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"When it's raining Gold, Reach For a Bucket, Not a Thimble." -Warren Buffett, February 27, 2010
On Thursday, February 4, 2010, I sent out a Blog entitled "Stock Price/Business Opportunity Dis-Connect at Clean Coal Technologies, Inc. (CCTC.PK)." That day the CCTC stock closed at $.07 per share. Over the next six trading sessions the stock went down to $.04 per share. Today, the stock closed at $.147, double the price when I wrote the Blog. See below for a copy of that blog post.
Here are some further insights on this opportunity for you who are interested. On January 6, 2010 the CCTC shares closed at $1.20. The average daily volume was approximately 10,000 shares per day. There were approximately 1,600,000 shares of outstanding "free-trading" registered shares available owned by approximately 3,000 shareholders. On January 14, 2010, approximately 435,000,000 shares of existing "restricted" stock became eligible for "free-trading" status that ONE day! (The officers, directors, control persons, and affiliates have slightly different rules. This accounts for approximately 100,000,000 shares. There are approximately another 100,000,000 shares of people who are "close" to the company who understand what's happening, and will not be substantial sellers of the CCTC stock at current prices). From the January 6, 2010 closing price of $1.20, just 24 trading days later, on February 10, 2010, the CCTC stock hit its all-time low of $ .0370 per share. Keep in mind none of this stock action has anything to do with the underlying performance of the Company; this is strictly a "stock phenomenon." From January 14, 2010 to January 29, 2010 (11 trading days), there were 10,632,487 shares traded. In the month of February 2010 there were 272,151,291 shares traded (19 trading days), and so far in March, including today, there have been 55,287,601 shares traded (11 trading days). Therefore, from January 14, 2010 through March 15, 2010 (41 trading days), there have been 338,071,379 shares traded. Assuming that there were 150,000,000 shares cleared and processed by the Company, the stock transfer agent, and the selling broker/dealers, that means every share available has been sold twice to someone. Or, to say this in a different way, let us assume that there are 435,000,000 total shares outstanding; 200,000,000 are being held by officers, directors, control people, affiliates, and knowledgeable close investors; and from the balance of total stock held by everyone else; 150,000,000 out of 235,000,000 shares have gone through the process of delivering their shares to a broker/dealer for sale. I personally think this is a stretch!
I think the market-makers and some speculators recognized early on the opportunity of having 435,000,000 shares becoming eligible for "free-trading" status in one day on a stock then trading 10,000 average shares per day. (The "shorters" would analyse this by thinking, with an average volume of 10,000 shares per day, [Demand], and an immediate availability of 435,000,000 shares [Supply], this stock is going down!). Market makers have the legal right to sell shares short that they do not own. This is called "naked" short sales. It would be my educated guess that the company has a 40,000,000 to maybe as much as 60,000,000 over-hanging "short" position.
The next step is . . . how do the "shorters" cover themselves, and what is the direction of the stock. The "shorters" will "cover" when they are certain the stock is heading "UP." What happens if there is no stock for them to purchase? All of a sudden the "supply/demand" position is turned on its head. Instead of no Buyers (demand) looking at a 435,000,000 share supply, we now have maybe 40,000,000 to 60,000,000 short demand chasing no supply. As fast as the stock went from $1.20 per share to $ .04 per share, it is my opinion that the stock could go from $.14 per share (present), back to above a dollar. There could develop a "feeding frenzy" to buy the stock to stop the losses of the stock moving up.
Since early January until now, and continuing, the "company development" and the "stock sales" have been dis-connected. In my February 4, 2010 Blog, I explained some of the projects the company is working on, i .e., the Chinese Inner-Mongolian coal and gasification plant, the India (Global Ink) licensing agreement, and other foreign and domestic transactions that are and have been for some time in the works. All of these company developments are not being considered in the stock transactions of the last two months.
On March 31, 2010 (two weeks from now) the 2009 Annual Report (10-K) is due to be filed with the Securities and Exchange Commission (SEC). This report is the third 10-K for this company, and should be substantially better than the December 31, 2007, or the December 31, 2008 Annual reports. On May 15, 2010 (two months), the first quarter (10-Q) report for fiscal year ending December 31, 2010 will be due. The next quarterly report will be the second quarter, ending June 30, 2010, which will be due the SEC by August 15, 2010. All of these things take awhile for the "market" to hear about, consider, and digest. There has been a lot of talk that as the Company moves closer to positive cash flow, and over-all development, the Company would hire a full-time Chief Financial Officer (CFO), and a full-time Public Relations (PR) person. Hopefully, both of those hires will happen soon!
