had the option to be prepaid in whole or in part at BlueFire’s option without penalty. The proceeds received by the Company under the purchase agreement were used for general working capital purposes which include costs reimbursed under the DOE cost share program.

In connection with the Convertible Note, approximately $93,000 was withheld and immediately disbursed to cover costs of the Convertible Note and Equity Facility described above. The costs related to the Convertible Note were $24,800 which were capitalized as deferred financing costs; were amortized on a straight-line basis over the term of the Convertible Note. In addition, $7,500 was dispersed to cover legal fees. After all costs, the Company received approximately $207,000 in cash from the Convertible Note. Amortization of the deferred financing costs during the six months ended June 30, 2014 and 2013 was approximately $0 and $38,617, respectively. As of June 30, 2014, there were no remaining deferred financing costs.

This note contained an embedded conversion feature whereby the holder could convert the note at a discount to the fair value of the Company’s common stock price. Based on applicable guidance the embedded conversion feature was considered a derivative instrument and bifurcated. This liability was recorded on the face of the financial statements as “derivative liability”, and was revalued each reporting period. During the three months ended June 30, 2014, the note was repaid in full along with accrued interest and fees thereon. Accordingly, the remaining derivative liability of $13,189 was transferred to equity.

On April 11, 2014, the Convertible Note with TCA was repaid in full.

F-15

Liability Purchase Agreement

On December 9, 2013, The Circuit Court of the Second Judicial Circuit in and for Leon County, Florida (the “Court”), entered an order (the “Order”) approving, among other things, the fairness of the terms and conditions of an exchange pursuant to Section 3(a)(10) of the Securities Act of 1933, in accordance with a stipulation of settlement (the “Settlement Agreement”) between the Company, and Tarpon Bay Partners, LLC, a Florida limited liability company (“Tarpon”), in the matter entitled Tarpon Bay Partners, LLC v. BlueFire Renewables, Inc., Case No. 2013-CA-2975 (the “Action”). Tarpon commenced the Action against the Company on November 21, 2013 to recover an aggregate of $583,710 of past-due accounts payable of the Company, which Tarpon had purchased from certain creditors of the Company pursuant to the terms of separate receivable purchase agreements between Tarpon and each of such vendors (the “Assigned Accounts”), plus fees and costs (the “Claim”). The Assigned Accounts relate to certain legal, accounting, financial services, and the repayment of aged debt. The Order provides for the full and final settlement of the Claim and the Action. The Settlement Agreement became effective and binding upon the Company and Tarpon upon execution of the Order by the Court on December 9, 2013. Notwithstanding anything to the contrary in the Stipulation, the number of shares beneficially owned by Tarpon will not exceed 9.99% of the Company’s Common Stock. In connection with the Settlement Agreement, the Company relied on the exemption from registration provided by Section 3(a)(10) under the Securities Act.

Pursuant to the terms of the Settlement Agreement approved by the Order, the Company shall issue and deliver to Tarpon shares (the “Settlement Shares”) of the Company’s Common Stock in one or more tranches as necessary, and subject to adjustment and ownership limitations, sufficient to generate proceeds such that the aggregate Remittance Amount (as defined in the Settlement Agreement) equals the Claim. In addition, pursuant to the terms of the Settlement Agreement, the Company issued to Tarpon the Tarpon Initial Note in the principal amount of $25,000. Under the terms of the Tarpon Initial Note, the Company shall pay Tarpon $25,000 on the date of maturity which was January 30, 2014. This Note is convertible by Tarpon into the Company’s Common Shares (See Note 4).

Pursuant to the fairness hearing, the Order, and the Company’s agreement with Tarpon, on December 23, 2013, the Company issued the Tarpon Success Fee Note in the principal amount of $50,000 in favor of Tarpon as a commitment fee. The Tarpon Success Fee Note was due on June 30, 2014. The Tarpon Success Fee Note is convertible into shares of the Company’s common stock (See Note 4).

In connection with the settlement, on December 18, 2013 the Company issued 6,619,835 shares of Common Stock to Tarpon in which gross proceeds of $29,802 were generated from the sale of the Common Stock. In connection with the transaction, Tarpon received fees of $7,450 and providing payments of $22,352 to settle outstanding vendor payables. During the six months ended June 30, 2014, the Company issued Tarpon 61,010,000 shares of Common Stock from which gross proceeds of $163,406 were generated from the sale of the Common Stock. In connection with the transaction, Tarpon received fees of $42,402 and providing payments of $121,004 to settle outstanding vendor payables. Any shares not used by Tarpon are subject to return to the Company. Accordingly, the Company accounts for these shares as issued but not outstanding until the shares have been sold by Tarpon and the proceeds are known. Net proceeds received by Tarpon are included as a reduction to accounts payable or other liability as applicable, as such funds are legally required to be provided to the party Tarpon purchased the debt from.

Warrants Exercised

Some of our warrants contain a provision in which the exercise price is to be adjusted for future issuances of common stock at prices lower than their current exercise price.

In 2012, certain shareholders’ owning an aggregate of 5,740,741 warrants made claims of the Company that the exercise price of their warrants should have been adjusted due to a certain issuance of common shares by the Company (see Note 6). The Company believed that said issuance would not trigger adjustment based on the terms of the respective agreements.

F-16

On December 4, 2012, these shareholders presented exercise forms to the Company to exercise all 5,740,741 warrants for a like amount of common shares. The warrants were exercised at $0.00, which is the amount the shareholders’ believed the new exercise price should be based the ratchet provision and their claims.

On February 26, 2013, the Company received notice that the Court issued an Order in connection with these certain shareholders’ claims of breach of contract and declaratory relief related to 5,740,741 warrants issued by the Company.

Pursuant to the Order, the Court ruled in favor of the shareholders on the two claims, finding that the Warrants contain certain anti-dilution protective provisions which provide for the re-adjustment of the exercise price of such Warrants upon certain events and that such exercise price per share of the Warrants must be decreased to $0.00.

The Company has considered these warrants exercised based on the notice of exercise received from the respective shareholders in December 2012. The Company determined, that based on the Order by the Court a ratchet event had taken place based on the Order and claims made. The Company used December 4, 2012 as the date in which the new terms were considered to be in force based on the Shareholders’ notice to exercise on that date and the Courts subsequent Order that allowed the Shareholders to do so.

As such, the modification of the exercise price was treated as an extinguishment of the warrants under the previous terms, with a revaluation of the warrants with new terms. As such, the warrant liability was valued immediately before extinguishment with the gain/loss recognized through earnings and remaining value reclassified to equity. Because there was only approximately one week of remaining life under the unmodified terms and because the previous exercise price was out of the money ($2.90) compared to the price of our common stock on the day of extinguishment ($0.14), the warrant value upon extinguishment was considered to be near zero based on a Black-Scholes calculation, which also used volatility of 104.2% and risk-free rate of 0.07%.

In addition, the new warrant liability was valued immediately after the modification but prior to the exercise by the Shareholders with the new value being recognized through earnings. The “new” warrants had a fixed price, fixed number of shares, and effectively no ratchet provision based on the Order. There were no circumstances at that time that would require or allow for net cash settlement. As such, the warrants qualified for equity accounting under ASC 815. The Company valued the warrants with new terms at approximately $804,000 based on the fair value of the Company’s common stock on December 4, 2012 ($0.14) as it was considered an immediate exercise and therefore, the value of the shares was known on the date of exercise. Accordingly, the warrants were considered committed shares to be issued in the consolidated balance sheets as of December 31, 2012. On August 2, 2013, the Company issued these 5,740,741 shares and the value transferred to additional paid-in capital.

NOTE 10 – SUBSEQUENT EVENTS

Subsequent to June 30, 2014, the holder of various convertible notes, converted $37,500 in principal, along with $1,500 of accrued interest, of a note with a maturity date of December 23, 2014, into 24,537,990 shares of common stock. See Note 4 for more information on the conversion features of the notes.

Subsequent to June 30, 2014, the Company paid the remaining $12,500 on the Tarpon Initial Note.

Subsequent to June 30, 2014, the Company issued the AKR Warrant B, consisting of warrants to purchase 7,350,000 shares of the Company’s common stock, in connection with the AKR Note transaction on April 8, 2014 (See Note 4).

Subsequent to June 30, 2014, the Company finalized an extension to the 2nd AKR Note, which amends the original note so that the maturity date is now December 31, 2014 (See Note 4).

Subsequent to June 30, 2014, the Company and the CEO amended a line of credit provided by the CEO in order to grant additional liquidity to the Company as needed from a maximum of $40,000 to a maximum amount of $55,000. All of the other terms remained the same. See Note 7 for more information on the line of credit.

F-17

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This quarterly report on Form 10-Q and other reports filed by the Company from time to time with the SEC contain or may contain forward-looking statements and information that are (collectively, the “Filings”) based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the Filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks contained in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, filed with the SEC, relating to the Company’s industry, the Company’s operations and results of operations, and any businesses that the Company may acquire. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this report.

PLAN OF OPERATION

Our primary business encompasses development activities culminating in the design, construction, ownership and long-term operation of cellulosic ethanol production biorefineries utilizing the licensed Arkenol Technology in North America. Our secondary business is providing support and operational services to Arkenol Technology based biorefineries worldwide. As such, we are currently in the process of finding suitable locations and deploying project opportunities for converting cellulose fractions of municipal solid waste and other opportunistic feedstock into ethanol fuels.

Our initial planned biorefineries in North America are projected as follows:

● A bio-refinery, costing approximately $100 million to $125 million, that will process approximately 190 tons of green waste material annually to produce roughly 3.9 million gallons of ethanol annually. On November 9, 2007, we purchased the facility site which is located in Lancaster, California for the BlueFire Ethanol Lancaster project (“Lancaster Bio-refinery”). Permit applications were filed on June 24, 2007, to allow for construction of the Lancaster Bio-refinery. On February 12, 2009, we were issued our “Authority to Construct” permit by the Antelope Valley Air Quality Management District. In 2009 the Company submitted an application for a $58 million dollar loan guarantee for the Lancaster Bio-refinery with the DOE Program DE-FOA-0000140 (“DOE LGPO”), which provided federal loan guarantees for projects that employed innovative energy efficiency, renewable energy, and advanced transmission and distribution technologies. In 2010, the Company was informed that the loan guarantee for the planned bio-refinery in Lancaster, California, was rejected by the DOE due to a lack of definitive contracts for feedstock and off-take at the time of submittal of the loan guarantee for the Lancaster Bio-refinery, as well as the fact that the Company was also pursuing a much larger project in Fulton, Mississippi. The Lancaster plant is currently shovel ready, except for the air permit which the Company will need to renew once financing is obtained, and only requires minimal capital to maintain until funding is obtained for the construction. Although the Company originally intended to use this proposed facility for their first cellulosic ethanol refinery plant, the Company is now considering using it as a bio-refinery to produce products other than cellulosic ethanol, such as higher value chemicals that would yield fuel additives that could improve the project economics for a smaller facility. Although the Company is actively seeking financing for this project no definitive agreements are in place.

