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EX-21 - GLOBAL CLEAN ENERGY, INC.e606802_ex21.htm
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EX-32.1 - GLOBAL CLEAN ENERGY, INC.e606802_ex32-1.htm
EX-32.2 - GLOBAL CLEAN ENERGY, INC.e606802_ex32-2.htm
EX-31.1 - GLOBAL CLEAN ENERGY, INC.e606802_ex31-1.htm
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
Form 10-K
 
(Mark One)
 
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the Fiscal Year Ended December 31, 2009
 
or
 
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Commission File Number: 0-30303
 
GLOBAL CLEAN ENERGY, INC.
 (Exact name of registrant as specified in its charter)
 
Maryland
 
No. 84-1522846
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
     
6040 Upshaw Dr. #105
Humble, Texas
 
 
77396
(Address of principal executive offices)
 
(Zip Code)
 
Registrant's telephone number, including area code:
(281) 441-2538
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of Each Class
 
Name of Each Exchange on Which Registered
None
 
None
 
Securities registered pursuant to Section 12(g) of the Act:
 
Common Stock, par value $.001 per share
(Title of Class)
 
 
(Title of Class)
 
Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes o No x
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to the filing requirements for at least the past 90 days. Yes x No o
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer
  o
Accelerated filer
  o
       
Non-accelerated filer
(Do not check if a smaller reporting company)
  o
Smaller reporting company
  x
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
 
The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant on April 12, 2010, was $1,077,973 (based on the closing price of the registrant’s common stock on that date).
 
38,803,721 shares of Common Stock were outstanding at April 12, 2010.

DOCUMENTS INCORPORATED BY REFERENCE
 
None
 

 
GLOBAL CLEAN ENERGY, INC.
 
10-K for the Year Ended December 31, 2009
 
Table of Contents
 
Page
 
PART I
 
 
4
 
13
 
20
 
20
 
21
PART II
 
 
21
 
22
 
23
 
26
 
26
 
26
 
26
 
26
 
27
PART III
 
 
 
27
 
30
 
31
 
32
 
33
 
33
 
 
FORWARD-LOOKING STATEMENTS
 
This report contains forward-looking statements and information relating to us that is based on the beliefs of our management as well as assumptions made by, and information currently available to, our management. When used in this report, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan” and similar expressions, as they relate to us or our management, are intended to identify forward-looking statements. These statements reflect management’s current view of us concerning future events and are subject to certain risks, uncertainties and assumptions, including among many others:
 
·  
the availability and adequacy of our cash flow to meet our requirements;
 
·  
economic, competitive, demographic, business and other conditions in our local and regional markets;
 
·  
changes or developments in laws, regulations or taxes in the renewable energy industries;
 
·  
actions taken or not taken by third-parties, including our competitors, as well as legislative, regulatory, judicial and other governmental authorities;
 
·  
competition in the renewable energy industry;
 
·  
the failure to obtain or loss of any license or permit;
 
·  
the cyclical nature of the energy industry, and therefore any downturns in this cyclical industry could adversely affect operations;
 
·  
the energy-related industry that we service is heavily regulated and the costs associated with such regulated industries increases the costs of doing business;
 
·  
the ability to carry out our business plan and to manage our growth effectively and efficiently;
 
·  
the failure to manage any foreign exchange risk adequately;
 
·  
a general economic downturn or a downturn in the securities markets; and
 
·  
risks and uncertainties described in the Risk Factors section or elsewhere in this Annual Report on Form 10-K.
 
Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this report as anticipated, estimated or expected. All written and oral forward-looking statements attributable to us or persons acting on our behalf subsequent to the date of this Annual Report are expressly qualified in their entirety by the foregoing risks and those set forth in the “Risk Factors” section below.
 
When used in this report, the terms “Company,” “GCE,” “we,” “our” and “us” refer to Global Clean Energy, Inc.
 
 
ITEM 1.  BUSINESS
 
Introduction

Global Clean Energy, Inc., a cleantech corporation, develops and markets proprietary technology in waste to energy management.  With the growing awareness for the need to develop alternative sources of energy, both established and startup companies are entering into the field utilizing a multitude of technologies including bio, solar, wind, geothermal and hydrogen energy.  Our focus is organic waste recovery.  We have developed two complementary technologies to salvage and reform waste from a variety of sources to produce a variety of clean energy byproducts.  We believe that we are well-positioned to exploit fully the opportunities presented by the government policies and programs that are setting the agenda for the alternative energy industry.  We are at the forefront of global initiatives to reduce greenhouse gas emissions and lower the dependency in the USA and Europe on imported oil and natural gas, with proprietary and innovative technologies for clean coal and renewable energy and international partners in business, university, consulting and engineering.

Our Mission
 
R.E.S.C.U.E™ -- Reforming Environmental Salvage into Clean Usable Energy

Global Clean Energy, Inc., in collaboration with Concordia University and Cascades Engineering, a division of Cascades Canada Inc., one of Canada’s largest paper manufacturers, have spent two years researching and developing technology to recover and reform synthetic fuel from waste containing a wide variety of carbon byproducts.   The result was the filing of two proprietary patents:

·  
the AirPump™ that utilizes Vortex technology to efficiently separate waste and recover carbon from extracted material; and
·  
a hybrid steam gasifier, the G2G Steam Reformer, a world’s first in gasification technology.

Both technologies, with accomplished proof-of-concept, constitute the foundation of GCE’s mission: to produce clean energy by clean, sustainable methods and lead an industrial revolution in waste management and disposal.

We are focused on global markets, energy and environmental concerns.  To accomplish our projects, we are supported by engineering, procurement, construction and research partners. These business relationships form the core of our ability to design, develop and supply technology for a wide-range of applications. In this regard, GCE is engaged in and currently accepting orders for projects: which can benefit from mid-range (5 to 100 megawatt equivalent) converted energy production; and which can benefit from the use of our proprietary AirPump™.
 
What begin as a search for best of breed technologies to convert waste and biomass into clean renewable energy, has evolved and expanded into five areas of active business development:
 
·  
research and development of new technologies;
·  
international joint-ventures to develop waste-to-energy projects;
·  
offering technology and services for environmental ash cleanup operations;
·  
expanding into renewable energy production; and
·  
seeking public financing for projects in the green energy sector.

Business Summary

As global reserves diminish, biodiesel and other synthetic fuels are now regarded as realistic alternatives to oil.  The combination of fears about declining conventional oil reserves, increasing demand from developing countries like India and China, and dependence on unstable suppliers in the Middle East and elsewhere, has generated tremendous interest in developing alternative energy sources.
 
