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EESTech, Inc. – ‘10-12G’ on 8/26/22

On:  Friday, 8/26/22, at 9:17am ET   ·   Accession #:  1539497-22-1487   ·   File #:  0-32863

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 8/26/22  EESTech, Inc.                     10-12G                 6:876K                                   Nuvo Group, Inc./FA

Registration Statement   —   Form 10   —   § 12(g) – SEA’34

Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-12G      Registration Statement                              HTML    725K 
 2: EX-3.1      Amended and Restated Certificate of Incorporation   HTML     22K 
                of Eestech, Inc.                                                 
 3: EX-3.2      By-Laws of Eestech, Inc.                            HTML     66K 
 4: EX-10.1     Agreement Between the Registrant and Murray         HTML     29K 
                Bailey, Dated as of February 18, 2019                            
 5: EX-10.2     Agreement Between the Registrant and Graeme Lynch,  HTML     29K 
                Dated as of February 1, 2019                                     
 6: EX-21       Subsidiaries of Registrant                          HTML      6K 


‘10-12G’   —   Registration Statement


This is an HTML Document rendered as filed.  [ Alternative Formats ]



 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10

 

GENERAL FORM FOR REGISTRATION OF SECURITIES

Pursuant to Section 12(b) or (g) of The Securities Exchange Act of 1934

 

EESTech, Inc

(Exact name of registrant as specified in its charter)

 

 

Delaware   33-0922627

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. employer

identification no.)

 

Suite 417, 241 Adelaide Street, Brisbane, 4000, Australia

(Address of principal executive offices and zip code)

 

(061) 417 079 299

(Registrant’s telephone number, including area code)

 

Securities to be registered pursuant to Section 12(b) of the Act:

None

 

Securities to be registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.001 per share

(Title of class)

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 

Large accelerated filer [  ] Accelerated filer [  ]
       
Non-accelerated filer [X] Smaller reporting company [X]
       
    Emerging growth company [X]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financing accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

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TABLE OF CONTENTS

EXPLANATORY NOTE 1
IMPLICATIONS OF BEING AN EMERGING GROWTH COMPANY 1
WHERE YOU CAN FIND MORE INFORMATION ABOUT US 2
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS 2
Item 1.  Description of Business. 3
Item 1A.  Risk Factors. 17
Item 2.  Financial Information. 21
Item 3.  Properties. 25
Item 4.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 25
Item 5.  Directors and Executive Officers. 26
Item 6.  Executive Compensation. 27
Item 7.  Certain Relationships and Related Transactions and Director Independence. 28
Item 8.  Legal Proceedings. 28
Item 9.  Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters. 28
Item 10.  Recent Sales of Unregistered Securities. 29
Item 11.  Description of the Registrant’s Securities to be Registered. 30

 

 

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Item 12.  Indemnification of Directors and Officers. 32
Item 13.  Financial Statements and Supplementary Data. 33
Item 14.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. 33
Item 15.  Financial Statements and Exhibits. 33
SIGNATURE 34

 

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EXPLANATORY NOTE

 

EESTech, Inc., a Delaware corporation (the “Company”, “EESTech”, “we”, “our”, “us”), is filing this General Form for Registration of Securities on Form 10 (this “registration statement”) to register common stock, par value $0.001 per share (“common stock”), pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our common stock previously was registered pursuant to the Exchange Act; however, on February 17, 2009, we filed a Form 15 with the Securities and Exchange Commission (the “SEC”) to terminate registration of our common stock.

 

This registration statement will become effective automatically by lapse of time 60 days from the date of its filing pursuant to Section 12(g)(1) of the Exchange Act. As of the effective date of the registration statement, we will be subject to the requirements of Regulation 13(a) under the Exchange Act and will be required to file annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and we will be required to comply with all other obligations of the Exchange Act applicable to issuers filing registration statements pursuant to Section 12(g) of the Exchange Act.

 

IMPLICATIONS OF BEING AN EMERGING GROWTH COMPANY

 

We qualify as an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). For so long as we remain an emerging growth company, we are permitted and plan to rely on exemptions from certain disclosure requirements that are applicable to other public companies. These provisions include, but are not limited to:

 

·being permitted to have only two years of audited financial statements and only two years of related management’s discussion and analysis of financial condition and results of operations disclosure;

 

·being exempt from compliance with management’s assessment of our internal control over financial reporting pursuant to Section 404(a) of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”);

 

·being exempt from compliance with the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act;

 

·not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board (the “PCAOB”) regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;

 

·reduced disclosure obligations regarding executive compensation arrangements in our periodic reports, registration statements and proxy statements; and

 

·being exempt from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved by stockholders.

 

We have elected to take advantage of certain reduced disclosure obligations in this registration statement and may elect to take advantage of other reduced reporting requirements in future filings. In addition, the JOBS Act permits us, as an emerging growth company, to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. As a result, the information that we provide to our stockholders may be different from what you might receive from other public reporting companies in which you hold equity interests.

 

We will remain an emerging growth company until the earliest of (i) the last day of our fiscal year following the fifth anniversary of the date of our first sale of our common stock pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), (ii) the first fiscal year after our annual gross revenues exceed $1.07 billion, (iii) the date on which we have, during the immediately preceding three-year period, issued more than $1.00 billion in non-convertible debt securities or (iv) the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeds $700 million as of the end of the second quarter of that fiscal year.

 

Even after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company” (as we do as of the filing date of this registration statement), which would allow us to take advantage of many of the same exemptions from disclosure requirements, including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.

 

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WHERE YOU CAN FIND MORE INFORMATION ABOUT US

 

When this registration statement becomes effective, the Company will begin to file reports, proxy statements, information statements and other information with the SEC. These filings will be accessible at www.sec.gov, which is a website maintained by the SEC. We also maintain a website at www.eestechinc.com. When this registration statement becomes effective, the Company also will make available on its website electronic copies of the materials it files with the SEC. Information contained on our website does not constitute part of this registration statement. The Company has included its website address in this registration statement solely as an inactive textual reference.

 

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This registration statement contains forward-looking statements relating to plans and objectives of management for future operations, including plans and objectives relating to the products and the future economic performance of the Company. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “budget,” “target,” “aim,” “strategy,” “estimate,” “plan,” “guidance,” “outlook,” “intend,” “may,” “should,” “could,” “will,” “would,” “will be,” “will continue,” “will likely result” and similar expressions, although not all forward-looking statements contain these identifying words. Forward-looking statements involve known and unknown risks, uncertainties and other important factors, which include, but are not limited to, the risks described under the heading “Item 1A. – Risk Factors,” any of which could cause actual results to differ materially from those projected herein. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of those assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated in any of the forward-looking statements contained herein will be realized. Based upon actual experience and business development, the Company may alter its marketing, capital expenditure plans or other budgets, which may in turn affect the Company’s results of operations. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of any such statement should not be regarded as a representation by the Company or any other person that the objectives or plans of the Company will be achieved. These forward-looking statements speak only as of the date of this registration statement and, except as required by law, the Company undertakes no obligation to correct, update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required under federal securities laws.

 

 

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Item 1. Description of Business.

 

EESTech promotes economically and environmentally sustainable technologies to the world’s mining and minerals processing industry. EESTech has developed waste management solutions that enables the recycling of mine site waste and process slag to recover targeted materials of value. EESTech’s industry disruptive technologies deliver a paradigm shift in how mineral recourses are processed.

 

EESTech’s mineral processing capabilities dramatically reduce cost, increase productivity, reduce energy requirements, eliminate polluting leachates, transform hazardous waste liabilities into products of value with zero-waste outcomes, significantly reduce the carbon footprint of mineral resource processing.

 

Company Overview

 

EESTech, Inc., incorporated in 2000 as a US company, with shares publicly traded on the OTC, Pink Open Market. “EESTech” stands for “Economically Environmentally Sustainable Technologies.”

 

The Company operates its commercial and market development activities through its 100% owned subsidiaries, EESTech Australia Pty Ltd, EESTech Inc Ltd (New Zealand), EESTech Management Services (Pty) Ltd (South Africa), EESTech Europe BV, with all Intellectual Property held in EESTech Holding Europe BV.

 

EESTech’s initial focus is on developing, acquiring and commercializing reclamation and remediation services to the mining and minerals processing industries. Our goal is to provide mining and mineral processing companies a circular economy, which we believe is essential to environmental sustainability and with significant Environmental Social and Governance (“ESG”) benefits. We believe EESTech’s waste management solution helps supply chain requirements of critical raw materials and a sustainable, low carbon, resource efficient, competitive economy by recycling waste liabilities to recover valuable resources.

 

EESTech’s energy efficient high yield process can recycle mine site and process waste streams to access up to 99% of targeted materials of value, typically remaining within waste generated by the inefficiencies of traditional processes, to produce high value products at significantly less cost than industry standards.

 

EESTech’s process capabilities takes advantage of the sunk cost left within a waste resource to cost effectively recover and produce high quality concentrates ready for smelting in the EESTech’s patent pending Inductosmelt Reduction Furnace (“IRF”), industry’s first plasma over induction furnace.

 

EESTech believes that the mineral processing and primary smelting capabilities of the IRF will set new industry benchmarks for economic and environmental sustainability, providing the resource industry with tangible, cost-effective, minerals processing and critical waste management solutions. All post process tailings are upgraded into inert sand products to be marketed by EESTech as ThermaSand™ and ThermaPrills™. Both are valuable products in demand for high volume downstream applications.

 

To achieve its corporate goals, EESTech has established a Heads of Agreement (HOA) with industry leading equipment suppliers for the collaborative development and project deployment of their equipment. One of the strengths of EESTech’s proprietary process capabilities is through the application of uniquely configured, commercially available, robust industrial process equipment specially configured for EESTech.

 

EESTech is committed to good corporate citizenship with the communities in which we operate and live. The long-term nature of projects should enable EESTech to establish lasting relationships with clients and communities by making a positive contribution wherever we work. EESTech seeks to support local enterprise development, employment, skills development and the use of local business services.

 

EESTech is committed to creating long-term shareholder value through development and commercialization of products and services designed to meet the needs of a world demanding ever increasing higher standards of environmental sustainability.

 

Company and Subsidiary History

 

EESTech, Inc.

 

EESTech, Inc. was incorporated as Aqua Dyne, Inc in the State of Delaware and commenced operations on April 26, 2000. The Company was formed to develop or acquire economically environmentally sustainable technologies with the

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intent of bringing them to commercialization within the mining and minerals processing industry. In June 2006, the Company changed its name from “Aqua Dyne, Inc.” to “EESTech, Inc.”

 

EESTech Australia Pty Ltd.

 

In December 2002, a wholly-owned subsidiary of the Company, Aqua Dyne Australia Pty Ltd. (now known as EESTech Australia Pty Ltd.), was incorporated under the laws of Australia. EESTech Australia Pty Ltd, was formed to conduct the Company’s proprietary process development and product introduction activities.

 

In November 2020, Albatross Equity Investments of New Zealand purchased a 27% interest in EESTech Australia Pty Ltd, this sale was initiated to enable the development of comprehensive laboratory and pilot plant trials for the environmentally sustainable disposal of the SPL at the NZ aluminium production facility and to initiate the development of market opportunities for EESTech within Australia and New Zealand

 

EESTech Management Services (Pty) Ltd (EESTech-MS)

 

EESTech-MS was incorporated in South Africa in 2016 as a 100% owned subsidiary of EESTech Inc Ltd. The purpose of EESTech-MS was to serve as an employment and contracting platform for the engagement of employees and consultants, as required for the delivery of South African project opportunities being developed by EESTech Inc Ltd.

 

EESTech Inc Ltd.

 

In July 2017 EESTech Inc Ltd was incorporated in New Zealand as a 100% owned subsidiary of EESTech Inc. EESTech Inc Ltd was founded to deliver project opportunities being developed within South Africa.

 

E’Prime Alloys

 

In July 2019 E’Prime Alloys was formed as a 100% wholly owned US subsidiary of EESTech, Inc. to establish a mineral oxide processing facilities within the US, sometime in the near future. The US Government has identified a series of ‘critical’ minerals deemed integral to the US national economy and security that need to be produced domestically. It remains EESTech’s intention to initiate the development of this facility once project financing and product offtake agreements have been confirmed.

 

Environmental Management Solutions LLC (EMS)

 

In February of 2013 EESTech entered into a Technology Licence Agreement with the US systems and technologies development company, Environmental Management Solutions LLC (“EMS”) whereby the founder of EMS, Chad Lehman, became a fulltime consultant to EESTech Inc. Arrangements with EMS progressed and in 2015 EESTech signed another agreement which culminated in EESTech taking over the ownership of EMS, with Mr. Lehman becoming an equity holder and Chief Technologies Officer of EESTech Inc.

 

EMS had developed methods for particle shaping organic materials and proprietary formulations for the agglomeration of micro-fines into briquettes which, can include reductants, fluxes, metallurgical thermites and bounding agents. EMS developed these process capabilities for third world humanitarian applications, e.g.; the agglomeration of industry waste organic compounds to produce a wood replacement fuel source for heating, boiling water and cooking food. EESTech identified the EMS processes as having potential for upgrading waste coal and other mineral resources into smelt ready export quality products. All technologies developed by EMS have been transferred to EESTech and the EMS company has been mothballed and remain under the ownership of EESTech.

 

Anglo American / Kumba Iron Ore

 

In August 2013 EESTech initiated an evaluation trial with AngloAmerican Corp (Kumba Iron Ore) to determine the application potential of the EMS formulations when used in EESTech’s Waste Resource Agglomeration Module (“WRAM”), for agglomeration of waste ore fines into briquettes that included EMS reductants and a fluxing agent to provide an ultra-efficient smelting concentrate to be marketed by EESTech as “WRAM-ROX. The shareholders of Kumba Iron Ore are; Anglo American plc (63.4%) the Industrial Development Corporation (IDC) of South Africa (13.1%) and Minority shareholders (23.5%).

 

The evaluation program clearly demonstrated that WRAM-ROX have the necessary integrity to be used as feedstock for smelting iron ore and other metal oxides in a blast furnace. Trial results confirmed that WRAM-ROX increased the efficiency of blast furnace operations to significantly reduce energy demand. EESTech’s testing indicated that WRAM-ROX resulted in a 30% reduction in downstream processing energy requirements and up to a 45% reduction in required

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carbon additives used by the furnace smelting process; equating to a substantial reduction in carbon emissions. EESTech believes this innovation collectively delivers economic and environmental sustainability outcomes for smelting metal oxides into metal.

 

Sasol South Africa Limited

 

Sasol Limited (“Sasol”) is a publicly listed company on the Johannesburg Stock Exchange in South Africa and the New York Stock Exchange in the United States. Sasol is a large company and the seventh largest coal mining companies in the world. 

 

In February 2014 EESTech was invited by Sasol to demonstrate its ability to improve the physical or chemical properties (“beneficiate”) of discarded coal fines into a product suitable for gasification. Sasol is a large South African based multinational chemicals and energy production company spanning 30 countries. Sasol operates Fischer-Tropsch synthesis-based fuels production plants and is one of the world’s leading large-scale producer of liquid fuels and chemicals from coal.

 

EESTech successfully demonstrated that it could mitigate Sasol’s environmental waste footprint through the deployment of the WRAM-ROX process, by converting a liability into a suitable feedstock for Sasol’s gasification plant. Gasification, rather than direct combustion, significantly reduces the environmental emissions of coal as a fuel source.

 

In August 2014, EESTech responded to a formal request for a proposal from Sasol by submitting a comprehensive proposal for a complete WRAM-ROX process line for the agglomeration of coal fines. Unfortunately, EESTech never heard back from Sasol until 2019.

 

In May, 2019 EESTech was contacted by Sasol, asking if EESTech would resubmit a proposal for the agglomeration of coal fines for use as a feedstock in their gasification plant located in Secunda, South Africa. EESTech declined the Sasol request and noted that this was due to EESTech’s involvement with the previous tender issued by Sasol in 2014 to which EESTech allocated a great deal of time and cost in making the submission, which came to nothing as Sasol chose not to proceed with the project at that time.

 

EESTech informed Sasol that while it was not prepared to resubmit a proposal (tender), it would however welcome the opportunity to deliver the project for Sasol if the respondents to the new Request for Proposals failed to meet the original standards set by EESTech in 2014.

 

In 2021 Sasol made contact with EESTech because they were dissatisfied with the outcome of the tender by others as no suitable submissions were received. Subject to further trials being completed by EESTech Sasol is seeking a commercial arrangement with EESTech to agglomerate Sasol’s discard coal fines to a standard that could meet their gasification requirements. Sasol is ideally seeking a tolling / fee for service arrangement for an immediate agglomeration 25,000 tons of coal per month in the first year growing each year thereafter to an approximate 2,500,000 per year within 3 years, with a contract period of fifteen years. Pre-contract trials are continuing.

 

Samancor Chrome Holdings Proprietary Limited

 

A revision of South Africa’s Mineral and Petroleum Resources Development Act 2002, which introduced strict regulations governing mine and process waste, compelled Samancor with over 40 million tons of FeCr slag stockpiled across six production sites, to contract with EESTech for the provision of an economically, environmentally sustainable, waste management solution.

 

In 2015, Samancor, the world’s largest integrated ferrochrome (FeCr) producer, entered into a Collaborative Development Agreement with EESTech, to demonstrate EESTech’s waste management capability by agglomerating discarded chromite ore fines into WRAM-ROX. The Agglomeration would enhance the efficiency of FeCr metal production, thereby eliminating a waste liability by transforming process slag waste into a valuable resource.

 

While working with Samancor, EESTech identified an opportunity to recycle Samancor’s FeCr slag to recover up to 99% of chrome units that remain locked within process slag, due to the inefficiencies of traditional process equipment, to produce a smelt ready concentrate in the form of WRAM-ROX.

 

EESTech’s ability to recover chrome units from slag for smelting in its IRF, results in all post process tailing being an ultra-clean sand product, independently classified as an inert material, that is nontoxic and ecologically stable, making it environmentally sustainable and suitable for a number of downstream commercial applications. This sand product has been trademarked by EESTech as ThermaSand.

 

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In September, 2017 Samancor informed EESTech that it would enter into an agreement with EESTech to implement a 10 million ton slag waste recycling project at their Ferrometals production facility, the largest of Samancor’s facilities, located in Emalahleni, Mpumalanga Province, approximately 65km east of Pretoria in South Africa.

 

On February 21, 2019, Samancor Chrome, awarded EESTech a 10-year contract with a 5-year extension option to undertake the recycling of FeCr slag waste at their Emalahleni facility. where over 12.5 million tons of FeCr slag waste is stockpiled with approximately 1 million tons of FeCr fines stored in a slimes dam.

 

EESTech was contracted to deliver a “zero waste” solution, where EESTech’s advanced process methodologies will reclaim up to 99% of residual FeCr units from Samancor’s slag dumps. The EESTech facility is configured to process up to 600,000 tons of slag per year, with test results projecting a FeCr metal recovery rate of above 16%. The current market value of FeCr metal is approximately US$1,335 per ton.

 

Under the terms of the contract, Samancor is obligated to purchase all FeCr metal reclaimed by EESTech at a pre-determined discount to the spot market price for FeCr. Based on the volume of recoverable FeCr we believe the potential contract value over ten years is approximately US$800 million, plus an upside share in FeCr market price increases.