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● A bio-refinery proposed for development and construction previously in conjunction with the DOE, previously located in Southern California, and now located in Fulton, Mississippi, which will process approximately 700 metric dry tons of woody biomass, mill residue, and other cellulosic waste to produce approximately 19 million gallons of ethanol annually (“Fulton Project”). We estimate the total construction cost of the Fulton Project to be in the range of approximately $300 million. In 2007, we received an Award from the DOE of up to $40 million for the Fulton Project. This award is 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 2008, the Company began to draw down on the Award 1 monies that were finalized with the DOE. As our Fulton Project developed further, the Company was able to begin drawing down on Award 2, the second phase of DOE monies. On December 4, 2009, the DOE announced that the total award for this project was increased to a maximum of $88 million under the American Recovery and Reinvestment Act of 2009 (“ARRA”) and the Energy Policy Act of 2005. As of September 12, 2012 Award 1 was officially closed. On December 23, 2013, the Company received notice from the DOE indicating that the DOE would no longer provide funding under the DOE Grant for the development of the Fulton Project 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. The Company is seeking to re-establish funding under the DOE Grant. The Company shall exhaust all options available to it in order to reverse the DOE’s decision. The Company cannot make any assurances that the DOE’s decision will be reversed . In 2010, BlueFire signed definitive agreements for the following three crucial contracts related to the Fulton Project: (a) feedstock supply with Cooper Marine, (b) off-take for the ethanol of the facility with Tenaska, and (c) the construction of the facility with MasTec. Also in 2010, BlueFire continued to develop the engineering package for the Fulton Project, and completed both the FEL-2 and FEL-3 stages of engineering readying the facility for construction. As of November 2010, the Fulton Project has all necessary permits for construction, and in that same month we began site clearing and preparation work, signaling the beginning of construction. In June 2011, BlueFire completed initial site preparation and the site is now ready for facility construction. In February 2010, we announced that we submitted an application for a $250 million dollar loan guarantee for the Fulton Project, under the DOE LGPO, mentioned above. In February 2011, BlueFire received notice from the DOE LGPO staff that the Fulton Project’s application will not move forward until such time as the project has raised the remaining equity necessary for the completion of funding and the company abandoned the DOE LGPO loan guarantee. In August 2010, BlueFire submitted an application for a $250 million loan guarantee with the USDA.In October 2011, BlueFire was notified by its lender (“Lender”) for the Company’s USDA loan guarantee application that the USDA sent the Lender notice that they were currently ineligible to participate in the USDA Bio-refinery Assistance Program. No significant progress was made with the USDA or the Lender and thus the Company abandoned the pursuit of the USDA Loan Guarantee program, however the Company may reapply at a later date. The Company is currently pursuing opportunities with a Chinese Engineering Procurement Construction (the “EPC”) company. In tandem with the new EPC contractor, the company is engaging Chinese banks to provide the debt financing for the Fulton Project. BlueFire is currently in negotiations but no definitive agreements have yet been executed. In Mid 2013, the Company began developing a new integration concept in regards to the Fulton project where a wood pellet facility would be integrated into the ethanol facility to provide a stronger financing package. A preliminary design package and due diligence has been completed. The Company continues to explore this option and will utilize whichever plant design is the most beneficial for financing.

4

Several other opportunities are being evaluated by us in North America, although no definitive agreements have been reached.

● In November 2011, BlueFire created SucreSource LLC, a wholly owned subsidiary specifically tasked to partner with synergistic back end companies that need cellulosic sugars as a feedstock for their fermentation or chemical processes. SucreSource will utilize the Arkenol process to provide the front end technology to partner with these companies.

● In February of 2012, SurceSource announced it had retained its first client, GS Caltex, a South Korean petroleum company. In the same month, it received the first payment under the Professional Services Agreement (the “PSA”) for work on a facility in South Korea. As of June 30, 2014, SucreSource has completed and fulfilled all initial work and obligations under the fixed portion of the PSA. In 2014, the company expanded its scope of work with GS Caltex and has begun billing for additional work product and additional services. Once completed with the expanded services, the Company may provide additional engineering services which will be billed on an hourly basis when services are performed.

BlueFire’s capital requirement strategy for its planned bio-refineries are as follows:

● Pursue additional operating capital from joint venture partnerships, Federal or State grants or loan guarantees, debt financing or equity financing to fund our ongoing operations and the development of initial bio-refineries in North America. Although the Company is in discussions with potential financial and strategic sources of financing for their planned bio-refineries, no definitive agreements are in place.

● The 2008 Farm Bill, Title IX (Energy Title) and subsequent funding Bills provides grants for demonstration scale Bio-refineries, and loan guarantees for commercial scale Bio-refineries that produce advanced Biofuels (i.e., any fuel that is not corn-based). Section 9003 includes a Loan Guarantee Program under which the USDA could provide loan guarantees up to $250 million to fund development, construction, and retrofitting of commercial-scale refineries. Section 9003 also includes a grant program to assist in paying the costs of the development and construction of demonstration-scale bio-refineries to demonstrate the commercial viability which can potentially fund up to 50% of project costs. BlueFire plans to pursue all available opportunities within the Farm Bill and the subsequent funding Bills, although initial attempts have been unsuccessful.

● Utilize remaining proceeds from reimbursements under the DOE contract.

● The Company shall apply for public funding to leverage private capital raised by us, as applicable.

DEVELOPMENTS IN BLUEFIRE’S BIOREFINERY ENGINEERING AND DEVELOPMENT

BlueFire has completed the engineering package for the Fulton Project, including Front-End Loading (FEL) stages 2 and FEL-3 of engineering for the Fulton Project readying the facility for construction. FEL is the process for conceptual development of processing industry projects. This process is used in the petrochemical, refining, and pharmaceutical industries. Front-End Loading is also referred to as Front-End Engineering Design (FEED).

5

There are three stages in the FEL process:

FEL-1	FEL-2	FEL-3
* Material Balance	* Preliminary Equipment Design	* Purchase Ready Major Equipment Specifications
* Energy Balance	* Preliminary Layout	* Definitive Estimate
* Project Charter	* Preliminary Schedule	* Project Execution Plan
	* Preliminary Estimate	* Preliminary 3D Model
		* Electrical Equipment List
		* Line List
		* Instrument Index

As of November 2010, the Fulton Project had all necessary permits for construction, and in that same month we began site clearing and preparation work, signaling the beginning of construction. In June 2011, BlueFire completed initial site preparation and the site is now ready for facility construction. In February 2010, we announced that we submitted an application for a $250 million dollar loan guarantee for the Fulton Project, under the DOE LGPO, In February 2011, BlueFire received notice from the DOE LGPO staff that the Fulton Project’s application would not move forward until such time as the project has raised the remaining equity necessary for the completion of funding and the company abandoned the DOE LGPO loan guarantee. In August 2010, BlueFire submitted an application for a $250 million loan guarantee with the U.S. Department of Agriculture (“USDA”) under Section 9003 of the 2008 Farm Bill, In October 2011, BlueFire was notified by its lender (“Lender”) for the Company’s USDA loan guarantee application that the USDA sent the Lender notice that they are currently ineligible to participate in the USDA Bio-refinery Assistance Program. The Company attempted to resolve the issue with the Lender and USDA but as of December 31, 2013, no significant progress has been made with the USDA or the Lender and the Company has abandoned the pursuit of the USDA Loan Guarantee program. As discussed above, BlueFire is currently pursuing opportunities with a large Chinese EPC company. In tandem with the new EPC contractor, the Company is engaging Chinese banks to provide the debt financing for the Fulton Project. BlueFire is currently in negotiations but no definitive agreements have yet been executed.

In Mid 2013, the Company began developing a new integration concept in regards to the Fulton project where a wood pellet facility would be integrated into the ethanol facility to provide a stronger financing package. A preliminary design package and due diligence has been completed. The Company continues to explore this option and will utilize whichever plant design is the most beneficial for financing.

On September 27, 2010, the Company announced a contract with Cooper Marine & Timberlands to provide feedstock for the Company’s planned Fulton Project for a period of up to 15 years. Under the agreement, Cooper Marine & Timberlands (“CMT”) will supply the project with all of the feedstock required to produce approximately 19-million gallons of ethanol per year from locally sourced cellulosic materials such as wood chips, forest residual chips, pre-commercial thinnings and urban wood waste such as construction waste, storm debris, land clearing; or manufactured wood waste from furniture manufacturing. Under the Agreement, CMT will pursue a least-cost strategy for feedstock supply made possible by the project site’s proximity to feedstock sources and the flexibility of BlueFire’s process to use a wide spectrum of cellulosic waste materials in pure or mixed forms. CMT, with several chip mills in operation in Mississippi and Alabama, is a member company of Cooper/T. Smith one of America’s oldest and largest stevedoring and maritime related firms with operations on all three U.S. coasts and foreign operations in Central and South America.

6

On September 20, 2010, the Company announced an off-take agreement with Tenaska BioFuels, LLC (“TBF”) for the purchase and sale of all ethanol produced at the Company’s planned Fulton Project. Pricing of the 15-year contract follows a market-based formula structured to capture the premium allowed for cellulosic ethanol compared to corn-based ethanol giving the Company a credit worthy contract to support financing of the project. Despite the long-term nature of the contract, the Company is not precluded from the upside in the coming years as fuel prices rise. TBF, a marketing affiliate of Tenaska, provides procurement and marketing, supply chain management, physical delivery, and financial services to customers in the agriculture and energy markets, including the ethanol and biodiesel industries. In business since 1987, Tenaska is one of the largest independent power producers.

RESULTS OF OPERATIONS

For the Three Months Ended June 30, 2014 Compared to the Three Months Ended June 30, 2013

Revenue

Revenues for the three months ended June 30, 2014 and 2013 were approximately $453,000 and $552,000, respectively. Revenue in both 2014 and 2013 was primarily related to federal grant revenue from the DOE. The federal grant generally provides for reimbursement in connection with related development and construction costs involving commercialization of our technologies. The decrease in revenue was due primarily to limited capital resources available to us in the second quarter of 2014 versus the same period in 2013. The overall decrease was net of increased consulting revenue in 2014.

Project Development

For the three months ended June 30, 2014, our project development costs were approximately $202,000, compared to project development costs of $128,000 for the same period during 2013. The increase in project development costs is mainly due the Company no-longer capitalizing construction-in progress costs as it did during 2013 prior to receiving notice from the DOE indicating that the DOE would no longer provide funding under Award 2.

General and Administrative Expenses

General and administrative expenses were approximately $182,000 for the three months ended June 30, 2014, compared to $176,000 for the same period in 2013. The increase in general and administrative costs is mainly due to increased business development costs related to finding partners and the costs associated with the 3(a)10 transaction.

Six Months Ended June 30, 2014 Compared to the Six Months Ended June 30, 2013

Revenue

Revenues for the six months ended June 30, 2014 and 2013 were approximately $1,064,000 and $620,000, respectively. Revenue in both 2014 and 2013 was primarily related to federal grant revenue from the DOE. The increase in revenue was mainly due to an increase in reimbursements from the DOE on previously incurred costs paid for and reimbursed in 2013, and consulting revenue from our work with GS Caltex.

Project Development

For the six months ended June 30, 2014, our project development costs were approximately $415,000 compared to project development costs of $247,000 for the same period during 2013. The increase in project development costs is mainly due the Company no longer capitalizing construction-in-progress costs as it did during 2013 prior to receiving notice from the DOE indicating that the DOE would no longer provide funding under Award 2.

General and Administrative Expenses

General and administrative expenses were approximately $475,000 for the six months ended June 30, 2014, compared to $399,000 for the same period in 2013. The increase in general and administrative costs is mainly due to increased costs relating to insurance and certain legal costs as well as stock based compensation cost increases as part of the Tarpon Bay 3(a)10 transaction.

7

LIQUIDITY AND CAPITAL RESOURCES

Historically, we have funded our operations through financing activities consisting primarily of private placements of debt and equity securities with existing shareholders and outside investors. In addition, in the past we have received funds under the grant received from the DOE. Our principal use of funds has been for the further development of our bio-refinery projects, for capital expenditures and general corporate expenses. As our projects are developed to the point of construction, we anticipate significant purchases of long lead time item equipment for construction if the requisite capital can be obtained. As of June 30, 2014, we had cash and cash equivalents of approximately $41,000. As of August 11, 2014, we had cash and cash equivalents of approximately $150,800.

Management has funded operations primarily through proceeds received in connection with the reverse merger, loans from its majority shareholder, 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 throughout 2009 to 2014.

