##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
 þ
    
    ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2008
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 333-145939
 CleanTech Biofuels, Inc.
  Delaware
(State or other jurisdiction of incorporation or organization)
    
    33-0754902
(I.R.S. Employer Identification No.)7386 Pershing Ave., University City, Missouri
(Address of principal executive offices)
    
    63130
(Zip Code)
 (314) 802-8670
 Securities registered under Section 12(b) of the Exchange Act:  Securities registered under Section 12(g) of the Exchange Act:
 Yes o No þ
 o þ
 þ o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company þ
 o þ
 2009  $1,830,212
  DOCUMENTS INCORPORATED BY REFERENCE




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##### 



CLEANTECH BIOFUELS, INC.
TABLE OF CONTENTS
 PAGEPART IITEM 1. Business
    
    
    3ITEM 1A. Risk Factors
    
    
    12ITEM 1B. Unresolved Staff Comments
    
    
    19ITEM 2. Properties
    
    
    19ITEM 3. Legal Proceedings
    
    
    19ITEM 4. Submission of Matters to a Vote of Security Holders
    
    
    20PART IIITEM 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    21ITEM 6. Selected Financial Data
    
    
    24ITEM 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    25ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    31ITEM 8. Financial Statements and Supplemental Data
    
    
    32ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    51ITEM 9A. Controls and Procedures
    
    
    51ITEM 9B. Other Information
    
    
    52PART IIIITEM 10. Directors, Executive Officers and Corporate Governance
    
    
    52ITEM 11. Executive Compensation
    
    
    52ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    52ITEM 13. Certain Relationships and Related Transactions and Director Independence
    
    
    52ITEM 14. Principal Accountant Fees and Services
    
    
    53PART IV.ITEM 15. Exhibits and Financial Statement Schedules
    
    
    53Signatures
    
    
    55Index to Exhibits
    
    
    56Exhibit 10.20Exhibit 21.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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Statement Regarding Forward-Looking Information
  
 
    
    the commercial viability of our technologies,
 
    
    our ability to maintain and enforce our exclusive rights to our technologies,
 
    
    our ability to raise additional capital on favorable terms to continue developing our
technologies;
 
    
    the demand for and production costs of various energy products made from our biomass,
 
    
    competition from other alternative energy technologies, and
 
    
    other risks and uncertainties detailed from time to time in our filings with the SEC.
  
 PART I
 
 ITEM 1. Business
   3




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Company Overview
  
    
    a pressurized steam classification technology, which we refer to as the PSC
technology, invented at the University of Alabama, Huntsville that used a pressurized steam
classification vessel to convert MSW into cellulosic material while simultaneously
segregating and eliminating any inorganic materials in the solid waste and cleaning
recyclable materials in the MSW;
 
    
    a sulfuric acid hydrolysis process, which we refer to as the Brelsford technology,
developed by Brelsford Engineering, Inc. that employs an acid hydrolysis process to convert
cellulosic material into fermentable sugars, which can then be fermented into ethanol, and;
 
    
    a nitric acid hydrolysis process, which we refer to as our HFTA technology, developed
by scientists working at the University of California, Berkeley, that incorporates
anticipated improvements in chemical reaction by which acid hydrolysis occurs.
         4




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Plan of Operation
  Biomass Feedstock Production
      5




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Diesel Fuel Production
    New Technologies; Commercializing Existing Technologies
   
    
    construct and operate a commercial plant that processes MSW into cellulosic biomass for
combustion in existing co-fired boilers for electricity production in Chicago, Illinois;
 
    
    identify and partner with landfill owners, waste haulers and municipalities to identify
locations suitable for our technology; and
 
    
    pursue additional opportunities to implement our technology in commercial settings at
transfer stations and landfills in the United States and elsewhere in the world.
  
    
    complete the research and development of our licensed technologies, which we believe
when combined can convert MSW into ethanol; and
 
    
    explore, develop and/or license additional technologies for processing waste into energy
products as opportunities to do so present themselves.
 Industry Overview
  
    
    Municipal Solid Waste Landfills (MSWLFs)  includes municipal solid waste, industrial
waste, construction and demolition debris, and bioreactors.
 
    
    Mass Burn/Incineration Plants
  6




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Municipal Solid Waste Landfills
    Mass Burn/Incineration Plants
          7




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
    
    Dry Scrubbers  these wash the air emissions from the WTE process (called the gas
stream) and remove any acidic gases by passing the gas stream through a liquid.
 
    
    Electrostatic Precipitators (ESP)  these use high voltage electricity to remove up to
98% of all particles remaining in the gas stream after passing through the scrubbers,
including any heavy metal particles.
 
    
    Fabric Filters (baghouses)  these consist of a series of nearly two thousand fabric
bags made of heat-resistant material which filter remaining particles from the gas stream.
This includes any large concentrations of condensed toxic organic compounds (such as
dioxins) and heavy metal compounds.
  Environmental Matters
  
    
    The Clean Air Act, as well as state laws and regulations impacting air emissions,
including State Implementation Plans related to existing and new national ambient air
quality standards for ozone and particulate matter. Owners and/or operators of air emission
sources are responsible for obtaining permits and for annual compliance and reporting.
 
    
    The Clean Water Act which requires permits for facilities that discharge wastewaters
into the environment.
 
    
    The Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act,
which requires certain solid wastes, including hazardous wastes, to be managed pursuant to
a comprehensive regulatory regime.
 
    
    The National Environmental Policy Act, which requires federal agencies to consider
potential environmental impacts in their decisions, including siting approvals.
  8




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Government Approvals
  Our Technologies
  Biomass Recovery Process
   
    
    Cellulosic biomass, a decontaminated, homogeneous feedstock that we expect will
represent approximately 55 to 60 percent of the MSW and will be suitable for conversion to
multiple energy uses.
 
    
    Separated recyclables (steel cans and other ferrous materials, aluminum cans, plastics,
and glass), which we expect will represent about 25 percent of the MSW input and are sorted
and can be sold to recyclers.
   
    
    the relationship between agitation of the waste material, moisture, and the temperature
and pressure of steam in the vessel uses less energy while obtaining a cleaner biomass
resource;
 
    
    the method of introduction of steam into the autoclave vessel, the pressure range, along
with the method of full depressurization, and treatment of the steam being vented from the
process to prevent air pollution make our process more environmentally friendly than any
other means to handle MSW;
 
    
    the method of mixing the heat and steam with the waste uniformly throughout the vessel
create a homogenous feedstock for fuel production; and,
 
    
    the direct and critical correlation between the length and diameter of the vessel,
internal flighting and the total tonnage of waste to be processed for proper mixing and
product yield.
  9




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HFTA Technology
    Principal Products or Services and their Markets
  Energy
  MSW Processing Services
   10




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Recyclable Byproducts
  Sources and Availability of Raw Materials
   Intellectual Property License Terms
 Biomass North America Licensing, Inc
   HFTA Technology
   11




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Patent
  Employees
  Access to SEC Filings
 www.cleantechbiofuels.net
 
 ITEM 1A. Risk Factors
  Risks Related to Our Business
 We have no operating experience and may not be able to implement our business plan.
    12




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We need to obtain significant additional capital to complete the development of our technologies,
and the failure to secure additional capital will prevent us from commercializing our technology
and executing our plan of operation
  
    
    obtain additional debt or equity financing,
 
    
    secure significant government grants, and/or
 
    
    enter into a strategic alliance with a larger energy company to provide funding.
  Our Biomass Recovery Process technology may have design and engineering issues that may increase
the costs of using the technology.
   We may not have sufficient legal protection of our technologies and other proprietary rights, which
could result in the loss of some or all of our rights or the use of our intellectual properties by
our competitors.
    13