 
Our Technology

The AirPump™

Existing slurry lagoons in the mining, fossil fuel and pulp and paper industries pose a serious threat to the environment, world-wide.  These slurry lagoons can cause disaster to their surrounding environment. In February 1972 in Logan County, West Virginia, over 100 million gallons of coal slurry breached from holding dams, flooding the Buffalo Creek River system. Besides the $50 million of damage and long-term impact to the eco-system, 125 people were killed, a thousand others injured and thousands of others left homeless.  The massive spill in Dec. 2008, where a billion gallons of ash slurry breached from just one of the more than 100 slurry lagoons in Kentucky, highlights the urgency to address the problem. Similar situations can be found across the globe. In the current tar-sand operations in northern Alberta, Canada “at least 90% of the fresh water used in the oil sands ends up in ends up in tailing ponds so toxic that propane cannons are used to keep ducks from landing.   Evidence points to the fact that these ponds are already leaching into Canada’s major freshwater system.
 
Designed to address the challenge of emptying deep slurry lagoons created during mining, fossil fuel and pulp-and-paper production, our  proprietary cyclonic pump can recover massive amounts of toxic waste to be reformed into an alternative energy resource using the G2G.  The device uses only compressed air to create a tornado-like effect inside a circular chamber, employing no moving parts. The resulting low pressure system in the chamber draws materials in at the base, spinning and propelling the material upwards with great force, increasing in power the deeper it descends.  In stark contrast to conventional submersible dredging devices that contain screws or impellers, this device has no impediments to the flow of material, nor does it employ components that can break, wear out or be damaged by abrasive materials.  Nor are there electrical components that could complicate safe operation under water and in other hazardous environments.

Unlike heavy equipment which cannot be used in close proximity to industrial waste lagoons or in difficult to access locations, the AirPump™ is lightweight and easily attached to the end of solid or flexible pipe, making it relatively simple to deploy or redirect, posing little or no safety hazard to the operator.

The unique design of the AirPump™ makes it an excellent investment for any industry requiring extraction-based clean up.  We believe that the Canadian oil sands, already a divisive and controversial issue for governments and environmental organizations, would benefit from this technology.  The AirPump has been used by UK Coal to empty an accumulation of coal slurry lagoons for land recovery, redevelopment and biofuel production.

Enhanced AirPump Design

A new water-based version of the AirPump™ is currently being developed based on the research assistance of Dr. George Vatistas, Professor of Mechanical and Industrial Engineering at Concordia University and former Associate Dean of Engineering.  Being one the world’s leading experts in vortex systems, Dr. Vatistas has over 30 years of experience in both theoretical and practical work on vortices in nature.  The expected applications for the enhanced AirPump™ will include above surface pumping of liquids and slurries, allowing us to offer both land and water-based dredging and pumping technologies.

AirPump Advantages and Applications

The advantages of the AirPump™ are multiple. The simplicity of its design means that it requires no special training to operate. Running on compressed air, water, or inert-gases, there are no electrical components.  This allows the pump to operate safely in hazardous environments, such as underwater or in mineshafts.
 
 
As compared to standard dredging devices which contain screws or impellers, there are no impediments to the flow of material through the pump, nor are there any components which can wear out, stuck or be damaged by abrasive materials (rocks, sand, tar etc). The pump can be directed and pin-point way, causing minimal impact to the surroundings where it is operated.   

The G2G Steam Reformer – the future of pyrolytic gasification

Gasification, a thermal process by which feedstock (i.e. fossil fuels, plastics, solid wastes and biomass) is converted to synthetic fuel gas (syngas), has been used in some form for almost 30 years as a viable waste-to-energy, or WtE technology.  But existing gasification plants use air or oxygen to combust feedstock, releasing toxic nitrogen and sulfur compounds.  By contrast, our steam-reforming method minimizes those toxins by processing materials in an oxygen-starved environment.  Our solution for gasification is a process by heating organic material at high temperature (>700°C) and controlling the amount of oxygen it combines, producing a synthetic gas commonly referred to as Syngas, while minimizing emissions.  At very high temperatures toxic, medical and even nuclear waste can be processed in a safe and clean manner. Additionally, Syngas can be used as an energy source of heat or electricity, converted to Hydrogen gas or liquid fuels such as ethanol and methanol, making it a highly versatile source of energy.

Moreover, unlike most existing gasifiers which are designed exclusively for a single or limited input feedstock, the G2G is designed to accept and process a wide range of carbonaceous materials including coal, plastic, rubber, Municipal Solid Waste, or MSW.

Consequently, the G2G is a substantial upgrade over the incineration processes currently used for MSW disposal because:
·  
in contrast to incineration, gasification is a cleaner process, with higher carbon conversion efficiency;
·  
in the absence of oxygen, minimal nitrogen and sulfur emissions are produced;
·  
emissions are controlled by scrubbing to remove contaminants;
·  
gasification plants are quicker and less expensive to build than incinerators; and
·  
the resulting syngas can be used directly to power gas engines (and potentially hydrogen fuel cells) or be catalytically converted to liquid hydrocarbon fuel such as kerosene or diesel.

CGE’s hybrid gasification technology, already in next-stage development presents a virtually limitless opportunity for biofuel production, waste management and toxic waste clean-up.

Current Projects

Salaberry-de-Valleyfield, Québec –

On December 9, 2009, the City of Salaberry-de-Valleyfield announced field testing of our gasification technology to convert MSW and industrial waste to synthetic gas and biodiesel.  The funding from this initiative came from the Canadian government through the Green Municipal Fund of the Federation of Canadian Municipalities.

This project is designed to significantly reduce the amount of waste the city sends to landfill and to generate substantial savings on transportation and disposal of waste.  We expect that ongoing collaboration between us and the city will also result in a new source of biodiesel to fuel some city installations and municipal vehicles at a reduced energy cost.

Phase Two of the project will gasify 5,000 metric tons of MSW per year.

Phase Three will establish a regional MSW sorting centre including construction of a gasification plant capable of processing 30,000 metric tons of waste per year, or more depending on the feedstock.

 We believe that the full-scale gasification project in Phase Three will accomplish the following:
·  
eliminate 9,000 truckloads of MSW per year from landfill;
·  
produce 10,000,000 gallons of fuel from MSW and industrial waste products;
·  
reduce collateral greenhouse gas emissions at landfill sites; and
·  
reduce vehicle emissions from transportation of waste material to landfills.
 