Changes in Cash Flows

During the six months ended June 30, 2014 and 2013, we used cash of approximately $198,000 and $159,000 in operating activities. During the 2014 period we had net income of approximately $65,000, which included add back non-cash charges of approximately $107,000 and net cash usage stemming from operating assets and liabilities of approximately $370,000. During the 2013 period, we had a net loss of approximately $176,000, which included add back non-cash charges of approximately $112,000 and net cash usage stemming from operating assets and liabilities of approximately $95,000. The increase in cash usage was to pay down payables and accrued liabilities, including approximately $98,000 in accrued interest stemming from past-due convertible notes.

During the six months ended June 30, 2014, we received no cash from DOE reimbursements in construction activities at our Fulton Project, compared with $4,000 for the same period in 2013.

During the six months ended June 30, 2014, we had positive cash flow from financing activities of approximately $193,000 compared to approximately $110,000 for the same period in 2013. We issued a convertible note for $37,500, of which we received proceeds of $35,000 during the six months ended June 30, 2014, as compared to $118,000 in convertible notes and $110,000 in net proceeds for the same period in 2013. During the six months ended June 30, 2014, the Company received $380,000 in proceeds from two notes payable with AKR, Inc. The majority of these funds was used to pay-off previous convertible notes, along with interest and accrued fees thereon. The Company paid $250,000 in principal balance to extinguish the convertible note with TCA and $12,500 to pay down one of the notes with Tarpon Bay. In addition, the Company’s CEO advanced an additional $40,000 under his line of credit.

CRITICAL ACCOUNTING POLICIES

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements require the use of estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Our management periodically evaluates the estimates and judgments made. Management bases its estimates and judgments on historical experience and on various factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates as a result of different assumptions or conditions.

The methods, estimates, and judgment we use in applying our most critical accounting policies have a significant impact on the results we report in our financial statements. The SEC has defined “critical accounting policies” as those accounting policies that are most important to the portrayal of our financial condition and results, and require us to make our most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based upon this definition, our most critical estimates relate to the fair value of warrant liabilities. We also have other key accounting estimates and policies, but we believe that these other policies either do not generally require us to make estimates and judgments that are as difficult or as subjective, or it is less likely that they would have a material impact on our reported results of operations for a given period. For additional information see Note 2, “Summary of Significant Accounting Policies” in the notes to our reviewed financial statements appearing elsewhere in this quarterly report and our annual audited financial statements appearing on Form 10-K. Although we believe that our estimates and assumptions are reasonable, they are based upon information presently available, and actual results may differ significantly from these estimates.

8

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We do not hold any derivative instruments and do not engage in any hedging activities.

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures.

In connection with the preparation of this Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, our Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”) evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our PEO and PFO concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our Chief Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

(b) Changes in Internal Control over Financial Reporting.

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

On February 26, 2013, the Company received notice that the Orange County Superior Court (the “Court”) issued a Minute Order (the “Order”) in connection with certain shareholders’ claims of breach of contract and declaratory relief related to 5,740,741 warrants (the “Warrants”) issued by the Company.

Pursuant to the Order, the Court ruled in favor of the shareholders on the two claims, finding that the Warrants contain certain anti-dilution protective provisions which provide for the re-adjustment of the exercise price of such Warrants upon certain events and that such exercise price per share of the Warrants must be decreased to $0.00.

The Company has considered these warrants exercised based on the notice of exercise received from the respective shareholders in December 2012.

On March 7, 2013, the shareholders making claims provided their request for judgment based on the Order received, which was initially refused by the Court via a second minute order received by the Company on April 8, 2013. On April 15, 2013, the Company’s counsel submitted a proposed judgment to the Court as per the Courts request, which followed the Order and provided for no monetary damages against the Company. On May 14, 2013, this proposed judgment was approved by the Court (“Judgment”).

On June 20, 2013, the Company filed motions to vacate the Judgment, a motion for a new trial, and a motion to stay enforcement of the Judgment, all of which were denied on June 27, 2013.

9

On August 2, 2013, pursuant to the exercise notice of the Warrants, and the Order, the Company issued 5,740,741 shares to certain shareholders. See Note 9 in the accompanying notes to consolidated financial statements for additional information.

Other than as disclosed above, we are currently not involved in any litigation that we believe could have a material 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 companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors.

We believe there are no changes that constitute material changes from the risk factors previously disclosed in our annual report on Form 10-K for the year ended December 31, 2013, filed with the SEC on April 15, 2014.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

See Note 4 for information related to Convertible Notes Payable. Other than the information presented in Note 4 there were no unregistered sales of the Company’s equity securities during the quarter ended June 30, 2014, other than those previously reported in a Current Report on Form 8-K.

Item 3. Defaults Upon Senior Securities.

There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Not applicable.

Item 6. Exhibits.

Exhibit No.	Description
31.1	Certification of Principal Executive Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of 2002*
31.2	Certification of Principal Financial Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of 2002*
32.1	Certification of Principal Executive Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2	Certification of Principal Financial Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
101.INS	XBRL Instance Document**
101.SCH	XBRL Taxonomy Extension Schema Document**
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document**
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document**
101.LAB	XBRL Taxonomy Extension Label Linkbase Document**
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document**

*	Filed herewith
**	In accordance with Regulation S-T, the XBRL related information on Exhibit No. 101 to this Quarterly Report on Form 10-Q shall be deemed “furnished” herewith not “filed”.

10

SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	BLUEFIRE RENEWABLES, INC.
Date: August 11, 2014	By:	/s/ Arnold Klann
	Name:	Arnold Klann
	Title:	Chief Executive Officer

11

EX-31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Arnold Klann, certify that:

1.	I have reviewed this Form 10-Q of Bluefire Renewables, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;
4.	I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 11, 2014	By:	/s/ Arnold Klann
		Arnold Klann
		Principal Executive Officer
		Bluefire Renewables, Inc.

EX-31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Arnold Klann, certify that:

1.	I have reviewed this Form 10-Q of Bluefire Renewables, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;
4.	I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 11, 2014	By:	/s/ Arnold Klann
		Arnold Klann
		Principal Financial Officer
		Bluefire Renewables, Inc.

EX-32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report of Bluefire Renewables, Inc. (the “Company”), on Form 10-Q for the period ended June 30, 2014, as filed with the U.S. Securities and Exchange Commission on the date hereof, I, Arnold Klann, Principal Executive Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	Such Quarterly Report on Form 10-Q for the period ended June 30, 2014, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in such Quarterly Report on Form 10-Q for the period ended June 30, 2014, fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 11, 2014	By:	/s/ Arnold Klann
		Arnold Klann
		Principal Executive Officer
		Bluefire Renewables, Inc.

EX-32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report of Bluefire Renewables, Inc. (the “Company”), on Form 10-Q for the period ended June 30, 2014, as filed with the U.S. Securities and Exchange Commission on the date hereof, I, Arnold Klann, Principal Financial Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	Such Quarterly Report on Form 10-Q for the period ended June 30, 2014, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in such Quarterly Report on Form 10-Q for the period ended June 30, 2014, fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 11, 2014	By:	/s/ Arnold Klann
		Arnold Klann
		Principal Financial Officer
		Bluefire Renewables, Inc.

XML

Stockholders' Deficit (Details Narrative) (USD $)	0 Months Ended		3 Months Ended		6 Months Ended											0 Months Ended	6 Months Ended			6 Months Ended	0 Months Ended		6 Months Ended	0 Months Ended	6 Months Ended
	Aug. 02, 2013	Dec. 15, 2010	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Nov. 21, 2013	Jun. 13, 2013	Feb. 26, 2013	Feb. 11, 2013	Dec. 31, 2012	Dec. 21, 2012	Dec. 04, 2012	Oct. 11, 2012	Jul. 31, 2012	Dec. 19, 2013 Tarpon Initial Note [Member]	Jun. 30, 2014 Tarpon Initial Note [Member]	Dec. 31, 2013 Tarpon Initial Note [Member]	Dec. 23, 2013 Tarpon Initial Note [Member]	Jun. 30, 2014 Stock Purchase Agreement [Member]	Jan. 19, 2011 Lincoln Park Capital Fund, LLC [Member]	Jun. 30, 2014 Lincoln Park Capital Fund, LLC [Member]	Jun. 30, 2014 Lincoln Park Capital Fund, LLC [Member] Initial Purchase [Member]	Mar. 28, 2012 TCA Global Credit Master Fund, LP [Member]	Jun. 30, 2014 TCA Global Credit Master Fund, LP [Member]	Jun. 30, 2014 TCA Global Credit Master Fund, LP [Member] Convertible Notes Payable [Member]	Mar. 28, 2013 TCA Global Credit Master Fund, LP [Member] Convertible Notes Payable [Member]
Stock based compensation relating to general and administrative expense			$ 9,700	$ 0	$ 46,700	$ 9,100
Stock based compensation relating to project development expense			0	0	0	0
Purchase agreement signed amount																					10,000,000			2,000,000
Common stock issued for cash																29,802	163,406						150,000	2,000,000
Common stock issued for cash, shares																6,619,835	61,010,000						428,571
Warrants exercise price		$ 0.50	$ 2.90		$ 2.90				$ 0.00				$ 0.00									$ 0.55
Warrant expiration date		Dec. 15, 2013																					Jan. 31, 2016
Company drew on purchase agreement			0	0	0	0
Number of warrant accounted by the company																				428,571
Facility fees																								110,000
Common shares issued for services, shares					75,000																			280,000
Common shares issued for services, value					9,100																			110,000
Equity agreement period																								24 months
Price of shares as a percentage of lowest daily volume weighted average price																								95.00%			95.00%
Payment of stock issue costs																									60,000
Capitalized deferred costs																									170,000
Deferred financings costs, amortization period																									1 year
Convertible note issued								32,500		53,000		32,500		37,500	63,500		25,000	25,000	50,000								300,000
Convertible note interest rate																											12.00%
Payment for financing and issue cost																										93,000
Capitalized deferred financings costs																										24,800
Proceeds from convertible notes payable					35,000	110,000																				207,000
Legal fees																										7,500
Amortization of deferred financing costs					0	38,617																			0
Remaining derivative liability transferred to equity			13,189
Accounts payable1							583,710
Maximum of companies common stock2							9.99%
Placement agents fees																7,450	42,402
Amount provided to outstanding settlement																22,352	121,004
Stock issued during period, shares, new issues	5,740,741
Expected volatility1					104.20%
Risk free interest rate2					0.07%
Class of warrant or right exercise price claim on number of warrants3											5,740,741
Class of warrant or right exercise form presented on number of warrants4													5,740,741
Class of warrant or right claims of breach of contract and declaratory relief number of warrants5			5,740,741		5,740,741				5,740,741
Quoted market price common stock6			$ 0.14		$ 0.14								$ 0.14
Fair value of warrants based on common stock7													$ 804,000
Sale of stock, per share																								$ 0.001

XML

Notes Payable - Schedule of Fair Market Value of Conversion Features Using Black-Scholes Pricing Model (Details)	6 Months Ended
	Jun. 30, 2014
Short-term Debt [Line Items]
Annual dividend yield
Expected volatility	197.00%
Minimum [Member]
Short-term Debt [Line Items]
Expected life (years)	15 days
Risk-free interest rate	0.04%
Maximum [Member]
Short-term Debt [Line Items]
Expected life (years)	2 months 5 days
Risk-free interest rate	0.07%

XML

Notes Payable

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Notes Payable

NOTE 4 – NOTES PAYABLE

On March 28, 2012 the Company entered into a $300,000 promissory note with a third party. See Note 9 for additional information.

As further described below, the Company has entered into several convertible notes with 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.

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 will account for the derivative liability upon the passage of time and the note becoming convertible if not extinguished, as defined above.