 

All Post Process Tailing (“PPT”) generated from recycling and reclaiming of chrome units from slag is transformed, with no additional cost, into high-grade inert, specialty sand products, highly sought after by a variety of industries. Under the terms of contract with Samancor all PPT are 100% owned by EESTech, marketed as ThermaSand, with all revenues from the sale of this material going to the sole benefit of EESTech.

 

Equipment manufacturers configure each component to meet EESTech’s requirements. All equipment is underwritten with standard industry warranties and performance guarantees with turnkey on site commissioning, for delivery of the project EESTech will appoint a well credentialed local EPC contractor.

 

EESTech’s process configurations were validated in South Africa by Samancor over the course of a 4-year due diligence process, which included multiple sample processing’s, third party test analysis and economic and technical feasibility appraisals.

 

Upon contract completion, EESTech initiated a planned rollout schedule to advance the Samancor project which included contracting the services of Ekoinfo CC Environmental & Wildlife Management Consultancy, to undertake a comprehensive Environmental Impact Assessment (“EIA”) as part of the regulatory requirements that must be completed and approved prior to initiating project construction, EIA is now completed, and approval received.

 

A two-stage two-year rollout plan was determined the most cost-effective way to establish the Samancor project. A two-stage deployment program will result in Stage 1 requiring the establishment of a FeCr slag milling and screening facility that should produce an early cashflow of saleable products: a) a Chrome concentrate in the form of WRAM-ROX which EESTech intends to sell to Samancor and b) ThermaSand, for which EESTech already has a high volume off-take commitment for by the foundry and metal casting industry.

 

Stage 2, comprises the deployment of EESTech’s patent pending plasma over induction furnace (IRF), for the primary smelting of the chrome concentrate WRAM-ROX into FeCr metal, sold back to Samancor under the terms of an Off-Take Agreement for all FeCr metal produced. The ability and efficiencies of Stage 2 will significantly increase the commercial benefits to EESTech.

 

EESTech Technology

 

JetWater

 

The JetWater system was developed by EESTech in 2004, is a water purification technology that is designed to deliver efficient and cost-effective treatment of contaminated effluent arising from industrial processes or occurring in process waste streams. The JetWater can also be used for the desalination of sea water.

 

The JetWater system (“JWS”) can process up to 11,000 gallons (50,000 litres) of contaminated water per hour, using a simple and unique process for extracting dissolved and suspended solids from water, resulting in water which can be processed to pharmaceutical standard if required.

 

The evaporation based JWS process can produce purity of output water to less than ten parts per million of suspended solids. Achieving target levels of the output contaminants can be controlled to any level by mixing of feed water with processed water. Water classified as demineralised or potable are able to be produced from the process. Industrial waste

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water can be processed to achieve 100% recycling of site waters, making for no off-site discharge and hence exceeding all EPA guidelines.

 

The quality of the produced water may permit discharge to ecosystems with no further treatment necessary to comply with EPA guidelines. Further chemical treatment can be utilised to address residual pathogens that are not sterilised in the heating by this process. The requirement for chemical treatment and the quantities of chemicals utilised in the post-treatment dosing are significantly reduced in comparison to all filtration technologies. Cost of total treatment of wastewaters is significantly reduced due to less chemical intervention to achieve the same cleaning of the water.

 

Delta-E

 

The Delta-E is a proprietary technology under development by EESTech, designed to be a highly efficient, milling process that utilizes the extreme dynamics of natural forces on hard rock.

 

The Delta-E, with no internal moving components, is intended to use a counter flow vortex generator, acoustic modulation, vacuum and cryogenics to generate the required conditions to breakdown the structural bond of materials fed directly into the process chamber.

 

The design features of the Delta-E are intended to induce naturally occurring stresses that have the ability to mill dry or saturated materials down from 70mm to ultra-fines subangular particles of less than -50µm, water is vaporized, all solids are disassembled to their elemental form before discharging within the gas/air stream.

 

Processed materials will be pneumatically conveyed into a cyclone where they are separated from the gas/air stream. The processed material will then be dispensed from a storage hoper into a gravitational separator, whereby the ultra-fine materials are separated by specific gravity.

 

The purified fine materials will be able to be bagged and sold as feed stock for a variety of industrial applications or can be processed into WRAM-ROX as a smelt ready concentrate for the production of Metals and alloys.

 

Prototype Delta-E devices have been built in a number of development configurations and tested with a variety of feed materials, demonstrating the potential to significantly reduce the cost of milling hard rock materials.

 

The development phase of the Delta-E has demonstrated a promising potential to achieve the priceable design objective. EESTech plans to continue this development as a work in progress.

 

EESTech Binary Compounds

 

EESTech delivers advanced waste stabilization solutions that incorporate the use of proprietary binary compounds that react with wastes to encapsulate hazardous heavy metal materials within an acid resistant matrix. This reaction produces a strong, low permeability, chemically stabilized substrate that can be used in the processing of organic and inorganic waste streams.

 

When mixed with waste materials, these binary compounds react with polyvalent metal ions to produce precipitates, which are less soluble across a broader pH range than metal hydroxides produced by other processes. These precipitates reduce the solubility and leachability of heavy metals to produce a more chemically stable non-toxic material. The reduced mobility of hazardous solids through encapsulation, results in a by-product of limited solubility with reduced risk of leaching hazardous materials into the environment.

 

EESTech’s binary compound enhances the setting and hydration of all cementitious and pozzolanic matrixes. When combined with commercially available setting agents, it improves the final compressive strength of processed materials, reducing permeability and resistant to acidic attack. Increasing the hydration and bonding formation of cementitious or pozzolanic matrix decreases the total number and size of voids or channels that can form during curing to further promote the structural integrity of processed materials.

 

The permeability of processed material will decrease over time to further enhance acid resistance. The gel structures that achieve this function are generated through a combination of process formulations contributing to the structural compressive strengths of the final product. The resulting product is solid, less leachable and more resistant to corrosive or mechanical erosion and degradation.

 

The cumulative benefits of EESTech’s waste stabilization process have been validated by an analysis of ThermaSand. The reclaimed sand generated from EESTech’s remediation of ferrochrome (FeCr) slag waste. Independent analysis reports that EESTech’s waste stabilization process transforms the environmental liabilities of FeCr slag waste into an

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inert, commercially preferred high-grade sand.

 

Waste Resource Agglomeration Module (WRAM)

 

As previously described, WRAM is an EESTech developed process that incorporates proprietary technologies entailing the re-engineered and re-configured extrusion and or roll forming equipment, particle shaping and the chemical engineering of advanced binder formulations.

 

The WRAM process agglomerates ore concentrates or valuable materials reclaimed from coarse discard dumps and fines dams to produce a saleable product in the form of “WRAM ROX”:

 

·A single line WRAM facility is projected to be able to agglomerate up to 90-tonnes per hour of wet or dry fines into highly compacted customized shapes and size as required for downstream furnacing.

 

·WRAM readily enables the blending of various minerals such as iron ore and coking coal and or a EESTech proprietary pyro-metallurgical formula to enhance smelting efficiencies through reduced energy consumption and increased production.

 

·The WRAM process permits the porosity of WRAM ROX to be regulated to facilitate improved aeration and oxidization efficiencies when smelting.

 

·The high pressure blending and particle shaping of the WRAM allows for the potential bypassing of feedstock preparation of sintering, further reducing energy consumption and finished product costs.

 

·Regardless of the application, the high shear blending of the WRAM process produces high-quality products of consistent composition throughout with enhanced performance characteristics.

 

Multiple independent trials have successfully demonstrated that WRAM ROX have the necessary integrity to be used as feedstock for most applications, including waste coal fines agglomeration for gasification or for use as a feed stock for power generation.

 

WRAM ROX increase the efficiency of blast furnace operation to significantly reduce energy demand. WRAM ROX resulted in a 30% reduction in downstream processing energy requirements and up to a 45% reduction in required carbon additives used by the furnace in the smelting process, equating to a substantial reduction in carbon emissions.

 

Hybrid Coal Gas Turbine (HCGT)

 

The HCGT represents a significant initiative in the battle against climate change.

 

Billions of tonnes of waste coal are stockpiled in dumps around the world. Until now this has been an acknowledged legacy of coal mining and coal fired power generation. Waste coal is an ongoing generator of environmentally hazardous methane, a Green House Gases (“GHG”) emission that the United States EPA estimates is more than 25 time as potent as carbon dioxide at trapping heat in the atmosphere.

 

The HCGT is a robust, high efficiency combustion process with a multi-fuel capability, designed and developed for the combustion of low-quality waste coal in combination with fugitive coal mine methane gases such as Ventilated Air Methane (“VAM”) or Coal Mine Methane (“CMM”), in the uniquely configured HCGT rotary kilns.

 

Using waste coal for the production of a low carbon cement and the generation of electrical energy would greatly reduce GHG emissions when compared to the volume of methane emissions constantly generated over the lifetime of waste coal dumps. EESTech believes that utilization of waste coal as a fuel for the HCGT will mitigate the production of methane and acid mine leachates, to deliver long-term environmentally sustainable benefits and commercially responsible governance of natural resources.

 

The HCGT uses a sophisticated combustion control system to regulate the flow of variable fuel types or combination of fuels, including waste coal, high volumes of forced air flow and the ability to use CMM / VAM to produce high temperature combustion gases. These super-heated gases are passed through a heat recovery boiler to convert heat energy generated from combustion into steam which is expanded through a steam condensing turbine to produce electricity. All exhaust gasses are treated by an industry first acoustic agglomeration filtration process that removes up to 83% of all particulate matter from the HCGT exhaust stream.

 

The HCGT was developed as modular 1MW, 3MW and 6MW power generation platform with the capability of

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producing commercial volumes of low carbon cement per MWh of energy produced. All components utilised in the HCGT design were developed using commercially available components that could be sourced from local manufacturers, and configured as a platform to incorporate EESTech’s process. The HCGT was thus easily scalable to meet the requirements of most applications.

 

EESTech has recently made an addition to the HCGT by including the WRAM ROX process for the preparation of waste coal as fuel for the HCGT, whereby proprietary formulations are added to enhance the thermal values and combustion characteristics of the waste coal. The combination of enhanced fuel and high volumes of forced air flow result in ultra-high temperatures being achieved inside an enclosed flare, effectively eliminates any visible smoke from being exhausted.

 

A key component of the WRAM ROX formulation is designed to transform fly-ash, produced from the high temperature combustion of waste coal within the HCGT, into a calcined clinker that, when mixed with gypsum and milled down to a uniform size of below 30 micron, produces a high grade low carbon cement, an economically and environmentally sustainable replacement for Portland Cement.

 

After completing a fully developed HCGT pilot plant in 2007, three internationally recognised independent engineering companies were contracted to undertake a comprehensive performance review and to confirm the efficiencies and scalability of the HCGT.

 

R3 Process

 

EESTech’s Reclamation Resource Recovery Process (R3 Process™) represents Stage 1 of an efficient comminution process that enhances the beneficiation of feed materials to increase yields and profitability of waste recycling.

 

EESTech’s waste recycling process capability incorporates equipment attributes from the oil, cement and minerals processing industries whereby the R3 Process vastly outperforms traditional industry processes.

 

Traditional industry processes reduce solid materials down to an average size of 1mm to 5mm for recovery of one target mineral resource at a time. The unique configuration of EESTech’s comminution process reduces feed material down to under 500 micron with the ability to liberate any target resource from its matrix material, efficiently recovering up to 99% of multiple target materials in a single pass, with increased yields of higher grade products.

 

All post process tailings are upgraded into inert sand products marketed by EESTech as ThermaSandTM, sold for application into a number of downstream markets.

 

EESTech’s advanced beneficiation processes enhance the economic outcomes of the extractive metallurgy process to deliver significant improvements in resource recovery. All recovered materials are processed into smelt ready WRAM ROX, that enhance the efficiencies of the primary smelting process

 

Inductosmelttm Reduction Furnace (IRF)

 

As previously mentioned EESTech’s IRF is a breakthrough in primary smelting furnace technology, a disruptive technology that incorporates plasma over induction to deliver a paradigm shift in primary smelting furnaces.

 

The IRF delivers superior performance and significant energy savings over current mainstream furnace technologies. The IRF has the capability to significantly reduce the energy cost of primary ore smelting and achieve up to 99% conversion rate of metal-oxides into metals.

 

The EESTech IRF provides an ability to melt/smelt non-conductive materials such as ores, metal oxides, and silica that when smelted produce high levels of slag in an induction furnace. Until now, melting or smelting of non-conductive materials relied on low efficiency electric arc, blast furnaces, or traditional induction furnaces fitted with costly carbon crucibles which, contaminate the molten material with carbon and have a short life span making them costly to use.

 

EESTech’s IRF hybrid furnace has the capability to melt/smelt ores and concentrates while managing the high-volume production of slag in a continuous and highly efficient manner. The proprietary design of the IRF positions an ultra-high temperature plasma field directly over the slag zone of the IRF mitigating the formation of dangerous slag crust forming above the molten metal while significantly reducing noxious off-gases, emitted to atmosphere, normally associated with traditional smelting furnaces.

 

A key design feature of the IRF is the positioning of “Induction Heated Decanting Spouts” that regulate and automatically control the discharge of molten metal and molten slag. The molten slag is discharged through a spray

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system that transforms molten slag into spherical micro-prills (ThermaPrills™), a high-end ceramic sand product widely sought after by the metal casting industry.

 

The application of the EESTech IRF, with an integrated plasma cap for primary smelting is primarily enabled due to the following:

 

·The IRF can maintain slag in a safe molten liquid state.

 

·Automated regulation and control of molten metal and slag volumes by continuous discharge through an induction heated discharge spouts.

 

·Feedstock material is passed directly through an ultra-high temperature plasma field to rapidly initiate the melt/smelt process.

 

·The ultra-high temperatures of the plasma field and its extended exposure to the reduction zone significantly reduces energy demands of primary ore smelting, delivering higher conversion rates of metal-oxides into metals.

 

·The induction heated metal zone below the plasma heated slag zone completes the reduction of metal-oxides into molten metal and provides electromagnetic stirring action that produces homogenous metal alloys.

 

The net result of EESTech’s IRF is a highly-efficient primary smelting platform that is over 30% more energy efficient than traditional primary smelting furnaces, with significantly reduced emissions. The IRF produces high quality metal with zero-waste outcomes, all post process tailings are transformed into value-added inert sand products sold by EESTech as ThermaSandTM for application into a number of downstream markets.

 

Pyro-Metallurgical Thermite Formulations

 

EESTech has developed proprietary pyro-metallurgical thermite formulations that can be incorporated into WRAM ROX to enhance primary smelting efficiencies by significantly reducing energy requirements for smelting mineral oxides into metal including reactive metals such as titanium.

 

EESTech successfully demonstrated that this proprietary process has the potential for competitive commercial titanium production. Laboratory-scale testing that incorporated the use of EESTech’s proprietary pyro-metallurgical thermite formulations, confirmed the ability to convert titanium dioxide TiO2 into Ti metal through a highly efficient three-stage process incorporating a modified IRF, trademarked as the Ti-IRF.

 

The purpose of the first stage Ti-IRF process using EESTech’s pyro-metallurgical formulations was to ensure that the high-temperature smelting reactions occur reliably at a controlled rate.

 

The second stage of the process was smelting the WRAM ROX in the Ti-IRF to produce molten Ti metal. WRAM ROX formulations regulate the reaction rates to prevent violent splattering normally associated with high-temperatures generated by a thermite reaction. The Ti-IRF provides a controlled environment that prevents molten metal contamination. This aspect is critical to ensure a high-grade Ti metal product.

 

EESTech solved the problems related to the reactivity of titanium metal and its oxides by lining the Ti-IRF crucible with an oxide that does not react with molten Ti metal. Using a water-cooled copper skull crucible in the Ti-IRF for the production of Ti metal successfully addresses this critical issue.

 

The atmosphere within the Ti-IRF is controlled with inert gas to prevent oxidation of the molten Ti- metal during the smelting process. This will be continued in pilot-and commercial-scale work, and vacuum vessels will also be introduced to limit the oxygen content of the final product.

 

The third stage of the process for the reduction of the molten Ti-metal was the dissolved oxygen content so that the finished product meets industry standards. This is achieved by adding a granulated metal to the molten Ti-metal while in the Ti-IRF. The granulated metal has a higher affinity for oxygen than the molten Ti-metal, thus stripping out the oxygen without alloying with the molten Ti-metal. The granulated metal is converted to an oxide and is removed from the molten Ti-metal in the form of slag, which potentially has a commercial value of its own.

 

EESTech’s believes Ti-IRF has the potential to deliver a more efficient, more cost-effective method of producing Ti-metal compared to current industry processes. EESTech believes that the computational and experimental work conducted to date indicates that the Ti-IRF has the potential to deliver a more efficient and more cost-effective approach

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compared to the mainstream processes currently used to produce Titanium metal. EESTech believes the process will transition to become a major primary smelting breakthrough for the titanium industry.

 

EESTech believes that its’ proprietary formulations combined with the Ti-IRF process will disrupt and alter the landscape of this industry, as it holds the potential to be more energy efficient and to significantly reduce the carbon footprint of the industry standard Kroll process invented in 1932.

 

ThermaSand - ThermaPrills

 

As previously described, ThermaSand™ produced by EESTech’s unique process will have a market acceptance as a high grade, high demand, industrial sand product. Being manufactured from FeCr slag, it will have a typical chemical composition of silica, alumina and magnesium bound together in an amorphous glass matrix. ThermaSand is dust resistant, sub-angular, and with an elevated alumina content making it harder and stronger than silica sand which is being banned by the foundry and metals casting industries due to it causing silicosis.

 

ThermaSand can be upgraded into high-end metal casting ceramic prills, trademarked as ThermaPrills™, manufactured by melting ThermaSand in a proprietary induction heated launder where it is discharged into a PLC controlled proprietary venturi assembly using a high-pressure jet of air to rapidly cool the molten material into a spherical ceramic ThermaPrills, then screened into various size fractions ranging from 500µm to 100µm, with a uniformity coefficient of 1.22 as compared to natural sand of 1.64. ThermaPrills also have a 161% higher compression strength than natural sand, and a hardness of (62 Rockwell).

 

Sand is an essential part of the ferrous and non-ferrous foundry industry. Sand made from FeCr slag has proven to be a superior product when used in the production of casting molds. EESTech’s ThermaPrills can be sized and blended to meet demanding specifications of this high-end market opportunity.

 

ThermaPrills have a fusion point of above 1600°C and a low rate of thermal expansion, making them an ideal, cost effective foundry sand solution for most casting requirements. ThermaPrills produce stable cores and molds that yield high quality metal surface finishes, thereby reducing finishing costs of the final product. These attributes make ThermaPrills a premium foundry casting sand solution.

 

More than 90% of all manufactured goods in the United States contain cast metal components, requiring 100 million tons of foundry sand in circulation with 10 million being replaced annually. ThermaSand and TheraPrills will provide a longer service life and a more environmentally friendly alternative to the banned silica sand.

 

The wholesale price for industry standard metal casting sands ranges from US$620 to US$1,120 per ton, EESTech’s wholesales price is significantly less with ThermaSand being US$320 per ton and ThermaPrills at US$630 per ton.

 

EESTech transforms process slag, an industry liability, into the first real alternative to stop controversial wetland sand mining and the destruction of sensitive ecosystems. The production of ThermaSand and ThermaPrills delivers a total full cycle waste management solution.

