FORWARD-LOOKING STATEMENTS AND FACTORS THAT MAY AFFECT FUTURE RESULTS

This Annual Report on Form 10-K contains forward-looking statements (as referenced in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934) that involve risks and uncertainties, as well as assumptions that, if they do not materialize or prove correct, could cause our results to differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, but not limited to, statements concerning: our plans, strategies and objectives for future operations; new products or developments; future economic conditions, performance or outlook; the outcome of contingencies; expected cash flows or capital expenditures; our beliefs or expectations; activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future; and assumptions underlying any of the foregoing. Forward-looking statements may be identified by their use of forward-looking terminology, such as "believes," "expects," "may," "should," "would," "will," "intends," "plans," "estimates," "anticipates," "projects" and similar words or expressions. You should not place undue reliance on these forward-looking statements, which reflect our management's opinions only as of the date of the filing of this Annual Report on Form 10-K and are not guarantees of future performance or actual results.

Overview

Over the past decade, Clean Coal Technologies, Inc. has developed processes that address what we believe are the key technology priorities of the global coal industry. We currently have three processes in our intellectual property portfolio:

The original process, called Pristine, is designed to remove moisture and volatile matter, rendering a high-efficiency, cleaner thermal coal. The process has been tested successfully on bituminous and subbituminous coals, and lignite from various parts of the United States and from numerous countries around the world.

Our second process, called Pristine-M, is a low-cost coal dehydration technology. In tests, this process has succeeded in drying coal economically and stabilizing it using volatile matter released by the feed coal. Construction of our coal testing plant was completed in December 2015 and was successfully tested through April 2016 at AES Coal Power Utility in Oklahoma. Additional tests commenced and were completed in the fourth quarter of 2017. This test facility has been moved from AES to Wyoming where reassembly has commenced and testing of international coal is expected upon completion of the reassembly. Changes identified to the process by the University of Wyoming and our EPC contractors will be included in the reassembly and it is expected to provide a higher quality end product with a lower capital cost for a commercial unit. The reassembly is expected to be completed no later than Q2 2020.

Our third process, called Pristine-SA, is designed to eliminate 100% of the volatile matter in the feed coal and to achieve stable combustion by co-firing it with biomass or natural gas. The process is expected to produce a cleaner fuel that eliminates the need for emissions scrubbers and the corollary production of toxic coal ash. We anticipate that treated coal that is co-fired with other energy resources will burn as clean as natural gas.

Anticipated Benefits of the Technology:





   •    Reduction of undesired emissions and greenhouse gases through the removal
        of compounds that are not required for combustion in conventional
        boilers.




   •    Cost savings and environmental impact reduction. Our pre-combustion
        solution is expected to be significantly less expensive than
        post-combustion solutions such as emissions scrubbers. Not only are the
        latter prohibitively expensive, they produce coal ash containing the
        "scrubbed" compounds, which is dumped in toxic waste disposal sites where
        it may pose continuing environmental risk. Coal treated using our
        processes may eliminate the need for post-combustion emissions scrubbers
        and the resulting toxic ash. By beneficiating the coal it requires less
        coal to be consumed to achieve the same energy output. This will save on
        transportation and handling costs.




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   •    Potential use of compounds removed from treated coal. Volatile matter
        captured in the Pristine process is removed in the form of hydrocarbon
        liquids that we believe will be easily blended with crude oil or used as
        feedstock for various products. For example, sulfur, which can be removed
        using the Pristine process, is a basic feedstock for fertilizer. The
        harvesting of hydrocarbon liquids from abundant, cheaper coal is a
        potentially lucrative side benefit of our processes. All coal by-products
        including Rare Earth Minerals extraction will be tested in the
        second-generation facility.

Successful testing of the Pristine M process resulted in an increase in BTU of the processed coal and a reduction in moisture content making it less expensive to transport (as moisture has been removed) with the end product being a dust free stabilized enhanced coal which we believe will address the issue of coal dust pollution during transportation.





   •    Energy Independence. To the extent that volatile matter is removed from
        coal, coal's use as an energy resource is greatly improved, enabling
        coal-rich countries to move towards energy independence owing to coal's
        greater abundance. Extraction of by-products including Rare Earth
        Minerals is also expected to provide coal derivative product
        independence.




