BLUE SPHERE CORP. (Form: S-1, Received: 08/15/2016 17:27:22)

As filed with the Securities and Exchange Commission on [__________], 2016

Registration No. _______

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

	BLUE SPHERE CORPORATION
	(Exact name of registrant as specified in its charter)

Nevada	7370	98-0550257
(State or other jurisdiction of	(Primary Standard Industrial	(I.R.S. Employer
incorporation or organization)	Classification Code Number)	Identification No.)

301 McCullough Drive
4th Floor, Charlotte, North Carolina 28262
(704) 909-2806

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Mr. Shlomi Palas
301 McCullough Drive
4th Floor, Charlotte, North Carolina 28262
(704) 909-2806

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Peter J. Gennuso, Esq.

Robin D. Powell, Esq.

Benjamin Walker, Esq.

Thompson Hine LLP

335 Madison Avenue, 12th Floor

New York, NY 10017

(212) 908-3958

Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: þ

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	þ

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered (1)	Amount to be Registered		Proposed Maximum Offering Price Per Share (2)		Proposed Maximum Aggregate Offering Price (2)		Amount of Registration Fee
Common stock, no par value per share		53,266,668	$	0.075	$	3,995,000	$	402.30
Warrants		35,766,669	$	0.11	$	3,934,334	$	396.19
Total		89,033,337			$	7,929,334	$	798.48

(1)

The shares of our common stock being registered hereunder are being registered for sale by the selling security holders named in the prospectus. Under Rule 416 of the Securities Act of 1933, as amended, the shares being registered include such indeterminate number of shares of common stock as may be issuable with respect to the shares being registered in this registration statement as a result of any stock splits, stock dividends or other similar event.

(2)	The proposed maximum offering price per share and the proposed maximum aggregate offering price have been estimated solely for the purpose of calculating the amount of the registration fee in accordance with Rule 457 under the Securities Act of 1933, as amended.

The registrant hereby amends this registration statement on such date or date(s) as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until the registration statement shall become effective on such date as the Commission acting pursuant to said Section 8(a) may determine.

The information in this prospectus is not complete and may be changed. These securities may not be sold until the Registration Statement filed with the Securities and Exchange Commission of which this prospectus is a part becomes effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion, Dated August 15, 2016

PROSPECTUS

BLUE SPHERE CORPORATION

(BLUE SPHERE LOGO)

89,033,337 Shares of Common Stock

This prospectus relates to the resale of up to 89,033,337 shares of our common stock, of which (1) 53,266,668 shares are issued and outstanding and (2) 35,766,669 shares are issuable upon the exercise of certain outstanding warrants (the “Offering Warrants”). We are not selling any shares of our common stock in this offering and will not receive any proceeds from this offering.

The selling security holders named in this prospectus are offering to sell shares of our common stock through this prospectus and they may be deemed “underwriters” as that term is defined in Section 2(a)(11) of the Securities Act of 1933, as amended (the “Securities Act”).

Shares of the Company’s common stock are quoted on the OTCQB® Venture Marketplace under the symbol “BLSP”. On August 12, 2016, the closing sale price of our common stock was $0.07 per share. The selling security holders will pay all brokerage commissions and discounts attributable to the sale of the shares, plus brokerage fees. The selling security holders will receive all of the net proceeds from the offering.

We qualify as an “emerging growth company” as defined in the Jumpstart our Business Startups Act (“JOBS Act”). For more information, see the sub-section titled “Emerging Growth Company Status” in the Prospectus Summary section of this prospectus.

The Company is currently in the development stage and has limited operations and revenues to date, and there can be no assurance that the Company will be successful in furthering its operations and/or revenues. Persons should not invest unless they can afford to lose their entire investment.

Investing in our securities involves a high degree of risk. You should purchase these securities only if you can afford a complete loss of your investment. For more information, please see the section of this prospectus titled “Risk Factors”.

Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined whether this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is [________], 2016

TABLE OF CONTENTS


PROSPECTUS SUMMARY		2
THE OFFERING		4
SUMMARY FINANCIAL DATA		5
RISK FACTORS		6
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		13
TAX CONSIDERATIONS		13
USE OF PROCEEDS		13
CAPITALIZATION		14
DETERMINATION OF THE OFFERING PRICE		14
MARKET FOR COMMON STOCK		14
DIVIDEND POLICY		15
THE STOCK OFFERING		15
SELLING SECURITY HOLDERS		17
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		19
BUSINESS		23
PROPERTIES		29
LITIGATION		29
MANAGEMENT		29
EXECUTIVE COMPENSATION		33
PRINCIPAL SHAREHOLDERS		37
RELATED PARTY TRANSACTIONS		39
DESCRIPTION OF SECURITIES		39
PLAN OF DISTRIBUTION		40
LEGAL MATTERS		41
EXPERTS		41
ADDITIONAL INFORMATION		42
FINANCIAL STATEMENTS		F-1
FINANCIAL STATEMENTS (SEPTEMBER 30, 2015 )		F-2
FINANCIAL STATEMENTS (DECEMBER 31, 2015)		F-1
FINANCIAL STATEMENTS (JUNE 30, 2016)		F-1

You should rely only on information contained in this prospectus. We have not authorized anyone to provide you with information that is different from that contained in this prospectus. No selling security holder is offering to sell, or seeking offers to buy, shares of common stock in jurisdictions where such offers and sales are not permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock. We are responsible for updating this prospectus to ensure that all material information is included and will update this prospectus to the extent required by law.

PROSPECTUS SUMMARY

This summary highlights certain information appearing elsewhere in this prospectus. This summary is not complete and does not contain all of the information you should consider prior to investing in the securities offered hereby. After you read this summary, you should read and consider carefully the more detailed information and financial statements and related notes that we include in this prospectus, especially the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” If you invest in our securities, you are assuming a high degree of risk.

Unless we have indicated otherwise or the context otherwise requires, references in this prospectus to the “Company,” “we,” “us” and “our” or similar terms are to Blue Sphere Corporation and its subsidiaries.

Our Company

We are an international Independent Power Producer (IPP) that is globally active in the clean energy production and waste-to-energy markets. We are becoming a key player in these rapidly growing markets by developing or acquiring projects with clean energy technologies, including but not limited to waste-to-energy facilities that generate clean energy, such as electricity, natural gas, heat, compost and other by-products. These markets provide tremendous opportunity, insofar as there is a virtually endless supply of waste and organic material that can be used to generate power and valuable by-products. In particular, the disposal of organic material to landfills in most parts of the world is a costly problem with environmentally-damaging consequences. We seek to offer a cost-effective, environmentally-safe alternative.

Our Projects

We are developing or operating, as applicable, the following projects:

United States

Charlotte, NC Waste to Energy Anaerobic Digester 5.2 MW Plant

Johnston, RI Waste to Energy Anaerobic Digester 3.2 MW Plant

Italy

Soc. agr. AGRICERERE srl – Tromello (Pavia) 999 KW Plant

Soc. agr. AGRIELEKTRA srl – Alagna (Pavia) 999 KW Plant

Soc. agr. AGRISORSE srl - Garlasco (Pavia) 999 KW Plant

Soc. agr. GEFA srl – Dorno (Pavia) 999 KW Plant

We have also entered into nonbinding letters of intent to acquire additional biogas facilities in Italy and to construct and develop waste-to-energy facilities in the Netherlands and United Kingdom, and we continue to evaluate a pipeline of similar projects in a less mature phase.

Our Strategy

Our main focus is providing tailored solutions internationally to produce clean energy primarily out of waste. We are focused on waste-to-energy projects in the United States, Italy and Israel and are in the process of developing a pipeline of similar projects. We believe there is a virtually endless supply of waste suitable for such projects and the demand for energy (particularly from such projects) is growing every year.

Our model in respect of waste-to-energy is to acquire or build, own and operate. We select projects with signed, long-term Power Purchase Agreements (“PPAs”) with waste producers or waste haulers in respect of feedstock, with national governments or electricity corporations in respect of the energy output and with private entities in respect of other project by-products (such as renewable energy credits, heat, compost and fertilizer). We are currently focused on several types of projects: (i) anaerobic digestion to electricity, (ii) landfill gas to energy, (iii) anaerobic digestion to renewable natural gas, (iv) biomass and (v) energy crop to electricity.

Another component of the clean energy and waste-to-energy business in the United States is renewable energy credits (“RECs”). An REC represents a MWh or KWh of clean energy. Many states, including North Carolina and Rhode Island, the sites of our two United States projects, require their utilities to prove that a portion of the energy they sell is produced from clean or renewable sources. An REC is used to demonstrate that the relevant unit of energy has a clean or renewable source. Consequently, utilities purchase RECs from producers of clean and renewable energy. Our agreements with Duke Energy and National Grid provide for “bundled” pricing for the sale of electricity and RECs.

We expect to generate revenue through sales of thermal and electrical energy, energy efficiency technologies and RECs, and by-products, project development services, and tipping fees from accepting waste. As of June 30, 2016, we have recorded deferred revenue in respect of our projects in the United States (which will be recognized as revenue upon successful completion of those projects) and revenue in respect of our four SPVs in Italy.

Our strategy is to integrate all activities and components that make up a project, providing a turnkey, one-stop shop solution for waste-to-energy projects. We are also active in seeking to purchase already operational facilities. We work with and outsource key components of projects to engineering, procurement and construction (“EPC”) and technology providers and other project participants that provide the most economically viable solution for each individual project. We believe this provides us the flexibility and freedom to tailor the best solution for each project. We expect that we will remain involved in managing and financing all aspects of our projects for their lifetimes or until they are sold. We believe this assures all of the involved parties, including waste producers, financing parties, EPC and technology providers, and customers, that there is long-term continuity and responsibility for each project.

We aim to be distinctive and successful in the waste-to-energy market by:

providing a one-stop, turn-key/build, own and operate/transfer solution that is unique in the market today;

identifying and obtaining the rights to lucrative projects without incurring material expense;

delivering seamless and professional project implementation through a combination of our own expertise and the use of third-party experts with a track-record of success;

using mature and well-known technologies when necessary to tailor make cost-efficient and effective solutions for our projects;

leveraging our management’s more than 30 years of experience in successful implementation of large and complex projects in the developing world;

building local and international teams to support each project;

obtaining political, property, non-performance and insolvency insurance for our projects; and

receiving almost all of our revenue in United States dollars or euros, whether operating in the United States, Europe or the developing world.

Our Corporate Information

We are a Nevada corporation. Our principal executive offices are located at 301 McCullough Drive, 4th Floor, Charlotte, North Carolina 28262 and our telephone number is (704) 909-2806. Our web address is http://www.bluespherecorporate.com . The information on our website does not form a part of this prospectus.

Emerging Growth Company

We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies.

Section 107(b) of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act.

THE OFFERING

Securities offered		Up to 89,033,337 shares of our common stock by the selling security holders.

Terms of offering		The selling security holders will offer their shares at prevailing market or privately negotiated prices, in one or more transactions that may take place by ordinary broker’s transactions, privately-negotiated transactions or through sales to one or more dealers for resale.

Common stock issued and outstanding before this offering		261,776,552 shares.

Common stock issued and outstanding after this offering		297,143,221 shares, if all shares are sold (and therefore, all shares underlying the Offering Warrants included in this offering are exercised).

Use of proceeds		We will not receive any proceeds from this offering.