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We will be dependent on our ability to negotiate favorable feedstock supply and biomass off-take
agreements.
  We may not be able to attract and retain management and other personnel we need to succeed.
  We will incur increased costs as a result of being a public company.
  Our failure to adequately adhere to the new corporate governance practices or the failure or
circumvention of our controls and procedures could seriously harm our business.
   14




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Our senior managements lack of experience managing a publicly traded company will divert
managements attention from operations and harm our business.
  Risks Related to our Industry
 As a new small company, we will be at a competitive disadvantage to most of our competitors, which
include larger, established companies that have substantially greater financial, technical,
manufacturing, marketing, distribution and other resources than us.
  Our success is dependent on continued high energy prices.
  Waste processing and energy production is subject to inherent operational accidents and disasters
from which we may not be able to recover, especially if we have only one or a very small number of
facilities.
  Alternative technologies could make our business obsolete.
   15




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Risks Related to Government Regulation and Subsidization
 Enforcement of energy policy regulations could change.
  Costs of compliance may increase with changing environmental and operational safety regulations.
      16




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Risks related to our Common Stock and Stock Price Fluctuation
 Our stock is thinly traded, so you may be unable to sell at or near ask prices or at all.
  
    
    we only recently re-commenced operations;
 
    
    we are a small company that is relatively unknown to stock analysts, stock brokers,
institutional investors and others in the investment community that generate or influence
sales volume; and
 
    
    stock analysts, stock brokers and institutional investors may be risk-averse and be
reluctant to follow an unproven, early stage company such as ours or purchase or recommend
the purchase of our shares until such time as we became more seasoned and viable.
  Even if an active trading market develops, the market price for our common stock may be highly
volatile and could be subject to wide fluctuations.
  
    
    significant sales of our common stock or other securities in the open market;
 
    
    speculation in the press or investment community;
 
    
    actual or anticipated variations in quarterly operating results;
 
    
    changes in earnings estimates;
 
    
    publication (or lack of publication) of research reports about us;
 
    
    increases in market interest rates, which may increase our cost of capital;
 
    
    changes in applicable laws or regulations, court rulings, and other legal actions;
 
    
    changes in market valuations of similar companies;
 
    
    additions or departures of key personnel;
 
    
    actions by our stockholders; and
 
    
    general market and economic conditions.
 Trading in our common stock is subject to special sales practices and may be difficult to sell.
   17




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
    
    control of the market for the security by one or a few broker-dealers that are often
related to the promoter or issuer;
 
    
    manipulation of prices through prearranged matching of purchases and sales and false and
misleading press releases;
 
    
    boiler room practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons;
 
    
    excessive and undisclosed bid-ask differentials and markups by selling broker-dealers;
and
 
    
    the wholesale dumping of the same securities by promoters and broker-dealers after
prices have been manipulated to a desired level, along with the resulting inevitable
collapse of those prices and with consequent investor losses.
  Substantial future sales of our common stock shares in the public market could cause our stock
price to fall.
  Potential issuance of additional common and preferred stock could dilute existing stockholders.
  
    
    exercising voting, redemption and conversion rights to the detriment of the holders of
common stock;
 
    
    receiving preferences over the holders of common stock regarding a surplus of funds in
the event of our dissolution or liquidation;
 
    
    delaying, deferring or preventing a change in control of our company; and
 
    
    discouraging bids for our common stock.
    18




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ITEM 1B. Unresolved Staff Comments
  
 ITEM 2. Properties
  
 ITEM 3. Legal Proceedings
 Cleantech Biofuels, Inc. v. Bio-Products International, Inc .
  Duluth Venture Capital Partners, LLC v. Cleantech Biofuels, Inc., et al.
    19




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Selling Stockholder
    
    Shares SuspendedBrite Star Associates, Inc.
    
    
    1,777,867Fountain Consulting, Inc.
    
    
    1,482,000St Ives Consulting, Inc.
    
    
    1,368,000Trinity Enterprises, L.L.C.
    
    
    1,966,667Padstow Estates, Inc.
    
    
    1,966,667
 Ram Resources, L.L.C. v. CleanTech Biofuels, Inc.
 
 ITEM 4. Submission of Matters to a Vote of Security Holders
   20




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PART II
 
 ITEM 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
  Price Range ofCommon Stock (1)Fiscal Year
    
    High
    
    
    LowYear Ended December 31, 2006First Quarter
    
    $
    0.80
    
    
    $
    0.40Second Quarter
    
    $
    2.00
    
    
    $
    0.70Third Quarter
    
    $
    0.80
    
    
    $
    0.31Fourth Quarter
    
    $
    0.80
    
    
    $
    0.30Year Ended December 31, 2007First Quarter
    
    $
    2.00
    
    
    $
    0.65Second Quarter
    
    $
    1.01
    
    
    $
    0.65Third Quarter
    
    $
    1.00
    
    
    $
    0.15Fourth Quarter
    
    $
    0.55
    
    
    $
    0.25Year Ended December 31, 2008First Quarter
    
    $
    1.50
    
    
    $
    0.55Second Quarter
    
    $
    1.32
    
    
    $
    0.80Third Quarter
    
    $
    1.20
    
    
    $
    0.21Fourth Quarter
    
    $
    0.75
    
    
    $
    0.07
 (1)
    
    all periods presented are adjusted for the 100 to 1 reverse stock split that occurred on
February 21, 2007    Number of SecuritiesNumber of securities to be
    
    
    
    
    
    
    Remaining Available forissued upon Exercise of
    
    
    Weighted-Average
    
    
    Future Issuance Under EquityOutstanding Options,
    
    
    Exercise Price of
    
    
    Compensation PlansWarrants and Rights and
    
    
    Outstanding Options,
    
    
    (excluding securities reflectedPlan Category
    
    Restricted Stock
    
    
    Warrants and Rights
    
    
    in column (a))(a)
    
    
    (b)
    
    
    (c)Equity compensation
plans approved by
security
holders: 2007
Stock Option
Plan
    
    
    7,290,000
    
    
    $
    0.23
    
    
    
    1,710,000Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Totals
    
    
    7,290,000
    
    
    
    
    
    
    
    1,710,000
  21




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Dividend Policy
  Recent Sales of Unregistered Securities
   Holder
    
    Number of SharesBrite Star Associates, Inc.
    
    
    1,777,867Two Shamrocks, Inc.
    
    
    1,600,000Fountain Consulting, Inc.
    
    
    1,482,000St Ives Consulting, Inc.
    
    
    1,368,000STL Capital Holdings, Inc.
    
    
    1,638,933Duluth Venture Capital Partners
    
    
    1,500,000
     22




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23




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ITEM 6. Selected Financial Data
  Years ended December 31,2008
    
    
    2007
    
    
    2006Statements of Operations Data:Costs and expenses:General and administrative
    
    $
    568,115
    
    
    $
    476,937
    
    
    $
    16,496Professional fees
    
    
    430,798
    
    
    
    279,814
    
    
    
    47,078Research and development
    
    
    392,471
    
    
    
    118,230
    
    
    
    14,0001,391,384
    
    
    
    874,981
    
    
    
    77,574Other expense (income):Interest
    
    
    179,690
    
    
    
    64,029
    
    
    
    2,439Amortization of technology license
    
    
    15,000
    
    
    
    20,000
    
    
    
    Deposit forfeiture
    
    
    
    
    
    
    
    
    
    
    (25,000
    )Interest income
    
    
    (13,749
    )
    
    
    (21,405
    )
    
    
    180,941
    
    
    
    62,624
    
    
    
    (22,561
    )Net loss applicable to common stockholders
    
    $
    1,572,325
    
    
    $
    937,605
    
    
    $
    55,013Basic net loss per common share
    
    $
    0.03
    
    
    $
    0.02
    
    
    
