UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the year ended: December 31, 2021
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________________ to
____________________
Commission file number: 000-53557
CLEAN COAL TECHNOLOGIES,
INC.
(Exact name of small business issuer as specified in its
charter)
Nevada
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26-1079442
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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295 Madison Avenue (12th
Floor), New York, NY
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10017
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(Address of principal executive offices)
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(Zip Code)
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(646)
710-3549
(Issuer’s telephone number)
Securities registered pursuant to Section 12(b) of the Exchange
Act:
Title of each
class
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Trading
Symbol
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Name of each exchange on
which registered
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None
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N/A
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Securities registered pursuant to Section 12(g) of the Exchange
Act:
Title of
class
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Common Stock
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Indicate by check mark if the Registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act. YES ☐
No ☒
Indicate by check mark if the Registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Exchange
Act. YES ☐ No ☒
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Exchange
Act during the preceding 12 months (or for such shorter period that
the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes ☒ NO ☐
Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the
registrant was required to submit such files). Yes ☒ NO ☐
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 the definitions of “large
accelerated filer,” “accelerated filer” and “smaller reporting
company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☒
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Smaller reporting company ☒
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Emerging growth company ☐
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If an emerging growth company, indicate by check mark if the
registrant has elected to not use the extended transition period
for complying with any new or revisited financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
YES ☐ No ☒
Indicate by check mark whether the registrant has filed a report on
and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the
registered public accounting firm that prepared or issued its audit
report. ☐
Indicate by check mark whether the Registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). YES ☐ No ☒
State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the
price at which the common equity was last sold, or the average bid
and asked price of such common equity, as of the last business day
of the registrant’s most recently completed second quarter.
The market value of the voting and non-voting common stock is
$3,076,840 based on 384,605,063 shares held by non-affiliates. The
shares were valued at $0.008 per share, that being the closing
price on June 30, 2021, the last business day of the registrant’s
most recently completed second quarter.
As of December 31, 2021 the total number of outstanding common
shares was 414,279,613 and as of April 15, 2022 the total number
was 414,279,613.
Documents Incorporated by Reference
None.
CLEAN COAL TECHNOLOGIES, INC.
2021 ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS
PART I
ITEM 1. BUSINESS
Forward-Looking and Cautionary Statements
Except for statements of historical fact, certain information in
this document contains “forward-looking statements” that involve
substantial risks and uncertainties. You can identify these
statements by forward-looking words such as “anticipate,”
“believe,” “could,” “estimate,” “expect,” “intend,” “may,”
“should,” “would,” or similar words. The statements that contain
these or similar words should be read carefully because these
statements discuss our future expectations, contain projections of
our future results of operations, or of our financial position, or
state other “forward-looking” information. Clean Coal believes that
it is important to communicate our future expectations to our
investors. However, there may be events in the future that we are
not able to accurately predict or control. Further, we urge you to
be cautious of the forward-looking statements that are contained in
this Annual Report because they involve risks, uncertainties and
other factors affecting our technology, planned operations, market
growth, products and licenses. These factors may cause our actual
results and achievements, whether expressed or implied, to differ
materially from the expectations we describe in our forward-looking
statements. The occurrence of any of these events could have a
material adverse effect on our business, results of operations and
financial position.
Overview
Over the past decade, Clean Coal Technologies, Inc. has developed
processes that address what we believe are the key technology
priorities of the global coal industry. We currently have three
processes in our intellectual property portfolio:
The original process, called Pristine, is designed to remove
moisture and volatile matter, rendering a high-efficiency, cleaner
thermal coal. The process has been tested successfully on
bituminous and subbituminous coals, and lignite from various parts
of the United States and from numerous countries around the
world.
Our second process, called Pristine-M, is a low-cost coal
dehydration technology. In tests, this process has succeeded in
drying coal economically and stabilizing it using volatile matter
released by the feed coal. Construction of our coal testing plant
was completed in December 2015 and was successfully tested through
April 2016 at AES Coal Power Utility in Oklahoma. Additional tests
commenced and were completed in the fourth quarter of 2017. This
test facility has been moved from AES to Wyoming where reassembly
has commenced and testing of international coal is expected upon
completion of the reassembly. Changes identified to the process by
the University of Wyoming and our EPC contractors will be included
in the reassembly and it is expected to provide a higher quality
end product with a lower capital cost for a commercial unit. The
reassembly was delayed due to the pandemic but is expected to be
completed in Q3 2022.
Our third process, called Pristine-SA, is designed to eliminate
100% of the volatile matter in the feed coal and to achieve stable
combustion by co-firing it with biomass or natural gas. The process
is expected to produce a cleaner fuel that eliminates the need for
emissions scrubbers and the corollary production of toxic coal ash.
We anticipate that treated coal that is co-fired with other energy
resources will burn as clean as natural gas.
Anticipated Benefits of the Technology:
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Reduction of undesired emissions and greenhouse gases through the
removal of compounds that are not required for combustion in
conventional boilers.
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Cost savings and environmental impact reduction. Our pre-combustion
solution is expected to be significantly less expensive than
post-combustion solutions such as emissions scrubbers. Not only are
the latter prohibitively expensive, they produce coal ash
containing the “scrubbed” compounds, which is dumped in toxic
waste disposal sites where it may pose continuing environmental
risk. Coal treated using our processes may eliminate the need for
post-combustion emissions scrubbers and the resulting toxic ash. By
beneficiating the coal it requires less coal to be consumed to
achieve the same energy output. This will save on transportation
and handling costs.
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Potential use of compounds removed from treated coal. Volatile
matter captured in the Pristine process is removed in the form of
hydrocarbon liquids that we believe will be easily blended with
crude oil or used as feedstock for various products. For example,
sulfur, which can be removed using the Pristine process, is a basic
feedstock for fertilizer. The harvesting of hydrocarbon liquids
from abundant, cheaper coal is a potentially lucrative side benefit
of our processes. All coal by-products including Rare Earth
Minerals extraction will be tested in the second-generation
facility.
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Successful testing of the Pristine M process resulted in an
increase in BTU of the processed coal and a reduction in moisture
content making it less expensive to transport (as moisture has been
removed) with the end product being a dust free stabilized enhanced
coal which we believe will address the issue of coal dust pollution
during transportation.
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Energy Independence. To the extent that volatile matter is removed
from coal, coal’s use as an energy resource is greatly improved,
enabling the United States and other coal-rich countries to move
towards energy independence owing to coal’s greater abundance.
Extraction of by-products including Rare Earth Minerals is also
expected to provide coal derivative product independence.
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Development Status:
Pristine process. Pristine process successfully lab tested on small
scale and through advanced computer modeling. As at November, 2020,
various aspects of the Pristine process were successfully tested at
our test facility at the AES coal Power plant in Oklahoma as part
of the overall testing of Pristine M. The second-generation
facility in Wyoming is expected to perform a more detailed testing
of the Pristine process. The build out and delivery of the Rotary
Kiln will enable the test facility to reach significantly higher
temperatures to test with more accuracy the Pristine process.
Pristine-M. Testing of the Pristine M process on Powder River Basin
coal at the AES facility in Oklahoma was completed in December
2017. The Pristine M process was successfully tested and the
process, engineering and science were independently proven. The
test facility was moved from the AES location to Wyoming where
reassembly commenced in Q4 2019 and testing of international coal
is expected upon completion of reassembly. The reassembly was
delayed due to the pandemic but it is expected to be completed in
Q3 2022. Over several months in 2018 and early 2019 the University
of Wyoming independently validated the Pristine M process in their
laboratory. By coating the exterior of the coal during the
stabilization period with heavy hydrocarbons the process produces
dust free stabilized coal for transportation.
Pristine-SA process. Pristine SA process analysis is at a very
early stage. Further research and development is expected using the
test facility at its permanent location in Wyoming. The
introduction of the Rotary Kiln and the higher temperatures it can
achieve will enable a more accurate testing protocol for this
process.
Business Outlook
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Wyoming New Power, a related party company, has agreed to sign a
two million ton per annum license agreement to use Pristine M at a
location in Wyoming. They have paid a non-refundable $100,000
deposit on the license agreement. The definitive license agreement
is expected to be signed following the receipt of commercial design
which will incorporate the suggested changes proposed by the
University of Wyoming and our EPC contractor. Wyoming New Power is
a Related Party because it is controlled by a party that also
controls the entity, which is the major lender and significant
stockholder of the Company.
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Jindal Steel & Power is expected to send though their coal for
sampling immediately following the plants re-assembly. The bespoke
commercial facility design is expected after the testing.
In Q2, 2019 the Company signed a non binding MOU with Universitas
Indonesia in a combined effort to assess the impact of our
technology on Indonesian Coal both from a coal beneficiation
perspective and also coal by-products.
The second-generation test facility will have the capability of
producing Char. There is local Wyoming demand for this product that
the company expects to sell.
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The Company entered into a partnership with the University of
Wyoming with the sole focus of using our suite of technologies to
increase the use of and value of Wyoming Powder River Basin coal.
Primary focus is on utilizing our technology to extract valuable
derivative products from coal. Changes to the process have been
identified by the University and the company EPC engineers and will
be incorporated in the reassembly of the facility in Wyoming. The
University confirmed in Q2, 2019 that they had successfully
validated the Pristine M process in their laboratory and as a
result entered into an agreement with the Company. The agreement
between the University and the Company is for the reassembly of the
second generation test facility. The University will advance to the
EPC contractor on a two to one basis. As of the date of this filing
the University has advanced a total of approx. $1,300,000 directly
to the manufacturer of the Rotary Kiln. The kiln and all its
relevant control panels was delivered to our site at Gillette,
Wyoming in June 2020.
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The Company has been engaged with AusTrade (The Australian Trade
and Investment Commission) and through that relationship has
partnered with three separate universities in Australia. Like the
University of Wyoming these Universities have a focus on their
local coal both from a beneficiation perspective and also
extracting derivative by products from coal using our technology.
The Company received full Australian patents in Q2, 2019 so the
company plans to move forward with this relationship in Q3, 2022
following the assembly of the second-generation test facility.
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The Company continues in discussions with the Minister for Coal in
India and a number of the Energy governmental bodies in India. Coal
samples are expected to be sent for testing once the Second
Generation Test Facility is assembled which is expected in Q3, 2022
but subject to potential delays due to the current pandemic.
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Meetings occurred in Q2, 2019 with the US DOE, DOD and Wyoming
State Representatives to further our technology to benefit US coal.
These discussions continue through March 2022 in light of coal
mining bankruptcies in Wyoming.
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Technology
Our original Pristine coal treating process extracts the volatile
matter (solidified gases or pollutant material) from a wide variety
of coal types by heating the mineral as it transitions through
several disparate heat chambers, causing the volatile matter to
turn to gas and escape the coal, leaving behind a cleaner-burning
fuel source. Historically, the primary technological challenge of
extracting this volatile matter has been maintaining the structural
and chemical integrity of the carbon, while achieving enough heat
to turn the volatile matter into a gaseous state. Heating coal to
temperatures well in excess of 700° Fahrenheit is necessary to
quickly turn volatile matter gaseous. However, heating coal to
these temperatures has generally caused the carbon in the coal to
disintegrate into an unusable fine powder (coal dusting). Our
patented flow process transitions the coal through several
atmospherically independent heat chambers controlled at
increasingly higher temperatures. These heat chambers are infused
with inert gases, primarily carbon dioxide (CO2), preventing the
carbon from combusting. We have identified the optimum combination
of atmospheres, levels of inert gases, transport speed, and
temperatures necessary to quickly extract and capture volatile
matter, while maintaining the structural and chemical integrity of
the coal. Using our technology, we are able to capture the volatile
gases that escape the coal, and to utilize some of these gases to
fuel the process, while others are captured in the form of usable
byproducts, to potentially provide an ancillary revenue stream.
Depending on the characteristics of the coal being cleaned, the
flow processing time is expected to be in the range of 6 to 8
minutes.
Our process derivatives are broadly characterized by the following
three elements which vary according to the characteristics of the
feed coal:
A first stream is predominantly water that is extracted from the
coal. Although expected to be 100% pure (water removed from coal is
condensed from its vapor state), it may contain some
contaminants.
A second stream, produced in the de-volatizing stage of the
process, is the condensed light hydrocarbons gases that we call
“coal-derived liquids”, or CDLs. These could prove to be the most
valuable component of the process. It is anticipated that the CDLs
will resemble a crude oil (probably sweet crude if the sulfur
content of the feed coal is low) resulting in a readily-marketable
product. In the Pristine-M process, de-volatization is controlled
and optimized to meet the needs of drying and stabilizing the coal,
minimizing the production of gas or liquid byproducts.
The third stream is the heavy tar-like liquid potentially
marketable to the asphalt and coal tar industry. This stream is
entirely absent in the Pristine-M process which is focused only on
the task of drying and stabilizing.
The Pristine technology has three distinct primary applications:
the cleaning of coal for direct use as fuel for power stations and
other industrial and commercial applications; the extraction of
potentially valuable chemical by-products for commercial sale; and
the use of processed coal as a feed stock for gasification and
liquefaction (CTG & CTL) projects.
Pristine-M De-Watering Process. During the fourth quarter of
2011, the Company filed a provisional patent application for a new
technology focused on the de-watering of coal. The new process,
Pristine-M, is unique in that it retains elements of the original
process but has discovered a technology that stabilizes the dried
coal, rendering it impermeable and easy to transport with low to no
risk of spontaneous combustion. The latter results have proved
elusive for the majority of companies that have entered the market
with coal de-watering technologies.
The Pristine-M process, sharing some of the scientific principles
and engineering components that underpin the Pristine process, is
also a modular design that includes a section where the coal is
partially de-volatized and then coupled to as many drying and
stabilization modules as may be required to achieve a client’s
desired level of production. Each of the modules is designed to
handle 30-tons/hr and, similar to the Pristine process, relies on
components that are primarily available off-the-shelf and have
already stood the test of time as to their reliability and
durability.
Pristine-SA Process. In June 2013, we filed a provisional patent
application for a new process to be called Pristine-SA. The new
process is designed to produce a coal product that is devoid of all
volatiles and comes together with a solution for ensuring efficient
and clean combustion on a level with natural gas. Now that the
application on the basic concept has been filed, we expect to
continue further research and development to address Pristine-SA’s
potential application in various fuel and non-fuel product
areas.
Our technology has been tested and proven under laboratory and
pilot scale conditions in Pittsburg, PA, and the results studied by
LEIDOS (previously SAIC) as well as certain potential strategic
partners as part of their due diligence on CCTI and the CCTI
technology. To date, testing of about 40 coal types from all over
the world has been completed. We have also benchmarked our
technology against the Carnegie Mellon simulation model with
excellent results. Testing has shown no evidence of coal dusting,
self-combustion, moisture re-absorption, or other technical
concerns that might hinder commercialization. We have successfully
tested Powder River Basin coal at out testing facility at AES
Oklahoma. The test facility was moved to Wyoming where assembly
completion of the second generation test facility is expected in
the third quarter of 2022.
While we believe that all of our Pristine technologies offer vast
potential for commercialization, our market entry strategy right
now is focused on the Pristine -M technology that we believe offers
an immediate opportunity to monetize our intellectual property. The
specific opportunity is in Asia that, at the moment, is focused
almost entirely on the need to produce a dry and stable coal to
meet the growing need of coal-fired power plants. Indonesia is
currently one of the largest suppliers of thermal coal to India and
China, but Indonesian coal suffers from its high moisture content
and low calorific content. Since January 2017 we have engaged in
advanced discussions with the representatives from the US DOE and
also key representatives from Wyoming. As we successfully tested
PRB at our test facility at AES it has led to a unique opportunity
to upgrade PRB coal and export it through several ports in the US
and also from Canadian and Mexican ports. Since our successful
tests at AES coal power utility we believe that the issues
currently facing the upgrading of coal and its stabilization have
been effectively addressed by the Pristine-M technology and we
continue to work with both US government bodies and US producers
along with key international energy providers.
Initial designs have been completed for both the Pristine and the
Pristine-M processes. The Pristine design provides for the
deployment of standard operational modules, each with annual
capacity of 166,000 metric tons, providing the flexibility to be
configured in accordance with customers’ individual production
capacity requirements. The coal cleaning process will typically be
energy self-sufficient, relying upon captured methane and other
byproducts to fuel the coal cleaning process. Since 2018 our EPC
contractor in conjunction with the University of Wyoming have been
working to further enhance the process and update the commercial
designs that were previously produced. Following nine months of
work with the University of Wyoming and our engineers we have
identified changes to the original test facility that is expected
to further increase the beneficiated processed coal. These changes
have been incorporated in the reassembly of the second generation
test facility in Wyoming.
Business Activities and Strategy
The Company’s business model at this stage is simple: to license
our technology to third parties and exact a license fee, as well as
a royalty fee, based on plant production. Over time, as the company
builds up equity capital and cash reserves, opportunities to
penetrate the coal business at different points of the value chain
will be considered. Among these, direct investments in low-cost
reserves, partnerships in mining or industrial projects, or trading
may be contemplated.
Research and development will be a key focus going forward. The
highest priority will be on the commercialization of our Pristine M
process, but there are various other product areas including
biomass where our technology may prove relevant.
Competitive Strengths
We believe our technology and designs represent the only process
that can effectively separate and capture undesired chemical
compounds prior to carbon combustion in a commercially viable
manner. Our process differs from competing processes through its
ability to maintain the structural integrity of coal during the
heating process. This is achieved through a unique design that
inserts inert gas into the heating chambers, and maintains the
inert atmosphere in each chamber. By inserting an inert gas into
the chambers, the process allows for rapid heating of the coal and
prevents coal combustion and significant coal dusting. Competing
technologies have used differing methods of preventing coal
combustion and dusting, albeit with limited success. Some of the
particular strengths of our process include:
Pollution reduction: By heating coal prior to combustion, we
are able to extract volatile matter (pollutants in the form of
solidified gases) from the coal in a controlled environment,
transforming coal with high levels of impurities, contaminants and
other polluting elements into a more efficient, cleaner source of
high energy, lower polluting fuel. Testing has demonstrated that
our process removes a substantial percentage of harmful pollutants,
including mercury. The processed end product is dust free so
concerns about coal dust loss during transportation is
eliminated.
Lower cost of operation: We believe that our process will be
a relatively low-cost solution to the reduction of pollution at
coal-fired power facilities. Our engineering consulting firm,
believes that our coal cleaning process will typically not require
any external energy and can be fully fueled by the methane and
other byproducts that the process captures from raw coal. This
effective use of byproducts contrasts markedly with emissions
scrubbers that generally use a portion of the generated power and
have high initial capital and maintenance costs. In addition, our
process may have certain advantages in terms of the pollutants
removed that can be utilized in a complementary manner with other
processes including scrubbers.
Increased flexibility in feedstock: Our process eliminates
both the moisture and volatile matter in raw coal, increasing the
heat capacity of standard sub-bituminous low-rank raw coal from
approximately 8,800 BTUs to between 11,000-12,000 BTUs. We believe
the process can increase heat capacity of lignite raw coal ranging
from 4,000-7,000 BTUs to a range of 9,000-10,000 BTUs. As the
worldwide supply of high-BTU bituminous coal dwindles, our
technology may enable coal-fired plants to effectively utilize the
abundance of low-rank coal. Results will differ depending on the
coal being processed.