 

Geopolymer Cement

 

There are nine different classes of geopolymers, but the classes of greatest potential application for construction and infrastructure are comprised of aluminosilicate materials, used to completely replace Portland cement in concrete. Geopolymer is ground-breaking and sustainable construction material, which can be used to replace Portland cement to reduce the adverse effect of extreme CO2 emission.

 

The production of Portland cement is responsible for upward of 80% of the energy and 91% of the carbon dioxide attributed to a typical ready-mixed concrete, the potential energy and carbon dioxide reduction using geopolymers are considerable. Studies show geopolymer concrete mixes indicate a potential for 46% less energy and a reduction in greenhouse gas emissions of 73%, making geopolymers the preferred alternative to Portland cement.

 

Through the application of a unique proprietary process that takes advantage of the sunk energy cost inherent in FeCr slag, EESTech is able to transform ThermaSand into geopolymer activator - a high pH, user friendly, liquid activator that chemically initiates the setting of sand and aggregate into geopolymer concrete.

 

EESTech’s geopolymers and green cement products offer advantages such as high strength, ultra-porosity, low drying shrinkage, low creep, acid resistance, thermal properties and ultra-low carbon footprint as a preferred substitute to Portland cement, therefore having the ability to generate carbon credits.

 

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The environmental regulations driving the cement industry to reduce emissions are increasing global demand for economically and environmentally sustainable alternatives to replace Portland cement. Furthermore, driving the demand for change is the international financial markets support investment in environmental sustainability projects which is contributing to the growth of the geopolymer and green cement markets.

 

All EESTech processes are nontoxic and ecologically harmless in freshwater environments, completely inorganic, economically and environmentally sustainable.

 

HEDS Battery (High Energy Density Storage).

 

Designed, developed and licensed to EESTech by: Dr. Patrick Glynn; Adjunct Professor, Griffith University, Queensland Australia and member of EESTech’s Advisory Board.

 

The HEDS technology was appointed the winner of the Kanthal Award in 2018, for innovation in energy storage and power generation.

 

Thermal Energy Storage

 

EESTech believes its HEDS Battery (High Energy Density Storage) is a breakthrough in high density energy storage, that delivers a paradigm shift in how high density energy storage is achieved.

 

The HEDS battery is based on sensible and latent heat energy storage using silicon metalloid, a unique material that overcomes previous energy storage barriers for heat, solar and wind power production and will in time, revolutionize green energy production around the world.

 

Phase Change Material of Choice

 

Silicon metalloid is solid or as a solid in granular form. For Silicon metalloid to undergo a phase change it requires heat to be applied until it melts. This is the phase change we are looking for, the melting point at which Silicon metalloid turns to liquid, is 14100C.

 

To raise the temperature 1000 grams of Silicon metalloid from ambient temperature (<>250C) to 14100C, the Silicon metalloid will absorb approximately 975,365 Joules. To now force the same 1000 grams of Silicon metalloid through the phase change and into a liquid without raising the temperature, the Silicon metalloid would need to absorb a further 1,743,763 Joules. This would give Silicon metalloid in its molten state without exceeding 14100C, an energy storage capacity that is 20 times that of a lead acid battery.

 

The HEDS battery has unlimited charge/discharge cycles, 480 W/hour per kg energy storage density and a potential >90% efficiency when used in combined heat and power (CHP) applications. HEDS batteries are suited for energy storage applications including mobile phone cell-towers, bus, truck, train and sea ferries due the smallest size starting with 500 kW/hour thermal storage for transport and commercial vehicles increasing to over 50 MW/hour thermal storage for utilities requiring mass scale energy storage.

 

EESTech believes this technology will set a new benchmark for clean energy storage, it is based on existing proven technologies, reducing development time, with design advantages achieving 20 times higher energy storage capacity of a lead acid battery and up to 200% better than all other energy storage technologies. The integration of custom sized HEDS will increase the average efficiencies of wind or solar power systems by over 80%.

 

A HEDS technology License Agreement has be assigned to Bharat Energy Storage Technology, India, this company has successfully produced operating systems and is in the process of introducing HEDS for both domestic and industry market applications. EESTech will initially contract Bharat Energy Storage Technology for the production and distribution of HEDS into current and growth market opportunities.

 

Intellectual Property Rights and Strategy

  

EESTech Intellectual Property Strategy

 

The following presents a high-level summary of EESTech intellectual property: i) current status; ii) ownership and IP management; and iii) future strategy.

 

EESTech Intellectual Property – Current Status

 

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EESTech intellectual property currently includes registered and unregistered intellectual property rights: three international patent applications, one early stage patent application, two registered trade marks, five unregistered trade marks, copyright works, data, designs, confidential information and trade secrets (please see Table 1).

 

The three international patent applications protect the novel aspects of the EESTech technology as a process, as the related equipment and the resulting products or qualities of the products.

 

PCTIB2022/055499 ‘Improved hybrid smelting system’ describes the novel EESTech induction smelting system and the parameters of control that optimize the hybrid combination of plasma over induction for a superefficient, continuous smelting process, via real-time monitoring and adjustment of the process parameters.

 

PCT/IB2022/056395 ‘Method and system for the remediation of spent pot liners’, citing PCTIB2022/055499 and the pertinent advantages of the EESTech smelting process, this patent application describes the EESTech plasma field remediation of spent pot liners where toxic and hazardous compounds are rendered safe, and remediation yields repurposed materials and value-add product. Remediation is accomplished by a system comprising a primary plasma arc furnace to receive and decompose the spent pot liners to produce a raw syngas, a secondary plasma arc furnace to receive and decompose the raw syngas to produce a refined syngas, and a controller to monitor and control the remediation.

 

PCT/IB2022/056624 ‘Method and system for beneficiation’ describes the EESTech method and system for beneficiation for the recovery of alloys, metals, and minerals from mining and process waste, for example, the recovery of ferrochrome (FeCr) from less desirable materials. An exemplary product is a chrome concentrate of 95% chrome units.

 

GB2210223.0 ‘Method and system for thermal spent pot liner beneficiation’ describes a process to thermally beneficiate spent pot liner from aluminum smelters into inert slag, crude iron (‘pig iron’) and syngas, with the advantage that the syngas is combusted in a generator providing supplemental power for the beneficiation process.

 

The three international patent applications will be published around mid—2023 and will enter specific national territories shortly after.

 

Product and corporate names are protected via registered, post publication registration applications and unregistered trade marks. We intend to use an international application for the EESTech leaf (grant due in EU 25th August 2022) internationally as an alphabet and translation agnostic brand identifier, akin to Apple Mac’s apple. A text component, the EESTech name and other descriptors will be used in association with the graphical mark.

 

Copyright works support the technology covered by the patent applications and an inventory of copyright works (including software, design drawings flow charts and other documentation) is underway, as is a review of designs eligible for protection via design rights, copyright and/or utility models.

 

IPR: Application number: Title: Filing date:
Patent: PCTIB2022/055499 Improved hybrid smelting system

15.06.21

 

  PCT/IB2022/056395

Method and system for the remediation of spent pot liners

 

03.12.21
  PCT/IB2022/056624 Method and system for beneficiation

17.12.21

 

  GB2210223.0 Method and system for thermal SPL beneficiation 12.07.22

Trade marks:

 

Registered trade marks

 

 

NZ 1077578

 

 

Inductosmelt®

 

 

04.10.17

  EU 018694714 ®

 

28.04.22

Unregistered trade marks  

ThermaSand™

ThermaPrills™

 
   

WRAM-ROX™

R3 Process™

Delta-E™

 

 
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Copyright:  

source code* and software* (including of the patented process master control unit)

documentation

brand illustrative and instructional matter

design drawings*

flow charts

graphical works

data

 

 
Design:  

Equipment / plant*

Equipment / plant components

logo

 

 
   

* currently among EESTech trade secrets

 

 

 

Ownership and IP management

 

In March 2022, EESTech, Inc incorporated a wholly owned subsidiary company – EESTech Europe Holdings BV to manage EESTech intellectual property. Among the anticipated benefits are: clarity of ownership for ease of intergroup and commercial transactions; the focus of an expert team; the minimizing of the overall rate of tax for the group and simplification of inter-jurisdictional tax issues; and ease of IP valuation.

 

In addition to other considerations the holdings entity, the Netherlands was chosen for its tax, funding and legal advantages (including the caliber of intellectual property law, practice and flexible choice of filing jurisdiction).

 

All intellectual property is in the process of assignment from EESTech, Inc to EESTech Europe Holdings BV, and EESTech Europe Holdings BV will now be the applicant and owner of intellectual property.

 

EESTech Intellectual Property Strategy

 

We believe each form of intellectual property right serves a different purpose. We believe as separate legal instruments, each intellectual property right can be used independent of, or in combination with other rights and can thus build value and facilitate different commercial operations internationally.

 

Historically, EESTech had relied on confidentiality and trade secrets. This reflected the fast pace of improvement and development to the EESTech technology, while avoiding the ‘public’ disclosure that most forms of intellectual property application entail.

 

The EESTech intellectual property portfolio is now being constructed to take advantage of different intellectual property rights to enhance protection, value and commercialization options.

 

Our goals is to seek to ensure each novel and valuable aspect of the EESTech technology will be being captured - individually and within the context of use - as well as iterations that are non-core business for EESTech but which can be out-licensed to third parties or further developed as collaborative ventures.

 

We intend for EESTech IPRs to extend internationally: to countries where EESTech operates/will be operating; to countries where there is out-licensing potential; and to countries where there might be risk of ‘invent around’ or ‘non- infringing’ copying. We will also select optimal jurisdiction for filing, according to qualitative criteria and competition.

 

Among other advantages, we intend that the portfolio will support EESTech’s commercial negotiating position and preemptively define EESTech ‘background’ intellectual property prior to collaboration to reserve EESTech’s right to related new intellectual property resulting from collaboration.

 

We intend that the portfolio will also be structured to enable EESTech to take-up alternative revenue generating opportunities.

 

Year Ended December 31, 2020

 

Covid-19

 

In February 2020, the Covid-19 Pandemic impacted EESTech’s project rollout plan by bringing everything to a halt, including EkoInfo’s work on the Samancor project EIA, with all other projects being disrupted.

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Sasol

 

In May 2020 Sasol issued an international Request for Proposals (RFP) / Tender for the agglomeration of coal fines to a specification suitable for gasification. While EESTech was once again invited to submit a proposal under this RFP now ready for public release. EESTech gave notice to Sasol that, as previously noted in 2019, that EESTech was not prepared to be part of its competitive tender process. EESTech reiterated that it would still welcome the opportunity to deliver the project for Sasol if the respondents to the new RFP failed to meet the original standards set by EESTech in 2014.

 

In 2021 Sasol made contact with EESTech because they were dissatisfied with the outcome of the tender by others as no suitable submissions were received. Subject to further trials being completed by EESTech Sasol is seeking a commercial arrangement with EESTech to agglomerate Sasol’s discard coal fines to a standard that could meet their gasification requirements. Sasol is ideally seeking a tolling / fee for service arrangement for an immediate agglomeration 25,000 tons of coal in the first year growing each year thereafter to an approximate 2,500,000 per year within 3 years, with a contract period of fifteen years. Pre-contract trials are continuing.

 

Spent Pot Liners (SPL) disposal

 

In March 2020 EESTech Australia Pty Ltd entered into a confidential Technology/process trial/demonstration Agreement with a New Zealand based aluminium smelter to develop and demonstrate a waste management solution for the disposal of Spent Pot Liners (SPL), a hazardous and problematic waste material produced through the production of aluminium. EESTech’s plans to develop an innovative waste management solutions that requires minimal pre-treatment of SPL waste streams by utilising the inherent calorific value of SPL to supplement the energy requirements for the remediation process.

 

EESTech’s reclamation and remediation process will incorporates the automated IRF to melt/smelt all SPL materials into non-hazardous vitrified and inert material suitable for downstream applications, resulting in a zero-waste outcome. The refractory component of SPL will be transformed into ThermaPrillsTM a high-grade, feature-rich, foundry and metal casting sands. The carbon component of SPL will be converted into an organics syngas. The syngas is quenched, cleaned and passed into an off-the-shelf engine that can use syngas as fuel for the generation of the project’s energy requirements.

 

In November 2020, Albatross Equity Investments of New Zealand purchased a 27% interest in EESTech Australia Pty Ltd, this sale was initiated to enable the development of comprehensive laboratory and pilot plant trials for the environmentally sustainable disposal of the SPL at the NZ aluminium production facility and to initiate the development of market opportunities for EESTech within Australia and New Zealand.

 

Samancor

 

In January 2020, EESTech appointed Nautilus Projects (Pty) Ltd, as the lead engineering company to initiate the detailed engineering plan for the deployment of the Samancor project. Nautilus is an independent turnkey projects solutions company, with expertise in the mining sector where they deliver Engineering, Procurement and Construction (EPC) services.

  

Over the twelve months Nautilus has worked closely with EESTech to complete the Samancor projects scope of works, identifying and consolidating arrangements with all equipment and service providers. EESTech and Nautilus have completed a comprehensive process design review, confirming the logistics and supply chain certainty for all imported equipment.

 

Year Ended December 31, 2021

 

Sasol

 

In April 2021 EESTech was once again contacted by Sasol who reported that they were dissatisfied with the outcome from multiple tenders as no suitable submissions were received and were now seeking a commercial arrangement with

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EESTech to use the WRAM ROX process to agglomerate Sasol’s discard coal fines to a standard that could meet their gasification requirements.

 

Sasol stated that the samples submitted by EESTech in 2014 were of a standard well above any competitive offers presented by respondents to the RFP and that EESTech's WRAM-ROX were the only products that met all their requirements.

 

This has resulted in Sasol exclusively engaging EESTech to deliver a fine coal agglomeration solution to recover what is presently deemed discard coal fines. The outcomes developed by EESTech will mitigate Sasol’s environmental waste footprint and convert an environmental liability into a suitable feedstock for Sasol’s gasification plant. Gasification, rather than direct combustion, significantly reduces the environmental emissions of coal as a fuel source.

 

While the previous RFP in 2014 was seeking to agglomerate coal fines for thermal combustion / power generation, the current requirement is for the agglomeration of coal fines for gasification, requiring a different formulation to produce WRAM-ROX, for gasification and the production of synthetic fuels.

 

Sasol has given EESTech two work orders, one for 25,000 tons per month and the second for 2.5 million tons per year. Sasol is ideally seeking a $40 per ton tolling / fee for EESTech’s services.

 

Samancor Chrome

 

After disruptions and long delays caused by the Covid-19 Pandemic, EkoInfo, EESTech’s environmental engineering consultants were able to complete the Environmental Impact Assessment for the Samancor project, and in October 2021 EESTech received notification, from the South African Government Department of Environmental Affairs, that the EIA for the Samancor project had been approved.

 

The Samancor project will be initiated in two separate stages, with each being managed by a contracted Engineering, Procurement and Construction (EPC) specialist, contract to manage the deployment of each stage as defined by a scope of works.

 

Stage 1. incorporates EESTech’s patent pending Reclamation Resource Recovery Process (R3 Process) which represents a highly efficient comminution process that maximizes the yield potential of targeted material from the recycling of process slag.

 

EESTech’s R3 Process capability incorporates long serves live equipment with successful operating histories in the oil, cement and minerals processing industries.

 

The unique configuration of EESTech’s comminution process reduces feed material down to under 500µm with the ability to liberate targeted resources from its matrix material, efficiently recovering up to 99% of multiple target materials in a single pass, all post process tailings are upgraded in inert products for downstream applications.

 

EESTech’s advanced R3 beneficiation process enhances the economic outcomes of the extractive metallurgy process to deliver significant improvements in resource recovery. All recovered resource concentrates are passed through a Waste Resource Agglomeration Module (WRAM) to produce saleable WRAM-ROX, an EESTech patent pending process that uses proprietary binder formulations to enhance the efficiencies of the smelting process.

 

Stage 2. incorporates EESTech’s patent pending Inductosmelt Reduction Furnace (IRF) a world’s first Plasma over Induction furnace comprising the integration of two well established technologies. The IRF has the ability to smelt non-conductive materials, a process that until now relied on low efficiency electric arc or blast furnaces. The IRF provides the perfect smelting environment to reduce metal-oxides into metal. It is significantly more cost effective to build, own, and operate than traditional furnace technologies.

 

Zero-Waste and Environmentally sustainable outcomes

 

Stage 1. incorporates a proprietary binary compound that reacts with the post process tailings to encapsulate any remaining hazardous materials within an acid resistant matrix to produce a high-grade, particle shaped, technical sand product, independently validated as a non-hazardous product with a NEMWA Class 4 “inert” material certification. Trademarked and marketed by EESTech as ThermaSand, in demand by a number of high volume downstream commercial markets.

 

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ThermaSand can be further upgraded into ceramic prills, trademarked as ThermaPrills. Manufactured by melting ThermaSand in a proprietary induction heated launder which is then discharged to form spherical ceramic ThermaPrills, a high-end, high value metals casting sand.

 

Stage 2. The IRF primary smelting process produces two products, FeCr metal which is sold back to Samancor and an ultra-clean slag material that is upgraded into ThermaPrills.

 

The net result of EESTech’s process is Zero-Waste and Environmentally sustainable outcomes

 

Product Warranties

 

We have not yet determined what type of warranty, if any, will be offered other than back to back equipment warrantees and process guaranties provided by equipment/component suppliers. The deployment of our process capabilities will be covered by independent detailed engineering service providers and EPC contractors. We anticipate that performance guarantees will apply to most of our systems. 

 

Employees

 

Our operations have been conducted by utilizing the services of specialist consultants and contractors. The Company has no direct employees. For as long it remains in the development stage, the Company intends to continue to utilize consultants and contractors for administrative, accounting, and other services.

 

Item 1A. Risk Factors.

 

An investment in the Company involves a high degree of risk. Before making an investment decision with respect to our common stock, you should consider the risks described below in addition to the cautionary statements and risks described elsewhere and the other information in this registration statement and in our other subsequent filings with the SEC. These risks and uncertainties are not the only ones we face. Additional risks and uncertainties not presently known to us or currently deemed immaterial by us, may also impair our operations. If any such risks actually occur, our business, financial condition, liquidity, results of operations and prospects could be materially adversely affected and our ability to implement our growth plans could be adversely affected.

 

Risks Related to our Business and Operations

 

We have incurred significant net operating losses since our inception and anticipate that we will incur continued losses for the foreseeable future.

 

We had an accumulated deficit of $35.1 million as of June 30, 2022, and we will continue to incur significant expenses in the foreseeable future related to the development and commercialization of our business plan. As a result, we will be sustaining substantial operating and net losses, and it is possible that we will never be able to sustain or develop the revenue levels necessary to attain profitability.

 

Our financial position creates doubt as to whether we will continue as a going concern.

 

We generated minimal revenues in 2021 and no revenues in 2020. Our financial position raises substantial doubt about our ability to continue as a going concern, and we may need to raise additional funds in order to continue to conduct our business. The Company historically has sold equity to raise working capital from a number of investor sources, on an as and when needed basis. There can be no assurances that we will be able to achieve a level of revenues adequate to generate sufficient cash flow from operations or obtain funding from additional financing through private placements or other financing necessary to support our working capital requirements. If we are unable to secure sufficient capital to fund our operating activities, we may be forced to delay the completion of, or significantly reduce the scope of, our business plan.

