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 $2,719,653 and $2,042,992 as of December 31, 2018 and 2017, 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 2018 has still not earned revenue, the obligation to Mr. Ponce de Leon of $1,496,589 is currently in default and the amount includes $269,875 in accrued interest. It is the Company’s intention to pay Mr. Ponce de Leon immediately upon receiving revenue. Nonconvertible Debt During the year ended December 31, 2018, the Company received $35,000 from the issuance of a related party note payable. The note is due on demand and does not accrue interest. As of December 31, 2018 and 2017, the Company had outstanding notes payable to former affiliates of the Company of $85,000 and $50,000, respectively. These notes payable of the Company are unsecured, bear no interest and are due on demand. During the year ended December 31, 2018, the Company received $1,600 from a related party advance. The advance is due on demand and does not accrue interest. As of December 31, 2018 and 2017, the Company had outstanding advances payable to an officer of the Company of $1,600 and $0, respectively. The advances payable are unsecured, bear no interest and are due on demand. During the year ended December 31, 2017, the Company borrowed $130,010 from officers and directors. The loans were unsecured, bore no interest and was due on demand. The Company repaid $48,090 of the loans. The remaining principal of $99,970 was converted into 1,000,000 shares of common stock during 2017, resulting in a loss on settlement of $27,430. Convertible Debt 2018 During the year ended December 31, 2018, the Company borrowed an aggregate of $2,284,800, net of beneficial conversion feature of $1,907,655, under convertible notes payable from a Company with an interest owned by a significant stockholder. As of December 31, 2018, the Company had outstanding short-term convertible notes payable of $4,660,381, net of unamortized discounts of $139,977 and outstanding long term convertible notes payable of $5,026,800, net of unamortized discounts of $3,154,012. The convertible notes payable mature between May 2019 and December 2021 and 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 years ended December 31, 2018 and 2017 was $1,506,170. During the year ended December 31, 2018, the holder of convertible debt elected to convert a total of $1,534,907 in principal into 19,186,333 shares of common stock, or $0.08 per share. 2017 During the year ended December 31, 2017, $907,100 of non-related party convertible debt was purchased by a significant shareholder of the Company. During the year ended December 31, 2017, the Company borrowed an aggregate of $2,836,680, net of original issue discounts and fees of $30,081, under convertible notes payable from a Company with an interest owned by a significant stockholder. Accrued cash structuring fees of $124,760 are associated with the borrowings. Additional discounts of $1,095,215 were recognized due to derivative liabilities and discounts of $1,170,918 due to beneficial conversion features. As of December 31, 2017, the Company had outstanding short term convertible notes payable of $4,551,227, net of unamortized discounts of $310,428 and outstanding long term convertible notes payable of $1,493,558, net of unamortized discounts of $2,582,075. The outstanding convertible notes of the Company are unsecured, bear interest between 6% and 12% per annum, mature between November 2018 and December 2020 and are convertible at fixed rates between $0.06 and $0.15 per share. All notes that were convertible during the year ended December 31, 2017 were accounted for as derivative liabilities until the final resolution of outstanding variable conversion debt instruments on June 30, 2017 (see Note 6). Aggregate amortization of the debt discounts on convertible debt for the year ended December 31, 2017 was $1,324,265. Eleven of the above referenced convertible notes payable are convertible at $0.06 per share, which was a discount to the market price on the date of issuance. As such, a total of $1,170,918 was recognized as the intrinsic value of a beneficial conversion feature and is being amortized to interest expense over the life of the respective convertible notes payable. During the year ended December 31, 2017, related party holders of convertible notes payable elected to convert a total of $1,661,100 in principal and $44,579 in accrued interest into a total of 25,200,512 shares of the Company’s common stock. Outstanding notes payable and convertible notes payable to related parties consisted of the following as of December 31, 2018 and 2017: December 31, Name 201 8 2017 Convertible Debt: Convertible notes payable, interest at 12%, convertible at $0.08 per share, unsecured, due May 25, 2019 $ 1,452,566 $ 2,987,473 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 27, 2020 4,804,800 2,520,000 Total 9,687,181 8,937,288 Less: short-term debt (4,520,404 ) (4,861,655 ) Total long-term debt 5,166,777 4,075,633 Less: Long-term unamortized discounts (3,293,989 ) (2,582,075 ) Net long-term debt $ 1,872,788 $ 1,493,588 Nonconvertible Debt: Notes payable, no interest, unsecured, due upon demand $ 86,600 $ 50,000 Total $ 86,600 $ 50,000 Principal payments on debt to related parties for each of the following five years is as follows: 2019 $ 4,746,981 2020 2,742,000 2021 2,284,800 2022 - 2023 - Thereafter - Total $ 9,773,781 Common Stock I ssued to R elated P arties During the year ended December 31, 2018, the Company issued a total of 5,792,829 common shares for compensation to two officers, fair value of $514,916 is recognized as expense during 2018. During the year ended December 31, 2018, the Company issued 100,000 common shares for compensation to a member of the board of directors, fair value of $8,000 is recognized as expense during 2018. During the year ended December 31, 2018, the Company issued an aggregate of 19,186,333 common shares to a related party convertible note holder for conversion of $1,534,907 in principal. During the year ended December 31, 2017, the Company issued a total of 8,000,000 common shares for the conversion of $1,000,000 of salary due to two officers. During the year ended December 31, 2017, the Company issued a total of 1,500,000 common shares for compensation to two officers, fair value of $194,700 is recognized as expense during 2017. During the year ended December 31, 2017, the Company issued a total of 1,000,000 common shares for the conversion of $99,970 of notes payable to an officer, the fair value of the shares is $127,390, resulting in a loss of $27,430 on settlement 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 the second quarter of 2019. Wyoming New Power is a related party because it is controlled by an entity that has a significant interest in Clean Coal Technologies, Inc. |