Favorable price arbitrage: Low-rank coal in Asia with a heat
content of 7,000 – 9,000 BTUs currently sells for at a significant
discount to high-BTU bituminous coal with a heat capacity of
10,000+ BTUs, as can be observed in various international price
indices, among them, the Baltic Dry Bulk Index. Our process
essentially transforms low-grade coal into bituminous coal at a
direct operating cost of an estimated $3.50 per ton, capturing the
value of higher-grade coal prices.
Potential tax benefits: This will be clearer under the new
US Administration and the new laws being passed
Competition
At this filing, the coal upgrade industry globally, excluding
coking processes, remains in its infancy. The penetration rate of
technologies focused on de-watering coal is well under 1% based on
annual production of thermal coals measured in the billions of
tons. There are numerous competitors in the pre-combustion, upgrade
segment but many of these have failed, are inactive, or in pilot
mode. The Company believes that given its successful testing of its
Pristine M process it will be able to enjoy early-mover advantage
in 2022.
The difficulties experienced by the Company’s competitors fall into
three categories: the technologies have failed to scale up; they
are expensive and, therefore, challenge the economics of the
process; or they have failed to produce a stable end product, that
is, a product that does not reabsorb moisture and is safe to
transport with minimal risk of spontaneous combustion. From a
scale-up perspective, CCTI’s Pristine M technology faces a much
smaller challenge as it is a modular system built around well-known
and proven components. From our 2-ton per hour prototype to our
30-ton per hour standard commercial module, initial scale-up is a
1:15 proposition that is considered very modest from an engineering
perspective. Scalability issues are mitigated by the modular nature
of the industrial design that, once the basic module is
operational, further scale up is achieved by adding identical
modules. We consider it a major competitive advantage that our
clients who build large capacity, single-unit plants based on what
are likely to be new and untested components.
From a plant reliability and maintenance perspective, our modular
design brings many advantages that the Company believes enhance the
competitiveness of its offering. The major benefits are the ability
to carry on maintenance on one module while the other modules
continue to operate. Down-time can be minimized. Similarly, if a
component breaks down, it does not incapacitate the entire plant.
It is localized to a single module.
From a planning perspective, mine operators would be able to expand
their capacity piecemeal rather than in step-wise fashion by
large-scale increments. This mitigates much of the financial risk
normally attendant on large-scale plant expansions and, over time,
our modular design may prove to be one of the most significant
competitive advantages of our process.
Another significant competitive advantage of either of the
Company’s processes is that these do not require crushing of the
coal, thereby minimizing if not entirely eliminating the need for
costly briquetting. CCTI’s plant economics are compelling as they
derive much of the process heat from the feed coal itself,
rendering the processes very energy efficient. The processes
require a modest amount of electric power and a small number of
operatives. Consequently, our operating costs are very
competitive.
The Pristine process not only removes the moisture, but also
removes undesired volatiles which we capture as a chemical “soup”
that may be further refined by us, or sold directly to chemical
manufacturers, or refineries as a complementary revenue source. The
Pristine process addresses a very different market need than the
Pristine M Technology and therefore enables CCTI to offer a more
diverse product slate to our potential customers than most, if not
all, our existing competitor base.
We consider our most direct competition in the reduction of coal
emissions comes from companies offering pre-combustion cleaning
designed to remove impurities. However, post-combustion filtering
or “scrubbers” designed to filter released gases are a clear
alternative for coal-fired power producers. We are not in
competition with suppliers of emissions scrubbers, except to the
extent that that burning a cleaner fuel is more economical than
post-combustion solutions.
The best known present and past competitors in the pre-combustion
area include Evergreen Energy, Inc. (“Evergreen”), Kobe Steel
(“Kobe”), GTL Energy (“GTL”) and White Energy (“White Energy”),
both the latter of which are Australian companies. Neither Encoal
or SynCoal are currently operational having experienced serious
problem in the area of product stability. There are operators that
utilize older, less efficient technologies such as the Fleissner
process, but these are not as effective the newer technologies.
Evergreen, based in Denver, Colorado, developed a technology
primarily focused on reducing the moisture in raw coal to increase
its heating capacity. The company declared bankruptcy in 2012 after
suffering problems having to do with the stability of the end
product. CoalTek, based in Tucker, Georgia, claims its
patent-pending process uses electromagnetic energy to reduce
contaminants and moisture in coal prior to combustion. While public
information is limited, we believe the amount of energy necessary
to run the electromagnetic process may offset any economic benefits
of the upgraded coal. The Australian processes use a combination of
heat and compaction to remove moisture from coal. The company is
not in commercial mode. White Energy claims that compaction
generates close bonding between the dried coal particles to form a
high density, higher energy content briquette. Energy requirements
for heating coal an operating a pelletizer are typically large but
no basis or explanation is provided for the favorable cost numbers
published by White Energy. During 2012, White Energy was forced to
abandon further investment in its flagship 1 million ton facility
in Indonesia that suffered serious operational problems. The Kobe
process is proven. However, the plant is complex and, consequently,
very expensive. This was indicated by the fact a one significant
plant in Indonesia shuttered a Kobe plant during 2012 owing to
unfavorable process economics.
Indirect competition comes from alternative low-pollution energy
sources, including: wind, bio-fuels and solar; all of which need
additional technological advancements, cost reduction and universal
acceptance to be able to produce power at the scale of coal-fueled
plants, which today produce over 40% of world’s electricity
according to U.S. Department of Energy.
Patents
Our technology is the subject of U.S. patent #6,447,559, “Treatment
of Coal” which was filed on November 3, 2000 based on provisional
application 60/163,566 filed November 5, 1999, and issued in 2002.
We also filed PCT international patent application PCT/US00/41772
based on this U.S. patent on November 2, 2000, and, in accordance
with this, patents have been applied for in all countries where we
believe our technology has application. On February 1, 2011 CCTI
was awarded a continuation patent US #7,879,117.
On April 15, 2008, the Company filed a PCT International
application PCT/US2008/060364based on our revised design, and
national patent applications based on this PCT International
application have been filed in India, China, Indonesia, Australia,
South Africa, Colombia, Brazil, Chile, and the Republic of
Mongolia. These were filed by our patent attorneys Nixon
&Vanderhye P.C. at a cost of $33,000. On October 15, 2010, the
Company filed the PCT US national phase application for its revised
design as contained in PCT/US2008/060364.
The April 15, 2008 application details the process of using
byproducts to power the process, and details a simpler, vertical
factory design with proprietary seals that help preserve the
atmosphere of each chamber, compared to a horizontal design in the
original filing. This application goes into great detail regarding
the byproducts of the coal and their capture.
The patent details a process wherein coal is heated to different
temperatures in various chambers with controlled low-oxygen
atmospheres. There are seals between these chambers, serving to
maintain the heat and gas content in each chamber. The invention
notes the controlled de-volatilization and removal of moisture and
organic volatiles, while maintaining the structural integrity of
the coal and reducing the level of disintegration into powder form.
The invention also notes the significantly decreased time in
treating coal as compared to alternative approaches, most of which
focus on moisture removal as a means of increasing calorific or BTU
value.
In September, 2011, the Company filed provisional patent
application Serial No. 61/531,791 that seeks to protect a new
invention for the reduction of moisture inherent in coal, and
stabilization of the final product. A corresponding PCT
International application PCT/US2012/054160 was filed in September,
2012 and counterpart national patent applications have been filed
in US, EP, Eurasia, Australia, Canada, India, Philippines, South
Africa, Colombia, Mexico, Panama, Japan, South Korea, Indonesia
Mongolia, Malaysia, Sri Lanka. Testing to date indicates that our
stabilized product will be resistant to moisture re-absorption and
safe to handle, even over long distances. The new invention draws
from the scientific knowledge embedded in our existing patent, but
it is an entirely new concept that is easily differentiated from
the offerings of our competitors. The most novel aspect relates to
the stabilization of the end product and to the ability to enhance
the heat content of the coal beyond what would be normally achieved
by moisture removal alone. The product is banded Pristine–M.
From a commercial perspective, Pristine-M is proving to be
attractive to clients not only because of its characteristics, but
because the industrial design is simple, elegant and inexpensive.
We estimate that operating costs based on US labor rates is $3.50
per to which includes $2.00 per ton on-going maintenance. The cost
of the commercial plant is expected to be highly competitive, based
on preliminary estimates. Changes being incorporated to the second
generation test facility is expected to reduce the capital cost of
a commercial unit.
A new provisional patent application Serial No. 61/829,006 was
filed by the Company in May, 2013 directed to the treatment of
coal. Counterpart foreign patents has been filed based on that
technology. In the second quarter of 2013, we filed a provisional
patent application for a new process to be called Pristine-SA. The
new process is designed to produce a coal product that is devoid of
all volatiles and comes together with a solution for ensuring
efficient and clean combustion on a level with natural gas. Now
that the application on the basic concept has been filed, we expect
to continue further research and development to address
Pristine-SA’s potential application in various fuel and non-fuel
product areas.
We expect to file for additional patents as we continue the
commercialization of our technology and factory design. We intend
to continue to seek worldwide protection for all our technology.
The following table provides a summary of our technology to
date.
In 2019, the company was successfully awarded full patents for the
following countries; Indonesia, Philippines, Republic of Korea,
United States, New Zealand and Hong Kong. The duration of most
patents is 20 years from date of application.
In 2021, the company was successfully awarded full patents for
Canada and South Africa.
In September 2021, the company applied for a provisional global
patent with the U.S Patent and Trademark Office and was assigned
USPTO application number 63/248,035. This patent incorporates the
additional changes to the company process which includes but not
limited to the introduction of a rotary kiln.
COUNTRY
|
APPLN NO
|
APPLN
DATE
|
GRANT
DATE
|
STATUS
|
CHIN - (China P.R.)
|
00818174.8
|
11/02/2000
|
02/03/2016
|
G - (Granted)
|
USA - (United States)
|
09/704,738
|
11/03/2000
|
09/10/2002
|
G - (Granted)
|
CANA - (Canada)
|
2,389,970
|
11/02/2000
|
03/27/2012
|
G - (Granted)
|
EPC - (European Patent Convention)
|
00992027.3
|
11/02/2000
|
10/02/2013
|
G - (Granted)
|
INDO - (Indonesia)
|
W-00200201274
|
11/02/2000
|
|
F - (Pending)
|
USA - (United States)
|
11/344,179
|
02/01/2006
|
02/01/2011
|
G - (Granted)
|
INDI - (India)
|
7426/DELNP/2010
|
04/15/2008
|
02/15/2016
|
G - (Granted)
|
CHIN - (China P.R.)
|
200880129212.2
|
04/15/2008
|
12/25/2013
|
G - (Granted)
|
INDO - (Indonesia)
|
W00201003932
|
04/15/2008
|
|
F - (Pending)
|
SAFR - (South Africa)
|
2010/07455
|
04/15/2008
|
04/25/2012
|
G - (Granted)
|
COLO - (Colombia)
|
10-142509
|
04/15/2008
|
11/24/2017
|
G - (Granted)
|
BRAZ - (Brazil)
|
PI0822577-0
|
04/15/2008
|
08/15/2017
|
G - (Granted)
|
CHIL - (Chile)
|
01145-2010
|
10/19/2010
|
01/05/2017
|
G - (Granted)
|
MONG - (Mongolia)
|
4510
|
04/15/2008
|
10/25/2010
|
G - (Granted)
|
CHIN - (China P.R.)
|
201110142494.3
|
11/02/2000
|
10/14/2015
|
G - (Granted)
|
HONG - (Hong Kong)
|
11110274.3
|
09/29/2011
|
08/15/2014
|
G - (Granted)
|
HONG - (Hong Kong)
|
12102379.3
|
03/08/2012
|
10/21/2016
|
G - (Granted)
|
EPC - (European Patent Convention)
|
13153292.1
|
01/30/2013
|
|
F - (Pending)
|
ALBA - (Albania)
|
AL//P/2013/0342
|
11/02/2000
|
10/02/2013
|
G - (Granted)
|
ATRA - (Austria)
|
00992027.3
|
11/02/2000
|
10/02/2013
|
G - (Granted)
|
CYPR - (Cyprus)
|
CY20131101169
|
11/02/2000
|
10/02/2013
|
G - (Granted)
|
GERM - (Germany)
|
00992027.3
|
11/02/2000
|
10/02/2013
|
G - (Granted)
|
SPAI - (Spain)
|
00992027.3
|
11/02/2000
|
10/02/2013
|
G - (Granted)
|
GBRI - (Great Britain)
|
00992027.3
|
11/02/2000
|
10/02/2013
|
G - (Granted)
|
GREC - (Greece)
|
00992027.3
|
11/02/2000
|
10/02/2013
|
G - (Granted)
|
IREL - (Ireland)
|
00992027.3
|
11/02/2000
|
10/02/2013
|
G - (Granted)
|
ITAL - (Italy)
|
502013902221416
|
11/02/2000
|
10/02/2013
|
G - (Granted)
|
LATV - (Latvia)
|
00992027.3
|
11/02/2000
|
10/02/2013
|
G - (Granted)
|
MACE - (Macedonia)
|
00992027.3
|
11/02/2000
|
10/02/2013
|
G - (Granted)
|
PORT - (Portugal)
|
00992027.3
|
11/02/2000
|
10/02/2013
|
G - (Granted)
|
ROMA - (Romania)
|
00992027.3
|
11/02/2000
|
10/02/2013
|
G - (Granted)
|
SWED - (Sweden)
|
00992027.3
|
11/02/2000
|
10/02/2013
|
G - (Granted)
|
SLOV - (Slovenia)
|
00992027.3
|
11/02/2000
|
10/02/2013
|
G - (Granted)
|
TURK - (Turkey)
|
00992027.3
|
11/02/2000
|
10/02/2013
|
G - (Granted)
|
USA - (United States)
|
14/282,558
|
05/20/2014
|
10/25/2016
|
G - (Granted)
|
EPC - (European Patent Convention)
|
12845210.9
|
09/07/2012
|
|
F - (Pending)
|
EURA - (Eurasian Patent Convention)
|
201490565
|
09/07/2012
|
07/31/2017
|
G - (Granted)
|
ASTL - (Australia)
|
2012333101
|
09/07/2012
|
10/27/2016
|
G - (Granted)
|
CANA - (Canada)
|
2,848,068
|
09/07/2012
|
|
F - (Pending)
|
INDI - (India)
|
1722/DELNP/2014
|
09/07/2012
|
|
F - (Pending)
|
PHIL - (Philippines)
|
1-2014-500512
|
09/07/2012
|
09/16/2019
|
G - (Granted)
|
USA - (United States)
|
14/343,568
|
09/07/2011
|
12/31/2019
|
G - (Granted)
|
SAFR - (South Africa)
|
2014/02154
|
09/07/2012
|
06/28/2017
|
G - (Granted)
|
COLO - (Colombia)
|
14068729
|
09/07/2012
|
11/23/2015
|
G - (Granted)
|
MEXI - (Mexico)
|
MX/a/2014/002717
|
09/07/2012
|
10/18/2018
|
G - (Granted)
|
PANA - (Panama)
|
90134-01
|
09/07/2012
|
|
F - (Pending)
|
JAPA - (Japan)
|
2014-529896
|
09/07/2012
|
12/05/2017
|
G - (Granted)
|
KORS - (Republic of Korea)
|
10-2014-7008281
|
09/07/2012
|
4/05/2019
|
G - (Granted)
|
INDO - (Indonesia)
|
P00201401962
|
09/07/2012
|
10/30/2019
|
G - (Granted)
|
MONG - (Mongolia)
|
5304
|
03/25/2014
|
04/09/2015
|
G - (Granted)
|
MAYS - (Malaysia)
|
PI2014000646
|
09/07/2012
|
|
F - (Pending)
|
SRIL - (Sri Lanka)
|
17613
|
09/07/2012
|
02/26/2015
|
G - (Granted)
|
AU – (Australia)
|
2018282423
|
12/20/2018
|
|
F - (Pending)
|
HONG - (Hong Kong)
|
15100135.9
|
01/07/2015
|
08/15/2019
|
G - (Granted)
|
ASTL - (Australia)
|
2015202493
|
05/08/2015
|
09/14/2017
|
G - (Granted)
|
USA - (United States)
|
14/891,893
|
05/30/2014
|
|
F - (Pending)
|
ASTL - (Australia)
|
2014273996
|
05/30/2014
|
02/14/2019
|
G - (Granted)
|
CANA - (Canada)
|
2,912,824
|
05/30/2014
|
07/20/2021
|
G - (Granted)
|
CHIN - (China P.R.)
|
201480030985.0
|
05/30/2014
|
|
F - (Pending)
|
COLO - (Colombia)
|
15-304594
|
05/30/2014
|
|
F - (Pending)
|
EPC - (European Patent Convention)
|
14803703.9
|
05/30/2014
|
|
F - (Pending)
|
HONG - (Hong Kong)
|
16112584.9
|
11/02/2016
|
|
F - (Pending)
|
INDI - (India)
|
11109/DELNP/2015
|
05/30/2014
|
|
F - (Pending)
|
INDO - (Indonesia)
|
P00201508659
|
05/30/2014
|
10/30/2019
|
G - (Granted)
|
JAPA - (Japan)
|
2016-517043
|
05/30/2014
|
11/30/2018
|
G - (Granted)
|
NEWZ - (New Zealand)
|
714208
|
05/30/2014
|
10/01/2019
|
G - (Granted)
|
RUSS - (Russian Federation)
|
2015155730
|
05/30/2014
|
04/10/2018
|
G - (Granted)
|
SAFR - (South Africa)
|
2015/08515
|
05/30/2014
|
01/29/2021
|
G - (Granted)
|
KORS - (Republic of Korea)
|
10-2015-7037018
|
05/30/2014
|
|
G - (Granted)
|
CHIN - (China P.R.)
|
201610015312.9
|
01/11/2016
|
04/10/2018
|
G - (Granted)
|
INDI - (India)
|
201618002729
|
01/25/2016
|
|
F - (Pending)
|
USA - (United States)
|
15/297,210
|
10/19/2016
|
|
F - (Pending)
|
HONG - (Hong Kong)
|
16113567.8
|
11/29/2016
|
|
F - (Pending)
|
Governmental Regulations
Environmental Regulation Affecting our Potential Market
We believe that under the Biden administration legislation and
regulations will have a negative impact on fossil fuel-fired, and
specifically coal-fired, power generating facilities nationally and
internationally. According to the U.S. Environmental Protection
Agency, or EPA, power generation emits substantial levels of sulfur
dioxide, nitrogen oxides, mercury and carbon dioxide into the
environment. Regulation of these emissions affected the potential
market for coal processed using our technology by imposing limits
and caps on fossil fuel emissions. The most significant, existing
national legislation and regulations affecting our potential market
include the Clean Air Act, the Clean Air Interstate Rule and the
Clean Air Mercury Rule, which are described further below.
Environmental Regulation Affecting the Construction and
Operation of Plants Using our Technology
In the United States, future production plants using our technology
will require numerous permits, approvals and certificates from
appropriate federal, state and local governmental agencies before
construction of each facility can begin and will be required to
comply with applicable environmental laws and regulations
(including obtaining operating permits) once facilities begin
production. The most significant types of permits that are
typically required for commercial production facilities include an
operating and construction permit under the Clean Air Act, a
wastewater discharge permit under the Clean Water Act, and a
treatment, storage and disposal permit under the Resource
Conservation and Recovery Act. Some federal programs have delegated
regulatory authority to the states and, as a result, facilities may
be required to secure state permits. Finally, the construction of
new facilities may require review under the National Environmental
Policy Act, or a state equivalent, which requires analysis of
environmental impacts and, potentially, the implementation of
measures to avoid or minimize these environmental impacts. We are
working closely with Wyoming to assess all permitting
requirements.
