UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly
period ended
For the transition period from _______ to _______
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Securities registered pursuant to Section 12(b) of the Act:
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| N/A | N/A | N/A |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
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| ☒ | Smaller reporting company |
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As of May 15, 2025, there were shares of the issuer’s common stock issued and outstanding.
CLEAN VISION CORPORATION
FORM 10-Q
For the Quarterly Period Ended March 31, 2025
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
INDEX TO FINANCIAL STATEMENTS
| Consolidated Balance Sheets as of March 31, 2025 (unaudited) and December 31, 2024 | F-2 |
| Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2025, and 2024 (unaudited) | F-3 |
| Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the Three Ended March 31, 2025, and 2024 (unaudited) | F-4 |
| Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025, and 2024 (unaudited) | F-6 |
| Notes to the Consolidated Financial Statements (unaudited) | F-7 |
F-1
CLEAN VISION CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| March 31, 2025 | December 31, 2024 | |||||||
| ASSETS | (Unaudited) | (Audited) | ||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Restricted cash | ||||||||
| Prepaids and other assets | ||||||||
| Accounts receivable | ||||||||
| Loan receivable | ||||||||
| Right of use asset | ||||||||
| Trading securities | ||||||||
| Total Current Assets | ||||||||
| Property and equipment | ||||||||
| Goodwill | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
| Current Liabilities: | ||||||||
| Cash overdraft | $ | $ | ||||||
| Accounts payable | ||||||||
| Accrued compensation | ||||||||
| Accrued expenses | ||||||||
| Accrued interest – related party | ||||||||
| Convertible note payable, net discount of $ | ||||||||
| Derivative liability | ||||||||
| Settlement liability | ||||||||
| Loans payable | ||||||||
| Related party payables | ||||||||
| Loans payables – related parties | ||||||||
| Lease liabilities - current portion | ||||||||
| Liabilities of discontinued operations | ||||||||
| Total current liabilities | ||||||||
| Economic incentive (Note 12) | ||||||||
| Commercial loan, net of discount of $ | ||||||||
| Lease liabilities - net of current portion | ||||||||
| Total Liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders' Deficit: | ||||||||
| Preferred stock, $ par value, shares authorized; shares issued and outstanding | ||||||||
| Series A Preferred stock, $ par value, shares authorized; shares issued and outstanding | ||||||||
| Series B Preferred stock, $0.001 par value, 2,000,000 shares authorized; 0 and 2,000,000 shares issued and outstanding, respectively | ||||||||
| Series C Preferred stock, $ par value, shares authorized; shares issued and outstanding | ||||||||
| Common stock, $ par value, shares authorized, and shares issued and outstanding, respectively | ||||||||
| Common stock to be issued | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive loss | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Non-controlling interest | ||||||||
| Total stockholders' deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders' deficit | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
F-2
CLEAN VISION CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenue | $ | $ | ||||||
| Cost of revenue | ||||||||
| Gross margin | ||||||||
| Operating Expenses: | ||||||||
| Consulting | ||||||||
| Advertising and promotion | ||||||||
| Development expense | ||||||||
| Professional fees | ||||||||
| Payroll expense | ||||||||
| Director fees | ||||||||
| General and administration expenses | ||||||||
| Total operating expense | ||||||||
| Loss from Operations | ( | ) | ( | ) | ||||
| Other income (expense): | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Change in fair value of derivative | ( | ) | ||||||
| Loss on debt issuance | ( | ) | ||||||
| Loss on conversion of debt | ( | ) | ||||||
| Gain on extinguishment of debt | ||||||||
| Other income (expense), net | ( | ) | ||||||
| Penalty expense on convertible debt | ( | ) | ||||||
| Total other expense | ( | ) | ( | ) | ||||
| Net loss before provision for income tax | ( | ) | ( | ) | ||||
| Provision for income tax expense | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Net loss attributed to non-controlling interest | ||||||||
| Net loss attributed to Clean Vision Corporation | ( | ) | ( | ) | ||||
| Other comprehensive income (loss): | ||||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | ||
| Loss per share - basic and diluted | $ | ) | $ | ) | ||||
| Weighted average shares outstanding - basic and diluted | ||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
F-3
CLEAN VISION CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
For the Three Months Ended March 31, 2025 and 2024
(Unaudited)
| Series C Preferred Stock | Common Stock | Additional paid | Common Stock To be | Accumulated Other Comprehensive | Minority | Accumulated | Total Stockholders' | |||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | In Capital | Issued | Loss | Interest | Deficit | Deficit | |||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||
| Stock issued for services | — | ( | ) | |||||||||||||||||||||||||||||||||||||
| Stock issued for services – related parties | — | ( | ) | |||||||||||||||||||||||||||||||||||||
| Stock issued for debt commitments | — | ( | ) | |||||||||||||||||||||||||||||||||||||
| Stock issued for debt | — | ( | ) | |||||||||||||||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | )) | $ | ( | ) | ||||||||||||||||||||||||||
| Series C Preferred Stock | Common Stock | Additional paid | Common Stock To be | Accumulated Other Comprehensive | Minority | Accumulated | Total Stockholders' | |||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | In Capital | Issued | Loss | Interest | Deficit | Deficit | |||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||
| Stock issued for services | — | |||||||||||||||||||||||||||||||||||||||
| Stock issued for debt commitments | — | |||||||||||||||||||||||||||||||||||||||
| Stock issued for cash | — | |||||||||||||||||||||||||||||||||||||||
| Stock issued for warrant exercise | — | ( | ) | |||||||||||||||||||||||||||||||||||||
| Debt issuance cost – warrants issued | — | — | ||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
F-4
CLEAN VISION CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used by operating activities: | ||||||||
| Stock issued for services | ||||||||
| Debt discount amortization | ||||||||
| Loss on issuance of debt | ||||||||
| Change in fair value of derivative | ( | ) | ||||||
| Loss on conversion of debt | ||||||||
| Gain on extinguishment of debt | ( | ) | ||||||
| Gain on settlement liability | ( | ) | ||||||
| Penalty expense on convertible debt | ||||||||
| Operating lease expense | ||||||||
| Depreciation expense | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaids and other assets | ( | ) | ( | ) | ||||
| Accounts receivable | ||||||||
| Accounts payable | ||||||||
| Accruals | ||||||||
| Related-party payables - short-term | ||||||||
| Accrued interest – relate party | ||||||||
| Accrued compensation | ||||||||
| Net cash used by operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Trading securities | ( | ) | ||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Net cash used by investing activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Cash overdraft | ||||||||
| Proceeds from convertible notes payable | ||||||||
| Payments-convertible notes payable | ( | ) | ||||||
| Proceeds from the sale of common stock | ||||||||
| Proceeds from notes payable - related party | ||||||||
| Proceeds from notes payable | ||||||||
| Proceeds from commercial loan | ||||||||
| Net cash provided by financing activities | ||||||||
| Net change in cash | ( | ) | ||||||
| Effects of currency translation | ( | ) | ( | ) | ||||
| Cash at beginning of period | ||||||||
| Cash at end of period | $ | |||||||
| Supplemental schedule of cash flow information: | ||||||||
| Interest paid | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| Supplemental non-cash disclosure: | ||||||||
| Common stock issued for conversion of debt | $ | $ | ||||||
| Warrants issued with notes payable | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
F-5
CLEAN VISION CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
March 31, 2025
(Unaudited)
NOTE 1 — ORGANIZATION AND NATURE OF BUSINESS
Clean Vision Corporation (“Clean Vision,” “we,” “us,” or the “Company”) is a new entrant in the clean energy and waste-to-energy industries focused on clean technology and sustainability opportunities. Currently, we are focused on providing a solution to the plastic and tire waste problem by recycling the waste and converting it into saleable byproducts, such as hydrogen and other clean-burning fuels that can be used to generate clean energy. Using a technology known as pyrolysis, which heats the feedstock (i.e., plastic) at high temperatures in the absence of oxygen so that the material does not burn, we are able to turn the feedstock into (i) low sulfur fuel, (ii) clean hydrogen and (iii) carbon black or char (char is created when plastic is used as feedstock). Our goal is to generate revenue from three sources: (i) service revenue from the recycling services we provide (ii) revenue generated from the sale of the byproducts; and (iii) revenue generated from the sale of fuel cell equipment. Our mission is to aid in solving the problem of cost-effectively upcycling the vast amount of waste plastic generated on land before it flows into the world’s oceans.