 
This venture affords us a unique opportunity to advance our research and development in an industrial park with an endless supply and variety of feedstock.  And it functions as a prototype for the future of MSW management which is still being defined by an evolution of government policy.
 
For example, the Quebec government recently announced that municipal regions will be required to recover 65% of all waste generated by their citizens, businesses and institutions in order to divert as much waste as possible from landfill (“Transformer les poubelles en combustible”, La Presse, January 26, 2010).

The province of Quebec has commenced with mandating the production of bio-fermentation and composting solutions for its organic waste to reduce landfill requirements.  The challenge of non-organic waste has not been dealt with and will continue to require disposal. These policies accord us the authority to establish gasification as a necessary supplement to tri-composting and biomethanization and as a new standard for the construction of waste treatment and processing facilities.

Salaberry-de-Valleyfield’s need for small-scale, local energy production accurately mirrors the needs of other municipalities and offers a valuable opportunity to demonstrate how gasification works and how local biofuel production can be incorporated into future public works and urban planning projects.

We believe that a functional 125 mtpd gasification plant has enormous commercial potential.  Beyond managing MSW, generated on average in developed countries of 1 ton per person per year, the same gasifier can be commissioned for uses in any energy reformation application involving carbon-rich feedstock, including turning coal into natural gas.

UK Coal – Clean Coal Gasification

In 2002, we approached UK Coal with the intention of reforming coal into synthetic gas. Current industrial incineration of coal produces energy by burning coal with oxygen, resulting in emissions that are harmful to the environment.  Subsequently, we entered into a Memorandum of Understanding with UK Coal to dredge slurry ponds for land recovery.

Economic conditions in the UK and their impact on UK Coal have delayed proposed dredging and land recovery and rehabilitation projects outlined in a Memorandum of Understanding.   GCE is developing strategies for the newly-elected government (regardless of who wins) that allow GCE and UK Coal to follow through on their commitments. A physical operating presence in England will enhance GCE’s profile as an international company and serve as an entry point to other EU nations.

UK Coal is an attractive strategic partner, as it has millions of tons of untapped coal slurry; in lagoons at old deep mine sites near Doncaster in North East England can provide an excellent feedstock source for the GCE Gasifier. The slurry can be reformed into Syngas and from there converted into electricity. UK Coal has expressed a wish to buy all Syngas produced from this plant to generate electricity for their own use.
 
Furthermore, UKC has assigned 30 acres of land adjacent to its Kellingley Colliary for GCE to site and develop a gasification plant.  Additionally, UKC holds all relevant and necessary permits for GCE to build and operate its PSR technology on this site, which could possibly advance by months the time and costs that would otherwise be required in planning and meeting regulatory requirements. GCE is also being supported by NISP (National Industrial Symbiotic Programme), a UK Government department under the Department of Trade and Industry, to accelerate this project to a speedy and successful start.
 
Our site at Kellingley is slated to process 125 tons per day of coal and other feedstock. These other feedstock alternatives will include plastics (including car plastics), tires, sewage cake, paper, cardboard, municipal waste, disposal diapers and biomass (e.g., corn stalks, willow and paper mill pulp).
 
 
We will show a greater profit by including feedstocks which have tipping fees, as the net cost of feedstock will be effectively zero. Although it is too early to state with assurance, we also believe that the sale of Renewable Obligation Certificates (ROCs) which are credits for reductions in carbon dioxide emissions) could be profitable for us.
 
World-Wide Connections and Opportunities

We benefit from board members who reside in Canada and the USA and who bring their contacts and regional expertise to the table.  In the UK, the focus for GCE has been on helping find innovative ways to take advantage of its huge coal reserves. In Canada, a country blessed by natural resources, the focus is on developing green energy systems.

In the USA, head-office of GCE, the focus has been on renewable energy production where President Obama has proposed to make renewable energy a central initiative for the government.

Plans for Future Development

·  
We are studying a plan to acquire a former shrimp farm in Texas for algae production.  For now, the infrastructure modification costs seem too high and the undertaking may be too much of a distraction from GCE’s core business.  However, from our head office in Houston, GCE will continue to monitor relevant developments in biomass production and preparation and will apprise us of financing opportunities with local bodies to set up operations in the city’s renewable energy park;
 
·  
We plan to commercial license the AirPump™ to expedite deployment across a range of industries and generate seed revenue for other projects;
 
·  
We intend to continue exploratory discussions with a motivated third-party to design and build mobile gasification testing units;
 
·  
We hope to complete a scaled-up design of a 100-200 ton stackable gasification unit for manufacturing by 2013;
 
·  
We anticipate developing working relationships with representative bodies and associations of industries that would most benefit from our two core technologies;
 
·  
We plan to advance education at all levels of government about gasification and vortex pump technology to facilitate technically-informed budgetary/funding decisions;
 
·  
We intend to create working partnerships with waste preparation, engineering, construction, and recycling companies to secure a position in the first wave of the emerging MSW industry; and
 
·  
We hope to expand GCE’s presence in the research and development cycle of universities and research centers in Canada, the U.S. and overseas.
 
THE ALTERNATIVE ENERGY INDUSTRY
 
We believe that we are well positioned to take advantage of the tremendous opportunities in the mushrooming alternative energy industry due to our technology, project development approach and financial engineering expertise.  We are structured to be a low-cost supplier in its selected market niches and will be positioned to survive periods of market weakness and to thrive during market expansions.
 
The combination of fears about declining conventional oil and gas reserves, increasing demand from developing countries like India and China, and dependence on unstable suppliers in the Middle East, Russia and elsewhere, has generated tremendous interest in developing alternative energy sources. As oil and gas prices reached an all-time high this year, most experts agreed that the increasing costs of tapping non-conventional oil sources and growing world-wide demand for oil will create powerful long-term opportunities for alternative energy. As global reserves diminish, ethanol, methanol, biodiesel and other synthetic fuels are now regarded as realistic alternatives to oil.
 
 
Alternative energy will experience very rapid increases in demand, as energy markets experience substantial growth in demand, because there is little near-term ability to increase conventional oil production. Low cost (and well funded) alternative energy supplies are most likely to survive market fluctuations, as it has been demonstrated recently.  Under these circumstances, feedstock for waste and biomass-based technologies will quickly become a limiting factor and only those alternative energy producers with access to feedstock supplies at reasonable prices will be able to take full advantage of the opportunity. Thus, in the face of potentially wide swings in market conditions, we believe that we will be well-positioned to be successful due to its low cost of production and ability to negotiate long-term feedstock supply and off-take agreements (preferably at fixed prices).
 