 

Some of our technologies are not, and may not become, commercially operated in the marketplace.

 

The Company’s technologies and process capabilities have not been commercially operated in the marketplace. We have established design capability and validated operational characteristics through laboratory testing, process trials and the operation of pilot plants. In addition, while our process capabilities are in an advanced stage of commercialization and are capable of “stand alone” operations, they have not been fully integrated with other technologies developed by the Company. In each of the technologies, the components are generally not unique in structure and operation. The uniqueness is in the formulation, process configurations and computerized operating control systems. There can be no

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assurance that we will be able to integrate these technologies and market them successfully as a package to generate revenues.

 

Our plan requires technological expertise to develop and to oversee the operations our technologies and process capabilities.

 

Although we have an internal research and engineering team and an advisory board conversant with the Company’s technologies and process capabilities, we currently have no plans to develop a deployment or operating team. We will use external EPC and OM contractors with technical expertise to provide us with developmental and operations services. If we are unable to locate and utilize contractors and service providers, we may be unable to develop and operate our existing technologies and may be unable to develop other technologies in the future.

 

Due to the period that we expect it will take to deploy our products, we will require significant capital to sustain us until we are able to market our products.

 

We expect that once we initiate the deployment of our products, it will take approximately 18 to 24 months to bring our products to market. We anticipate that we will receive minimal if any revenues during this period, which will place significant pressure on funding and other supply considerations. While we have budgeted for what we believe to be the required lead time to bring our products to market, no assurances can be given for adequate funding during this period. If we are delayed in obtaining adequate funding, we may be delayed in bringing our products to market.

 

We depend on the services of key personnel and the loss of any of these personnel could disrupt our operations. 

 

We do not have any full-time employees. Our officers and all other support persons perform services for us pursuant to consulting arrangements. We do not maintain “key-man” life insurance policy on our executive officers. The unexpected loss of the services of any of our executive officers could have a material adverse effect on our operations. 

 

We will be dependent on suppliers and manufacturers when we bring our technologies to market.

 

We currently do not possess or intend to develop the capability to undertake the manufacture and fabrication of our technologies when they are ready to be brought to market. We are developing relationships with key suppliers and manufacturers able to meet our requirements for providing such services. The manufacture and fabrication of our technologies will require exacting standards. If we are unable to develop these relationships, we may be unable to produce any products. In addition, if the suppliers and manufacturers are unable to meet the standards that our products require, we may experience delays in bringing our product to market. While we intend to develop a team that will address quality control issuers, we will be dependent on third parties to produce our technologies.

 

If we are unable to adapt our technologies to the changing demands of the marketplace, our products may become obsolete.

 

Changes in technology, competitively imposed process standards and regulatory requirements influence the demand for our products and services. To grow and remain competitive, we need to anticipate changes in technological and regulatory standards. We need to introduce new and enhanced products on a timely basis. We may not achieve these goals and some of our products may become obsolete. New products often face lack of market acceptance, development delays or operational failure. Stricter governmental regulations also may affect acceptance of new products. If our products are unable to gain market acceptance, our operations and financial condition may be adversely affected.

 

We may face competition from other companies marketing similar technologies.

 

There may be other companies that are currently developing technologies that are similar to the ones that we are developing. If such competitors are able to bring their products to market sooner than we are able, there may be less of a market for our products. In addition, once a market exists for technologies such as ours, we expect that additional competitors will enter the industry to attempt to capture the growth potential in the market. If competitors are able to provide a better product or adapt the technologies more quickly than we are able to, we may be unable to obtain or maintain market share. Some of our current and future competitors may be larger and better funded than we are. If our competitors are more successful than we are at developing uses for our technologies, our ability to generate revenues may be adversely affected.

 

We will be subject to extensive environmental laws and regulations in the jurisdictions where our products are used and we may be subject to significant liability if we are unable to comply with such laws and regulations.

 

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Environmental laws and regulations require us to meet certain standards and may impose liability if we do not meet them. Environmental laws and regulations and their interpretations change. We must comply with any new standards and requirements, even when they require us to clean up environmental conditions that were not illegal when the conditions were created. The liabilities and risks imposed on our customers by environmental laws may adversely impact demand for some of our products or services or impose greater liabilities and risks on us, which could also have an adverse effect on our competitive and financial position.

 

Our plan to operate internationally subjects us to increased risks that could harm our business, operating results and financial condition.

 

Although we intend to market our technologies internationally, we have limited experience with operations and our ability to manage our business and conduct our operations internationally. Doing so requires considerable management attention and resources and is subject to a number of risks, including the following:

 

·challenges caused by distance, language, and cultural differences;
·longer payment cycles;
·currency exchange rate fluctuations;
·political and economic instability; and
·higher costs associated with doing business internationally.

 

In addition, compliance with complex foreign laws and regulations that may apply to our international operations increases our cost of doing business in international jurisdictions. Violations of these laws and regulations could result in fines, criminal sanctions against us, our officers, prohibitions on the conduct of our business and damage to our reputation. Any such violation could result in prohibitions on our ability to offer our products and services to one or more countries, and could also materially damage our international expansion efforts, our business and our operating results.

 

If currency exchange rates fluctuate substantially in the future, our operating results, which are reported in U.S. dollars, could be adversely affected.

 

We present our financial statements in U.S. Dollar (“US$”). However, a significant portion of our expenses and revenue are and will be denominated in non-US$ currencies, in particular the Australian dollar (“A$”). As a result, there is potential that our financial results will be exposed to movements of the US$ against these foreign currencies. The risk may be increased where the foreign currency against the US$ becomes more volatile, for example, due to economic, political factors, or significant events that may occur in the jurisdictions of those foreign currencies.

 

If we are unable to protect our intellectual property rights, it could reduce the value of our products and services.

 

Our patents, trade secrets and other intellectual property rights are important assets for us. Various events outside of our control may pose a threat to our intellectual property rights as well as to our products and services. For example, effective intellectual property protection may not be available in every country in which our products are used. However, in the key geographical regions of South African, Australasian, North American and European markets, the Company already has patent applications in place. Also, the efforts we have taken to protect our proprietary rights may not be sufficient or effective. Any significant impairment of our intellectual property rights could harm our business or our ability to compete. Also, protecting our intellectual property rights is costly and time consuming. Any increase in the unauthorized use of our intellectual property could make it more expensive to do business and harm our operating results.

 

We may be subject to intellectual property rights claims, which are costly to defend, could require us to pay damages and could limit our ability to use certain technologies in the future.

 

Technology companies frequently own large numbers of patents and trade secrets and frequently enter into litigation based on allegations of infringement or other violations of intellectual property rights. Our technologies may not be able to withstand any third-party claims and, regardless of the merits of the claim, intellectual property claims are often time-consuming and expensive to litigate or settle. In addition, to the extent claims against us are successful, we may have to pay substantial monetary damages or discontinue use of our technologies that are found to be in violation of another party’s rights. We also may have to seek a license to continue such practices, which may significantly increase our operating expenses.

 

Risks Related to Our Common Stock

 

The market for our common stock may be limited, and our common stock price may fluctuate significantly.

 

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Although shares of our common stock currently trade on the Pink Limited Information Tier of the OTC Markets, trading has been limited and sporadic. A more active trading market may not develop or be sustained following the effectiveness of this registration statement or otherwise in the future. The market price of our common stock could fluctuate significantly as a result of:

 

·our operating and financial performance and prospects;
·quarterly variations in the rate of growth of our financial indicators, such as net income per share;
·changes in revenue or earnings estimates or publication of research reports by analysts about us our industry;
·liquidity and registering our common stock for public resale;
·sales of our common stock by our stockholders;
·increases in our cost of capital;
·changes in market valuations of similar companies;
·additions or departures of key management personnel; and
·actions by our stockholders;

 

The trading price of our common stock also may be subject to volatility due to general market conditions unrelated to the operating performance of the Company. Any of these fluctuations may adversely affect the trading price of our common stock.

 

Because our common stock is subject to the penny stock rules, broker-dealers may experience difficulty in completing customer transactions and trading activity in our securities may be adversely affected.

 

Our common stock currently is subject to the penny stock rules. A penny stock generally is any equity security, not listed on a national exchange, with a price of less than $5.00, subject to certain exceptions, that is offered by a company with limited revenues and assets. The penny stock rules require a broker-dealer: to deliver on any solicited transactions a standardized risk disclosure document prepared by the SEC; to provide the customer with a current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, monthly account statements showing the market value of each penny stock held in the customer’s account; to make a special written determination that the penny stock is suitable investment for the purchaser; and to receive the purchaser’s written agreement to the transaction. The disclosure requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for the stock that becomes subject to the penny stock rules. Because our common stock is subject to the penny stock rules, investors may find it more difficult to sell their securities, and the market liquidity for our securities could be severely and adversely affected by limiting the ability of broker-dealers to sell our common stock and the ability of stockholders to sell our common stock in any secondary market.

 

Our directors and executive officers own a substantial portion of our common stock, and their interests may conflict with yours.

 

At June 30, 2022, our directors and executive officers beneficially owned 17.4% of our outstanding common stock. No other person to our knowledge holds more than 5% beneficial ownership in our common stock. Accordingly, our directors and executive officers may be in a position to exercise substantial influence over the Company’s affairs. We cannot assure you that the interests of our directors and executive officers will always align with the interests of other holders of our common stock.

 

We are an “emerging growth company,” and the reduced reporting requirements applicable to emerging growth companies may make our common stock less attractive to investors.

 

We qualify as an “emerging growth company,” as defined in the JOBS Act. For so long as we remain an emerging growth company, we are permitted and plan to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. These provisions include, but are not limited to: being permitted to have only two years of audited financial statements and only two years of related management’s discussion and analysis of financial condition and results of operations disclosure; an exemption from compliance with the management’s assessment of our internal controls over financial reporting pursuant to Section 404(a) of the Sarbanes-Oxley Act; an exemption from compliance with the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act; not being required to comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements; reduced disclosure obligations regarding executive compensation arrangements in our periodic reports, registration statements and proxy statements; and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved by stockholders. In addition, the JOBS Act permits emerging growth companies to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We intend to take advantage

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of the exemptions described above. As a result, the information we provide will be different than the information that is available with respect to other public companies. We cannot predict whether investors will find our common stock less attractive if we rely on these exemptions. In addition, there may be an increased risk, or perceived increased risk, of material weaknesses or other deficiencies in our internal controls or that they may go undetected. If some investors find our common stock less attractive as a result of our status as an emerging growth company, there may be a less active trading market for our common stock, and the market price of our common stock may be more volatile.

 

We will incur increased costs and will be subject to additional regulations and requirements as a public company, which will lower our profits and may make it more difficult to run our business.

 

As a public company, we will incur significant legal, accounting and other expenses including costs associated with public company reporting requirements. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly. These laws and regulations also could make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve on the Board of Directors or as our executive officers of the Company. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to fines, sanctions and other regulatory action and potentially civil litigation.

 

We do not expect to pay cash dividends.

 

We do not expect to pay dividends in the near future. The payment of dividends, if any, will be contingent upon our revenues and earnings, if any, capital requirements, and our general financial condition. The payment of any dividends will be within the discretion of the Board of Directors. We presently intend to retain all earnings, if any, for use in our business operations and accordingly, the Board does not anticipate declaring any dividends in the foreseeable future.

 

Item 2. Financial Information.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The following should be read in conjunction with the financial statements and related notes appearing elsewhere in this registration statement. The discussion in this section regarding the Company’s business and operations includes “forward-looking statements” as described and qualified under “Cautionary Note Regarding Forward-Looking Statements” at the beginning of this registration statement.

 

Overview

 

EESTech promotes economically and environmentally sustainable technologies to the world’s mining and minerals processing industries. EESTech’s waste management solutions enable the recycling of mine site waste and process slag to recover targeted materials of value. EESTech’s mineral processing capabilities reduce cost, increase productivity, reduce energy requirements, eliminate polluting leachates, transform hazardous waste liabilities into products of value with zero-waste outcomes and reduce the carbon footprint of mineral resource processing. EESTech intends to generate its income from the sale of all recovered targeted materials being sold back to the waste owner. Post process tailing are transformed into inert high grade sand products 100% owned by EESTech. Trademarked as ThermSand and ThermaPrills, both products will be sold into high volume downstream markets.

 

Technologies and waste management Solutions offerings

 

Commercial advancement of EESTech’s remediation and reclamation capabilities is being underwritten by a self-performing approach whereby the Company demonstrating confidence in its service and technology offerings carries responsibility for project capital funding. Providing clients with low-risk waste management solutions on the basis that EESTech is only paid on performance.

 

EESTech initial focus will be on the deployment of the following Technology Solutions:

 

·Reclamation Resource Recovery Process (R3 Process): An efficient comminution process that maximizes the yield potential of targeted material from the recycling of mine site waste and process slag.
·Waste Resource Reclamation: Optimizing the recovery of materials of value from mine site waste and process slag.
·Waste Resource Agglomeration (WRAM): Agglomeration of fine materials into WRAM ROX, such as coal fines for gasification, recycling non-conductive materials, and metal oxides.
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·Waste to Energy Platforms: 1, 3 and 6MW power generation from waste materials such as low grade/ discard coal, methane run off, agricultural and forestry waste.
·Inductosmelt Reduction Furnace: Increasing the efficiencies of primary smelting, melt/smelt reclaimed non-conductive materials including metal oxides into metal/alloy.

 

The Company has been working to secure contracts with major global mining entities. Prior to August 2021, no revenue had been recorded within EESTech, Inc. In February 2019 Samancor Chrome, South Africa, the world’s largest integrated ferro-chrome (FeCr) producer awarded EESTech an exclusive ten-year agreement, with a five-year extension option, granting EESTech the reclamation rights to the FeCr process slag located at Samancor’s Ferrometals process facility in Emalahleni, South Africa. Project start was delayed due to the impact of the covid virus, with the Environmental Impact Assessment (EIA) being granted in October of 2021 and approvals were received January of 2022. An 18-month project establishment period is required before project cashflows are generated. In August 2021, a trial has begun with Sasol for which EESTech Inc is being paid. Revenue at this stage is minimal and as such, losses are still being recorded.

 

The Company has been in the developmental stage since its inception.

 

Results of Operations

 

The following table summarizes our results of operations:

 

    Six Months Ended     Years Ended
    June 30,     December 31,
    2022     2021     2021     2020
    $     $     $     $
Income     53,877             52,554      
Total operating expenses     (508,500)       (561,406)       (1,482,015 )     (932,455)
Net loss     (454,623)       (561,406)       (1,428,999 )     (932,471)
Loss per share     (0.002)       (0.003)       (0.007 )     (0.005)
Total assets     629,833       115,582       527,561       96,884
Total liabilities     521,275       1,153,713       570,199       1,025,533

  

Six Months Ended 30 June 2022 compared to Six Months Ended 30 June 2021

 

Net Loss. Our net loss for the six months ended June 30, 2022 and 2021 was $454,623 and $561,406 respectively.

 

General Administrative Expenses. Our general administrative expenses for the six months ended June 30, 2022 and 2021 were $508,500 and $561,406 respectively. A decrease of $52,906 or 9%. The decrease is primarily due to consulting fees which were $412,806 in the six months to June 30, 2021 compared to $325,703 during the six months to June 30, 2022. This decrease of 21% in the six months to June 30, 2022, is primarily due to a large number of shares issued to independent consultants in exchange for services in 2021. These services provided include delivering a series of small scale lab testing for the Rio Tinto SPL remediation project.

 

Foreign exchange loss (gain). Our foreign exchange loss/(gain) for the six months ended June 30, 2022 and 2021 were $226,239 loss and $119,269 loss respectively.

 

Year Ended December 31, 2021 compared to Year Ended December 31, 2020

 

Net Loss. Our net loss for the fiscal years ended December 31, 2021 and 2020 were $1,428,999 and $932,471 respectively.

 

General Administrative Expenses. Our general administrative expenses for the years ended December 2021 and 2020 were $1,482,015 and $932,455 respectively. An increase of $549,560 or 59%. The increase is primarily due to:

 

·Gain on Extinguishment of Debt of $1,775 for December 31, 2020, and a loss of $57,058 for December 31, 2021, respectively, an increased loss of $58,833. During the year to December 31, 2021, the Company issued shares to extinguish debt. The creditors balance (which predominantly consisted of consulting fees owed to the
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directors) was reduced from $763,665 at December 31, 2020, to $359,173 at December 31, 2021. This realized a loss on extinguishment of debt, as the value of shares issued was in excess of the liability extinguished.

 

·In the year ended December 31, 2020, new contracts were issued on the existing warrants which increased the exercise price from $0.01 to $0.035. This downward revaluation created a credit in legal costs resulting in an ending balance in the year ended December 31, 2020, of $47,700. This resulted in a large movement to the year ended December 31, 2021 (in which the legal costs were $19,279) of $66,979.

 

·Consultancy fees were $792,941 for the year to December 31, 2020, and $1,088,514 for the year to December 31, 2021, respectively an increase of $295,573 or 37%. In the year to December 31, 2021, the four directors each received 1,500,000 shares for past services rendered. The impact on consulting expenses for this issue was $252,000.

 

·Laboratory expenses were $10,729 for the year to December 31, 2020, and $37,382 for the year to December 31, 2021, respectively an increase of $26,653 or 248%. This was due to the Sasol testing which was initiated in the year to December 31, 2021.

 

Foreign exchange loss (gain). Our foreign exchange loss/(gain) for the fiscal years ended December 2021 and 2020 was a $239,233 loss and a $240,923 gain respectively.

 

Liquidity and Capital Resources

 

As of June 30, 2022, the Company had a cash balance of $559,333. As of December 31, 2021, the Company had a cash balance of $416,811 ($82,250 at December 31, 2020).

 

Cash Used in Operating Activities

 

Net cash used in operating activities for the six months ended June 30, 2022, and June 30, 2021, and for the years ended December 31, 2021, and 2020, were as follows:

    Six Months Ended     Years Ended  
    June 30,     December 31,  
    2022     2021     2021     2020  
    $     $     $     $  
Net cash (used in)/provided by operating activities     (421,038)       (219,932)       (897,136)       (72,192)  
                                 

 

Operating cash outflows have increased primarily due to the increased activity in connection with this registration statement, including increased accounting, audit and consulting costs.

 

Cash Flow from Investing Activities

 

Net cash used in investing activities for the six months ended June 30, 2022, and June 30, 2021, and for the years ended December 31, 2021, and 2020, were as follows:

    Six Months Ended     Years Ended  
    June 30,     December 31,  
    2022     2021     2021     2020  
    $     $     $     $  
Net cash (used in)/provided by investing activities     (32,662)       (3,828)       (43,194)       199,816  
                                 

 

All of the cash used in investing activities in 2021 and 2022 related to the purchase of fixed assets. In 2020, cash provided related to the sale of 27% of EESTech Australia.

 

Cash Flow from Financing Activities

 

Net cash used in financing activities for the six months ended June 30, 2022, and June 30, 2021, and for the years ended December 31, 2021, and 2020, were as follows:

    Six Months Ended     Years Ended  
    June 30,     December 31,  
    2022     2021     2021     2020  
    $     $     $     $  
Net cash provided by financing activities     585,251       346,351       1,320,651       44,675  
                                 

  

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The majority of this related to issuance of common stock with a very small balance being repayment of loans.