All operations are currently being conducted through Clean-Seas, Inc. (“Clean-Seas”), our wholly-owned subsidiary. Clean-Seas acquired its first pyrolysis unit in November 2021 for use in a pilot project in India, which began operations in early May 2022. On April 23, 2023, Clean-Seas completed its acquisition of a fifty-one percent (51%) interest in Ecosynergie S.A.R.L., a limited liability company organized under the laws of Morocco (“Ecosynergie” or “Clean-Seas Morocco”). Clean-Seas Morocco began operations at its pyrolysis facility in Agadir, Morocco in April 2023, which currently has capacity to convert 20 tons per day (“TPD”) of waste plastic through pyrolysis.
We believe that our current projects will showcase our ability to convert waste plastic (using pyrolysis), to generate three byproducts: (i) low sulfur fuel, (ii) clean hydrogen (specifically, the Company’s branded clean hydrogen, AquaH®, which trademark was issued by the USPTO on November 8, 2023 and published on November 28, 2023our branded), and (iii) char. We intend to sell the majority of these byproducts, while retaining a small amount of the low sulfur fuels and/or hydrogen to power our facilities and equipment. To date, our operations in India have not generated any revenue.
Clean-Seas India Private Limited was incorporated on November 17, 2021, as a wholly owned subsidiary of Clean-Seas.
Clean-Seas, Abu Dhabi PVT. LTD was incorporated in Abu Dhabi on December 9, 2021 as a wholly owned subsidiary of the Company. On January 19, 2022, the Company changed the name of its wholly owned subsidiary, Clean-Seas, Abu Dhabi PVT. LTD, to Clean-Seas Group; however, as of July 4, 2022, the Clean-Seas Group had ceased operations.
Endless Energy, Inc. (“Endless Energy”) was incorporated in Nevada on December 10, 2021, as a wholly owned subsidiary of the Company, for the purpose of investing in wind and solar energy projects but does not currently have any operations.
EcoCell, Inc. ("EcoCell”) was incorporated on March 4, 2022, as a wholly owned subsidiary of the Company. EcoCell does not currently have any operations, but we intend to use EcoCell for the purpose of licensing fuel cell patented technology in the future.
Clean-Seas Arizona, Inc. (“Clean-Seas Arizona”) was incorporated in Arizona on September 19, 2022, as a wholly owned subsidiary of Clean-Seas. Pursuant to that certain Memorandum of Understanding signed on November 4, 2022, Arizona State University (ASU) and the Rob and Melani Walton Sustainability Solution Services (WS3), the parties intend for Clean-Seas Arizona to establish a plastic feedstock to clean hydrogen conversion facility to be located in Phoenix, Arizona. In furtherance of these goals, and pursuant to a Services Agreement (the “Arizona Services Agreement”) signed on June 12, 2023 with ASU and WS3, this facility is currently intended to source and convert plastic feedstock from the Phoenix area and import plastic from California. Pursuant to the Arizona Services Agreement, the Arizona facility is expected to begin processing plastic feedstock in Q4 2025 at 100 TPD and scale up to a maximum of 500 TPD at full capacity. Additionally, we are exploring plans for this facility to be powered by renewable energy, which, if successful, would become the first completely off grid pyrolysis conversion facility in the world.
Clean-Seas West Virginia, Inc. (“Clean-Seas West Virginia”), formed on April 1, 2023, is our first PCN facility slated for the United States and is currently expected to be operational in the third quarter of 2025. This facility is located in the city of Belle, outside of Charleston, the capital of West Virginia, and is expected to begin operations converting 50 TPD of plastic feedstock. The Company expects to expand to greater than 500 TPD within three years of beginning operations. Clean-Seas has engaged MacVallee, LLC (“MacVallee”) to secure mixed plastic feedstock from material recovery facilities and industrial suppliers.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Company’s unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company as of and for the three month period ending March 31, 2025 and not necessarily indicative of the results to be expected for the full year ending December 31, 2025. These unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes included in the Company’s financial statements for the year ended December 31, 2024.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Concentrations of Credit Risk
We maintain our cash
in bank deposit accounts, the balances of which at times may exceed federally insured limits. We continually monitor our banking relationships
and consequently have not experienced any losses in our accounts. At times, such deposits may be in excess of the Federal Deposit Insurance
Corporation insurable amount (“FDIC”). As of March 31, 2025, the Company had cash in excess of the FDIC’s $
Cash Equivalents
The Company considers
all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. There were
Restricted Cash
As of March 31, 2025
and December 31, 2024, the Company has $
Principles of Consolidation
The accompanying unaudited consolidated financial statements for the period ended March 31, 2025, include the accounts of the Company and its wholly owned subsidiaries, Clean-Seas, Clean-Seas India Private Limited, Clean-Seas Group, Endless Energy, Inc., EcoCell, Inc., Clean-Seas Arizona, Inc., Clean-Seas West Virginia, and our 51% owned subsidiary, Clean-Seas Morocco, LLC. As of March 31, 2025, there was no activity in Clean-Seas Group, Endless Energy or Clean-Seas Arizona. All intercompany transactions are eliminated in consolidation.
F-6
Translation Adjustment
The accounts of the Company’s subsidiary, Clean-Seas India, are maintained in Rupees and the accounts of Clean-Seas Morocco in Moroccan dirham. In accordance with ASC 830-30 – Foreign Currency Matters, all assets and liabilities were translated at the current exchange rate at respective balance sheets dates, members’ capital are translated at the historical rates and income statement items are translated at the average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income in accordance with the Comprehensive Income Topic of the Codification (ASC 220), as a component of members’ capital. Transaction gains and losses are reflected in the income statement.
Comprehensive Income
The Company uses SFAS 130 “Reporting Comprehensive Income” (ASC Topic 220). Comprehensive income is comprised of net loss and all changes to the consolidated statements of stockholders’ equity, except changes in paid-in capital and distributions to shareholders. Comprehensive loss is inclusive of net loss and foreign currency translation adjustments.
Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period presented. As of March 31, 2025 and 2024, the Company’s diluted loss per share is the same as the basic loss per share, as the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.
| March 31, 2025 | March 31, 2024 | ||||||
| Common shares | |||||||
| Net loss | $ | ( |
$ | ( |
) | ||
| Basic and diluted loss per share | $ | ( |
) | $ | ( |
) | |
| Shares from convertible debt | |||||||
| Shares from warrants | |||||||
| Series B preferred stock | |||||||
| Series C preferred stock | |||||||
| Total Diluted Shares | |||||||
Stock-Based Compensation
The Company accounts for stock-based compensation using the provisions of ASC Topic 718, Stock Compensation, which requires the recognition of the fair value of stock-based compensation. Stock-based compensation is estimated at the grant date based on the fair value of the awards. The Company accounts for forfeitures of grants as they occur. Compensation cost for awards is recognized using the straight-line method over the vesting period. Stock-based compensation is included in officer compensation, general and administrative and consulting expense, as applicable, in the consolidated statements of operations and comprehensive loss.