COMPLEMENTARY NEXT-GENERATION TECHNOLOGIES
 
We recognize that alternative energy technologies are evolving rapidly and that other technologies that are likely to emerge may provide for various applications. These technologies will allow us to develop projects over a wider size range and broader scope of potential feedstock. We currently employ a number of industry consultants to help us broaden our search for complementary technologies.
 
THE CURRENT MARKET
 
We believe we can become a significant niche player in the massive world-wide energy market by developing and operating “private power” R.E.S.C.U.E projects primarily for industrial and public sector entities that have waste disposal and on-site or near-by energy requirements.  There is a tremendous opportunity for providing BOO (Build-Own-Operate) plants that have access to waste or low-cost feedstock and provide the bulk of the output to the local hosts, thereby avoiding direct competition with large utility-scale generators and suppliers.
 
Worldwide primary demand is forecast to increase most rapidly for natural gas, followed by oil, and then coal. Hydro, although a relatively small contributor, is projected to grow at 1.8% per year between 2002 and 2030, while biomass and other waste is projected to grow at 1.3% annually. Industrial use is projected to grow more slowly than transport or residential use, primarily because of growing efficiency in the industrial sector.
 
World Primary Energy Demand (Million tons oil equivalent)
 
                           
Average
 
   
2002
   
2010
   
2020
   
Annual %
 
Coal
   
2,389
     
2,763
     
3,139
     
1.5
%
Oil
   
3,676
     
4,308
     
5,074
     
1.6
%
Gas
   
2,190
     
2,703
     
3,451
     
2.3
%
Nuclear
   
692
     
778
     
776
     
0.4
%
Hydro
   
224
     
276
     
321
     
1.8
%
Biomass and Waste
   
1,119
     
1,264
     
1,428
     
1.3
%
Other Renewables
   
55
     
101
     
162
     
5.7
%
                         
Total
   
10,345
     
12,194
     
14,404
     
1.7
%
 
Source: International Energy Agency, Global Energy Trends, 2004
 
In order to comply with new environmental requirements, gasification is projected to account for a significant portion of the increase in demand for coal over the next few years, especially in large IGCC (Integrated Gasification Combined Cycle) applications.  At the same time, while relatively small, much of the increase in biomass and waste utilization will be through gasification and biodiesel production, with a decline in direct wood use by households in developing countries. As a result, there may be substantial opportunities for smaller niche players to target specialty markets, without having to compete directly with large oil and utility companies.
 
 
Another important trend is the growing role of public policies in setting energy and waste disposal prices. For example, in some of our target markets, energy use taxes have pushed retail prices of gasoline as high as six dollars or more, versus half that in the United States. Similarly, limitations on land disposal option and higher tipping fees and taxes have made some waste disposal costs as much as twice as expensive as they are in the United States. In addition, carbon taxes and tradable emissions permits for carbon dioxide and other greenhouse gases are increasingly changing the relative costs of different fuels. These trends are likely to continue as various countries allocate give different priorities in dealing with environmental problems and global warming. We anticipate the developed countries as being most likely to take the lead in the near-term, with developing countries following suit.
 
Marketing Plan
 
We will focus on projects for industrial and municipal facilities that have low-cost fuel supplies and on-site gas, electricity and/or process heat needs. These facilities typically prefer to purchase their energy (and where necessary, waste disposal services) from third parties.  Our primary product offering, therefore, is anticipated to be a one-stop, full-service, third-party source for generating on-site Syngas, heat, electric power, and/or ethanol or other liquid fuels from locally available waste or low-cost fuel sources.
 
We intend to be a leading supplier of mid-size, on-site gasification facilities by providing the best suited technology at a competitive price.  We will initially offer a range of gasifiers and associated gas-to-liquids technology, but will ultimately utilize whatever equipment is best at the time.  We will target creditworthy public and private sector clients across a broad range of industries and geographic regions in order to diversify and reduce market risks.  If it is successful in penetrating the UK, Canadian and U.S. markets, we intend to expand to other international markets targeting clients with similar profiles.
 
We will be prepared to enter into energy savings contracts, either in partnership with existing energy service companies (ESCOs) or on an independent basis. Where clients want to participate directly in potential cost savings, we will price our gasification projects to be competitive with other vendors, but will compete on the quality of the technology and responsiveness to client needs, rather than on price.
 
Target Markets
 
The market segment being targeted by we is mid-scale applications, especially industrial and municipal facilities that generate or process waste materials and need on-site energy for their own use.  In addition, where appropriate low-cost or no-cost waste feedstock is available, we plan on developing stand-alone “merchant” energy facilities. With our suite of technologies, we believe that the costs of providing energy from low-cost feedstock such as poor-quality coal, agricultural wastes, or industrial byproducts are quite low.  Given anticipated low production costs, we can stand on our own as a producer of energy at most locations where low-cost feedstock supplies are available. However, we can more easily insulate itself from broad price fluctuations through the use of longer-term feedstock supply and energy purchase agreements by concentrating primarily on the on-site segment.
 
Target Clients
 
GCE will target governments including municipalities and industries such as food, paper and chemical products, all of which have substantial demand for process heat, as well as electric power (and often liquid fuels for their vehicle fleets).  Priority will be given to those companies that are in a position to enter into both feedstock supply and energy off-take agreements either on a fixed-price or toll-processing basis.  In this way, GCE will insulate itself from feedstock and energy market price fluctuations for its first plants.
 
Due to the fact that we will be depending primarily on the security of the long-term feedstock supply and energy off-take agreements, we will attempt to give priority to companies with strong balance sheets and good out-year prospects.  It is currently intended that companies with less secure business prospects will generally be served only if they can post performance bonds or provide other assurances that minimize the risks of their non-performance.  In this regard, municipal clients will often be the most secure.
 
 
Competition
 
Only a handful of companies (e.g., Intrinergy, Blue Fire Ethanol, Range fuels, Plasco) are focused on the “inside-the-fence” market segment and most of these are emphasizing the United States market because of its size. Of these companies, we are not aware of any that have the combination of worldwide licensing rights to specific technologies, together with a focus on all promising markets around the globe. This combination of preferred access to some of the most promising gasification technology, together with the ability to source other technologies more suited for particular applications, represents a significant barrier to market entry for most potential competitors.
 
Another barrier to entry is the difficulty that most private firms have in accessing capital markets to finance BOO projects.  GCE’s ability to access well proven technology with an excellent track record means that lease finance is available for the plant and ancillary equipment and, in the UK at least, no property costs.
 