On July 31, 2012, the Company issued a convertible note of $63,500 to Asher Enterprises, Inc. pursuant to the terms above, with a maturity date of May 2, 2013. In accordance with the terms of the note, the note became convertible on January 27, 2013.

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 $47,000, resulting in a discount to the note. The discount was amortized over the term of the note and accelerated as the note was converted. As of June 30, 2014, all amounts outstanding in relation to this note have been converted to equity through the issuance of 1,642,578 shares of common stock.

On October 11, 2012, the Company issued a convertible note of $37,500 to Asher Enterprises, Inc. pursuant to the terms above, with a maturity date of July 15, 2013. In accordance with the terms of the note, the note became convertible on April 9, 2013.

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 $66,000, resulting in a discount to the note and an additional day one charge of $28,507 for the excess value of the derivative liability over the face value of the note. The excess value was recognized as an expense in the accompanying statement of operations. The discount was amortized over the term of the note. As of June 30, 2014 the note was fully converted through the issuance of 2,262,860 shares of common stock.

On December 21, 2012, the Company agreed to a convertible note of $32,500 to Asher Enterprises, Inc, which was funded in January 2013, such note had an interest rate of 8% per annum with a maturity date of September 26, 2013. In accordance with the terms of the note, the note became convertible on June 19, 2013.

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 $15,600, resulting in a discount to the note. The discount was amortized over the term of the note and accelerated as the note was converted. As of June 30, 2014, the note was fully converted into 4,017,599 shares of common stock.

On February 11, 2013, the Company agreed to a convertible note of $53,000 to Asher Enterprises, Inc. pursuant to the terms above, with a maturity date of November 13, 2013. In accordance with the terms of the note, the note became convertible on August 10, 2013.

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 $49,500, resulting in a discount to the note. The discount was amortized over the term of the note and accelerated as the note was converted. As of June 30, 2014, the entire discount was amortized to interest expense, with no remaining unamortized discount and the note was fully converted into 9,689,211 shares of common stock.

On June 13, 2013, the Company agreed to a convertible note of $32,500 to Asher Enterprises, Inc. pursuant to the terms above, with a maturity date of March 17, 2014. In accordance with the terms of the note, the note became convertible on December 10, 2013.

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 $28,000, resulting in a discount to the note. The discount was amortized over the term of the note and accelerated as the note was converted. As of June 30, 2014, the entire discount was amortized to interest expense, with no remaining unamortized discount and the note was fully converted into 22,207,699 shares of common stock. See below for assumptions used in valuing the derivative liability.

On December 19, 2013, the Company agreed to a convertible note of $37,500 to Asher Enterprises, Inc. which was funded and effective in January 2014 with terms identified above and a maturity date of December 23, 2014. The conversion feature was not triggered until after quarter end due to the effective date of the note being in January 2014. Subsequent to June 30, 2014, all of the principal and accrued interest outstanding in relation to this note were converted to equity through the issuance of 24,537,990 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 at inception (as applicable), at each conversion event, and at quarter end. Based on valuation conducted during the six months and at June 30, 2014 of derivative liabilities related to Asher Enterprises, Inc. notes, the Company recognized a gain on derivative liabilities of $86,527, which is included in the accompanying statement of operations within Gain (loss) from change in fair value of derivative liabilities.

During the six months ending June 30, 2014, the range of inputs used to calculate derivative liabilities noted above were as follows:

	Six months ended
	June 30, 2014
Annual dividend yield	-
Expected life (years)	0.04 - 0.18
Risk-free interest rate	0.04 - 0.07	%
Expected volatility	197	%

In addition, fees paid to secure the convertible debt were accounted for as deferred financing costs and capitalized in the accompanying balance sheet or considered an on-issuance discount to the notes. The deferred financing costs and discounts, as applicable, are amortized over the term of the notes.

As of June 30, 2014, the Company amortized on-issuance discounts totaling $1,250 with approximately $1,250 remaining.

Tarpon Bay Convertible Notes

Pursuant to a 3(a)10 transaction with Tarpon Bay Partners LLC (“Tarpon”), on November 4, 2013, 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 January 30, 2014. 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.

Also pursuant to the 3(a)10 transaction with Tarpon, on December 23, 2013, the Company issued a convertible promissory note in the principal amount of $50,000 in favor of Tarpon as a success fee (the “Tarpon Success Fee Note”). The Tarpon Success Fee Note was due on June 30, 2014. The Tarpon Success Fee Note is convertible into shares of the Company’s common stock at a conversion price for each share of Common Stock at a 50% discount from the lowest closing bid price in the twenty (20) trading days prior to the day that Tarpon requests conversion.

Each of the above notes were issued without funds being received. Accordingly, the notes were issued with a full on-issuance discount that was amortized over the term of the notes. During the six months ended June 30, 2014, amortization of approximately $51,960 was recognized to interest expense related to the discounts on the notes.

As of June 30, 2014, both the Tarpon Initial Note and the Tarpon Success Fee Note were in default. Subsequent to quarter end, the Company paid the Tarpon Initial Note (See Note 10), although the Tarpon Success Fee Note is still in default as of August 11, 2014.

Because the conversion price is variable and does not contain a floor, the conversion feature represents a derivative liability upon issuance. Accordingly, the Company calculated the derivative liability using the Black-Sholes pricing mode for the notes upon inception, resulting in a day one loss of approximately $96,000. The derivative liability was marked to market as of June 30, 2014 which resulted in a loss of approximately $20,000. The Company used the following assumptions as of June 30, 2014 and December 31, 2013:

	June 30, 2014			December 31, 2013
Annual dividend yield		0	%		0	%
Expected life (years)		0.00 - 0.01			0.8
Risk-free interest rate		0.02	%		0.02	%
Expected volatility		234	%		159	%

During the six months ended June 30, 2014, the Company paid $12,500 in cash on the Tarpon Initial Note, and subsequent to June 30, 2014, the Company paid the remaining $12,500 in cash.

AKR Promissory Note

On April 8, 2014, the Company finalized a $350,000 promissory note in favor of AKR Inc (“AKR Note”). Under the terms of the agreement, the note is due on April 8, 2015, and 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”). The Company may prepay the debt, prior to maturity with no prepayment penalty.

The Company valued the warrants as of the date of the note and recorded a discount of $42,380 based the relative fair value of the warrants compared to the debt. During the six months ended June 30, 2014 the Company amortized $9,681 of the discount to interest expense. As of June 30, 2014 unamortized discount of $32,699 remains. The Company assessed the fair value of the 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 finalized an additional $30,000 promissory note in favor of AKR Inc (“2nd AKR Note”). Under the terms of the agreement, the note is due on July 24, 2014, although the Company and AKR Inc extended the maturity date as disclosed in Note 10. Under the terms of this note, the Company is to repay any principal balance and interest, at 5% per annum at maturity. Company may prepay the debt, prior to maturity with no prepayment penalty.

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Outstanding Warrant Liability - Schedule of Black-Scholes Option Pricing Model Assumptions to Estimate Fair Value of Warrants (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Class of Warrant or Right [Line Items]
Annual dividend yield
Expected volatility	197.00%
Warrant [Member]
Class of Warrant or Right [Line Items]
Annual dividend yield
Expected life (years) of	1 year 6 months 18 days	2 years 18 days
Risk-free interest rate	0.47%	0.38%
Expected volatility	214.00%	150.00%

XML

Outstanding Warrant Liability (Details Narrative) (USD $)	0 Months Ended	3 Months Ended		6 Months Ended		1 Months Ended
	Aug. 02, 2013	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Jan. 31, 2011 Warrant Two [Member]
Class of Warrant or Right [Line Items]
Gain (Loss) from change in fair value of warrant liability		$ 174	$ 7,736	$ (238)	$ 21,855
Common shares issued (in shares)	5,740,741					428,571

XML

Commitments and Contingencies (Details Narrative) (USD $)	1 Months Ended	3 Months Ended		6 Months Ended
	Jul. 20, 2010	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Aug. 02, 2013	Feb. 26, 2013
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		30,900	30,900	61,800	61,800
Accrued lease payments		0		0		233,267
Gain of credit for past site preparation reimbursements				$ 96,000
Class of warrant or right claims of breach of contract and declaratory relief number of warrants		5,740,741		5,740,741				5,740,741
Warrants issued							5,740,741
Warrant [Member]
Warrants decreased exercise price		$ 0.00		$ 0.00

XML

Related Party Transactions (Details Narrative) (USD $)	0 Months Ended				0 Months Ended
	Dec. 15, 2010	Jun. 30, 2014	Feb. 26, 2013	Dec. 04, 2012	Nov. 10, 2011 Chief Executive Officer [Member]
Net proceeds from related party loan payable	$ 200,000
Loan agreement, one-time fees as a percentage of loan	15.00%
Loan agreement, one-time fees payable in shares of common stock, per-share value	$ 0.50
Loan agreement, warrants issued	500,000
Warrants exercise price	$ 0.50	$ 2.90	$ 0.00	$ 0.00
Warrant expiration date	Dec. 15, 2013
Investment financing or a commitment amount from third party	(1,000,000)
Line of credit, amount outstanding					40,000
Line of credit, additional amount loaned					51,230
Line of credit, maximum amount borrowed					$ 55,000
Notes, repayment of principal balance and interest					12.00%
Receiving qualified investment financing, amount description					$100,000 or more

XML

Development Contracts

6 Months Ended

Jun. 30, 2014

Development Contracts

Development Contracts

NOTE 3 – DEVELOPMENT CONTRACTS

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. The Company is currently drawing down on funds for Phase II of its Fulton Project. 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. The Company is seeking to re-establish funding under Award 2 and has initiated the appeals process with the DOE. The Company shall exhaust all options available to it in order to reverse the DOE’s decision. Until the Company is notified of the outcome of its appeal, and as of August 11, 2014, we still have approximately $418,000 available under the grant prior to September 30, 2014. We cannot guarantee that we will continue to receive grants, loan guarantees, or other funding for our projects from the DOE.

As of June 30, 2014, the Company has received reimbursements of approximately $12,670,000 under these awards.

XML

Redeemable Non-Controlling Interest (Details Narrative) (USD $)	1 Months Ended	3 Months Ended		6 Months Ended
	Dec. 23, 2010	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Noncontrolling Interest [Abstract]
Ownership interest in BlueFire Fulton Renewable Energy LLC sold	1.00%
Proceeds from sale of LLC Unit	$ 750,000
Ownership interest in BlueFire Fulton Renewable Energy LLC	99.00%
Redeemable non-controlling interest	862,500
Net income (loss) attributable to non-controlling interest		$ 1	$ (685)	$ 2,373	$ (2,742)

XML

Consolidated Balance Sheets (Unaudited) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 41,120	$ 46,992
Accounts receivable	76,723
Department of Energy grant receivable	103,356
Costs of financing		1,031
Prepaid expenses	20,034	4,636
Total current assets	241,233	52,659
Property, plant and equipment, net of accumulated depreciation of $106,492 and $106,041, respectively	110,789	111,240
Total assets	352,022	163,899
Current liabilities:
Accounts payable	832,916	1,108,684
Accrued liabilities	183,383	272,910
Convertible notes payable, net of discount of $1,250 and $75,695, respectively	98,750	322,385
Notes payable, net of discount of $32,699 and $0, respectively	347,301
Line of credit, related party	51,230	11,230
Note payable to a related party	200,000	200,000
Derivative liability	87,500	122,309
Total current liabilities	1,801,080	2,037,518
Outstanding warrant liability	296	58
Total liabilities	1,801,376	2,037,576
Redeemable noncontrolling interest	858,417	856,044
Stockholders' deficit:
Preferred stock, no par value, 1,000,000 shares authorized; none issued and outstanding
Common stock, $0.001 par value; 500,000,000 shares authorized; 156,704,560 and 73,486,861 shares issued; and 156,672,388 and 68,910,395 outstanding, as of June 30, 2014 and December 31, 2013, respectively	156,704	68,943
Additional paid-in capital	16,395,771	16,123,744
Treasury stock at cost, 32,172 shares at June 30, 2014 and December 31, 2013	(101,581)	(101,581)
Accumulated deficit	(18,758,665)	(18,820,827)
Total stockholders' deficit	(2,307,771)	(2,729,721)
Total liabilities and stockholders' deficit	$ 352,022	$ 163,899

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Organization and Business

6 Months Ended

Jun. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Business

NOTE 1 – ORGANIZATION AND BUSINESS

BlueFire Renewables, Inc. (“BlueFire” or the “Company”) was incorporated in the State of Nevada on March 28, 2006 (“Inception”). 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 July 15, 2010, the board of directors of BlueFire, by unanimous written consent, approved the filing of a Certificate of Amendment to the Company’s Articles of Incorporation with the Secretary of State of Nevada, changing the Company’s name from BlueFire Ethanol Fuels, Inc. to BlueFire Renewables, Inc. On July 20, 2010, the Certificate of Amendment was accepted by the Secretary of State of Nevada.