My prediction is . . . for Clean Coal Technologies, Inc. (CCTC) stock price is that it could get to over $1.00 per share by, or before, September 15, 2010.
How is it possible for CCTC to go from $.14 to $1.00 within six months? What happens from March 15, 2010 to September 15, 2010 are the following:
It is my personal opinion that the next six months will be interesting and exciting! At $.14 per share, it is my further opinion that Clean Coal Technologies, Inc. (CCTC.PK) is under-priced and its short-term and long-term prospects may very well make these shares the opportunity of a lifetime! As always, I must say that I am not, nor any of my companies, are not stock brokers, broker dealers, an accountant, lawyer, or investment advisor. In deciding if you want to speculate in the stock of Clean Coal Technologies, Inc., or any other securities, you need to consult with a professional investment advisor who knows you, your personal financial circumstances, your tolerance for risk, and if the investment is right for you. I am basing my opinions upon over 50 years of speculating in the stock market, and being in business for almost 50 years. My experience and background can be reviewed on my website at: http://www.PacificStatesCapitalCorp.com. Again, as always, these are my personal opinions, and . . . I could be wrong!
There is a rare opportunity happening now in the common stock of Clean Coal Technologies, Inc. (CCTC.PK). The price of the stock has no relationship with the business opportunities being created by the company. There is a total dis-connect and therein is the opportunity!
Clean Coal Technologies, Inc. (CCTC.PK) stock was selling in November 2008 for over $7.00 per share. The stock closed on January 11, 2010 at $1.10 per share. The stock closed today at $.07 per share on 470,569 shares of volume. The stock has traded approximately 12,210,592 shares in the last 13 trading sessions. So, what has happened, and is this company going broke, or what? Or, . . . is this an opportunity of a lifetime?
Clean Coal Technologies, Inc. (CCTC.PK) owns a patented technology that it believes will provide clean energy at low costs through the use of the world’s most abundant fossil fuel, coal. The company’s technology is designed to utilize controlled heat to extract and capture pollutants and moisture from low-rank coal, transforming it into a clean-burning, more energy-efficient fuel, prior to combustion. The proprietary coal cleaning process is designed to ensure that the carbon in coal maintains its structural integrity during the heating process while the volatile matter within the coal turns into a gaseous state and is removed from the coal. The process is useful in a variety of applications, including coal-fired power stations, chemical by-product extraction, and as a source fuel for coal to liquid technologies. Clean Coal Technologies, Inc.’s patent information is available at:
The company’s scientific partner in the commercialization of the company’s technology is Science Applications International Corporation (SAIC), and their wholly owned subsidiary, Benham Companies, LLC. SAIC is a $10.1 billion annual revenue company with 45,000 employees, which over 6,000 are engineers. The company has a contract that provides for the engineering design, procurement and construction of the initial plant in China and other countries. SAIC has experience doing business in almost every country in the world. For more information on SAIC, go to the company websites at:
Clean Coal Technologies, Inc. (CCTC.PK) was formed in 2007 by merging Riverside Technologies, Inc. (a publicly traded shell corporation), Clean Coal Systems, Inc. (operating company), and Saudi American Minerals, Inc. (the company with the clean coal technology). Mostly everyone who purchased stock for cash, or was given stock for services or goods, was told that the holding period on Section 144 shares was one year. It was always the plan to become public and get the stock trading. Everyone felt at all times that they were within one year from selling their shares and getting cash. The SEC ruled on February 15, 2008 that if any company went public by the way of merging into a publicly traded shell, the stock would stay “restricted” until the company filed a registration statement with the SEC and an additional one year went by. By the time the company met all of the rules of the SEC and the Sarbanes-Oxley Act of 2002, and filed a Form 10 with the SEC, it was January 14, 2009. Some shareholders by this time had held their shares for up to 12 years without being able to sell them in a broker/dealer transaction as “free-trading” shares. On January 14, 2010 most everyone’s stock became “free-trading.” It appears that there are approximately 3,000 shareholders who could possibly sell as much as 100,000,000 shares of the stock over a 75-day period (from January 15, 2010 to March 31, 2010). In the last 13 trading sessions, approximately 12,210,592 shares have been traded. There are some really big smart buyers in the wings, but they want to make sure they are buying the stock at the absolute bottom. At $.07 per share, they could theoretically buy the entire company for $30,000,000 (patents, joint ventures, contracts, and the sales of future technology licenses, and royalty payments).