Research and Development
 
We expect to focus our research and development on designing, developing and testing the technologies that we offer or will offer to our customers. A primary goal will be to bring new products and new versions of existing products to market quickly in order to keep pace with customer demands and remain competitive in the marketplace. During the fiscal year ended December 31, 2009, over $2,000,000 was allocated towards research and development expenses.
 
For 2009-2012, research facilities are being set up at and in conjunction with Concordia University in Montreal, Canada. On site research at our the City of Salaberry-de-Valleyfield and Kingsley Falls, Quebec is being done with the assistance of funding from the Canadian Federal Governments’ Green Municipal Fund of the Federation of Canadian Municipalities.
 
Along with research being conducted by Dr. Vatistas to hone the design of the AirPump™, GCE is looking to expand into other areas of research with the University, including cyclonic separation of materials (e.g. coal from slurry) and coal to liquid reforming.
 
The company is continuing extensive research on the efficiency and ongoing developments of feedstocks for biomass fuel conversion.  The company continues to pursue the acquisition of a pilot demonstration site with particular emphasis on algae and jatropha development.
 
Patents
 
Global Clean Energy, Inc., acquired the entire right, title and interest in and to a static fluid mixing pump device, set forth in a Patent application for Letters Patent of the United States, filed on June 30th, 2008 as U.S. Application No. 61/129, 484; as well as the inventions and Application for Letters Patent of the United States, and in and to any Letters Patent of the United States to be obtained therefore and thereon from Mr. Philip Azimov for the consideration of 300,000 shares of our Common Stock.
 
We also in 2009 acquired the entire right, title and interest in a proprietary Hybrid Gasification System, set forth in a Patent application for Letters Patent of the United States, filed on March 24, 2009 under #61/202,671, as well as the inventions and Application for Letters Patent of the United States, and in and to any Letters Patent of the United States to be obtained therefore and thereon from Mr. Philip Azimov and Mr. Louis-Phillipe Senecal for the consideration of 1,000,000 shares of our Common Stock valued at $1,000,000 for such assignment.
 
Government Incentives and Policies
 
The Obama administration has made as a cornerstone of  the United States Federal Governments’ efforts to expand and support   research into renewable energy.  The present laws such as the governments’ loan guarantee program have been put on a “fast track” for utilization.  In the US proposals, included is $75 billion over 10 years to establish a permanent tax credit for research and experimentation for all forms of renewable energy.  Additionally, the US budget includes $20 billion in tax incentives for clean energy and $39 billion for biomass fuel development.  It is the intention of the new administration to create 3.5 million jobs in the renewable energy sector.
 
 
To take advantage of the tremendous growth in monetary support by the Federal government, over the last two months, we have become a registered and approved company with the following required entities:    www.ccr.gov. , www.grants.gov., ORCA, and FEDBIZOPPS.gov.
 
The staff of Global Clean Energy has throughout the year been engaged with meetings in Washington, D.C. and other sites in the US to take the fullest advantage of monies available in the renewable energy field.
 
Government Regulations, Environment and Permits
 
Our technologies are subject to compliance with United States federal, state and local environmental, health and safety laws and regulations. These regulations govern operations and use, storage, handling, discharge and disposal of a variety of substances. For instance, under CERCLA, we could be held jointly and severally responsible for the removal and remediation of any hazardous substance contamination at our facilities, at neighboring properties (where migration from our facilities occurred) and at third party waste disposal sites. We could also be held liable for any consequences arising out of human exposure to these substances or other environmental damage. We may incur substantial costs to comply with these environmental, health and safety law requirements. We may also incur substantial costs for liabilities arising from past releases of, or exposure to, hazardous substances. In addition, we may discover currently unknown environmental problems or conditions. The discovery of currently unknown environmental problems or conditions, changes in environmental, health and safety laws and regulations or other unanticipated events could give rise to claims that may involve material expenditures or liabilities for us.
 
Employees
 
The company at present has 4 full time employees, 12 consultants on a project basis and a network of  subcontractors.
 
Available Information
 
We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission. You may read and copy any document we file with the Commission at the Commission's public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information on the public reference rooms. Our Commission filings are also available to the public from the Commission's Website at www.sec.gov.
 
Corporate History
 
Global Clean Energy, Inc. (“GCE”), a Maryland corporation, was incorporated on November 8, 2007.  GCE is successor to Newsearch, Inc. (“Newsearch”), a Colorado corporation, which was incorporated on December 3, 1999.  Newsearch was dormant until August 20, 2002, when it acquired Panache, Inc. (“Panache”), a Colorado corporation, and Panache became a wholly-owned subsidiary of Newsearch.  Panache was incorporated under the laws of Colorado on May 18, 1998, and sold women’s apparel under its trade name, “The Ollie Collection,” on a wholesale basis primarily through its display showrooms at the Denver Merchandise Mart. In addition, Panache represented several manufacturers of women’s apparel and accessories and also bought and resold women’s apparel and accessories for its own account, for resale. Panache ceased operations in June 2004, when it determined that its business plan could not be executed due to a lack of operating capital and prospects for raising adequate funding, and was later dissolved in January 2005. Newsearch was dormant from July 2004 through July 2006 when it began operating in furtherance of its current business plan.
 
By stockholder approval, on November 13, 2007, Newsearch’s state of incorporation was changed from Colorado to Maryland and at the same time, Newsearch changed its name to Global Clean Energy, Inc .
 
 
Internet Web Site
 
Our website is located at http://www.globalcleanenergy.net.
 
ITEM 1A.  RISK FACTORS
 
You should carefully consider the risks described below. If any of the following risks actually occur, our business could be harmed. You should also refer to the other information about us contained in this Form 10-K, including our financial statements and related notes.
 
We are in need of additional funds to operate our business without which we may not be able to continue to operate.
 
Currently, we do not have any financing arrangements in place.  We may need to raise additional funds through the issuance of equity and/or debt through private placements or public offerings to provide financing to meet the needs of our long-term strategic plan.  If we raise additional financing through the issuance of equity, equity-related or debt securities, those securities may have rights, preferences or privileges senior to those of the rights of our common stock and our stockholders may experience dilution of their ownership interests.  Similarly, the incurrence of additional debt could increase our interest expense and other debt service obligations and could result in the imposition of covenants that restrict our operational and financial flexibility. If financing is not available or obtainable within the next three months, our ability to meet our financial obligations and pursue our plan of operation will be substantially limited and investors may lose a substantial portion or all of their investment.
 