Goodwill
The Company accounts for business combinations under the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations, where the total purchase price is allocated to the tangible and identified intangible assets acquired and liabilities assumed based on their estimated fair values. The purchase price is allocated using the information currently available, and may be adjusted, up to one year from acquisition date, after obtaining more information regarding, among other things, asset valuations, liabilities assumed and revisions to preliminary estimates. The purchase price in excess of the fair value of the tangible and identified intangible assets acquired less liabilities assumed is recognized as goodwill.
In accordance with ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, the Company will test for indefinite-lived intangibles and goodwill impairment in the fourth quarter of each year and whenever events or circumstances indicate that the carrying amount of the asset exceeds its fair value and may not be recoverable.
Derivative Financial Instruments
The Company evaluates its convertible notes to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a weighted-average Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.
Fair Value of Financial Instruments
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification(“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP) and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3: Pricing inputs that are generally unobservable inputs and not corroborated by market data.
The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate their fair value because of the short maturity of those instruments. The Company’s notes payable represents the fair value of such instruments as the notes bear interest rates that are consistent with current market rates.
The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of:
March 31, 2025
| Description | Level 1 | Level 2 | Level 3 | |||||||||||
| Derivative | $ | $ | $ | |||||||||||
| Total | $ | $ | $ | |||||||||||
F-7
December 31, 2024
| Description | Level 1 | Level 2 | Level 3 | |||||||||||
| Derivative | $ | $ | $ | |||||||||||
| Total | $ | $ | $ | |||||||||||
Revenue Recognition
The Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers” (“ASC 606”). The Company determines revenue recognition under ASC 606 through the following steps:
| ● | Identification of a contract with a customer; | |
| ● | Identification of the performance obligations in the contract; |
| ● | Determination of the transaction price; | |
| ● | Allocation of the transaction price to the performance obligations in the contract; and | |
| ● | Recognition of revenue when or as the performance obligations are satisfied. |
Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Shipping and handling activities associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment activity and recognized as revenue at the point in time at which control of the goods transfers to the customer. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less.
Our business model is focused on generating revenue from the following sources:
(i) Service revenue from the recycling services we provide. We plan to establish plastic feedstock agreements with a number of feedstock suppliers for the delivery of plastic to our facilities. Much of this plastic is currently a cost center for such feedstock suppliers, who pay "tipping fees" to landfills or incinerators. We will accept this plastic feedstock at reduced price or for no tipping fees. In some cases, feedstock suppliers will also share in revenue on products produced from their feedstock. This revenue will be realized and recognized upon receipt of feedstock at one of our facilities.
(ii) Revenue generated from the sale of commodities. We will produce commodities including, but not limited to, pyrolysis oil, fuel oil, lubricants, synthetic gas, hydrogen, and carbon char. We are in negotiation with chemical and oil companies for purchasing, or off-taking, fuels and oils we produce, and exploring applications for carbon char. This revenue will be recognized upon shipment of products from one of our facilities and in some cases off-takers may pre-pay for a contractual obligation to buy our commodities.
(iii) Revenue generated from the sale of environmental credits. Our products are eligible for numerous environmental credits, including but not limited to carbon credits, plastic credits, and biodiversity credits. These credits may be monetized directly on the relevant markets or may be realized as value-add to off-takers, who will pay a premium for eligible products. Revenue from these credits will be recognized upon sale of applicable environmental credits on recognized markets, and/or upon sale of commodities to off-takers when that off-take includes an environmental credit premium.
(iv) Revenue generated from royalties and/or the sale of equipment. We expect to develop or acquire intellectual property which could generate revenue through royalties and/or sales of manufactured equipment. Revenue may be recognized upon the terms of a contracted sale agreement.
F-8
For the period ended
March 31, 2025, our operations in Morocco had generated approximately $
For the period ended
March 31, 2024, our operations in Morocco had generated approximately $
Trade Accounts Receivable
Trade accounts receivable
are amounts due from customers under normal trade terms. After assessing the creditworthiness of our customers and considering our historical
experience, anticipated future operations, and prevailing economic conditions, we have determined that the application of the current
expected credit loss (CECL) methodology would be immaterial to our financial statements. Consequently, no allowance for credit losses
has been recorded as of the year-end. The absence of a recorded allowance for credit losses reflects our judgment that potential credit
losses on outstanding receivables are negligible. As of March 31, 2025, approximately
Inventory
Inventory consists
of plastic bottles that are acquired at no cost to us and are held for use in our pyrolysis process, which converts these materials
into pyrolysis oil, carbon char, and other commodities. In accordance with U.S. Generally Accepted Accounting Principles (GAAP), these
bottles are recorded at the lower of cost or market. Since the acquisition cost of the bottles is zero, and there is no significant alternative
market value attributable to these materials before conversion, the carrying value of this inventory is recorded at $
The absence of a recorded cost for the plastic bottles does not reflect their importance to our production process or potential value of the end products. This accounting treatment is specific to the characteristics of the materials used and does not imply any underlying concerns about the viability or value of the final products produced through our pyrolysis process.
Leases
The Company determines whether an arrangement contains a lease at the inception of the arrangement. If a lease is determined to exist, the term of such lease is assessed based on the date on which the underlying asset is made available for the Company’s use by the lessor. The Company’s assessment of the lease term reflects the non-cancelable term of the lease, inclusive of any rent-free periods and/or periods covered by early-termination options which the Company is reasonably certain of not exercising, as well as periods covered by renewal options which the Company is reasonably certain of exercising. The Company also determines lease classification as either operating or finance at lease commencement, which governs the pattern of expense recognition and the presentation reflected in the consolidated statements of operations over the lease term.
For leases with a term exceeding 12 months, an operating lease liability is recorded on the Company’s consolidated balance sheet at lease commencement reflecting the present value of its fixed minimum payment obligations over the lease term. A corresponding operating lease right-of-use asset equal to the initial lease liability is also recorded, adjusted for any prepaid rent and/or initial direct costs incurred in connection with execution of the lease and reduced by any lease incentives received. For purposes of measuring the present value of its fixed payment obligations for a given lease, the Company uses its incremental borrowing rate, determined based on information available at lease commencement, as rates implicit in its leasing arrangements are typically not readily determinable. The Company’s incremental borrowing rate reflects the rate it would pay to borrow on a secured basis and incorporates the term and economic environment of the associated lease.
For the Company’s operating leases, fixed lease payments are recognized as lease expense on a straight-line basis over the lease term. For leases with a term of 12 months or less, lease payments are recognized as paid and are not recognized on the Company’s consolidated balance sheet as an accounting policy election.
F-9
Operating Segments
Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”), or decision maker group, in deciding how to allocate resources to an individual segment and in assessing performance. Our chief operating decision–making group is composed of the Chief Executive Officer. The Company has one operating segment generating revenue as of March 31, 2025 and 2024.
Recently Issued Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures, which requires disclosure of incremental segment information on an annual and interim basis, primarily disclosure of significant segment expense categories and amounts for each reportable segment. The new standard is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-07 in the annual financial statements for the year ended December 31, 2024, and for interim periods beginning in 2025. The Company adopted this ASU, effective for the year ended December 31, 2024. The adoption had no impact on the Company’s financial statements.
The Company has implemented all new applicable accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
NOTE 3 — GOING CONCERN
The accompanying
unaudited consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business. The Company has not yet established a source of revenue sufficient
to cover its operating costs, had an accumulated deficit of $
Management plans to continue to implement its business plan and to fund operations by raising additional capital through the issuance of debt and equity securities. The Company’s existence is dependent upon management's ability to implement its business plan and/or obtain additional funding. There can be no assurance that the Company’s financing efforts will result in profitable operations or the resolution of the Company's liquidity problems. Even if the Company is able to obtain additional financing, it may include undue restrictions on our operations in the case of debt or cause substantial dilution for our stockholders in the case of equity financing.
