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NOTE 7: EQUITY TRANSACTIONS
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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| Stockholders' Equity Note Disclosure [Text Block] |
NOTE
7: 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 $1,736,000. On August 5, 2011, Clean Coal
accelerated the vesting of 10,000,000 of the common shares.
The vesting of these shares was modified whereby the
10,000,000 shares were fully earned and issued on August 5,
2011. The remaining 4,000,000 common shares were earned on
January 31, 2012. Clean Coal fully expensed the fair value of
the award associated with the 10,000,000 shares that were
accelerated during 2011. A total of $14,273 and $622,296 was
recognized as share-based compensation under this award for
the years ended December 31, 2012 and 2011,
respectively.
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 vested 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 $276 and $75,724 was recognized as
share-based compensation under this award for the years ended
December 31, 2012 and 2011, respectively.
Including
the shares issued under the stock awards described above,
during the year ended December 31, 2011, Clean Coal issued an
aggregate of 36,510,000 common shares for services valued at
$1,380,912, issued 19,356,206 common shares for $1,250,400 of
third party and related party debt and accrued interest (see
Notes 4 and 5), issued 3,940,000 common shares in connection
with notes payable for which debt discounts of $68,231 were
recorded (see Note 5) and issued 2,000,000 common
shares as payment of $39,000 of interest expense (see Note
5).
Including
the shares issued under the stock awards described above,
during the year ended December 31, 2012, Clean Coal issued an
aggregate of 55,850,332 common shares for services valued at
$2,748,471, 3,160,000 common shares with debt valued at
$81,921 (see Note 5), 84,479,312 common shares for debt,
interest, and accrued liabilities valued at $3,002,188 which
resulted in a net gain on extinguishment of $140,666 during
the year ended December, 2012 (see Note 5), and issued
13,794,000 common shares valued at $691,700 for the
resolution of derivative liabilities (see Note 6).
On
December 5, 2012, Clean Coal entered into a stock purchase
agreement with Ventrillion Management Company Ltd relating to
the issuance and sale of up to 300 million common shares for
up to $15,000,000. On December 6, 2012, the Company closed
the first tranche of the investment and issued 100,000,000
common shares to Ventrillion for cash of $4,000,000. The
closing of the second and third tranches of the investment,
100,000,000 common shares for $5,000,000 and 100,000,000
common shares for $6,000,000, respectively, are set to be
within 6 months and 12 months of the agreement, respectively,
and are subject to certain conditions, including, with
respect to the second tranche of the investment, the receipt
of stockholders’ approval of a reverse split of the
common shares and completion of the Company’s pilot
plant and, with respect to the third tranche of the
investment, the commercialization of the Company’s
technology. Pursuant to the purchase agreement,
Ventrillion was issued an option to purchase 40,000,000
common shares at $0.00001 per share, which will become
exercisable if stockholder approval of the reverse split is
not obtained by the second closing date. Upon exercise of the
option, Ventrillion may elect to require the Company to seek
stockholder approval again to allow Ventrillion to acquire
the remaining 160,000,000 common shares under the purchase
agreement. If Ventrillion makes such election, the
Company will be prohibited, with certain exceptions, from
issuing equity securities for a period of 12 months from the
date of such notice, and after which, the Company may
terminate its obligation to issue and sell the remaining
160,000,000 common shares with no further liability.
Common
Stock Options
On
June 26, 2012, upon the increase to the Company’s
authorized common stock, the Company granted 10,000,000
common stock options to its Chief Executive Officer. The
options are exercisable at $0.03 per share, vest on August 1,
2012 and expire on August 1, 2018. The fair value of
these options was determined to be $453,933 using the
Black-Scholes Option Pricing Model. The significant
assumptions used in the model include (1) discount rate of
0.42%, (2) expected term of 3.0 years (3) expected volatility
of 179.12% and (4) zero expected dividends. The entire
$453,933 was expensed during the year ended December 31,
2012.
On
July 1, 2012, the Company entered into three year employment
agreements with its Chief Executive Officer and its Chief
Operating Officer. Each officer was granted 8,000,000
common shares and 16,000,000 common stock options. 8,000,000
of each officer’s options are exercisable at $0.20 per
share, vest on June 30, 2013 and expire June 30, 2018.
The remaining 8,000,000 of each officer’s options are
exercisable at $0.35 per share, vest on June 30, 2014 and
expire June 30, 2019. The fair value of these options was
determined to be $1,496,478 using the Black-Scholes Option
Pricing Model. The significant assumptions used in the model
include (1) discount rate of 0.72%, (2) expected terms
between 3.5 and 4.5 years (3) expected volatilities between
173.70% and 174.52% and (4) zero expected dividends. $559,493
was expensed during the year ended December 31, 2012 and
$936,985 will be expensed over the remaining vesting
periods.
On
October 1, 2012, the Company amended its retainer agreement
with its in-house counsel whereby the term was extended from
2 years to 4 years. In addition, the attorney was granted an
aggregate of 4,000,000 common stock options. 2,000,000 of the
options are exercisable at $0.20 per share, vest on July 1,
2013 and expire October 1, 2019. The remaining 2,000,000
options are exercisable at $0.35 per share, vest on July 1,
2014, and expire October 1, 2019. The fair value of these
options was determined to be $138,165 using the Black-Scholes
Option Pricing Model. The significant assumptions used in the
model include (1) discount rate of 0.72%, (2) expected terms
between 3.88 and 4.38 years (3) expected volatilities between
165.87% and 169.70% and (4) zero expected dividends. $33,023
was expensed during the year ended December 31, 2012 and
$105,142 will be expensed over the remaining vesting
periods.
There
was no stock option activity during 2011. The following table
presents the stock option activity during 2012:
The
weighted average remaining life of the outstanding options as
of December 31, 2012 was 6.41 years, the weighted average
grant date fair value of the options granted during the year
ended December 31, 2012 was $0.045 and the intrinsic value of
the exercisable options as of December 31, 2012 was
$170,000.
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