Dividend policy		We have not declared or paid any dividends on our common stock since our inception, and we do not anticipate paying any such dividends for the foreseeable future.

Risk factors		See the prospectus section titled “Risk Factors” and the other information set forth in this prospectus for a discussion of factors you should consider before deciding to invest in our securities.

Market for common stock		Shares of the Company’s common stock are quoted on the OTCQB® Venture Marketplace under the symbol “BLSP”. On August 12, 2016, the closing sale price of our common stock was $0.07 per share.

The number of shares of our common stock issued and outstanding is based on 261,776,552 shares of our common stock issued and outstanding before this offering, which does not include 35,766,669 shares of our common stock issuable upon exercise of the Offering Warrants. In addition, the number of shares of our common stock outstanding before this offering also excludes 8,214,676 shares of our common stock, vested and unvested, that are outstanding pursuant to stock grants or upon the exercise of options under our Equity Incentive Plan, options to purchase up to 3,175,000 shares of our common stock that have been granted under our 2014 Incentive Plan but not issued, and 23,223,498 shares of our common stock that are issuable upon exercise of our currently outstanding convertible notes and warrants.

SUMMARY FINANCIAL DATA

The following summary of our financial data should be read in conjunction with, and is qualified in its entirety by reference to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements, appearing elsewhere in this prospectus.

Statements of Operations Data*

	For the year ended September 30, 2015 (audited)			For the six-months ended June 30, 2016 (unaudited)
Revenue	$	—			2,706,000

Loss from Operations	$	(5,317,000	)		(4,105,000	)

Finance Expense	$	(2,415,000	)		(3,110,000	)

Net Loss	$	(7,462,000	)		(7,215,000	)

Balance Sheet Data*

	As of September 30, 2015 (audited)			As of June 30, 2016 (unaudited)
Current Assets	$	182,000			2,666,000

Total Assets	$	5,165,000			39,635,000

Total Current Liabilities	$	7,859,000			17,122,000

Total Stockholders’ Deficit	$	(2,694,000	)		(8,287,000	)

* The Company changed its fiscal year to end on December 31st each year, effective January 1, 2016. The Company has filed an Annual Report on Form 10-K for the fiscal year ending September 30, 2015, a Quarterly Transitional Report on Form 10-Q for the quarter ending December 31, 2015, and Amendment No. 1 to the Quarterly Transitional Report on Form 10-Q for the quarter ending December 31, 2015.

RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the following risk factors before deciding whether to invest in the Company. If any of the events discussed in the risk factors below occur, our business, financial condition, results of operations or prospects could be materially and adversely affected. In such case, the value and marketability of the common stock could decline. Additional risks and uncertainties that we do not presently know or that we currently deem immaterial may also impair our business, financial condition, operating results and prospects.

Risks Relating to Financial Position and Need for Additional Capital

We have a limited operating history which makes it difficult to evaluate our business and prospects.

The Company has a limited operating history upon which you can base an evaluation of its business and prospects. Currently none of our United States projects have commenced commercial operations, and we recently acquired four biogas plants in Italy pursuant to the Italy Projects Agreement. We have entered into certain agreements for the acquisition or development of other projects, but there is no assurance that we will successfully acquire or develop such projects. Accordingly, our business is subject to substantial risks, uncertainties and expenses that are difficult to evaluate. Our ability to generate revenue and become and remain profitable will depend on, among other things:

our ability to satisfy the conditions for obtaining ownership of our projects for those projects we have entered into definitive signed agreements for;

our ability to enter into definitive signed agreements for the acquisition of our projects for which we have entered into term sheets, letter of intent or memoranda of understanding;

our ability to obtain adequate financing for our projects on terms and upon timing consistent with our expectations;

our ability to develop and construct our projects at our projected cost and within our projected timetables;

our ability to effectively manage the operations at our projects;

our ability to develop and maintain an effective internal corporate organization; and

our ability to attract, hire and retain qualified and experienced management as well as technical and operations personnel.

There can be no assurance that we will generate sufficient revenue or that we will have adequate working capital to meet our obligations as they become due. Readers should consider the risks and difficulties frequently encountered by companies like Blue Sphere, particularly in rapidly evolving markets. We cannot be certain that our business strategy will be successful or that we will successfully address these risks. In the event that we do not successfully address these risks, our business, prospects, financial condition, and results of operations could be materially and adversely affected.

We have a history of losses and can provide no assurance of our future operating results.

As of September 30, 2014 and 2015, we had working capital deficit of $55,000 and $7,542,000 respectively, and shareholders’ equity (deficit) of $310,000 and ($2,694,000), respectively. As of September 30, 2015, we had an aggregate accumulated deficit of $43,404,000. As of June 30, 2016, we had working capital deficit of $14,456,000, shareholders’ deficit of approximately $8,287,000, and an accumulated deficit of approximately $51,916,000. For the years ended September 30, 2014 and 2015, we incurred net losses of $7,376,000 and $7,462,000. For the six months ended June 30, 2016, we incurred a net loss of $7,215,000. There is a substantial risk that we will incur additional substantial operating losses for the foreseeable future, and we may never achieve or maintain profitability. We anticipate that our expenses increase as we continue to implement our project development and construction plan and expand our general and administrative operations. As a result, we will need to generate significant revenues in order to achieve and maintain profitability. We may not be able to generate these revenues or achieve profitability in the future. Our failure to achieve or maintain profitability could negatively impact the value of our common stock.

Any delay in, or failure to, accomplish our acquisition, financing and development plans could adversely affect our ability to generate revenues and become profitable.

Because of the numerous uncertainties associated with the acquisition, financing, and development of our projects, we are unable to predict the timing of when we will become profitable, if ever. No assurances can be given about if and when our North Carolina and Rhode Island projects will commence commercial operations, if we will close acquisitions of additional biogas plants in Italy, or if we will be able to continue to develop a pipeline of projects. We may fail to satisfy the conditions in our acquisition, financing and development agreements, and project construction may not be completed on the schedule or within the budget that we intend, or at all. The foregoing could materially and adversely affect our ability to generate revenue and become profitable. Even if we do achieve profitability, we may be unable to sustain or increase our profitability in the future.

Our independent auditors’ report states that there is substantial doubt that we will be able to continue as a going concern.

Our independent registered public accounting firm, Brightman Almagor Zohar & Co., a member firm of Deloitte Touche Tohmatsu Limited, state in their audit report, dated January 13, 2016, that our recurring losses from operations raise substantial doubt about our ability to continue as a going concern. There is a risk that we will continue to incur expenses without generating significant revenue into the future. Our source of funds to date has been the sale of our common stock, debt financing and certain development fees and reimbursements in connection with our North Carolina and Rhode Island projects. Because we cannot ensure that any of our projects will become operational or that we will be able to generate any significant revenue, obtaining new sources of equity or debt financing will be difficult.

We will require additional funding, and our future access to capital is uncertain. Insufficient capital may limit our ability to pursue our projects.

All of our current and future projects will require significant amounts of financing from us and/or our partners. We also may seek additional capital due to favorable market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans. There can be no assurance that additional funds will be available on acceptable terms or at all. We may be required to pursue sources of additional capital through various means, including debt or equity financings. Future financings through equity financings are likely to be dilutive to existing stockholders. Newly issued securities may include preferences, voting rights, warrants or other derivative securities, which may have additional dilutive effects to existing stockholders. Further, we may incur substantial costs to obtain additional funding, including investment banking fees, legal fees, accounting fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we issue, such as convertible notes and warrants, which will adversely impact our financial condition. Our ability to obtain additional funding may be impaired by general market conditions and/or our financial condition, which could impact the availability or cost of future financings. If the amount of capital we are able to raise from financing activities, together with our future revenue from operations, if any, is not sufficient to satisfy our capital needs, we may not be able to pursue our projects and our business, financial condition and results of operations may be materially and adversely affected.

We have incurred substantial indebtedness.

As of June 30, 2016, we had indebtedness of approximately $34,866,000. Our level of indebtedness increases the possibility that we may not have sufficient cash to pay, when due, the principal, interest or other amounts due in respect of such indebtedness. Our level of indebtedness, combined with other financial obligations and contractual commitments, could:

make it difficult for us to satisfy our obligations with respect to such indebtedness, which could result in events of default under the loan agreements and instruments governing the indebtedness;

require us to dedicate a substantial portion of our cash flow from operations to payments on indebtedness, thereby reducing funds available for working capital, capital expenditures, and other corporate purposes;

increase our vulnerability to adverse economic and industry conditions, which could place us at a competitive disadvantage compared to competitors that have relatively less indebtedness;

limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and

limit our ability to borrow additional funds, or to dispose of assets to raise funds, if needed, for working capital, capital expenditures, and other corporate purposes.

We may incur additional indebtedness in the future, including through the issuance of convertible notes. If we incur a substantial amount of additional indebtedness, the related risks that we face could become more significant. Additionally, the terms of any future debt that we incur may impose requirements or restrictions that further affect our financial and operating flexibility.

Risks Relating to Business and Industry

Project construction and development requires significant outlays of capital and is subject to numerous risks.

The construction and development of our projects involves numerous risks. We are required to outlay significant capital for preliminary engineering, permitting, legal, and other expenses before we can determine whether a project is feasible or economically attractive. In order to successfully construct and develop our projects, we need to negotiate satisfactory engineering, procurement and construction agreements and feedstock supply and power purchase agreements, receive all required governmental permits and approvals, obtain financing, and timely implement construction and development. Successful completion of a particular project may be adversely affected by numerous factors, including: (i) failure or delay in obtaining required government permits and approvals with acceptable conditions; (ii) unavailability of financing; (iii) uncertainties relating to land costs for projects; (iv) engineering problems; (v) construction delays and contractor performance shortfalls; (vi) work stoppages; (vii) cost over-runs; (viii) failure of equipment and materials supply; (ix) adverse weather conditions; and (x) environmental and geological conditions.

Our power purchase agreements, which we expect to be the primary source of future revenue, require us to meet certain milestones and other performance criteria.

Power purchase agreements typically require us to meet certain milestones and other performance criteria, including the commencement of a project’s commercial operations by a certain date. Our failure to meet these milestones and other criteria may result in termination of these contracts, in which case we would lose any future cash flow from the relevant project and may be required to pay fees and penalties to our counterparty. We cannot assure you that we will be able to perform our obligations under such contracts or that we will have sufficient funds to pay any fees or penalties thereunder. In the past we have had to pay fees under the Duke PPA and National Grid PPA to extend certain milestones. The Duke PPA and National Grid PPA required us to commence commercial operations of the North Carolina and Rhode Island projects, respectively, by December 31, 2015. Because commercial operations of the North Carolina project were not commenced within 60 days of December 31, 2015, OEC was required to pay $500,000 of liquidated damages to Duke Energy pursuant to the Duke PPA during the first quarter of 2016; York was responsible for contributing these funds to OEC. Because commercial operations of the Rhode Island project were not commenced by December 31, 2015, OERI paid an additional “Development Period Security” of $22,500 pursuant to the National Grid PPA; York was responsible for contributing these funds to OERI. Although York was responsible for these amounts, we are heavily dependent on the Duke PPA and National Grid PPA as our expected primary source of future revenue.

Our business model depends on performance by third parties under contractual arrangements.

