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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D. C. 20549
 Form 10-QSB
 þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   Biomass Processing Technology, Inc.
  Delaware
    
    65-0638890(State or Other Jurisdiction of
Incorporation or Organization)
    
    (I.R.S. Employer
Identification No.)3222 Commerce Place, Suite A, West Palm Beach, Florida
    
    33407(Address of Principal Executive Offices)
    
    (Zip Code)
 (561) 684-6611
     x o
 o o
  x o




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TABLE OF CONTENTS
 PART I FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    4Item 2. Plan of Operation
    
    
    15Item 3. Controls and Procedures
    
    
    22PART II OTHER INFORMATIONItem 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    23Item 6. Exhibits
    
    
    24SIGNATURES
    
    
    25Section 302 Certification of CEOSection 302 Certification of CFOSection 906 Certification of CEOSection 906 Certification of CFO
 2




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Caution Regarding Forward-Looking Information
    3




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PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 BIOMASS PROCESSING TECHNOLOGY, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
 (Unaudited)June 30,
    
    
    December 312005
    
    
    2004ASSETSCurrent assetsCash and cash equivalents
    
    $
    279,869
    
    
    $
    44,559Accounts receivable
    
    
    
    
    
    
    79,963Prepaid expenses and other current assets
    
    
    168,037
    
    
    
    284,427Total Current Assets
    
    
    447,906
    
    
    
    408,949Property and equipment, net
    
    
    23,539,031
    
    
    
    24,974,665Other assetsEquipment system
    
    
    2,137,783
    
    
    
    2,137,783Patent application costs
    
    
    329,620
    
    
    
    246,489Deposits and other assets
    
    
    101,780
    
    
    
    101,780Total Other Assets
    
    
    2,569,183
    
    
    
    2,486,052Total Assets
    
    $
    26,556,120
    
    
    $
    27,869,666LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable
    
    $
    672,714
    
    
    $
    1,709,511Accrued expenses
    
    
    819,814
    
    
    
    1,033,880Current portion of long term debt and capital leases
    
    
    59,921
    
    
    
    124,810Total Current Liabilities
    
    
    1,552,449
    
    
    
    2,868,201Long term debtLong term debt and capital leases, less current portion
    
    
    12,915
    
    
    
    45,461Note payable  officer
    
    
    39,661
    
    
    
    107,700Total Long-term Liabilities
    
    
    52,576
    
    
    
    153,161Commitments and ContingenciesStockholders equityCommon stock, $.02 par value; 100,000,000 sharesauthorized; issued and outstanding, 70,748,507 atJune 30, 2005 and 69,931,413 at December 31, 2004
    
    
    1,414,970
    
    
    
    1,398,628Additional paid in capital
    
    
    44,636,967
    
    
    
    40,959,999Deficit accumulated during the development stage
    
    
    (21,100,842
    )
    
    
    (17,510,323
    )Total Stockholders Equity
    
    
    24,951,095
    
    
    
    24,848,304Total Liabilities and Stockholders Equity
    
    $
    26,556,120
    
    
    $
    27,869,666
 See accompanying notes to the consolidated financial statements
 4




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BIOMASS PROCESSING TECHNOLOGY, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 Cumulative
    
    
    For the Three
    
    
    For the SixDuring
    
    
    Months Ended June 30,
    
    
    Months Ended June 30,DevelopmentStage
    
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Revenues (Note 5)
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Operating ExpensesResearch and development
    
    
    19,633,090
    
    
    
    1,070,646
    
    
    
    629,074
    
    
    
    3,134,134
    
    
    
    1,145,280(Gain) loss on disposal of assets
    
    
    736,690
    
    
    
    541,384
    
    
    
    (21,989
    )
    
    
    541,384
    
    
    
    (22,192
    )Total Operating Expenses
    
    
    20,369,780
    
    
    
    1,612,030
    
    
    
    607,085
    
    
    
    3,675,518
    
    
    
    1,123,088Interest Expense
    
    
    (397,175
    )
    
    
    (16,018
    )
    
    
    (10,313
    )
    
    
    (23,994
    )
    
    
    (16,345
    )Loss from continuing operationsbefore income tax benefit
    
    
    (20,766,955
    )
    