    **Weighted average common shares outstanding
    
    
    56,857,870
    
    
    
    45,174,094
    
    
    
    38,567,100Other Data:Depreciation and amortization
    
    $
    43,572
    
    
    $
    20,256
    
    
    $
    Capital expenditures
    
    
    30,180
    
    
    
    3,355
    
    
    
    Balance Sheet Data (end of period):Total Assets
    
    
    2,805,570
    
    
    
    777,406
    
    
    
    117,520Debt (1)
    
    
    607,478
    
    
    
    1,400,000
    
    
    
    Stockholders equity (deficit)
    
    
    1,866,257
    
    
    
    (811,615
    )
    
    
    (38,166
    )
 (1)
    
    amounts include both current and long-term portions of Notes Payable,
Debentures and Capital Lease**
    
    - less than $.01 per share  24




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ITEM 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Plan of Operation
   Biomass Feedstock Production
      25




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Diesel Fuel Production
     Results of Operations
   26




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General
  Year ended December 31, 2008 compared to the year ended December 31, 2007
 2008
    
    
    2007
    
    
    Change
    
    
    % ChangeCosts and expenses:General and administrative
    
    $
    568,115
    
    
    $
    476,937
    
    
    $
    91,178
    
    
    
    19
    %Professional fees
    
    
    430,798
    
    
    
    279,814
    
    
    
    150,984
    
    
    
    54
    %Research and development
    
    
    392,471
    
    
    
    118,230
    
    
    
    274,241
    
    
    
    232
    %1,391,384
    
    
    
    874,981
    
    
    
    516,403Other expense (income):Interest
    
    
    179,690
    
    
    
    64,029
    
    
    
    115,661
    
    
    
    181
    %Amortization of technology license
    
    
    15,000
    
    
    
    20,000
    
    
    
    (5,000
    )
    
    
    -25
    %Interest income
    
    
    (13,749
    )
    
    
    (21,405
    )
    
    
    7,656
    
    
    
    -36
    %Net loss applicable to common stockholders
    
    $
    1,572,325
    
    
    $
    937,605
    
    
    $
    634,720
    
    
    
    68
    %
 Costs and expenses:
 General and administrative
 Professional fees
 Research and development
 Other expense (income):
 Interest expense
 Year ended December 31, 2007 compared to the year ended December 31, 2006
 2007
    
    
    2006
    
    
    Change
    
    
    % ChangeCosts and expenses:General and administrative
    
    $
    476,937
    
    
    $
    16,496
    
    
    $
    460,441
    
    
    
    2791
    %Professional fees
    
    
    279,814
    
    
    
    47,078
    
    
    
    232,736
    
    
    
    494
    %Research and development
    
    
    118,230
    
    
    
    14,000
    
    
    
    104,230
    
    
    
    745
    %874,981
    
    
    
    77,574
    
    
    
    797,407Other expense (income):Interest
    
    
    64,029
    
    
    
    2,439
    
    
    
    61,590
    
    
    
    2525
    %Amortization of technology license
    
    
    20,000
    
    
    
    
    
    
    
    20,000
    
    
    NMDeposit forfeiture
    
    
    
    
    
    
    (25,000
    )
    
    
    25,000
    
    
    
    -100
    %Interest income
    
    
    (21,405
    )
    
    
    
    
    
    
    (21,405
    )
    
    NMNet loss applicable to common stockholders
    
    $
    937,605
    
    
    $
    55,013
    
    
    $
    882,592
    
    
    
    1604
    %
  27




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Costs and expenses:
 General and administrative
 Professional fees
 Research and development
 Other expense (income):
 Interest expense
 Amortization of technology license
 Deposit forfeiture
 Interest income
 Liquidity and Capital Resources
   Debt
 Convertible Notes Payable
   28




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WWT Note Payable
  Note Payable
   Series A Convertible Debentures
    29




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Summary of Cash Flow Activity
 For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Net cash used by operating activities
    
    $
    (866,285
    )
    
    $
    (715,165
    )
    
    $
    (85,471
    )Net cash used by investing activities
    
    
    (200,180
    )
    
    
    (3,355
    )
    
    
    Net cash provided by financing activities
    
    
    1,042,726
    
    
    
    838,856
    
    
    
    84,914
 Net cash used by operating activities
  Net cash used by investing activities
  Net cash provided by financing activities
  Contractual Obligations and Commitments
  Payments due by PeriodLess than 1
    
    
    
    
    
    
    
    
    
    
    More thanTotal
    
    
    year
    
    
    1 to 3 years
    
    
    4 to 5 years
    
    
    5 yearsConvertible Notes (1)
    
    $
    643,420
    
    
    $
    643,420
    
    
    $
    
    
    
    $
    
    
    
    $
    WWT Note (2)
    
    
    470,250
    
    
    
    470,250
    
    
    
    
    
    
    
    
    
    
    
    Note Payable (2)
    
    
    46,600
    
    
    
    46,600
    
    
    
    
    
    
    
    
    
    
    
    Series A Convertible Debentures (3)
    
    
    140,000
    
    
    
    
    
    
    
    140,000
    
    
    
    
    
    
    
    Capital Lease (4)
    
    
    12,150
    
    
    
    5,400
    
    
    
    6,750
    
    
    
    
    
    
    
    Operating Lease (5)
    
    
    43,200
    
    
    
    21,600
    
    
    
    21,600
    
    
    
    
    
    
    
    Total contractual obligations
    
    $
    1,355,620
    
    
    $
    1,187,270
    
    
    $
    168,350
    
    
    $
    
    
    
    $
    
 (1)
    
    Amount represents value of principal amount of notes and estimates for interest. These notes are with various
individuals, carry one-year terms and are convertible into shares of the Companys common stock at the noteholders option(2)
    
    Amount represents value of principal amount of note and interest through term of note.(3)
    
    Debentures are convertible at Companys option into shares of the Companys common stock.(4)
    
    Represents lease on office furniture.(5)
    
    Represents lease for office space. The lease is for three years from occupancy date of January 2008.  Merrick & Company.
  30




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Off-Balance Sheet Arrangements
   
    
    a retained or contingent interest in assets transferred to the unconsolidated entity or
similar arrangement that serves as credit;
 
    
    liquidity or market risk support to such entity for such assets;
 
    
    an obligation, including a contingent obligation, arising out of a variable interest in
an unconsolidated entity that is held by, and material to, us where such entity provides
financing, liquidity, market risk or credit risk support to, or engages in leasing,
hedging, or research and development services with us.
 Critical Accounting Estimates
 Intangible Assets 
 Deferred Taxes 
 Stock-Based Compensation  Share-Based Payment
 
 ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
   31




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ITEM 8. Financial Statements and Supplemental Data
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
   32




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MANAGEMENTS ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
   .
  33




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##### Table of Contents



CLEANTECH BIOFUELS, INC.
(formerly Alternative Ethanol Technologies, Inc.)
(A Development Stage Company)
BALANCE SHEET
 December 31,
    
    
    December 31,2008
    
    
    2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    96,617
    
    
    $
    120,356Receivables:Interest
    
    
    
    
    
    
    19,425Promissory notes
    
    
    
    
    
    
    450,000Prepaids and other current assets
    
    
    68,345
    
    
    
    72,026164,962
    
    
    
    661,807Property and equipment, net
    
    
    18,826
    
    
    
    3,099Non-current assets:Technology licenses, net
    
    
    2,021,782
    
    
    
    112,500Patents
    
    
    600,000
    
    
    
    Total Assets
    
    $
    2,805,570
    
    
    $
    777,406LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)Current liabilities:Accounts payable
    
    $
    238,925
    
    
    $
    91,988Accrued interest
    
    
    26,660
    
    
    