NOTE 4 — PROPERTY & EQUIPMENT
Property and equipment
are recorded at cost. The Company capitalizes purchases of property and equipment over $
Long lived assets, including property and equipment, to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Impairment losses are recognized if expected future cash flows of the related assets are less than their carrying values. Measurement of an impairment loss is based on the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.
F-10
Maintenance and repair expenses, as incurred, are charged to expense. Betterments and renewals are capitalized in plant and equipment accounts. Cost and accumulated depreciation applicable to items replaced or retired are eliminated from the related accounts with any gain or loss on the disposition included as income.
Clean-Seas has purchased a pyrolysis unit for piloting and demonstration purposes which has been commissioned in Hyderabad, India as of May 2022. The unit will be used to showcase the Company’s technology and services, turning waste plastic into environmentally friendly commodities, to potential customers.
Property, plant,
and equipment at our Clean-Seas Morocco facility comprise equipment, buildings and fixtures, automobiles, furniture, and land. Upon acquisition,
buildings and land were recorded at their estimated fair value, determined through a valuation conducted in 2018. Subsequently, these
assets have been adjusted annually to reflect an approximate 5% increase in fair value, consistent with local real estate market trends.
Depreciation for equipment, buildings, automobiles, and furniture is computed using the straight-line method over estimated useful lives
of
Property and equipment stated at cost, less accumulated depreciation consisted of the following:
| March 31, 2025 | December 31, 2024 | |||||||
| Pyrolysis unit | $ | $ | ||||||
| Equipment | ||||||||
| Buildings and fixtures | ||||||||
| Land | ||||||||
| Office furniture | ||||||||
| Leasehold improvements | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | $ | ||||||
Depreciation expense
For
the three months ended March 31, 2025 and 2024, depreciation expense was $
NOTE 5 — LOANS PAYABLE
Effective January
1, 2025, the Company acquired a financing loan for its Director and Officer Insurance for $
West Virginia State Incentive Package
On June 12, 2023,
Clean-Seas announced that it secured $
NOTE 6 — CONVERTIBLE NOTES PAYABLE
Walleye Opportunities Master Fund Ltd
February 2023 Convertible Notes - Walleye Opportunities Master Fund Ltd
On February 21, 2023,
the Company entered into a securities purchase agreement (the “February Purchase Agreement”) with Walleye Opportunities Master
Fund Ltd (“Walleye”). Pursuant to the February Purchase Agreement, the Company issued senior convertible notes in the aggregate
principal amount of $
On February 21, 2023,
the Walleye, under the February Purchase Agreement purchased a senior convertible promissory note (the “February Note”) in
the original principal amount of $
The terms of the
February Note were amended pursuant to the March 2024 Note (discussed below).
April 2023 Convertible Note - Walleye Opportunities Master Fund Ltd
Pursuant to the February
Purchase Agreement, on April 10, 2023, Walleye purchased a senior convertible promissory note (the “April Note”) in the original
principal amount of $
May 2023 Convertible Note - Walleye Opportunities Master Fund Ltd
On May 26, 2023,
the Company entered into that certain Securities Purchase Agreement (the “May Purchase Agreement”) with Walleye, pursuant
to which Walleye purchased a senior convertible promissory note in the aggregate original principal amount of $
The May Note matures
12 months after issuance and bears interest at a rate of
This May Note is
currently in default and has incurred a $
March 2024 Financing Walleye Opportunities Master Fund Ltd.
On March 25, 2024
(the “Issue Date”), the Company and Walleye entered into a Securities Purchase Agreement (the “March Purchase Agreement”),
whereby: (i) the Company issued to Walleye (i) a convertible note in the aggregate principal amount of $
March 2024 Note
At any time on or
after the Issue Date, the March Investor shall be entitled to convert any portion of the outstanding Conversion Amount (as defined in
the March 2024 Note) into validly issued, fully paid and non-assessable shares of Common Stock at a conversion price equal to $
This note is currently
in default and has incurred a $
Coventry Enterprises, LLC
June 2024 Note - Coventry Enterprises, LLC
On June 14, 2024,
the Company issued a convertible promissory note to Coventry Enterprises, LLC in the aggregate principal amount of $
GS Capital Partners
October 2023 Note - GS Capital Partners
On October 26, 2023,
the Company entered into a Securities Purchase Agreement (the “October Purchase Agreement”)
with GS Capital Partners (the “GS Capital”)
related to the Company’s sale of two 12% convertible notes in the aggregate principal amount of $
On the First Closing Date, the Company issued restricted shares of Common Stock to GS Capital as additional consideration for the purchase of the First Note (the “First Note Commitment Shares”). In addition to the Commitment Shares, the Company agreed to issue shares of Common Stock to GS Capital (the “Returnable Shares”) for each Note.
October 2024 Note - GS Capital Partners
On October 2, 2024,
the Company issued a convertible promissory note to GS Capital in the aggregate principal
amount of $82,500 (which includes $
ClearThink Capital Partners
February 2024 Note
On February 12, 2024,
the Company entered into a Securities Purchase Agreement with ClearThink Capital LLC (“ClearThink”). The ClearThink Note
contains a principal amount of $
May 2024 Note
On May 24, 2024,
the Company issued a convertible promissory note to ClearThink in the aggregate principal amount of $
October 2024 Note
On October 2, 2024,
the Company issued a convertible promissory note to ClearThink in the aggregate principal amount of $
Trillium Partners LP
February 2024 Note Trillium Financing
On February 15, 2024,
the Company entered into a Securities Purchase Agreement (the “Trillium Agreement”) with Trillium Partners L.P. (“Trillium”),
whereby the Company issued and sold to Trillium (i) a promissory note (the “Trillium Note”) in the aggregate principal amount
of $
Pursuant to the Trillium
Note, beginning on the fifth month anniversary of the Issuance Date, and for the next six months after, the Company will make a total
of seven (7) equal monthly payments of $
This
note is currently in default and has incurred a $
F-11
The Company accounted for the above Convertible Notes according to ASC 815. For the derivative financial instruments that are accounted for as liabilities, the derivative liability was initially recorded at its fair value and is being re-valued at each reporting date, with changes in the fair value reported in the statements of operations.
For the warrants that were issued with each tranche of funding, the Company uses a weighted-average Black-Scholes-Merton option pricing model to value the warrants at inception and then calculates the relative fair value for each loan.
Commitment shares are valued at the closing stock price on the effective date of the promissory note. The value of the shares is accounted for as debt discount.
The Company deducts the total value of all discounts (OID, value of warrants, discount for derivative) from the calculated derivative liability with any difference accounted for as a loss on debt issuance.