Any international plants will also be subject to various permitting
and operational regulations specific to each country. International
initiatives, such as the Kyoto Protocol/Copenhagen Accord, are
expected to create increasing pressures on the electric power
generation industry on a world-wide basis to reduce emissions of
various pollutants, which management expects will create additional
demand for our technology.
Research and Development
In association with our engineering consultants and the University
of Wyoming we have identified a number of changes to the original
test facility. While our budget does not currently allow us to
allocate a specific funding for Research and Development
(“R&D”), we will incorporate these changes to the assembly of
the second generation test facility in Wyoming in the third quarter
of 2022. During 2011 we invented the new Pristine M technology
which following its successful testing in 2016 and 2017 we believe
has already put us at the forefront of the global moisture removal
technologies. The second generation test facility is expected to
enable the extraction of coal by-products and potentially Rare
Earth Minerals for testing and research in partnership with the
University of Wyoming.
In the future, we anticipate a growing R&D budget that seeks to
fully develop the potential of our three main processes. We will
continue to evaluate our progress in new and existing technologies
and will seek to fund additional needs as they arise.
Employees
As of December 31, 2021, we had two full-time executives, President
and CEO Robin Eves, Chief Operations Officer and Chief Financial
Officer, Aiden Neary, who both have written employment agreements.
Messrs. Eves and Neary received no compensation for their
participation on the Board of Directors.
The terms of the agreements described above were negotiated by and
between the individuals and our Board of Directors based on the
qualifications and requirements of each individual and the needs of
the Company; however, the negotiations may not be deemed to have
been at arm’s length.
ITEM 1A. RISK FACTORS
We have limited licensing revenues to date and we have made
no provision for any contingency, unexpected expenses or increases
in costs that may arise.
We have received only limited licensing revenues from operations to
date. We have generated operational funding in fiscal 2021 from
private debt and equity offerings to use for operating expenses or
research and development. Since inception, we have been able to
cover our operating losses from debt and equity financing. These
sources of funds may not be available to cover future operating
losses. If we are not able to obtain adequate sources of funds to
operate our business we may not be able to continue as a going
concern.
Our business strategy and plans could be adversely affected in the
event we need additional financing and are unable to obtain such
funding when needed. It is possible that our available funds may
not be sufficient to meet our operating expenses, development
plans, and capital expenditures for the next twelve months.
Insufficient funds may prevent us from implementing our business
strategy or may require us to delay, scale back or eliminate
certain opportunities for the commercialization of our technology.
If we cannot obtain necessary funding, then we may be forced to
cease operations.
We may experience delays in resolving unexpected technical
issues arising from the design of commercial units that will
increase development costs and make the economics
unattractive.
As we develop, refine and implement our technology on a commercial
basis, we may have to solve technical, manufacturing and/or
equipment-related issues. Some of these issues are ones that we
cannot anticipate because the technology we are developing is new.
If we must revise existing manufacturing processes or order
specialized equipment to address a particular issue, we may not
meet our projected timetable for bringing commercial operations on
line. Such delays may interfere with our projected operating
schedules, delay our receipt of licensing and royalty revenues from
operations and decrease royalties from operations. Enhanced
commercial designs are underway.
The market in which we are attempting to sell our technology
is highly competitive and may attract significant additional
research and development in coming years.
The market for our technology may become highly competitive on a
global basis, with a number of competitors gaining significantly
greater resources and greater market share than us. Because of
greater resources and more widely accepted brand names, many of our
competitors may be able to adapt more quickly to changes in the
markets we have targeted or devote greater resources to the
development and sale of new technology products. Our ability to
compete is dependent on our emerging technology that may take some
time to develop market acceptance. To improve our competitive
position, we may need to make significant ongoing investments in
service and support, marketing, sales, research and development and
intellectual property protection. We may not have sufficient
resources to continue to make such investments or to secure a
competitive position within the market we target.
Our business depends on the protection of our patents and
other intellectual property and may suffer if we are unable to
adequately protect such intellectual property.
Our success and ability to compete are substantially dependent upon
our intellectual property. We rely on patent laws, trade secret
protection and confidentiality or license agreements with our
employees, consultants, strategic partners and others to protect
our intellectual property rights. However, the steps we take to
protect our intellectual property rights may be inadequate. There
are events that are outside of our control that pose a threat to
our intellectual property rights as well as to our products and
services. For example, effective intellectual property protection
may not be available in every country in which we license our
technology. Also, the efforts we have taken to protect our
proprietary rights may not be sufficient or effective. Any
impairment of our intellectual property rights could harm our
business and our ability to compete. Also, protecting our
intellectual property rights is costly and time consuming. Any
increase in the unauthorized use of our intellectual property could
make it more expensive to do business and harm our operating
results. In addition, other parties may independently develop
similar or competing technologies designed around any patents that
may be issued to us.
We have been granted several global patents in 2018 and have
several patents applications pending as noted in the table above.
Our ability to license our technology is substantially dependent on
the validity and enforcement of these patents and patents pending.
We cannot assure you that our patents will not be invalidated,
circumvented or challenged, that patents will be issued for our
patents pending, that the rights granted under the patents will
provide us competitive advantages or that our current and future
patent applications will be granted.
Third parties may invalidate our patents.
Third parties may seek to challenge, invalidate, circumvent or
render unenforceable any patents or proprietary rights owned by or
licensed to us based on, among other things:
• subsequently discovered prior art;
• lack of entitlement to the priority of an earlier, related
application; or
• failure to comply with the written description, best mode,
enablement or other applicable requirements.
United States patent law requires that a patent must disclose the
“best mode” of creating and using the invention covered by a
patent. If the inventor of a patent knows of a better way, or “best
mode,” to create the invention and fails to disclose it, that
failure could result in the loss of patent rights. Our decision to
protect certain elements of our proprietary technologies as trade
secrets and to not disclose such technologies in patent
applications, may serve as a basis for third parties to challenge
and ultimately invalidate certain of our related patents based on a
failure to disclose the best mode of creating and using the
invention claimed in the applicable patent. If a third party is
successful in challenging the validity of our patents, our
inability to enforce our intellectual property rights could
seriously harm our business.
We may be liable for infringing the intellectual property
rights of others.
Our technology may be the subject of claims of intellectual
property infringement in the future. Our technology may not be able
to withstand any third-party claims or rights against their use.
Any intellectual property claims, with or without merit, could be
time-consuming, expensive to litigate or settle, could divert
resources and attention and could require us to obtain a license to
use the intellectual property of third parties. We may be unable to
obtain licenses from these third parties on favorable terms, if at
all. Even if a license is available, we may have to pay substantial
royalties to obtain it. If we cannot defend such claims or obtain
necessary licenses on reasonable terms, we may be precluded from
offering most or all of technology and our business and results of
operations will be adversely affected.
Our ability to execute our business plan would be harmed if
we are unable to retain or attract key personnel.
Our technology is being marketed by a small number of the members
of our management. Our technology is being developed and refined by
a small number of technical consultants. Our future success
depends, to a significant extent, upon our ability to retain and
attract the services of these and other key personnel. The loss of
the services of one or more members of our management team or our
technical consultants could hinder our ability to effectively
manage our business and implement our growth strategies. Finding
suitable replacements could be difficult, and competition for such
personnel of similar experience is intense. We do not carry key
person insurance for our officers.
Overseas development of our business is subject to
international risks, which could adversely affect our ability to
license profitable overseas plants.
We believe a significant portion of the growth opportunity for our
business lies outside the United States. Doing business in foreign
countries may expose us to many risks that are not present
domestically. We lack significant experience in dealing with such
risks, including political, military, privatization, technology
piracy, currency exchange and repatriation risks, and higher credit
risks associated with customers. In addition, it may be more
difficult for us to enforce legal obligations in foreign countries,
and we may be at a disadvantage in any legal proceeding within the
local jurisdiction. Local laws may also limit our ability to hold a
majority interest in the projects that we develop. The Company has
yet to establish any representation offices outside the United
States.
We do not know if coal processed using our technology is
commercially viable.
We do not yet know whether coal processed using our technology can
be produced and sold on a commercial basis in a cost effective
manner after taking into account the cost of the feedstock,
processing costs, license and royalty fees and the costs of
transportation. Because we have not experienced any full scale
commercial operations, we have not yet developed a guaranteed
efficient cost structure. Initial indications show commercial
viability. We are currently using the estimates for anticipated
pricing and costs, as well as the qualities of the coal processed
in the laboratory and our test facility at AES setting to make such
estimates. We may experience technical problems that could make the
processed coal more expensive than anticipated. Failure to address
both known and unforeseen technical challenges may materially and
adversely affect our business, results of operations and financial
condition. Initial indications based on actual test results show a
positive impact on the quality of the processed coal and based on
current prices appear economically attractive.
We have experienced large net losses, have little liquidity
and need to obtain funds for operations or we may not be able to
continue.
We have incurred net losses since inception. The net losses to date
include large non-cash expenses recorded for share-based
compensation for consultants and officer compensation. However, in
addition to the non-cash expenses, we had other operating expenses,
funded in large part through loans from existing shareholders. In
order to meet our current operating budget and anticipated
contractual obligations, we estimate that we will need an
additional $5,500,000 for 2022 based on our current contractual
obligations. At December 31, 2021, we had total liabilities of
$28,577,028 and cash of $1,762. If we cannot obtain adequate
financing from new funding sources, we will be unable to continue
operations or meet our contractual obligations.
Our use of equity as an alternative to cash compensation may
cause excessive dilution for our current shareholders.
Due to shortage of operating funds and low liquidity, we have
issued shares as compensation for services, including board and
officer compensation as well as compensation for outside
consultants and other services. This form of compensation has
enabled us to obtain services that would not otherwise have been
available to us but it has resulted in dilution to our
shareholders. Unless we are able to obtain adequate financing in
the immediate future, we may be forced to continue to obtain
services through the issuance of shares and warrants, resulting in
additional dilution to shareholders and potentially adversely
affecting any return on investment.
Due to the uncertain commercial acceptance of coal processed
using our technology we may not be able to realize significant
licensing revenues.
While we strongly believe that a commercial market is developing
both domestically and internationally for cleaner coal products
such as coal processed using our technology, we may face the
following risks due to the developing market for cleaner coal
technology:
- limited pricing information;
- changes in the price differential between low- and high-BTU
coal;
- unknown costs and methods of transportation to bring processed
coal to market;
- alternative fuel supplies available at a lower price;
- the cost and availability of emissions-reducing equipment or
competing technologies; failure of governments to implement and
enforce new environmental standards; and
- a decline in energy prices which could make processed coal less
price competitive.
If we are unable to develop markets for our processed coal, our
ability to generate revenues and profits will be negatively
impacted.
If we are unable to successfully construct and commercialize
production plants, our ability to generate profits from our
technology will be impaired.
Our future success depends on our ability to secure partners to
locate, develop and construct future commercial production plants
and operate them at a profit. A number of different variables,
risks and uncertainties affect such commercialization
including:
- the complex, lengthy and costly regulatory permit and approval
process;
- potential local opposition to development of projects, which can
increase cost and delay timelines;
- increases in construction costs such as for contractors, workers
and raw materials;
- transportation costs and availability of transportation;
- the inability to acquire adequate amounts of low rank feedstock
coal at forecasted prices to meet projected goals;
- availability of suitable consumers of chemical by-product
produced by our process;
- engineering, operational and technical difficulties; and
- possible price fluctuations of low-Btu coal which could impact
profitability.
If we are unable to successfully address these risks, our results
from operations, financial condition and cash flows may be
adversely affected.
Future changes in the law may adversely affect our ability to
sell our products and services.
A significant factor in expanding the potential U.S. market for
coal processed using our technology is the numerous federal, state
and local environmental regulations, which provide various air
emission requirements for power generating facilities and
industrial coal users. The Trump Administration revoked a number of
regulations and restrictions which had an adverse impact on the
market for our products and services, however, under the current
Biden Administration it remains unclear what regulations will be
re-imposed.
Covid-19 had a negative impact on our funding ability through 2021.
There is no assurance that future funding requirements will not be
impacted by the continuation of this pandemic.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
We have a leased satellite office at 295 Madison Avenue, New York,
NY 10017 with a monthly cost of $200 per month. We lease the land
at our test facility in Gillette, Wyoming. It is a three year lease
at $1,000 per month. The Company paid the three year lease payment
of $36,000 in advance. The lease expired in April 2021 and was
renewed for an additional three years on the same terms. The full
three year lease payment of $36,000 was paid in advance in April
2021.
ITEM 3. LEGAL PROCEEDINGS
None.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY
SECURITIES
Market Information
Our common stock is quoted on the OTC Markets Group website under
the symbol CCTC since October 12, 2007. The following table sets
forth the high and low bid prices for the Company’s common stock
for the periods indicated. The prices below reflect inter-dealer
quotations, without retail mark-up, mark-down or commissions and
may not represent actual transactions.
Quarter Ended
|
|
Low
|
|
|
High
|
|
31-Dec-21
|
|
$ |
0.003 |
|
|
$ |
0.004 |
|
30-Sep-21
|
|
$ |
0.005 |
|
|
$ |
0.007 |
|
30-Jun-21
|
|
$ |
0.007 |
|
|
$ |
0.008 |
|
31-Mar-21
|
|
$ |
0.009 |
|
|
$ |
0.009 |
|
31-Dec-20
|
|
$ |
0.010 |
|
|
$ |
0.012 |
|
30-Sep-20
|
|
$ |
0.010 |
|
|
$ |
0.014 |
|
30-Jun-20
|
|
$ |
0.028 |
|
|
$ |
0.037 |
|
31-Mar-20
|
|
$ |
0.060 |
|
|
$ |
0.070 |
|
The closing price of our common stock as quoted on the OTC Markets
on March 01, 2022 was $0.004 per share. As of March 09, 2022, there
were approximately 2,205 holders of record of our common stock and
414,279,613 shares of common stock outstanding based on information
provided by our transfer agent, Worldwide Stock Transfer, LLC.
Dividends
We have not paid any dividends on our common stock since our
inception and do not anticipate paying any dividends in the
foreseeable future. Any future determination to pay dividends will
be at the discretion of our Board of Directors and will be
dependent upon then-existing conditions, including our financial
condition, results of operations, contractual restrictions, capital
requirements, business prospects and other factors our Board of
Directors deems relevant.
Issuer Purchases of Equity Securities
During the year ended December 31, 2021, we did not purchase any of
our own equity securities.
Recent Issues and Sales of Unregistered Securities
The total number of common shares issued and outstanding as of
December 31, 2021 was 414,279,613.
The above securities were issued in reliance on the exemption from
registration pursuant to Section 4(2) of the Securities Act of
1933, as amended, and the regulations promulgated thereunder. The
issuances were for investment received, the transactions were
privately negotiated and none involved any kind of public
solicitation.
Issued for Convertible Debt
During the year ended December 31, 2021, Clean Coal issued
81,710,894 common shares for convertible notes payable, accrued
interest and fees valued at $453,975.
ITEM 6. SELECTED FINANCIAL DATA
We are a “Smaller Reporting Company” as defined under §229.10(f)(1)
of Regulation S-K and are not required to provide the information
required by this Item.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS AND FACTORS THAT MAY AFFECT FUTURE
RESULTS
This Annual Report on Form 10-K contains forward-looking
statements (as referenced in Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934) that
involve risks and uncertainties, as well as assumptions that, if
they do not materialize or prove correct, could cause our results
to differ materially from those expressed or implied by such
forward-looking statements. All statements other than statements of
historical fact are statements that could be deemed forward-looking
statements, including, but not limited to, statements concerning:
our plans, strategies and objectives for future operations; new
products or developments; future economic conditions, performance
or outlook; the outcome of contingencies; expected cash flows or
capital expenditures; our beliefs or expectations; activities,
events or developments that we intend, expect, project, believe or
anticipate will or may occur in the future; and assumptions
underlying any of the foregoing. Forward-looking statements may be
identified by their use of forward-looking terminology, such as
“believes,” “expects,” “may,” “should,”
“would,” “will,” “intends,” “plans,”
“estimates,” “anticipates,” “projects” and
similar words or expressions. You should not place undue reliance
on these forward-looking statements, which reflect our
management’s opinions only as of the date of the filing of
this Annual Report on Form 10-K and are not guarantees of future
performance or actual results.
Overview
Over the past decade, Clean Coal Technologies, Inc. has developed
processes that address what we believe are the key technology
priorities of the global coal industry. We currently have three
processes in our intellectual property portfolio:
The original process, called Pristine, is designed to remove
moisture and volatile matter, rendering a high-efficiency, cleaner
thermal coal. The process has been tested successfully on
bituminous and subbituminous coals, and lignite from various parts
of the United States and from numerous countries around the
world.
Our second process, called Pristine-M, is a low-cost coal
dehydration technology. In tests, this process has succeeded in
drying coal economically and stabilizing it using volatile matter
released by the feed coal. Construction of our coal testing plant
was completed in December 2015 and was successfully tested through
April 2016 at AES Coal Power Utility in Oklahoma. Additional tests
commenced and were completed in the fourth quarter of 2017. This
test facility has been moved from AES to Wyoming where reassembly
has commenced and testing of international coal is expected upon
completion of the reassembly. Changes identified to the process by
the University of Wyoming and our EPC contractors will be included
in the reassembly and it is expected to provide a higher quality
end product with a lower capital cost for a commercial unit. The
reassembly is expected to be completed no later than Q3 2022.
Our third process, called Pristine-SA, is designed to eliminate
100% of the volatile matter in the feed coal and to achieve stable
combustion by co-firing it with biomass or natural gas. The process
is expected to produce a cleaner fuel that eliminates the need for
emissions scrubbers and the corollary production of toxic coal ash.
We anticipate that treated coal that is co-fired with other energy
resources will burn as clean as natural gas.
Anticipated Benefits of the Technology:
|
•
|
Reduction of undesired emissions and greenhouse gases through the
removal of compounds that are not required for combustion in
conventional boilers.
|
|
•
|
Cost savings and environmental impact reduction. Our pre-combustion
solution is expected to be significantly less expensive than
post-combustion solutions such as emissions scrubbers. Not only are
the latter prohibitively expensive, they produce coal ash
containing the “scrubbed” compounds, which is dumped in toxic
waste disposal sites where it may pose continuing environmental
risk. Coal treated using our processes may eliminate the need for
post-combustion emissions scrubbers and the resulting toxic ash. By
beneficiating the coal it requires less coal to be consumed to
achieve the same energy output. This will save on transportation
and handling costs.
|
|
•
|
Potential use of compounds removed from treated coal. Volatile
matter captured in the Pristine process is removed in the form of
hydrocarbon liquids that we believe will be easily blended with
crude oil or used as feedstock for various products. For example,
sulfur, which can be removed using the Pristine process, is a basic
feedstock for fertilizer. The harvesting of hydrocarbon liquids
from abundant, cheaper coal is a potentially lucrative side benefit
of our processes. All coal by-products including Rare Earth
Minerals extraction will be tested in the second-generation
facility.
|
Successful testing of the Pristine M process resulted in an
increase in BTU of the processed coal and a reduction in moisture
content making it less expensive to transport (as moisture has been
removed) with the end product being a dust free stabilized enhanced
coal which we believe will address the issue of coal dust pollution
during transportation.
|
•
|
Energy Independence. To the extent that volatile matter is removed
from coal, coal’s use as an energy resource is greatly improved,
enabling coal-rich countries to move towards energy independence
owing to coal’s greater abundance. Extraction of by-products
including Rare Earth Minerals is also expected to provide coal
derivative product independence.
|
Development Status:
Pristine process. Pristine process successfully lab tested on small
scale and through advanced computer modeling. As at November, 2020,
various aspects of the Pristine process were successfully tested at
our test facility at the AES coal Power plant in Oklahoma as part
of the overall testing of Pristine M. The second-generation
facility in Wyoming is expected to perform a more detailed testing
of the Pristine process. The build out and delivery of the Rotary
Kiln will enable the test facility to reach significantly higher
temperatures to test with more accuracy the Pristine process.