    60,433Accrued professional fees and other
    
    
    66,250
    
    
    
    36,600Notes Payable, net
    
    
    456,712
    
    
    
    Capital lease
    
    
    4,649
    
    
    
    Total current liabilities
    
    
    793,196
    
    
    
    189,021Capital Lease
    
    
    6,117
    
    
    
    Series A Convertible Debentures
    
    
    140,000
    
    
    
    1,400,000STOCKHOLDERS EQUITY (DEFICIT)Preferred stock, $0.001 par value; 10,000,000 authorized shares; no shares
issued or outstanding
    
    
    
    
    
    
    Common stock, $0.001 par value; 240,000,000 authorized shares;
61,270,153 and 49,343,680 shares issued and outstanding at
December 31, 2008 and 2007, respectively
    
    
    61,270
    
    
    
    49,344Additional paid-in capital
    
    
    4,675,098
    
    
    
    364,260Notes receivable  restricted common shares issued to Directors and Employees
    
    
    (162,567
    )
    
    
    (90,000
    )Deficit accumulated during the development stage
    
    
    (2,707,544
    )
    
    
    (1,135,219
    )Total Stockholders Equity (Deficit)
    
    
    1,866,257
    
    
    
    (811,615
    )Total Liabilities and Stockholders Equity (Deficit)
    
    $
    2,805,570
    
    
    $
    777,406
 See accompanying notes to financial statements.
  34




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##### Table of Contents



CLEANTECH BIOFUELS, INC.
(formerly Alternative Ethanol Technologies, Inc.)
(A Development Stage Company)
STATEMENTS OF OPERATIONS
 July 14, 2004(inception) toYears ended December 31,
    
    
    December 31,2008
    
    
    2007
    
    
    2006
    
    
    2008Costs and expenses:General and administrative
    
    $
    568,115
    
    
    $
    476,937
    
    
    $
    16,496
    
    
    $
    1,067,750Professional fees
    
    
    430,798
    
    
    
    279,814
    
    
    
    47,078
    
    
    
    759,441Research and development
    
    
    392,471
    
    
    
    118,230
    
    
    
    14,000
    
    
    
    524,7011,391,384
    
    
    
    874,981
    
    
    
    77,574
    
    
    
    2,351,892Other expense (income):Interest
    
    
    179,690
    
    
    
    64,029
    
    
    
    2,439
    
    
    
    246,458Amortization of technology license
    
    
    15,000
    
    
    
    20,000
    
    
    
    
    
    
    
    35,000Deposit forfeiture
    
    
    
    
    
    
    
    
    
    
    (25,000
    )
    
    
    (25,000
    )Interest income
    
    
    (13,749
    )
    
    
    (21,405
    )
    
    
    
    
    
    
    (35,154
    )180,941
    
    
    
    62,624
    
    
    
    (22,561
    )
    
    
    221,304Net loss applicable to common stockholders
    
    $
    1,572,325
    
    
    $
    937,605
    
    
    $
    55,013
    
    
    $
    2,573,196Basic net loss per common share
    
    $
    0.03
    
    
    $
    0.02
    
    
    
    **
    
    
    $
    0.06Weighted average common shares outstanding
    
    
    56,857,870
    
    
    
    45,174,094
    
    
    
    38,567,100
    
    
    
    44,137,431
 **
    
    - less than $.01 per share See accompanying notes to financial statements.
  35




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##### Table of Contents



CLEANTECH BIOFUELS, INC.
(formerly Alternative Ethanol Technologies, Inc.)
(A Development Stage Company)
Statements of Changes in Stockholders Deficit
 Notes Rec restrictedcommon
    
    
    July 14, 2004Additional
    
    
    shares issued
    
    
    (inception) toCommon Stock
    
    
    Paid-in
    
    
    to Directors
    
    
    December 31,Shares
    
    
    Amount
    
    
    Capital
    
    
    and Employees
    
    
    2008Balances at December 31, 2005
    
    
    38,509,371
    
    
    $
    38,509
    
    
    $
    (28,409
    )
    
    $
    
    
    
    $
    (8,253
    )Common stock sold for cash in January
2006 at $.13 per share
    
    
    115,413
    
    
    
    116
    
    
    
    14,884Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (55,013
    )Balances at December 31, 2006
    
    
    38,624,784
    
    
    
    38,625
    
    
    
    (13,525
    )
    
    
    
    
    
    
    (63,266
    )Shares effectively issued to former
AETA stockholders in recapitalization
in May 2007
    
    
    752,096
    
    
    
    752
    
    
    
    
    
    
    
    
    
    
    
    (134,348
    )Conversion of promissory notes in
May 2007 at $.014 per share
    
    
    9,366,800
    
    
    
    9,367
    
    
    
    124,229Issuance of restricted shares to Directors
in August 2007 at $.15 per share
    
    
    600,000
    
    
    
    600
    
    
    
    89,400
    
    
    
    (90,000
    )Fair value of RAM warrants issued in
August 2007 at $.13 per share
    
    
    
    
    
    
    
    
    
    
    125,027Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    39,129Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (937,605
    )Balances at December 31, 2007
    
    
    49,343,680
    
    
    
    49,344
    
    
    
    364,260
    
    
    
    (90,000
    )
    
    
    (1,135,219
    )Conversion of promissory notes in
March 2008 at $.15 per share
    
    
    4,433,067
    
    
    
    4,433
    
    
    
    660,527Conversion of promissory notes in
April 2008 at $.15 per share
    
    
    4,455,844
    
    
    
    4,456
    
    
    
    663,921Shares released from escrow to HFTA in
September 2008 at $.52 per share
    
    
    962,562
    
    
    
    962
    
    
    
    499,570Shares issued in accordance with Biomass
North America Licensing, Inc. merger
in September 2008 at $.75 per share
    
    
    1,895,000
    
    
    
    1,895
    
    
    
    1,419,355Discounts on Notes Payable
    
    
    
    
    
    
    
    
    
    
    783,853Issuance of restricted shares to Employees
in December 2008 at $.36 per share
    
    
    180,000
    
    
    
    180
    
    
    
    64,620
    
    
    
    (64,800
    )Interest on Notes Receivable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,767
    )Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    218,992Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,572,325
    )Balances at December 31, 2008
    
    
    61,270,153
    
    
    $
    61,270
    
    
    $
    4,675,098
    
    
    $
    (162,567
    )
    
    $
    (2,707,544
    )
 See accompanying notes to financial statements.
  36




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##### Table of Contents



CLEANTECH BIOFUELS, INC.
(formerly Alternative Ethanol Technologies, Inc.)
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
 July 14, 2004Year Ended
    
    
    (inception) toDecember 31,
    
    
    December 31,2008
    
    
    2007
    
    
    2006
    
    
    2008Operating ActivitiesNet loss applicable to common stockholders
    
    $
    (1,572,325
    )
    
    $
    (937,605
    )
    
    $
    (55,013
    )
    
    $
    (2,573,196
    )Adjustments to reconcile net loss applicable to common
stockholders to net cash used by operating activities:Items that did not use (provide) cash:Common stock issued for organizational costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100Depreciation
    
    
    28,572
    
    
    
    256
    
    
    
    
    
    
    
    28,828Amortization
    
    
    15,000
    
    
    
    20,000
    
    
    
    
    
    
    
    35,000Interest income
    
    
    (7,767
    )
    
    
    
    
    
    
    
    
    
    
    (7,767
    )Amortization of discounts (interest expense) and
other financing charges
    
    
    138,952
    
    
    
    
    
    
    
    
    
    
    
    138,952Share-based compensation expense
    
    
    218,992
    
    
    
    39,129
    
    
    
    
    
    
    