The following table summarizes the convertible notes outstanding as of March 31, 2025:
| Note Holder | Date | Maturity Date | Interest | Default Interest | Balance December 31, 2024 |
Additions | Repayments / Conversions | Balance March 31, 2025 |
||||||||||||||||
| Walleye Opportunities Fund | |
— | — | |||||||||||||||||||||
| Walleye Opportunities Fund | — | — | ||||||||||||||||||||||
| Walleye Opportunities Fund | — | — | ||||||||||||||||||||||
| GS Capital Partners | — | — | ||||||||||||||||||||||
| Trillium Partners LP | — | — | ||||||||||||||||||||||
| Walleye Opportunities Fund | — | — | ||||||||||||||||||||||
| ClearThink Capital Partners | ( |
(1) | ||||||||||||||||||||||
| Coventry Enterprises, LLC | — | ( |
(2) | — | ||||||||||||||||||||
| GS Capital Partners | — | — | ||||||||||||||||||||||
| ClearThink Capital Partners | — | — | ||||||||||||||||||||||
| Total | $ | $ | $ | ( |
$ | |||||||||||||||||||
| Less debt discount | $ | ( |
( |
|||||||||||||||||||||
| Convertible notes payable, net | $ | $ | ||||||||||||||||||||||
| (1) | |
| (2) |
F-12
Total interest accrued
on the above convertible notes was $
A summary of the activity of the derivative liability for the notes above is as follows:
| Balance at December 31, 2023 | $ | |||
| Increase to derivative due to new issuances and/or modification of conversion terms | ||||
| Decrease to derivative due to mark to market | ( | ) | ||
| Balance at December 31, 2024 | ||||
| Decrease to derivative due to conversions | ( | ) | ||
| Decrease to derivative due to mark to market | ||||
| Balance at March 31, 2025 | $ |
NOTE 7 — COMMERCIAL LOAN
On November
13, 2024 (the “Closing Date”), Company’s wholly-owned subsidiary, Clean-Seas West Virginia, Inc. (the “Clean-Seas
WV”), closed on the transactions set forth in that certain Credit Agreement (the “Credit Agreement”) between Clean-Seas
West Virginia and The Huntington National Bank, a national banking association (the “Lender”). Pursuant to the Credit
Agreement, the Lender agreed to make a term loan (the “Term Loan”) to Clean-Seas West Virginia in the amount of $
Pursuant
to the Credit Agreement, the proceeds of the Term Loan will be funded to Clean-Seas West Virginia in two extensions (each, a “Credit
Extension”) as follows:
The Term
Loan is evidenced by a promissory note (the “Term Note”) executed by Clean-Seas West Virginia in favor of the Lender
with interest due and payable on the 15th calendar day of each month while any amount remains outstanding and the principal
amount to be repaid in full on the maturity date of
The credit
extension of $
The initial
credit extension of $
NOTE 8 — RELATED PARTY TRANSACTIONS
Daniel Bates, CEO
On February 21, 2021, the Company amended the employment agreement with Daniel Bates, CEO. The amendment extended the term of his agreement from three years commencing May 27, 2020, to expire on May 27, 2025.
As of March
31, 2025 and December 31, 2024, the Company owed Mr. Bates $
F-13
Rachel Boulds, CFO
Daniel Harris, Chief Revenue Officer
As of March
31, 2025 and December 31, 2024, the Company owed Mr. Harris, $
Michael Dorsey, Director
During the
three months ended March 31, 2025 and 2024, the Company paid Mr. Dorsey, $
Greg Boehmer, Director
During the
three months ended March 31, 2025 and 2024, the Company paid Mr. Boehmer, $
Bart Fisher, Director
During the
three months ended March 31, 2025 and 2024, the Company paid Mr. Fisher, $
On December 20, 2023, the Company granted Mr. Fisher shares of common stock for services. The shares
Green Invest Solutions Ltd.
During September
2023, a $
Management of Clean-Seas Morocco
On occasion, management
of Clean-Seas Morocco provides funds to the company for general operations. As of March 31, 2025 and December 31, 2024, $
Note Payable
Pursuant
to the Morocco Purchase Agreement, Clean-Seas paid an aggregate purchase price of $
On March
11, 2025, the Company issued a Promissory Note to Dan Bates, CEO, for $
On March
26, 2025, the Company issued a Promissory Note to Dan Bates, CEO, for $
Related Party Revenue
For the three months ended March 31, 2025, our operations in Morocco generated all of the revenue from a party under control of the management of Clean-Seas Morocco.
F-14
NOTE 9 — COMMON STOCK
On January 1, 2025, the Company issued shares of common stock to a service provider. The shares were valued at $, the closing stock price on the date of grant, for total non-cash expense of $.
On January 30, 2025, the Company’s transfer agent issued shares of common stock due as of December 31, 2024, to a service provider for services.
On January 31, 2025, the Company’s transfer agent issued commitment shares of common stock due to GS Capital.
On February 6, 2025, the Company’s transfer agent issued the shares of common stock granted to Mr. Bates on December 12, 2024.
On February 6, 2025, the Company’s transfer agent issued the shares of common stock granted to Ms. Boulds on December 12, 2024.
On February 6, 2025, the Company’s transfer agent issued the shares of common stock granted to Ms. Harris on December 12, 2024.
On February 6, 2025 the Company’s transfer agent issued the shares of common stock granted to its directors on December 12, 2024.
On February 6, 2025, the Company’s transfer agent issued the shares of common stock granted to its service providers and employees on December 12, 2024.
On February 6, 2025, the Company’s transfer agent issued the shares of common stock purchased on August 23, 2024.
On February 6, 2025, the Company’s transfer agent issued shares of common stock due as of December 31, 2024 for services.
On February 14, 2025, The Company issued shares of common stock each to GS Capital and ClearThink for commitment shares pursuant to the terms of promissory notes that were issued in 2024.
On February 24, 2025, the Company’s transfer agent issued shares of common stock due for the Dorado Purchase Agreement as of December 24, 2024.
During the
three months ended March 31, 2025, ClearThink converted $
During the
three months ended March 31, 2025, Coventry converted $
NOTE 10 — PREFERRED STOCK
The Company is authorized to issue shares of Preferred Stock at $ par value per share with the following designations.
Series A Redeemable Preferred Stock
On September 21, 2020, the Company created a series of Preferred Stock designating shares as Series A Redeemable Preferred Stock ranks senior to the Company’s Common Stock upon the liquidation, dissolution or winding up of the Company. The Series A Preferred Stock does not bear a dividend or have voting rights and is not convertible into shares of our Common Stock.
F-15
Series B Preferred Stock
On December 14, 2020, the Company designated shares of its authorized preferred stock as Series B Convertible, Non-voting Preferred Stock (the “Series B Preferred Stock”). The Series B Preferred Stock does not bear a dividend or have voting rights. The Series B Preferred Stock automatically converted into shares of common stock on January 1, 2023, at the rate of 10 shares of common stock for each share of Series B Preferred Stock; however, due to an ongoing dispute with certain holders of the Series B Preferred Stock, which is expected to be resolved through binding arbitration in December 2023, such conversion has not been effectuated as of the date hereof. Holders of our Series B Preferred Stock have anti-dilution rights protecting their interests in the Company from the issuance of any additional shares of capital stock for a two year period following conversion of the Series B Preferred Stock calculated at the rate of 20% on a fully diluted basis.
On December 17, 2020, the Company entered into a three-year consulting agreement with Leonard Tucker LLC (“Tucker”). Per the terms of the agreement, Tucker received shares of Series B Preferred Stock for services provided, which shares of Series B Preferred Stock are to be classified as mezzanine equity until they are fully issued. As a result of the arbitrator’s decision regarding the Company’s litigation with Tucker, as of April 15, 2024 Tucker does not hold any shares of Series B Preferred Stock. See Note 13 – Commitments and Contingencies (Legal Proceedings) below. The shares of Series B Preferred Stock were cancelled and credited to additional paid in capital.
Series C Preferred Stock
On February
19, 2021, the Company amended its Articles of Incorporation whereby shares of preferred stock were designated Series C Convertible
Preferred Stock. The holders of the Series C Convertible Preferred Stock are entitled to
NOTE 11 — WARRANTS
A summary of the Company’s outstanding warrants as of March 31, 2025 is as follows.
| Number
of Warrants |
Weighted Average Exercise Price |
Weighted
Average Remaining Contract Term |
Intrinsic Value | |||||||||||
| Outstanding, December 31, 2023 | $ | $ | ||||||||||||
| Issued | $ | |||||||||||||
| Cancelled | $ | — | ||||||||||||
| Exercised | ( |
$ | — | |||||||||||
| Outstanding, December 31, 2024 | $ | $ | — | |||||||||||
| Issued | $ | — | ||||||||||||
| Expired | ( |
$ | — | |||||||||||
| Exercised | $ | — | ||||||||||||
| Outstanding, March 31, 2025 | $ | $ | — | |||||||||||
NOTE 12 — COMMITMENTS AND CONTINGENCIES
Project Finance Arrangement
On November 4, 2022, the Company entered into a consulting agreement (the “Agreement”) with Edge Management, LLC (“Edge”), a services firm based in New York City. Under the Agreement, Edge will assist us to develop, structure and implement project finance strategies (“Project Finance”) for our clean energy installations around the world.