Pristine-M. Testing of the Pristine M process on Powder River Basin
coal at the AES facility in Oklahoma was completed in December
2017. The Pristine M process was successfully tested and the
process, engineering and science were independently proven. The
test facility was moved from the AES location to Wyoming where
reassembly commenced in Q4 2019 and testing of international coal
is expected upon completion of reassembly. The reassembly was
delayed due to the pandemic but it is expected to be completed in
Q3 2022. Over several months in 2018 and early 2019 the University
of Wyoming independently validated the Pristine M process in their
laboratory. By coating the exterior of the coal during the
stabilization period with heavy hydrocarbons the process produces
dust free stabilized coal for transportation.
Pristine-SA process. Pristine SA process analysis is at a very
early stage. Further research and development is expected using the
test facility at its permanent location in Wyoming. The
introduction of the Rotary Kiln and the higher temperatures it can
achieve will enable a more accurate testing protocol for this
process.
Business Outlook
|
•
|
Wyoming New Power, a related party company, has agreed to sign a
two million ton per annum license agreement to use Pristine M at a
location in Wyoming. They have paid a non-refundable $100,000
deposit on the license agreement. The definitive license agreement
is expected to be signed following the receipt of commercial design
which will incorporate the suggested changes proposed by the
University of Wyoming and our EPC contractor. Wyoming New Power is
a Related Party because it is controlled by a party that also
controls the entity, which is the major lender and significant
stockholder of the Company.
|
|
•
|
Jindal Steel & Power is expected to send though their coal for
sampling immediately following the plants re-assembly. The bespoke
commercial facility design is expected after the testing.
In Q2, 2019 the Company signed a non binding MOU with Universitas
Indonesia in a combined effort to assess the impact of our
technology on Indonesian Coal both from a coal beneficiation
perspective and also coal by-products.
The second-generation test facility will have the capability of
producing Char. There is local Wyoming demand for this product that
the company expects to sell.
|
|
•
|
The Company entered into a partnership with the University of
Wyoming with the sole focus of using our suite of technologies to
increase the use of and value of Wyoming Powder River Basin coal.
Primary focus is on utilizing our technology to extract valuable
derivative products from coal. Changes to the process have been
identified by the University and the company EPC engineers and will
be incorporated in the reassembly of the facility in Wyoming. The
University confirmed in Q2, 2019 that they had successfully
validated the Pristine M process in their laboratory and as a
result entered into an agreement with the Company. The agreement
between the University and the Company is for the reassembly of the
second generation test facility. The University will advance to the
EPC contractor on a two to one basis. As of the date of this filing
the University has advanced a total of approx. $1,300,000 directly
to the manufacturer of the Rotary Kiln. The kiln and all its
relevant control panels was delivered to our site at Gillette,
Wyoming in June 2020.
|
|
|
|
|
•
|
The Company has been engaged with AusTrade (The Australian Trade
and Investment Commission) and through that relationship has
partnered with three separate universities in Australia. Like the
University of Wyoming these Universities have a focus on their
local coal both from a beneficiation perspective and also
extracting derivative by products from coal using our technology.
The Company received full Australian patents in Q2, 2019 so the
company plans to move forward with this relationship in Q3, 2022
following the assembly of the second-generation test facility.
|
|
•
|
The Company continues in discussions with the Minister for Coal in
India and a number of the Energy governmental bodies in India. Coal
samples are expected to be sent for testing once the Second
Generation Test Facility is assembled which is expected in Q3, 2022
but subject to potential delays due to the current pandemic.
|
|
•
|
Meetings occurred in Q2, 2019 with the US DOE, DOD and Wyoming
State Representatives to further our technology to benefit US coal.
These discussions continue through March 2022 in light of coal
mining bankruptcies in Wyoming.
|
Employees
As of December 31, 2021, we had two full-time executives. President
and CEO Robin Eves, Chief Operations Officer and Aiden Neary, Chief
Financial Officer have written employment agreements. Messrs. Eves
and Neary received no compensation for their participation on the
Board of Directors.
Factors Affecting Results of Operations
Our operating expenses include the following:
●
|
Consulting expenses, which consist primarily of amounts paid for
technology development and design and engineering services;
|
●
|
General and administrative expenses, which consist primarily of
salaries, commissions and related benefits paid to our employees,
as well as office and travel expenses;
|
●
|
Research and development expenses, which consist primarily of
equipment and materials used in the development and testing of our
technology; and
|
●
|
Legal and professional expenses, which consist primarily of amounts
paid for patent protections, audit, disclosure, and reporting
services.
|
Results of Operations
The following information should be read in conjunction with the
financial statements and notes appearing elsewhere in this Report.
We have generated limited revenues from inception to date. We
anticipate that we may not receive any significant revenues from
operations until we begin to receive royalty revenues from our coal
testing plant which we estimate will be approximately 12 months
after the successful signing of a commercial agreement anticipated
in quarter three of fiscal 2022. We are also in preliminary
discussions with companies, business groups, consortiums in the USA
and Asia to license our technology, which, if successful, could
realize limited short-term revenue opportunities from the signing
of technology licensing agreements.
For the Years Ended December 31, 2021 and 2020.
We had no direct revenues for the years ended December 31, 2021 and
2020. In the fourth quarter of 2017 we received $100,000 as a non-
refundable deposit on a two million ton license agreement from
Wyoming New Power, a related party. The definitive license
agreement is expected to be completed in 2020 following the
assembly of the second generation test facility. In the year ended
December 31, 2012, we have received an initial license fee of
$375,000 from Jindal paid pursuant to the signing of our coal
testing plant construction contract. The balance of $375,000 will
be due upon the successful testing of Jindal coal in our second
generation test facility in Wyoming. We do not anticipate any
significant royalty fees for approximately 12-18 months
thereafter.
Operating Expenses
Our operating expenses for the year ended December 31, 2021 totaled
$3,583,151 compared to $2,497,967 for the prior year. The
$1,085,184 increase is mainly due to a $2,032,399 increase in
general and administrative expenses and a $128,954 decrease in
gains on forgiveness of accounts payable, partially offset by a
$1,076,169 decrease in research and development expenses.
Other Income and Expenses
Total other expenses for the year ended December 31, 2021 were
$1,902,178, compared to $3,826,304 for the year ended December 31,
2021. Other expenses consists of $2,052,722 in interest expense on
convertible debt and related amortization of debt discounts, $600
in debt default and standstill expenses related to convertible
notes payable and $151,144 in fair value gains as a result of
conversion options on convertible debt. During the year ended
December 31, 2020, we recognized $3,152,623 in interest expense and
$125,262 in debt default and standstill expenses related to
convertible notes payable and $548,419 in fair value losses as a
result of conversion options on convertible debt.
Net Income/Loss
For the year ended December 31, 2021, we recognized a net loss of
$5,485,329, compared to a net loss of $6,324,271 for the year ended
December 31, 2020. As discussed above, the net losses for 2021 and
2020 are due to the $3,583,151 and $2,497,967 in operating expenses
and $1,902,178 and $3,826,304 in other expenses, respectively.
We anticipate losses from operations will increase during the next
twelve months due to anticipated increased payroll expenses as we
add necessary staff and increases in legal and accounting expenses
associated with maintaining a reporting company. We expect that we
will continue to have net losses from operations for several years
until revenues from operating facilities become sufficient to
offset operating expenses, unless we are successful in the sale of
licenses for our technology.
Liquidity and Capital Resources
We have generated minimal revenues since inception. We have
obtained cash for operating expenses through advances and/or loans
from affiliates and stockholders, the sale of common stock, the
issuance of loans and convertible debentures converted or
convertible to common stock and the receipt of $375,000 in license
fees from Jindal as described above.
Net Cash Used in Operating Activities.
During the years ended December 31, 2021 and 2020, we used $636,121
and $874,119 in cash from operations, mainly due to the net losses
discussed above, net of non-cash operating expenses of $513,671 and
$2,527,355 in 2021 and 2020, respectively. Our primary uses of
funds in operations were payments made to our consultants and
employees, legal and professional costs as well as travel and
office expenses.
Net Cash Provided By Investing Activities.
We had no cash flows from investing activities in 2021 and
2020.
Net Cash Provided by Financing Activities.
Net cash provided by financing activities during the years ended
December 31, 2021 and 2020 totaled $633,680 and $786,040,
respectively. We received $18,600 and $76,990 in cash from the
issuance of convertible debt from related parties, $625,080 and
$45,050 in cash from the issuance of notes payable to related
parties and $0 and $858,000 in cash from the issuance of
convertible notes payable during the years ended December 31, 2021
and 2020, respectively. We repaid $10,000 and $11,500 on notes
payable to related parties and $0 and $162,500 on convertible notes
in cash during the years ended December 31, 2021 and 2020,
respectively. We paid $20,000 in debt issue costs during the year
ended December 31, 2020, we had no such costs during the current
year.
Cash Position and Outstanding Indebtedness.
Our total indebtedness at December 31, 2021 and 2020 was
$28,577,028 and $23,254,115, respectively, which consists of
$28,483,101 and $23,191,339 of current liabilities and $93,927 and
$332,776 of long-term debt, respectively. Current liabilities
consist primarily of accounts payable, accounts payable to related
parties, short-term debt, related party convertible debt and
accrued liabilities. At December 31, 2021 and 2020, our current
assets were cash totaling $1,762 and $4,203, respectively. Our
working capital deficit at December 31, 2021 and 2020 was
$28,481,399 and $23,187,136, respectively.
Employees
As of December 31, 2021, we have two full-time executives,
President and CEO Robin Eves and Chief Operations Officer and Chief
Financial Officer Aiden Neary, who have written employment
agreements. Mr. Eves and Neary received no compensation for their
participation on the Board of Directors.
On July 1, 2020, we entered into two year employment agreements
with Robin Eves as President and Chief Executive Officer and Aiden
Neary as Chief Operating Officer, Chief Financial Officer and
director. Mr. Eves receives an annual salary of $525,000. Mr. Neary
receives an annual salary of $500,000. Each officer was also
granted 750,000 common shares upon signing the contract.
The terms of the agreements described above were negotiated by and
between the individuals and our Board of Directors based on the
qualifications and requirements of each individual and the needs of
the company.
Contractual Obligations and Commitments
We secured a permanent location in Gillette, Wyoming for our test
facility. The term of the lease is three years and calls for rent
of $36,000, prepaid. We are currently negotiating an additional
three year lease under the same terms and conditions.
We lease office space in New York, NY on a month to month basis, at
a monthly rate of $200 per month.
Our engineering consultants has tentatively estimated construction
costs for each one million short ton coal complete cleaning
facility of approximately $250 million (excluding land costs) or
costs and for a similar size Pristine-M-only facility of
approximately $30-35 million (excluding land costs). All
intellectual property rights associated with new art developed by
our engineering consultants remain our property.
We are also actively pursuing technology license and royalty
agreements in order to begin construction of other facilities
without incurring the capital costs associated with the
construction of future plants.
In November 2015, we entered into a month to month agreement with
South of the Rose communication to manage our Investor Relations
needs and manage social media requirements.
Construction of the coal testing plant was completed in 2015 and
testing commenced in December 2015 at the AES Coal Power Utility in
Oklahoma. As of December 31, 2021, we have paid $11,237,639 in
development costs. The facility was moved to Wyoming in the first
quarter of 2019. We anticipate that there will be an additional
cost of approximately $4 million to acquire the additional parts
for the second generation test facility and for its assembly.
Based on our current operational costs and including the capital
requirements for our project deployments, we estimate we will need
a total of approximately $5,500,000 to fund the Company for the
fiscal year 2022 for plant re-assembly and operating costs and an
additional $4,000,000 to continue for the following fiscal year
(2023) or until an initial commercial plant is up and running.
Off-Balance Sheet Arrangements
We have not and do not have any relationships with unconsolidated
entities or financial partnerships, such as entities often referred
to as structured finance or special purpose entities, which would
have been established for the purpose of establishing off-balance
sheet arrangements or other contractually narrow or limited
purposes. Therefore, we do not believe we are exposed to any
financing, liquidity, market or credit risk that could arise if we
had engaged in such relationships.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
We are exposed to changes in prevailing market interest rates
affecting the return on our investments but do not consider this
interest rate market risk exposure to be material to our financial
condition or results of operations. We invest primarily in United
States Treasury instruments with short-term (less than one year)
maturities. The carrying amount of these investments approximates
fair value due to the short-term maturities. Under our current
policies, we do not use derivative financial instruments,
derivative commodity instruments or other financial instruments to
manage our exposure to changes in interest rates or commodity
prices.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Our financial statements required by this item are included on the
pages immediately following the Index to Financial Statements
appearing below.
FINANCIAL STATEMENTS INDEX
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of
Clean Coal Technologies, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Clean Coal
Technologies, Inc. (the “Company”) as of December 31, 2021 and
2020, and the related statements of operations, stockholders’
deficit, and cash flows for the years then ended, and the related
notes (collectively referred to as the “financial statements”). In
our opinion, the financial statements present fairly, in all
material respects, the financial position of the Company as of
December 31, 2021 and 2020, and the results of its operations and
its cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of
America.
Going Concern Matter
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in
Note 3 to the financial statements, the Company has suffered
recurring losses from operations and has a net capital deficiency
that raises substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are
also described in Note 3. The financial statements do not include
any adjustments that might result from the outcome of this
uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on the
Company’s financial statements based on our audits. We are a public
accounting firm registered with the Public Company Accounting
Oversight Board (United States) ("PCAOB") and are required to be
independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the
PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error
or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting. As part of our audits we are required to obtain an
understanding of internal control over financial reporting but not
for the purpose of expressing an opinion on the effectiveness of
the Company's internal control over financial reporting.
Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those
risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as
well as evaluating the overall presentation of the financial
statements. We believe that our audits provides a reasonable basis
for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising
from the current period audit of the financial statements that were
communicated or required to be communicated to the audit committee
and that: (1) relate to accounts or disclosures that are material
to the financial statements and (2) involved our especially
challenging, subjective, or complex judgments. We determined that
there are no critical audit matters.
/s/ MaloneBailey, LLP
www.malonebailey.com
We have served as the Company's auditor since 2008.
Houston, Texas
April 15, 2022
Clean Coal Technologies, Inc.
Balance Sheets
|
|
December 31,
|
|
|
|
2021
|
|
|
2020
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
Cash
|
|
$ |
1,762 |
|
|
$ |
4,203 |
|
Total Current Assets
|
|
|
1,762 |
|
|
|
4,203 |
|
|
|
|
|
|
|
|
|
|
Right to use ground lease, net of accumulated amortization of
$44,000 and $32,000, respectively
|
|
|
28,000 |
|
|
|
4,000 |
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$ |
29,762 |
|
|
$ |
8,203 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$ |
2,045,767 |
|
|
$ |
1,900,639 |
|
Accrued liabilities
|
|
|
13,647,445 |
|
|
|
9,438,354 |
|
Customer deposit – related party
|
|
|
100,000 |
|
|
|
100,000 |
|
Notes payable – related parties
|
|
|
1,518,230 |
|
|
|
788,150 |
|
Notes payable
|
|
|
413,185 |
|
|
|
413,185 |
|
Convertible debt, net of unamortized discounts
|
|
|
1,019,529 |
|
|
|
1,600,686 |
|
Convertible debt, net of unamortized discounts – related
party
|
|
|
9,738,945 |
|
|
|
8,950,325 |
|
Total Current Liabilities
|
|
|
28,483,101 |
|
|
|
23,191,339 |
|
|
|
|
|
|
|
|
|
|
Long-Term Liabilities
|
|
|
|
|
|
|
|
|
Convertible debt, net of unamortized discounts – related
party
|
|
|
93,927 |
|
|
|
332,776 |
|
Total Liabilities
|
|
|
28,577,028 |
|
|
|
23,524,115 |
|
|
|
|
|
|
|
|
|
|
Stockholders’ Deficit
|
|
|
|
|
|
|
|
|
Common stock, $0.00001 par value 500,000,000 shares
authorized, 414,279,613 and 337,085,679 shares
issued and outstanding, respectively
|
|
|
4,143 |
|
|
|
3,371 |
|
Additional paid-in capital
|
|
|
262,260,303 |
|
|
|
261,807,100 |
|
Accumulated deficit
|
|
|
(290,811,712 |
)
|
|
|
(285,326,383 |
)
|
Total Stockholders’ Deficit
|
|
|
(28,547,266 |
)
|
|
|
(23,515,912 |
)
|
Total Liabilities and Stockholders’ Deficit
|
|
$ |
29,762 |
|
|
$ |
8,203 |
|
The accompanying notes are an integral part of these financial
statements.
Clean Coal Technologies, Inc.
Statements of Operations
|
|
Years Ended
|
|
|
|
December 31,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
General and administrative
|
|
$ |
3,572,565 |
|
|
$ |
1,540,166 |
|
Gain on settlement of accounts payable
|
|
|
(2,585 |
)
|
|
|
(131,539 |
)
|
Research and development
|
|
|
13,171 |
|
|
|
1,089,340 |
|
|
|
|
|
|
|
|
|
|
Loss from Operations
|
|
|
(3,583,151 |
)
|
|
|
(2,497,967 |
)
|
|
|
|
|
|
|
|
|
|
Other Income (Expenses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(2,052,722 |
)
|
|
|
(3,152,623 |
)
|
Change in fair value of share-settled debt
|
|
|
151,144 |
|
|
|
(548,419 |
)
|
Debt default, standstill, settlement and transfer expenses
|
|
|
(600 |
)
|
|
|
(125,262 |
)
|
Total Other Income (Expenses)
|
|
|
(1,902,178 |
)
|
|
|
(3,826,304 |
)
|
|
|
|
|
|
|
|
|
|
Net (loss)
|
|
$ |
(5,485,329 |
)
|
|
$ |
(6,324,271 |
)
|
|
|
|
|
|
|
|
|
|
Net (loss) per share basic and diluted
|
|
$ |
(0.01 |
)
|
|
$ |
(0.03 |
)
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding basic and diluted
|
|
|
382,363,989 |
|
|
|
238,576,740 |
|
The accompanying notes are an integral part of these financial
statements.
Clean Coal Technologies, Inc.
