Annual report pursuant to Section 13 and 15(d)

RELATED PARTY TRANSACTIONS

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RELATED PARTY TRANSACTIONS
12 Months Ended
Dec. 31, 2020
Related Party Transactions [Abstract]  
Related Party Transactions Disclosure [Text Block]

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 $3,726,943 and $3,090,116 as of December 31, 2020 and 2019, 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 2019 has still not earned revenue, the obligation to Mr. Ponce de Leon of $1,692,861 is currently in default and the amount includes $466,147 in accrued interest. It is the Company’s intention to pay Mr. Ponce de Leon immediately upon receiving revenue.


Nonconvertible Debt


During the years ended December 31, 2020 and 2019, the Company received $30,000 and $590,000 from the issuance of related party notes payable to an affiliate. The notes are due on demand and do not accrue interest. As of December 31, 2020 and 2019, the Company had outstanding notes payable to affiliates of the Company of $705,000 and $675,000, respectively. These notes payable of the Company are unsecured, bear no interest and are due on demand.


During the years ended December 31, 2020 and 2019, the Company received $15,050 and $243,000 from related party advances, respectively. The Company repaid $11,500 and $165,000 on these advances during the years ended December 31, 2020 and 2019, respectively. The advances are due on demand and do not accrue interest. As of December 31, 2020 and 2019, the Company had outstanding advances payable to an officer of the Company of $83,150 and $79,600, respectively. The advances payable are unsecured, bear no interest and are due on demand.


Convertible Debt


During the years ended December 31, 2020 and 2019, the Company borrowed an aggregate of $76,990 and $366,653, net of beneficial conversion features of $4,150 and $152,962, respectively, under convertible notes payable. During the years ended December 31, 2020 and 2019, the Company repaid $0 and $25,000 of principal in cash and issued 1,250,000 and 1,875,000 shares of common stock for the conversion of $100,000 and $150,000 of principal on the convertible notes payable, respectively. 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, 2020 and 2019, the Company had outstanding short-term convertible notes payable of $9,437,192 and $6,593,469, net of unamortized discounts of $486,867 and $658,922, respectively; and, outstanding long-term convertible notes payable of $418,943 and $2,626,753, net of unamortized discounts of $86,167 and $1,558,289, 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, 2020 and 2019 was $1,648,339 and $1,229,740, respectively. As of December 31, 2020 and 2019, $7,152,383 and $4,510,384 in convertible notes are past due.


Outstanding notes payable and convertible notes payable to related parties consisted of the following as of December 31, 2020 and 2019:


   

December 31,

 

Name

 

2020

   

2019

 

Convertible Debt:

               

Convertible notes payable, interest at 12%, convertible at $0.08 per share, unsecured, due May 25, 2019

  $ 1,202,566     $ 1,302,566  

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 December 24, 2023

    5,223,754       5,146,753  

Total

    9,856,135       9,879,134  

Less: short-term debt

    (9,437,192

)

    (6,593,459

)

Total long-term debt

    418,943       3,285,675  

Less: unamortized discounts

    (86,167

)

    (2,217,211

)

Net long-term debt

  $ 332,776     $ 1,068,464  
                 

Nonconvertible Debt:

               

Notes payable, no interest, unsecured, due upon demand

  $ 788,150     $ 754,600  

Total

  $ 788,150     $ 754,600  

Principal payments on convertible debt to related parties for each of the following five years is as follows:


2021

  $ 9,437,192  

2022

    341,953  

2023

    76,990  

2024

    -  

2025

    -  

Thereafter

    -  

Total

  $ 9,856,135  

Common Stock Issued to Related Parties


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.


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 May 2019, the Company issued two of its officers a total of 4,408,000 shares of common stock for services valued at $440,800. The shares are not forfeitable and considered to be earned as of the date of issuance.


During August 2019, the Company issued 1,875,000 shares of common stock for the conversion of $150,000 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 2021 . Wyoming New Power is a related party because it is controlled by an entity that has a significant interest in Clean Coal Technologies, Inc.