Quarterly report pursuant to Section 13 or 15(d)

NOTE 5: EQUITY TRANSACTIONS

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NOTE 5: EQUITY TRANSACTIONS
6 Months Ended
Jun. 30, 2011
Stockholders' Equity Note Disclosure [Text Block]
NOTE 5: EQUITY TRANSACTIONS

Common Stock

On August 9, 2010 Clean Coal entered into an employment agreement with Robin Eves as President and Chief Executive Officer. Under the employment agreement, President and Chief Executive Officer is entitled to a stock bonus of 28,000,000 common shares. Under the terms of the employment agreement, the stock is to be awarded as follows: 50% of the shares to be exercisable at the signing of the agreement, and the balance of 50% exercisable after January 31, 2012, or on the accomplishment of a significant business objective as established by the Board of Directors. Clean Coal calculated the fair value of the award based upon the closing stock price on the grant date of August 9, 2010 and is expensing the award over the award periods. The total fair value of the award was determined to be $868,000. A total of $146,274 and $290,941 was recognized as share-based compensation under this award for the three and six months ended June 30, 2011, respectively and is reflected as accrued stock-based compensation in the Statement of Stockholders’ Deficit. As of June 30, 2011, a total of 14,000,000 shares have been issued under the agreement and are shown as outstanding in the Statement of Stockholders’ Deficit. The unvested portion of the award of $345,983 will be recognized over the remaining award period through January 31, 2012.

On April 1, 2011 Clean Coal entered into an employment agreement with Ignacio Ponce De Leon as Chief Operating Officer. Under the employment agreement, the Chief Operating Officer is entitled to a stock bonus of 2,000,000 common shares. Under the terms of the employment agreement, the stock vests on January 1, 2012. Clean Coal calculated the fair value of the award based upon the closing stock price on the grant date of April 1, 2011 and is expensing the award over the vesting period. The total fair value of the award was determined to be $76,000. A total of $24,873 was recognized as share-based compensation under this award for the three and six months ended June 30, 2011 and is reflected as accrued stock-based compensation in the Statement of Stockholders’ Deficit. As of June 30, 2011, no shares have been issued under the agreement. The unvested portion of the award of $51,127 will be recognized over the remaining vesting period through January 1, 2012.

During the six months ended June 30, 2011, Clean Coal issued an aggregate of 21,343,333 common shares for services valued at $616,225 and issued an aggregate of 17,359,078 common shares for the conversion of debt and accrued interest totaling $1,219,475.

On August 12, 2010, Clean Coal entered into a fifteen month strategic financial and consulting agreement with MMB Global Advisors. Under the terms of the agreement, MMB was to be awarded 12,000,000 restricted shares at the time of the contract signing with 15,000,000 additional shares to be awarded over the term of the contract (1 million shares per month). On June 1, 2010, Clean Coal amended the Advisory Agreement with MMB Global Advisors dated August 12, 2010 to reflect a reduction of four million shares. This Amendment reduced the total number of 27,000,000 shares originally awarded by this agreement, to 23,000,000 shares. As of the date of the amendment, 21,000,000 shares had vested under the agreement. The unvested balance of the remaining 2,000,000 shares will be earned over the remaining months of the agreement through November 2011.

Common Stock Options

On February 7, 2011, Clean Coal entered into an investor relations advisor agreement and granted the advisor 900,000 common stock options. The options are exercisable at $0.0264 per share, expire on February 7, 2016 and vest 75,000 options per month over one year. Clean Coal estimated the fair value of the options to be $20,647 using the Black-Scholes option pricing model. The significant assumptions used in the model included the following: the closing price of Clean Coal’s common stock on the date of grant of $0.026, no expected dividend yield, expected volatility of 180.34%, risk free interest rate of 1.28% and an expected term of 2.77 years. On June, 8, 2011, the investor relations agreement was amended to reflect a lesser number of services, with a corresponding 50% reduction in monthly fees, a one-time share payment, and the elimination of all previous stock option provisions. Due to the stock options being cancelled, there was no expense recorded for these options.