Statements of Changes in Stockholders’ Deficit
Years Ended December 31, 2021 and 2020
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
|
Stockholders’
|
|
|
|
Common Stock
|
|
|
Paid-In
|
|
|
Accumulated
|
|
|
Equity
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
(Deficit)
|
|
Balances at December 31, 2019
|
|
|
181,347,218 |
|
|
|
1,815 |
|
|
|
260,127,550 |
|
|
|
(279,002,112 |
)
|
|
|
(18,872,747 |
)
|
Common stock issued for officer bonus
|
|
|
13,275,153 |
|
|
|
132 |
|
|
|
172,418 |
|
|
|
- |
|
|
|
172,550 |
|
Common stock issued for services
|
|
|
479,123 |
|
|
|
4 |
|
|
|
7,854 |
|
|
|
|
|
|
|
7,858 |
|
Common stock issued for conversion of notes payable and accrued
interest
|
|
|
140,734,185 |
|
|
|
1,407 |
|
|
|
1,297,141 |
|
|
|
- |
|
|
|
1,298,548 |
|
Common stock issued for conversion of notes payable – related
party
|
|
|
1,250,000 |
|
|
|
13 |
|
|
|
99,987 |
|
|
|
- |
|
|
|
100,000 |
|
Beneficial conversion feature on convertible debt
|
|
|
- |
|
|
|
- |
|
|
|
102,150 |
|
|
|
- |
|
|
|
102,150 |
|
Net loss
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(6,324,271 |
)
|
|
|
(6,324,271 |
)
|
Balances at December 31, 2020
|
|
|
337,085,679 |
|
|
|
3,371 |
|
|
|
261,807,100 |
|
|
|
(285,326,383 |
)
|
|
|
(23,515,912 |
)
|
Common stock issued for conversion of notes payable and accrued
interest
|
|
|
81,710,894 |
|
|
|
817 |
|
|
|
453,158 |
|
|
|
- |
|
|
|
453,975 |
|
Common stock issued for services returned and cancelled
|
|
|
(4,516,960 |
)
|
|
|
(45 |
)
|
|
|
45 |
|
|
|
- |
|
|
|
- |
|
Net loss
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(5,485,329 |
)
|
|
|
(5,485,329 |
)
|
Balances at December 31, 2021
|
|
|
414,279,613 |
|
|
$ |
4,143 |
|
|
$ |
262,260,303 |
|
|
$ |
(290,811,712 |
)
|
|
$ |
(28,547,266 |
)
|
The accompanying notes are an integral part of these financial
statements.
Clean Coal Technologies, Inc.
Statements of Cash Flows
|
|
Years Ended
|
|
|
|
December 31,
|
|
|
|
2021
|
|
|
2020
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$ |
(5,485,329 |
)
|
|
$ |
(6,324,271 |
)
|
Adjustment to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Amortization of debt discounts
|
|
|
654,800 |
|
|
|
1,822,355 |
|
Amortization of lease asset
|
|
|
12,000 |
|
|
|
12,000 |
|
Common stock issued for officer bonus
|
|
|
- |
|
|
|
172,550 |
|
Common stock issued for consulting expense
|
|
|
- |
|
|
|
7,858 |
|
Change in fair value of share-settled debt
|
|
|
(151,144 |
)
|
|
|
548,419 |
|
Debt conversion and extension expense |
|
|
600 |
|
|
|
95,712 |
|
Gain on settlement of accounts payable
|
|
|
(2,585 |
)
|
|
|
(131,539 |
)
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Prepayment of right of use asset
|
|
|
(36,000 |
)
|
|
|
- |
|
Decrease in prepaid expenses
|
|
|
- |
|
|
|
39,219 |
|
Increase in accounts payable
|
|
|
145,128 |
|
|
|
1,010,068 |
|
Increase in accrued expenses
|
|
|
4,226,409 |
|
|
|
1,873,510 |
|
Net Cash Used in Operating Activities
|
|
|
(636,121 |
)
|
|
|
(874,119 |
)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Borrowings on convertible debt, net of original issue discounts
– related party
|
|
|
18,600 |
|
|
|
76,990 |
|
Borrowings on related party debt
|
|
|
625,080 |
|
|
|
45,050 |
|
Borrowings on convertible debt, net of original issue discounts
|
|
|
- |
|
|
|
858,000 |
|
Payments on convertible debt
|
|
|
- |
|
|
|
(162,500 |
)
|
Payments on related party debt
|
|
|
(10,000 |
)
|
|
|
(11,500 |
)
|
Payments of debt issue costs
|
|
|
- |
|
|
|
(20,000 |
)
|
Net Cash Provided by Financing Activities
|
|
|
633,680 |
|
|
|
786,040 |
|
|
|
|
|
|
|
|
|
|
NET CHANGE IN CASH
|
|
|
(2,441 |
)
|
|
|
(88,079 |
)
|
CASH - beginning of period
|
|
|
4,203 |
|
|
|
92,282 |
|
CASH - end of period
|
|
$ |
1,762 |
|
|
$ |
4,203 |
|
The accompanying notes are an integral part of these unaudited
financial statements.
Clean Coal Technologies, Inc.
Statements of Cash Flows
(Continued)
|
|
Years Ended
|
|
|
|
December 31,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES:
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
$ |
- |
|
|
$ |
- |
|
Cash paid for income taxes
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Common stock issued for conversion of debt and accrued interest
|
|
$ |
453,975 |
|
|
$ |
1,298,548 |
|
Note payable, related party, issued for convertible debt and
accrued interest
|
|
$ |
115,000 |
|
|
$ |
- |
|
Common shares returned and cancelled
|
|
$ |
45 |
|
|
$ |
- |
|
Common stock issued for conversion of debt and accrued
interest– related party
|
|
$ |
- |
|
|
$ |
100,000 |
|
Beneficial conversion feature on convertible debt
|
|
$ |
- |
|
|
|
98,000 |
|
Beneficial conversion feature on convertible debt, related
party
|
|
$ |
- |
|
|
$ |
4,150 |
|
The accompanying notes are an integral part of these financial
statements.
Clean Coal Technologies, Inc.
Notes to Financial Statements
NOTE 1: NATURE OF BUSINESS
Clean Coal Technologies, Inc. (“CCTI”, the “Company”, “Clean Coal”,
“we”, “our”), a Nevada corporation, is developing a patented
multi-stage process that transforms coal with high levels of
impurities, contaminants and other polluting elements into an
exceptionally efficient, clean and inexpensive source of high
energy, low polluting fuel.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
The Company’s financial statements are prepared using the accrual
method in accordance with Generally Accepted Accounting Principles
in the United State of America (“GAAP”). Certain amounts have been
reclassified to conform to the current period’s presentation
including Notes payable; Notes payable – related parties; short and
long term Convertible debt, net of unamortized discounts; short and
long term Convertible debt, net of unamortized discounts – related
party.
Use of Estimates
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure on
contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Revenue Recognition
On January 1, 2018, the Company adopted Financial Accounting
Standards Board (FASB) Accounting Series Update (ASU) 2014-09
Revenue from Contracts with Customers (“ASU 2014-09”) and
all subsequent amendments to the ASU, which (i) creates a single
framework for recognizing revenue from contracts with customers
that fall within its scope and (ii) revises when it is appropriate
to recognize a gain (loss) from the transfer of nonfinancial
assets. The core principle of ASU 2014-09 is that revenue is
recognized when the transfer of goods or services to customers
occurs in an amount that reflects the consideration to which the
Company expects to be entitled in exchange for those goods or
services. ASU 2014-09 requires the disclosure of sufficient
information to enable readers of the Company’s financial statements
to understand the nature, amount, timing and uncertainty of revenue
and cash flows arising from customer contracts. ASU 2014-09 also
requires disclosure of information regarding significant judgments
and changes in judgments, and assets recognized from costs incurred
to obtain or fulfill a contract. ASU 2014-09 provides two methods
of retrospective application, full and modified retrospective. Full
retrospective requires companies to apply ASU 2014-09 to each prior
reporting period presented while modified retrospective requires
companies to retrospectively apply ASU 2014-09 with the cumulative
effect recognized at the date of initial application. The Company
elected to adopt ASU 2014-09 using the modified retrospective
application effective for the quarter ending March 31, 2018, with
no impact the Company’s financial statements as it has no current
contracts for revenue generating activities and a limited history
of generating revenue from operations as discussed below.
The Company generated revenue in 2012 related to license fees
received for the use of its technology. The license fee revenue
requires no continuing performance on the Company’s part and is
recognized upon receipt of the licensing fee and grant of the
license.
During 2012, the Company granted a 25-year technology license
agreement for a one-time license fee of $750,000. The first
installment of the license fee of $375,000 has been collected
pursuant to the signing of a coal testing plant construction
contract and the balance of $375,000 will be due upon the
successful testing of the coal testing plant, estimated sometime in
fiscal 2020. In addition, under the technology license agreement,
the Company will receive an on-going royalty fee of $1 per metric
ton on all coal processed using the technology, up to $4,000,000
per annum. No revenue has been earned in 2020 or 2021.
Net Loss per Common Share
Basic net loss per share is computed on the basis of the weighted
average number of common shares outstanding during each year.
Diluted net loss per share is computed similar to basic net loss
per share except that the denominator is increased to include the
number of additional common shares that would have been outstanding
if the potential common shares had been issued and if the
additional common shares were dilutive. The Company uses the
“if-converted” method for calculating the earnings per share impact
of outstanding convertible debentures, whereby the securities are
assumed converted and an earnings per incremental share is
computed. Options, warrants and their equivalents are included in
EPS calculations through the treasury stock method. In periods
where losses are reported, the weighted-average number of common
stock outstanding excludes common stock equivalents, because their
inclusion would be anti-dilutive.
The calculation of basic and diluted net loss per share for the
years ended December 31, 2021 and 2020 are as follows:
|
|
2021
|
|
|
2020
|
|
Basic Net Loss Per Share:
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$ |
(5,485,329 |
)
|
|
$ |
(6,324,271 |
)
|
Denominator:
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding
|
|
|
382,363,989 |
|
|
|
238,576,740 |
|
|
|
|
|
|
|
|
|
|
Basic net loss per share
|
|
$ |
(0.01 |
)
|
|
$ |
(0.03 |
)
|
|
|
|
|
|
|
|
|
|
Diluted Net Loss Per Share:
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$ |
(5,485,329 |
)
|
|
$ |
(6,324,271 |
)
|
Diluted net loss
|
|
$ |
(5,485,329 |
)
|
|
$ |
(6,324,271 |
)
|
Denominator:
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding
|
|
|
382,363,989 |
|
|
|
238,576,740 |
|
Common stock warrants
|
|
|
- |
|
|
|
- |
|
Convertible debt
|
|
|
- |
|
|
|
- |
|
Weighted average shares used in computing diluted net loss per
share
|
|
|
382,363,989 |
|
|
|
238,576,740 |
|
|
|
|
|
|
|
|
|
|
Diluted net loss per share
|
|
$ |
(0.01 |
)
|
|
$ |
(0.03 |
)
|
The following table summarizes the potential shares of common stock
that were excluded from the computation of diluted net loss per
share for the years ended December 31, 2021 and 2020 as such shares
would have had an anti-dilutive effect:
|
|
2021
|
|
|
2020
|
|
Common stock warrants
|
|
|
67,340 |
|
|
|
491,875 |
|
Convertible notes payable
|
|
|
512,525,925 |
|
|
|
323,859,717 |
|
Total
|
|
|
512,593,265 |
|
|
|
324,351,592 |
|
Cash and Cash Equivalents
Clean Coal considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents for
purposes of preparing its Statements of Cash Flows. There are no
cash equivalents at December 31 2021 and 2020.
Federal Income Tax
Clean Coal files income tax returns in the U.S. federal
jurisdiction, and the state of Nevada. Clean Coal’s policy is to
recognize interest accrued related to unrecognized tax benefits in
interest expense and penalties in operating expenses.
Deferred taxes are provided on a liability method whereby deferred
tax assets are recognized for deductible temporary differences and
operating loss and tax credit carry forwards and deferred tax
liabilities are recognized for taxable temporary differences.
Temporary differences are the differences between the reported
amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of
the deferred tax assets will not be realized. Deferred tax assets
and liabilities are adjusted for the effects of changes in tax laws
and rates on the date of enactment.
Net deferred tax assets consist of the following components as of
December 31, 2021 and 2020:
|
|
2021
|
|
|
2020
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
|
Net operating loss carryforward
|
|
$ |
10,005,075 |
|
|
$ |
8,959,019 |
|
Valuation allowance
|
|
|
(10,005,075 |
)
|
|
|
(8,959,019 |
)
|
|
|
$ |
- |
|
|
$ |
- |
|
The federal income tax provision differs from the amount of income
tax determined by applying the U.S. federal income tax rate of 21%
to pretax income from continuing operations for the years ended
December 31, 2021 and 2020 due to the following:
|
|
2021
|
|
|
2020
|
|
Pre-tax book loss
|
|
$ |
(1,151,919 |
)
|
|
$ |
(1,328,097 |
)
|
Meals
|
|
|
95 |
|
|
|
406 |
|
Common stock issued for services
|
|
|
- |
|
|
|
37,886 |
|
Change in fair value of shares settled debt
|
|
|
(31,740 |
)
|
|
|
115,168 |
|
Debt discount amortization
|
|
|
137,508 |
|
|
|
382,695 |
|
Valuation allowance
|
|
|
1,046,056 |
|
|
|
791,942 |
|
|
|
$ |
- |
|
|
$ |
- |
|
The Company had net operating losses of approximately $47,600,000
that begin to expire in 2029. Due to the change in ownership
provisions of the Tax Reform Act of 1986, net operating loss
carryforwards for Federal income tax reporting purposes are subject
to annual limitations. Should a change in ownership occur, net
operating loss carryforwards may be limited as to use in future
years. In accordance with the statute of limitations for federal
tax returns, the Company’s federal tax returns for the years 2017
through 2020 are subject to examination.
Property and Equipment
Property and equipment consists of furniture and fixtures and
computer equipment, recorded at cost, depreciated upon placement in
service over estimated useful lives ranging from three to five
years on a straight-line basis. As of December 31, 2021 and 2020,
Clean Coal had property and equipment with no net book value.
Expenditures for normal repairs and maintenance are charged to
expense as incurred.
Impairment of Long Lived Assets
In the event facts and circumstances indicate the carrying value of
a long-lived asset, including associated intangibles, may be
impaired, an evaluation of recoverability is performed by comparing
the estimated future undiscounted cash flows associated with the
asset to the asset’s carrying amount to determine if a write-down
to market value or discounted cash flow is required.
Research and Development Costs
Research and development expenses include salaries, related
employee expenses, research expenses and consulting fees. All costs
for research and development activities are expensed as incurred.
Clean Coal expenses the costs of licenses of patents and the
prosecution of patents until the issuance of such patents and the
commercialization of related products is reasonably assured. During
the years ended December 31, 2021 and 2020, the Company recognized
$13,171 and $1,089,340 of research and development costs,
respectively.
Stock-based Compensation
FASB ASC 718, Compensation—Stock Compensation, (ASC
718) established financial accounting and reporting standards for
stock-based employee compensation plans. It defines a fair value
based method of accounting for an employee stock option or similar
equity instrument. Clean Coal accounts for stock-based compensation
to employees in accordance with FASB ASC 718.
Derivative Financial Instruments
Clean Coal evaluates its convertible instruments to determine if
those contracts or embedded components of those contracts qualify
as derivative financial instruments to be separately accounted for
in accordance with ASC 815 Derivatives and Hedging (“ASC
815”). The accounting treatment of derivative financial instruments
requires that the Company record embedded conversion options and
any related freestanding instruments at their fair values as of the
inception date of the agreement and at fair value as of each
subsequent balance sheet date. Any change in fair value is recorded
as non-operating, non-cash income or expense for each reporting
period at each balance sheet date. Conversion options are recorded
as a discount to the host instrument and are amortized as
amortization of debt discount on the statements of operations over
the life of the underlying instrument. The Company reassesses the
classification of its derivative instruments at each balance sheet
date. If the classification changes as a result of events during
the period, the contract is reclassified as of the date of the
event that caused the reclassification.
Sequencing Policy
Under ASC 815-40-35, Clean Coal follows a sequencing policy,
whereby, in the event that reclassification of contracts from
equity to assets or liabilities is necessary pursuant to ASC 815
due to the Company’s inability to demonstrate it has sufficient
authorized shares as a result of certain securities with a
potentially indeterminable number of shares, shares will be
allocated on the basis of the earliest issuance date of potentially
dilutive instruments, with the earliest grants receiving the first
allocation of shares. Pursuant to ASC 815, issuance of securities
to the Company’s employees or directors are not subject to the
sequencing policy.
Fair Value of Financial Instruments
ASC 820, Fair Value Measurements (“ASC 820”) and ASC 825,
Financial Instruments (“ASC 825”), requires an entity
to maximize the use of observable inputs and minimize the use of
unobservable inputs when measuring fair value. It establishes a
fair value hierarchy based on the level of independent, objective
evidence surrounding the inputs used to measure fair value. A
financial instrument’s categorization within the fair value
hierarchy is based upon the lowest level of input that is
significant to the fair value measurement. It prioritizes the
inputs into three levels that may be used to measure fair
value:
Level 1 - Level 1 applies to assets or liabilities for which
there are quoted prices in active markets for identical assets or
liabilities.
Level 2 - Level 2 applies to assets or liabilities for which
there are inputs other than quoted prices that are observable for
the asset or liability such as quoted prices for similar assets or
liabilities in active markets; quoted prices for identical assets
or liabilities in markets with insufficient volume or infrequent
transactions (less active markets); or model-derived valuations in
which significant inputs are observable or can be derived
principally from, or corroborated by, observable market data.
Level 3 - Level 3 applies to assets or liabilities for which
there are unobservable inputs to the valuation methodology that are
significant to the measurement of the fair value of the assets or
liabilities.
The carrying value of accounts payable and accrued expenses, notes
payable and notes and convertible notes payable related parties
approximate their fair value due to the short-term maturity of
those items.
Certain convertible notes of the Company are required to be
recorded at fair value on a recurring basis. Fair value is
determined based on the price that would be received for an asset
or paid to transfer a liability in an orderly transaction based on
market participants. Factors that the Company considered when
estimating the fair value of its convertible notes payable included
quoted market prices of the Company’s common stock. The level of
the convertible notes payable is considered as Level 1.
The following table presents the Company’s liabilities that are
measured at fair value on a recurring basis, consistent with the
fair value hierarchy provisions.
December 31, 2021
|
|
|
|
Quoted Prices in Active Markets for Identical
Liabilities
|
|
|
Significant Other Observable Inputs
|
|
|
Significant Unobservable Inputs
|
|
|
|
|
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
|
Total
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible notes
|
|
$ |
1,019,529 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
1,019,529 |
|
Total
|
|
$ |
1,019,529 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
1,019,529 |
|
December 31, 2020
|
|
|
|
Quoted Prices in Active Markets for Identical
Liabilities
|
|
|
Significant Other Observable Inputs
|
|
|
Significant Unobservable Inputs
|
|
|
|
|
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
|
Total
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible notes
|
|
$ |
1,600,686 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
1,600,686 |
|
Total
|
|
$ |
1,600,686 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
1,600,686 |
|
Convertible Debt Instruments
The Company follows ASC 480-10, Distinguishing Liabilities from
Equity in its evaluation of the accounting for a hybrid
instrument. A financial instrument that embodies an unconditional
obligation, or a financial instrument other than an outstanding
share that embodies a conditional obligation, that the issuer must
or may settle by issuing a variable number of its equity shares
shall be classified as a liability (or an asset in some
circumstances) if, at inception, the monetary value of the
obligation is based solely or predominantly on any one of the
following: (a) a fixed monetary amount known at inception; (b)
variations in something other than the fair value of the issuer’s
equity shares; or (c) variations inversely related to changes in
the fair value of the issuer’s equity shares. Hybrid instruments
meeting these criteria are not further evaluated for any embedded
derivatives and are carried as a liability at fair value at each
balance sheet date with remeasurements reported in change on fair
value expense in the accompanying Statements of Operations.