 

Going Concern

 

The financial statements have been prepared on a going concern basis that presumes the realization of assets and the discharge of liabilities in the normal course of operations for the foreseeable future.

 

Continuation of the Company as a going concern is contingent upon establishing and achieving profitable operations. If such operations require additional financing, as in the past, this will be raised in the form of debt or equity placements to accommodate both corporate and project requirements. EESTech historically has sold equity for raising working capital from a number of investor sources, on an as and when needed basis as successfully achieved in the past. The Company believes that it similarly will be able to raise capital going forward and, accordingly, the Company will remain in a position to continue the pursuit of its planned objectives as an ongoing concern.

 

The above conditions give rise to a material uncertainty which may cast substantial doubt on the Company’s ability to continue as a going concern.

 

Notwithstanding the above, management of the Company considers it appropriate to prepare the financial statements on a going concern basis after having regard to the Company being award a 10+year contract and two commercial work orders for its services, the Company in the near future will no longer be required to raise working capital through equity placements as the Company will have reached a market point where cash flows will be realized through its commercial and operational activities.

 

Should the Company be unable to continue as a going concern, it may be required to realize its assets and liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements. These financial statements do not give effect to any adjustments, which could be necessary, should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business, and at amounts different from those reflected in the financial statements.

 

Critical Accounting Policies

 

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our consolidated financial statements, which have been prepared in accordance with US GAAP. A summary of our significant accounting policies is included in Note 2 to the accompanying consolidated financial statements.

 

A “critical accounting policy” is one that is both important to the portrayal of our financial condition and results of operations and that requires management’s most difficult, subjective, or complex judgments. Such judgments are often the result of a need to make estimates about the effect of matters that are inherently uncertain. We have identified the following accounting policies as critical:

 

Stock Based Compensation

 

Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and non-employee services received in exchange for an award of equity instruments over the period the employees, consultants and third parties are required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employees, consultants and third parties’ services received in exchange for an award based on the grant-date fair value of the award.

 

The fair value of these stock based compensation and warrants is measured at grant date using the Black-Scholes option pricing model taking into account the terms and conditions upon which the options were granted. This requires management to make estimates regarding the inputs for option pricing models, such as the expected life of the option, the volatility of our common stock price, the vesting period of the option and the risk-free interest rate are used. Actual results could differ from those estimates. The estimates are considered for each new grant of stock options or warrants.

 

Share-based compensation expense is recognized on a straight-line basis over the period during which the options vest, with a corresponding increase in equity.

 

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Non-Controlling Interests

 

Non-controlling interests (“NCI”) are measured initially at their proportionate share of the acquiree’s identifiable net assets at the date of acquisition. Changes in the Company’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

 

Item 3. Properties.

 

The Company’s registered office is located at Level 1, Suite 417, 241 Adelaide Street, Brisbane, Queensland 4000, Australia. The Company currently does not have any material physical properties.

 

Item 4. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 

The following table sets forth as of June 30, 2022, the number and percentage of shares of common stock of the Company beneficially owned by the Company’s executive officers and directors. Common stock is the sole equity and voting securities outstanding of the Company. The Company is not aware of any other person beneficially owning more than 5% of common stock of the Company. On June 30, 2022, there were 255,613,697 shares of common stock outstanding.

 

Except as otherwise indicated, the Company believes that the beneficial owners of common stock listed below, based on information furnished by such owners, have sole investment and voting power with respect to such shares. Beneficial ownership is determined in accordance with the rules of the SEC.

 

Name   Amount and Nature of Beneficial Ownership   Percent of Class  
               
Murray Bailey (1)     18,520,488     7.2%  
Graeme Lynch (2)     12,980,775     5.1%  
Don Bartlem (3)     8,175,340     3.2%  
Gaylord Beeson     3,599,575     1.4%  
Patrick Caragata (4)     1,223,400     *  
Directors and executive officers as a group (5 persons)     44,499,578     17.4%  

 

*

Represents beneficial ownership of less than 1%. 

   
(1) Includes 1,100,139 shares owned by Mr. Bailey’s spouse and 1,783,300 shares owned by the Stonehaven Trust, of which Mr. Bailey is trustee. Mr. Bailey and his spouse share voting and dispositive power of the shares of our common stock owned by his spouse.
   
(2) Consists of (i) 5,195,875 shares owned by R3 Projects Pty Ltd, a custodian for a family trust of which Mr. Lynch is a beneficiary, (ii) 6,284,900 shares owned by Mr. Lynch’s spouse, of which 4,500,000 shares are pledged as security for a loan from a lender unaffiliated with the Company, and (iii) 1,500,000 shares owned by SIDEMA Pty, Ltd., a self-managed retirement fund on behalf of Mr. Lynch. Mr. Lynch and his spouse share voting and dispositive power of the shares of our common stock owned by his spouse and SDIEMA Pty, Ltd.
   
(3)

Includes 4,143,400 shares owned jointly with Mr. Bartlem’s spouse and for which they share voting and dispositive power. 

   
(4)

Consists of shares owned by Caragata Holdings Pty Ltd, of which Mr. Caragata is trustee. 

 

Changes in Control

 

We are not aware of any arrangements which may result in a “change in control” within the scope of Item 403 of Regulation S-K.

 

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Item 5. Directors and Executive Officers.

 

The directors and executive officers of the Company, their ages and present positions held with the Company are as follows:

 

Name   Age   Position with the Company
         
Murray Bailey   72   Chief Executive Officer and President, and Director
Graeme Lynch   60   Chief Operating Officer
Don Bartlem   76   Director
Gaylord Beeson   74   Director
Patrick Caragata   73   Director

 

Murray Bailey co-founded the Company, and has served as a director since 2006 and as Chief Executive Officer and President since 2009. Mr. Bailey has experience as an entrepreneur and in international business, with technical skills in product identification, research, and development.

 

Graeme Lynch has served as Chief Operating Officer of the Company since 2014. Mr. Lynch has more than 25 years of senior international corporate experience in both private and publicly listed organizations, particularly venture companies with an emphasis on technology commercialization. He also has experience financing company growth, managing merger, acquisition and divestment initiatives.

 

Don Bartlem has served as a director of the Company since 2012. Mr. Bartlem formerly was a mining industry executive in various positions with a background in industrial, corporate, government and international trade. He has experience planning and developing major projects in Western Australia. Mr. Bartlem formerly was a director of the Pilbara Development Commission, and was chairman of one of Australia’s largest Employees Superannuation Fund.

 

Gaylord Beeson has served as a director of the Company since 2005. Mr. Beeson formerly was an executive in the oil and chemical industry in various positions for more than 25 years until his retirement in 2002. His has business expertise in plant design, project management, plant operations, and quality control. Mr. Beeson also has managed, developed and delivered complex engineering and infrastructure projects.

 

Patrick Caragata has served as a director of the Company since 2020. Mr. Caragata has been the Head of Research and Development at RapidRatings Inc. since 2007 and previously served as its Chief Executive Officer until 2006. RapidRatings, Inc. is a New York-based company that provides software-based corporate credit ratings to manage supply chain and third-party risk. Before establishing RapidRatings, Mr. Caragata formerly was the Chief Tax Policy Advisor and Special Adviser Taxation Economics with New Zealand Inland Revenue Department, the Chief Economist for the New Zealand Ministry of Energy where he was the architect of petroleum royalty regime, and the Senior International Economist at Toronto-Dominion Bank in charge of the country risk analysis group. Mr. Caragata holds a Ph.D in Mineral Economics and Foreign Policy from the University of Toronto.

 

There are no familial relationships between any director and executive officer.

 

All directors hold office until the next annual meeting of stockholders of the Company and the election and qualification of their successors. Officers are elected annually by, and serve at the discretion of, the Board of Directors of the Company.

 

Mr. Bartlem has indicated to the Company that he intends to resign as director of the Company subsequent to it becoming a reporting company with the SEC and when practical to do so.

 

Board Committees

 

The Company does not presently have an audit committee (or a director that could be considered an audit committee financial expert), nominating committee or compensation committee. The Board of Directors as a whole performs the functions of each of these committees. The Board of Directors anticipates seeking to appoint a director with financial expertise within the next 12 months who would qualify as an audit committee financial expert.

 

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Code of Ethics

 

The Company has not adopted a code of ethics that applies to its principal executive officer, principal financial officer or principal accounting officer. The Company does not believe that a code of ethics is currently necessary because the Company has no employees and is a development stage company.

 

Item 6. Executive Compensation.

 

The following table sets forth information regarding compensation earned by the Company’s executive officers for the fiscal year ended December 31, 2021. Executive officers are compensated in Australian dollars; accordingly, for purposes of this table, compensation paid in A$ has been converted to US$ at an exchange rate of A$1 to US$0.7256 for the year ended December 31, 2021.

 

Summary Compensation Table

 

 

Name and Principal Position

 

 

Year

 

 

Salary

($)

Stock Awards(1)

($)

All Other
Compensation ($)

Total

($)

 

Murray Bailey

Chief Executive Officer

    2021     181,110 (2)(3) 78,000

 

14,512

(4)(5)   273,622  

Graeme Lynch

Chief Operating Officer

    2021     148,022 (6) 78,000     226,022  

(1)

Represents the grant date fair value of shares of our common stock issued during the fiscal year indicated, calculated in accordance with ASC Topic 718. The fair value of shares of our common stock issued was based on the trading price of the stock on the date of issuance.

   
(2) Mr. Bailey serves as Chief Executive Officer pursuant to a five-year management services consulting agreement with the Company entered into in February 2019 that provides for compensation of A$250,000 annually.
   
(3) Includes 1,470,250 shares of our common stock paid in settlement of $58,810 of consulting fees for part of 2021.
   
(4) Represents fees for services as a director of the Company.
   
(5) Amount shown reflects 361,700 shares of our common stock paid in settlement of director fees for all of 2021.
   
(6) Mr. Lynch serves as Chief Operating Officer pursuant to a five-year management services consulting agreement with the Company entered into in February 2019 that provides for compensation of A$17,000 monthly.
   

Outstanding Equity Awards at Fiscal Year-end

 

The following table sets forth, as of the year ended December 31, 2021, information regarding stock that has not vested held by the Company’s executive officers. The Company did not issue, and the executive officers do not hold, options. The Company has not adopted an equity incentive plan.

 

Name  

Number of shares of
stock that have
not vested (1)

(#)

  Market value of shares of units of stock that have not vested
($)
   
Murray Bailey     224,240   $ 11,212    
Graeme Lynch     224,240   $ 11,212    

 

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(1)

 

Represents shares of our common stock, awarded in connection with each executive officer’s consulting agreement in 2019, that remained subject to a repurchase option by the Company as of December 31, 2021; however, in accordance with its terms, each such repurchase option was fully released in April 2022.

 

Director Compensation

 

The following table sets forth the compensation earned or awarded to each director who served on the Board of Directors in 2021. The compensation of Mr. Bailey, who also serves as an executive officer, is set forth above in the Summary Compensation Table. Compensation fees for service as a director is A$20,000 annually. All directors also are reimbursed for out-of-pocket expenses, if any, in connection with attendance at meetings of the Board of Directors. The directors are compensated in Australian dollars; accordingly, for purposes of this table, compensation paid in A$ has been converted to US$ at an exchange rate of A$1 to US$0.7256 for the year ended December 31, 2021.

 

Name  

Fees Earned or Paid in Cash

($)

 

Stock Awards(1)  

($)

   

All Other Compensation

($)

 

Total

($)

 
Don Bartlem     14,512     78,000       87,072 (2)(3)   179,584  
Gaylord Beeson     14,512               14,512  
Patrick Caragata     14,512 (4)             14,512  

  

(1) Represents the grant date fair value of shares of our common stock issued during the fiscal year indicated, calculated in accordance with ASC Topic 718. The fair value of shares of our common stock issued was based on the trading price of the stock on the date of issuance.
   
(2) Mr. Bartlem provides corporate secretarial services as a consultant to the Company pursuant to an unwritten arrangement approved by the Board of Directors for A$120,000 annually.
   
(3) Amount shown reflects 361,700 shares of our common stock paid in settlement of $14,512 of consulting fees for part of 2021.
   
(4) Amount shown reflects 361,700 shares of our common stock paid in full settlement of director fees for 2021.

 

Item 7. Certain Relationships and Related Transactions and Director Independence.

 

Since January 1, 2021, there have been no transactions, and there currently are no proposed transactions in which the Company was or is a participant and in which any related person has or will have a direct or indirect material interest involving the lesser of $120,000 or one percent of the average of our total assets as of the end of last two completed fiscal years. A related person is any executive officer, director, nominee for director or holder of 5% or more of our common stock, or an immediate family member of any of those persons.

 

It is the Company’s current practice that all transactions with officers, directors, 5% stockholders and their affiliates are entered into only if they are approved by a majority of the disinterested directors or are on terms no less favorable to us than could be obtained from unaffiliated parties and are reasonably expected to benefit the Company.

 

The Board of Directors has chosen to apply Nasdaq Stock Market corporate governance requirements and standards in determining director independence. The Board of Directors has determined that two of its four members, Gaylord Beeson and Patrick Caragata, are independent as defined by the listing standards of the Nasdaq Stock Market.

 

Item 8. Legal Proceedings.

 

Currently we are not a party to any legal proceedings. However, we could become subject to claims and legal proceedings that may arise out of the normal course of business in the future.

 

Item 9. Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters.

 

Since February 17, 2009, when the Company filed a Form 15 to terminate registration of our common stock, our common stock has had limited and sporadic trading. Our common stock currently trades on the Pink Limited Information Tier of the OTC Markets under the symbol “EESH”.

 

For the periods indicated, the following table sets forth the high and low bid prices per share of common stock of the Company. The below prices represent inter-dealer quotations without retail mark-up, markdown, or commission and may not necessarily represent actual transactions.

 

2022 Fiscal Year   High     Low  
       
Third Quarter (through August 24, 2022)     0.055     0.0434  
Second Quarter     0.051     0.045  
First Quarter     0.0575     0.0145  

 

2021 Fiscal Year     High     Low  
         
Fourth Quarter     0.065     0.013  
Third Quarter     0.059     0.0086  
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Second Quarter     0.065     0.0022  
First Quarter     0.07     0.0017  

 

2020 Fiscal Year     High     Low  
         
Fourth Quarter     0.06     0.04  
Third Quarter     0.06     0.04  
Second Quarter     0.07     0.03  
First Quarter     0.09     0.03  

      

Shareholders

 

As of June 30, 2022, there were 501 stockholders of record of our common stock.

 

Dividends

 

Holders of our common stock are entitled to dividends when, as, and if declared by the Board of Directors, out of funds legally available therefore. We have never declared cash dividends on our common stock and the Board of Directors does not anticipate paying cash dividends in the foreseeable future as it intends to retain future earnings to finance the growth of our businesses. There are no restrictions in our articles of incorporation or bylaws that restrict us from declaring dividends.

 

Item 10. Recent Sales of Unregistered Securities.

 

The following sets forth information regarding all unregistered securities issued and sold by the Company since August 1, 2019:

 

·In August and September 2019, the Company sold an aggregate of 1,407,891 shares of common stock at a price of $0.10 per share for total consideration of $140,789 in a series of private placements to investors outside the United States.

 

·In February 2020, the Company sold an aggregate of 802,193 shares of common stock at prices between $0.05 and $0.10 per share for total consideration of approximately $45,000 in a series of private placements to investors outside the United States.

 

·In October 2020, the Company sold an aggregate of 500,000 shares of common stock at a price of $0.02 per share for total consideration of $10,000 in a series of private placements to investors outside the United States.

 

·In November 2020, the Company sold 1,213,666 shares of common stock at a price of $0.03 per share for total consideration of $36,410 in a private placement to an investor outside the United States.

 

·In March 2021, the Company sold (i) an aggregate of 3,879,050 shares of common stock at a price of $0.02 per share for total consideration of $77,581 in a series of private placements to investors outside the United States, and (ii) 1,000,000 shares of common stock at a price of $0.035 per share for total consideration of $35,000 in a private placement to an investor outside the United States.

 

·In April 2021, the Company sold (i) an aggregate of 861,500 shares of common stock at a price of $0.04 per share for total consideration of $33,640 in a series of private placements to investors outside the United States, and (ii) 306,880 shares of common stock at a price of $0.035 per share for total consideration of $7,672 in a private placement to an investor outside the United States.

 

·In May 2021, the Company sold an aggregate of 2,704,934 shares of common stock at prices between $0.032 and $0.045 per share for total consideration of approximately $150,000 in a series of private placements to investors outside the United States.

 

·Between June and September 2021, the Company sold an aggregate of 13,589,173 shares of common stock at a price of $0.04 per share for total consideration of $543,567 in a series of private placements to investors outside the United States.

 

·Between October and December 2021, the Company sold (i) an aggregate of 12,472,511 shares of common stock at a price of $0.04 per share for total consideration of $498,900 in a series of private placements to
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investors that included one United States person who qualified as an accredited investor and was known to the officers of the Company, and otherwise consisted of persons outside the United States, and (ii) 640,600 shares of common stock at a price of $0.045 per share for total consideration of $28,827 in a series of private placements to investors outside the United States.

 

·

Since January 2022, the Company has sold an aggregate of 18,371,879 shares of common stock at a price of $0.04 per share for total consideration of $734,875 in a series of private placements to investors that included three United States persons who qualified as accredited investors and were known to the officers of the Company, and otherwise consisted of persons outside the United States.

 

·In June and July 2020, four advisors who qualified as accredited investors holding warrants to purchase 787,499 shares of common stock of the Company agreed to modify such warrants so that (i) warrants to purchase 62,499 shares exercisable at a price of $0.015 per share was increased to $0.035 per share, and (ii) warrants to purchase 725,000 shares exercisable at a price of $0.10 per share was reduced to $0.035 per share.

 

·In July 2020, the Company issued a warrant to purchase 950,000 shares of common stock of the Company at a price of $0.035 per share to an advisor who qualified as an accredited investor. The advisor subsequently exercised (i) a part of such warrant in August 2020 to purchase 100,000 shares of common stock, and (ii) a part of such warrant in January 2021 to purchase 285,714 shares of common stock.

 

·The Company issued an aggregate of 14,281,545 shares of common stock to a total of 21 directors, officers, consultants, and advisors. These shares were awarded for compensatory purposes and no cash consideration was received by the Company in connection with their issuance.

 

·The Company also issued an aggregate of 13,941,244 shares of common stock to a total of 12 directors, officers, consultants, and advisors. These shares were awarded in satisfaction of accrued compensation in the aggregate amount of $695,593.

 

None of the foregoing transactions involved any underwriters, underwriting discounts or commissions. The offers, sales, and issuances of the securities described in this Item 10 were deemed to be exempt from registration under the Securities Act in accordance with either Regulation S under the Securities Act or Section 4(a)(2) of the Securities Act (and Regulation D promulgated thereunder) as transactions by an issuer not involving any public offering. Appropriate transfer restrictions were implemented with respect to the securities issued in such transactions. The offers and sales of these securities were made without any general solicitation or advertising.

 

Item 11. Description of the Registrant’s Securities to be Registered.

 

Description of Our Securities

 

General

 

Our authorized capital stock consists of 450,000,000 shares of common stock, par value $0.001 per share and 50,000,000 shares of undesignated preferred stock, par value $0.001 per share. As of the filing date of this registration statement, there were 259,302,369 shares of our common stock issued and outstanding held of record by 501 stockholders , and no shares of Preferred Stock issued or outstanding.