Development Status:

Pristine process. Pristine process successfully lab tested on small scale and through advanced computer modeling. As at February, 2020, various aspects of the Pristine process were successfully tested at our test facility at the AES coal Power plant in Oklahoma as part of the overall testing of Pristine M. The second-generation facility in Wyoming is expected to perform a more detailed testing of the Pristine process.

Pristine-M. Testing of the Pristine M process on Powder River Basin coal at the AES facility in Oklahoma was completed in December 2017. The Pristine M process was successfully tested and the process, engineering and science were independently proven. The test facility was moved from the AES location to Wyoming where reassembly commenced in Q4 2019 and testing of international coal is expected upon completion of reassembly. The reassembly is expected to be completed no later than Q2 2020. Over several months in 2018 and early 2019 the University of Wyoming independently validated the Pristine M process in their laboratory.

Pristine-SA process. Pristine SA process analysis is at a very early stage. Further research and development is expected using the test facility at its permanent location in Wyoming.





Business Outlook



   •    Wyoming New Power, a related party company, has agreed to sign a two
        million ton per annum license agreement to use Pristine M at a location
        in Wyoming. They have paid a non-refundable $100,000 deposit on the
        license agreement. The definitive license agreement is expected to be
        signed following the receipt of commercial design which will incorporate
        the suggested changes proposed by the University of Wyoming and our EPC
        contractor. Wyoming New Power is a Related Party because it is controlled
        by a party that also controls the entity, which is the major lender and
        significant stockholder of the Company.




   •    Jindal Steel & Power is expected to send though their coal for sampling
        immediately following the plants re-assembly. The bespoke commercial
        facility design is expected after the testing.

        In Q2, 2019 the Company signed a non binding MOU with Universitas
        Indonesia in a combined effort to assess the impact of our technology on
        Indonesian Coal both from a coal beneficiation perspective and also coal
        by-products.

        The second-generation test facility will have the capability of producing
        Char. There is local Wyoming demand for this product that the company
        expects to sell.




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   •    The Company entered into a partnership with the University of Wyoming
        with the sole focus of using our suite of technologies to increase the
        use of and value of Wyoming Powder River Basin coal. Primary focus is on
        utilizing our technology to extract valuable derivative products from
        coal. Changes to the process have been identified by the University and
        the company EPC engineers and will be incorporated in the reassembly of
        the facility in Wyoming. The University confirmed in Q2, 2019 that they
        had successfully validated the Pristine M process in their laboratory and
        as a result entered into an agreement with the Company. The agreement
        between the University and the Company is for the reassembly of the
        second generation test facility. The University will advance to the EPC
        contractor on a two to one basis up to $500,000 in 2019 and additional
        $500,000 in 2020. The company will need to first pay $1,000,000 per year
        for 2019 and 2020, in order for the University to advance their portion
        of the funds. As of the date of this filing the University has advanced a
        total of $411,640 directly to the manufacturer of the Rotary Kiln. An
        additional $500,000 will be paid to the manufacturer in 2020 by the
        University. These payments are part of the $500,000 grant that was
        awarded to the company in 2019.




   •    The Company has been engaged with AusTrade (The Australian Trade and
        Investment Commission) and through that relationship has partnered with
        three separate universities in Australia. Like the University of Wyoming
        these Universities have a focus on their local coal both from a
        beneficiation perspective and also extracting derivative by products from
        coal using our technology. The Company received full Australian patents
        in Q2, 2019 so the company plans to move forward with this relationship
        in Q2 2020 following the assembly of the second-generation test
        facility.




   •    The Company continues in discussions with the Minister for Coal in India
        and a number of the Energy governmental bodies in India. Coal samples are
        expected to be sent for testing once the Second Generation Test Facility
        is assembled which is expected in Q2, 2020.




   •    Meetings occurred in Q2, 2019 with the US DOE, DOD and Wyoming State
        Representatives to further our technology to benefit US coal. These
        discussions continue through February, 2020 in light of the recent coal
        mining bankruptcies in Wyoming.




