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
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 inWyoming . The introduction of the Rotary Kiln and the higher temperatures it can achieve will enable a more accurate testing protocol for this process. 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 of WyomingPowder 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 . 12
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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 Q1, 2023
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
Q1, 2023 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
November 2022
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 nine 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
For the Nine months ended
Revenues
We have generated no revenues for the nine months ended
Operating Expenses
Our operating expenses for the nine months ended
Other Income and Expenses
During the nine months ended
Net Income/Loss
For the nine 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.
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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
Net Cash Provided by Financing Activities. Net cash provided by financing
activities during the nine 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.
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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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