On November 25, 2013, the Company filed an amendment to the Company’s articles of incorporation with the Secretary of State of the State of Nevada, to increase the Company’s authorized common stock from one hundred million (100,000,000) shares of common stock, par value $0.001 per share, to five hundred million (500,000,000) shares of common stock, par value $0.001 per share.

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Summary Of Significant Accounting Policies - Schedule of Redeemable Noncontrolling Interest Considered Level Three (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Accounting Policies [Abstract]
Balance at the beginning			$ 856,044
Net income attributable to non-controlling interest	1	(685)	2,373	(2,742)
Balance at the end	$ 858,417		$ 858,417

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Note Payable (Details Narrative) (USD $)

0 Months Ended

6 Months Ended

0 Months Ended

6 Months Ended

6 Months Ended

0 Months Ended

0 Months Ended

Jun. 13, 2013

Feb. 11, 2013

Dec. 21, 2012

Oct. 11, 2012

Jul. 31, 2012

Mar. 28, 2012

Jun. 30, 2014

Dec. 31, 2013

Jun. 30, 2014

AKR Warrant B [Member]

Subsequent Event [Member]

Jun. 30, 2014

Note One [Member]

Jun. 30, 2014

Note One [Member]

Common Stock [Member]

Jun. 30, 2014

Note Two [Member]

Common Stock [Member]

Jun. 30, 2014

Note Three [Member]

Common Stock [Member]

Jun. 30, 2014

Note Four [Member]

Jun. 30, 2014

Note Five [Member]

Dec. 19, 2013

Note Six [Member]

Jun. 30, 2014

Note Six [Member]

Jun. 30, 2014

Tarpon Initial Note [Member]

Dec. 31, 2013

Tarpon Initial Note [Member]

Dec. 23, 2013

Tarpon Initial Note [Member]

Jun. 30, 2014

Tarpon Initial Note [Member]

Subsequent Event [Member]

Jun. 30, 2014

Tarpon Success Fee Note [Member]

Jun. 30, 2014

Tarpon Bay Convertible Notes [Member]

Jun. 30, 2014

Tarpon Bay Convertible Notes [Member]

Day One Loss On Derivative [Member]

Apr. 08, 2014

AKR Promissory Note [Member]

Apr. 24, 2014

AKR Promissory Note [Member]

Apr. 08, 2014

AKR Promissory Note [Member]

AKR Warrant B [Member]

Apr. 08, 2014

AKR Promissory Note [Member]

AKR Warrant A [Member]

Apr. 08, 2014

AKR Promissory Note [Member]

AKR Warrant B [Member]

Apr. 08, 2014

AKR Promissory Note [Member]

AKR Warrant C [Member]

Short-term Debt [Line Items]

Promissory note

$ 300,000

$ 350,000

$ 30,000

Convertible note issued

32,500

53,000

32,500

37,500

63,500

37,500

25,000

25,000

50,000

50,000

Debt conversion, original debt, interest rate of debt

8.00%

8.00%

8.00%

Debt conversion, converted instrument, expiration or due date

Mar. 17, 2014

Nov. 13, 2013

Sep. 26, 2013

Jul. 15, 2013

May 02, 2013

Dec. 23, 2014

Jan. 30, 2014

Jun. 30, 2014

Apr. 08, 2015

Debt instrument convertible conversion price description

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.

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.

50% discount from the lowest closing bid price in the twenty (20) trading days prior to the day that Tarpon requests conversion.

Derivative liability, fair value, net

28,000

49,500

15,600

66,000

47,000

Debt conversion, converted instrument, shares issued

1,642,578

2,262,860

4,017,599

9,689,211

22,207,699

24,537,990

Excessive value of the derivative liabilities

28,507

Debt instrument, unamortized discount

1,250

75,695

0

0

0

32,699

Debt instrument, amortized discount

1,250

9,681

Amortization interest expense

51,960

Derivative liabilities

86,527

20,000

96,000

Debt, principal and accrued interest outstanding

1,300

Debt, interest percentage

5.00%

5.00%

Warrants to buy common shares

7,350,000

7,350,000

7,350,000

8,400,000

Warrants, exercise price per share

0.007

0.007

0.007

Warrants, expiration date

Apr. 08, 2016

Apr. 08, 2016

Apr. 08, 2016

Discount on relative fair value of warrants compared to debt

42,380

Cash payment on Tarpon Initial Note

$ 12,500

$ 12,500

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Management’s Plans

Going Concern

The Company has incurred losses since Inception. Management has funded operations primarily through proceeds received in connection with the reverse merger, loans from its majority shareholder, 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 throughout 2009 to 2014. 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 June 30, 2014, the Company has negative working capital of approximately $1,560,000. Management has estimated that operating expenses for the next 12 months will be approximately $1,700,000, 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 the remainder of 2014, the Company intends to fund its operations with remaining reimbursements under the Department of Energy contract as available, as well as seek additional funding in the form of equity or debt. The Company’s ability to get reimbursed under the DOE contract is dependent on the availability of cash to pay for the related costs and the availability of funds remaining under the contract after the discontinuance of the Department of Energy contract further disclosed in Note 3. As of August 11, 2014, the Company expects the current resources available to them will only be sufficient for a period of approximately 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. 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.

Additionally, the Company’s Lancaster plant is currently shovel ready, except for the air permit which the Company will need to renew and only requires minimal capital to maintain until funding is obtained for the construction. This project shall continue once we receive the funding necessary to construct the facility.

As of December 31, 2010, the Company completed the detailed engineering on our proposed Fulton Project, procured all necessary permits for construction of the plant, and began site clearing and preparation work, signaling the beginning of construction. As of June 30, 2014, 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 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 and approximately $100 million to $125 million for the Lancaster Biorefinery. 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.

Basis of Presentation

The accompanying unaudited consolidated interim financial statements have been prepared by the Company pursuant to the rules and regulations of the United States Securities Exchange Commission. Certain information and disclosures normally included in the annual financial statements prepared in accordance with the accounting principles generally accepted in the Unites States of America have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these financial statements have been included. Such adjustments consist of normal recurring adjustments. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2013. The results of operations for the three and six months ended June 30, 2014 are not necessarily indicative of the results that may be expected for the full year.

In July 2014, the Company elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allows the company to remove the inception to date information and all references to development stage.

Principles of Consolidation

The consolidated financial statements include the accounts of BlueFire Renewables, Inc., and its wholly-owned subsidiaries, BlueFire Ethanol, Inc., and Sucre Source LLC. BlueFire Ethanol Lancaster, LLC, and BlueFire Fulton Renewable Energy LLC (excluding 1% interest sold) 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.

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 three and six-months ended June 30, 2014 and 2013, research and development costs included in Project Development were approximately $202,000, $128,000, $415,000, and $247,000, 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.

Equity Instruments Issued with Registration Rights Agreement

The Company accounts for these penalties as contingent liabilities, applying the accounting guidance of ASC 450 “Contingencies”. This accounting is consistent with views established in ASC 825 “Financial Instruments”. Accordingly, the Company recognizes damages when it becomes probable that they will be incurred and amounts are reasonably estimable.

In connection with the Company signing the $2,000,000 Equity Facility with TCA on March 28, 2012, the Company agreed to file a registration statement related to the transaction with the Securities and Exchange Commission (“SEC”) covering the shares that may be issued to TCA under the Equity Facility within 45 days of closing. Although under the Registration Rights Agreement the registration statement was to be declared effective within 90 days following closing, it was not declared effective. The Company was working with TCA to resolve this issue and, on April 11, 2014, the Equity Facility was canceled and related convertible note repaid in full. No penalties were incurred as part of the repayment.

Fair Value of Financial Instruments

The Company follows the guidance of ASC 820 – “Fair Value Measurement and Disclosure”. 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 June 30, 2014 or December 31, 2013.

As of June 30, 2014, the Company’s warrant liability and derivative liability are considered level 2 items (see Notes 4 and 5).

As of June 30, 2014 and December 31, 2013 the Company’s redeemable non-controlling interest is considered a level 3 item and changed during the six months ended June 30, 2014 as follows.

Balance at December 31, 2013	$	856,044
Net income attributable to non-controlling interest		2,373
Balance at June 30, 2014	$	858,417

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 expenditures to comply 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.

Income (loss) per Common Share

The Company presents basic income (loss) per share (“EPS”) and diluted EPS on the face of the consolidated statement of operations. Basic income (loss) per share is computed as net income (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. As of June 30, 2014 and 2013, the Company had 7,778,571 and 928,571 warrants, respectively, for which all of the exercise prices were in excess of the average closing price of the Company’s common stock during the corresponding period and thus no shares are considered dilutive under the treasury stock method of accounting and their effects would have been antidilutive due to the loss in certain of the periods presented.

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.

Redeemable - Non-controlling 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 non-controlling 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, “Distinguishing Liabilities from Equity”. All redeemable non-controlling 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 accreted the redemption value of the redeemable non-controlling interest over the redemption period using the straight-line method.

New Accounting Pronouncements

In June 2014, the FASB issued ASU No. 2014-10, which eliminates the concept of a development stage entity, or DSE, in its entirety from GAAP. Under existing guidance, DSEs are required to report incremental information, including inception-to-date financial information, in their financial statements. A DSE is an entity devoting substantially all of its efforts to establishing a new business and for which either planned principal operations have not yet commenced or have commenced but there has been no significant revenues generated from that business. Entities classified as DSEs will no longer be subject to these incremental reporting requirements after adopting ASU No. 2014-10. ASU No. 2014-10 is effective for fiscal years beginning after December 15, 2014, with early adoption permitted. Retrospective application is required for the elimination of incremental DSE disclosures. Prior to the issuance of ASU No. 2014-10, the Company had met the definition of a DSE since its inception. The Company elected to adopt this ASU early, and therefore it has eliminated the incremental disclosures previously required of DSEs, starting with this Quarterly Report on Form 10-Q.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

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Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Property, plant and equipment, accumulated depreciation	$ 106,492	$ 106,041
Convertible notes payable, discount	$ 1,250	$ 75,695
Preferred stock, no par value
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	156,704,560	73,486,861
Common stock, shares outstanding	156,672,388	68,910,395
Treasury stock, shares	32,172	32,172

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Schedule of Redeemable Noncontrolling Interest Considered Level Three

As of June 30, 2014 and December 31, 2013 the Company’s redeemable non-controlling interest is considered a level 3 item and changed during the six months ended June 30, 2014 as follows.