Our businesses depend on a limited number of third parties to, among other things, own and operate our projects, purchase energy produced by our projects, and supply and deliver the goods and services necessary for the construction and operation of our projects. The viability of our projects depends significantly upon the performance of these third parties in accordance with long-term contracts. If these third parties cannot or will not perform their contractual obligations, whether due to their financial condition, force majeure events, changes in laws or regulations, or otherwise, we may not be able to secure alternate arrangements on substantially the same terms or at all for the goods and services provided under such contracts. In addition, some of the owners and operators of our projects may be smaller companies that are more likely to experience financial and operational difficulties than relatively larger, well-established companies, which could result in interruptions or delays in the operation of our projects. Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.

We may not be able to obtain feedstock or other inputs at acceptable prices, which could increase our operating costs significantly and harm our financial condition and results of operations.

Although we can obtain certain project inputs pursuant to fixed price arrangements, we are vulnerable to the availability and price fluctuations of certain raw materials and utilities, such as feedstock and electricity. Our ability to operate our projects is dependent upon the availability of feedstock and utilities at reasonable prices. Market conditions can impact the availability and price of these inputs, and our suppliers may be unable to deliver our requirements for these inputs at acceptable prices or at all. During periods when availability of these inputs decreases or their prices increase, we may incur significant increases in our operating costs without being able to increase the selling price of our projects’ energy output under fixed price power purchase agreements. This could have a material adverse effect on our financial condition and results of operations.

Our operations in foreign markets could cause us to incur additional costs and risks associated with doing business internationally.

Our operations in markets outside the United States subject us to additional costs and risks, including:

compliance with foreign requirements regulating the environment and the waste-to-energy market;

difficulties in establishing, staffing and managing international operations;

U.S. laws and regulations related to foreign operations, including tax and anti-corruption laws and regulations;

differing intellectual property laws;

differing contract laws that impact the enforceability of agreements among energy suppliers and energy consumers;

imposition of special taxes;

strong national and international competitors;

currency exchange rate fluctuations; and

political and economic instability in the countries in which we operate.

In addition, although our principal executive office is in the United States, a substantial part of our business and management is based in Israel. Therefore, our business, financial condition and results of operations could be adversely affected by political, economic and military instability in Israel. Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of trade within Israel or between Israel and its trading partners could adversely affect our operations and could make it more difficult for us to raise capital.

Our failure to manage the risks associated with international operations could limit the future growth of our business and adversely affect our business, financial condition and results of operations. We may be required to make a substantial financial investment and expend significant management efforts in connection with our international operations.

Our planned operations in the developing world could cause us to incur additional costs and risks associated with doing business in developing markets.

We are seeking to operate in the developing world (such as, e.g., countries in Eastern Europe), which would make us vulnerable to political, economic and social instability in such areas. Many areas of the developing world have experienced political, economic and social uncertainty in recent years, including an economic crisis characterized in some cases by increased inflation, high domestic interest rates, negative economic growth, reduced consumer purchasing power and high unemployment. Currently, many of the countries in the developing world where we have projects have been pursuing economic stabilization policies, including the encouragement of foreign trade and investment and other reforms, but there is no guarantee these policies will be successful or stay in place. Political, economic and social instability in these countries may have an adverse effect on our business, financial condition and results of operations.

Acquisition, financing, construction and development of new projects and project expansions may not commence as anticipated or at all.

Our strategy is to continue to expand in the future, including through acquisition of additional projects. The acquisition, financing, construction and development of new projects involves numerous risks, including:

difficulties in identifying, obtaining and permitting suitable sites for new projects;

assumptions with respect to the cost and schedule for completing construction;

the ability to obtain financing for a project on acceptable terms;

delays in deliveries of, or increases in the prices of, equipment;

the unavailability of sufficient quantities of waste or other fuels for startup;

permitting and other regulatory issues, license revocation and changes in legal requirements;

labor disputes and work stoppages;

unforeseen engineering and environmental problems;

cost overruns; and

weather conditions and certain force majeure events.

In addition, new projects have no operating history and may employ recently developed technology and equipment. A new project may be unable to fund principal and interest payments under its debt service obligations or may operate at a loss. In certain situations, if a project fails to achieve commercial operation, at certain levels or at all, termination rights in the agreements governing the project financing may be triggered, rendering all of the project’s debt immediately due and payable. As a result, the project may be rendered insolvent and we may lose our interest in the project.

Changes in climate conditions could materially affect our business and prospects.

Significant changes in weather patterns and volatility could have a positive or negative influence on our existing business and our prospects for growth. Such changes may cause episodic events (such as floods or storms) that are difficult to predict or prepare for, or longer-term trends (such as droughts or sea-level rise). These or other meteorological changes could lead to increased operating costs, capital expenses, disruptions in facility operations or supply chains, changes in waste generation and interruptions in waste deliveries, and changes in energy pricing, among other effects.

We may face intense competition and may not be able to successfully compete.

There are a number of other companies operating in the renewable energy and waste-to-energy markets. These include service or equipment providers, consultants, managers, buyers and/or investors. In contrast to the standard market approach in these markets, we seek to provide a one-stop shop, turn-key solution to project owners.

We may not have the resources to compete with our existing competitors or with any new competitors. Most of our competitors have significantly greater personnel, financial and managerial resources than we have, and we may fail to maintain or expand our business. Moreover, as the demand for renewable energy increases, new companies may enter the market, and the influx of added competition will pose an increased risk to us. Increased competition could harm our business, prospects, financial condition and results of operations.

We rely on key personnel, and if we are unable to retain or hire qualified personnel, we may not be able to maintain or expand our business.

The development of our business will continue to place a significant strain on our limited personnel, management, and other resources. Our future success depends upon the continued services of our executive officers and the engagement of key employees and contractors who have critical industry experience and relationships that we will rely on to implement our business plan. The loss of the services of any of our officers or the lack of availability of other skilled personnel would negatively impact our ability to maintain or expand our business, which could adversely affect our business, prospects, financial condition and results of operations. In order to support our projected growth, we will be required to effectively recruit, hire, train and retain additional qualified management personnel. Our inability to attract and retain the necessary personnel could have a material adverse effect on us. We have no “key man” insurance on any of our key employees.

If we fail to establish and maintain a system of disclosure controls and procedures and an effective system of internal control over financial reporting, we may not be able to accurately and timely disclose information and financial results of the Company or prevent fraud. Any inability to accurately and timely disclose information and financial results could harm our business and reputation and cause the price of our common stock to decline.

A system of disclosure controls and procedures is necessary to ensure that information required to be disclosed by the Company in the reports that we file under the Exchange Act is recorded, processed, summarized and reported, within the time specified in the Securities and Exchange Commission’s rules and forms. Effective internal control over financial reporting is necessary for us to provide reliable financial reports and prevent fraud. If we cannot disclose required information or provide reliable financial reports, we may not be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation with investors may be harmed. Due to lack of segregation of duties, limited resources, and lack of a formal audit committee and financial expert on our Board, we concluded that our internal controls over financial reporting were not effective as of September 30, 2015. In addition, our management concluded that our disclosure controls and procedures were not effective as of June 30, 2016 due to our limited internal resources and lack of ability to have multiple levels of transaction review. We have taken certain steps, including the creation of an audit committee, to address these deficiencies, but we continue to determine how best to change our current system and implement a more effective system. There can be no assurance that implementation of any changes will be completed in a timely manner or that they will be adequate once implemented.

Volatility in foreign exchange currency rates could adversely affect our financial condition and results of operations.

Foreign currency exchange rate movements between the U.S. dollar and the currencies of the jurisdictions in which we operate or receive payment (including the Euro) could make doing business more expensive or revenue in foreign currencies less valuable, which could have a material adverse effect on our financial condition and results of operations.

If our strategy is unsuccessful, we will not be profitable and our stockholders could lose their investment.

We do not believe there is a track record for companies pursuing our specific strategy, and there is no guarantee that our strategy will be successful or profitable. If our strategy is unsuccessful and we do not generate revenue or profit, the value of the Company could decrease and our stockholders could lose their investments in the Company.

Risks Relating to Regulation

We may be unable to obtain, modify, or maintain the regulatory permits, approvals and consents required to construct and operate our projects.

In order to construct and operate our projects, we must obtain and modify numerous environmental and other regulatory permits and certifications from federal, state and local agencies and authorities, including air permits and wastewater discharge permits. A number of these permits and certifications must be obtained prior to the start of construction of a project, while other permits are required to be obtained at or prior to the time of first commercial operation or within prescribed time frames following commencement of commercial operations. Any failure to obtain or modify the necessary environmental and other regulatory permits and certifications on a timely basis could delay the construction or commercial operation of our projects. In addition, once a permit or certification has been issued for a project, we must take steps to comply with each permit’s or certification’s conditions, which can include conditions as to timely construction and commencement of the project. Failure to comply with these conditions could result in revocation or suspension of the permit or certification and/or the imposition of penalties or other consequences. We also may need to modify existing permits to reflect changes in project design or requirements, which could trigger a legal or regulatory review under a standard that may be more stringent than when the permits were originally granted.

Obtaining and modifying necessary permits and certifications is a time-consuming and expensive process, and we may not be able to obtain or modify them on a timely basis or at all. In the event that we fail to obtain or modify all necessary permits and certifications, we may be forced to delay construction or operation of a project or abandon the project altogether, which could have a material adverse effect on our business, financial condition and results of operations. In addition, we may be required to make capital expenditures on an ongoing basis to comply with increasingly stringent federal, state, provincial and local environmental, health and safety laws, regulations and permits.

We are subject to environmental laws and potential exposure to environmental liabilities.

Because of the nature of our projects, we are subject to various federal, state and local environmental laws and regulations that govern our operations, including the import, handling and disposal of non-hazardous and hazardous wastes, and emissions and discharges into the environment. Failure to comply with these laws and regulations could result in costs for corrective action, penalties or the imposition of other liabilities. We also are subject to laws and regulations that impose liability and clean-up responsibility for releases of hazardous substances into the environment. Under certain of these laws and regulations, a current or previous owner or operator of property may be liable for the costs of remediating the release or spill of hazardous substances or petroleum products on or from its property, without regard to whether the owner or operator knew of, or caused, the contamination, and such owner or operator may incur liability to third parties impacted by such contamination. Failure to comply with applicable environmental laws and regulations and the imposition of environmental liability could have a material adverse effect on our business, financial condition and results of operations.

Changes in applicable laws and regulations can adversely affect our business, financial condition and results of operations.

Governmental entities that regulate our operations or projects may adopt new laws, regulations or policies, or amend or change the interpretation of existing laws, regulations or policies, at any time. We have no control over these changes, which could potentially have an adverse effect on our business, prospects, financial condition and results of operations.

Our business and reputation could be adversely affected if we or third parties with whom we have a relationship fail to comply with United States or foreign anti-corruption laws or regulations.

Our business and operations may be conducted in countries where corruption has historically penetrated the economy to a greater extent than in the United States. It is our policy to comply, and to require our local partners and those with whom we do business to comply, with all applicable anti-corruption laws, such as the U.S. Foreign Corrupt Practices Act, and with applicable local laws of the foreign countries in which we operate. Our business and reputation may be adversely affected if we or our local partners fail to comply with such laws.

Risk Relating to Common Stock

Future sales of our common stock by existing stockholders could cause our stock price to decline.