Employees

As of December 31, 2019, we had two full-time executives. President and CEO Robin Eves, Chief Operations Officer and Aiden Neary, Chief Financial Officer have written employment agreements. Messrs. Eves and Neary received no compensation for their participation on the Board of Directors.

Factors Affecting Results of Operations

Our operating expenses include the following:





?    Consulting expenses, which consist primarily of amounts paid for technology
     development and design and engineering services;


?    General and administrative expenses, which consist primarily of salaries,
     commissions and related benefits paid to our employees, as well as office
     and travel expenses;


?    Research and development expenses, which consist primarily of equipment and
     materials used in the development and testing of our technology; and


?    Legal and professional expenses, which consist primarily of amounts paid for
     patent protections, audit, disclosure, and reporting services.




Results of Operations

The following information should be read in conjunction with the financial statements and notes appearing elsewhere in this Report. We have generated limited revenues from inception to date. We anticipate that we may not receive any significant revenues from operations until we begin to receive royalty revenues from our coal testing plant which we estimate will be approximately 12 months after the successful signing of a commercial agreement anticipated in quarter three of fiscal 2020 We are also in preliminary discussions with companies, business groups, consortiums in the USA and Asia to license our technology, which, if successful, could realize limited short-term revenue opportunities from the signing of technology licensing agreements.





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For the Years Ended December 31, 2019, and 2018.

We had no direct revenues for the years ended December 31, 2019 and 2018. In the fourth quarter of 2017 we received $100,000 as a non- refundable deposit on a two million ton license agreement from Wyoming New Power, a related party. The definitive license agreement is expected to be completed in 2020 following the assembly of the second generation test facility. In the year ended December 31, 2012, we have received an initial license fee of $375,000 from Jindal paid pursuant to the signing of our coal testing plant construction contract. The balance of $375,000 will be due upon the successful testing of Jindal coal in our second generation test facility in Wyoming. We do not anticipate any significant royalty fees for approximately 12-18 months thereafter.





Operating Expenses

Our operating expenses for the year ended December 31, 2019 totaled $2,061,978 compared to $2,745,129 for the prior year. The $683,151 decrease is mainly due to a $775,889 decrease in general and administrative expenses, $186,969 decrease in research and development expenses and $60,726 decrease in consulting services during 2019 as a result of winding down the administrative support and development of our Pristine M technology in late 2018 and early 2019. The decreases are partially offset by a $322,133 decrease in gains on forgiveness of accounts payable and a $18,300 decrease in gain on sale of assets.





Other Income and Expenses

Total other expenses for the year ended December 31, 2019 were $2,968,470, compared to $2,814,571 for the year ended December 31, 2018. Other expenses consists of $2,669,079 in interest expense on convertible debt and related amortization of debt discounts and $299,391 in debt standstill and settlement expenses related to convertible notes payable. During the year ended December 31, 2018, we recognized $2,814,571 in interest expense.





Net Income/Loss

For the year ended December 31, 2019, we recognized a net loss of $5,030,448, compared to a net loss of $5,559,700 for the year ended December 31, 2018. The net loss for 2019 is due to $2,968,470 in other expenses and $2,061,978 in operating expenses as discussed above. The net loss for 2018 is due to $2,814,571 in interest expense and operating expenses of $2,745,129 as discussed above.

We anticipate losses from operations will increase during the next twelve months due to anticipated increased payroll expenses as we add necessary staff and increases in legal and accounting expenses associated with maintaining a reporting company. We expect that we will continue to have net losses from operations for several years until revenues from operating facilities become sufficient to offset operating expenses, unless we are successful in the sale of licenses for our technology.

Liquidity and Capital Resources

We have generated minimal revenues since inception. We have obtained cash for operating expenses through advances and/or loans from affiliates and stockholders, the sale of common stock, the issuance of loans and convertible debentures converted or convertible to common stock and the receipt of $375,000 in license fees from Jindal as described above.

Net Cash Used in Operating Activities.