F-16
Financing strategies will be in amounts and upon terms acceptable to us, and may include, without limitation, common and preferred equity financing, mezzanine and other junior debt financing, and/or senior debt financing, including but not limited to one or more bond offerings (“Project Financing(s)”). Under the Agreement, Edge is engaged as our exclusive representative for Project Financing matters. Edge is entitled to receive a cash payment for any Project Financing involving as follows: 5% of the gross amount of the funding facilities (up to $500 million) of all forms approved by the lender (“Lender”) introduced by Edge and or its affiliates and accepted by the Company on closing (“Closing”), 4% of the gross amount of the funding facilities (for the tranche of funding ranging from $500,000,001 to $1,000,000,000) approved by the Lender introduced by Edge and or its affiliates and accepted by the Company on Closing, and 3% of the subsequent gross amount ($1,000,000,001 and greater) of the funding facilities of all forms approved by the Lender introduced by Edge and/or its affiliates and accepted by the Company on Closing. In addition to the cash consulting fee, Edge shall be issued cashless, five-year warrants equal to: 2% (at a strike price to be mutually determined by the Parties for the first tranche of funding, up to $500 million), 1% (at a strike price to be mutually determined by the Parties for the tranche of funding ranging from $500,000,001 to $1,000,000,000), and 1% (at a strike price to be mutually determined by the Parties for any and all subsequent Debt Funding ($1,000,000,001 and greater)) of the outstanding common and preferred shares, warrants, options, and other forms of participation in the our Company on Closing.. The Agreement has an initial term of one (1) year and is cancellable by either party on ninety (90) days written notice. There is no guarantee that Edge will be successful in helping us obtain Project Financing.
Legal Proceedings
Presently, except as described below, there are not any material pending legal proceedings to which the Company is a party or as to which any of its property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.
Trillium
On
November 1, 2024, Trillium filed a lawsuit in the United States District Court for the District of Nevada (Case No. 2:24-cv-02047) against
the Company and its transfer agent, ClearTrust as a relief defendant, seeking monetary damages, as well declaratory and injunctive relief
related to . On February 24, 2025, Trillium amended its complaint, adding Frank Benedetto, Mirador Consulting LLC and the following members
of the Company’s board of directors as named defendants: Daniel Bates, Gregory Boehmer, Bart Fisher, and Dr. Michael Dorsey. In
its complaint, Trillium claims allege that Clean Vision defaulted on a convertible promissory note, and thereafter, in conjunction with
the other co-defendants, tortiously blocked Trillium’s ability to convert shares under the convertible promissory note. Clean Vision
has countersued Trillium, seeking declaratory relief to adjudicate and declare the respective parties’ rights and obligations under
the convertible promissory note, if any. Daniel Bates and Gregory Boehmer have both filed motions to dismiss the claims against them.
In addition to the $
Effective
May 2, 2025, the United Stated District Court of Nevada filed an Order Dismissing the case. The Company reversed the potential settlement
liability of $
NOTE 13 – OPERATING LEASES
Adoption of Accounting
Standard Update (“ASU”) 2016-02, Leases (Topic 842), resulted in recording an initial right-of-use (“ROU”)
assets and operating lease liabilities of $
On January 24, 2025,
F-17
Adoption of
Accounting Standard Update (“ASU”) 2016-02, Leases (Topic 842), resulted in recording an initial right-of-use (“ROU”)
assets and operating lease liabilities of $
| Asset | Balance Sheet Classification | December 31, 2024 | ||||
| Operating lease asset | Right of use assets | $ | ||||
| Total lease asset | $ | |||||
| Liability | ||||||
| Operating lease liability – current portion | Current operating lease liability | $ | ||||
| Operating lease liability – noncurrent portion | Long-term operating lease liability | |||||
| Total lease liability | $ | |||||
Lease obligations at March 31, 2025 consisted of the following:
| For the year ended December 31: | ||||
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total payments | $ | |||
| Amount representing interest | $ | ( |
||
| Lease obligation, net | ||||
| Less current portion | ( |
|||
| Lease obligations – long term | $ | |||
Lease expense for
the three months ended March 31, 2025 for the auto and property lease, was $
NOTE 14 - SEGMENT REPORTING
ASC Topic 280, “Segment Reporting” establishes the standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about services categories, business segments and major customers in financial statements. The Company is managed as one operating unit, rather than multiple reporting units, for internal reporting purposes and for internal decision-making and discloses its operating results in a single reportable segment. The Company’s chief operating decision maker (“CODM”), represented by the Company’s Chief Executive Officer, reviews financial information and assesses the operations of the Company in order to make strategic decisions such as allocation of resources and assessing operating performance.
NOTE 15 — DISCONTINUED OPERATIONS
In accordance with the provisions of ASC 205-20, Presentation of Financial Statements, we have separately reported the liabilities of the discontinued operations in the consolidated balance sheets. The liabilities have been reflected as
discontinued operations in the consolidated balance sheets as of March 31, 2025 and December 31, 2024 , and consist of the following:
| March 31, 2025 | December 31, 2024 | |||||||
| Current Liabilities of Discontinued Operations: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Loans payable | ||||||||
| Total Current Liabilities of Discontinued Operations: | $ | $ | ||||||
F-18
NOTE 16 — SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date of filing and has determined that it has the following material subsequent events to disclose in these unaudited consolidated financial statements.
Subsequent to March 31, 2025, the Company issued shares of common stock to a service provider for services.
Subsequent
to March 31, 2025, ClearThink converted $
Subsequent
to March 31, 2025, GS Capital converted $
On May 13, 2025,
pursuant to that certain Securities Purchase Agreement between the Company and ClearThink, the Company issued a convertible promissory
note to ClearThink in the aggregate principal amount of $
During May
2025, the Company entered into Revenue Purchase Agreements with five separate accredited investors. Pursuant to the terms of the
agreements the Company has agreed to sell a continuing interest in the revenue it generates.
F-19
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
The information in this report contains forward-looking statements. All statements other than statements of historical fact made in this report are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. These forward-looking statements can be identified by the use of words such as “believes,” “estimates,” “could,” “possibly,” “probably,” anticipates,” “projects,” “expects,” “may,” “will,” or “should” or other variations or similar words. No assurances can be given that the future results anticipated by the forward-looking statements will be achieved. Forward-looking statements reflect management’s current expectations and are inherently uncertain. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, our actual results may differ significantly from management’s expectations. Should one or more of these uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those anticipated in these forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q or, in the case of documents referred to or incorporated by reference, the date of those documents.
The following discussion and analysis should be read in conjunction with our unaudited financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management.
Company Overview and Description of Business
Overview
Clean Vision is a new entrant in the clean energy and waste-to-value industries focused on clean technology and sustainability opportunities. By leveraging innovative technology, we aim to responsibly resolve environmental challenges by producing valuable products. Currently, we are focused on providing a solution to the plastic waste problem by converting the waste (feedstock) into saleable byproducts, such as precursors for new plastic products, hydrogen and other clean-burning fuels that can be used to generate clean energy. Using a technology known as pyrolysis, which heats the feedstock (i.e., plastic) at high temperatures in the absence of oxygen, so that the material does not burn, we are able to convert the feedstock into (i) clean fuels i.e. plastic pyrolysis oil, (ii) clean hydrogen (specifically, the Company’s branded clean hydrogen, AquaH®, which trademark was issued by the USPTO on November 8, 2023 and published on November 28, 2023), and (iii) carbon char. We intend to generate revenue from the following sources: (i) service revenue from the recycling services we provide; (ii) revenue generated from the sale of commodities; (iii) revenue generated from the sale of environmental credits; and (iv) revenue generated from the sale of equipment. Our mission is to aid in solving the problem of cost-effectively upcycling the vast amount of plastic feedstock generated on land before it flows into the world’s oceans.
