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NOTE 6: DERIVATIVE LIABILITIES
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12 Months Ended |
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Dec. 31, 2012
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| Derivative Instruments and Hedging Activities Disclosure [Text Block] |
NOTE
6: DERIVATIVE LIABILITIES
During
2012, the Company committed to issue more common shares than
its authorized amount through the issuance of common stock
with debt, stock for services and through the vesting of a
stock option bonus to the Company’s Chief Executive
Officer. If the shares had been issued, the Company would
have exceeded its authorized common stock on January31, 2012.
Therefore, all issuances after this date were accounted for
as derivative liabilities through June 26, 2012 when the
authorized common stock was increased to 975,000,000. The
shares in excess of the authorized common stock were
determined in chronological order based upon the date the
obligation to issue the shares took place.
On
January 31, 2012, the 4,000,000 common shares vested under a
stock bonus granted to the Company’s Chief Executive
Officer. 1,056,000 of these shares were reported as issued
and the remaining 2,944,000 were accounted for as a
derivative liability as they were in excess of the authorized
shares. The fair value of these 2,944,000 common shares was
determined to be $156,032 as of January 31, 2012 and $147,200
as of June 26, 2012 using the closing price of Clean
Coal’s common stock.
Between
February 1, 2012 and June 26, 2012, the Company reported as
issued an aggregate of 4,000,000 common shares with debt in
excess of the authorized shares. The fair value of the
4,000,000 common shares was determined to be $205,160 on the
date of the loans using the closing price of Clean
Coal’s common stock of which $187,880 was recorded as
loan discounts and $17,280 was expensed as a loss on
derivative liabilities. On June 26, 2012, the fair value of
the 4,000,000 common shares was determined to be$202,000
using the closing price of Clean Coal’s common
stock.
Between
February 1, 2012 and June 26, 2012, the Company reported as
issued an aggregate of 6,850,000 common shares for services
provided to the company. The fair value of the 6,850,000
common shares was determined to be $566,275 on the grant
dates and was expensed as compensation expense. On June 26,
2012 the fair value of the 6,850,000 common shares was
determined to be $342,500 using the closing price of Clean
Coal’s common stock.
On
June 26, 2012, the company increased the authorized common
shares to 975,000,000 shares. As a result of the increase,
the Company issued these 13,794,000 common shares. On June
26, 2012, the aggregate fair value of the derivative
liabilities was determined to be $691,700 and was recorded
against additional paid-in capital. There are no derivative
liabilities outstanding as of December
31, 2012 because the Company has sufficient authorized common
shares to cover its outstanding issuances and convertible
instruments.
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