    258,121Write-off of technology license
    
    
    97,500
    
    
    
    
    
    
    
    
    
    
    
    97,500Fair value of RAM warrant settlement
    
    
    
    
    
    
    125,027
    
    
    
    
    
    
    
    125,027Changes in operating assets and liabilities that provided
(used) cash, net:Prepaids and other current assets
    
    
    3,681
    
    
    
    (72,026
    )
    
    
    
    
    
    
    (68,345
    )Technology license
    
    
    
    
    
    
    (15,000
    )
    
    
    (75,000
    )
    
    
    (132,500
    )Accounts payable
    
    
    146,937
    
    
    
    91,988
    
    
    
    
    
    
    
    238,925Other assets and other liabilities
    
    
    34,523
    
    
    
    38,569
    
    
    
    2,439
    
    
    
    75,531Accrued liabilities
    
    
    29,650
    
    
    
    (5,503
    )
    
    
    42,103
    
    
    
    66,250Net cash used by operating activities
    
    
    (866,285
    )
    
    
    (715,165
    )
    
    
    (85,471
    )
    
    
    (1,717,574
    )Cash Flows Provided (Used) by Investing ActivitiesAcquisition of patent, net
    
    
    (150,000
    )
    
    
    
    
    
    
    
    
    
    
    (150,000
    )Merger of Biomass North America Licensing, Inc.,
net
    
    
    (20,000
    )
    
    
    
    
    
    
    
    
    
    
    (20,000
    )Acquisition of HFTA technology, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Expenditures for equipment
    
    
    (30,180
    )
    
    
    (3,355
    )
    
    
    
    
    
    
    (33,535
    )Net cash used by investing activities
    
    
    (200,180
    )
    
    
    (3,355
    )
    
    
    
    
    
    
    (203,535
    )Cash Flows Provided (Used) by Financing ActivitiesAdvances  related parties
    
    
    
    
    
    
    (111,144
    )
    
    
    69,914
    
    
    
    Payments on capital lease, including interest
    
    
    (3,787
    )
    
    
    
    
    
    
    
    
    
    
    (3,787
    )Series A Convertible Debentures, including interest
    
    
    474,900
    
    
    
    950,000
    
    
    
    
    
    
    
    1,424,900Issuance of Convertible Notes Payable
    
    
    607,000
    
    
    
    
    
    
    
    
    
    
    
    607,000Payments on Note Payable
    
    
    (35,387
    )
    
    
    
    
    
    
    
    
    
    
    (35,387
    )Sale of common stock
    
    
    
    
    
    
    
    
    
    
    15,000
    
    
    
    25,000Net cash provided by financing activities
    
    
    1,042,726
    
    
    
    838,856
    
    
    
    84,914
    
    
    
    2,017,726Net increase (decrease) in cash and cash equivalents
    
    
    (23,739
    )
    
    
    120,336
    
    
    
    (557
    )
    
    
    96,617Cash and cash equivalents at beginning of period
    
    
    120,356
    
    
    
    20
    
    
    
    577
    
    
    
    Cash and cash equivalents at end of period
    
    $
    96,617
    
    
    $
    120,356
    
    
    $
    20
    
    
    $
    96,617
 See accompanying notes to financial statements.
  37




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##### Table of Contents



CLEANTECH BIOFUELS, INC.
(formerly Alternative Ethanol Technologies, Inc.)
(A Development Stage Company)
STATEMENTS OF CASH FLOWS contd
 July 14, 2004Year Ended
    
    
    (inception) toDecember 31,
    
    
    December 31,2008
    
    
    2007
    
    
    2006
    
    
    2008Supplemental disclosure of cash flow information:Cash paid for interest
    
    $
    1,174
    
    
    $
    6,036
    
    
    $
    
    
    
    $
    7,210Supplemental disclosure of noncash investing and
financing activities:Promissory notes receivable related to Series A
Convertible Debentures
    
    $
    
    
    
    $
    450,000
    
    
    $
    
    
    
    $
    450,000Capital lease related to the purchase of equipment
    
    $
    14,119
    
    
    $
    
    
    
    $
    
    
    
    $
    Common stock issued for organizational costs
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    100Common stock issued for promissory notes
    
    $
    
    
    
    $
    133,596
    
    
    $
    
    
    
    $
    133,596Common stock issued for Debentures converted
    
    $
    1,333,337
    
    
    $
    
    
    
    $
    
    
    
    $
    1,333,337Common stock and note payable issued for
acquisition of Biomass
    
    $
    1,501,250
    
    
    $
    
    
    
    $
    
    
    
    $
    1,501,250Common stock issued for HFTA
    
    $
    500,532
    
    
    $
    
    
    
    $
    
    
    
    $
    500,532
 See accompanying notes to financial statements.
  38




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##### Table of Contents



CLEANTECH BIOFUELS, INC.
(A DEVELOPMENT-STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1  Organization and Business
      Note 2  Summary of Significant Accounting Policies
 Use of Estimates
 Consolidation
 Research and Development Costs
  39




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##### Table of Contents



Impairment of Long-Lived Assets 
 Intellectual Property
 Property, plant and equipment
 Income Taxes Accounting for Income Taxes
 Accounting for Uncertainty in Income Taxesan interpretation of SFAS No. 109, Accounting
for Income Taxes
 Fair Value of Financial Instruments
 Convertible Notes Payable and Warrants  Derivatives Accounting for Convertible Securities
with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, Application of Issue No. 98-5 to Certain Convertible Instruments
 Comprehensive Income  Reporting Comprehensive Income
 Net Loss per Common Share
  40




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##### Table of Contents



Share-based compensation
 Share-Based Payment
 Dividends
 Recent Accounting Pronouncements The Fair Value
Option for Financial Assets and Financial Liabilities  Including an Amendment of FASB Statement
No. 115 Accounting for Certain Investments in Debt and Equity Securities,
 Business Combinations
 Noncontrolling Interests in Consolidated Financial
Statements Consolidated Financial
Statements
  41




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##### Table of Contents



Disclosures about Derivative Instruments and Hedging
Activities
 The Hierarchy of Generally Accepted Accounting
Principles, The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles
 Note 3  Property and Equipment
  December 31,2008
    
    
    2007Computers
    
    $
    3,355
    
    
    $
    3,355Furniture and fixtures
    
    
    15,799
    
    
    
    Plant and equipment
    
    
    25,000
    
    
    
    Construction-in-progress
    
    
    3,500
    
    
    
    47,654
    
    
    
    3,355Accumulated Depreciation
    
    
    (28,828
    )
    
    
    (256
    )Total
    
    $
    18,826
    
    
    $
    3,099
  Note 4  Mergers/Acquisitions
    42




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##### Table of Contents



Note 5  Patent
  Note 6  Technology Licenses
 Biomass North America Licensing, Inc.
   HFTA, Inc.
    43




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##### Table of Contents



Bio-Products International, Inc.
   Brelsford Engineering, Inc.
    44




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##### Table of Contents



Note 7  Debt
 December 31,2008
    
    
    2007Convertible Notes Payable, net of discounts of $514,797 which are made
up of various individual notes with an aggregate $607,000 face value,
due in one year from date of note, interest at 6.0%
    
    $
    92,203
    
    
    $
    WWT Note Payable, net of discount of $130,105, with a $450,000 face
value, due July 22, 2009, interest at 6.0%
    
    
    319,895
    
    
    
    Note Payable, due April 10, 2009, interest at 6.0%
    
    
    44,614
    
    
    
    Series A Convertible Debentures, due April 16, 2010, interest at 6.0%
    
    
    140,000
    
    
    
    1,400,000Total debt
    
    
    596,712
    
    
    
    1,400,000Current maturities  Notes Payable, net
    
    
    (456,712
    )
    