If our existing stockholders sell substantial amounts of our common stock in the public market, or if there is a perception that our stockholders might sell shares of our common stock, the price of our common stock could decrease significantly. If we issue convertible notes or warrants, the conversion of these securities into our common stock could also decrease the price of our common stock. A decline in the price of our common stock might impede our ability to raise capital through the issuance of additional shares of our common stock or other securities.

There is a limited public market for our common stock.

Trading in our common stock continues to be conducted on the electronic bulletin board in the over-the-counter market. As a result, a holder of our common stock may find it difficult to dispose of or to obtain accurate quotations as to the market value of our common stock, and our common stock may be less attractive for margin loans, investment by financial institutions, as consideration in future capital raising transactions or for other purposes.

Our common stock is thinly traded, the price of our common stock may not reflect the value of the Company, and there can be no assurance that there will be an active market for our common stock either now or in the future.

Our common stock is thinly traded and the price of our common stock may not reflect the actual or perceived value of the Company. There can be no assurance that there will be an active market for our common stock either now or in the future. Consequently, holders of our common stock may not be able to liquidate their investment in the Company at an acceptable price to them or at all.

The market liquidity of our common stock depends, in part, on the perception of our business. We may take certain steps, including utilizing investor awareness campaigns and firms, press releases, road shows and conferences, to increase awareness of our business, which may require us to compensate consultants with cash and/or common stock. There can be no assurance that these steps will result in any impact on the trading volume or price of our common stock.

Holders of our common stock may incur dilution.

We may issue additional shares of common stock or securities convertible into or exchangeable for share of our common stock in order to raise additional capital, which could dilute existing stockholders’ percentage ownership of the Company.

The market price of our common stock could be highly volatile.

Because there is currently a low price for our common stock, many brokerage and clearing firms are not willing to effect transactions in our common stock or accept our shares for deposit in an account. Many lending institutions will not permit the use of low priced common stock as collateral for loans. If a more active market for our common stock develops, the price of our common stock could be highly volatile. The low and/or volatile price of our common stock may make it difficult for holders to sell our common stock at an acceptable price to them or at all.

Our common stock is a “penny stock”, as defined in the Exchange Act. Trading of our common stock may be restricted by the Securities and Exchange Commission’s “penny stock” regulations, which may limit a stockholder’s ability to buy and sell our stock.

Our common stock is subject to the regulations of the Securities and Exchange Commission promulgated under the Exchange Act that require additional disclosure for trading in penny stocks. The Securities and Exchange Commission regulations generally define penny stocks to be any equity security that is not listed on a national securities exchange and has a market price of less than $5.00 per share, subject to certain exceptions. Unless an exception is available, those regulations require broker-dealers to (i) approve the customer for the specific penny stock transaction and receive from the customer a written agreement to the transaction; (ii) furnish the customer a disclosure document describing the risks of investing in penny stocks; (iii) disclose to the customer the current market quotation, if any, for the penny stock; and (iv) disclose to the customer the amount of compensation the firm and its broker will receive for the trade. In addition, after executing the sale, a broker-dealer must send to its customer monthly account statements showing the market value of each penny stock held in the customer’s account. These disclosure requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a stock that becomes subject to the penny stock rules. Consequently, these penny stock rules may adversely affect the ability of broker-dealers and stockholders to trade our common stock.

As an issuer of “penny stock,” the safe harbor provided by the federal securities laws relating to forward-looking statements does not apply to the Company.

Although federal securities laws provide a safe harbor for forward-looking statements made by a public company that files reports under the federal securities laws, this safe harbor is not available to issuers of penny stocks. As a result, we will not have the benefit of this safe harbor in the event of a private legal action against us based on a claim that any forward-looking statement in our reports contained a material misstatement of fact or omitted a material fact necessary to make the statement not misleading. Such an action, whether successful or not, could have a material adverse effect on our business.

We have no intention to pay dividends at the present time.

We have never paid dividends or made other cash distributions on our common stock, and we do not expect to declare or pay any dividends in the foreseeable future. We intend to retain future earnings, if any, for working capital and to finance current operations and expansion of our business.

We are classified as an “emerging growth company” as well as a “smaller reporting company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies will make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act.

We could remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, and (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.

Notwithstanding the above, we are also currently a “smaller reporting company.” Specifically, similar to “emerging growth companies,” “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings. Decreased disclosures in our SEC filings due to our status as an “emerging growth company” or “smaller reporting company” may make it harder for investors to analyze our results of operations and financial prospects.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements, within the meaning of Section 27A of the Securities Act and the Exchange Act, that involve risk and uncertainties. Any statements contained in this prospectus that are not statements of historical fact may be forward-looking statements. When we use the words such as “may,” “will,” “should,” “estimates,” “predicts,” “potential,” “continue,” “strategy,” “believes,” “anticipates,” “plans,” “expects,” “intends” and similar expressions are intended to identify forward-looking statements. Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions:

These statements are based on current expectations, estimates and projections about our business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may, and are likely to, differ materially from what is expressed or forecasted in the forward-looking statements due to those risks discussed from time to time in this registration statement, of which this prospectus is a part, including the risks described under “Risk Factors”, and due to numerous factors, including:

current or future financial performance;

management’s plans and objectives for future operations;

uncertainties associated with product research and development;

uncertainties associated with dependence upon the actions of government regulatory agencies;

product plans and performance;

management’s assessment of market factors; and

statements regarding our strategy and plans.

Any forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances that occur in the future. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we may have projected. Any forward-looking statements you read in this prospectus reflects our current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, financial condition, growth strategy and liquidity. You should specifically consider the factors identified in this prospectus that could cause actual results to differ before making an investment decision.

TAX CONSIDERATIONS

We are not providing any tax advice as to the acquisition, holding or disposition of the securities offered herein. In making an investment decision, investors are strongly encouraged to consult their own tax advisor to determine the U.S. federal, state and any applicable foreign tax consequences relating to their investment in our securities.

USE OF PROCEEDS

We will not receive any proceeds from the sale of the common stock by the selling security holders pursuant to this prospectus. The selling security holders named herein will receive all proceeds from the sale of the shares of our common stock in this offering. Please see the prospectus section titled “Selling Security Holders”. We will pay all expenses (other than transfer taxes) of the selling security holders in connection with this offering.

CAPITALIZATION

The following table sets forth our capitalization as of September 30, 2015 and June 30, 2016. The table should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this prospectus:


Stockholders’ Deficit	As of September 30, 2015 (audited)			As of June 30, 2016 (unaudited)
Common stock, $0.001 per share par value;	$	1,244,000		$	1,318,000
Proceeds on account of shares		20,000			—
Treasury Shares		(28,000	)		(28,000	)
Accumulated other comprehensive income		—			46,000
Additional paid-in capital		39,474,000			42,293,000
Accumulated/Retained deficit		(43,404,000	)		(51,916,000	)
Total Stockholders’ Deficit	$	(2,694,000	)	$	(8,287,000	)

DETERMINATION OF THE OFFERING PRICE

The selling security holders will offer their shares at prevailing market or privately negotiated prices, in one or more transactions that may take place by ordinary broker’s transactions, privately-negotiated transactions or through sales to one or more dealers for resale. The selling security holders will receive all proceeds from the sale of the common stock. However, we may receive up to $3,759,333 in gross proceeds from the exercise of the outstanding Offering Warrants. Our common stock is currently listed for quotation on the OTCQB® Venture Marketplace under the symbol “BLSP.”

MARKET FOR COMMON STOCK

Our common stock is quoted on the OTCQB® Venture Marketplace under the symbol “BLSP”. Trading in our common stock has historically lacked consistent volume, and the market price has been volatile.

The following table presents, for the periods indicated, the high and low sales prices of the Company’s common stock, and is based upon information provided by the OTCQB® Venture Marketplace. These quotations below reflect inter-dealer prices, without retail mark-up, mark-down, or commission, and may not necessarily represent actual transactions.

	HIGH	LOW

Quarter Ended:
30-Jun-16	$ 0.09	$ 0.06
31-Mar-16	$ 0.10	$ 0.04
31-Dec-15	$ 0.05	$ 0.01

Quarter Ended:
30-Sep-15	$ 0.04	$ 0.01
30-Jun-15	$ 0.07	$ 0.02
31-Mar-15	$ 0.21	$ 0.04
31-Dec-14	$ 0.20	$ 0.12

Quarter Ended:
30-Sep-14	$ 0.32	$ 0.17
30-Jun-14	$ 0.32	$ 0.06
31-Mar-14	$ 0.37	$ 0.09
31-Dec-13	$ 0.49	$ 0.05

The last reported sale price of the Company’s common stock as of August 12, 2016 was $0.07 per share.

As of August 12, 2016, 1,750,000,000 shares of common stock, par value $0.001 per share, and 500,000,000 shares of preferred stock, $0.001 par value, in one or more series and with such rights, preferences and privileges as our Board of Directors may determine, have been authorized. As of August 12, 2016, there were 261,776,552 shares of our common stock issued and outstanding, and no shares of our preferred stock were issued and outstanding.

As of August 12, 2016, there were 140 holders of record of the Company’s common stock, per the listing of shareholders maintained by the Company’s transfer agent. This number does not include beneficial owners whose shares are held in the names of various security brokers, dealers, and registered clearing agencies.

As of August 12, 2016, there were 261,776,552 shares of our common stock issued and outstanding and 35,766,669 shares of common stock issuable upon the exercise of the Offering Warrants. In addition, on the same date, 8,214,676 shares of our common stock, vested and unvested, are outstanding pursuant to stock grants or upon the exercise of options under our Equity Incentive Plan, options to purchase up to 3,175,000 shares of our common stock have been granted under our 2014 Incentive Plan but not issued, and 23,223,498 shares of our common stock are issuable upon exercise of our currently outstanding convertible notes and warrants, which are not included in this offering.

Including the Offering Warrants, our outstanding warrants have an average exercise price of $0.070 per share and expire on dates ranging from January 30, 2019 to July 25, 2021. All issued options which were issued under our 2010 Equity Incentive Plan referenced above have an exercise price of $0.576 per share and expire on April 30, 2018. All options granted under our 2014 Incentive Plan but not issued will have an exercise price of $0.14 per share and expire on February 24, 2020, if issued.

DIVIDEND POLICY

We have never paid any cash dividends on our common stock and do not anticipate paying any cash dividends on our common stock in the foreseeable future. We intend to retain future earnings, if any, to fund ongoing operations and the future capital requirements of our business. Any future determination to pay cash dividends will be at the discretion of the Board of Directors and will be dependent upon our financial condition, results of operations, capital requirements and such other factors as the Board of Directors deems relevant.

THE STOCK OFFERINGS

February 2016 Stock Offering

In February 2016, we conducted an offering (the “February Stock Offering”) consisting of (a) up to USD $1,925,000 of our shares of common stock, priced at the closing price for shares of our common stock, as reported on the OTCQB® Venture Marketplace on the trading day prior to the closing of the February Stock Offering, and (b) 5-year warrants to purchase shares of our common stock in an amount equal to 50% of the number of shares of our common stock so purchased by the subscriber (the “February Offering Warrants”).