    
    (1,628,048
    )
    
    
    (617,398
    )
    
    
    (3,699,512
    )
    
    
    (1,139,433
    )Income tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Loss from continuing operations
    
    
    (20,766,955
    )
    
    
    (1,628,048
    )
    
    
    (617,398
    )
    
    
    (3,699,512
    )
    
    
    (1,139,433
    )Discontinued Operations (Note 5):Profit (loss) from discontinuedLandfill contract activities
    
    
    (333,887
    )
    
    
    1,239
    
    
    
    (502,482
    )
    
    
    108,993
    
    
    
    (477,970
    )NET LOSS
    
    $
    (21,100,842
    )
    
    $
    (1,626,809
    )
    
    $
    (1,119,880
    )
    
    $
    (3,590,519
    )
    
    $
    (1,617,403
    )Loss per Common Share, Basic and Diluted:From Continuing Operations
    
    
    
    
    
    $
    (0.02
    )
    
    $
    (0.01
    )
    
    $
    (0.05
    )
    
    $
    (0.02
    )From Discontinued Operations
    
    
    
    
    
    $
    0.00
    
    
    $
    (0.01
    )
    
    $
    0.00
    
    
    $
    (0.00
    )Net Loss
    
    
    
    
    
    $
    (0.02
    )
    
    $
    (0.02
    )
    
    $
    (0.05
    )
    
    $
    (0.02
    )Weighted average number of common shares outstanding
    
    
    
    
    
    
    70,437,877
    
    
    
    69,600,112
    
    
    
    70,291,905
    
    
    
    69,547,729
 See accompanying notes to the consolidated financial statements
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BIOMASS PROCESSING TECHNOLOGY, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
(UNAUDITED)
 DeficitAccumulatedNumber of
    
    
    Common
    
    
    
    
    
    
    During theCommon
    
    
    Stock,
    
    
    Paid in
    
    
    DevelopmentShares
    
    
    at Par Value
    
    
    Capital
    
    
    Stage
    
    
    TotalBalances as of December 31, 2004
    
    
    69,931,413
    
    
    $
    1,398,628
    
    
    $
    40,959,999
    
    
    $
    (17,510,323
    )
    
    $
    24,848,304Issuance of common shares
    
    
    817,094
    
    
    
    16,342
    
    
    
    3,676,968
    
    
    
    
    
    
    
    3,693,310Net loss for the six monthperiod ended June 30, 2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,590,519
    )
    
    
    (3,590,519
    )Balances as of June 30, 2005
    
    
    70,748,507
    
    
    $
    1,414,970
    
    
    $
    44,636,967
    
    
    $
    (21,100,842
    )
    
    $
    24,951,095
 See accompanying notes to the consolidated financial statements
 6




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BIOMASS PROCESSING TECHNOLOGY, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 For the Six Months EndedCumulative During
    
    
    June 30,DevelopmentStage (see Note 1)
    
    
    2005
    
    
    2004Operating ActivitiesNet Loss
    
    $
    (21,100,842
    )
    
    $
    (3,590,519
    )
    
    $
    (1,617,403
    )Adjustments to reconcile net loss to net
cash provided by (used in) operations:Depreciation
    
    
    3,085,827
    
    
    
    1,483,439
    
    
    
    106,290Loss (gain) on disposal of assets
    
    
    736,690
    
    
    
    541,384
    
    
    
    (22,192
    )Stock-based compensation
    
    
    163,700
    
    
    
    
    
    
    
    Changes in certain assets and liabilities:Accounts receivable
    
    
    
    
    
    
    79,963
    
    
    
    6,518Prepaid expenses & other current assets
    
    
    (313,045
    )
    
    
    (28,618
    )
    
    
    18,435Deposits and other assets
    
    
    (101,780
    )
    
    
    
    
    
    
    (500
    )Accounts payable and accrued expenses
    
    
    1,500,200
    
    
    
    (1,250,863
    )
    
    
    1,818,443Net Cash Provided by (Used in) Operations
    
    
    (16,029,250
    )
    
    
    (2,765,214
    )
    
    
    309,591Investing ActivitiesProceeds from sale of assets
    
    
    137,230
    
    
    
    
    
    
    