    
    Long-term portion, less current maturities
    
    $
    140,000
    
    
    $
    1,400,000
 Convertible Notes Payable
   WWT Note Payable
  Note Payable
   45




---



##### Table of Contents



Series A Convertible Debentures
    Note 8  Stockholders Deficit
        46




---



##### Table of Contents



Note 9  Related Party Transactions
     Note 10  Share-based Payments
      47




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##### Table of Contents



2008
    
    
    2007Risk-free interest rate
    
    
    1.57
    %
    
    
    4.25
    %Dividend yield
    
    
    0
    %
    
    
    0
    %Volatility
    
    
    36.91
    %
    
    
    61.49
    %Expected term
    
    
    4.8
    
    
    
    5.0Fair market value
    
    $
    0.12
    
    
    $
    0.08
   For the Year EndedDec 31, 2008
    
    
    Dec 31, 2007Pre-tax compensation expense:Stock options
    
    $
    218,992
    
    
    $
    39,129Warrants
    
    
    
    
    
    
    125,027Total expense
    
    
    218,992
    
    
    
    164,156Tax benefit, net
    
    
    
    
    
    
    After-tax compensation expense
    
    $
    218,992
    
    
    $
    164,156
    48




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##### Table of Contents



WeightedShares Under
    
    
    Average
    
    
    AggregateOption
    
    
    Exercise Price
    
    
    intrinsic valueOptions outstanding at December 31, 2007
    
    
    4,010,000
    
    
    $
    0.15
    
    
    $
    1,604,000Granted
    
    
    2,500,000
    
    
    
    0.37Exercised
    
    
    Forfeited
    
    
    Options outstanding at December 31, 2008
    
    
    6,510,000
    
    
    
    0.23
    
    
    
    (1
    )Options exercisable at December 31, 2008
    
    
    1,371,667
    
    
    $
    0.15
    
    
    $
    96,017
 (1)
    
    The weighted-average exercise price at December 31, 2008 for all outstanding options was
greater than the fair value of the Companys stock on that date, resulting in an aggregate intrinsic value of
$-0-. Note 11  Income Taxes
     At December 31,2008
    
    
    2007Start-up costs
    
    $
    248,000
    
    
    $
    132,000Net operating loss carryforward
    
    
    339,000
    
    
    
    78,000Accrual to cash conversion
    
    
    163,000
    
    
    
    49,000Share-based compensation related to stock options
    
    
    100,000
    
    
    
    15,000Other
    
    
    10,000
    
    
    
    1,000Total
    
    
    860,000
    
    
    
    275,000Valuation allowance
    
    
    (860,000
    )
    
    
    (275,000
    )Net deferred tax asset
    
    $
    
    
    
    $
    
  49




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##### Table of Contents



Note 12  Commitments and Contingencies
 Project management
  Duluth Litigation
 Leases 
 Note 13  Subsequent Events
     50




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##### Table of Contents



Note 14  Quarterly Financial Data (Unaudited)
  For the quarters ended 2008:Mar 31
    
    
    June 30
    
    
    Sept 30
    
    
    Dec 31Costs and expenses:General and administrative
    
    $
    146,223
    
    
    $
    155,107
    
    
    $
    99,204
    
    
    $
    167,581Professional fees
    
    
    111,946
    
    
    
    78,946
    
    
    
    90,284
    
    
    
    149,622Research and development
    
    
    183,104
    
    
    
    53,812
    
    
    
    40,271
    
    
    
    115,284441,273
    
    
    
    287,865
    
    
    
    229,759
    
    
    
    432,487Other expense (income):Interest
    
    
    19,751
    
    
    
    4,136
    
    
    
    3,314
    
    
    
    152,489Amortization of technology license
    
    
    3,750
    
    
    
    3,750
    
    
    
    3,750
    
    
    
    3,750Interest income
    
    
    (5,727
    )
    
    
    (252
    )
    
    
    (3
    )
    
    
    (7,767
    )Net loss applicable to common stockholders
    
    $
    459,047
    
    
    $
    295,499
    
    
    $
    236,820
    
    
    $
    580,959Basic net loss per common share
    
    $
    0.01
    
    
    $
    0.01
    
    
    
    **
    
    
    $
    0.01
 For the quarters ended 2007:Mar 31
    
    
    June 30
    
    
    Sept 30
    
    
    Dec 31Costs and expenses:General and administrative
    
    $
    4,007
    
    
    $
    229,344
    
    
    $
    175,635
    
    
    $
    67,951Professional fees
    
    
    1,970
    
    
    
    154,873
    
    
    
    62,152
    
    
    
    60,819Research and development
    
    
    
    
    
    
    
    
    
    
    41,533
    
    
    
    76,6975,977
    
    
    
    384,217
    
    
    
    279,320
    
    
    
    205,467Other expense (income):Interest
    
    
    3,597
    
    
    
    17,500
    
    
    
    21,466
    
    
    
    21,466Amortization of technology license
    
    
    
    
    
    
    
    
    
    
    16,250
    
    
    
    3,750Interest income
    
    
    
    
    
    
    (5,020
    )
    
    
    (9,038
    )
    
    
    (7,347
    )Net loss applicable to common stockholders
    
    $
    9,574
    
    
    $
    396,697
    
    
    $
    307,998
    
    
    $
    223,336Basic net loss per common share
    
    
    **
    
    
    $
    0.01
    
    
    $
    0.01
    
    
    
    **
 **
    
    - less than $.01 per share 
 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  
 ITEM 9A. Controls and Procedures
  Effectiveness of Disclosure Controls and Procedures
  51




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##### Table of Contents



Changes in Internal Control Over Financial Reporting
 Attestation Report of Registered Public Accounting Firm
 
 ITEM 9B. Other Information
  
 PART III
 
 ITEM 10. Directors, Executive Officers and Corporate Governance
  
 ITEM 11. Executive Compensation
  
 ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
  
 ITEM 13. Certain Relationships and Related Transactions and Director Independence
   52




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##### Table of Contents



ITEM 14. Principal Accountant Fees and Services
  
 PART IV
 
 ITEM 15. Exhibits
 (a)
    
    The following documents are filed as part of this report:
 1.
    
    Financial Statements:Report of Independent Registered Public Accounting FirmConsolidated Balance Sheets as of December 31, 2008 and 2007Consolidated Statements of Operations for the years ended December 31, 2008,
2007 and 2006 and Inception to December 31, 2008Consolidated Statements of Changes in Stockholders Equity for the years ended
December 31, 2008, 2007 and 2006Consolidated Statements of Cash Flows for the years ended December 31, 2008,
2007 and 2006 and Inception to December 31, 2008Notes to Consolidated Financial Statements
 2.
    