 

Common Stock

 

Voting. The holders of our common stock are entitled to one vote for each outstanding share of common stock owned by that stockholder on every matter properly submitted to the stockholders for their vote. Stockholders are not entitled to vote cumulatively for the election of directors. Except for the election of directors, which are elected by a plurality vote, a majority vote of common stockholders is generally required to take action under our bylaws.

 

Conversion, Redemption, and Pre-emptive Rights. Holders of our common stock have no conversion, redemption, pre-emptive, subscription or similar rights.

 

Dividend Rights. Subject to the rights of holders of preferred stock, holders of our common stock are entitled to receive such cash dividends as may be declared thereon by the Board of Directors from time to time out of assets of funds of the Company legally available for the payment of dividends.

 

Preferred Stock

 

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The Board of Directors has the authority to issue this preferred stock in one or more series and to fix the number of shares and the relative rights, including conversion rights, voting rights and terms of redemption (including sinking fund provisions) and liquidation preferences, without further vote or action by the stockholders. If shares of preferred stock with voting rights are issued, such issuance could affect the voting rights of the holders of our common stock by increasing the number of outstanding shares having voting rights, and by the creation of class or series voting rights. If the Board of Directors authorizes the issuance of shares of preferred stock with conversion rights, the number of shares of our common stock outstanding could potentially be increased by up to the authorized amount. Issuance of preferred stock could, under certain circumstances, have the effect of delaying or preventing a change in control of the Company and may adversely affect the rights of the holders of our common stock. Also, preferred stock could have preferences over our common stock (and other series of preferred stock) with respect to dividend and liquidation rights. There have been no issuances of preferred stock to date.

 

Warrants

 

Since 2016, we have issued an aggregate of 1,737,499 warrants which currently have an exercise price of $0.035 per share. These warrants are exercisable for a period of up to seven years after the date of issuance. As of the filing date of this registration statement, 1,351,785 of these warrants are outstanding.

 

Limitations on Directors’ Liability; Indemnification of Directors and Officers

 

As permitted by Delaware law, our certificate of incorporation and by-laws provide that no director will be liable to us or our stockholders for monetary damages for breach of certain fiduciary duties as a director. The effect of this provision is to restrict our rights and the rights of our stockholders in derivative suits to recover monetary damages against a director for breach of certain fiduciary duties as a director, except that a director will be personally liable for:

 

·any breach of his or her duty of loyalty to us or our stockholders;
·acts or omissions not in good faith which involve intentional misconduct or a knowing violation of law;
·the payment of dividends or the redemption or purchase of stock in violation of Delaware law; or
·any transaction from which the director derived an improper personal benefit.

 

For additional information, refer to “Item 12. Indemnification of Directors and Officers” in this registration statement.

 

At present, we do not maintain directors’ and officers’ liability insurance in order to limit the exposure to liability for indemnification of directors and officers, including liabilities under the Securities Act; however, we are in the process of obtaining such insurance.

 

Anti-Takeover Provisions of our Charter Documents and Delaware Law

 

Certificate of Incorporation and By-Laws

 

Among other things, our amended and restated certificate of incorporation and by-laws, each as currently in effect:

 

·provide that special meetings of stockholder may be called only by the affirmative vote of a majority of all members of the Board, the chairperson of the Board, the lead independent director, and the Chief Executive Officer or President, and the ability of stockholders to call a special meeting is specifically denied;
·do not provide for cumulative voting rights, therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the director standing for election, if they should so choose; and
·provide that all vacancies, including newly created directorships, may be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum.

The combination of these provisions will make it more difficult for our existing stockholders to replace the Board of Directors as well as for another party to obtain control of us by replacing the Board of Directors. These and other provisions may be deemed to have an anti-takeover effect or may delay, deter or prevent a tender offer or takeover attempt that a stockholder might consider to be in its best interests, including attempts that might result in a premium being paid over the market price for the shares held by stockholders.

 

Delaware Takeover Statute

 

We are subject to Section 203 of the Delaware General Corporation Law (the “DGCL”) which prohibits a Delaware corporation that is a public company from engaging in any “business combination” (as defined below) with any “interested stockholder” (defined generally as an entity or person beneficially owning 15% or more of the outstanding

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voting stock of the corporation and any entity or person affiliated with such entity or person) for a period of three years following the date that such stockholder became an interested stockholder, unless: (1) prior to such date, the Board of Directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; (2) on consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned (x) by persons who are directors and also officers and (y) by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or (3) on or subsequent to such date, the business combination is approved by the Board of Directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.

 

Section 203 of the DGCL defines “business combination” to include: (1) any merger or consolidation involving the corporation and the interested stockholder; (2) any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder; (3) subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; (4) any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or (5) the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.

 

Potential for Anti-Takeover Effects

 

While certain provisions of Delaware law may have an anti-takeover effect, these provisions are intended to enhance the likelihood of continuity and stability in the composition of the Board of Directors and in the policies formulated by the board, and to discourage certain types of transactions that may involve an actual or threatened change of control. In that regard, these provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal. The provisions also are intended to discourage certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for shares of our common stock and, as a consequence, they also may inhibit fluctuations in the market price of our common stock that could result from actual or rumored takeover attempts. Such provisions also may have the effect of preventing changes in our management.

 

Choice of Forum

 

Our by-laws provide that the Court of Chancery of the State of Delaware will be the exclusive forum for any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty; any action asserting a claim against us arising under the DGCL, our certificate of incorporation or our by-laws; any action to interpret, apply, enforce or determine the validity of our certificate of incorporation or our by-laws; and any action asserting a claim against us that is governed by the internal affairs doctrine.

 

This exclusive forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees. Alternatively, if a court were to find this exclusive forum provision in our by-laws to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving such action in other jurisdictions, all of which could have a material adverse effect on our business, financial condition, and results of operations.

 

Transfer Agent and Registrar

 

The transfer agent for shares of our common stock is Action Stock Transfer Corp, 2469 East Fort Union Boulevard, Suite 214, Salt Lake City, Utah, 84121.

 

Item 12. Indemnification of Directors and Officers.

 

Section 145 of the DGCL empowers a Delaware corporation to indemnify any persons who are, or are threatened to be made, parties to any threatened, pending, or completed legal action, suit, or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person was an officer or director of such corporation, or is or was serving at the request of such corporation as a director, officer, employee, or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit, or proceeding, provided that such officer or director acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation’s best interests, and, for criminal proceedings,

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had no reasonable cause to believe his conduct was illegal. A Delaware corporation may indemnify officers and directors in an action by or in the right of the corporation under the same conditions, except that no indemnification is permitted without judicial approval if the officer or director is adjudged to be liable to the corporation in the performance of his duty. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him against the expenses which such officer or director actually and reasonably incurred.

 

Our by-laws provide that we will indemnify our directors and officers to the fullest extent permitted by Delaware law. The by-laws also provide that the right of directors and officers to indemnification will be a contract right and will not be exclusive of any other right now possessed or hereafter acquired under any statute, provision of the certificate of incorporation, bylaw, agreement, vote of stockholders or disinterested directors or otherwise.

 

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

 

Item 13. Financial Statements and Supplementary Data.

 

The consolidated financial statements of EESTech, Inc. required to be included in this registration statement appear beginning on page F-1. 

 

Item 14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

 

None.

 

Item 15. Financial Statements and Exhibits.

 

(a) Financial Statements

 

The financial statements required to be included in this Registration Statement appear beginning on page F-1.

 

(b) Exhibits

 

 

Exhibit No. Description of Exhibit
  
3.1Amended and Restated Certificate of Incorporation of EESTech, Inc.
3.2By-Laws of EESTech, Inc.
10.1Agreement between EESTech, Inc. and Murray Bailey, dated as of February 18, 2019
10.2Agreement between EESTech, Inc. and Graeme Lynch, dated as of February 1, 2019
21Subsidiaries of Registrant

 

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SIGNATURE

 

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

Dated: August 26, 2022 EESTECH, INC.
   
  By:   /s/ Murray Bailey
    Name:   Murray Bailey
    Title: Chief Executive Officer and President
       

 

 

 

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (BDO Audit Pty Ltd; Brisbane, Queensland, Australia; PCAOB ID: 2256) F-2
EESTech, Inc Consolidated Financial Statements for the Years Ended 31 December 2021 and 2020 F-3
Consolidated Balance Sheets as at 31 December 2021 and 2020 F-3
Consolidated Statements of Operations and Comprehensive Loss for the Years Ended 31 December 2021 and 2020 F-4
Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the Years Ended 31 December 2021 and 2020 F-5
Consolidated Statements of Cash Flows for the Years Ended 31 December 2021 and 2020 F-6
Notes to Consolidated Financial Statements F-7
EESTech, Inc. Interim Unaudited Consolidated Financial Statements for the Six Months Ended 30 June 2022 F-16
Interim Unaudited Consolidated Balance Sheets for the Six Months Ended June 30, 2022, and December 31, 2021 F-16
Interim Unaudited Consolidated Statements of Operations and Comprehensive Loss for the Six Months Ended June 30, 2022, and June 30, 2021 F-17
Interim Unaudited Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the Six Months Ended June 30, 2022, and December 31, 2021 F-18
Interim Unaudited Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022, and June 30, 2021 F-19
Notes to Interim Consolidated Financial Statements F-20

 

 

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Report of Independent Registered Public Accounting Firm

 

Board of Directors and Stockholders

 

EESTech, Inc.

Brisbane, Australia

 

Opinion on the Consolidated Financial Statements

 

We have audited the accompanying consolidated balance sheets of EESTech, Inc. (the “Company”) as of December 31, 2020 and December 31, 2021, the related consolidated statements of operations and comprehensive loss, statements of changes in stockholders’ equity (deficit), and cash flows for each of the two years in the period ended December 31, 2021 and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and December 31, 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America.

 

Going concern uncertainty

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 1 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for opinion

 

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB and in accordance with standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over consolidated financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

/s/ BDO Audit Pty Ltd

We have served as the Company’s auditor since 2021

Brisbane, Queensland, Australia

August 26, 2022

 C: 
F-2

 

EESTECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

EESTech, Inc Consolidated Financial Statements for the Years Ended 31 December 2021 and 2020

 

Consolidated Balance Sheets as at 31 December 2021 and 2020

 

  Note DECEMBER 31, DECEMBER 31,
    2021 2020
    $ $
ASSETS      
       
Current assets:      
Cash     416,811     82,250  
Prepaid expenses     28,128      
Other receivables 3   42,818     8,624  
Total current assets     487,757     90,874  
               
OTHER NON-CURRENT ASSETS              
Property and equipment, net 4   39,804     6,010  
Total non-current assets     39,804     6,010  
               
Total assets     527,561     96,884  
               
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)              
               
Current liabilities:              
Accounts payable 5   359,173     763,665  
Accrued expenses 6   189,258     215,656  
Shareholder loans     21,768     46,212  
Total current liabilities     570,199     1,025,533  
               
Stockholders’ equity (deficit):              
Common Stock, $0.001 par value, 450,000,000 shares authorized;              
 and 239,001,760 shares issued and outstanding at              
December 31, 2021 and 184,373,533 as at December 31, 2020, respectively     240,175     185,548  
Additional paid-in capital     35,769,252     33,489,487  
Accumulated deficit     (34,682,133 )   (33,329,874 )
Accumulated comprehensive loss     (1,550,394 )   (1,531,011 )
Change in proportionate interest reserve     1,178,039     1,178,039  
Total stockholders’ equity (deficit)     954,939     (7,811 )
Non-Controlling Interest     (997,577 )   (920,838 )
Total equity (deficit)     (42,638 )   (928,649 )
               
Total liabilities and stockholders’ equity     527,561     96,884  

 

 

The accompanying notes are an integral part of these financial statements

 

 C: 
F-3

 

EESTECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

 

Consolidated Statements of Operations and Comprehensive Loss for the years ended 31 December 2021 and 2020

 

  Note FOR THE YEAR FOR THE YEAR
    ENDED ENDED
    DECEMBER 31, DECEMBER 31,
    2021 2020
    $ $
Revenue recognized from contracts with customers 9   52,554      
               
Operating expenses:              
General administrative     (1,482,015 )   (932,455 )
Total operating expenses     (1,482,015 )   (932,455 )
               
Loss from operations     (1,429,461 )   (932,455 )
               
Other income (expense):              
Unrealized FX gain/(loss) on translation     462      
Interest expense         (16 )
               
Net loss     (1,428,999 )   (932,471 )
               
Other comprehensive loss:              
Other comprehensive loss for the year, net of tax     (19,383 )   (91,706 )
               
Total comprehensive loss for the year     (1,448,382 )   (1,024,177 )
               
Loss for the year is attributable to:              
Owners of EESTech, Inc.     (1,352,260 )   (989,856 )
Non-Controlling Interests     (76,739 )   57,385  
               
Total comprehensive loss for the year is attributable to:              
Owners of EESTech, Inc.     (1,371,643 )   (1,081,562 )
Non-Controlling Interests     (76,739 )   57,385  
               
Loss per share     (0.007 )   (0.005 )
               
Weighted average number of common shares outstanding – basic and diluted     205,677,834     180,831,531  

 

  

The accompanying notes are an integral part of these financial statements 

 

 C: 
F-4

EESTECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the years ended 31 December 2021 and 2020

 

Common Stock     Deficit accumulated during
development
stage
     

Accumulated

other

comprehensive

loss

    Change in proportionate interest reserve    

Total

Stockholders’
equity
(deficit)

    Non-Controlling Interests     Total
equity
(deficit)
       

Shares issued

Par

 

Par

Value
$0.001

   

Additional

paid-in

capital

                                             
No.   $     $     $       $     $     $     $     $     $  
                                                         

Balance December

31, 2019

  175,909,330     176,133     33,041,653       (32,340,018 )   (1,439,305 )       (561,536 )       (561,537 )
                                                         
Issuance of stock for
Cash
  2,515,859     2,517     88,820                   91,337         91,337  
Issuance of stock for
Services
  5,948,344     6,898     359,014                   365,912         365,912  
Issuance of shares to Non-Controlling Interest                         22     22         22  
Change in proportionate interests                         1,178,017     1,178,017     (978,223 )   199,794  
                                                         
Net Loss                 (989,856 )           (989,856 )   57,385     (932,471 )
Adjustment for foreign currency translations                     (91,706 )       (91,706 )       (91,706 )

Balance December

31, 2020

  184,373,533     185,548     33,489,487       (33,329,874 )   (1,531,011 )   1,178,039     (7,811 )   (920,838 )   (928,649 )
                                                         
Issuance of stock for
Cash
  35,740,362     35,739     1,309,355                   1,345,094         1,345,094  
Issuance of stock for
Services
  18,887,865     18,888     970,410                   989,298         989,298  
                                                         
Net Loss                 (1,352,260 )           (1,352,260 )   (76,739 )   (1,428,999 )
Adjustment for foreign currency translations                     (19,383 )       (19,383 )       (19,383 )

Balance December

31, 2021

  239,001,760     240,175     35,769,252       (34,682,133 )   (1,550,394 )   1,178,039     954,939     (997,577 )   (42,638 )

 

The accompanying notes are an integral part of these financial statements 

 C: 
F-5

EESTECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY) 

Consolidated Statements of Cash Flows for the years ended 31 December 2021 and 2020

 

  FOR THE YEAR ENDED
DECEMBER 31,
2021
FOR THE YEAR ENDED
DECEMBER 31,
2020
  $ $
Cash flows from operating activities:    
     
Net loss   (1,428,999 )   (932,471 )
             
Adjustments to reconcile net loss to net            
cash used in operating activities:            
Amortization and depreciation   9,276     11,624  
Unrealized FX gain   462      
Shares issued for services and settlement of debt   989,298     365,912  
             
Changes in assets and liabilities:            
Increase (decrease) in accruals   (26,398 )   98,385  
Increase in other receivables   (8,152 )   (1,433 )
Decrease in prepaid expenses   (28,128 )    
Increase (decrease) in accounts payable   (404,495 )   385,791  
Net cash (used in) by operations   (897,136 )   (72,192)  
             
Cash flows used by investing activities:            
Acquisition of plant and equipment   (43,194 )    
Investment in subsidiaries       21  
Sale of 27% EESTech Australia       199,795  
Net cash (used by) from investing activities   (43,194 )   199,816  
             
Cash flows from financing activities:            
Issuance of common stock   1,345,094     91,337  
Loan repaid to shareholder   (24,443 )   (46,662 )
Net cash from financing activities   1,320,651     44,675  
             
Comprehensive loss on translation   (45,760 )   (90,088 )
Net increase in cash   334,561     82,211  
Cash, beginning of period   82,250     39  
Cash, end of period   416,811     82,250  
             
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:            
Issuance of stock for services and extinguishing debt   989,298     365,912  

 

 

The accompanying notes are an integral part of these financial statements

 

 C: 
F-6

 

EESTECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

1. BASIS OF PRESENTATION, ORGANIZATION AND NATURE OF OPERATIONS

 

(a) Organization and nature of operations

 

EESTech, Inc and subsidiaries (the “Company,” “we,” or “our”) promotes economically and environmentally sustainable technologies to the world’s mining and minerals processing industry. The Company has developed waste management solutions that enables the recycling of mine site waste and process slag to recover targeted materials of value. the Company’s industry disruptive technologies deliver a paradigm shift in how mineral recourses are processed.

 

The Company’s mineral processing capabilities dramatically reduce cost, increase productivity, reduce energy requirements, eliminate polluting leachates, transform hazardous waste liabilities into products of value with zero-waste outcomes, significantly reduce the carbon footprint of mineral resource processing.

 

·The Company was formed on 26th April, 2000 as a Delaware corporation, File number 3218311 as Aquadyne Inc. On the 26th June 2006 the name of the Company was changed to EESTech Inc.
·EESTech Australia Pty Ltd, ACN 103 011 696, was registered on 2nd December 2002. EESTech Inc. holds 73% with Albatross Equity Investments Limited Holding 27%.
·EESTech Inc Limited, incorporation number 6341030, New Zealand, was incorporated on 19th June 2017. and is 100% owned by EESTech Inc.
·EESTech Management Services (Pty) Ltd, number 2016 / 410087 / 07 South Africa, was registered on the 20th September 2016. and is 100% owned by EESTech Inc Limited.
·E’Prime Alloys LLC, ID 2019-000867434, was registered on 23rd September 2019. and is 100% owned by EESTech Inc.
·Environmental Management Solutions LLC, File number 5324412, was formed on 11th July 2013. and is 100% owned by EESTech Inc.

 

(b) Basis of Preparation

 

The consolidated financial statements have been prepared in accordance with United States generally accepted accounting policies (“US GAAP”) and have been prepared on a historical cost basis.

 

In accordance with Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern for at least one year after the date the consolidated financial statements are issued.

 

The Company has incurred significant losses since inception and expects to continue to incur losses as we advance our tests and development of technologies. The Company had an accumulated deficit of $34.7 million at December 31, 2021. Although the Company historically has sold equity for raising working capital from a number of investor sources, on an as and when needed basis, there is no assurance that any additional equity offerings, debt financings, or other non-dilutive third-party funding will be available to us on acceptable terms or at all. 

 

The above conditions give rise to a material uncertainty which may cast substantial doubt on the Company’s ability to continue as a going concern.