    39,300Patent application costs
    
    
    (329,620
    )
    
    
    (83,131
    )
    
    
    (134,021
    )Construction of equipment system
    
    
    (2,137,783
    )
    
    
    
    
    
    
    (298,089
    )Purchases of property and equipment
    
    
    (26,166,714
    )
    
    
    (444,181
    )
    
    
    (1,594,805
    )Net Cash Used in Investing Activities
    
    
    (28,496,887
    )
    
    
    (527,312
    )
    
    
    (1,987,615
    )Financing ActivitiesProceeds from long-term debt issuances
    
    
    219,596
    
    
    
    
    
    
    
    10,000Repayment of debt and capital leases
    
    
    (1,331,488
    )
    
    
    (97,435
    )
    
    
    (151,222
    )Proceeds from (payments on)
Note payable  officer
    
    
    39,661
    
    
    
    (68,039
    )
    
    
    169,700Proceeds from common stock issuance
    
    
    45,878,237
    
    
    
    3,693,310
    
    
    
    1,474,500Net Cash Provided by Financing Activities
    
    
    44,806,006
    
    
    
    3,527,836
    
    
    
    1,502,978Net increase (decrease) in cash and cash equivalents
    
    
    279,869
    
    
    
    235,310
    
    
    
    (175,046
    )Cash and cash equivalentsat beginning of the period
    
    
    
    
    
    
    44,559
    
    
    
    394,816Cash and cash equivalentsat the end of the period
    
    $
    279,869
    
    
    $
    279,869
    
    
    $
    219,770
 (Continued)
 See accompanying notes to the consolidated financial statements
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BIOMASS PROCESSING TECHNOLOGY, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 For the Six Months EndedCumulative During
    
    
    June 30,DevelopmentStage (see Note 1)
    
    
    2005
    
    
    2004Supplemental Disclosure of Cash Flow InformationCASH PAID DURING THE PERIOD FOR:Interest (net of amounts capitalized)
    
    $
    396,839
    
    
    $
    27,976
    
    
    $
    14,111Income taxes
    
    $
    
    
    
    $
    
    
    
    $
    
 Supplemental Disclosure of Noncash Investing and Financing Activities:
 Equipment Financing
  See accompanying notes to the consolidated financial statements
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BIOMASS PROCESSING TECHNOLOGY, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
 NOTE 1  BASIS OF PRESENTATION
  Development Stage and Going Concern Considerations
  Interim Reporting:
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BIOMASS PROCESSING TECHNOLOGY, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
 NOTE 1  BASIS OF PRESENTATION (Continued)
  NOTE 2  RELATED PARTY TRANSACTIONS
    NOTE 3  NET LOSS PER COMMON SHARE
  10




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BIOMASS PROCESSING TECHNOLOGY, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
 NOTE 3  NET LOSS PER COMMON SHARE (Continued)
    For the Three
    
    
    For the SixMonths Ended June 30,
    
    
    Months Ended June 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Outstanding shares
    
    
    70,748,507
    
    
    
    69,550,688
    
    
    
    70,748,507
    
    
    
    69,550,688Effect of Weighting
    
    
    (310,630
    )
    
    
    49,424
    
    
    
    (456,602
    )
    
    
    (2,959
    )Weighted Average
    
    
    70,437,877
    
    
    
    69,600,112
    
    
    
    70,291,905
    
    
    
    69,547,729
 NOTE 4  ACCRUED LIABILITIES
  11




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BIOMASS PROCESSING TECHNOLOGY, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
 NOTE 4  ACCRUED LIABILITIES (Continued)
 June 30, 2005
    
    
    December 31, 2004Accrued Property Taxes
    
    $
    297,967
    
    
    $
    206,639Reserve for Casualty Loss
    
    
    254,243
    
    
    
    445,687Deferred Officers Salaries
    
    
    148,019
    
    
    
    176,950Accrued Vacation
    
    
    34,798
    
    
    
    35,885Accrued Payroll and Payroll Taxes
    
    
    36,956
    
    
    
    56,543Accrued Professional Fees
    
    
    30,650
    
    
    
    104,810Other
    
    
    17,181
    
    
    