Balance at December 31, 2013	$	856,044
Net income attributable to non-controlling interest		2,373
Balance at June 30, 2014	$	858,417

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Aug. 11, 2014
Document And Entity Information
Entity Registrant Name	Bluefire Renewables, Inc.
Entity Central Index Key	0001370489
Document Type	10-Q
Document Period End Date	Jun. 30, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		181,242,551
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2014

XML

Notes Payable (Tables)

6 Months Ended

Jun. 30, 2014

Short-term Debt [Line Items]

Schedule of Fair Market Value of the Conversion Features Using the Black-Scholes Pricing Model

During the six months ending June 30, 2014, the range of inputs used to calculate derivative liabilities noted above were as follows:

	Six months ended
	June 30, 2014
Annual dividend yield	-
Expected life (years)	0.04 - 0.18
Risk-free interest rate	0.04 - 0.07	%
Expected volatility	197	%

Tarpon Bay Convertible Notes [Member]

Short-term Debt [Line Items]

Schedule of Derivative Liability Using Black Schole Price

The Company used the following assumptions as of June 30, 2014 and December 31, 2013:

	June 30, 2014			December 31, 2013
Annual dividend yield		0	%		0	%
Expected life (years)		0.00 - 0.01			0.8
Risk-free interest rate		0.02	%		0.02	%
Expected volatility		234	%		159	%

AKR Promissory Note [Member]

Short-term Debt [Line Items]

Schedule of Derivative Liability Using Black Schole Price

	April 8, 2014
Annual dividend yield		-
Expected life (years) of		1.41 - 2.00
Risk-free interest rate		0.40	%
Expected volatility		183% - 206	%

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Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Revenues:
Consulting fees	$ 128,705		$ 214,225	$ 2,020
Department of Energy grant revenue	323,917	551,828	849,503	617,939
Total revenues	452,622	551,828	1,063,728	619,959
Cost of revenue
Consulting revenue	12,369		12,369
Gross margin	440,253	551,828	1,051,359	619,959
Operating expenses:
Project development	201,548	128,301	415,473	246,688
General and administrative	181,676	176,263	475,028	398,602
Total operating expenses	383,224	304,564	890,501	645,290
Operating income (loss)	57,029	247,264	160,858	(25,331)
Other income and (expense):
Amortization of debt discount	(34,323)	(44,513)	(84,541)	(125,616)
Interest expense	(20,896)	(19,386)	(36,552)	(76,447)
Related party interest expense	(1,417)	(462)	(1,754)	(919)
Gain on settlement of accounts payable and accrued liabilities			95,990
Gain / (loss) from change in fair value of warrant liability	174	7,736	(238)	21,855
Gain / (loss) from change in fair value of derivative liability	86,527	90,236	(67,737)	59,505
Loss on excess of derivative over face value		(28,507)		(28,507)
Total other income and (expense)	30,065	5,104	(94,832)	(150,129)
Income (loss) before income taxes	87,094	252,368	66,026	(175,460)
Provision (benefit) for income taxes	(252)	(355)	1,491	751
Net income (loss)	87,346	252,723	64,535	(176,211)
Net income (loss) attributable to non-controlling interest	1	(685)	2,373	(2,742)
Net income (loss) attributable to controlling interest	$ 87,345	$ 253,408	$ 62,162	$ (173,469)
Basic and diluted income (loss) per common share	$ 0.00	$ 0.01	$ 0.00	$ 0.00
Weighted average common shares outstanding, basic and diluted	155,680,081	35,699,485	133,116,512	34,807,751

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Related Party Transactions

6 Months Ended

Jun. 30, 2014

Related Party Transactions [Abstract]

Related Party Transactions

NOTE 7 – RELATED PARTY TRANSACTIONS

On December 15, 2010, the Company entered into a loan agreement (the “Loan Agreement”) by and between Arnold Klann, the Chief Executive Officer (“CEO”), Chairman of the board of directors and 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.

On November 10, 2011, the Company obtained a line of credit in the amount of $40,000 from its CEO 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. During the three months ended June 30, 2014, the CEO loaned the Company an additional $40,000 under the line of credit, bringing the balance to $51,230, which is in excess of the line of credit limit, however, subsequent to June 30, 2014, the Company and the CEO amended this line of credit so that the maximum amount that could be borrowed is $55,000 (See Note 10).

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 6 – COMMITMENTS AND CONTINGENCIES

Fulton Project Lease

On July 20, 2010, the Company entered into a thirty 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 thirty 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.

Rent expense under non-cancellable leases was approximately $30,900, $30,900, $61,800, and $61,800 during the three and six-months ended June 30, 2014 and 2013, respectively.

As of June 30, 2014 and December 31, 2013, $0, and $233,267 of the monthly lease payments were included in accounts payable on the accompanying balance sheets During the first half of 2014, the County of Itawamba gave the Company credit for past site preparation reimbursements provided to the County through DOE reimbursements totaling approximately $96,000 which was recorded as a gain in the accompanying statement of operations. The remaining past due balances from December 31, 2013 were paid in full.

Legal Proceedings

On February 26, 2013, the Company received notice that the Orange County Superior Court (the “Court”) issued a Minute Order (the “Order”) in connection with certain shareholders’ claims of breach of contract and declaratory relief related to 5,740,741 warrants (the “Warrants”) issued by the Company.

Pursuant to the Order, the Court ruled in favor of the shareholders on the two claims, finding that the Warrants contain certain anti-dilution protective provisions which provide for the re-adjustment of the exercise price of such Warrants upon certain events and that such exercise price per share of the Warrants must be decreased to $0.00.

The Company has considered these warrants exercised based on the notice of exercise received from the respective shareholders in December 2012.

On March 7, 2013, the shareholders making claims provided their request for judgment based on the Order received, which has been initially refused by the Court via a second minute order received by the Company on April 8, 2013. On April 15, 2013, the Company’s counsel submitted a proposed judgment to the Court as per the Courts request, which followed the Order and provided for no monetary damages against the Company. On May 14, 2013, this proposed judgment was approved by the Court (“Judgment”).

On June 20, 2013, the Company filed motions to vacate the Judgment, a motion for a new trial, and a motion to stay enforcement of the Judgment, all of which were denied on June 27, 2013.

On August 2, 2013, pursuant to the exercise notice of the Warrants, and the Order, the Company issued 5,740,741 shares to certain shareholders. See Note 9 for additional information.

Other than the above, 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.

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Development Contracts (Details Narrative) (USD $)	0 Months Ended	3 Months Ended		6 Months Ended		1 Months Ended
	Aug. 11, 2014	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Oct. 31, 2007 Company Cost Share [Member]	Dec. 31, 2009 U.S. Department Of Energy [Member]	Oct. 31, 2007 U.S. Department Of Energy [Member]	Dec. 31, 2009 U.S. Department Of Energy [Member] Phase II [Member]	Dec. 31, 2009 U.S. Department Of Energy [Member] Project One [Member]	Oct. 31, 2007 U.S. Department Of Energy [Member] Company Cost Share [Member]	Feb. 28, 2007 U.S. Department Of Energy [Member] Maximum [Member]
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Revenue from Grants		$ 323,917	$ 551,828	$ 849,503	$ 617,939		$ 88,000,000	$ 10,000,000	$ 81,000,000	$ 7,000,000		$ 40,000,000
Award, percentage						60.00%					40.00%
Reimbursements received under awards plan				12,670,000
Total grant available to Entity under awards	$ 418,000

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Outstanding Warrant Liability (Tables)

6 Months Ended

Jun. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Black-Scholes Option Pricing Model Assumptions to Estimate Fair Value of Warrants

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.

	June 30, 2014			December 31, 2013
Annual dividend yield		-			-
Expected life (years) of		1.55			2.05
Risk-free interest rate		0.47	%		0.38	%
Expected volatility		214	%		150	%

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Subsequent Events

6 Months Ended

Jun. 30, 2014

Subsequent Events [Abstract]

Subsequent Events

NOTE 10 – SUBSEQUENT EVENTS

Subsequent to June 30, 2014, the holder of various convertible notes, converted $37,500 in principal, along with $1,500 of accrued interest, of a note with a maturity date of December 23, 2014, into 24,537,990 shares of common stock. See Note 4 for more information on the conversion features of the notes.

Subsequent to June 30, 2014, the Company paid the remaining $12,500 on the Tarpon Initial Note.

Subsequent to June 30, 2014, the Company issued the AKR Warrant B, consisting of warrants to purchase 7,350,000 shares of the Company’s common stock, in connection with the AKR Note transaction on April 8, 2014 (See Note 4).

Subsequent to June 30, 2014, the Company finalized an extension to the 2nd AKR Note, which amends the original note so that the maturity date is now December 31, 2014 (See Note 4).

Subsequent to June 30, 2014, the Company and the CEO amended a line of credit provided by the CEO in order to grant additional liquidity to the Company as needed from a maximum of $40,000 to a maximum amount of $55,000. All of the other terms remained the same. See Note 7 for more information on the line of credit.

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Redeemable Non-Controlling Interest

6 Months Ended

Jun. 30, 2014

Noncontrolling Interest [Abstract]

Redeemable Noncontrolling Interest

NOTE 8 – REDEEMABLE NON-CONTROLLING 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 in the consolidated joint ventures are reflected as redeemable non-controlling interests in the Company’s consolidated financial statements outside of equity. The Company accreted the redeemable non-controlling interest for the total redemption price of $862,500 through the estimated forecasted financial close, originally estimated to be the end of the third quarter of 2011.

Net income (loss) attributable to the redeemable non-controlling interest during for the three and six-months ended June 30, 2014 and 2013 was $1, $(685), $2,373, and $(2,742), respectively which netted against the value of the redeemable non-controlling interest in temporary equity. The allocation of income (loss) was presented on the statement of operations.

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Stockholders' Deficit

6 Months Ended

Jun. 30, 2014

Stockholders' Equity Note [Abstract]

Stockholders' Deficit

NOTE 9 – STOCKHOLDERS’ DEFICIT

Stock-Based Compensation

During the three and six-months ended June 30, 2014 and 2013, the Company recognized stock-based compensation, including consultants, of approximately $9,700, $0, $46,700, and $9,100, to general and administrative expenses and $0, $0, $0, and $0 to project development expenses, respectively. There is no additional future compensation expense to record as of June 30, 2014 based on the previous awards.

Stock Purchase Agreement

On January 19, 2011, the Company signed a $10 million purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“LPC”), an Illinois limited liability company. The Company also entered into a registration rights agreement with LPC whereby we agreed to file a registration statement related to the transaction with the U.S. Securities & Exchange Commission (“SEC”) covering the shares that may be issued to LPC under the Purchase Agreement within ten days of the agreement. Although under the Purchase Agreement the registration statement was to be declared effective by March 31, 2011, LPC did not terminate the Purchase Agreement. The registration statement was declared effective on May 10, 2011, without any penalty. The Purchase Agreement was terminated in July 18, 2013. During the three and six-months ended June 30, 2014 and 2013 the Company drew $0, $0, $0, and $0 on the Purchase Agreement.

Upon signing the Purchase Agreement, BlueFire received $150,000 from LPC as an initial purchase under the $10 million commitment in exchange for 428,571 shares of our common stock and warrants to purchase 428,571 shares of our common stock at an exercise price of $0.55 per share. The warrants contain a ratchet provision in which the exercise price will be adjusted based on future issuances of common stock, excluding certain issuances; if issuances are at prices lower than the current exercise price (see Note 6). The warrants have an expiration date of January 2016.

