Item
3.02 Unregistered Sale of Equity Securities.
As
previously disclosed, on September 27, 2017, BlueFire Renewables, Inc., a Nevada Corporation (the “Company”) entered
into a Settlement Agreement and Stipulation (the “Settlement Agreement”) with Tarpon Bay Partners, LLC, a Florida
limited liability company (“TBP”), pursuant to which the Company agreed to issue common stock to TBP in exchange for
the settlement of $999,630.45 (the “Settlement Amount”) of past-due obligations and accounts payable of the Company.
TBP purchased the obligations and accounts payable from certain vendors of the Company as described below.
On
October 11, 2017, the Circuit Court of Leon County, Florida (the “Court”), entered an order (the “TBP Order”)
approving, among other things, the fairness of the terms and conditions of an exchange pursuant to Section 3(a)(10) of the Securities
Act of 1933, as amended (the “Securities Act”), in accordance with a stipulation of settlement, pursuant to the Settlement
Agreement between the Company and TBP, in the matter entitled
Tarpon Bay Partners, LLC v. BlueFire Renewables, Inc
. (the
“TBP Action”). TBP commenced the TBP Action against the Company to recover an aggregate of $999,630.45 of past-due
obligations and accounts payable of the Company (the “TBP Claim”), which TBP had purchased from certain vendors of
the Company pursuant to the terms of separate receivable purchase agreements between TBP and each of such vendors (the “TBP
Assigned Accounts”). The TBP Assigned Accounts relate to certain contractual obligations and legal services provided to
the Company. The TBP Order provides for the full and final settlement of the TBP Claim and the TBP Action. The Settlement Agreement
became effective and binding upon the Company and TBP upon execution of the TBP Order by the Court on October 11, 2017.
Pursuant
to the terms of the Settlement Agreement approved by the TBP Order, on October 11, 2017, the Company agreed to issue to TBP shares
(the “TBP Settlement Shares”) of the Company’s common stock, $0.001 par value (the “Common Stock”).
The Settlement Agreement provides that the TBP Settlement Shares will be issued in one or more tranches, as necessary, sufficient
to satisfy the TBP Settlement Amount through the issuance of freely trading securities issued pursuant to Section 3(a)(10) of
the Securities Act. Pursuant to the Settlement Agreement, TBP may deliver a request to the Company for shares of Common Stock
to be issued to TBP (the “TBP Share Request”).
The
parties reasonably estimate that the fair market value of the TBP Settlement Shares to be received by TBP is equal to approximately
$1,666,000. In connection with the Settlement Agreement, on October 16, 2017, the Company issued 37,000,000 shares (the “Initial
Settlement Shares”) of the Company’s common stock to TBP.
The
Settlement Agreement provides that in no event shall the number of shares of Common Stock issued to TBP or its designee in connection
with the Settlement Agreement, when aggregated with all other shares of Common Stock then beneficially owned by TBP and its affiliates
(as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
and the rules and regulations thereunder), result in the beneficial ownership by TBP and its affiliates (as calculated pursuant
to Section 13(d) of the Exchange Act and the rules and regulations thereunder) at any time of more than 9.99% of the Common Stock.
Since
the issuance of the Initial Settlement Shares, TBP demonstrated to the Company’s satisfaction that it was entitled to receive
another 49,462,000 shares of Common Stock (the “Additional Settlement Shares”), and that the issuance of such Additional
Settlement Shares to TBP would not result in TBP exceeding the beneficial ownership limitation set forth above. Accordingly, on
December 16, 2017, the Company issued and delivered to TBP another 49,462,000 Additional Settlement Shares pursuant to the terms
of the Settlement Agreement approved by the Order.
The
issuance of Common Stock to TBP pursuant to the terms of the Settlement Agreement approved by the Order is exempt from the registration
requirements of the Securities Act pursuant to Section 3(a)(10) thereof, as an issuance of securities in exchange for bona fide
outstanding claims, where the terms and conditions of such issuance are approved by a court after a hearing upon the fairness
of such terms and conditions at which all persons to whom it is proposed to issue securities in such exchange shall have the right
to appear.