 

Notwithstanding the above, management of the Company considers it appropriate to prepare the financial statements on a going concern basis after having regard to the Company being award a 10+year contract and two commercial work orders for its services, the Company in the near future will no longer be required to raise working capital through equity placements as the Company will have reached a market point where cash flows will be realized through its commercial and operational activities.

 

Should the Company be unable to continue as a going concern, it may be required to realize its assets and liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements. These financial statements do not give effect to any adjustments, which could be necessary, should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business, and at amounts different from those reflected in the financial statements.

 C: 
F-7

 

COVID-19

 

The rapid global spread of the COVID-19 virus since December 2019 has affected production and sales, and disrupted supply chains across a range of industries. The impact of COVID-19 on the Company’s operations and financial performance will depend on numerous factors, including but not limited to the duration and spread of the virus, and the impact on the Company’s customers, employees, clinical trial sites and vendors.

 

As the COVID-19 pandemic continues to evolve, the ultimate impact of the pandemic on the Company’s operations is highly uncertain and subject to change and will depend on future developments, which cannot be accurately predicted, including the duration of the pandemic, additional or modified government actions, and the actions taken to contain COVID-19 or address its impact, among others. Management does not yet know the full extent of potential delays or impacts on the Company, clinical trials, research programs, healthcare systems or the global economy, but continue to monitor the situation closely.

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

 

(a) Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The financial statements have been consolidated with the parent company and all inter-company transactions and balances have been eliminated in consolidation.

 

The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognized directly in equity attributable to the parent.

 

Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of operations and comprehensive loss, statement of financial position and statement of changes in equity of the consolidated entity.

 

Losses incurred by the consolidated entity are attributed to the non-controlling interest in full, even if that results in a deficit

balance.

 

(b) Use of Estimates

 

The preparation of consolidated financial statements in conformity with US GAAP requires management to make certain judgements, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company has only used estimates for useful lives for depreciation, deferred income tax assets and liabilities and relatively minor accruals when they are not in possession of actual invoices after the balance date. The Company accounts for all its foreign subsidiaries on the same basis. Actual results could differ from those estimates.

 

(c) Revenue Recognition

 

 C: 
F-8

Revenue in EESTech currently relates to the ongoing R&D process with Sasol as EESTech has taken on testing of excess fine coal agglomeration.

 

Revenues are recognized when the control of the promised goods and services are transferred to a customer in an amount that reflects the consideration that the Company expects to receive in exchange for those services.

 

The Company applies the five following steps in order to determine the appropriate amount of revenue to be recognized as it fulfils its obligations under each of its arrangements:

 

·Identify the contract with the customer,
·Identify the performance obligations in the contract,
·Determine the transaction price,
·Allocate the transaction price to performance obligations in the contract, and
·Recognize revenue as the performance obligation is satisfied.

 

The Company estimates the transaction price, including variable consideration, at the commencement of the contract and recognizes revenue over the contract term, rather than when fees become fixed or determinable.

 

(d) Goods and Services Tax (“GST”) and other similar taxes

 

Revenues, expenses and assets are recognized net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority. In this case it is recognized as part of the cost of the acquisition of the asset or as part of the expense.

 

Receivables and payables are stated inclusive of the amount of GST receivable of payable. The net amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position.

 

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.

 

(e) Cash

 

Cash  include short-term investments that are readily convertible into cash with original maturities of three months or less.

 

(f) Property and Equipment

 

Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets, which is three to seven years. The Company has no equipment under capital lease.

 

(g) Borrowings

 

Loans and borrowings (including to related parties) are initially recognized at the fair value of the consideration received, net of transaction costs.

 

(h) Income Taxes

 

The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

ASC Topic 740, “Income Taxes,” prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company’s management determined that Australia is the Company’s only major tax jurisdiction.

 

 C: 
F-9

(i) Net Loss per Share

 

Basic earnings (loss) per share (“EPS”) is calculated by dividing profit or loss attributable to ordinary equity holders (numerator) by the weighted average number of ordinary shares outstanding (denominator) during the period. The denominator is calculated by adjusting the shares issued at the beginning of the period by the number of shares bought back during the period, multiplied by a time-weighting factor.

 

(j) Non-Controlling Interests

 

Non-controlling interests (“NCI”) are measured initially at their proportionate share of the acquiree’s identifiable net assets at the date of acquisition. Changes in the Company’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

 

(k) Segment Information

 

FASB ASC Topic No. 280, Segment Reporting (“ASC 280”), establishes standards for the way that public business

enterprises report information about operating segments in their annual consolidated financial statements and requires that those enterprises report selected information about operating segments in interim financial reports. ASC 280 also establishes standards for related disclosures about products and services, geographic areas and major customers. The Company’s business segment is based on the organization’s structure used by the chief operating decision maker for making operating and investment decisions and for assessing performance.

 

The Company is organized as a single operating segment, whereby its chief operating decision maker assess the performance of and allocates resources to the business as a whole.

 

(l) Share capital

 

The Company records proceeds from share issuances net of issuance costs. Par value is recorded at its rate of 0.001 per share with the remaining proceeds net of issuance costs being recorded as additional paid in capital.

 

The Company has issued freestanding warrants to purchase shares of common stock. The warrants are recorded as equity instruments at the grant date fair value using the Black-Scholes option pricing model and are not subject to revaluation at each balance sheet date.

 

The Company records compensation expense related to stock options issue to nonemployees, including consultants based on the fair value of the stock options calculated using the Black-Scholes option pricing model over the service performance period as the equity instruments vest. The Black-Scholes option-pricing model requires the use of highly subjective and complex assumptions, which determining the fair value of share based awards, including the option’s expected term and the price volatility of the underlying stock. The Company calculates the fair value of options granted by using the Black-Scholes option-pricing model with the following assumptions:

 

Expected Volatility – The Company estimated volatility for option grants by evaluating the average historical volatility of a peer group of companies for the period immediately preceding the option grant for a term that is approximately equal to the options’ expected term.

 

Expected Term – The expected term of the Company’s options represents the period that the stock-based awards are expected to be outstanding. The Company has elected to use the midpoint of the stock options vesting term and contractual expiration period to compute the expected term, as the Company does not have sufficient historical information to develop reasonable expectations about the future exercise patterns and post-vesting employment termination behavior.

 

Risk-Free Interest Rate – the risk-free interest rate is based on the implied yield currently available on US Treasury zero-coupon issues with a term that is equal to the options’ expected term at the grant date.

 

Dividend Yield - The Company has not declared or paid dividends to date and does not anticipate declaring dividends. As such, the dividend yield has been estimated to be zero.

 

(m) Fair value of financial instruments

 

Assets and liabilities recorded at fair value on a recurring basis in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

 

The three-tier fair value hierarchy for disclosure of fair value measurements as follows:

 

·Level 1 inputs consist of unadjusted quoted prices in active markets for identical assets or liabilities and have the highest priority.
 C: 
F-10

·Level 2 valuations are based on quoted prices in markets that are not active.
·Level 3 valuations are based on inputs that are unobservable and supported by little or no market activity.

 

(n) Foreign Currency Translation

 

The functional currency of the Company’s foreign operations is Australian Dollars. The Company translates the foreign currency financial statements of its foreign operations in accordance with generally accepted accounting principles by translating balance sheet accounts at the appropriate historical or current exchange rate on the balance sheet date and the income statement accounts using the prevailing exchange rates at the transaction date. Translation gains and losses are recorded in stockholders’ equity and realized gains and losses are reflected in operations. The translation exchange loss for the year ended December 31, 2021, was $2,385 and the translation exchange loss for the year ended December 31, 2020, was $3,011.

 

(o) Research and Development

 

Research and development costs are charged to expense as incurred. The Company’s research and development expenses consist primarily of expenditures for operations, studies, compensation and consulting costs.

 

(p) Newly Adopted Accounting Standards

 

“Income Taxes - Simplifying the Accounting for Income Taxes” - In December 2019, the Financial Accounting Standards Board issued Accounting Standards Update, or ASU, 2019-12, which simplified various aspects related to accounting for income taxes. ASU 2019-12 removed certain exceptions to the general principles in Accounting Standards Codification, or ASC, Topic 740 –Income Taxes, and clarified and amended existing guidance to improve consistent application.

 

The adoption of ASU 2019-12 on January 1, 2021, did not have material impact on the Company’s consolidated financial statements.

 

(q) Accounting Standards Not Yet Implemented

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. For operating leases, a lessee is required to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the balance sheet. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. For SEC Filers (GAAP definition), excluding smaller reporting companies (SRCs) as defined by the SEC , the ASU 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities including smaller reporting companies, as amended by ASU 2019-10, the ASUs are effect for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Earlier application is permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently evaluating the effect that the adoption of this ASU will have on its consolidated financial statements.

  

In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible instruments by eliminating the requirement to separate embedded conversion features from the host contract when the conversion features are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital. By removing the separation model, a convertible debt instrument will be reported as a single liability instrument with no separate accounting for embedded conversion features. This new standard also removes certain settlement conditions that are required for contracts to qualify for equity classification and simplifies the diluted earnings per share calculations by requiring that an entity use the if-converted method and that the effect of potential share settlement be included in diluted earnings per share calculations. The new standard will be effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company has not yet determined the potential impact the adoption may have on our consolidated financial statements.

 

In October 2021, the FASB issued ASU No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendments in this ASU improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability, and payment terms and their effect on subsequent revenue recognized by the acquirer. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, including the interim periods within those fiscal years. Early adoption is permitted.

 

3. OTHER RECEIVABLES

 

 C: 
F-11

Other receivables consist of the following:

   DECEMBER 31,
2021
  DECEMBER 31,
2020
    $    $ 
Amounts due from Customers   26,043     
Advances to related parties   14,955    7,702 
GST Receivable   1,820    922 
Total Other Receivables   42,818    8,624 

 

4. PROPERTY AND EQUIPMENT

 

Property and equipment consist of the following:

 

  Computers Plant & Equipment Lab Equipment TOTAL
  $ $ $ $
Balance at 1 January 2020 7,337 10,021 17,358
Additions 1,558 1,558
Impact of foreign exchange (1,282) (1,282)
Depreciation (3,924) (7,700) (11,624)
Balance at 31 December 2020 3,689 2,321 6,010
Additions 5,832 14,811 24,707 45,350
Impact of foreign exchange (2,318)  — (2,318)
Depreciation (3,096) (3,944) (2,198) (9,238)
Balance at 31 December 2021 4,107 13,188 22,509 39,804

  

Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets, which is three to seven years. The Company has no equipment under capital lease.

 

5. ACCOUNTS PAYABLE

 

Accounts payable consist of the following:

    DECEMBER 31,
2021
  DECEMBER 31,
2020
      $       $  
Amounts due for consulting costs to related parties/Directors     341,505       763,665  
Amounts due to suppliers     17,668        
Total Accounts Payable     359,173       763,665  

 

6. ACCRUED EXPENSES 

 

Accrued expenses consist of the following:

    DECEMBER 31,
2021
  DECEMBER 31,
2020
      $       $  
Amounts due to related parties/Directors     65,304       154,040  
Amounts due to suppliers     123,954       61,616  
Total Accounts Payable     189,258       215,656  

 

7. COMMON STOCK

 

During the fiscal year ended December 31, 2020, the Company raised $91,337 from private placements, via the issue of 2,515,859 shares.

 

 C: 
F-12

During the fiscal year ended December 31, 2020, the Company issued 2,472,200 shares in lieu of services received, valued at $169,376.

 

During the fiscal year ended December 31, 2020, the Company issued 3,476,144 shares in lieu of invoices received, valued at $196,536.

 

During the fiscal year ended December 31, 2021, the Company raised $1,345,094 from private placements, via the issue of 35,740,362 shares.

 

During the fiscal year ended December 31, 2021, the Company issued 8,422,765 shares in lieu of services received, valued at $490,346.

 

During the fiscal year ended December 31, 2021, the Company issued 10,465,100 shares in lieu of invoices received, valued at $498,952.

 

 

Warrants

 

The Company has historically issued warrants to purchase 1,737,499 shares of the Company’s common stock with an exercise price of $0.035 per share and a term of seven years. As at 31 December 2021, 1,351,785 of these warrants are outstanding. The warrants were recorded to additional paid-in capital.

 

The fair value of the warrants was determined using the Black-Scholes option-pricing method, with the following assumptions:

 

  Warrants
Fair market value of common stock $0.035
Expected dividend yield -%
Risk-free interest rate 0.12%
Expected volatility 27.29%
Expected term (in years) 7

  

8. INCOME TAXES

 

The components of net deferred taxes consisted of the following at December 31 (in thousands):

 

    DECEMBER 31, 2021   DECEMBER 31, 2020
      $       $  
Deferred tax assets:                
Net operating loss carry-forward     7,627       7,339  
Gross deferred tax assets     7,627        7,339   
Lee valuation allowance     (7,624 )     (7,338 )
Total deferred tax assets            
Deferred tax liabilities:                
Depreciation     (3)       (1)  
Net deferred tax assets     —         —    

 

The Company has provided a full valuation allowance on the net deferred tax assets. The valuation allowance increased by $0.3 million during 2021 and $0.1 million during 2020.

 

The Company utilizes ASC 740, Accounting for Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. At December 31, 2021, and 2020, valuation allowances for the full amount of the net deferred tax asset were established due to the uncertainties as to the amount of the taxable income that would be generated in future years.

Reconciliation of the differences between the statutory tax rate and the effective income tax rate is as follows:

 

   DECEMBER 31,
2021
  DECEMBER 31,
2020
       
Statutory federal tax (benefit) rate   (21.00)%   (21.00)%
Statutory foreign tax (benefit) rate   (25.00)%   (26.00)%
           
Weighted average effective tax rate   (21.00)%   (21.00)%
           
Valuation allowance   21.00%   21.00%
           
Effective income tax rate   0.00%   0.00%

 

The Company had available approximately $35.6M (2021) and $34.1M (2020) of unused net operating loss carryforwards that may be applied against future taxable income. Net operating loss carryforward that arose in the tax year 2000 expired in 2021 for Federal purposes.

The future utilization of the Company’s NOL and tax credit carryforwards to offset future taxable income may be subject to a substantial annual limitation as a result of changes in ownership by stockholders that hold 5% or more of the Company’s common stock. An assessment of such ownership changes under Section 382 was not completed through December 31, 2021. To the extent that an assessment is completed in the future, the Company’s ability to utilize tax attributes could be restricted on a year-by-year basis and certain attributes could expire before they are utilized. The Company will examine the impact of any potential ownership changes in the future.

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the nation. The Company is not currently under audit by the Internal Revenue Service or other similar state and local authorities. All tax years remain open to examination by major taxing jurisdictions to which the Company is subject. 

9. REVENUE

 C: 
F-13

Revenue was first recorded in EESTech in the third quarter of FY 2021. It relates to the ongoing R&D process with Sasol as EESTech has taken on testing of excess fine coal agglomeration. As of 31 December 2021, revenue was immaterial but is forecasted to increase throughout FY2022 providing the successful completion of the testing process is achieved.

 

Revenue is based on completion of 3 stages of the fine coal agglomeration, each stage being deemed to be a distinct performance obligation. The 3 stages are as follows:

 

1)Evaluation of agglomerates to confirm suitability for gasfication – EESTech will be provided with 2 tons of fine coal by Sasol for test work from which the Company must produce agglomerates meeting Sasol’s expectations along with providing a basic analysis of the agglomerated material. The Company has fulfilled their requirements of this stage during FY2021, and has recognized revenue related to this performance obligation.
2)A proposal from EESTech on the business model – If stage 1 produces suitable agglomerates which pass Sasol’s testing, EESTech will be required to develop a full proposal on a 200 kilo tons per annum scale project including a detailed business model. The Company has provided the proposal which Sasol has deemed appropriate and thus fulfilled their requirements of this performance obligation and recognized the corresponding revenue during FY2021.
3)Full scale demonstration in a commercial gasifier – Stage 3 entails EESTech to manufacture about 1,000 tons of agglomerates to enable a commercial scale demonstration. As at December 31, 2021, this stage had not yet been completed by the Company and hence, Sasol had not been invoiced for payment at year-end. However, the requirements of this stage were satisfied subsequent to year-end and has therefore been received and recognized as revenue in March 2022.

 

Once each stage is complete, an invoice is raised, and the revenue is recognized at a point in time, upon completion of each stage, which represents a distinct performance obligation. Each stage has been deemed a distinct performance obligation since the agreement between EESTech and Sasol is such that the customer can begin benefitting from the results provided by the Company after completion of each stage, or, if the customer should see no further benefit, cancel the remaining stages. Payment for each invoice is typically due 7 days from the date of invoice. There are no warranties or rights of return under this contract.

 

Costs relating to the completion of the contract are recognized as incurred in line with each stage. Costs are minimal and mainly relate to lab hire and small lab expenses. Larger laboratory expenses have been capitalized and are being depreciated in line with the depreciation policy.

 

The breakdown of opening and closing revenue for the year from contracts is noted below:

 

Sasol

($)

Opening balance of Contract Revenue at 1 January 2021
New Contracts 66,130
Revenue recognized on Contracts for performance obligations satisfied (52,554)
Difference arising on translation of foreign currency 554
Closing balance of Contract Revenue at 31 December 2021 14,130

 

The Company expects to be able to invoice the final stage of the contract of $14,130 upon shipment of the agglomerated fine coal. This took place in March 2022.

 

There was no revenue recognized for completion of performance obligations in prior periods.

  

10.  LOSS PER SHARE

 

The calculation of basic loss per share has been based on the following loss attributable to ordinary shareholders and weighted average number of ordinary shares outstanding.

    DECEMBER 31,
2021
  DECEMBER 31,
2020
    $   $
Loss attributable to ordinary shareholders     (1,352,260 )     (989,856 )
                 
Weighted average number of ordinary shares at 1 January     180,831,531       171,195,779  
Effect of shares issued in year     24,846,302       9,635,753  
Weighted average number of ordinary shares at 31 December     205,677,834       180,831,531  
Loss per share     (0.007)       (0.005)  

  

 

11. RELATED PARTY TRANSACTIONS

(a) Due from related parties

During the period ended December 31, 2021, the Company provided advances to two directors in the form of credit cards to be able to pay for any expenses. As at December 31, 2021, balances on account from related parties were $14,955 (2020: $7,702).

(b) Due to related parties

As at December 31, 2021, balances owing to related parties were $406,809 (2020: $917,705). They were unsecured and non-interest bearing, and had no stated terms of repayment. All of these relate to director fees and contractor/consulting costs. 

12. ISSUANCE OF SHARES TO EXTINGUISH DEBT

 

The Company, on occasion, uses shares to extinguish debt. This can be in the form of an invoice or services received. Where an invoice has been received, the shares are valued at the quoted market value on the day of settlement. Any difference between the value of the shares and the net carrying amount of the extinguished debt is recognized in income of the period of extinguishment as losses or gains. For the year ended December 31, 2021, a loss of $57,058 has been recognized (2020: gain of $1,775).

 

 C: 
F-14

 

Where shares are issued for services rendered, the Black-Scholes method of valuation is applied and the expense is straight lined over the period of service received. During the years ended December 31, 2021, and 2020 the Company issued 10,465,100 and 3,476,144 shares of common stock for the extinguishment of $498,952 and $196,536 of debt, respectively.