We have limited operating experience and a history of operating losses, and we may be subject to risks inherent in early stage companies, which may make it difficult for you to evaluate our business.
 
We have a limited operating history upon which you can evaluate our business and prospects. We cannot provide any assurance that we will profitable in any given period or at all. You must consider our business, financial history and prospects in light of the risks and difficulties we face as an early stage company with a limited operating history. In particular, our management may have less experience in implementing our business plan and strategy compared to our competitors, including our strategy to establish our operations and build our brand name. In addition, we may face challenges in planning and forecasting accurately as a result of our limited historical data and inexperience in implementing and evaluating our business strategies. Our inability to successfully address these risks, difficulties and challenges as a result of our inexperience and limited operating history may have a negative impact on our ability to implement our strategic initiatives, which may have a material adverse effect on our business, prospects, financial condition and results of operations.
 
We may not be able to raise sufficient capital to grow our business.
 
We have in the past needed to raise funds to operate our business, and we likely will need to raise additional funds to construct our BOO plants in commercial quantities. If we are unable to raise additional funds when needed, our ability to operate and grow our business could be impaired. We do not know whether we will be able to secure additional funding or funding on terms favorable to us. Our ability to obtain additional funding will be subject to a number of factors, including market conditions, our operating performance and investor sentiment. These factors may make the timing, amount, terms and conditions of additional funding unattractive. If we issue additional equity securities, our existing stockholders may experience dilution or be subordinated to any rights, preferences or privileges granted to the new equity holders.
 
Gasification / Pyrolytic Steam Reforming technology may not gain broad commercial acceptance.
 
Commercial applications of gasification / PSR technology are at an early stage of development, and the extent to which gasification / PSR power generation will be commercially viable is uncertain. Many factors may affect the commercial acceptance of gasification / PSR technology, including the following:
 
 
·  
performance, reliability and cost-effectiveness of gasification / PSR technology compared to conventional and other alternative energy sources and products;
 
·  
developments relating to other alternative energy generation technologies;
 
·  
fluctuations in economic and market conditions that affect the cost or viability of conventional and alternative energy sources, such as increases or decreases in the prices of oil and other fossil fuels;
 
·  
overall growth in the alternative energy equipment market;
 
·  
availability and terms of government subsidies and incentives to support the development of alternative energy sources, including gasification / PSR;
 
·  
fluctuations in capital expenditures by utilities and independent power producers, which tend to decrease when the economy slows and interest rates increase; and
 
·  
the development of new and profitable applications requiring the type of energy supply provided by our autonomous gasification / PSR systems.
 
If gasification/PSR technology does not gain broad commercial acceptance, our business will be materially harmed and we may need to curtail or cease operations.
 
If sufficient demand for our BOO on-site alternative energy plants does not develop or takes longer to develop than we anticipate, our revenues may decline, and we may be unable to achieve and then sustain profitability.
 
Even if gasification technology achieves broad commercial acceptance, our BOO plants may not prove to be a commercially viable technology for generating electricity from low-cost sources of feedstock. We expect to invest a significant portion of our time and financial resources in the development of our BOO plants. As we begin to market, sell and construct our BOO plants, unforeseen hurdles may be encountered that would limit the commercial viability of our BOO plants, including unanticipated construction, operating, maintenance and other costs. Our target customers and we may also encounter technical obstacles to construction, constructing and maintaining BOO plants with sufficient capacity to generate competitively-priced electricity.
 
If demand for our BOO plants fails to develop sufficiently, we may be unable to grow our business or generate sufficient revenues to achieve and then sustain profitability. In addition, demand for BOO plants in our presently targeted markets, including North America and Europe, may not develop or may develop to a lesser extent than we anticipate. If we are not successful in commercializing our BOO plants, or are significantly delayed in doing so, our business, financial condition and results of operations could be adversely affected.
 
Our targeted markets are highly competitive. We expect to compete with other alternative energy companies and may have to compete with larger companies that enter into the alternative energy business.
 
The renewable energy industry, particularly in our targeted markets of North America and Europe, is highly competitive and continually evolving as participants strive to distinguish themselves and compete with the larger electric power industry. Competition in the renewable energy industry is likely to continue to increase with the advent of dozens of new alternative energy technologies. If we are not successful in constructing systems that generate competitively priced electricity, we will not be able to respond effectively to competitive pressures from other alternative energy technologies.
 
Moreover, the success of alternative energy generation technologies may cause larger electric utility and other energy companies with substantial financial resources to enter into the alternative energy industry. These companies, due to their greater capital resources and substantial technical expertise, may be better positioned to develop new technologies. Our inability to respond effectively to such competition could adversely affect our business, financial condition and results of operations.
 
 
We anticipate investing funds to construct demonstration BOO plants that generate little or no direct revenue.
 
We plan to construct in the future a demonstration and pilot BOO plant to establish the feasibility of our gasification technology and to encourage the market adoption of our BOO plants. A pilot BOO plant permits potential customers to see first-hand the viability of gasification technology as a source of electricity. Although we incur significant costs in constructing and maintaining a pilot BOO plant, this BOO plant will generate little or no direct revenue to us.
 
We may be unable to manage the expansion of our operations effectively.
 
We intend to expand our business significantly. However, to date the scope of our operations has been limited, and we do not have experience operating on the scale that we believe will be necessary to achieve profitable operations. Our current personnel, facilities, systems and internal procedures and controls are not adequate to support our anticipated future growth. We plan to add sales, marketing and engineering offices in additional locations, including continental Europe and throughout North America.
 
To manage the expansion of our operations, we will be required to improve our operational and financial systems, procedures and controls, increase our construction operating capacity and expand, train and manage our employee base, which must increase significantly if we are to fulfill our current construction, operation and growth plans. Our management will also be required to maintain and expand our relationships with any customers, suppliers and other third parties, as well as attract new customers and suppliers. If we do not meet these challenges, we may be unable to take advantage of market opportunities, execute our business strategies or respond to competitive pressures.
 
We may be unable to successfully negotiate and enter into operations and maintenance contracts with potential customers.
 
An important element of our business strategy is to maximize our revenue opportunities with any potential future customers by seeking to enter into operations and maintenance contracts with them under which we would be paid fees for operating and maintaining the BOO plants that they have purchased from us. Even if customers purchase our BOO plants, they may not enter into operations and maintenance contracts with us. Even if we successfully negotiate and enter into such operations and maintenance contracts, our customers may terminate them prematurely or they may not be profitable for a variety of reasons, including the presence of unforeseen hurdles or costs. In addition, our inability to perform adequately under such operations and maintenance contracts could impair our efforts to successfully market the BOO plants. Any one of these outcomes could have a material adverse effect on our business, financial condition and results of operations.
 