The securities in the February Stock Offering were offered pursuant to securities subscription agreements with each investor (the “February Subscription Agreements”). In addition to other customary provisions, each February Subscription Agreement provides that the Company will use its reasonable commercial efforts to register all shares of our common stock sold in the February Stock Offering (the “February Offering Shares”), including all shares of our common stock underlying the February Offering Warrants, within 60 days of the closing of the February Stock Offering. The subscriber in the February Stock Offering agreed to extend the date for filing. Subject to other customary terms, the February Offering Warrants are exercisable for 5 years from the date of issuance at $0.10 per share and include an option by which the holder may exercise the February Offering Warrant by means of a cashless exercise. The February Offering Warrants also include customary weighted-average price adjustment and anti-dilution terms.

On February 15, 2016, the Company completed the only closing of the February Stock Offering, representing aggregate gross proceeds to the Company of USD $1,925,000. In connection with the closing, the Company and subscribers entered into (a) February Subscription Agreements for, in the aggregate, 35,000,000 shares of our common stock at $0.055 per share, and (b) February Offering Warrants to purchase, in the aggregate, up to 17,500,001 shares of our common stock at an exercise price of $0.10 per share.

June 2016 Stock Offering

In June and July 2016, we conducted an offering (the “June Stock Offering”) consisting of (a) up to USD $3,000,000 of our shares of common stock, priced at the closing price for shares of common stock, as reported on the OTCQB® Venture Marketplace on the trading day prior to each respective closing of the June Stock Offering, and (b) five-year warrants to purchase shares of common stock in an amount equal to one hundred percent (100%) of the number of shares of common stock so purchased by the subscriber, with an exercise price equal to the per share price of the common stock or $0.011 per share, whichever is greater (the “June Offering Warrants”). The June Stock Offering consisted of two closings, with the last closing occurring on July 22, 2016.

The securities in the June Stock Offering were offered pursuant to subscription agreements with each subscriber (the “June Subscription Agreement”). In addition to other customary provisions, each June Subscription Agreement provides that the Company will use its reasonable commercial efforts to register all shares of common stock sold in the June Stock Offering (the “June Offering Shares”), including all shares of common stock underlying the June Offering Warrants, within twenty (20) days of the final closing of the June Stock Offering. Each June Subscription Agreement also provides that if, during the period beginning on the date of the first closing of the June Stock Offering and ending on the six month anniversary thereof, the Company completes (a) a subsequent closing of the June Stock Offering or (b) a public or private offering and sale of USD $1,000,000 or more of common stock or warrants to purchase common stock, where such subsequent closing or offering, as applicable, provides for material deal terms and conditions more favorable than are contained in such June Subscription Agreement, then the June Subscription Agreement will be deemed modified to provide the applicable subscriber with the more favorable deal terms and conditions, and the Company will take all reasonable steps necessary to amend the securities and/or issue new securities to the applicable subscriber reflecting such more favorable material deal terms and conditions. The June Offering Warrants are exercisable for five years from the date of issuance, include an option by which the holder may exercise the June Offering Warrant by means of a cashless exercise, and include customary weighted-average price adjustment and anti-dilution terms.

In connection with closings on July 7, 2016 and July 26, 2016, the Company received aggregate gross proceeds of USD $1,370,000 and subscribers entered into (a) June Subscription Agreements for an aggregate of 18,266,668 shares of our common stock at $0.075 per share, and (b) June Offering Warrants to purchase up to an aggregate of 18,266,668 shares of our common stock at an exercise price of $0.11 per share.

The Stock Offerings

Any reference herein to the “Stock Offerings” shall be to, collectively, the February Stock Offering and the June Stock Offering. This prospectus covers the registration of the February Offering Shares, the February Offering Warrants, the common stock underlying the February Offering Warrants, the June Offering Shares, the June Offering Warrants, and the common stock underlying the June Offering Warrants (collectively, the “Registered Securities”).

Net proceeds received by the Company from the Stock Offerings were used for the Company’s general working capital. Additional information concerning the use of proceeds from the Stock Offerings can be found in the subsection titled “Liquidity and Capital Resources” found in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, which is incorporated by reference into this section.

The foregoing is only a brief description of the material terms of the February Subscription Agreements, February Offering Warrants, June Subscription Agreements, and June Offering Warrants, each of which are filed as an exhibit hereto, and does not purport to be a complete description of the rights and obligations of the parties thereunder; such descriptions are qualified in their entirety by reference to such exhibits. The representations, warranties and covenants contained in the February Subscription Agreements and June Subscription Agreements were made solely for the benefit of the parties to the agreement and may be subject to limitations agreed upon by the contracting parties. Accordingly, the February Subscription Agreements and June Subscription Agreements are referenced herein only to provide investors with information regarding its terms and not to provide investors with any other factual information regarding the Company or its business, and should be read in conjunction with the disclosures in this prospectus, the Company’s periodic reports and other SEC filings.

Other Related Unregistered Issuances

In December 2015, we closed on a private placement (the “Debenture Placement”) of $3,000,000 of our senior debentures (the “Debentures”) and warrants to purchase up to 8,000,000 shares of common stock of the Company, in proportion pro rata to each Subscriber’s subscription amount relative to the total Debenture Placement amount, with 50% of the shares exercisable at a price per share of $0.05 and the other 50% of the shares exercisable at price per share of $0.075 (the “Debenture Warrants”).

The Company engaged Maxim Group LLC (“Maxim”) to assist in the Stock Offerings and Debenture Placement. Pursuant to the terms of an engagement letter, as amended, between Maxim and the Company, Maxim received (a) commissions equal to (i) 7% of the gross proceeds raised from Maxim investors and (ii) 3.5% of the gross proceeds raised from Company directed investors, and (b) common stock purchase warrants for a number of securities equal to (i) 8% of the total amount of securities sold to Maxim investors and (ii) 4% of the total amount of securities sold to Company directed investors, at a price per share equal to 110% of the price of the securities paid by investors (the “Maxim Warrants”). Pursuant to the letter of engagement between Maxim and the Company, Maxim was entitled to, and did, elect to have the Maxim Warrants issued into the names of its wholly-owned subsidiaries. Pursuant to the Debenture Placement, the Company issued Maxim Warrants to purchase 4,480,000 shares of our common stock at $0.06875 per share. Pursuant to the February Stock Offering, the Company issued Maxim Warrants to purchase (a) 2,800,000 shares of our common stock at $0.0605 per share and (b) 1,400,000 shares of our common stock at $0.11 per share. Pursuant to the June Stock Offering, the Company issued Maxim Warrants to purchase (a) 928,000 shares of our common stock at $0.0825 per share and (b) 928,000 shares of our common stock at $0.121 per share.

SELLING SECURITY HOLDERS

The following table provides information about each selling security holder including how many shares of our common stock they owned as of August 12, 2016, how many shares are offered for sale by this prospectus, and the number and percentage of outstanding shares each selling security holder will own after this offering, assuming all shares covered by this prospectus are sold. Except as disclosed in this prospectus, none of the selling security holders have had any position, office, or material relationship with us or our affiliates within the past three years. The information concerning beneficial ownership has been taken from our stock transfer records and information provided by the selling security holders. Information concerning the selling security holders may change from time to time, and any changed information will be set forth if and when required in prospectus supplements or other appropriate forms permitted to be used by the SEC.

We do not know when or in what amounts a selling security holder may offer shares for sale. The selling security holders may not sell any or all of the shares offered by this prospectus. Because the selling security holders may offer all or some of the shares, and because there are currently no agreements, arrangements or understandings with respect to the sale of any of the shares, we cannot estimate the number of the shares that will be held by the selling security holders after completion of this offering. However, for purposes of this table, we have assumed that, after completion of this offering, all of the shares covered by this prospectus will be sold by the selling security holder.

Unless otherwise indicated, the selling security holders have sole voting and investment power with respect to their shares of common stock. All of the information contained in the table below is based upon information provided to us by the selling security holders, and we have not independently verified this information. The selling security holders may have sold, transferred or otherwise disposed of, or may sell, transfer or otherwise dispose of, at any time or from time to time since the date on which it provided the information regarding the shares beneficially owned, all or a portion of the shares beneficially owned in transactions exempt from the registration requirements of the Securities Act.

The number of shares outstanding and the percentages of beneficial ownership are based on 261,776,552 shares of our common stock issued and outstanding as of August 12, 2016. For the purposes of the following table, the number of shares common stock beneficially owned has been determined in accordance with Rule 13d-3 under the Exchange Act, and such information is not necessarily indicative of beneficial ownership for any other purpose. Under Rule 13d-3, beneficial ownership includes any shares as to which a selling security holder has sole or shared voting power or investment power and also any shares which that selling security holder has the right to acquire within 60 days of the date of this prospectus through the exercise of any stock option, warrant or other rights.

Name	Note		Number of shares of common stock owned before the Offering (a)		Number of securities to be offered (a)		Number of securities owned after the Offering (b)		Percentage of securities owned after the Offering (b)
Lazarus Investment Partners LLLP		(1)		11,073,204		6,818,183		4,255,021		1.63	%
Lazarus Israel Opportunities Fund LLLP		(2)		54,718,018		37,500,000		17,218,018		6.58	%
Lazarus Israel Opportunities Fund II LLLP		(3)		15,063,674		8,181,818		6,881,856		2.63	%
Auto Transtech Inc.		(4)		26,666,668		26,666,668		—		*
Gary Haseley		(5)		6,666,667		5,333,334		1,333,333		*
EMBR Capital, LLC		(6)		3,200,000		3,200,000		—		*
R. Alfred Brand III		(7)		1,466,667		1,333,334		133,333		*

Less than 1%.

(a)

Based on the information provided by the selling security holders and/or our stock transfer records as of August 12, 2016, and assumes that all shares offered under this prospectus have not been sold or otherwise transferred by the selling security holders.

(b)

Assumes the selling security holder sells all of their shares offered in this offering, including shares underlying the Offering Warrants.

(1)

Lazarus Management Company LLC, as the investment advisor and general partner of Lazarus Investment Partners LLLP, has voting power and dispositive control over these shares. The 11,073,204 shares of our common stock consists of (i) 8,800,476 shares of our common stock, which includes 4,545,455 February Offering Shares, and (ii) 2,272,728 shares of common stock issuable upon exercise of the February Offering Warrants.

(2)

Lazarus Management Company LLC, as the investment advisor and general partner of Lazarus Israel Opportunities Fund LLLP, has voting power and dispositive control over these shares. The 54,718,018 shares of our common stock consists of (i) 42,218,018 shares of our common stock, which includes 25,000,000 February Offering Shares, and (ii) 12,500,000 shares of common stock issuable upon exercise of the February Offering Warrants.

(3)

Lazarus Management Company LLC, as the investment advisor and general partner of Lazarus Israel Opportunities Fund II LLLP, has voting power and dispositive control over these shares. The 15,063,674 shares of our common stock consists of (i) 12,336,401 shares of our common stock, which includes 5,454,545 February Offering Shares, and (ii) 2,727,273 shares of common stock issuable upon exercise of the February Offering Warrants.

(4)

Messrs. Simyon Loshak and Mikhail Shakhnovich, as the owners of Auto Transtech Inc., have shared voting power and dispositive control over these shares. The 26,666,668 shares of our common stock consists of (i) 13,333,334 June Offering Shares, and (ii) 13,333,334 shares of common stock issuable upon exercise of the June Offering Warrants.

(5)

The 6,666,667 shares of our common stock consists of (i) 2,666,667 June Offering Shares, (ii) 2,666,667 shares of common stock issuable upon exercise of the June Offering Warrants, and (iii) 1,333,333 shares of common stock issuable upon exercise of the Debenture Warrants.