    7,366Total Accrued Liabilities
    
    $
    819,814
    
    
    $
    1,033,880
 NOTE 5  DISCONTINUED OPERATIONS
     Cumulative
    
    
    For the Three
    
    
    For the SixDuring
    
    
    Months Ended June 30,
    
    
    Months Ended June 30,DevelopmentStage
    
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Revenues
    
    $
    8,448,276
    
    
    $
    18,831
    
    
    $
    313,024
    
    
    $
    468,772
    
    
    $
    672,353Cost of Services Provided
    
    
    8,782,163
    
    
    
    17,592
    
    
    
    815,506
    
    
    
    359,779
    
    
    
    1,150,323Net Income (Loss)
    
    $
    (333,887
    )
    
    $
    1,239
    
    
    $
    (502,482
    )
    
    $
    108,993
    
    
    $
    (477,970
    )
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BIOMASS PROCESSING TECHNOLOGY, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
 NOTE 5  DISCONTINUED OPERATIONS (Continued)
   NOTE 6  CHANGES IN ESTIMATED SERVICE LIVES OF CERTAIN ASSETS AND RECLASSIFICATION OF CERTAIN
CURRENT ASSETS
    13




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BIOMASS PROCESSING TECHNOLOGY, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
 NOTE 7  SUBSEQUENT EVENTS
 
 14




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ITEM 2. PLAN OF OPERATION
  Liquidity and Capital Resources
    15




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The CAV Facility
    16




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17
    Table of Contents     Patent Applications
     
    
    Ruminant cattle manure
    
    Swine and other animal manure
    
    Municipal cellulosistic solid waste
    
    Other cellulosistic solid waste
    
    Whey broth from cheese production
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
    
    Fermentation broth remediation from alcohol and yeast production
    
    Other undefined dilute waste streams
     
    
    Recovery of organic material suitable for fermentation.
    
    Limiting presence of substances that interfere with, or make less optimal, proper
recovery.
   EcoGold  The Dilute Waste Stream Recovery Technology
  19




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Other Products in Development
  Discontinued Operations
    20




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21




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ITEM 3. CONTROLS AND PROCEDURES
     22




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PART II. OTHER INFORMATION
 
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
   23




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ITEM 6. EXHIBITS
 List of Exhibits:
 Document
    
    Exhibit No.Certificate of Incorporation filed with the Delaware Secretary
of State on January 30, 1996 (incorporated herein by reference
to Exhibit 2.1.1 of the registrants Form 10-SB, filed with
the Commission on December 19, 2003)
    
    
    3.1.1Certificate of Amendment to Certificate of Incorporation filed
with the Delaware Secretary of State on September 12, 1997
(incorporated herein by reference to Exhibit 2.1.2 of the
registrants Form 10-SB, filed with the Commission on December
19, 2003)
    
    
    3.1.2Certificate of Amendment to Certificate of Incorporation filed
with the Delaware Secretary of State on May 23, 2001
(incorporated herein by reference to Exhibit 2.1.3 of the
registrants Form 10-SB, filed with the Commission on December
19, 2003)
    
    
    3.1.3By-Laws (incorporated herein by reference to Exhibit 2.2 of
the registrants Form 10-SB, filed with the Commission on
December 19, 2003)
    
    
    3.2Certification by the Chief Executive Officer of the Company
pursuant to Rule 13a-14 under the Securities Exchange Act of
1934, as amended
    
    
    31.1Certification by the Chief Financial Officer of the Company
pursuant to Rule 13a-14 under the Securities Exchange Act of
1934, as amended
    
    
    31.2Certification by the Chief Executive Officer of the Company
pursuant to 18 U.S.C. Section 1350 as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
    
    
    32.1Certification by the Chief Financial Officer of the Company
pursuant to 18 U.S.C. Section 1350 as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
    
    
    32.2
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SIGNATURES
  Biomass Processing Technology, Inc.Dated: August 22, 2005
    By:
    /s/ Larry W. DenneyLarry W. Denney, Chairman of the Board, Presidentand Chief Executive Officer (principal executive
officer and duly authorized officer)Biomass Processing Technology, Inc.Dated: August 22, 2005
    By:
    /s/ Robert F. KendallRobert F. Kendall, CPA, Chief Financial Officer(principal financial officer) 25