According to analysis and projections reported by the EIA on June 14, 2023, it is estimated that while annual demand growth is expected to drop from 2.4 million barrels per day (“mb/d”) due to a shift in focus to a clean energy economy, global oil demand will rise by 6% from 2022 to 2028, reaching 105.7 mb/d. The EIA also estimates that upstream investments in oil and gas exploration, extraction and production were on course to reach their highest levels since 2015, growing 11% year-on-year to $528 billion in 2023.
Additionally, as stated in the Hydrogen Generation Market Research published by Allied Market Research in September 2022, the global hydrogen generation market size was valued at $136.3 billion in 2021 and is expected to each $262 billion by 2031, growing at a CAGR of 6.8% from 2022 to 2031. The Hydrogen Generation Market Research explains that hydrogen plays a vital role in the chemicals and oil & gas industry, with major factors driving the hydrogen generation market growth mostly due to ongoing unprecedented revolutions under the net zero emissions scenario, where global output of hydrogen is expected to reach 200 metric tons in 2030 when it is estimated that around 70% of hydrogen production will be done through low carbon technologies. It is anticipated that by 2050, the production of hydrogen will increase to roughly 500 metric tons and that energy efficiency, electrification, renewable energy, hydrogen and hydrogen based fuels, and carbon, capture, utilization and storage are some of the major technology pillars to decarbonize the world energy system.
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According to the research and analysis by Argonne published in the Journal of Cleaner Production on November 1, 2023, plastics are important products for the modern economy, reaching production of 367 and 56 million tons in the world and North America, respectively, in 2022. The Argonne research also states that as of November 2023, the plastic industry relied heavily on fossil resources with data suggesting that 6% of the global production of crude oil and natural gas liquids is devoted to the production of plastics and is expected to increase to 20% in 2050, resulting in higher waste generation. According to Argonne, while recycling could reduce reliance on fossil resources and waste generation in the plastic industry while converting post-use plastic into a resource, only 9% of the post-use plastic collected in the United States is mechanically recycled due to diverse economic, technical environmental and regulatory barriers.
Further, the Organization for Economic Cooperation and Development has suggested that global plastics use is projected to almost triple between 2019 and 2060, with estimates of an increase from 460 million tons to 1,231 million tons yearly.
We believe that in the near future, a significant growth sector of the economy will be in clean energy and sustainable products and services. This belief was a key factor in our shift in our business focus in May 2020 and our acquisition of Clean-Seas, Inc. (“Clean-Seas”), which became our wholly owned subsidiary on May 19, 2020. We believe that Clean-Seas has made significant progress in identifying and developing its business model around the clean energy and waste-to-value sectors.
Clean Vision was established in 2017 as a company focused on the acquisition of disruptive technologies that will impact the digital economy. The Company, which was formerly known as Byzen Digital Inc., changed its corporate name to Clean Vision on March 12, 2021.
All operations are currently being conducted through Clean-Seas. Clean-Seas acquired its first pyrolysis unit in November 2021 for use in a pilot project in India, which began operations in early May 2022. On April 23, 2023, Clean-Seas completed its acquisition of a fifty-one percent (51%) interest in EcoSynergie, which changed its name to Clean-Seas Morocco, LLC on such date. Clean-Seas Morocco began operations at its pyrolysis facility in Agadir, Morocco, in April 2023, which currently has capacity to convert 20 TPD of waste plastic through pyrolysis
Available Information
All reports of the Company filed with the U.S. Securities and Exchange Commission (the “SEC” or the “Commission”) are available free of charge through the SEC’s website at www.sec.gov. In addition, the public may read and copy materials filed by the Company at the SEC’s Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. The public may also obtain additional information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330.
Our principal executive offices are located at 2711 N. Sepulveda Blvd., Suite #1051, Manhattan Beach, CA 90266. Our telephone number is (424) 835-1845.
Our common stock is quoted on the OTCQB maintained by OTC Markets, Inc. under the symbol “CLNV”.
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Results of Operations
Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024
Revenue
For the three months ended March 31, 2025 and 2024, the Company recognized revenue of $10,525 and $49,692, respectively from our subsidiary Clean-Seas Morocco, a decrease of $39,167 or 78.8%. Revenue from operations is generated from the processing of plastic waste material ("feedstock") at our plant in Agadir, Morocco. The plastic feedstock is put through a pyrolysis system which applies pressure and heat, in the absence of oxygen (no incineration), converting the plastic back to its petroleum form. The revenue was generated from selling the output product, "pyrolysis oil," to a local oil and gas wholesaler in Morocco, called the "off-taker". We receive the plastic feedstock in Agadir at $0 cost, but variable expenses include labor, land lease, and overhead such as insurance.
Consulting Expense
For the three months ended March 31, 2025 and 2024, we had consulting expenses of $243,097 and $384,732, respectively, a decrease of $141,635 or 36.8%. The decrease is primarily due to fewer shares of common stock issued for services in the current period.
Advertising and Promotion Expense
For the three months ended March 31, 2025 and 2024, we had advertising and promotion expenses of $68,195 and $30,672, respectively, an increase of $37,523 or 122.3%. The Company has been actively increasing its marketing activities in 2025.
Development Expense
For the three months ended March 31, 2025 and 2024 we had development expenses of $2,420 and $28,515, respectively, a decrease of $26,095 or 91.5%. Development expenses have decreased related to the PCN facility in West Virginia as activity is now focused on preparing the facility for production.
Professional Fees
For the three months ended March 31, 2025 and 2024, we had professional fees of $87,791 and $271,091, respectively, a decrease of $183,300 or 67.6%. The decrease is mainly due to a decrease in legal fees associated with the ending of some of the Company’s prior litigation.
Payroll Expense
For the three months ended March 31, 2025 and 2024, we had payroll expenses of $406,742 and $301,546, respectively, an increase of $105,196 or 34.9%. The increase is due to additional employees in the current period compared to the prior period.
Director Fees
For the three months ended March 31, 2025 and 2024, we had director fees of $13,500 and $13,500.
General and Administrative Expenses
For the three months ended March 31, 2025 and 2024, we had G&A expenses of $212,721 and $338,955, respectively, a decrease of $126,234 or 37.2%. In the current period we have had to decrease spending while the Company pursues financing opportunities.
Other Income and Expense
For the three months ended March 31, 2025 and 2024, we had total other expense of $2,268,932 compared to $905,919, respectively In the current period we recognized $632,397 of interest expense, of which $317,193 was amortization of debt discount, a loss in the change in fair value of derivative of $1,732,057, a loss on the conversion of debt of $12,054 and penalty expense for default on a convertible note of $39,357. We had gains of $145,967 for the extinguishment of debt and $966 of other income. For the three months ended March 31, 2024, we recognized $1,475,355 of interest expense, of which $1,322,528 was amortization of debt discount, a loss on debt issuance of $252,376, a gain in the change in fair value of derivative of $625,857, a gain on the extinguishment of debt of $196,430 and other expense of $475.
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Net Loss
Net loss for the three months ended March 31, 2025 was $3,233,681 (after deducting $61,136 for the non-controlling interest). Net loss for the three months ended March 31, 2024, was $2,168,657 (after deducting $53,596 for the non-controlling interest).
Liquidity and Capital Resources
Cash Flow from Operating Activities
During the three months ended March 31, 2025 and 2024, we used $2,889,671 and $988,729 of cash in operating activities. During the current period, we incurred a net loss of $3,294,817, adjusted by $2,081,973 for non-cash items and $1,676,827 in adjustments for changes in assets and liabilities. In the prior period we incurred a net loss of $2,222,253, adjusted by $1,087,969 for non-cash items and $145,555 in adjustments for changes in assets and liabilities.