(6)

Mr. Ryan M. Brucato, as sole owner and principal of EMBR Capital, LLC, has sole voting power and dispositive control over these shares. The 3,200,000 shares of our common stock consists of (i) 1,600,000 June Offering Shares, and (ii) 1,600,000 shares of common stock issuable upon exercise of the June Offering Warrants.

(7)

The 1,466,667 shares of our common stock consists of (i) 666,667 June Offering Shares, (ii) 666,667 shares of common stock issuable upon exercise of the June Offering Warrants, and (iii) 133,333 shares of common stock issuable upon exercise of the Debenture Warrants.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated unaudited interim and audited financial statements and notes thereto included in this prospectus. The following discussion contains forward-looking statements. Forward-looking statements are not guarantees of future performance and our actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in the section “Cautionary Note Regarding Forward-Looking Statements” contained in this prospectus. We assume no obligation to revise or update any forward-looking statements for any reason, except as required by law.

Company Overview and Summary of Operations

We are currently developing or operating, as applicable, six projects located in the Unites States and Italy. We have also entered into nonbinding letters of intent to acquire additional biogas facilities in Italy and construct and develop waste-to-energy facilities in the Netherlands and the United Kingdom, and we continue to evaluate a pipeline of similar projects in a less mature phase.

As from December 14, 2015, we consolidated our indirect wholly-owned subsidiary, Bluesphere Pavia. Bluesphere Pavia completed the acquisitions of one hundred percent (100%) of the share capital of Agricerere S.r.l., Agrielektra S.r.l., Agrisorse S.r.l. and Gefa S.r.l. (each, an “SPV” and collectively, the “SPVs”). Each SPV owns and operates an anaerobic digestion biogas plant in Italy for the production and sale of electricity to Gestore del Servizi Energetici GSE, S.p.A., a state-owned company, pursuant to a power purchase agreement. Our results of operation and have been significantly affected by this transaction.

Results of Operations – For the Three Months Ended June 30, 2016 Compared to the Three Months Ended June 30, 2015

Revenues

Revenues for the three-month period ended June 30, 2016 were $1,303,000, as compared to $0 for the three-month period ended June 30, 2015. The increase is attributable to the acquisition of the SPVs by our wholly-owned subsidiary, Bluesphere Pavia.

Cost of Revenues

Cost of revenues for the three-month period ended June 30, 2016 were $1,007,000, as compared to $0 for the three-month period ended June 30, 2015. The increase is attributable to the acquisition of the SPVs by our wholly-owned subsidiary, Bluesphere Pavia.

General and Administrative Expenses

General and administrative expenses for the three-month period ended June 30, 2016 were $2,809,000, as compared to $2,439,000 for the three-month period ended June 30, 2015. The increase is mainly attributable to direct expenses related to the acquisition of the SPVs by our wholly-owned subsidiary, Bluesphere Pavia, and general and administrative expenses of Bluesphere Pavia.

Net Loss

We incurred a net loss of $3,644,000 for the three-month period ended June 30, 2016, as compared to a net loss of $3,133,000 for the three-month period ended June 30, 2015. The increase in net loss is mainly attributable to the results of operations of Blueshpere Pavia, increase in financial expenses and increase of our general and administrative expenses as detailed above.

Results of Operations – For the Six Months Ended June 30, 2016 Compared to the Six Months Ended June 30, 2015

Revenues

Revenues for the six-month period ended June 30, 2016 were $2,706,000, as compared to $0 for the six-month period ended June 30, 2015. The increase is attributable to the acquisition of the SPVs by our wholly-owned subsidiary, Bluesphere Pavia.

Cost of Revenues

Cost of revenues for the six-month period ended June 30, 2016 were $2,323,000, as compared to $0 for the six-month period ended June 30, 2015. The increase is attributable to the acquisition of the SPVs by our wholly-owned subsidiary, Bluesphere Pavia.

General and Administrative Expenses

General and administrative expenses for the six-month period ended June 30, 2016 were $4,590,000, as compared to $3,450,000 for the six-month period ended June 30, 2015. The increase is mainly attributable to direct expenses related to the acquisition of the SPVs by our wholly-owned subsidiary, Bluesphere Pavia, and general and administrative expenses of Bluesphere Pavia.

Net Loss

We incurred a net loss of $7,215,000 for the six-month period ended June 30, 2016, as compared to a net loss of $4,944,000 for the six-month period ended June 30, 2015. The increase in net loss is mainly attributable to the results of operations of Blueshpere Pavia, increase in financial expenses and increase of our general and administrative expenses as detailed above.

Results of Operations for the Transition Period of Three-Months Ended December 31, 2015 Compared to the Three-Months Ended December 31, 2014

Deferred Revenue

$1,481,900 of development fees and reimbursements for the North Carolina and Rhode Island projects are recorded as deferred revenue. Upon successful completion of the projects, this amount will be recorded as revenue.

Revenues

Revenues for the three-month period ended December 31, 2015 were $400,000, as compared to $0 for the three-month period ended December 31, 2014. The increase is attributable to the acquisition of our wholly-owned subsidiary, Blueshpere Pavia, and represents the revenues generated for the period of 17 days commencing December 14, 2015.

Cost of Revenues

Cost of Revenues for the three-month period ended December 31, 2015 were $360,000, as compared to $0 for the three-month period ended December 31, 2014. The increase is attributable to the acquisition of our wholly-owned subsidiary, Blueshpere Pavia, and represents the cost of revenues incurred in the period of 17 days commencing December 14, 2015.

General and Administrative Expenses

General and administrative expenses for the three-month period ended December 31, 2015 were $1,005,000 as compared to $827,000 for the three-month period ended December 31, 2014. The increase is mainly attributable to the acquisition of our wholly-owned subsidiary, Blueshpere Pavia and general and administrative expenses of Blueshpere Pavia.

Net Loss

We incurred a net loss of $1,297,000 for the three-month period ended December 31, 2015, as compared to a net loss of $1,314,000 for the three-month period ended December 31, 2014. The decrease in net loss is mainly attributable to the decrease in financial expenses, partially offset by the increase of our general and administrative expenses as detailed above.

Results of Operations for the Year Ended September 30, 2015 Compared to the Year Ended September 30, 2014

Deferred Revenue

$1,481,900 of development fees for the Rhode Island project is recorded as deferred revenue. Upon successful completion of the project, this amount will be recorded as revenue. We have recorded no revenue since inception of the Company.

General and Administrative Expenses

General and administrative expenses for the year ended September 30, 2015 were $5,331,000 as compared to $7,120,000 for the year ended September 30, 2014. The decrease is mainly attributable to the decrease in share-based compensation expenses to employees and service providers.

Net Loss

We incurred a net loss of $7,462,000 for the year ended September 30, 2015, as compared to a net loss of $7,376,000 for the year ended September 30, 2014. The increase in net loss is mainly attributable to an increase in financial expenses, partially offset by a decrease in share-based compensation expenses to employees and service providers.

Inflation and Seasonality

In management’s opinion, our results of operations have not been materially affected by inflation or seasonality, and management does not expect that inflation risk or seasonality would cause material impact on our operations in the future.

Liquidity and Capital Resources

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures.

As of June 30, 2016, we had cash and cash equivalents of $1,280,000, as compared to $161,000 as of September 30, 2015. As of June 30, 2016, we had a working capital deficit of $14,456,000, as compared to $7,542,000 as of September 30, 2015. The increase in our working capital deficit is mainly attributable the increase in our deferred revenues from joint ventures in the amount of $3,975,000, increase in our current maturities of long term loans in the amount of $1,679,000, increase in our accounts payables in the amount of $3,417,000 and increase in our other accounts payable and liabilities in the amount of $762,000.

Net cash used in operating activities was $2,266,000 for the six-month period ended June 30, 2016, as compared to cash provided by operating activities of $198,000 for the six-month period ended June 30, 2015.

Net cash used in investing activities was $18,000 for the six-month period ended June 30, 2016, as compared to net cash used in investing activities of $1,000 for the six-month period ended June 30, 2015.

Net cash provided by financing activities was approximately $821,000 for the six-month period ended June 30, 2016, as compared to approximately $48,000 used in financing activities for the six-month period ended June 30, 2015.

We have principally financed our operations through the sale of our common stock and warrants and the issuance of convertible debt, including the Debenture Placement, February Stock Offering and June Stock Offering described in the notes to the condensed consolidated financial statements attached hereto.

Off-Balance Sheet Arrangements

As of June 30, 2016, we had no off-balance sheet arrangements of any nature.

Related Party Transactions

We are currently party to certain services and employment agreements with our executives and a non-executive member of our Board of Directors, which are specifically described under the headings “Narrative Disclosure to Executive Summary Compensation Table” and “Narrative Disclosure to Director Compensation Table” in the “Executive Compensation” section of this prospectus.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported in the financial statements, including the notes thereto, and related disclosures of commitments and contingencies, if any. We consider our critical accounting policies to be those that require the more significant judgments and estimates in the preparation of financial statements. No new accounting standards have been adopted since the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2015 was filed. The significant accounting policies applied in the annual financial statements of the Company as of September 30, 2015 are applied consistently in these financial statements except, for the following:

Business Combinations and Goodwill

The Company accounts for its business combinations using the purchase method of accounting. Under this method, the Company allocates the purchase price to tangible and intangible assets acquired and liabilities assumed based on estimated fair values at the date of acquisition, with the excess of the purchase price amount being allocated to goodwill.

Acquisition-related and integration costs associated to the business combination are expensed as incurred. Changes in estimates associated with future income tax assets after measurement period are recognized as income tax expense with prospective application to all business combinations regardless of the date of acquisition.

Goodwill for each reporting unit is assessed for impairment at least annually, or when an event or circumstance occurs that more likely than not reduces the fair value of a reporting unit below its carrying amount. An impairment charge is recorded when the carrying amount of the reporting unit exceeds its fair value and is determined as the difference between the goodwill’s carrying amount and its implied fair value.

Intangible Assets

Intangible assets consist of allocated acquisition costs of power purchase agreements, which are amortized using the straight-line method over the 15 year terms of the agreements (see Note 3 to our Condensed Consolidated Financial Statements for the period ending June 30, 2016).

Long-Lived Assets

When events or changes in circumstances indicate that the carrying amount of long-lived assets, such as capital assets and intangible assets, may not be recoverable, undiscounted estimated cash flows are projected over their remaining term and compared to the carrying amount. To the extent that such projections indicate that future undiscounted cash flows are not sufficient to recover the carrying amounts of related assets, a charge is recorded to reduce the carrying amount to the projected future discounted cash flows.

Revenue recognition

Revenues related to the sale of electricity are recorded based upon output delivered and capacity provided at rates specified under relevant contract terms.

BUSINESS

Company Overview

Our Projects

We are developing or operating, as applicable, the following projects:

United States

Charlotte, NC Waste to Energy Anaerobic Digester 5.2 MW Plant

Johnston, RI Waste to Energy Anaerobic Digester 3.2 MW Plant

Italy

Soc. agr. AGRICERERE srl – Tromello (Pavia) 999 KW Plant

Soc. agr. AGRIELEKTRA srl – Alagna (Pavia) 999 KW Plant

Soc. agr. AGRISORSE srl - Garlasco (Pavia) 999 KW Plant

Soc. agr. GEFA srl – Dorno (Pavia) 999 KW Plant

United States Projects

On October 19, 2012, we signed definitive project agreements in respect of both the North Carolina and Rhode Island sites with Orbit Energy, Inc. (“Orbit”), pursuant to which we would be entitled to full ownership of each of the entities that owns the rights to implement the respective projects (Orbit Energy Charlotte, LLC in the case of the North Carolina project (“OEC”) and Orbit Energy Rhode Island, LLC in the case of the Rhode Island project (“OERI”)), subject to the satisfaction of certain conditions.