Recently Issued Accounting Pronouncements
The Company has implemented all new accounting pronouncements that
are in effect and that may impact its financial statements. The
Company does not believe that there are any other new accounting
pronouncements that have been issued that might have a material
impact on its financial position or results of operations.
In July 2021, the FASB issued ASU 2021-05,
Lessors—Certain Leases with Variable Lease Payments
(“ASU 2021-05”). ASU 2021-05 was issued to address the day-one loss
issue related to a lessor’s accounting for certain leases with
variable lease payments, requiring a lease with variable lease
payments that do not depend on an index or a rate to be classified
as operating under certain conditions. ASU 2021-05 is effective for
the Company for interim periods beginning after December 15, 2021.
The Company is currently assessing the potential impact of the
adoption of ASU 2021-05, but does not expect it to have a material
effect on the Company’s financial statements and related
disclosures.
In May 2021, the FASB issued ASU 2021-04, Issuer’s
Accounting for Certain Modifications or Exchanges of Freestanding
Equity-Classified Written Call Options (“ASU 2021-04”). ASU
2021-04 codifies how an issuer should account for modifications
made to equity-classified written call options. The guidance in ASU
2021-04 requires the issuer to treat a modification of an
equity-classified warrant that does not cause the warrant to become
liability-classified as an exchange of the original warrant for a
new warrant. This guidance applies whether the modification is
structured as an amendment to the terms and conditions of the
warrant or as termination of the original warrant and issuance of a
new warrant. ASU 2021-04 is effective for fiscal years beginning
after December 15, 2021. The Company is currently assessing the
potential impact of the adoption of ASU 2021-04, but does not
expect it to have a material effect on the Company’s financial
statements and related disclosures.
In August 2020, the FASB issued ASU 2020-06, Debt—Debt
with Conversion and Other Options (Subtopic 470-20) and Derivatives
and Hedging—Contracts in Entity’s Own Equity
(Subtopic 815-40): Accounting for Convertible Instruments and
Contracts in an Entity’s Own Equity” (“ASU 2020-06”).
ASU 2020-06 simplifies the accounting for certain financial
instruments with characteristics of liabilities and equity,
including convertible instruments and contracts on an entity’s own
equity by removing the separation models for convertible debt with
cash conversion and beneficial conversion features by requiring
entities not to separately present in equity an embedded conversion
feature in such debt and instead will account for a convertible
debt instrument and convertible preferred stock as a single unit of
account unless a convertible instrument contains features that
require bifurcation as a derivative under ASC 815 or was issued at
a substantial premium. The ASU was early adopted for the fiscal
year ending December 31, 2021. The adoption of ASU 2020-06 did not
have a material effect on the Company’s financial statements and
related disclosures.
NOTE 3: GOING CONCERN
The accompanying financial statements have been prepared on a going
concern basis of accounting which contemplates continuity of
operations, realization of assets, liabilities, and commitments in
the normal course of business. The accompanying financial
statements do not reflect any adjustments that might result if
Clean Coal is unable to continue as a going concern. Clean Coal has
a working capital deficit as of December 31, 2021 and has generated
recurring net losses since inception. Management believes Clean
Coal will need to raise capital in order to operate over the next
12 months.
As shown in the accompanying financial statements, Clean Coal has
also incurred significant losses from operations since inception.
Clean Coal’s continuation as a going concern is dependent upon its
ability to generate sufficient cash flow to meet its obligations on
a timely basis and ultimately to attain profitability. Clean Coal
has limited capital with which to pursue its business plan. There
can be no assurance that Clean Coal’s future operations will be
significant and profitable, or that Clean Coal will have sufficient
resources to meet its objectives. These conditions raise
substantial doubt as to Clean Coal’s ability to continue as a going
concern. Management may pursue either debt or equity financing or a
combination of both, in order to raise sufficient capital to meet
Clean Coal’s financial requirements over the next twelve months and
to fund its business plan. There is no assurance that management
will be successful in raising additional funds.
NOTE 4: RELATED PARTY TRANSACTIONS
Wages and bonus payable to
related parties
Accruals for salary and bonuses to officers and directors are
included in accrued liabilities in the balance sheets and totaled
$6,653,566 and $3,726,943 as of December 31, 2021 and 2020,
respectively. As part of the separation agreement with Mr. Ponce de
Leon, the Company agreed to pay him all his accrued salary within
two years but agreed to pay him $200,000 by November 2015 out of
revenues earned. As the Company did not earn revenue in 2015 and as
of December 31, 2021 has still not earned revenue, the obligation
to Mr. Ponce de Leon of $1,790,997 is currently in default and the
amount includes $564,283 in accrued interest. It is the Company’s
intention to pay Mr. Ponce de Leon immediately upon receiving
revenue.
Nonconvertible
Debt
During the year ended December 31, 2021, the Company borrowed a
total of $625,050 and repaid $10,000 cash to, an entity controlled
and owned by a significant shareholder of the Company (“Related
Party Note Holder”). Additionally, during September 2021, the
Related Party Note Holder purchased a third-party convertible note
and accrued interest for $115,000, replacing it with a new,
non-convertible note. The notes are unsecured, due on demand and
accrued interest at 12% per annum.
During the years ended December 31, 2021 and 2020, the Company
received $0 and $30,000 from the issuance of related party notes
payable to an affiliate, respectively. These notes payable of the
Company are unsecured, bear no interest and are due on demand. As
of December 31, 2021 and 2020, the Company had outstanding notes
payable to affiliates of the Company of $705,000 and $705,000,
respectively.
During the years ended December 31, 2021 and 2020, the Company
received $30 and $15,050 from related party advances, respectively.
The Company repaid $0 and $11,500 on these advances during the
years ended December 31, 2021 and 2020, respectively. The advances
payable are unsecured, bear no interest and are due on demand. As
of December 31, 2021 and 2020, the Company had outstanding advances
payable to an officer of the Company of $83,180 and $83,150,
respectively.
Convertible Debt
During the years ended December 31, 2021 and 2020, the Company
borrowed an aggregate of $18,600 and $76,990, net of beneficial
conversion features of $0 and $4,150, respectively, under
convertible notes payable. During the year ended December 31, 2020,
the Company issued 1,250,000 shares of common stock for the
conversion of $100,000 of principal on the convertible notes
payable. The convertible notes are secured by assets and the common
stock of the Company, bear interest at 12% per annum, are
convertible into shares of the Company’s common stock at $0.06 per
share and are due three years from the dates of issuance.
As of December 31, 2021 and 2020, the Company had outstanding
short-term convertible notes payable of $9,779,145 and $9,437,192,
net of unamortized discounts of $40,200 and $486,867, respectively;
and, outstanding long-term convertible notes payable of $95,590 and
$418,943, net of unamortized discounts of $1,663 and $86,167,
respectively. The convertible notes payable mature(d) between
November 2018 and November 2022 and are convertible at $0.06 per
share, which, occasionally has been a discount to the market price
on the dates of issuance. Amortization expense related to debt
discounts on convertible debt for the years ended December 31, 2021
and 2020 was $530,348 and $1,648,339, respectively. As of December
31, 2021 and 2020, $9,436,845 and $7,152,383 in convertible notes
are past due, respectively.
Outstanding notes payable and convertible notes payable to related
parties consisted of the following as of December 31, 2021 and
2020:
|
|
December 31,
|
|
Name
|
|
2021
|
|
|
2020
|
|
Convertible Debt:
|
|
|
|
|
|
|
|
|
Convertible notes payable, interest at 12%, convertible at $0.08
per share, unsecured, due May 25, 2019
|
|
$ |
1,202,566 |
|
|
$ |
1,202,566 |
|
Convertible note payable, interest at 12%, convertible at $0.12 per
share, unsecured, due between May 25, 2019 and August 1, 2019
|
|
|
1,630,073 |
|
|
|
1,630,073 |
|
Convertible notes payable, interest at 12%, convertible at $0.15
per share, unsecured, due between May 25, 2019 and March 31,
2020
|
|
|
1,799,742 |
|
|
|
1,799,742 |
|
Convertible notes payable, interest at 12%, convertible at $0.06
per share, unsecured, due between April 20, 2020 and February 2,
2024
|
|
|
5,242,354 |
|
|
|
5,223,754 |
|
Total
|
|
|
9,874,735 |
|
|
|
9,856,135 |
|
Less: short-term debt
|
|
|
(9,779,145 |
)
|
|
|
(9,437,192 |
)
|
Total long-term debt
|
|
|
95,590 |
|
|
|
418,943 |
|
Less: unamortized discounts
|
|
|
(1,663 |
)
|
|
|
(86,167 |
)
|
Net long-term debt
|
|
$ |
93,927 |
|
|
$ |
332,776 |
|
|
|
|
|
|
|
|
|
|
Nonconvertible Debt:
|
|
|
|
|
|
|
|
|
Notes payable, no interest, unsecured, due upon demand
|
|
$ |
1,518,230 |
|
|
$ |
788,150 |
|
Total
|
|
$ |
1,518,230 |
|
|
$ |
788,150 |
|
Principal payments on convertible debt to related parties for each
of the following five years is as follows:
2022
|
|
$
|
9,779,145
|
|
2023
|
|
|
76,990
|
|
2024
|
|
|
18,600
|
|
2025
|
|
|
-
|
|
2026
|
|
|
-
|
|
Thereafter
|
|
|
-
|
|
Total
|
|
$
|
9,874,735
|
|
Common Stock Issued to
Related Parties
During March 2021, an officer and director of the Company agreed to
return and retire 4,516,960 shares of common stock previously
issued for common stock compensation.
During July and August 2020, the Company issued two of its officers
a total of 13,275,153 shares of common stock for services valued at
$172,550. The shares are not forfeitable and considered to be
earned as of the date of issuance.
During April 2020, the Company issued 1,250,000 shares of common
stock for the conversion of $100,000 related party convertible
notes payable, or the stated conversion price $0.08 per share.
Non-Binding License
Agreement – related
party
During July 2017, the Company entered into a non-binding agreement
to explore the opportunity of engaging in a license of Clean Coal
Pristine M technology. As part of the non-binding agreement, in
September 2017, the Company received a non-refundable deposit of
$100,000, subject to application to any future license agreement,
from Wyoming New Power. The license agreement is for two million
tons per annum. The remainder of the license fee will be due upon
the signing of a definitive license agreement expected in 2022.
Wyoming New Power is a related party because it is controlled by an
entity that has a significant interest in Clean Coal Technologies,
Inc.
NOTE 5: DEBT
Accounts Payable
In January 2020, following mediation with a vendor of an
outstanding balance, the Company successfully won the case and the
balance of $131,539 was waived. The company had previously
recognized the $131,539 balance in accounts payable, which was
reversed in 2020 and recognized as a gain on debt settlement.
Notes Payable
As of December 31, 2021 and 2020, the Company had outstanding notes
payable to former affiliates of the Company of $413,185 and
$413,185, respectively. The notes payable are unsecured, bear no
interest and are due on demand.
Convertible Debt
In accordance with ASC 480, Distinguishing Liabilities from
Equity, the Company evaluates its hybrid convertible debt
instruments with unconditional obligations allowing settlement by
issuing a variable number of its equity shares to determine proper
classification and accounting. The Company classifies the following
hybrid convertible debt instruments as a liability upon being
convertible at the option of the holders due to the conversion
terms being based on fixed monetary amounts known at inception, in
this case, settlement with a variable number of the Company’s
equity shares. As such, conversion option and are carried as a
liability at fair value at each balance sheet date with a
re-measurement reported as a change in fair value of share-settled
debt in other (income) expense in the accompanying condensed
statements of operations.
During October 2018, the Company borrowed $345,000, net of original
debt discount of $45,000 under a note payable bearing interest at
7% per annum, unsecured and was originally due January 18, 2019.
Between January 2019 and March 2020, the due date on the note was
extended multiple times in exchange for a total of $85,000 debt
extension fee added to the principal of the note, the addition of a
conversion feature and $20,000 in extension fees. The conversion
feature allowed the holder to convert the principal and accrued
interest into shares of the Company’s common stock at a discount of
70% of the lowest trading price for the Company’s common stock
during the twenty trading days immediately preceding the
conversion. During May 2020, the remaining note principal of
$135,000 note and accrued interest totaling $32,881 were converted
into 6,432,216 shares of common stock.
During February 2019, the Company issued a convertible note payable
in the amount of $315,000. The convertible note payable was due one
year from the date of issuance, has an original issuance discount
of $15,000, accrues interest at the rate of 6% per annum, is
unsecured and was convertible at any time into shares of the
Company’s common stock at a discount of 65% of the lowest trading
price for the Company’s common stock during the ten trading days
immediately preceding the conversion. Between February 2019 and
June 2020, the Company extended the note conversion feature
multiple times through April 15, 2020, paying two payments of
$25,000 each, with a total of $30,000 applied to principal, $20,000
to debt extension fees, and incurring prepayment penalties added to
principal of $7,500. During April 2020, the note became convertible
at the option of the holder. Between July and October 2020, the
Company issued a total of 18,731,446 shares of common stock for the
conversion of the remaining $123,329 in note principal. During the
year ended December 31, 2020, the Company recognized $8,671 in debt
discount amortization expense.
During May 2019, the Company issued a convertible note payable in
the amount of $262,500. The convertible note payable is past due
and in default, had an original issuance discount of $12,500,
accrues interest at the default rate of 16% per annum, is unsecured
and is convertible after 180 days into shares of the Company’s
common stock at a discount of 65% of the lowest trading price for
the Company’s common stock during the ten trading days immediately
preceding the conversion. Between May 2019 and June 2020, the
Company extended the note conversion feature multiple times through
April 15, 2020, paying payments totaling $187,500, with a total of
$140,000 applied to principal, $10,000 to interest, $37,500 to debt
extension fees and incurring prepayment penalties added to
principal of $35,000. On May 27, 2020, the Company incurred a 25%
late fee of $39,375, which was added to the principal balance.
During April 2020, the note became convertible at the option of the
holder. Between May and July 2020, the Company issued a total of
16,355,821 shares of common stock for the conversion of $175,000 in
note principal. The fair value of the discount conversion feature
on the remaining principal balance was $21,455 and $16,879 as of
December 31, 2021 and 2020, respectively.
As of December 31, 2021 and 2020, the balance on the convertible
note payable was $53,514 and $48,938, respectively. During the
years ended December 31, 2021 and 2020, the Company recognized $0
and $4,863 in debt discount amortization expense, respectively.
During August 2019, the Company issued a convertible note payable
in the amount of $157,500. The convertible note payable is past due
and in default, had an original issuance discount of $7,500,
accrues interest at the default rate of 16% per annum, is unsecured
and is convertible after 180 days into shares of the Company’s
common stock at a discount of 65% of the lowest trading price for
the Company’s common stock during the ten trading days immediately
preceding the conversion.
Between January and March 2020, the Company extended the note
conversion feature through April 15, 2020, paying $37,500, with
$30,000 applied to principal, $7,500 to debt extension fees and
incurring prepayment penalties added to principal of $7,500. During
April 2020, the note became convertible at the option of the
holder. On August 10, 2020, the Company incurred a 25% late fee of
$33,837, which was added to the principal balance. During August
and September 2020, the Company issued a total of 7,616,146 shares
of common stock for the conversion of $50,000 in note principal.
The fair value of the discount conversion feature on the remaining
principal balance was $79,023 and $62,831 as of December 31, 2021
and 2020, respectively.
As of December 31, 2021 and 2020, the balance on the convertible
note payable was $190,360 and $174,168, respectively. During the
years ended December 31, 2021 and 2020, the Company recognized $0
and $4,459 in debt discount amortization expense, respectively.
During September 2019, the Company issued two convertible notes
payable totaling $270,000, or $135,000 each. The convertible notes
payable were due one year from the date of issuance, each had an
original issuance discount of $11,500, accrued interest at the rate
of 6% per annum, unsecured and were convertible after 180 days into
shares of the Company’s common stock at a discount of 65% of the
lowest trading price for the Company’s common stock during the ten
trading days immediately preceding the conversion.
During April 2020, the notes became convertible at the option of
the holder. Between May and June 2020, the Company repaid $12,500
in principal in cash and the holders elected to convert the
remaining principal of $257,000 and $12,050 in accrued interest for
18,002,387 shares of the Company’s common stock. During the years
ended December 31, 2020, the Company recognized $16,888 in debt
discount amortization expense.
During November 2019, the Company issued a convertible note payable
in the amount of $336,000. The convertible note payable was due one
year from the date of issuance, had an original issuance discount
of $45,000, accrues interest at the rate of 10% per annum, is
unsecured and is convertible after 180 days into shares of the
Company’s common stock at a discount of 65% of the lowest trading
price for the Company’s common stock during the ten trading days
immediately preceding the conversion. As the note is past due it
currently accrues interest at the default rate of 16% per annum.
During May 2020, the note became convertible at the option of the
holder. Between July and November 2020, the note holder elected to
convert $241,000 of principal and $18,379 in accrued interest for
41,696,169 shares of the Company’s common stock. During February
2021, the note holder elected to convert the remaining principal of
$95,000 and accrued interest totaling $11,733 into 12,585,961
shares of the Company’s common stock. The fair value of the
discount conversion feature on the remaining principal balance was
$47,273 as of December 31, 2020. During the years ended December
31, 2021 and 2020, the Company recognized $0 and $33,781 in debt
discount amortization expense, respectively.
During December 2019, the Company issued a convertible note payable
in the amount of $220,000. The convertible note payable was due one
year from the date of issuance, has an original issuance discount
of $26,000, accrued interest at the rate of 7% per annum, was
unsecured and was convertible after 180 days into shares of the
Company’s common stock at a discount of 65% of the lowest trading
price for the Company’s common stock during the ten trading days
immediately preceding the conversion. During June 2020, the note
became convertible at the option of the holder. Between July and
December 2020, the note holder elected to convert the remaining
$220,000 of principal and $11,489 in accrued interest for
31,900,000 shares of the Company’s common stock. During the year
ended December 31, 2020, the Company recognized $25,047 in debt
discount amortization expense.
During January 2020, the Company issued a convertible note payable
in the amount of $138,000. The convertible note payable is past
due, had an original issuance discount of $3,000, accrues interest
at the rate of 8% per annum, has a default interest rate of 22%, is
unsecured and is convertible after 180 days into shares of the
Company’s common stock at a discount of 65% of the lowest trading
price for the Company’s common stock during the ten trading days
immediately preceding the conversion. During July 2020, the note
became convertible at the option of the holder.
The fair value of the discount conversion feature on the remaining
principal balance was $82,369 and $71,193 as of December 31, 2021
and 2020, respectively. As of December 31, 2021, the balance on the
convertible note payable was $220,369. During the years ended
December 31, 2021 and 2020, the Company recognized $222 and $2,778
in debt discount amortization expense, respectively.