Equity Facility Agreement

On March 28, 2012, BlueFire finalized a committed equity facility (the “Equity Facility”) with TCA Global Credit Master Fund, LP, a Cayman Islands limited partnership (“TCA”), whereby the parties entered into (i) a committed equity facility agreement (the “Equity Agreement”) and (ii) a registration rights agreement (the “Registration Rights Agreement”). Pursuant to the terms of the Equity Agreement, for a period of twenty-four (24) months commencing on the date of effectiveness of the Registration Statement (as defined below), TCA committed to purchase up to $2,000,000 of BlueFire’s common stock, par value $0.001 per share (the “Shares”), pursuant to Advances (as defined below), covering the Registrable Securities (as defined below). The purchase price of the Shares under the Equity Agreement is equal to ninety-five percent (95%) of the lowest daily volume weighted average price of BlueFire’s common stock during the five (5) consecutive trading days after BlueFire delivers to TCA an Advance notice in writing requiring TCA to advance funds (an “Advance”) to BlueFire, subject to the terms of the Equity Agreement. The “Registrable Securities” include (i) the Shares; and (ii) any securities issued or issuable with respect to the Shares 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 further consideration for TCA entering into and structuring the Equity Facility, BlueFire paid to TCA a fee by issuing to TCA shares of BlueFire’s common stock that equal a dollar amount of $110,000 (the “Facility Fee Shares”). It is the intention of BlueFire and TCA that the value of the Facility Fee Shares shall equal $110,000. In the event the value of the Facility Fee Shares issued to TCA does not equal $110,000 after a nine month evaluation date, the Equity Agreement provides for an adjustment provision allowing for necessary action (either the issuance of additional shares to TCA or the return of shares previously issued to TCA to BlueFire’s treasury) to adjust the number of Facility Fee Shares issued. BlueFire also entered into the Registration Rights Agreement with TCA. Pursuant to the terms of the Registration Rights Agreement, BlueFire is obligated to file a registration statement (the “Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC’) to cover the Registrable Securities within 45 days of closing. BlueFire must use its commercially reasonable efforts to cause the Registration Statement to be declared effective by the SEC by a date that is no later than 90 days following closing.

In connection with the issuance of approximately 280,000 shares for the $110,000 facility fee as described above, the Company capitalized said amount within deferred financings costs in the accompanying balance sheet as of March 31, 2012, along with other costs incurred as part Equity Facility and the Convertible Note described below. Additional costs related to the Equity Facility and paid from the funds of the Convertible Note described below, were approximately $60,000. Aggregate costs of the Equity Facility were $170,000. Because these costs were to access the Equity Facility, earned by TCA regardless of the Company drawing on the Equity Facility, and not part of a funding, they are treated akin to debt costs The deferred financings costs related to the Equity Facility were amortized over one (1) year on a straight-line basis. The Company believed this accelerated amortization, which is less than the two year Equity Facility term, was appropriate based on substantial doubt about the Company’s ability to continue as a going concern. As of December 31, 2012, the Company determined that it was not probable the Registration Statement would become effective under the original structure of the agreement and accordingly, wrote off all remaining deferred financing costs related to the Equity Agreement.

On March 28, 2012, BlueFire entered into a security agreement (the “Security Agreement”) with TCA, related to a $300,000 convertible promissory note issued by BlueFire in favor of TCA (the “Convertible Note”). The Security Agreement granted to TCA a continuing, first priority security interest in all of BlueFire’s assets, wheresoever located and whether now existing or hereafter arising or acquired. On March 28, 2012, BlueFire issued the Convertible Note in favor of TCA. The maturity date of the Convertible Note was March 28, 2013, and the Convertible Note bore interest at a rate of twelve percent (12%) per annum with a default rate of eighteen percent (18%) per annum. The Convertible Note was convertible into shares of BlueFire’s common stock at a price equal to ninety-five percent (95%) of the lowest daily volume weighted average price of BlueFire’s common stock during the five (5) trading days immediately prior to the date of conversion. The Convertible Note had the option to be prepaid in whole or in part at BlueFire’s option without penalty. The proceeds received by the Company under the purchase agreement were used for general working capital purposes which include costs reimbursed under the DOE cost share program.

In connection with the Convertible Note, approximately $93,000 was withheld and immediately disbursed to cover costs of the Convertible Note and Equity Facility described above. The costs related to the Convertible Note were $24,800 which were capitalized as deferred financing costs; were amortized on a straight-line basis over the term of the Convertible Note. In addition, $7,500 was dispersed to cover legal fees. After all costs, the Company received approximately $207,000 in cash from the Convertible Note. Amortization of the deferred financing costs during the six months ended June 30, 2014 and 2013 was approximately $0 and $38,617, respectively. As of June 30, 2014, there were no remaining deferred financing costs.

This note contained an embedded conversion feature whereby the holder could convert the note at a discount to the fair value of the Company’s common stock price. Based on applicable guidance the embedded conversion feature was considered a derivative instrument and bifurcated. This liability was recorded on the face of the financial statements as “derivative liability”, and was revalued each reporting period. During the three months ended June 30, 2014, the note was repaid in full along with accrued interest and fees thereon. Accordingly, the remaining derivative liability of $13,189 was transferred to equity.

On April 11, 2014, the Convertible Note with TCA was repaid in full.

Liability Purchase Agreement

On December 9, 2013, The Circuit Court of the Second Judicial Circuit in and for Leon County, Florida (the “Court”), entered an order (the “Order”) approving, among other things, the fairness of the terms and conditions of an exchange pursuant to Section 3(a)(10) of the Securities Act of 1933, in accordance with a stipulation of settlement (the “Settlement Agreement”) between the Company, and Tarpon Bay Partners, LLC, a Florida limited liability company (“Tarpon”), in the matter entitled Tarpon Bay Partners, LLC v. BlueFire Renewables, Inc., Case No. 2013-CA-2975 (the “Action”). Tarpon commenced the Action against the Company on November 21, 2013 to recover an aggregate of $583,710 of past-due accounts payable of the Company, which Tarpon had purchased from certain creditors of the Company pursuant to the terms of separate receivable purchase agreements between Tarpon and each of such vendors (the “Assigned Accounts”), plus fees and costs (the “Claim”). The Assigned Accounts relate to certain legal, accounting, financial services, and the repayment of aged debt. The Order provides for the full and final settlement of the Claim and the Action. The Settlement Agreement became effective and binding upon the Company and Tarpon upon execution of the Order by the Court on December 9, 2013. Notwithstanding anything to the contrary in the Stipulation, the number of shares beneficially owned by Tarpon will not exceed 9.99% of the Company’s Common Stock. In connection with the Settlement Agreement, the Company relied on the exemption from registration provided by Section 3(a)(10) under the Securities Act.

Pursuant to the terms of the Settlement Agreement approved by the Order, the Company shall issue and deliver to Tarpon shares (the “Settlement Shares”) of the Company’s Common Stock in one or more tranches as necessary, and subject to adjustment and ownership limitations, sufficient to generate proceeds such that the aggregate Remittance Amount (as defined in the Settlement Agreement) equals the Claim. In addition, pursuant to the terms of the Settlement Agreement, the Company issued to Tarpon the Tarpon Initial Note in the principal amount of $25,000. Under the terms of the Tarpon Initial Note, the Company shall pay Tarpon $25,000 on the date of maturity which was January 30, 2014. This Note is convertible by Tarpon into the Company’s Common Shares (See Note 4).

Pursuant to the fairness hearing, the Order, and the Company’s agreement with Tarpon, on December 23, 2013, the Company issued the Tarpon Success Fee Note in the principal amount of $50,000 in favor of Tarpon as a commitment fee. The Tarpon Success Fee Note was due on June 30, 2014. The Tarpon Success Fee Note is convertible into shares of the Company’s common stock (See Note 4).

In connection with the settlement, on December 18, 2013 the Company issued 6,619,835 shares of Common Stock to Tarpon in which gross proceeds of $29,802 were generated from the sale of the Common Stock. In connection with the transaction, Tarpon received fees of $7,450 and providing payments of $22,352 to settle outstanding vendor payables. During the six months ended June 30, 2014, the Company issued Tarpon 61,010,000 shares of Common Stock from which gross proceeds of $163,406 were generated from the sale of the Common Stock. In connection with the transaction, Tarpon received fees of $42,402 and providing payments of $121,004 to settle outstanding vendor payables. Any shares not used by Tarpon are subject to return to the Company. Accordingly, the Company accounts for these shares as issued but not outstanding until the shares have been sold by Tarpon and the proceeds are known. Net proceeds received by Tarpon are included as a reduction to accounts payable or other liability as applicable, as such funds are legally required to be provided to the party Tarpon purchased the debt from.

Warrants Exercised

Some of our warrants contain a provision in which the exercise price is to be adjusted for future issuances of common stock at prices lower than their current exercise price.

In 2012, certain shareholders’ owning an aggregate of 5,740,741 warrants made claims of the Company that the exercise price of their warrants should have been adjusted due to a certain issuance of common shares by the Company (see Note 6). The Company believed that said issuance would not trigger adjustment based on the terms of the respective agreements.

On December 4, 2012, these shareholders presented exercise forms to the Company to exercise all 5,740,741 warrants for a like amount of common shares. The warrants were exercised at $0.00, which is the amount the shareholders’ believed the new exercise price should be based the ratchet provision and their claims.

On February 26, 2013, the Company received notice that the Court issued an Order in connection with these certain shareholders’ claims of breach of contract and declaratory relief related to 5,740,741 warrants issued by the Company.

Pursuant to the Order, the Court ruled in favor of the shareholders on the two claims, finding that the Warrants contain certain anti-dilution protective provisions which provide for the re-adjustment of the exercise price of such Warrants upon certain events and that such exercise price per share of the Warrants must be decreased to $0.00.

The Company has considered these warrants exercised based on the notice of exercise received from the respective shareholders in December 2012. The Company determined, that based on the Order by the Court a ratchet event had taken place based on the Order and claims made. The Company used December 4, 2012 as the date in which the new terms were considered to be in force based on the Shareholders’ notice to exercise on that date and the Courts subsequent Order that allowed the Shareholders to do so.

As such, the modification of the exercise price was treated as an extinguishment of the warrants under the previous terms, with a revaluation of the warrants with new terms. As such, the warrant liability was valued immediately before extinguishment with the gain/loss recognized through earnings and remaining value reclassified to equity. Because there was only approximately one week of remaining life under the unmodified terms and because the previous exercise price was out of the money ($2.90) compared to the price of our common stock on the day of extinguishment ($0.14), the warrant value upon extinguishment was considered to be near zero based on a Black-Scholes calculation, which also used volatility of 104.2% and risk-free rate of 0.07%.

In addition, the new warrant liability was valued immediately after the modification but prior to the exercise by the Shareholders with the new value being recognized through earnings. The “new” warrants had a fixed price, fixed number of shares, and effectively no ratchet provision based on the Order. There were no circumstances at that time that would require or allow for net cash settlement. As such, the warrants qualified for equity accounting under ASC 815. The Company valued the warrants with new terms at approximately $804,000 based on the fair value of the Company’s common stock on December 4, 2012 ($0.14) as it was considered an immediate exercise and therefore, the value of the shares was known on the date of exercise. Accordingly, the warrants were considered committed shares to be issued in the consolidated balance sheets as of December 31, 2012. On August 2, 2013, the Company issued these 5,740,741 shares and the value transferred to additional paid-in capital.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Going Concern

Going Concern

The Company has incurred losses since Inception. Management has funded operations primarily through proceeds received in connection with the reverse merger, loans from its majority shareholder, 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 throughout 2009 to 2014. 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 June 30, 2014, the Company has negative working capital of approximately $1,560,000. Management has estimated that operating expenses for the next 12 months will be approximately $1,700,000, 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 the remainder of 2014, the Company intends to fund its operations with remaining reimbursements under the Department of Energy contract as available, as well as seek additional funding in the form of equity or debt. The Company’s ability to get reimbursed under the DOE contract is dependent on the availability of cash to pay for the related costs and the availability of funds remaining under the contract after the discontinuance of the Department of Energy contract further disclosed in Note 3. As of August 11, 2014, the Company expects the current resources available to them will only be sufficient for a period of approximately 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. 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.