North Carolina Project

On November 19, 2014, we signed an amended and restated purchase agreement with Orbit for the North Carolina project (the “Amended OEC Purchase Agreement”). Subject to the terms of the Amended OEC Purchase Agreement, Orbit transferred ownership of OEC to us in exchange for a development fee of $900,000, reimbursement of $17,764 and an amount equal to 30% of the distributable cash flow from the North Carolina project after the project achieves a post-recoupment 30% internal rate of return computed on the basis of any and all benefits from tax credits, depreciation and other incentives of any nature. We also agreed to use high solid anaerobic digester units designed by Orbit (the “HSAD Units”) and to retain Orbit to implement and operate the HSAD Units for an annual management fee of $187,500 (the “OEC Management Fee”), subject to certain conditions. The Amended OEC Purchase Agreement provided that we had until December 15, 2014 to pay Orbit the development fee and reimbursement amount, which was extended to January 15, 2015 upon payment of $75,000. We did not pay Orbit the development fee and reimbursement amount and, pursuant to the terms of the Amended OEC Purchase Agreement, ownership of OEC reverted back to Orbit on January 15, 2015.

On January 30, 2015, we entered into the Orbit Energy Charlotte, LLC Membership Interest Purchase Agreement by and among the Company, Orbit, Concord Energy Partners, LLC, a Delaware limited liability company (“Concord”), and OEC (the “New OEC Purchase Agreement”), pursuant to which (i) Concord purchased all of Orbit’s right, title and interest in and to the membership interests of OEC (the “OEC Interests”), (ii) Orbit abandoned all economic and ownership interest in the OEC Interests in favor of Concord, (iii) Orbit ceased to be a member of OEC and (iv) Concord was admitted as the sole member of OEC.

Subject to the satisfaction of certain conditions by Orbit, we agreed to be responsible for all costs of evaluating and incorporating into the North Carolina project (i) Orbit’s high solids anaerobic digestion technology, consisting of a proprietary process that uses an anaerobic digester design developed by the U.S. Department of Energy and subsequently modified by Orbit in combination with the proprietary bacteria supplied by Orbit (the “Orbit Technology”), and (ii) two HSAD Units designed by Orbit with up to a total maximum capacity of 100 tons per day. We are responsible for both direct and indirect costs, all payments to be made to Orbit and all increased costs, expenses and any damages incurred in connection with the design, installation, integration, operation and maintenance of the Orbit Technology incorporated into the project. We also agreed to enter into an operations agreement with Orbit in respect of the HSAD Units to be integrated into the North Carolina project, and to pay Orbit the OEC Management Fee.

In a letter agreement executed in connection with the New OEC Purchase Agreement, we agreed to pay Orbit an amount equal to thirty percent (30%) of the North Carolina project’s distributable cash flow after we and the other equity investors in the North Carolina project fully recoup their respective investments in the North Carolina project (such investments to be calculated solely as amounts expended in and for the construction of the North Carolina project) and the North Carolina project achieves a thirty percent (30%) internal rate of return. The calculation of the project’s internal rate of return would take into account and be computed on the basis of any and all benefits from tax credits, depreciation and other incentives of any nature, as well as the OEC Management Fee.

On the same date as the New OEC Purchase Agreement, (i) the Company, Concord and York Renewable Energy Partners LLC (“York”) entered into a development and indemnification agreement (the “Concord Development and Indemnification Agreement”), pursuant to which Concord paid us $1,250,000, issued us 250 Series B units of Concord (“Concord Series B Units”) and issued 750 Series A units of Concord (“Concord Series A Units”) to York, and (ii) we and York entered into an amended and restated limited liability company operating agreement (the “Concord LLC Agreement”) to establish the Concord Series A Units and Concord Series B Units and admit us and York as 25% and 75% members of Concord, respectively. Purs uant to the foregoing agreements, York also agreed to pay us two equal installments of $587,500 upon (a) mechanical completion of the North Carolina project and (b) commercial operation of the North Carolina project. Our right to receive distributions from Concord are subject to certain priorities in favor of York.

Pursuant to the Concord LLC Agreement, Concord is managed by a board of managers initially consisting of three managers (the “Concord Board”). So long as York owns more than 50% of the membership interests of Concord, York is entitled to appoint two of the Concord Board’s three managers. So long as we own no less than 12.5% of the membership interests of Concord, we are entitled to appoint one manager of the Concord Board. In the event that the Concord Board determines in good faith that additional equity capital is needed by Concord and is in the best interests of the North Carolina project, the Concord Board may determine the amount of additional capital needed and issue new units to raise the necessary funds. In this case, our percentage interest in Concord would be reduced accordingly. The Concord LLC Agreement also contains certain restrictions on our right to transfer our membership interests in Concord to third parties.

In connection with the foregoing, on January 30, 2015, we terminated our amended and restated construction finance agreement, dated June 6, 2014, with Caterpillar Financial Services Corporation.

OEC and Duke Energy Carolinas, LLC (“Duke Energy”) are parties to an Amended and Restated Renewable Energy Purchase Agreement, dated October 12, 2012 and amended on April 25, 2013, January 31, 2014 and January 20, 2015 (as amended, the “Duke PPA”), pursuant to which OEC has agreed to sell, and Duke has agreed to purchase, the energy output of OEC’s facility, subject to the terms and conditions of the Duke PPA. Among other things, the Duke PPA requires OEC to commence commercial operations by December 31, 2015 or, if not operational within 60 days of such date, pay Duke Energy $500,000 of liquidated damages, which would extend the deadline for commercial operation to March 30, 2016. The Duke PPA is effective until December 31, 2029. The loss of Duke Energy as a customer of OEC could have a material adverse effect on the Company.

OEC and ARC Development are parties to an Organic Waste Delivery Agreement, dated February 4, 2014, in respect of the North Carolina project, which upon commencement of operations will provide 100 tons a day of organic feedstock to OEC’s facility. The Organic Waste Delivery Agreement has a ten year term beginning on the date of the first supply of organic feedstock. In addition, OEC is party to a Substrates Supply and Transportation Agreement with CP Bio Energy LLC, which upon commencement of operations will provide approximately 220 tons a day of substrate to OEC’s facility, increasing to 320 tons a day of substrate by the second year of commercial operation. The Substrates Supply and Transportation Agreement has a ten year term (with an automatic five year renewal) beginning on the date OEC’s facility commences commercial operations. OEC is projected to require about 432 tons of organic feedstock on a daily basis and is working with other organic waste suppliers to arrange for additional supplies of feedstock.

Although no assurances can be given, we expect the North Carolina project to commence commercial operations in the third quarter of 2016. Nevertheless, since the commercial operations were not been commenced within 60 days of December 31, 2015, OEC was required to pay $500,000 of liquidated damages to Duke Energy pursuant to the Duke PPA during the first quarter of 2016. York was responsible for contributing these funds to OEC.

Rhode Island Project

On January 7, 2015, we signed an amended and restated purchase agreement with Orbit for the Rhode Island project (the “Amended OERI Purchase Agreement”). Subject to the terms of the Amended OERI Purchase Agreement, Orbit transferred full ownership of OERI to us in exchange for a development fee of $300,000, reimbursement of $86,432 and an amount equal to 30% of the distributable cash flow from the Rhode Island project after the project achieves a post-recoupment 30% internal rate of return computed on the basis of any and all benefits from tax credits, depreciation and other incentives of any nature. We also agreed to use HSAD Units designed by Orbit and to retain Orbit to implement and operate the HSAD Units for an annual management fee of $187,500 (the “OERI Management Fee”), subject to certain conditions. The Amended OERI Purchase Agreement provided that we had until January 22, 2015 to pay Orbit the development fee and reimbursement amount, which was extended to February 28, 2015 upon payment of $31,000. We did not pay the development fee and reimbursement amount and, pursuant to the terms of the Amended OERI Purchase Agreement, ownership of OERI reverted back to Orbit.

On April 8, 2015, we entered into the Orbit Energy Rhode Island, LLC Membership Interest Purchase Agreement by and among the Company, Orbit, Rhode Island Energy Partners, LLC, a Delaware limited liability company (“Rhode Island”) and OERI (the “New OERI Purchase Agreement”), pursuant to which (i) Rhode Island purchased all of Orbit’s right, title and interest in and to the membership interests of OERI (the “OERI Interests”), (ii) Orbit abandoned all economic and ownership interest in the OERI Interests in favor of Rhode Island, (iii) Orbit ceased to me a member of OERI and (iv) Rhode Island was admitted as the sole member of OERI.

Subject to the satisfaction of certain conditions by Orbit, we agreed to be responsible for all costs of evaluating and incorporating into the Rhode Island project (i) the Orbit Technology and (ii) two HSAD Units designed by Orbit with up to a total maximum capacity of 75 tons per day. We are responsible for both direct and indirect costs, all payments to be made to Orbit and all increased costs, expenses and any damages incurred in connection with the design, installation, integration, operation and maintenance of the Orbit Technology incorporated into the project. We also agreed to enter into an operations agreement with Orbit in respect of the HSAD Units to be integrated into the Rhode Island project and to pay Orbit the OERI Management Fee.

We also acknowledged in the New OERI Purchase Agreement our continuing responsibility to pay Orbit an amount equal to thirty percent (30%) of the Rhode Island project’s distributable cash flow after we and the other equity investors in the Rhode Island project fully recoup our respective investments in the Rhode Island project (such investments to be calculated solely as amounts expended in and for the construction of the Rhode Island project) and the Rhode Island project achieves a thirty percent (30%) internal rate of return. The calculation of the project’s internal rate of return would take into account and be computed on the basis of any and all benefits from tax credits, depreciation and other incentives of any nature, as well as the OERI Management Fee.

On the same date as the New OERI Purchase Agreement, (i) the Company, Rhode Island and York entered into a development and indemnification agreement (the “Rhode Island Development and Indemnification Agreement”), pursuant to which Rhode Island agreed to pay us $1,481,900, issue us 2,275 Series B units of Rhode Island (“Rhode Island Series B Units), and issue 7,725 Series A units of Rhode Island (“Rhode Island Series A Units”) to York, and (ii) we and York entered into an amended and restated limited liability company operating agreement (the “Rhode Island LLC Agreement”) to establish the Rhode Island Series A Units and Rhode Island Series B Units and admit us and York as 22.75% and 77.25% members of Rhode Island, respectively. Pursuant to the foregoing agreements, York also agreed to pay us three equal installments of $562,500 upon (a) signing of the Rhode Island Development and Indemnification Agreement, (b) the later of (x) the date of mechanical completion of the Rhode Island project and (y) the date on which an executed interconnection agreement between OERI and National Grid, including receipt of any regulatory approvals from the Rhode Island Public Utility Commission, is delivered by OERI, and (c) commercial operation of the Rhode Island project.