 

13. COMMITMENTS AND CONTINGENCIES

 

Operating Leases

 

The Company leases its corporate offices under a month-to-month agreement, and under an operating lease that is renewable annually and expires in December 2022. Rent expense for office space amounted to approximately $660 for both the years ended December 31, 2021, and 2020, respectively.

 

Legal Matters

 

From time to time, the Company is involved in various disputes and litigation matters that arise in the ordinary course of business. To date, the Company had no material pending legal proceedings.

 C: 
F-15

EESTech, Inc. Interim Unaudited Consolidated Financial Statements for the Six Months Ended 30 June 2022

 

EESTECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

Interim Unaudited Consolidated Balance Sheets as at June 30, 2022, and December 31, 2021

 

    Note   JUNE 30,   DECEMBER 31,
        2022   2021
        $   $
ASSETS            
             
Current assets:            
Cash         559,333       416,811  
Prepaid expenses         11,926       28,128  
Other receivables   3     19,412       42,818  
Total current assets         590,671       487,757  
                     
OTHER NON-CURRENT ASSETS                    
Property and equipment, net   4     39,162       39,804  
Total non-current assets         39,162       39,804  
                     
Total assets         629,833       527,561  
                     
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)                    
                     
Current liabilities:                    
Accounts payable   5     364,579       359,173  
Accrued expenses   6     156,696       189,258  
Shareholder loans               21,768  
Total current liabilities         521,275       570,199  
                     
Stockholders’ equity (deficit):                    
Common Stock, $0.001 par value, 450,000,000 shares authorized;                    
 and 255,613,697 shares issued and outstanding at                    
June 30, 2022 and 239,001,760 as at December 31, 2021, respectively         256,289       240,175  
Additional paid-in capital         36,385,391       35,769,252  
Accumulated deficit         (35,071,260 )     (34,682,133 )
Accumulated comprehensive loss         (1,576,828 )     (1,550,394 )
Change in proportionate interest reserve         1,178,039       1,178,039  
Total stockholders’ equity (deficit)         1,171,631       954,939  
Non-Controlling Interest         (1,063,073 )     (997,577 )
Total equity (deficit)         108,558       (42,638 )
                     
Total liabilities and stockholders’ equity         629,833       527,561  

   

The accompanying notes are an integral part of these financial statements

 

 C: 
F-16

 

EESTECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

 

 

Interim Unaudited Consolidated Statements of Operations and Comprehensive Loss for the Six Months Ended June 30, 2022, and June 30, 2021

 

    FOR THE SIX
MONTH PERIOD
  FOR THE SIX
MONTH PERIOD
    ENDED   ENDED
    JUNE 30,   JUNE 30,
    2022   2021
    $   $
Revenue recognized from contracts with customers  9   53,877        
                 
Operating expenses:                
General administrative     (508,500 )     (561,406 )
Total operating expenses     (508,500 )     (561,406 )
                 
Loss from operations     (454,623 )     (561,406 )
                 
Other income (expense):                
Unrealized FX gain/(loss) on translation            
Interest income            
Interest expense            
                 
Net loss     (454,623 )     (561,406 )
                 
Other comprehensive income/(loss):                
Other comprehensive income/(loss) for the year, net of tax     (26,434 )     (31,287)  
                 
Total comprehensive loss for the year     (481,057 )     (592,693 )
                 
Loss for the year is attributable to:                
Owners of EESTech, Inc.     (389,127 )     (520,149 )
Non-Controlling Interests     (65,496)       (41,257 )
                 
Total comprehensive loss for the year is attributable to:                
Owners of EESTech, Inc.     (415,561 )     (551,436 )
Non-Controlling Interests     (65,496)       (41,257 )
                 
Loss per share     (0.002 )     (0.003 )
                 
Weighted average number of common shares outstanding – basic and diluted     245,680,221       189,919,013  
                 

    

The accompanying notes are an integral part of these financial statements 

 

 C: 
F-17

 

EESTECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

 

 

Interim Unaudited Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the Six Months Ended June 30, 2022, and June 30, 2021

 

    Common Stock     Deficit accumulated during
development
stage
 

Accumulated

other

comprehensive

income/(loss)

  Change in proportionate interest reserve  

Total

Stockholders’
equity
(deficit)

  Non-Controlling Interests   Total
equity
(deficit)
 
   

 

Shares issued

Par

 

Par

Value
$0.001

 

Additional

paid-in

capital

                           
    No.   $   $     $   $   $   $   $   $  
                                         

Balance December

31, 2020

    184,373,533       185,548       33, 489,487           (33,329,874 )     (1,531,011 )     1,178,039       (7,811 )     (920,838 )     (928,649 )
                                                                             
Issuance of stock for
Cash
    10,879,435       11,064       336,391                             347,455             347,455  
Issuance of stock for
Services
    1,887,985       1,888       133,868                             135,756             135,756  
Issuance of shares to Non-Controlling Interest                                                          
Change in proportionate interests                                                          
                                                                             
Net Loss                           (520,149 )                 (520,149 )     (41,257 )     (561,406 )
Adjustment for foreign currency translations                                 (31,287)             (31,287)             (31,287)  

Balance June

30, 2021

    197,140,953       198, 500       33,959,746           (33,850,023 )     (1,562,298 )     1,178,039       (76,036 )     (962,095 )     (1,038,131 )
                                                                             

Balance December

31, 2021

    239,001,760       240,175       35,769,252           (34,682,133 )     (1,550,394 )     1,178,039       954,939       (997,577 )     (42,638 )
Issuance of stock for
Cash
    14,983,207       14,986       584,345                             599,331             599,331  
Issuance of stock for
Services
    1,628,730       1,128       31,794                             32,922             32,922  
                                                                             
Net Loss                           (389,127 )                 (389,127 )     (65,496)       (454,623 )
Adjustment for foreign currency translations                                 (26,434 )           (26,434 )           (26,434 )

Balance June

30, 2022

    255,613,697       256,289       36,385,391           (35,071,260 )     (1,576,828 )     1,178,039       1,171,631       (1,063,073 )     108,558  
                                                                                     

  

The accompanying notes are an integral part of these financial statements 

 C: 
F-18

EESTECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY) 

 

 

Interim Unaudited Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022, and June 30, 2021

 

    FOR THE SIX MONTHS ENDED JUNE 30, 2022   FOR THE SIX MONTHS ENDED JUNE 30, 2021
    $   $
Cash flows from operating activities:        
         
Net loss     (454,623 )     (561,406 )
                 
Adjustments to reconcile net loss to net                
cash used in operating activities:                
Amortization and depreciation     6,919       4,345  
Shares issued for services and settlement of debt     32,922       135,756  
                 
Changes in assets and liabilities:                
Increase (decrease) in accruals     (32,561)       30,239  
(Increase) decrease in other receivables     (2,609 )     89  
Increase in prepaid expenses     23,508        
Increase in accounts payable     5,406       99,045  
Net cash used in operations     (421,038 )     (219,932)  
                 
Cash flows used by investing activities:                
Acquisition of plant and equipment     (32,662 )     (3,828)  
Net cash used by investing activities     (32,662 )     (3,828)  
                 
Cash flows from financing activities:                
Issuance of common stock     599,331       347,455  
Loan repaid to shareholder     (14,080 )     (1,104 )
Net cash from financing activities     585,251       346,351  
                 
Comprehensive gain (loss) on translation     10,971       (31,247)  
Net increase in cash     142,522       19,344  
Cash, beginning of period     416,811       82,250  
Cash, end of period     559,333       101,594  
                 
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:                
Issuance of stock for services and extinguishment of debt     32,922       135,756  

    

The accompanying notes are an integral part of these financial statements

  

 C: 
F-19

EESTECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

Notes to Interim Consolidated Financial Statements

 

1. BASIS OF PRESENTATION, ORGANIZATION AND NATURE OF OPERATIONS

 

Please see Note 1 “Basis of presentation, organization and nature of operations” contained in the audited consolidated financial statements for the year ended December 31, 2021.

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Please see Note 2 “Summary of Significant Accounting Policies” contained in the audited consolidated financial statements for the year ended December 31, 2021.

 

(a)Newly Adopted Accounting Standards and Accounting Standards not yet Implemented

 

During the period there has been no new Accounting Standards Update issued by the Financial Accounting Standards Board that had material impact on the Company’s consolidated financial statements.

 

3. OTHER RECEIVABLES

 

Other receivables consist of the following:

    JUNE 30,
2022
  DECEMBER 31,
2021
    $   $
Amounts due from Customers     -       26,043  
Advances to related parties     14,198       14,955  
GST Receivable     5,214       1,820  
Total Other Receivables     19,412       42,818  

 

 

4. PROPERTY AND EQUIPMENT

 

Property and equipment consist of the following:

 

  Computers Plant & Equipment Lab Equipment TOTAL
  $ $ $ $
Balance at 1 January 2021 3,689 2,321 6,010
Additions 5,832 14,811 24,707 45,350
Impact of foreign exchange (2,318) —  (2,318)
Depreciation (3,096) (3,944) (2,198) (9,238)
Balance at 31 December 2021 4,107 13,188 22,509 39,804
Additions 3,991 3,108 7,099
Impact of foreign exchange (1,158) 337 (821)
Depreciation (1,351) (2,448) (3,121) (6,920)
Balance at 30 June 2022 5,589 10,740 22,833 39,162

   

Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets, which is three to seven years. The Company has no equipment under finance lease.

 

5. ACCOUNTS PAYABLE

 

Accounts payable consist of the following:

 C: 
F-20

 

 

    JUNE 30,
2022
  DECEMBER 31,
2021
    $   $
Amounts due for consulting costs to related parties/Directors     343,435       341,505  
Amounts due to suppliers     21,144       17,668  
Total Accounts Payable     364,579       359,173  

  

6. ACCRUED EXPENSES

 

Accrued expenses consist of the following:

    JUNE 30,
2022
  DECEMBER 31,
2021
    $   $
Amounts due to related parties/Directors     86,112       65,304  
Amounts due to suppliers     70,584       123,954  
Total Accrued Expenses     156,696       189,258  

   

7. COMMON STOCK

  

During the fiscal year ended December 31, 2021, the Company raised $1,345,094 from private placements, via the issue of 35,740,362 shares.

 

During the fiscal year ended December 31, 2021, the Company issued 8,422,765 shares in lieu of services received, valued at $490,346.

 

During the fiscal year ended December 31, 2021, the Company issued 10,465,100 shares in lieu of invoices received, valued at $498,952.

 

During the six month period ended June 30, 2022, the Company raised $599,331 from private placements, via the issue of 14,983,207 shares.

 

During the six month period ended June 30, 2022, the Company issued 1,537,480 shares in lieu of services received, valued at $27,922.

 

During the six month period ended June 30, 2022, the Company issued 91,250 shares in lieu of invoices received, valued at $5,000.

 

Warrants

 

The Company has historically issued warrants to purchase 1,737,499 shares of the Company’s common stock with an exercise price of $0.035 per share and a term of seven years. As at 30 June 2022, 1,351,785 of these warrants are outstanding. The warrants were recorded to additional paid-in capital.

 

The fair value of the warrants was determined using the Black-Scholes option-pricing method, with the following assumptions:

 

  Warrants
Fair market value of common stock $0.035
Expected dividend yield -%
Risk-free interest rate 0.12%
Expected volatility 27.29%
Expected term (in years) 7

  

8. INCOME TAXES

 

The components of the deferred tax asset are as follows:

    JUNE
30, 2022
  DECEMBER
31, 2021
      $       $  
Deferred tax assets:                
Net operating loss carry-forward     7,440       7,627  
Gross deferred tax assets     7,440       7,627   
Less valuation allowance     (7,438 )     (7,624 )
Total deferred tax assets            
Deferred tax liabilities:                
Depreciation     (2)       (3)  
Net deferred tax assets     —         —    

 

  

 C: 
F-21

 

 

The Company has provided a full valuation allowance on the net deferred tax assets. The valuation allowance decreased by $0.2 million during the period ended 30 June 2022 and increased by $0.3 million during the year ended 31 December 2021.

The Company utilizes ASC 740, Accounting for Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. At June 30, 2022, and December 31, 2021, valuation allowances for the full amount of the net deferred tax asset were established due to the uncertainties as to the amount of the taxable income that would be generated in future years.

Reconciliation of the differences between the statutory tax rate and the effective income tax rate is as follows: 

 

    JUNE
30, 2022
  DECEMBER
31, 2021
         
Statutory federal tax (benefit) rate     (21.00 )%     (21.00 )%
Statutory foreign tax (benefit) rate     (25.00 )%     (25.00 )%
                 
Weighted average effective tax rate     (22.00 )%     (21.00 )%
                 
Valuation allowance     22.00 %     21.00 %
                 
Effective income tax rate     0.00 %     0.00 %

 

The Company had available approximately $34.7M (2022) and $35.6M (2021) of unused net operating loss carryforwards that may be applied against future taxable income. Net operating loss carryforwards that arose in the tax years 2001 and 2000 expired in 2022 and 2021, respectively, for Federal purposes.

  

9. REVENUE

 

 

Revenue was first recorded in EESTech in the third quarter of FY 2021. It relates to the ongoing R&D process with Sasol as EESTech has taken on testing of excess fine coal agglomeration. As of 31 December 2021, revenue was immaterial but is forecasted to increase throughout FY2022 providing the successful completion of the testing process is achieved.

 

Revenue is based on completion of 3 stages of the fine coal agglomeration, each stage being deemed to be a distinct performance obligation. The 3 stages are as follows:

 

1)Evaluation of agglomerates to confirm suitability for gasfication – EESTech will be provided with 2 tons of fine coal by Sasol for test work from which the Company must produce agglomerates meeting Sasol’s expectations along with providing a basic analysis of the agglomerated material. The Company has fulfilled their requirements of this stage during FY2021, and has recognized revenue related to this performance obligation.
2)A proposal from EESTech on the business model – If stage 1 produces suitable agglomerates which pass Sasol’s testing, EESTech will be required to develop a full proposal on a 200 kilo tons per annum scale project including a detailed business model. The Company has provided the proposal which Sasol has deemed appropriate and thus fulfilled their requirements of this performance obligation and recognized the corresponding revenue during FY2021.
3)Full scale demonstration in a commercial gasifier – Stage 3 entails EESTech to manufacture about 1,000 tons of agglomerates to enable a commercial scale demonstration. As at December 31, 2021, this stage had not yet been completed by the Company and hence, Sasol had not been invoiced for payment at year-end. However, the requirements of this stage were satisfied subsequent to year-end and has therefore been received and recognized as revenue in March 2022.

 

Once each stage is complete, an invoice is raised, and the revenue is recognized at a point in time, upon completion of each stage, which represents a distinct performance obligation. Each stage has been deemed a distinct performance obligation since the agreement between EESTech and Sasol is such that the customer can begin benefitting from the results provided by the Company after completion of each stage, or, if the customer should see no further benefit, cancel the remaining stages. Payment for each invoice is typically due 7 days from the date of invoice. There are no warranties or rights of return under this contract.

 

Costs relating to the completion of the contract are recognized as incurred in line with each stage. Costs are minimal and mainly relate to lab hire and small lab expenses. Larger laboratory expenses have been capitalized and are being depreciated in line with the depreciation policy.

 

The breakdown of opening and closing revenue for the year from contracts is noted below:

 

 

Sasol

($)

Opening balance of Contract Revenue at 1 January 2021
New Contracts 66,130
Revenue recognized on Contracts for performance obligations satisfied (52,554)
Difference arising on translation of foreign currency 554
Closing balance of Contract Revenue at 31 December 2021 14,130
New Contracts 39,500
Revenue recognized on Contracts for performance obligations satisfied (53,877)
Difference arising on translation of foreign currency 247
Closing balance of Contract Revenue at 30 June 2022

   

 C: 
F-22

 

 

10. LOSS PER SHARE

 

The calculation of basic loss per share has been based on the following loss attributable to ordinary shareholders and weighted average number of ordinary shares outstanding.

    June 30,
2022
  June 30,
2021
    $   $
Loss attributable to ordinary shareholders     (389,127 )     (520,149 )
                 
Weighted average number of ordinary shares at 1 January     205,677,834       180,831,531  
Effect of shares issued in period     40,002,388       9,087,482  
Weighted average number of ordinary shares at 30 June     245,680,221       189,919,013  
Loss per share     (0.002)       (0.003)  

 

11. RELATED PARTY TRANSACTIONS

 

(a) Due from related parties

During the period ended June 30, 2022, the Company provided advances to two directors in the form of credit cards to be able to pay for any expenses. As at June 30, 2022, balances on account from related parties were $14,198 (December 31, 2021: $14,955).

(b) Due to related parties

As at June 30, 2022, balances owing to related parties were $429,547 (December 31, 2021: $406,809). They were unsecured and non-interest bearing, and had no stated terms of repayment. All of these relate to director fees and contractor/consulting costs.  

12. ISSUANCE OF SHARES TO EXTINGUISH DEBT

 

The Company, on occasion, uses shares to extinguish debt. This can be in the form of an invoice or services received. Where an invoice has been received, the shares are valued at the quoted market value on the day of settlement. Any difference between the value of the shares and the net carrying amount of the extinguished debt is recognized in income of the period of extinguishment as losses or gains. For the six month period ended June 30, 2022, a gain of $2,719 has been recognized (2021: loss of $24,115).

 

Where shares are issued for services rendered, the Black-Scholes method of valuation is applied, and the expense is straight lined over the period of service received. During the six month period ended June 30, 2022, the Company issued 91,250 shares of common stock for the extinguishment of $5,000 of debt.

 

13. COMMITMENTS AND CONTINGENCIES

 

Operating Leases

 

The Company leases its corporate offices under a month-to-month agreement, and under an operating lease that is renewable annually and expires in December 2022. Rent expense for office space amounted to approximately $660 for both the years ended December 31, 2022, and 2021, respectively.

 

Legal Matters

 

From time to time, the Company is involved in various disputes and litigation matters that arise in the ordinary course of business. To date, the Company had no material pending legal proceedings.

 

 C: 
F-23

 

 


Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-12G’ Filing    Date    Other Filings
12/15/23
12/31/22
12/15/22
Filed on:8/26/22
8/24/22
6/30/22
12/31/21
12/15/21
6/30/21
1/1/21
12/31/20
12/15/20
12/31/19
8/1/19
2/21/19
12/15/18
2/17/0915-12G
4/26/00
 List all Filings 


9 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

11/14/23  EESTech, Inc.                     10-Q        9/30/23   61:3.3M                                   Nuvo Group, Inc./FA
 8/21/23  EESTech, Inc.                     10-Q        6/30/23   61:3.4M                                   Nuvo Group, Inc./FA
 5/15/23  EESTech, Inc.                     10-Q        3/31/23   61:3.4M                                   Nuvo Group, Inc./FA
 3/15/23  EESTech, Inc.                     10-12G/A               1:771K                                   Nuvo Group, Inc./FA
 2/14/23  EESTech, Inc.                     10-12G                 1:798K                                   Nuvo Group, Inc./FA
 1/17/23  EESTech, Inc.                     10-12G/A               1:785K                                   Nuvo Group, Inc./FA
12/16/22  EESTech, Inc.                     10-12G                 1:798K                                   Nuvo Group, Inc./FA
10/26/22  EESTech, Inc.                     10-12G                 3:1.2M                                   Nuvo Group, Inc./FA
 9/22/22  SEC                               UPLOAD5/02/23    2:66K  EESTech, Inc.
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