Additionally, the Company’s Lancaster plant is currently shovel ready, except for the air permit which the Company will need to renew and only requires minimal capital to maintain until funding is obtained for the construction. This project shall continue once we receive the funding necessary to construct the facility.

As of December 31, 2010, the Company completed the detailed engineering on our proposed Fulton Project, procured all necessary permits for construction of the plant, and began site clearing and preparation work, signaling the beginning of construction. As of June 30, 2014, 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 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 and approximately $100 million to $125 million for the Lancaster Biorefinery. 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.

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated interim financial statements have been prepared by the Company pursuant to the rules and regulations of the United States Securities Exchange Commission. Certain information and disclosures normally included in the annual financial statements prepared in accordance with the accounting principles generally accepted in the Unites States of America have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these financial statements have been included. Such adjustments consist of normal recurring adjustments. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2013. The results of operations for the three and six months ended June 30, 2014 are not necessarily indicative of the results that may be expected for the full year.

In July 2014, the Company elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allows the company to remove the inception to date information and all references to development stage.

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of BlueFire Renewables, Inc., and its wholly-owned subsidiaries, BlueFire Ethanol, Inc., and Sucre Source LLC. BlueFire Ethanol Lancaster, LLC, and BlueFire Fulton Renewable Energy LLC (excluding 1% interest sold) 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.

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 three and six-months ended June 30, 2014 and 2013, research and development costs included in Project Development were approximately $202,000, $128,000, $415,000, and $247,000, 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.

Equity Instruments Issued with Registration Rights Agreement

Equity Instruments Issued with Registration Rights Agreement

The Company accounts for these penalties as contingent liabilities, applying the accounting guidance of ASC 450 “Contingencies”. This accounting is consistent with views established in ASC 825 “Financial Instruments”. Accordingly, the Company recognizes damages when it becomes probable that they will be incurred and amounts are reasonably estimable.

In connection with the Company signing the $2,000,000 Equity Facility with TCA on March 28, 2012, the Company agreed to file a registration statement related to the transaction with the Securities and Exchange Commission (“SEC”) covering the shares that may be issued to TCA under the Equity Facility within 45 days of closing. Although under the Registration Rights Agreement the registration statement was to be declared effective within 90 days following closing, it was not declared effective. The Company was working with TCA to resolve this issue and, on April 11, 2014, the Equity Facility was canceled and related convertible note repaid in full. No penalties were incurred as part of the repayment.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company follows the guidance of ASC 820 – “Fair Value Measurement and Disclosure”. 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 June 30, 2014 or December 31, 2013.

As of June 30, 2014, the Company’s warrant liability and derivative liability are considered level 2 items (see Notes 4 and 5).

As of June 30, 2014 and December 31, 2013 the Company’s redeemable non-controlling interest is considered a level 3 item and changed during the six months ended June 30, 2014 as follows.

Balance at December 31, 2013	$	856,044
Net income attributable to non-controlling interest		2,373
Balance at June 30, 2014	$	858,417

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 expenditures to comply 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.

Income (loss) per Common Share

Income (loss) per Common Share

The Company presents basic income (loss) per share (“EPS”) and diluted EPS on the face of the consolidated statement of operations. Basic income (loss) per share is computed as net income (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. As of June 30, 2014 and 2013, the Company had 7,778,571 and 928,571 warrants, respectively, for which all of the exercise prices were in excess of the average closing price of the Company’s common stock during the corresponding period and thus no shares are considered dilutive under the treasury stock method of accounting and their effects would have been antidilutive due to the loss in certain of the periods presented.

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.

Redeemable - Non-Controlling Interest

Redeemable - Non-controlling 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 non-controlling 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, “Distinguishing Liabilities from Equity”. All redeemable non-controlling 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 accreted the redemption value of the redeemable non-controlling interest over the redemption period using the straight-line method.

New Accounting Pronouncements

New Accounting Pronouncements

In June 2014, the FASB issued ASU No. 2014-10, which eliminates the concept of a development stage entity, or DSE, in its entirety from GAAP. Under existing guidance, DSEs are required to report incremental information, including inception-to-date financial information, in their financial statements. A DSE is an entity devoting substantially all of its efforts to establishing a new business and for which either planned principal operations have not yet commenced or have commenced but there has been no significant revenues generated from that business. Entities classified as DSEs will no longer be subject to these incremental reporting requirements after adopting ASU No. 2014-10. ASU No. 2014-10 is effective for fiscal years beginning after December 15, 2014, with early adoption permitted. Retrospective application is required for the elimination of incremental DSE disclosures. Prior to the issuance of ASU No. 2014-10, the Company had met the definition of a DSE since its inception. The Company elected to adopt this ASU early, and therefore it has eliminated the incremental disclosures previously required of DSEs, starting with this Quarterly Report on Form 10-Q.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

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Subsequent Events (Details Narrative) (USD $)	0 Months Ended	6 Months Ended					6 Months Ended
	Nov. 10, 2011 Chief Executive Officer [Member]	Jun. 30, 2014 Tarpon Initial Note [Member]	Jun. 30, 2014 Subsequent Event [Member]	Jun. 30, 2014 Subsequent Event [Member] Chief Executive Officer [Member] Minimum [Member]	Jun. 30, 2014 Subsequent Event [Member] Chief Executive Officer [Member] Maximum [Member]	Jun. 30, 2014 Subsequent Event [Member] AKR Warrant B [Member]	Jun. 30, 2014 Subsequent Event [Member] Tarpon Initial Note [Member]
Subsequent Event [Line Items]
Notes, principal converted			$ 37,500
Accrued Interest			1,500
Notes, maturity date			Dec. 23, 2014
Conversion of stock, shares issued			24,537,990
Cash payment on Tarpon Initial Note		12,500					12,500
Warrants to buy common shares						7,350,000
Line of credit, maximum amount borrowed	$ 55,000			$ 40,000	$ 55,000

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Summary of Significant Accounting Policies (Details Narrative) (USD $)	1 Months Ended	3 Months Ended		6 Months Ended					0 Months Ended	12 Months Ended	6 Months Ended
	Dec. 31, 2007	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 Warrant [Member]	Jun. 30, 2013 Warrant [Member]	Jun. 30, 2014 Bluefire Fulton Renewable Energy Llc [Member]	Mar. 28, 2012 TCA [Member]	Dec. 31, 2014 Fulton Project [Member]	Jun. 30, 2014 Lancaster Biorefinery [Member] Minimum [Member]	Jun. 30, 2014 Lancaster Biorefinery [Member] Maximum [Member]	Jun. 30, 2014 Next Twelve Months [Member]
SignificantAccountingPoliciesLineItems [Line Items]
Proceeds from sale of stock through private placement	$ 14,500,000
Working capital deficit		1,560,000		1,560,000
Estimated operating expenses		383,224	304,564	890,501	645,290								1,700,000
Construction costs										300,000,000	100,000,000	125,000,000
Ownership interest in Bluefire Fulton Renewable Energy LLC sold								1.00%
Research and development expenses		202,000	128,000	415,000	247,000
Purchase agreement amount									$ 2,000,000
Ant-dilutive securities excluded from computation of earnings per share				0	0	7,778,571	928,571

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Notes Payable - Schedule of Derivative Liability Using Black Schole Price (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Short-term Debt [Line Items]
Annual dividend yield
Expected volatility	197.00%
Minimum [Member]
Short-term Debt [Line Items]
Expected life (years)	15 days
Risk-free interest rate	0.04%
Maximum [Member]
Short-term Debt [Line Items]
Expected life (years)	2 months 5 days
Risk-free interest rate	0.07%
Tarpon Bay Convertible Notes [Member]
Short-term Debt [Line Items]
Annual dividend yield	0.00%	0.00%
Risk-free interest rate	0.02%	0.02%
Expected volatility	234.00%	159.00%
Tarpon Bay Convertible Notes [Member] | Minimum [Member]
Short-term Debt [Line Items]
Expected life (years)	0 days
Tarpon Bay Convertible Notes [Member] | Maximum [Member]
Short-term Debt [Line Items]
Expected life (years)	4 days

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Consolidated Statements of Cash Flows (Unaudited) (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash flows from operating activities:
Net income (loss)	$ 64,535	$ (176,211)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Change in the fair value of warrant liability	238	(21,855)
Change in fair value of derivative liability	67,737	(59,505)
Loss on excess fair value of derivative liability		28,507
Gain on settlement of accounts payable and accrued liabilities	(95,990)
Share-based compensation	46,711	9,075
Amortization	87,600	154,439
Depreciation	451	1,989
Changes in operating assets and liabilities:
Accounts receivable	(76,723)	(93,294)
Department of Energy grant receivable	(103,356)
Prepaid expenses and other current assets	(15,398)	(4,608)
Accounts payable	(86,423)	127,993
Accrued liabilities	(87,754)	(124,860)
Net cash used in operating activities	(198,372)	(158,330)
Cash flows from investing activities:
Construction in progress		3,892
Net cash provided by investing activities		3,892
Cash flows from financing activities:
Proceeds from convertible notes payable	35,000	110,000
Repayment of convertible notes payable	(262,500)
Proceeds from notes payable	380,000
Proceeds from related party line of credit/notes payable	40,000
Net cash provided by financing activities	192,500	110,000
Net decrease in cash and cash equivalents	(5,872)	(44,438)
Cash and cash equivalents beginning of period	46,992	59,603
Cash and cash equivalents end of period	41,120	15,165
Supplemental disclosures of cash flow information
Interest	98,179
Income taxes		751
Supplemental schedule of non-cash investing and financing activities:
Conversion of convertible notes payable into common stock	32,500	101,000
Interest converted to common stock	1,300	4,040
Discount on fair value of warrants issued with note payable	42,323
Derivative liability reclassed to additional paid-in capital		86,187
Liabilities settled in connection with the Liabilities Purchase Agreement	$ 133,935

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Outstanding Warrant Liability

6 Months Ended

Jun. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Outstanding Warrant Liability

NOTE 5 – OUTSTANDING WARRANT LIABILITY

The Company issued 428,571 warrants to purchase common stock in connection with the Stock Purchase Agreement entered into on January 19, 2011 with Lincoln Park Capital, LLC (See Note 9). 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.

	June 30, 2014			December 31, 2013
Annual dividend yield		-			-
Expected life (years) of		1.55			2.05
Risk-free interest rate		0.47	%		0.38	%
Expected volatility		214	%		150	%

In connection with these warrants, the Company recognized a gain/(loss) on the change in fair value of warrant liability of $174, $7,736, ($238), and $21,855 from the change in fair value of these warrants during the three and six-months ended June 30, 2014 and 2013.

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.

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Notes Payable - Schedule of Fair Value of Warrants Based on Black Scholes (Details)	6 Months Ended			0 Months Ended
	Jun. 30, 2014	Jun. 30, 2014 Maximum [Member]	Jun. 30, 2014 Minimum [Member]	Apr. 08, 2014 AKR Promissory Note [Member]	Apr. 08, 2014 AKR Promissory Note [Member] Maximum [Member]	Apr. 08, 2014 AKR Promissory Note [Member] Minimum [Member]
Short-term Debt [Line Items]
Annual dividend yield
Expected life (years)		2 months 5 days	15 days		1 year 4 months 28 days	2 years
Risk-free interest rate		0.07%	0.04%	0.40%
Expected volatility	197.00%				183.00%	206.00%

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Organization and Business (Details Narrative) (USD $)	Jun. 30, 2014	Dec. 31, 2013	Nov. 25, 2013 Minimum [Member]	Nov. 25, 2013 Maximum [Member]
Common stock, shares authorized	500,000,000	500,000,000	100,000,000	500,000,000
Common stock, par value	$ 0.001	$ 0.001	$ 0.001	$ 0.001