Pursuant to the Rhode Island LLC Agreement, Rhode Island is managed by a board of managers initially consisting of three managers (the “Rhode Island Board”). So long as York owns more than 50% of the membership interests of Rhode Island, York is entitled to appoint two of the Rhode Island Board’s three managers. So long as we own no less than 11.375% of the membership interests of Rhode Island, we are entitled to appoint one manager of the Rhode Island Board. In the event that the Rhode Island Board determines in good faith that additional equity capital is needed by Rhode Island and is in the best interests of the Rhode Island project, the Rhode Island Board may determine the amount of additional capital needed and issue new units to raise the necessary funds. In this case, our percentage interest in Rhode Island would be reduced accordingly. The Rhode Island LLC Agreement also contains certain restrictions on our right to transfer our membership interests in Rhode Island to third parties.

OERI and The Narragansett Electric Company d/b/a National Grid (“National Grid”) are parties to a Power Purchase Agreement, dated May 26, 2011 and amended on April 11, 2013, December 9, 2013 and January 9, 2015 (as amended, the “National Grid PPA”), pursuant to which OERI has agreed to sell, and National Grid has agreed to purchase, the energy output of OERI’s facility, subject to the terms and conditions of the National Grid PPA. Among other things, the National Grid PPA requires OERI to commence commercial operations by December 31, 2015, which may be extended up to six months by OERI upon deposit of $22,500 of collateral. The National Grid PPA is effective for 15 years from the date commercial operations are commenced, which may be extended by 6 years at the option of National Grid. The loss of National Grid as a customer of OERI could have a material adverse effect on the Company.

OERI and Organic Waste Management, LLC are parties to an Organic Waste Delivery Agreement, dated February 27, 2015, in respect of 1100 to 1400 tons a week of organic feedstock, and OERI and E.L. Harvey & Sons are parties to a feedstock supply agreement, dated August 5, 2013, in respect of 50 to 100 tons a day of organic feedstock. Both agreements have ten year terms with certain provisions for renewal. Feedstock will be supplied to the Rhode Island project upon commencement of operations. OERI is projected to require 220 tons of organic feedstock on a daily basis and is working with other organic waste suppliers to arrange for additional supplies of feedstock.

Although no assurances can be given, we expect the Rhode Island project to commence commercial operations in the third quarter of 2016. Since commercial operations were not commenced by December 31, 2015, OERI paid an additional “Development Period Security” of $22,500 pursuant to the National Grid PPA. York was responsible for contributing these funds to OERI.

Both the Rhode Island and North Carolina projects previously entered into ten year compost off-take agreements, dated May 15, 2013, with McGill Environmental Systems (“McGill”), a market leader in the compost industry. The compost to be purchased by McGill will comprise the digestate that is a by-product from the anaerobic digestion process at each plant. The agreement between OEC and McGill never became effective, as the OEC facility was not operating by May 15, 2015. The agreement between OERI and McGill will become effective once the OERI facility is steadily producing 30 tons per day of compost. In general, we are currently seeking to diversify sales of the plants’ by-products among several buyers on more attractive terms.

Italy Projects

In September 2014, we entered into a letter of intent to acquire Kinexia S.p.A.’s right, interest and title in, to and under four biogas projects in the Vigevano area in Italy. The letter of intent also provides for the purchase of three additional biogas projects in the Emillia-Romagna and Lazio regions upon the same principals set forth in the letter of intent and subject to definitive agreements.

On May 14, 2015, we entered into a Share Purchase Agreement (the “Italy Projects Agreement”) with Volteo Energie S.p.A., Agriholding S.r.l., and Overland S.r.l. (each, a “Seller” and collectively, the “Sellers”) through our indirect, wholly-owned subsidiary, Bluesphere Italy S.r.l. (we subsequently changed the name of Bluesphere Italy S.r.l to Bluesphere Pavia, which is the name we use herein). Pursuant to the Italy Projects Agreement, we agreed to purchase one hundred percent (100%) of the share capital of Agricerere S.r.l., Agrielektra S.r.l., Agrisorse S.r.l. and Gefa S.r.l (each, an “SPV” and collectively, the “SPVs”) from the Sellers, who collectively hold all of the outstanding share capital of each SPV, Each SPV is engaged in the owning and operating of an anaerobic digestion biogas plant for the production and sale of electricity to Gestore del Servizi Energetici GSE, S.p.A., a state-owned company, pursuant to a power purchase agreement. Pursuant to the Italy Projects Agreement, we also issued a corporate guarantee to the Sellers, whereby the Company will secure the obligations of Bluesphere Pavia under the Italy Projects Agreement.

Pursuant to the Italy Projects Agreement, we agreed to pay an aggregate purchase price of five million six hundred thousand euros (€5,600,000) for all of the SPVs, consisting of a purchase price for each SPV of one million four hundred thousand euros (€1,400,000) (the “Purchase Price”). The Purchase Price for each SPV was determined based on a “Base Line EBITDA” guaranteed by the Sellers and an “Equity IRR Target” calculated on the Purchase Price of no less than twenty-five percent (25%). The Purchase Price is subject to certain adjustments prior to and after closing of the acquisitions, and any variation of EBITDA results in the 18 months following a closing will trigger an adjustment to the Purchase Price for the relevant SPV, as further set forth in the Italy Projects Agreement. Fifty-percent (50%) of the Purchase Price for each SPV will be paid at the relevant closing, and the remaining fifty percent (50%) of the Purchase Price, subject to specified adjustments, will be promised by a note from each Seller, to be paid on the third anniversary of the date of the relevant closing, along with interest on the balance due at an annual rate of five percent (5%). In addition, the Sellers granted us credit of one hundred thousand euros (€100,000) per SPV, half of which is allocable to each such payment.

The closing in relation to each SPV will occur independently of closings of the sale of the other SPVs, and any such closing is subject to certain conditions precedent including, but not limited to, obtaining consent to the proposed sale and resulting change of control from the SPVs’ lender in connection with a certain Financing Agreement, dated February 25, 2013, between the SPVs, Banca IMI S.p.A. and Intesa San Paolo S.p.A, as well as from other counterparties to certain agreements to which the SPVs are a party. We have agreed to pay fifty percent (50%) of any fees and expenses charged by the lenders in connection with obtaining these consents. On July 31, 2015, Banca IMI S.p.A. consented to the changes of control, subject to certain conditions precedent, including payment of a waiver fee equal to one hundred thousand euros (€100,000).

On July 17, 2015, we entered into a Framework EBITDA Guarantee Agreement (the “EBITDA Agreement”) with Austep S.p.A. (“Austep”), an Italian corporation. Austep specializes in the design, construction, operation and servicing of anaerobic digestion plants. The EBITDA Agreement provides a framework pursuant to which Austep will perform technical analyses of operating anaerobic digestion plants in Italy that we identify as potential acquisition targets. If and when we acquire such anaerobic digestion plants in Italy, subject to the terms of the EBITDA Agreement, we and Austep have agreed to negotiate individual agreements pursuant to which Austep will operate, maintain and supervise each plant and guarantee agreed-upon levels of EBITDA for a specified period. The EBITDA Agreement will apply to the first fifteen anaerobic digestion plants that we may acquire in Italy, including the plants subject to the Italy Projects Agreement.

On August 18, 2015, we and two of our wholly-owned subsidiaries, Eastern Sphere Ltd. (“Eastern Sphere”) and BlueSphere Pavia, entered into a Long Term Mezzanine Loan Agreement (the “Helios Loan Agreement”) with Helios Italy Bio-Gas 1 L.P. (“Helios”) to finance the Italy Projects Agreement. Under the Helios Loan Agreement, Helios will make up to five million euros (€5,000,000) available to Bluesphere Pavia (the “Helios Loan”) to finance (a) ninety percent (90%) of the total required investment of the first four SPVs acquired, (b) eighty percent (80%) of the total required investment of up to three SPVs subsequently acquired, (c) certain broker fees incurred in connection with the acquisitions, and (d) any taxes associated with registration of an equity pledge agreement (as described below). Each financing of an SPV acquisition will be subject to specified conditions precedent and will constitute a separate loan under the Helios Loan Agreement. Helios may, within 90 days of a closing, require repayment of ten percent (10%) of the relevant loan and broker fees. If no such repayment is required, Helios may reduce the amount of its commitment to finance the acquisitions of the three additional SPVs to seventy to eighty percent (70-80%) of the total required investment. Helios’s commitment to provide any loan under the Helios Loan Agreement that is not utilized by June 30, 2016 will automatically cancel, unless extended in writing by Helios.

Subject to specified terms, representations and warranties, the Helios Loan Agreement provides that each loan thereunder will accrue interest at a rate of fourteen and one-half percent (14.5%) per annum, paid quarterly. Helios will also be entitled to an annual operation fee, paid quarterly. The final payment for each loan will become due no later than the earlier of (a) thirteen and one half years from the date such loan was made available to Bluesphere Pavia, and (b) the date that the Feed in Tariff license granted to the relevant SPV expires. Pursuant to the Helios Loan Agreement and an equity pledge agreement, Eastern Sphere pledged all its shares in Bluesphere Pavia to secure all loan amounts utilized under the Helios Loan Agreement.

On December 14, 2015, pursuant to the Italy Projects Agreement, we completed the acquisitions of the four SPVs. We paid an aggregate purchase price of five million two hundred thousand euros (€5,200,000), subject to certain post-closing adjustments, to acquire the share capital of the SPVs. Fifty percent (50%) of this adjusted Purchase Price was paid at closing, and the balance is due to the Sellers on the third anniversary of the closing date. The portion of the Purchase Price and closing costs paid at closing was primarily financed by a loan of two million nine hundred thousand euros (€2,900,000) pursuant to the Helios Loan Agreement. In accordance with the EBITDA Agreement, Austep will operate, maintain and supervise the biogas plants owned by the SPVs. In addition, Austep will guarantee a monthly aggregate EBITDA of one hundred eighty-eight thousand euros (€188,000) from the four SPVs for the initial six months following the acquisition, and thereafter Austep will guarantee an annual aggregate EBITDA of three million seven hundred sixty thousand euros (€3,760,000) from the four SPVs. Pursuant to the terms of the agreements with Austep, we will receive the guaranteed levels of EBITDA and Austep will receive any revenue in excess of these levels.

Strategy

Our main focus is providing tailored solutions internationally to produce clean energy primarily out of waste. We are focused on waste-to-energy projects in the United States and Europe and are in the process of developing a pipeline of similar projects. We believe there is a virtually endless supply of waste suitable for such projects and the demand for energy (particularly from such projects) is growing every year.

Our model in respect of waste-to-energy is to acquire or build, own and operate. We select projects with signed, long-term agreements with waste producers or waste haulers in respect of feedstock, with national governments or electricity corporations in respect of the energy output and with private entities in respect of other project by-products (such as renewable energy credits, heat, compost and fertilizer). We are currently focused on several types of projects: (i) anaerobic digestion to electricity, (ii) landfill gas to energy, (iii) anaerobic digestion to renewable natural gas, (iv) biomass and (v) energy crop to electricity.

We expect to generate revenue through sales of thermal and electrical energy, energy efficiency technologies and RECs, and by-products, project development services, and tipping fees from accepting waste. As of September 30, 2015, we have recorded deferred revenue in respect of our projects in the United States (which will be recorded as revenue upon successful completion of those projects), but we have not otherwise received any revenues from our projects.