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Friday, August 10, 2018 7:27:47 PM
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 2017 has still not earned revenue, the obligation to Mr. Ponce de Leon of $1,447,521 is currently in default and the amount includes $220,807 in accrued interest. It is the Company’s intention to pay Mr. Ponce de Leon immediately upon receiving revenue.
During the six months ended June 30, 2018, the Company borrowed an aggregate of $1,582,300, net of beneficial conversion feature of $1,292,822, under convertible notes payable from a Company with an interest owned by a significant stockholder. As of June 30, 2018 and December 31, 2017, the Company had outstanding short-term convertible notes payable of $5,146,481 and $4,551,227, net of unamortized discounts of $357,747 and $310,428, respectively and outstanding long term convertible notes payable of $1,631,950 and $1,493,558, net of unamortized discounts of $3,102,903 and $2,582,075, respectively. The convertible notes payable are convertible at $0.06 per share, which was a discount to the market price on the date of issuance. Amortization expense related to debt discounts on convertible debt for the six months ended June 30, 2018 and 2017 was $724,675 and $629,353
During the six months ended June 30, 2018, the holder of convertible debt elected to convert a total of $280,507 in principal into 3,506,333 shares of common stock, or $0.08 per share.
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.
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