Problems with the quality or performance of our BOO plants could adversely affect our business, financial condition and results of operations.
 
We anticipate that our agreements with customers will generally include guarantees with respect to the quality and performance of our BOO plants. Because of the limited operating history of our BOO plants, we will be required to make assumptions regarding the durability, reliability and performance of the systems, and we cannot predict whether and to what extent we may be required to perform under the guarantees that we expect to give our customers. Our assumptions could prove to be materially different from the actual performance of our BOO plants, causing us to incur substantial expense to repair or replace defective systems in the future. We will bear the risk of claims long after we have sold our BOO plants and recognized revenue. Moreover, any widespread gasification or technology failures could adversely affect our business, financial condition and results of operations.
 
 
We plan to market and sell our products in international markets. If we are unable to manage our international operations effectively, our business, financial condition and results of operations could be adversely affected.
 
We plan to market and sell our products in foreign countries, including the United Kingdom and other countries in the European Union, and we are therefore subject to risks associated with having international operations. Risks inherent in international operations include, but are not limited to, the following:
 
·  
changes in general economic and political conditions in the countries in which we operate;
 
·  
unexpected adverse changes in foreign laws or regulatory requirements, including those with respect to renewable energy, environmental protection, permitting, export duties and quotas;
 
·  
trade barriers such as export requirements, tariffs, taxes and other restrictions and expenses, which could increase the prices of our BOO plants and make us less competitive in some countries;
 
·  
fluctuations in exchange rates may affect demand for our BOO plants and may adversely affect our profitability in US dollars to the extent the price of our BOO plants and cost of raw materials and labor are denominated in a foreign currency;
 
·  
difficulty with staffing and managing widespread operations;
 
·  
difficulty of, and costs relating to compliance with, the different commercial and legal requirements of the overseas markets in which we offer and sell our BOO plants;
 
·  
inability to obtain, maintain or enforce intellectual property rights; and
 
·  
difficulty in enforcing agreements in foreign legal systems.
 
Our business in foreign markets will require us to respond to rapid changes in market conditions in these countries. Our overall success as a global business depends, in part, on our ability to succeed in differing legal, regulatory, economic, social and political conditions. We may not be able to develop and implement policies and strategies that will be effective in each location where we do business, which in turn could adversely affect our business, financial condition and results of operations.
 
Currency translation and transaction risk may adversely affect our business, financial condition and results of operations.
 
Although our reporting currency is the US dollar, we expect to conduct our business and incur costs in the local currency of most countries in which we operate. As a result, we will be subject to currency translation risk. We expect a large percentage of our revenues to be generated outside the United States and denominated in foreign currencies in the future. Changes in exchange rates between foreign currencies and the US dollar could affect our revenues and cost of revenues, and could result in exchange losses. We cannot accurately predict the impact of future exchange rate fluctuations on our results of operations.
 
Our business uses non-exclusive licensed technology, which may be difficult to protect and may infringe on the intellectual property rights of third parties.
 
It is possible that we may need to acquire other licenses to, or to contest the validity of, issued or pending patents or claims of third parties. We cannot assure you that any license would be made available to us on acceptable terms, if at all, or that we would prevail in any such contest. In addition, we could incur substantial costs in defending ourselves in suits brought against us for alleged infringement of another party’s patents in bringing patent infringement suits against other parties based on our licensed patents.
 
 
In addition to licensed patent protection, we also rely on trade secrets, proprietary know-how and technology that we will seek to protect, in part, by confidentiality agreements with our prospective joint venture partners, employees and consultants. We cannot assure you that these agreements will not be breached, that we will have adequate remedies for any breach, or that our trade secrets and proprietary know-how will not otherwise become known or be independently discovered by others.
 
Our financial results may fluctuate from quarter to quarter, which may make it difficult to predict our future performance.
 
Our financial results may fluctuate as a result of a number of factors, many of which are outside of our control. For these reasons, comparing our financial results on a period-to-period basis may not be meaningful, and you should not rely on our past results as an indication of our future performance. Our future quarterly and annual expenses as a percentage of our revenues may be significantly different from those we expect for the future. Our financial results in some quarters may fall below expectations. Any of these events could cause our stock price to fall. Each of the risk factors listed in this “Risk Factors” section, including the following factors, may adversely affect our business, financial condition and results of operations:
 
·  
delays in permitting or acquiring necessary regulatory consents;
 
·  
delays in the timing of contract awards and determinations of work scope;
 
·  
delays in funding for or construction of BOO plants;
 
·  
changes in cost estimates relating to BOO plant completion, which under percentage of completion accounting principles could lead to significant charges to previously recognized revenue or to changes in the timing of our recognition of revenue from those projects;
 
·  
delays in meeting specified contractual milestones or other performance criteria under project contracts or in completing project contracts that could delay the recognition of revenue that would otherwise be earned;
 
·  
reductions in the availability or level of subsidies and incentives for alternative energy sources;
 
·  
decisions made by parties with whom we have commercial relationships not to proceed with anticipated projects;
 
·  
increases in the length of our sales cycle; and
 
·  
reductions in the efficiency of our construction and/or operations processes.
 
If prices for alternative energy or fuels drop significantly, we will also be forced to reduce our prices, which potentially may lead to losses.
 
Prices for alternative energy or fuels can vary significantly over time and decreases in price levels could adversely affect our profitability and viability. For example, the price of ethanol has some relation to the price of gasoline. The price of ethanol tends to increase as the price of gasoline increases, and the price of ethanol tends to decrease as the price of gasoline decreases. Any lowering of gasoline prices will likely also lead to lower prices for ethanol and may adversely affect our operating results if we are producing ethanol. We cannot assure you that we will be able to sell any alternative energy or fuels we produce.
 
Price increases or interruptions in needed energy supplies could cause loss of customers and impair our profitability.
 
Production of alternative fuel sources requires a constant and consistent supply of energy. If there is any interruption in our supply of energy for whatever reason, such as availability, delivery or mechanical problems, we may be required to halt any production we may have. If we halt production for any extended period of time, it will have a material adverse effect on our business. Natural gas and electricity prices have historically fluctuated significantly. We expect to purchase significant amounts of these resources as part of our gasification process. Increases in the price of natural gas or electricity would harm our business and financial results by increasing our energy costs.
 