Cash Flow from Investing Activities
During the three months ended March 31, 2025, we used $283,903 for the purchase of property and equipment and had a decrease in our trading securities of $256. During the three months ended March 31, 2024, we used $142,195 for the purchase of property and equipment.
Cash Flow from Financing Activities
During the three months ended March 31, 2025, we had net cash received of $3,698,112. Our cash overdraft increased $37,111. We received $350,000 of proceeds from notes payable issued to our CEO, $61,001 proceeds from other notes payable and $3,250,000 from our commercial loan. During the three months ended March 31, 2024, we had net cash received of $1,059,398. We received $1,176,500 of proceeds from convertible notes, $100,000 proceeds from the sale of Common Stock, $83,318 from other notes payable. Cash received was offset by repayment of $314,285 of a convertible note payable and a cash overdraft of $13,865.
Going Concern
The accompanying unaudited consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not yet established a source of revenue sufficient to cover its operating costs, had an accumulated deficit of $52,068,776 at March 31, 2025, and had a net loss of $(3,294,817) for the three months ended March 31, 2025. The Company’s ability to raise additional capital through the future issuances of common stock and/or debt financing is unknown. The obtainment of additional financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. These conditions and the ability to successfully resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern. The unaudited consolidated financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.
The Company believes that its current cash on hand will not be sufficient to fund its projected operating requirements for the next twelve months since the date of this Quarterly Report on Form 10-Q.
Management plans to continue to implement its business plan and to fund operations by raising additional capital through the issuance of debt and equity securities. The Company’s existence is dependent upon management's ability to implement its business plan and/or obtain additional funding. There can be no assurance that the Company’s financing efforts will result in profitable operations or the resolution of the Company's liquidity problems. Even if the Company is able to obtain additional financing, it may include undue restrictions on our operations in the case of debt or cause substantial dilution for our stockholders in the case of equity financing. These conditions and the ability to successfully resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern for the next twelve-month period since the date of this Quarterly Report on Form 10-Q.
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Off Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, sales or expenses, results of operations, liquidity or capital expenditures, or capital resources that are material to an investment in its securities.
Capital Raising Transactions
Proceeds from Notes Payable – Related Party
We generated net proceeds of $350,000 from the issuance of notes payable to our CEO during the three months ended March 31, 2025.
Other outstanding obligations at March 31, 2024
Convertible Notes Payable
The Company has convertible promissory notes aggregating $6,154,157 (not including debt discounts) outstanding at March 31, 2025. The accrued interest amounted to approximately $1,041,000 as of March 31, 2025. The convertible notes payable bear interest at rates ranging between 5% and 24% per annum.
Commercial Loan
On November 13, 2024 (the “Closing Date”), Clean Vision Corporation’s (“Clean Vision” or the “Company”) wholly-owned subsidiary, Clean-Seas West Virginia, Inc. (the “Clean-Seas WV”), closed on the transactions set forth in that certain Credit Agreement (the “Credit Agreement”) between Clean-Seas WV and The Huntington National Bank, a national banking association (the “Lender”). Pursuant to the Credit Agreement, the Lender agreed to make a term loan (the “Term Loan”) to Clean-Seas WV in the amount of $15,000,000, with the proceeds to be used for costs and expenses associated with the development and construction of Clean-Seas WV’s recycling and processing facility located in Kanawha County, West Virginia.
Pursuant to the Credit Agreement, the proceeds of the Term Loan will be funded to Clean-Seas WV in two extensions (each, a “Credit Extension”) as follows: (i) the initial Credit Extension in the amount of $5,000,000 on the Closing Date; and (ii) the second Credit Extension in the amount of $10,000,000 upon the satisfaction or waiver of the conditions set forth in Section 4.2 of the Credit Agreement, including, but not limited to, the delivery to the Lender of an executed performance and payment bond issued by a surety company listed on the Federal Treasury List that is rated A or higher by A.M. Best in an amount equal to $15,000,000 naming the Lender as beneficiary. On the Closing Date, Clean-Seas WV paid an upfront fee in the amount of $75,000 to the Lender.
The Term Loan is evidenced by a promissory note (the “Term Note”) executed by Clean-Seas WV in favor of the Lender with interest due and payable on the 15th calendar day of each month while any amount remains outstanding and the principal amount to be repaid in full on the maturity date of February 1, 2027. The Term Note bears interest at a rate per annum equal to Term SOFR (as defined in the Credit Agreement) plus 3.75% per annum. Upon the occurrence and during the continuance of an event of default, the interest rate applicable to the Term Note shall be equal to 2% per annum above the interest rate otherwise applicable (the “Default Rate”) and all such interest accrued at the Default Rate shall be due and payable on demand of the Lender.
The credit extension of $8,250,000 as of March 31, 2025, is presented on the balance sheet net of debt discount of $197,836,
Critical Accounting Policies
Refer to Note 2 to the Financial Statements for the three months ended March 31, 2025, for a condensed discussion of our critical accounting policies and our Form 10-K for the year ended December 31, 2024, for a full discussion of our critical accounting policies and procedures.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item.
ITEM 4. CONTROLS AND PROCEDURES
During the quarter ended March 31, 2025, we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, using the Internal Control - Integrated Framework (2013) developed by the Committee of Sponsoring Organizations of the Treadway Commission, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, are recorded, processed, summarized and reported within the required time periods specified in the Commission’s rules and forms and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Our principal executive officer and principal financial officer, do not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal controls over financial reporting that occurred during the quarter ended S March 31, 2025, that have materially or are reasonably likely to materially affect, our internal controls over financial reporting
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Presently, except as described below, there are not any material pending legal proceedings to which the Company is a party or as to which any of its property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.
Trillium
On November 1, 2024, Trillium filed a lawsuit in the United States District Court for the District of Nevada (Case No. 2:24-cv-02047) against the Company and its transfer agent, ClearTrust as a relief defendant, seeking monetary damages, as well declaratory and injunctive relief related to . On February 24, 2025, Trillium amended its complaint, adding Frank Benedetto, Mirador Consulting LLC and the following members of the Company’s board of directors as named defendants: Daniel Bates, Gregory Boehmer, Bart Fisher, and Dr. Michael Dorsey. In its complaint, Trillium claims allege that Clean Vision defaulted on a convertible promissory note, and thereafter, in conjunction with the other co-defendants, tortiously blocked Trillium’s ability to convert shares under the convertible promissory note. Clean Vision has countersued Trillium, seeking declaratory relief to adjudicate and declare the respective parties’ rights and obligations under the convertible promissory note, if any. Daniel Bates and Gregory Boehmer have both filed motions to dismiss the claims against them. In addition to the $174,933 penalty added to the principal and, increased interest rate, the Company has accrued a potential settlement liability of $145,967 as of December 31, 2024.
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Effective May 2, 2025, the United Stated District Court of Nevada filed an Order Dismissing the case. The Company reversed the potential settlement liability of $145,967 recognizing the gain as of March 31, 2025.
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On January 1, 2025, the Company issued 5,000,000 shares of common stock for services. The shares were valued at $0.0206, the closing stock price on the date of grant, for total non-cash expense of $103,000.
During the three months ended March 31, 2025, ClearThink converted $45,000 of principal into 4,500,000 shares of common stock. In addition, the Company’s transfer agent issued the 14,568,254 shares of common stock due for prior conversions as of December 31, 2024.
During the three months ended March 31, 2025, Coventry converted $104,055 of principal into 10,808,085 shares of common stock.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.f
ITEM 6. EXHIBITS
*Filed herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: May 15, 2025 | By: | /s/ Daniel Bates |
| Name: | Daniel Bates | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) | ||
| Date: May 15, 2025 | By: | /s/ Rachel Boulds |
| Name: | Rachel Boulds | |
| Title: | Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |
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