    Exhibits:
 ExhibitNumber
    
    Description2.1
    
    
    Agreement and Plan of Merger and Reorganization by and among Cleantech Biofuels, Inc., Biomass NA
Acquisition Subsidiary, Inc. and Biomass North America Licensing, Inc. dated as of July 14, 2008
(incorporated herein by reference to Exhibit 2.1 of the Registrants quarterly report on Form 10-Q for the
period ended June 30, 2008).3.1
    
    
    Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 of the Registrants
registration statement on Form SB-2 filed on September 10, 2007, File No. 333-145939).3.2
    
    
    Restated By-Laws (incorporated herein by reference to Exhibit 3.2 of the Registrants registration
statement on Form SB-2 filed on September 10, 2007, File No. 333-145939).4.1
    
    
    Form of Series A Convertible Debenture (incorporated herein by reference to Exhibit 4.1 of the Registrants
registration statement on Form SB-2 filed on September 10, 2007, File No. 333-145939).4.2
    
    
    Investors Rights Agreement dated as of April 16, 2007 by and among SRS Energy, Inc. and certain Investors
(incorporated herein by reference to Exhibit 4.2 of the Registrants registration statement on Form SB-2
filed on September 10, 2007, File No. 333-145939).4.3
    
    
    Series A Debenture Purchase Agreement dated as of April 16, 2007 by and among SRS Energy, Inc. and certain
Investors (incorporated herein by reference to Exhibit 4.3 of the Registrants registration statement on
Form SB-2 filed on September 10, 2007, File No. 333-145939).4.4
    
    
    Warrant dated August 31, 2007 by CleanTech Biofuels, Inc. in favor of RAM Resources, L.L.C (incorporated
herein by reference to Exhibit 4.4 of the Registrants registration statement on Form SB-2 filed on
September 10, 2007, File No. 333-145939).10.1
    
    
    Exclusive License Agreement between Brelsford Engineering, Inc. and SRS Energy, Inc. dated as of April 1,
2005 (incorporated herein by reference to Exhibit 10.1 of the Registrants registration statement on Form
SB-2 filed on September 10, 2007, File No. 333-145939).10.2
    
    
    Amendment to Exclusive License Agreement between Brelsford Engineering, Inc. and SRS Energy, Inc. dated as
of January 11, 2006 (incorporated herein by reference to Exhibit 10.2 of the Registrants registration
statement on Form SB-2 filed on September 10, 2007, File No. 333-145939).10.3
    
    
    Technology License Agreement between Bio-Products International, Inc. and SRS Energy, Inc. dated as of
August 17, 2005 (incorporated herein by reference to Exhibit 10.3 of the Registrants registration
statement on Form SB-2 filed on September 10, 2007, File No. 333-145939).
  53




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##### Table of Contents



ExhibitNumber
    
    Description10.4
    
    
    Technology License Agreement between Bio Products International, Inc. and SRS Energy, Inc. dated as of
March 8, 2007 (incorporated herein by reference to Exhibit 10.4 of the Registrants registration statement
on Form SB-2 filed on September 10, 2007, File No. 333-145939).10.5
    
    
    Engagement Agreement between Alternative Ethanol Technologies, Inc. k/n/a CleanTech Biofuels, Inc. and
Merrick & Company (incorporated herein by reference to Exhibit 10.5 of the Registrants registration
statement on Form SB-2 filed on September 10, 2007, File No. 333-145939).10.6
    
    
    Consulting Fee Agreement between Alternative Ethanol Technologies k/n/a CleanTech Biofuels, Inc. and Five
Sigma Ltd. dated as of April 17, 2007 (incorporated herein by reference to Exhibit 10.6 of the Registrants
registration statement on Form SB-2 filed on September 10, 2007, File No. 333-145939).10.7
    *
    
    2007 Stock Option Plan (incorporated herein by reference to Exhibit 10.7 of the Registrants registration
statement on Form SB-2 filed on September 10, 2007, File No. 333-145939).10.8
    *
    
    Form of Director Stock Option Agreement (incorporated herein by reference to Exhibit 10.8 of the
Registrants registration statement on Form SB-2 filed on September 10, 2007, File No. 333-145939).10.9
    *
    
    Director Stock Purchase Agreement (incorporated herein by reference to Exhibit 10.9 of the Registrants
registration statement on Form SB-2 filed on September 10, 2007, File No. 333-145939).10.10
    *
    
    Employment Agreement  Edward P. Hennessey, Jr. (incorporated herein by reference to Exhibit 10.10 of the
Registrants registration statement on Form SB-2 filed on September 10, 2007, File No. 333-145939).10.11
    *
    
    Form of Employee Agreement  Michael Kime and Tom Jennewein (incorporated herein by reference to Exhibit
10.11 of the Registrants registration statement on Form SB-2 filed on September 10, 2007, File No.
333-145939).10.12
    *
    
    Form of Employee Stock Option Agreement  Michael Kime and Tom Jennewein (incorporated herein by reference
to Exhibit 10.12 of the Registrants registration statement on Form SB-2 filed on September 10, 2007, File
No. 333-145939).10.13
    
    
    Commercial Lease with Pershing Properties, LLC dated October 12, 2007 (incorporated herein by reference to
Exhibit 10.13 of the Registrants registration statement on Form SB-2/A filed on November 30, 2007, File
No. 333-145939).10.14
    
    
    Sublicense Agreement with HFTA dated March 20, 2008 (incorporated herein by reference to Exhibit 10.1 of
the Registrants current report on Form 8-K filed March 25, 2008).10.15
    
    
    Sublicense Agreement among SRS Energy, Inc., Cleantech Biofuels, Inc. and HFTA for Methods and Apparatus
for Treating Biomass Material (incorporated herein by reference to Exhibit 10.1 of the Registrants current
report on Form 8-K filed on March 25, 2008).10.16
    
    
    Patent Purchase Agreement dated October 22, 2008 by and between Cleantech Biofuels, Inc. and World Waste
Technologies, Inc. (incorporated herein by reference to Exhibit 10.15 of the Registrants current report on
Form 8-K filed on October 27, 2008).10.17
    
    
    Note issued in favor of World Waste Technologies, Inc. dated October 22, 2008 (incorporated herein by
reference to Exhibit 10.16 of the Registrants current report on Form 8-K filed on October 27, 2008).10.18
    
    
    Security Agreement between Cleantech Biofuels, Inc. and World Waste Technologies, Inc. dated October 22,
2008 (incorporated herein by reference to Exhibit 10.17 of the Registrants current report on Form 8-K
filed on October 27, 2008).10.19
    
    
    Technology License and Joint Development Agreement among Biomass North America Licensing, Inc., Biomass
North America, LLC and Anthony P. Noll (incorporated herein by reference to Exhibit 10.18 of the
Registrants quarterly report on Form 10-Q for the period ended September 30, 2008).10.20
    *
    
    Form of employee stock purchase agreement entered into with Edward P. Hennessey, Jr., Michael Kime and Tom Jennewein14
    
    
    Code of Ethics (incorporated herein by reference to Exhibit 14 of the Registrants annual report on Form
10-KSB for the period ended December 31, 2007).21.1
    
    
    List of Subsidiaries.31.1
    
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities
Exchange Act, as amended31.2
    
    
    Certification of principal financial officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities
Exchange Act, as amended32.1
    
    
    Certificate (Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002) of Chief Executive Officer32.2
    
    
    Certificate (Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002) of principal financial officer
 
 *
    
    Management contract or compensatory plan or arrangement.  54




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##### Table of Contents



SIGNATURES
  CleanTech Biofuels, Inc.
(registrant)March 30, 2009
    By:
    /s/ Edward P. Hennessey, Jr.Edward P. Hennessey, Jr.Chief Executive OfficerMarch 30, 2009
    By:
    /s/ Thomas G. JenneweinThomas G. JenneweinChief Financial Officer  March 30, 2009
    
    /s/ Edward P. Hennessey, Jr.

Edward P. Hennessey, Jr., Chairman of the
Board of Directors and Chief Executive Officer
(principal executive officer)March 30, 2009
    
    /s/ Thomas G. Jennewein.

Thomas G. Jennewein, Chief Financial Officer
(principal financial and accounting officer)March 30, 2009
    
    /s/ Benton Becker

Benton Becker, DirectorMarch 30, 2009
    
    /s/ Ira Langenthal, Phd.

Ira Langenthal, Phd., DirectorMarch 30, 2009
    
    /s/ Paul Simon, Jr.