During February 2020, the Company issued a convertible note payable
in the amount of $440,000. The convertible note payable is past
due, had an original issuance discount of $40,000, accrues interest
at the rate of 5% per annum, has a default interest rate of 24%, is
unsecured and is convertible after 180 days into shares of the
Company’s common stock at a discount of 65% of the lowest trading
price for the Company’s common stock during the ten trading days
immediately preceding the conversion. During August 2020, the note
became convertible at the option of the holder. During the year
ended December 31, 2021, the note holder elected to convert
principal of $346,642 into 69,124,933 shares of the Company’s
common stock.
The fair value of the discount conversion feature on the remaining
principal balance was $68,139 and $226,724 as of December 31, 2021
and 2020, respectively. As of December 31, 2021 and 2020, the
balance on the convertible note payable was $161,497 and $666,724,
respectively. During the years ended December 31, 2021 and 2020,
the Company recognized $5,918 and $54,082 in debt discount
amortization expense.
During April 2020, the Company issued a convertible note payable in
the amount of $247,500. The convertible note payable is past due,
had an original issuance discount of $22,500, accrues interest at
the rate of 5% per annum, has a default interest rate of 24%, is
unsecured and is convertible after 180 days into shares of the
Company’s common stock at a discount of 65% of the lowest trading
price for the Company’s common stock during the ten trading days
immediately preceding the conversion. During October 2020, the note
became convertible at the option of the holder.
The fair value of the discount conversion feature on the remaining
principal balance was $146,288 and $123,518 as of December 31, 2021
and 2020, respectively. As of December 31, 2021 and 2020, the
balance on the convertible note payable was $393,788 and $371,018.
During the years ended December 31, 2021 and 2020, the Company
recognized $6,411 and $16,089 in debt discount amortization
expense, respectively.
During December 2020, the Company issued a convertible note payable
in the amount of $112,000. The convertible note payable was due one
year from the date of issuance, had an original issuance discount
of $12,000, incurred debt issuance costs of $2,000, accrued
interest at the rate of 10% per annum, had a default interest rate
of 24%, was unsecured and was convertible immediately into shares
of the Company’s common stock at $0.005 per share. As a result of
the conversion price being lower than the market price of the
Company’s common stock on the date of issuance, the Company
recognized a beneficial conversion feature of $98,000 upon
issuance.
During June 2021, as discussed above, the Related Party Note Holder
purchased the convertible promissory note and accrued interest for
a total of $115,000 and agreed to replace it with a non-convertible
promissory note. The principal and accrued interest at the time of
conversion totaled $117,585, resulting in a gain of $2,585 on note
conversion. As of December 31, 2021 and 2020, the balance on the
convertible note payable was $0 and $112,000, respectively. During
the years ended December 31, 2021 and 2020, the Company recognized
$111,901 and $99 in debt discount amortization expense,
respectively.
During the year ended December 31, 2020, the Company paid $20,000
as a debt financing fee on the above financings.
During the year ended December 31, 2021, the Company recognized
$151,144 in fair value gains and during the year ended December 31,
2020, the Company recognized $548,419 in fair value losses, as a
result of the conversion options on the above mentioned convertible
debt.
Nonconvertible
Debt
Outstanding notes payable and convertible notes payable to third
parties consisted of the following as of December 31, 2021 and
2020:
|
|
December 31,
|
|
Name
|
|
2021
|
|
|
2020
|
|
Convertible Debt:
|
|
|
|
|
|
|
|
|
Convertible note payable, interest at 16%, unsecured, due May 22,
2020
|
|
|
53,514 |
|
|
|
48,938 |
|
Convertible note payable, interest at 16%, unsecured, due August 5,
2020
|
|
|
190,360 |
|
|
|
174,168 |
|
Convertible note payable, interest at 10%, unsecured, due November
22, 2020
|
|
|
- |
|
|
|
142,273 |
|
Convertible note payable, interest at 10%, unsecured, due January
28, 2021
|
|
|
220,369 |
|
|
|
209,194 |
|
Convertible note payable, interest at 10%, unsecured, due February
6, 2021
|
|
|
161,497 |
|
|
|
666,724 |
|
Convertible note payable, interest at 10%, unsecured, due April 14,
2021
|
|
|
393,788 |
|
|
|
371,018 |
|
Convertible note payable, interest at 10%, unsecured, due December
28, 2021
|
|
|
- |
|
|
|
112,000 |
|
Total current debt
|
|
|
1,019,529 |
|
|
|
1,724,315 |
|
Less: Unamortized discount
|
|
|
- |
|
|
|
(123,629 |
)
|
Net, current debt
|
|
$ |
1,019,529 |
|
|
$ |
1,600,686 |
|
Nonconvertible Debt:
|
|
|
|
|
|
|
|
|
Notes payable, no interest, unsecured, past due
|
|
$ |
35,000 |
|
|
$ |
35,000 |
|
Notes payable, no interest, unsecured, past due
|
|
|
378,185 |
|
|
|
378,185 |
|
Total notes payable
|
|
|
413,185 |
|
|
|
413,185 |
|
NOTE 6: EQUITY TRANSACTIONS
Common Stock
2021
Between February and August 2021, the Company issued a total of
81,710,894 shares of common stock to holders of convertible notes
payable for principal totaling $441,642, accrued interest totaling
$11,734 and conversion fees of $600.
During March 2021, an officer and director of the Company agreed to
return and retire 4,516,960 shares of common stock previously
issued for common stock compensation.
2020
During January 2020, in conjunction with the issuance of a
convertible note payable to a related party, the Company recognized
a $4,150 debt discount to additional paid-in capital.
During April 2020, the Company issued 1,250,000 shares of common
stock for the conversion of $100,000 in principal of a convertible
note payable due to a related party.
Between May and December 2020, the Company issued a total of
140,734,185 shares of common stock for the conversion of $1,191,144
in principal, $102,354 in accrued interest and $5,050 in conversion
fees on eight convertible notes payable.
During July and August 2020, the Company issued 479,123 shares of
common stock for services valued at $7,858 and 13,275,153 shares of
common stock to officers and directors for bonuses valued at
$172,550. Common stock issued for services was valued at the market
prices of the Company’s common stock on the date of grant.
During December 2020, in conjunction with the issuance of a
convertible note payable to a related party, the Company recognized
a $98,000 debt discount to additional paid-in capital.
Warrants
There were no warrants issued during the years ended December 31,
2021 or 2020. The following table presents the stock warrant
activity during the years ended December 31, 2021 and 2020:
|
|
Warrants
|
|
|
Weighted Average Exercise Price
|
|
|
Weighted Average Remaining Term
|
|
Outstanding - December 31, 2020
|
|
|
491,872 |
|
|
$ |
0.14 |
|
|
|
0.43 |
|
Granted
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Forfeited/expired
|
|
|
(424,532 |
)
|
|
|
0.15 |
|
|
|
- |
|
Exercised
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Outstanding December 31, 2021
|
|
|
67,340 |
|
|
$ |
0.15 |
|
|
|
0.21 |
|
Exercisable – December 31, 2021
|
|
|
67,340 |
|
|
$ |
0.15 |
|
|
|
0.21 |
|
The intrinsic value of the exercisable warrants as of December 31,
2021 and 2020 was $0 and $0, respectively.
NOTE 7: COMMITMENTS AND CONTINGENCIES
Separation
Agreement
As part of the separation agreement with Mr. Ponce de Leon, the
ex–Chief Operating Officer of the Company, the Company agreed to
pay him his accrued salary of $1,226,711 within two years but
agreed to pay him $200,000 by November 2015 out of revenues
earned.
As the Company did not earn revenue in 2015 and as at December 2021
has still not earned revenue, the obligation to Mr. Ponce de Leon
of $1,790,997 is currently in default and the amount includes
$564,283 in accrued interest. It is the Company’s intention to pay
Mr. Ponce de Leon upon the company receiving revenue.
Operating Leases
Clean Coal has an operating lease for its executive offices in
Manhattan, New York. Effective February 1, 2014, the lease is month
to month, at a monthly rate of $200 per month.
In April 2018, the company secured a permanent location in Wyoming
for its test facility at the Fort Union Industrial Park. The term
of the lease was three years. The Company elected to renew the
lease for another three years in May 2021. The renewal calls for
rent of $36,000, prepaid. The $36,000 covering three years rent was
paid in May 2021 and is being amortized to lease expense using the
straight-line method over the three-year term of the lease. During
the years ended December 31, 2021 and 2020, the Company recognized
$12,000 and $12,000 in amortization of right of use assets,
respectively.
NOTE 8: SUBSEQUENT EVENTS
In January 2022, the company engaged in a Promissory Note with WNP
for $1,000. It attracts 12% interest and is payable on demand
In February 2022, the company engaged in a Promissory Note with WNP
for $1,500. It attracts 12% interest and is payable on demand
In March 2022, the company engaged in a Promissory Note with WNP
for $154,900. It attracts 12% interest and is payable on demand
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no changes in our independent accountants,
MaloneBailey, LLP, or disagreements with them on matters of
accounting or financial disclosure.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure
Controls and Procedures
As of December 31, 2021, we carried out an evaluation, under the
supervision and with the participation of our management, including
our Chief Executive Officer and Chief Financial Officer of the
effectiveness of the design and operation of our disclosure
controls and procedures pursuant to Exchange Act Rules 13a-15(e)
and 15d-15(e) under the Securities Exchange Act of 1934, as
amended. Based on this evaluation, our Chief Executive Officer and
Chief Financial Officer concluded that our financial disclosure
controls and procedures were not effective due to our limited
internal resources and lack of ability to have multiple levels of
transaction review.
Management’s Report on Internal Control over
Financial Reporting
Management is responsible for the preparation and integrity of our
published financial statements. The financial statements have been
prepared in accordance with GAAP and, accordingly, include amounts
based on judgments and estimates made by management. Management
also prepared the other information included in the annual report
and is responsible for its accuracy and consistency with the
financial statements.
Management is responsible for establishing and maintaining a system
of internal control over financial reporting, which is intended to
provide reasonable assurance to our management and Board of
Directors regarding the reliability of our financial statements.
The system includes but is not limited to:
- a documented organizational structure and division of
responsibility;
- established policies and procedures to foster a strong ethical
climate which is communicated throughout the Company;
- regular reviews of our financial statements by qualified
individuals; and
- the careful selection, training and development of our employees
and personnel.
There are inherent limitations in the effectiveness of any system
of internal control, including the possibility of human error and
the circumvention or overriding of controls. Also, the
effectiveness of an internal control system may change over time.
We have implemented a system of internal control that was designed
to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements in
accordance with GAAP.
Management has assessed our internal control system in relation to
criteria for effective internal control over financial reporting
described in “Internal Control-Integrated Framework” issued in 2013
by the Committee of Sponsoring Organizations (“COSO”) of the
Treadway Commission. Based upon these criteria, we believe that, as
of December 31, 2021, our system of internal control over financial
reporting was not effective due to material weaknesses that were
identified. The material weaknesses are caused by our limited
internal resources and limited personnel. We presently have only
two officers. The material weaknesses include 1.) no segregation of
duties within the Company, 2.) there is no management oversight or
multiple levels of supervision and review, no control documentation
being produced, no one to review control documentation if it was
being produced, 3.) a lack of expertise in the application of
generally accepted accounting principles in regard to the
accounting and reporting of our derivative transactions.
Changes in Internal Control
over Financial Reporting
There were no changes in disclosure controls and procedures that
occurred during the period covered by this report that have
materially affected, or are reasonably likely to materially effect,
our disclosure controls and procedures. We do not expect to
implement any changes to our disclosure controls and procedures
until there is a significant change in our operations or capital
resources.
This annual report does not include an attestation report of the
Company’s registered public accounting firm regarding internal
control over financial reporting. Management’s report was not
subject to attestation by the Company’s registered public
accounting firm pursuant to the rules of the Securities and
Exchange Commission for smaller reporting companies that permit the
Company to provide only management’s report in this annual
report.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
The executive officers and directors of the Company are as
follows:
Name
|
|
Age
|
|
Position
|
|
Held Since
|
Robin T. Eves
|
|
71
|
|
CEO, President, Director
|
|
August 2010
|
Thomas Shreve
|
|
70
|
|
Director
|
|
November 2015
|
Aiden Neary
|
|
50
|
|
COO, CFO, Director
|
|
February 2016
|
Certain biographical information with respect to our current
officers and directors is set forth below.
Robin Eves has been our Chief Executive Officer, President and a
member of the Board of Directors since August 2010. Prior to his
appointment with the Company, from February 2009 through August
2010, he served as the CEO of Atlantic Energy Group Ltd., a global
energy company developing a major storage and pipeline initiative
in South Carolina and the build-out of a global trading business in
London, Singapore and the rest of Asia. From the period March 2005
to January 2009 he worked with Oil Trade and Transport LLC, working
closely with Sempra Energy Trading. He was responsible for business
development in Russia, India and the Middle East. Also during the
period, from March 2003 to February 2005, Mr. Eves served as
Managing Director and global head of crude and refined products for
United Bank of Switzerland From October 2002 to February 2003, Mr.
Eves acted as a consultant for Barclays Capital in London, hired to
do an extensive due diligence on the Russian/former Soviet Union
markets in preparation for Barclays’ possible re-entry into those
markets. From February 1990 to September 2002, Mr. Eves served as
Managing Director for Synergy International SA/Magna Oil and Gas
LLC/CCL Oil, where he was responsible for all trading and
structured transactions. Prior to that time, from 1987 to 1990, Mr.
Eves served as Vice-President and global head of products trading,
and from 1976 to 1987, worked in various positions with
Cargill.
We believe that Mr. Eves’ qualifications to serve on the Board of
Directors include his extensive background in all aspects of the
global energy business, including experience in crude and refined
products for power production, including gas and coal, as well as
related emissions controls.
Aiden Neary was appointed as Chief Financial Officer of the Company
on November 26, 2013 and Chief Operating Officer in July 2015. In
January 2016 Mr. Neary was appointed to the Board of Directors.
Since October 2010, Mr. Neary has been exploring opportunities
across the investment banking landscape and has also pursued
private interests including charitable work. From February 2010 to
October 2010, he served as Managing Director and Chief of Staff for
Global Equity at UBS in Stamford, Connecticut. From November 2006
to February 2010, Mr. Neary was Executive Director and Chief of
Staff for Global Equity at UBS. From June 2003 to November 2006, he
served as Executive Director and COO for the Global Commodity
Business at UBS. Prior to that position, from February 2002 to June
2003, he was Director and Business Manager for Global Government
Bond and Derivative business at UBS in London, and from August 2000
to February 2002, as Associate Director and Business Manager for
Global Government Bond and Derivative Business at UBS in London.
Prior to joining UBS, from January 2000 to July 2000, Mr. Neary was
Manager and Head of Product Control for Fixed Income Derivatives at
Schroders Investment Bank in London. From January 1995 to January
2000, he was Manager and Head of Product Control for Government
Bonds and Derivatives at ING Barings. Mr. Neary earned a degree in
Accounting and Law from Kingston University in London (1990 –
1993), and is a Chartered Management Accountant since 1998.
We believe that Mr. Neary’s qualifications to serve on the Board of
Directors include his over 15 years of professional experience
working in Investment Banking and his over two years of working
with Clean Coal Technologies Inc.
Mr. Thomas W. Shreve was appointed to the Board of Directors in
November, 2015. Mr. Shreve moved from California to Indonesia in
1991 to serve as country representative for New York-based law firm
Milbank, Tweed, Hadley & McCloy, and over the succeeding 24
years has been a leading transaction execution specialist and
business executive in Indonesia. Tom has managed some of the more
significant transactions recently undertaken by Indonesian
companies, including the permanent acquisition financing and
subsequent sale of Berau Coal Energy, and the acquisition of Inter
Milan Football Club by a group of Indonesian businessmen. He served
as an officer of Berau Coal Energy and as a non-executive director
of Inter Milan Football Club. As a lawyer in Jakarta affiliated
with Milbank in the early 1990s, Mr. Shreve advised the issuers in
the first New York Stock Exchange listing by a private sector
Indonesian company, as well as the first U.S. public bond issue by
a private sector Indonesian company. As an investment banker, he
advised the Indonesian Government in the sale of distressed assets
in the aftermath of the Asian Financial Crisis of 1997-98. He
served as Chief Executive Officer of Recapital Investment Group
from 2009-14 and of Acuatico Pte. Ltd., a water infrastructure
company, in 2014-15. A member of the California Bar, Mr. Shreve
earned his J.D. degree at Northwestern University School of Law in
Chicago.
We believe that Mr. Shreve’s qualifications to serve on the Board
of Directors include his strong legal and business connections
across Asia and in particular in Indonesia where he currently
resides.
All directors will hold office until the next annual meeting of
stockholders (currently expected to be held in the second quarter
of 2022) and until their successors have been duly elected and
qualified. There are no agreements with respect to the election of
directors. Vacancies on the Board of Directors during the year may
be filled by the majority vote of the directors in office at the
time of the vacancy without action by the stockholders.
Board Committees
At this filing date, we have an audit committee, but no
compensation committee or nominating committee. Our full Board
currently performs the duties and responsibilities of such
committees. Due to the size of the Company and due to the small
number of directors that we had for 2021, we believed it was
appropriate for the full Board to handle the responsibilities of
these committees. It is our intention through 2022, as our Board
increases in size, to introduce a number of committees.
Audit Committee Financial Expert
We created an Audit Committee in December 2017 currently comprising
of one independent board of director member, Thomas Shreve, and two
internal board of director members Aiden Neary and Robin Eves.
Code of Conduct
On February 11, 2013, the board of directors approved a code of
business conduct and ethics, filed as an exhibit to the Company’s
Current Report on Form 8-K on February 14, 2013.
Board Leadership Structure and Role in Risk Oversight
The Board of Directors has risk oversight responsibility for the
Company and administers this responsibility directly. The Board of
Directors oversees our risk management process through regular
discussions of our risks with senior management both during and
outside of regularly scheduled Board of Directors meetings. In
addition, the Board of Directors administers our risk management
process with respect to risks relating to our accounting and
financial controls.
Our Board of Directors has no policy with regard to the separation
of the offices of Chairman of the Board and Chief Executive
Officer, and believes, given the size of our company, no such
formal policy is necessary at this time.
Director Independence
Our Board is not subject to any independence requirements. However,
our Board has reviewed the independence of its directors under the
requirements set forth by the NASDAQ Stock Market. Messrs. Eves and
Neary are officers of the Company and therefore not deemed
independent directors. Mr. Shreve is deemed to be an independent
director.
Meetings of our Board of Directors
Our Board of Directors held 4 meetings during the fiscal year ended
December 31, 2021 (including meetings conducted by telephone
conferencing). No director attended less than 75% of all board
meetings during the fiscal year ended December 31, 2021. All
current Board members and all nominees for election to the Board of
Directors are encouraged to attend our annual meetings of
stockholders, either in person or by teleconference.
Nomination of Director Candidates
We receive suggestions for potential director nominees from many
sources, including members of the Board, advisors, and
stockholders. Any such nominations, together with appropriate
biographical information, should be submitted to the Chairperson of
the Board in the manner discussed below. Any candidates submitted
by a stockholder or stockholder group are reviewed and considered
in the same manner as all other candidates.
