NEWSTREAM ENERGY TECHNOLOGIES GROUP, INC. FORWARD-LOOKING STATEMENTS AND FACTORS THAT MAY AFFECT FUTURE RESULTS
This Quarterly Report on Form 10-Q contains forward-looking statements 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 Quarterly Report on Form 10-Q and are not guarantees of future performance or actual results
Overview
Over the past decade,
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
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
Our third process, called
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.
• 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.
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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 the United
States and other 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 November, 2020, various aspects of the
Pristine process were successfully tested at our test facility at the AES coal
Power plant in
Pristine-M. Testing of the Pristine M process on
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 inWyoming . 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 theUniversity of Wyoming and our EPC contractor.Wyoming New Power is aRelated 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 withUniversitas 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 localWyoming demand for this product that the company expects to sell. • The Company entered into a partnership with theUniversity of Wyoming with the sole focus of using our suite of technologies to increase the use of and value ofWyoming 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 inWyoming . 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. As of the date of this filing the University has advanced a total of approx.$1,300,000 directly to the manufacturer of theRotary Kiln. The kiln and all its relevant control panels was delivered to our site atGillette, Wyoming inJune 2020 . 13
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• 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
Q3, 2021 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
Q3, 2021 but subject to potential
delays due to the current
pandemic.
• 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 May 2021 in light of the
recent coal mining bankruptcies
in Wyoming .
Employees
As of
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
We had no direct revenues for the three months ended
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For the Three Months Ended
Revenues
We have generated no revenues for the three months ended
Operating Expenses
Our operating expenses for the three months ended
Other Income and Expenses
During the three months ended
Net Income/Loss
For the three months ended
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
Net cash used in operating activities was
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Net Cash Provided by Financing Activities. Net cash provided by financing
activities during the three months ended
Cash Position and Outstanding Indebtedness
At
At
Our working capital deficit at
Contractual Obligations and Commitments
We secured a permanent location in
We lease office space in
Our engineering consultants has tentatively estimated construction costs for
each one million short ton coal complete cleaning facility of approximately
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
Construction of the coal testing plant was completed in 2015 and testing
commenced in
Based on our current operational costs and including the capital requirements
for our project deployments, we estimate we will need a total of approximately
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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