Paul Simon, Jr., DirectorMarch 30, 2009
    
    /s/ Larry McGee

Larry McGee, Director
  55




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##### Table of Contents



INDEX TO EXHIBITS
 ExhibitNumber
    
    Description2.1
    
    
    Agreement and Plan of Merger and Reorganization by and among
Cleantech Biofuels, Inc., Biomass NA Acquisition Subsidiary, Inc.
and Biomass North America Licensing, Inc. dated as of July 14, 2008
(incorporated herein by reference to Exhibit 2.1 of the
Registrants quarterly report on Form 10-Q for the period ended
June 30, 2008).3.1
    
    
    Restated Certificate of Incorporation (incorporated herein by
reference to Exhibit 3.1 of the Registrants registration statement
on Form SB-2 filed on September 10, 2007, File No. 333-145939).3.2
    
    
    Restated By-Laws (incorporated herein by reference to Exhibit 3.2
of the Registrants registration statement on Form SB-2 filed on
September 10, 2007, File No. 333-145939).4.1
    
    
    Form of Series A Convertible Debenture (incorporated herein by
reference to Exhibit 4.1 of the Registrants registration statement
on Form SB-2 filed on September 10, 2007, File No. 333-145939).4.2
    
    
    Investors Rights Agreement dated as of April 16, 2007 by and among
SRS Energy, Inc. and certain Investors (incorporated herein by
reference to Exhibit 4.2 of the Registrants registration statement
on Form SB-2 filed on September 10, 2007, File No. 333-145939).4.3
    
    
    Series A Debenture Purchase Agreement dated as of April 16, 2007 by
and among SRS Energy, Inc. and certain Investors (incorporated
herein by reference to Exhibit 4.3 of the Registrants registration
statement on Form SB-2 filed on September 10, 2007, File No.
333-145939).4.4
    
    
    Warrant dated August 31, 2007 by CleanTech Biofuels, Inc. in favor
of RAM Resources, L.L.C (incorporated herein by reference to
Exhibit 4.4 of the Registrants registration statement on Form SB-2
filed on September 10, 2007, File No. 333-145939).10.1
    
    
    Exclusive License Agreement between Brelsford Engineering, Inc. and
SRS Energy, Inc. dated as of April 1, 2005 (incorporated herein by
reference to Exhibit 10.1 of the Registrants registration
statement on Form SB-2 filed on September 10, 2007, File No.
333-145939).10.2
    
    
    Amendment to Exclusive License Agreement between Brelsford
Engineering, Inc. and SRS Energy, Inc. dated as of January 11, 2006
(incorporated herein by reference to Exhibit 10.2 of the
Registrants registration statement on Form SB-2 filed on September
10, 2007, File No. 333-145939).10.3
    
    
    Technology License Agreement between Bio-Products International,
Inc. and SRS Energy, Inc. dated as of August 17, 2005 (incorporated
herein by reference to Exhibit 10.3 of the Registrants
registration statement on Form SB-2 filed on September 10, 2007,
File No. 333-145939).10.4
    
    
    Technology License Agreement between Bio Products International,
Inc. and SRS Energy, Inc. dated as of March 8, 2007 (incorporated
herein by reference to Exhibit 10.4 of the Registrants
registration statement on Form SB-2 filed on September 10, 2007,
File No. 333-145939).10.5
    
    
    Engagement Agreement between Alternative Ethanol Technologies, Inc.
k/n/a CleanTech Biofuels, Inc. and Merrick & Company (incorporated
herein by reference to Exhibit 10.5 of the Registrants
registration statement on Form SB-2 filed on September 10, 2007,
File No. 333-145939).10.6
    
    
    Consulting Fee Agreement between Alternative Ethanol Technologies
k/n/a CleanTech Biofuels, Inc. and Five Sigma Ltd. dated as of
April 17, 2007 (incorporated herein by reference to Exhibit 10.6 of
the Registrants registration statement on Form SB-2 filed on
September 10, 2007, File No. 333-145939).10.7
    *
    
    2007 Stock Option Plan (incorporated herein by reference to Exhibit
10.7 of the Registrants registration statement on Form SB-2 filed
on September 10, 2007, File No. 333-145939).10.8
    *
    
    Form of Director Stock Option Agreement (incorporated herein by
reference to Exhibit 10.8 of the Registrants registration
statement on Form SB-2 filed on September 10, 2007, File No.
333-145939).10.9
    *
    
    Director Stock Purchase Agreement (incorporated herein by reference
to Exhibit 10.9 of the Registrants registration statement on Form
SB-2 filed on September 10, 2007, File No. 333-145939).10.10
    *
    
    Employment Agreement  Edward P. Hennessey, Jr. (incorporated
herein by reference to Exhibit 10.10 of the Registrants
registration statement on Form SB-2 filed on September 10, 2007,
File No. 333-145939).10.11
    *
    
    Form of Employee Agreement  Michael Kime and Tom Jennewein
(incorporated herein by reference to Exhibit 10.11 of the
Registrants registration statement on Form SB-2 filed on September
10, 2007, File No. 333-145939).
  56




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##### Table of Contents



ExhibitNumber
    
    Description10.12
    *
    
    Form of Employee Stock Option Agreement  Michael Kime and Tom
Jennewein (incorporated herein by reference to Exhibit 10.12 of the
Registrants registration statement on Form SB-2 filed on September
10, 2007, File No. 333-145939).10.13
    
    
    Commercial Lease with Pershing Properties, LLC dated October 12,
2007 (incorporated herein by reference to Exhibit 10.13 of the
Registrants registration statement on Form SB-2/A filed on
November 30, 2007, File No. 333-145939).10.14
    
    
    Sublicense Agreement with HFTA dated March 20, 2008 (incorporated
herein by reference to Exhibit 10.1 of the Registrants current
report on Form 8-K filed March 25, 2008).10.15
    
    
    Sublicense Agreement among SRS Energy, Inc., Cleantech Biofuels,
Inc. and HFTA for Methods and Apparatus for Treating Biomass
Material (incorporated herein by reference to Exhibit 10.1 of the
Registrants current report on Form 8-K filed on March 25, 2008).10.16
    
    
    Patent Purchase Agreement dated October 22, 2008 by and between
Cleantech Biofuels, Inc. and World Waste Technologies, Inc.
(incorporated herein by reference to Exhibit 10.15 of the
Registrants current report on Form 8-K filed on October 27, 2008).10.17
    
    
    Note issued in favor of World Waste Technologies, Inc. dated
October 22, 2008 (incorporated herein by reference to Exhibit 10.16
of the Registrants current report on Form 8-K filed on October 27,
2008).10.18
    
    
    Security Agreement between Cleantech Biofuels, Inc. and World Waste
Technologies, Inc. dated October 22, 2008 (incorporated herein by
reference to Exhibit 10.17 of the Registrants current report on
Form 8-K filed on October 27, 2008).10.19
    
    
    Technology License and Joint Development Agreement among Biomass
North America Licensing, Inc., Biomass North America, LLC and
Anthony P. Noll (incorporated herein by reference to Exhibit 10.18
of the Registrants quarterly report on Form 10-Q for the period
ended September 30, 2008).10.20
    *
    
    Form of employee stock purchase agreement entered into with Edward P. Hennessey, Jr., Michael Kime and Tom Jennewein14
    
    
    Code of Ethics (incorporated herein by reference to Exhibit 14 of
the Registrants annual report on Form 10-KSB for the period ended
December 31, 2007).21.1
    
    
    List of Subsidiaries.31.1
    
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a)
and Rule 15d-14(a) of the Securities
Exchange Act, as amended31.2
    
    
    Certification of principal financial officer pursuant to Rule
13a-14(a) and Rule 15d-14(a) of the Securities
Exchange Act, as amended32.1
    
    
    Certificate (Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002) of Chief
Executive Officer32.2
    
    
    Certificate (Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002) of principal
financial officer
 
 *
    
    Management contract or compensatory plan or arrangement.  57