During the years ended December 31, 2019 and 2018, we used $1,605,781 and $2,775,728 in cash from operations, mainly due to the net losses discussed above, net of non-cash operating expenses of $1,921,582 and $1,769,793 in 2019 and 2018, respectively. Our primary uses of funds in operations were payments made to our consultants and employees, legal and professional costs as well as travel and office expenses.

Net Cash Provided By Investing Activities.

During the year ended December 31, 2018, we received $18,300 in proceeds from the sale of fixed assets. We had no cash flows from investing activities in 2019.





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Net Cash Provided by Financing Activities.

Net cash provided by financing activities during the years ended December 31, 2019 and 2018 totaled $1,672,318 and $2,771,400, respectively. We received $354,880 and $2,284,800 in cash from the issuance of convertible debt from related parties, $641,000 and $36,600 in cash from the issuance of notes payable to related parties and $1,432,000 and $482,500 in cash from the issuance of convertible notes payable during the years ended December 31, 2019 and 2018, respectively. We repaid $565,562 on convertible notes, $165,000 on notes payable to related parties and $25,000 on convertible notes payable to related parties in cash during the year ended December 31, 2019 and repaid $32,500 in cash on notes payable during the year ended December 31, 2018.

Cash Position and Outstanding Indebtedness.

Our total indebtedness at December 31, 2019 and 2018 was $19,020,248 and $14,703,444, respectively, which consists of $17,951,784 and $12,830,656 of current liabilities and $1,068,464 and $1,872,788 of long-term debt, respectively. Current liabilities consist primarily of accounts payable, accounts payable to related parties, short-term debt, related party convertible debt and accrued liabilities. At December 31, 2019, we had current assets of $131,501, consisting of $92,282 of cash and $39,219 of prepaid assets. At December 31, 2018 we had current assets of $25,745 of cash. Our working capital deficit at December 31, 2019 and 2018 was $17,840,050 and $12,804,911, respectively.





Employees

As of December 31, 2019, we have two full-time executives, President and CEO Robin Eves and Chief Operations Officer and Chief Financial Officer Aiden Neary, who have written employment agreements. Mr. Eves and Neary received no compensation for their participation on the Board of Directors.

On July 1, 2019, we entered into two year employment agreements with Robin Eves as President and Chief Executive Officer and Aiden Neary as Chief Operating Officer, Chief Financial Officer and director. Mr. Eves receives an annual salary of $519,750. Mr. Neary receives an annual salary of $450,000. Each officer was also granted 750,000 common shares upon signing the contract.

The terms of the agreements described above were negotiated by and between the individuals and our Board of Directors based on the qualifications and requirements of each individual and the needs of the company.

Contractual Obligations and Commitments

We secured a permanent location in Gillette, Wyoming for our test facility. The term of the lease is three years and calls for rent of $36,000, prepaid.

We lease office space in New York, NY on a month to month basis, at a monthly rate of $200 per month.

Our engineering consultants has tentatively estimated construction costs for each one million short ton coal complete cleaning facility of approximately $250 million (excluding land costs) or costs and for a similar size Pristine-M-only facility of approximately $30-35 million (excluding land costs). All intellectual property rights associated with new art developed by our engineering consultants remain our property.

We are also actively pursuing technology license and royalty agreements in order to begin construction of other facilities without incurring the capital costs associated with the construction of future plants.

In November 2015, we entered into a month to month agreement with South of the Rose communication to manage our Investor Relations needs and manage social media requirements.

Construction of the coal testing plant was completed in 2015 and testing commenced in December 2015 at the AES Coal Power Utility in Oklahoma. As of December 31, 2019, we have paid $10,135,128 in development costs. The facility was moved to Wyoming in the first quarter of 2019. We anticipate that there will be an additional cost of approximately $4 million to build the additional parts required for the second generation test facility and for its assembly.

Based on our current operational costs and including the capital requirements for our project deployments, we estimate we will need a total of approximately $6,000,000 to fund the Company for the fiscal year 2020 and an additional $4,000,000 to continue for the following fiscal year (2021) or until an initial commercial plant is up and running.





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Off-Balance Sheet Arrangements

We have not and do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of establishing off-balance sheet arrangements or other contractually narrow or limited purposes. Therefore, we do not believe we are exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.

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