Qualifications for consideration as a Board nominee may vary
according to the particular areas of expertise being sought as a
complement to the existing board composition. However, minimum
qualifications include high level leadership experience in business
activities, breadth of knowledge about issues affecting the
Company, experience on other boards of directors, preferably public
company boards, and time available for meetings and consultation on
Company matters. Our Board does not have a formal policy with
regard to the consideration of diversity in identifying director
candidates, but seeks a diverse group of candidates who possess the
background, skills and expertise to make a significant contribution
to the Board, to the Company and our stockholders. Candidates whose
evaluations are favorable are then chosen by the full Board. The
full Board selects and recommends candidates for nomination as
directors for stockholders to consider and vote upon at the annual
meeting.
Stockholder Communications
Stockholders wishing to communicate with the Board of Directors or
with a specific director may send a letter to our corporate
secretary at Clean Coal Technologies, Inc., 295 Madison Avenue
(12th Floor), New York, NY 10017, and should be marked to the
attention of the appropriate director or directors. Our secretary
will circulate the communications (other than commercial
solicitations) to the appropriate director or directors.
Communications marked “Confidential” will be forwarded
unopened.
Directors’ Compensation
In 2021, all meetings were via telephone conference. The Board
plans one regularly scheduled meeting each fiscal quarter and may
schedule additional meetings as necessary. For fiscal 2020 and
2021, Mr. Shreve will receive annual compensation as a director of
$25,000 which will be paid only upon available cash flow.
All of our present non-employee directors, have other employment or
sources of income and will routinely devote only such time to the
Company necessary to maintain its viability. It is estimated that
each non-employee director will devote at least 2 days per month to
the Company’s corporate activities. We incurred $25,000 in director
fees for the outside director during the years 2020 and 2021.
Stock Ownership Requirements
The Board of Directors has encouraged its members to acquire and
maintain stock in the Company to link the interests of such persons
to the stockholders. However, the Board of Directors has not
established stock ownership guidelines for members of the Board of
Directors or the executive officers.
ITEM 11. EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
At this time, we do not have a compensation committee or a fully
developed compensation policy. We have only two executive officers,
our CEO and president, our Chief Operations Officer and Chief
Financial Officer. Their employment agreements were negotiated by
the board of directors with the terms based on the board’s
assessment of their qualifications and requirements.
We anticipate establishing a compensation committee sometime in the
next 12 months. The following Compensation Discussion and Analysis
describes prospectively the expected duties, responsibilities and
role of our future Compensation Committee as well as the material
elements of our planned compensation for our future executive
officers. The information below provides the description of
compensation policies that we intend to make applicable to
executive officers and other highly compensated individuals under
employment and/or consulting arrangements in the future.
Planned Objectives of Our Compensation Program
The primary objective of our compensation program, including our
executive compensation program, will be to maintain a compensation
program that will fairly compensate our executives and employees,
attract and retain qualified executives and employees who are able
to contribute to our long term success, encourage performance
consistent with clearly defined corporate goals and align our
executives’ long term interests with those of our stockholders. To
that end, our future compensation practices will be intended
to:
1. Tie total compensation to the Company’s performance and
individual performance in achieving financial and non-financial
objectives; and
2. Align senior management’s interests with stockholders’ interests
through long term equity incentive compensation.
Expected Role of the Compensation Committee
The Compensation Committee, once formed, will determine the
compensation of our Chief Executive Officer and, in consultation
with the Chief Executive Officer, and our other executive officers.
In addition, the Compensation Committee will be responsible for
adopting, reviewing and administering our compensation policies and
programs, including any cash bonus incentive plan or equity
incentive plan that we may adopt. We anticipate that our
Compensation Committee will adhere to a compensation philosophy
that (i) seeks to attract and retain qualified executives who will
add to the long term success of the Company, (ii) promotes the
achievement of operational and strategic objectives, and (iii)
compensates executives commensurate with each executive’s level of
performance, level of responsibility and overall contribution to
the success of the Company.
In determining the compensation of our Chief Executive Officer and
our other executive officers, the Compensation Committee expects to
consider the financial condition and operational performance of the
Company during the prior year. In determining the compensation for
executive officers other than the Chief Executive Officer, the
Compensation Committee plans to consider the recommendations of the
Chief Executive Officer.
The Compensation Committee will review the compensation practices
of other companies, based in part on market survey data and other
statistical data relating to executive compensation obtained
through industry publications and other sources. The Compensation
Committee does not intend to benchmark the Company’s compensation
program directly with other publicly traded companies or other
companies with which we may compete for potential executives since
some of these competitors are privately held companies for which
executive compensation information may not be available. However,
the Compensation Committee intends to compare our executive
compensation program as a whole with the programs of other
companies for which survey data is available, and will also compare
the pay of individual executives if the jobs are sufficiently
similar to make the comparison meaningful. The Compensation
Committee plans to use such survey data primarily to ensure that
our executive compensation program as a whole will be
competitive.
Components of Future Executive Compensation
We anticipate that our future executive employment agreements will
provide that employees will be compensated by salary and bonus,
with bonuses potentially including cash and equity components. The
specific elements of the future compensation program are not
determined but will most likely include base salary, an annual cash
performance bonus and long-term equity incentives. Our compensation
program will be designed to provide our executives with incentives
to achieve our short and long-term performance goals and to pay
competitive base salaries. Each executive officer’s current and
prior compensation will be considered in setting future
compensation.
In addition, we expect employment agreements with our executive
officers to provide for other benefits, including potential
payments upon termination of employment. Once established, the
compensation committee will consider all of the above components in
determining the exact makeup of the total executive compensation
package as well as the factors to be applied in establishing each
component.
Perquisites and Other Benefits
At this time, we do not expect to provide perquisites or personal
benefits to future executive officers, other than the payment of
health insurance premiums and payment of life insurance
premiums.
Employment Agreements
We signed two year employment agreements effective July 1, 2020,
with Robin Eves, as Chief Executive Officer and President, and Mr.
Neary as COO/CFO. Mr. Eves will receive an annual salary of
$519,750 and Mr. Neary $500,000. Each officer was granted a signing
bonus of 750,000 shares of the Company’s restricted common stock
upon execution of the agreements.
The above employment agreements include provisions for
participation in employee benefit programs if the Company adopts
such programs during the term of the agreements. The agreements
also include certain anti-takeover provisions that would require
payment of annual salary as well as immediate vesting of all equity
compensation if an entity acquiring the Company did not offer
comparable positions to each officer.
Neither Mr. Eves, nor Mr. Neary is compensated for their
contributions to the Board of Directors.
We have not entered into employment agreements with any other
officers, directors, or any other persons but may do so during the
current fiscal year as we expand operations.
Other Key Employees and Consultants
As at December 31, 2021 we have no other employees in the
company.
Employee Benefits
When we have adequate financing, we intend to offer employee health
insurance benefits coverage to provide our workforce with a
reasonable level of financial support in the event of illness or
injury. It is our intention to offer health insurance benefits to
all full time employees, including executive officers.
Accounting Matters
We have adopted the provisions of ACS 718 Compensation – Stock
Compensation which requires the fair value of options to be
recorded as compensation cost in the consolidated financial
statements. Options in our compensation packages result in
additional compensation costs being recognized.
Stock Ownership Requirements
The Board of Directors has encouraged its members to acquire and
maintain stock in the Company to link the interests of such persons
to the stockholders. However, the Board of Directors has not
established stock ownership guidelines for members of the Board of
Directors or the executive officers.
The Company has not adopted any other bonus, profit sharing, or
deferred compensation plan.
The following table sets forth, for the last two years, the dollar
value of all cash and non-cash compensation earned by the Company’s
named executive officers.
SUMMARY COMPENSATION
TABLE
Officers Name &
Principal Position
|
|
Year
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
($)
|
|
|
Option Awards
($)
|
|
|
All Other
Compensation ($)
|
|
|
Total
($)
|
|
Robin Eves, Pres and CEO (1)
|
|
2021
|
|
|
519,750
|
|
|
|
1,050,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,569,750 |
|
|
|
2020
|
|
|
519,750
|
|
|
|
-
|
|
|
|
86,275
|
|
|
|
-
|
|
|
|
-
|
|
|
|
606,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aiden Neary, COO/CFO (2)
|
|
2021
|
|
|
500,000
|
|
|
|
1,000,000
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
1,500,000
|
|
|
|
2020
|
|
|
450,000
|
|
|
|
-
|
|
|
|
86,275
|
|
|
|
|
|
|
|
|
|
|
|
536,275
|
|
(1) On July 8, 2013, Robin Eves was issued 28,571 common shares in
lieu of interest on loans made to the company. The value for these
shares was $19,747. As a bonus for forbearance on payment of
monthly fees, Mr. Eves was approved to receive 57,143 common shares
on October 7, 2013. These shares had a value of $80,000 based upon
$1.40 on the day that the shares were approved. Mr. Eves also
received an approval for bonus shares for the year 2013 on December
4, 2013. The amount of shares approved was 142,857 shares with a
value of $165,000 based upon $1.15 per share on the date of the
approval. Through December 31, 2014, Robin eves returned 1,273,360
common shares back to the Company. Mr. Eves also returned 457,143
options back to the company that were previously awarded. Mr. Eves
signed a two year contract on July 1, 2017 at an annual salary of
$519,750. He was also awarded 750,000 common shares upon signing
and received an additional 750,000 shares, valued at $67,500 on
July 1, 2018. Mr. Eves was issued 2,300,797 common shares as a
bonus on May 1, 2018, valued at $203,621. Mr. Eves was issued
2,204,000 common shares as a bonus on May 28, 2019, valued at
$220,400. Mr. Eves was issued 2,121,267 common shares as a bonus on
July 16, 2020, valued at $34,789. Mr. Eves was issued 4,516,310
common shares as a bonus on August 31, 2020, valued at $51,486.
(2) On November 26, 2013 Aiden Neary signed a two year Executive
Employment Agreement which called for 142,857 shares to be issued
at the time of signing his agreement and 142,857 that vest 1 year
after the date of grant. These shares were approved to be issued
and the issuance was deferred until after the Company completes its
planned common stock reverse. The fair value of this award was
determined to be $300,000 based upon $1.05 on the date of grant.
Mr. Neary was approved to receive 28,571 shares of stock as a bonus
for 2013 on December 4, 2013. These shares had a value of $33,000
based upon $1.15 per shares on the date of the approval. Through
year ended December 31, 2015 Mr. Neary returned 497,527 common
shares back to the company. Mr. Neary also forfeited his right of
the second tranche of 142,857 shares before vested. Mr. Neary
signed a two year contract on July 1, 2017 at an annual salary of
$450,000. He was also awarded 750,000 common shares upon signing
and received an additional 750,000 shares, valued at $67,500 on
July 1, 2018. Mr. Neary was issued 1,992,032 common shares as a
bonus on May 1, 2018, valued at $176,295. Mr. Neary was issued
2,204,000 common shares as a bonus on May 28, 2019, valued at
$220,400. Mr. Neary was issued 2,121,267 common shares as a bonus
on July 16, 2020, valued at $34,789. Mr. Neary was issued 4,516,310
common shares as a bonus on August 31, 2020, valued at $51,486.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
There were no outstanding grants of stock options or unvested stock
awards outstanding on the last day of the fiscal year ended
December 31, 2021 to any of the executive officers named in the
Summary Compensation Table.
The following table sets forth, for the current year, the dollar
value of all cash and non-cash compensation for the Company’s
directors.
DIRECTOR
COMPENSATION
Name
|
|
Year
|
|
Fees Earned or
Paid in Cash
($)
|
|
|
Stock Awards
($)
|
|
|
Option Awards
($)
|
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
|
Non Qualified
Deferred
Compensation
Earnings
|
|
|
All Other
Compensation
($)
|
|
|
Total
($)
|
|
Robin Eves
|
|
2021
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Aiden Neary
|
|
2021
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Thomas Shreve(1)
|
|
2021
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
(1) Mr. Shreve directors fees have been accrued
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth information, as of December 31,
2021, with respect to each person known by the Company to own
beneficially more than 5% of the shares of our 414,279,613 issued
and outstanding common stock, as well as the beneficial ownership
of each director and officer and all directors and officers as a
group. We are not aware of any present arrangements that could
result in a change of control of the Company. Except as otherwise
indicated, each of the stockholders listed below has sole voting
and investment power over the shares beneficially owned. Except as
otherwise indicated, addresses are c/o Clean Coal Technologies,
Inc., 295 Madison Avenue (12th Floor) New York, NY 10017.
Officers and Directors
|
|
Amount and Nature of Beneficial Ownership(1)
|
|
|
Percent of Class
|
|
|
|
|
|
|
|
|
|
|
Robin Eves, President, CEO, Director
|
|
|
10,913,071 |
|
|
|
2.7 |
%
|
Aiden Neary, COO/CFO
|
|
|
18,661,479 |
|
|
|
4.5 |
%
|
Thomas Shreve, Director
|
|
|
100,000 |
|
|
|
0.0 |
%
|
All directors and officers as a group (3 persons)
|
|
|
29,674,550 |
|
|
|
7.2 |
%
|
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE
Wages and bonus payable to
related parties
Accruals for salary and bonuses to officers and directors are
included in accrued liabilities in the balance sheets and totaled
$4,458,566 and $3,726,880 as of December 31, 2021 and 2020,
respectively. As part of the separation agreement with Mr. Ponce de
Leon, the Company agreed to pay him all his accrued salary within
two years but agreed to pay him $200,000 by November 2015 out of
revenues earned. As the Company did not earn revenue in 2015 and as
at December 2021 has still not earned revenue, the obligation to
Mr. Ponce de Leon of $1,790,997 is currently in default and the
amount includes $564,283 in accrued interest. It is the Company’s
intention to pay Mr. Ponce de Leon immediately upon receiving
revenue.
Nonconvertible
Debt
During the year ended December 31, 2021, the Company borrowed a
total of $740,050 from and repaid $10,000 to, an entity controlled
and owned by a significant shareholder of the Company (“Related
Party Note Holder”). Additionally, during September 2021, the
Related Party Note Holder purchased a third-party convertible note
and accrued interest for $115,000, replacing it with a new,
non-convertible note. The notes are unsecured, due on demand and
accrued interest at 12% per annum.
During the years ended December 31, 2021 and 2020, the Company
received $0 and $30,000 from the issuance of related party notes
payable to an affiliate, respectively. These notes payable of the
Company are unsecured, bear no interest and are due on demand. As
of December 31, 2021 and 2020, the Company had outstanding notes
payable to affiliates of the Company of $705,000 and $705,000,
respectively.
During the years ended December 31, 2021 and 2020, the Company
received $30 and $15,050 from related party advances, respectively.
The Company repaid $0 and $11,500 on these advances during the
years ended December 31, 2021 and 2020, respectively. The advances
payable are unsecured, bear no interest and are due on demand. As
of December 31, 2021 and 2020, the Company had outstanding advances
payable to an officer of the Company of $83,180 and $83,150,
respectively.
Convertible Debt
During the years ended December 31, 2021 and 2020, the Company
borrowed an aggregate of $18,600 and $76,990, net of beneficial
conversion features of $0 and $4,150, respectively, under
convertible notes payable. During the year ended December 31, 2020,
the Company issued 1,250,000 shares of common stock for the
conversion of $100,000 of principal on the convertible notes
payable. The convertible notes are secured by assets and the common
stock of the Company, bear interest at 12% per annum, are
convertible into shares of the Company’s common stock at $0.06 per
share and are due three years from the dates of issuance.
As of December 31, 2021 and 2020, the Company had outstanding
short-term convertible notes payable of $9,779,151 and $9,437,192,
net of unamortized discounts of $40,189 and $486,867, respectively;
and, outstanding long-term convertible notes payable of $9395,590
and $418,943, net of unamortized discounts of $1,663 and $86,167,
respectively. The convertible notes payable mature(d) between
November 2018 and November 2022 and are convertible at $0.06 per
share, which, occasionally has been a discount to the market price
on the dates of issuance. Amortization expense related to debt
discounts on convertible debt for the years ended December 31, 2021
and 2020 was $485,107 and $1,648,339, respectively. As of December
31, 2021 and 2020, $9,436,845 and $7,152,383 in convertible notes
are past due, respectively.
Common Stock Issued to
Related Parties
During March 2021, an officer and director of the Company agreed to
return and retire 4,516,960 shares of common stock previously
issued for common stock compensation.
During July and August 2020, the Company issued two of its officers
a total of 13,275,153 shares of common stock for services valued at
$172,549. The shares are not forfeitable and considered to be
earned as of the date of issuance.
During April 2020, the Company issued 1,250,000 shares of common
stock for the conversion of $100,000 related party convertible
notes payable, or the stated conversion price $0.08 per share.
Non-Binding License
Agreement – related
party
During July 2017, the Company entered into a non-binding agreement
to explore the opportunity of engaging in a license of Clean Coal
Pristine M technology. As part of the non-binding agreement, in
September 2017, the Company received a non-refundable deposit of
$100,000, subject to application to any future license agreement,
from Wyoming New Power. The license agreement is for two million
tons per annum. The remainder of the license fee will be due upon
the signing of a definitive license agreement expected in 2022.
Wyoming New Power is a related party because it is controlled by an
entity that has a significant interest in Clean Coal Technologies,
Inc.
Director
Independence
Our Board is not subject to any independence requirements. However,
our Board has reviewed the independence of its directors under the
requirements set forth by the NASDAQ Stock Market. Messrs. Eves and
Neary are officers of the Company and therefore not deemed
independent directors. Mr. Shreve is deemed to be an independent
director.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Fees billed to the Company by MaloneBailey, LLP
|
|
2021
|
|
|
2020
|
|
(1) Audit Fees
|
|
$ |
64,000 |
|
|
$ |
53,000 |
|
(2) Tax Fees
|
|
$ |
- |
|
|
$ |
- |
|
(3) Other Fees
|
|
$ |
- |
|
|
$ |
- |
|
All audit and non-audit services and fees are approved by the Board
of Directors.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Documents filed with this report.
1. Financial Statements:
See Index to Financial Statements on page 22.
2. Financial Statement Schedules:
Financial statement schedules are omitted because they are not
required or are not applicable or the required information is shown
in the financial statements or notes thereto.
3. Exhibits:
The exhibits to this report are listed on the Exhibit Index
below.
(b) Description of exhibits
(1) Filed with Registrant’s Form 10, January 14, 2009, Certificate
of Amendment, June 27, 2012, filed with this Report.
(2) Filed with Registrant’s Form 8-K, December 6, 2012.
(3) Filed with Registrant’s Form 10, January 14, 2009.
(4) Filed with Registrant’s Form 8-K, February 14, 2013.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
|
/s/Robin Eves
|
|
Dated: April 15, 2022
|
|
Robin Eves
CEO, President, Principal Executive Officer
|
|
|
|
|
|
|
Dated: April 15, 2022
|
|
/s/Aiden Neary
|
|
|
|
Aiden Neary
CFO, Principal Financial Officer
|
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities indicated on the
15th day of April 2022.
/s/Robin Eves
|
|
/s/Thomas Shreve
|
|
Robin Eves, CEO, President and Director
|
|
Thomas Shreve, Director
|
|
|
|
|
|
/s/Aiden Neary
|
|
|
|
Aiden Neary, COO, CFO and Director
|
|
|
|
|
|
|
|
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