On December 2, 2008 the company signed a 30-year joint venture agreement with the Sino-Mongolia International Railroad Systems, Co. Ltd. of the Inner Mongolia Autonomous Region, PRC. The Railroad company contributes all the capital for the joint venture and the company contributes its technology. The railroad has a 75% ownership stake, and the company a 25% ownership in the joint venture. The joint venture partner has a $6,000,000,000 line-of-credit for the project, and since the project has began, has spent $200,000,000. The joint venture is building an initial plant with an annual capacity of 1.5 million tons to supply clean coal for a newly constructed power station. Thereafter, production is estimated to be increased, over a 10 year period, to a total capacity of 80 million tons annually, the majority of which will be used as feed stock for coal-to-liquid production. Production is projected to commence by the summer of 2011. Phase II includes the construction of a gasification and liquefaction facility that will utilize the company’s technology and will have the capacity to liquefy 3.5 million tons of coal per year. It is projected that Phase II will be fully operational by December 2012. Clean Coal Technologies, Inc. will receive 2 ½% of the gross revenue from the sale of liquids from the coal gasification process. Phase III will increase the annual capacity of the gasification and liquefaction facility by 75 million tons – total annual capacity of the industrial park will be 80 million tons, which is the maximum annual capacity at the site given current transportation infrastructure. Phase III starts production in 2013 and is projected to be fully operational during 2018. Phase IV is to construct a second facility with the annual production capacity of one billion tons at the site of the coal mine mouth in Nomenhan of Hulun Buir. Overall, the Projected Net Income for this project, before any distributions to any partners is as follows: 2012- $5,100,000; 2013- $34,613,000; 2014- $166,321,000; 2015- $251,461,000; 2016- $339,928,000; 2017- $426,375,000; 2018- $443,709,000; and 2019- $452,239,000. Clean Coal Technologies, Inc. would generate cash flow equal to 25% of these figures plus 2 ½% of the gross revenue from the liquids part of the business.
In December 2009 the company announced a license agreement for the country of India to Ink Global, an Indian company. Unlike the above Mongolian joint venture transaction, the sale to the company in India is a sale of a license agreement for use of the technology and a royalty agreement on the coal processed through the plants. Clean Coal Technologies, Inc. will not have any capital at risk in the India ventures. Ink Global has already received from the government of India a $50,000,000 grant for the implementation of Clean Coal Technologies, Inc.’s technology in India. The transaction calls for Ink Global to build 100 - one million ton plants using the company’s technology over a 10-year period. Upon the construction of each plant Ink Global will pay for the license for that plant - $1,000,000. These should average 10 plants per year for 10 years. In addition to the license fee, Ink Global will pay $2.00 per ton for each ton of coal going through the plant. The plants will take about nine months to build, and the royalty will begin upon production of the coal going through the plant. Following is a rough budget for the 10- years. Notice, there are no cost-of-goods sold in this transaction, and no associated costs of receiving coal processing royalties.
| Item | 2010 | 2011 | 2012 | 2013 | 2014 |
| License | $10M | $10M | $10M | $10M | $10M |
| Royalty | - | - | $20M | $40M | $60M |
| Total | $10M | $10M | $30M | $50M | $70M |
| 2015 | 2016 | 2017 | 2018 | 2019 | 2020 |
| $10M | $10M | $10M | $10M | $10M | - |
| $80M | $100M | $120M | $140M | $160M | $180M |
| $90M | $110M | $130M | $150M | $170M | $180M |
In addition to the core technology, the company will purchase and/or license other technologies that are complementary to the existing technology. In January 2009, the company signed a Technology Option Agreement for a separation technology for carbon dioxide (CO2) as an alternative approach to “carbon capture and sequestration.” The company has hired SAIC to further evaluate the technology. The challenge of this particular technology is the cost of the energy required to make it work, and finding the solution to bringing the technology to market profitably.
The above presentation is based solely on two on-going projects in Mongolia and India. There are approximately another 192 countries that could benefit from the technology. For projects in the United States there are on-going discussions with wealthy investors, large coal burning utilities, railroads, and others to purchase license agreements and build plants. While it is usually a challenge to process a permit for anything to do with “carbon,” in the United States, it may actually be a positive to the governing class (federal and state) to have a clean coal burning plant from the point-of-view of cleaning up the environment, and as a “jobs program.”
While we are not broker/dealers (see the attached Disclosure), and we are not offering for sale any securities at this time, we feel that this opportunity is very rare buying opportunity. The company has made tremendous progress in developing and implementing its technology, and the stock today hit its all time low!
If you want to discuss this more, E-mail me at Wayne.Crumpley@gmail.com, or telephone me at (702)249-3000.
This is the way I see it, and these are my opinions . . . and I could be wrong!