 
We may be unable to attract and retain management and other personnel we need to succeed.
 
Our success depends on the skills, experience and efforts of our senior management and other key development, manufacturing, construction and sales and marketing employees. We cannot be certain that we will be able to attract, retain and motivate such employees. The loss of the services of one or more of these employees could have a material adverse effect on our business. There is a risk that we will not be able to retain or replace these key employees.
 
In addition, our anticipated growth will require us to hire a significant number of qualified technical, commercial and administrative personnel. The majority of our new hires will be engineers, project managers and operations personnel. There is intense competition from other companies and research and academic institutions for qualified personnel in the areas of our activities. If we cannot continue to attract and retain, on acceptable terms, the qualified personnel necessary for the continued development of our business, we may not be able to sustain our operations or grow at a competitive pace.
 
The reduction or elimination of government subsidies and economic incentives for alternative energy sources could prevent demand for our BOO plants from developing, which in turn would adversely affect our business, financial condition and results of operations.
 
Federal, state and local governmental bodies in many countries, most notably the United Kingdom, Canada and the United States, have provided subsidies in the form of tariff subsidies, rebates, tax credits and other incentives to utilities, power generators and distributors using alternative energy. However, these incentives and subsidies generally decline over time, and many incentive and subsidy programs have specific expiration dates. Moreover, because the market for electricity generated from gasification is at an early stage of development, some of the programs may not include gasification as an alternative energy source eligible for the incentives and subsidies.
 
Currently, the cost of electricity generated from gasification, without the benefit of subsidies or other economic incentives, substantially exceeds the price of electricity in most significant markets in the world. As a result, the near-term growth of the market for our BOO plants, which are designed to feed electricity to an on-site end-user, depends significantly on the availability and size of government incentives and subsidies for gasification. As alternative energy becomes more of a competitive threat to conventional energy providers, companies active in the conventional energy business may increase their lobbying efforts in order to encourage governments to stop providing subsidies for alternative energy, including gasification. We cannot predict the level of any such efforts, or how governments may react to such efforts. The reduction, elimination or expiration of government incentives and subsidies, or the exclusion of gasification technology from those incentives and subsidies, may result in the diminished competitiveness of gasification relative to conventional and non-gasification alternative sources of energy. Such diminished competitiveness could materially and adversely affect the growth of the gasification industry, which could in turn adversely affect our business, financial condition and results of operations.
 
Lax enforcement of environmental and energy policy regulations may adversely affect demand for alternative energy.
 
Our success will depend in part on effective enforcement of existing environmental and energy policy regulations. Many of our potential customers are unlikely to switch from the use of conventional fuels unless compliance with applicable regulatory requirements leads, directly or indirectly, to the use of alternative energy sources. Both additional regulation and enforcement of such regulatory provisions are likely to be vigorously opposed by the entities affected by such requirements. If existing emissions-reducing standards are weakened, or if governments are not active and effective in enforcing such standards, our business and results of operations could be adversely affected. Even if the current trend toward more stringent emissions standards continues, we will depend on the ability of alternative energy sources to satisfy these emissions standards. Certain standards imposed by regulatory programs may limit or preclude the use of our products to comply with environmental or energy requirements. Any decrease in the emission standards or the failure to enforce existing emission standards and other regulations could result in a reduced demand for any alternative energy we produce.
 
 
Costs of compliance with burdensome or changing environmental and operational safety regulations could cause our focus to be diverted away from our business and our results of operations to suffer.
 
The production of many alternative energy fuels still involves the emission of various airborne pollutants, including particulate matter, carbon monoxide, carbon dioxide, nitrous oxide, volatile organic compounds and sulfur dioxide. The production facilities that we will build may discharge water or other matters into the environment. As a result, we are subject to complicated environmental regulations of the countries we are in or the U.S. Environmental Protection Agency and regulations and permitting requirements of the states where our plants are to be located. These regulations are subject to change and such changes may require additional capital expenditures or increased operating costs. Consequently, considerable resources may be required to comply with future environmental regulations. In addition, our BOO plants could be subject to environmental nuisance or related claims by employees, property owners or residents near the plants arising from air or water discharges. Environmental and public nuisance claims, or tort claims based on emissions, or increased environmental compliance costs could significantly increase our operating costs.
 
Implementation of our planned projects is dependent upon receipt of all necessary regulatory permits and approvals.
 
Development of power generation is heavily regulated. Each of our planned projects is subject to multiple permitting and approval requirements. In many cases we expect to be dependent on a regional government agency for such permits and approvals. Due to the unique nature of gasification power generation systems, we would expect our projects to receive close scrutiny by permitting agencies, approval authorities and the public, which could result in substantial delay in the permitting process. Successful challenges by any parties opposed to our planned projects could result in conditions limiting the project size or in the denial of necessary permits and approvals.
 
If we are unable to obtain necessary permits and approvals in connection with any or all of our projects, those projects would not be implemented and our business, financial condition and results of operations would be adversely affected. Further, we cannot assure you that we have been or will be at all times in complete compliance with all such permits and approvals. If we violate or fail to comply with these permits and approvals, we could be fined or otherwise sanctioned by regulators.
 
Our proposed new BOO plants will also be subject to federal and state laws regarding occupational safety.
 
Risks of substantial compliance costs and liabilities are inherent in the production of alternative energy fuels. We may be subject to costs and liabilities related to worker safety and job related injuries, some of which may be significant. Possible future developments, including stricter safety laws for workers and other individuals, regulations and enforcement policies and claims for personal or property damages resulting from operation of any BOO plants could reduce the amount of cash that would otherwise be available to further enhance our business.
 
Any acquisitions that we make or joint venture agreements that we enter into, or any failure to identify appropriate acquisition or joint venture candidates, could adversely affect our business, financial condition and results of operations.
 
From time to time, we may evaluate potential strategic acquisitions of complementary businesses, products or technologies, as well as consider joint ventures and other collaborative projects. We may not be able to identify appropriate acquisition candidates or strategic partners, or successfully negotiate, finance or integrate any businesses, products or technologies that we acquire. We do not have any experience with acquiring companies or products. Any acquisition we pursue could diminish the proceeds from this offering available to us for other uses or be dilutive to our stockholders, and could divert management’s time and resources from our core operations.
 
 
Strategic acquisitions, investments and alliances with third parties could subject us to a number of risks, including risks associated with sharing proprietary information and loss of control of operations that are material to our business. In addition, strategic acquisitions, investments and alliances may be expensive to implement. Moreover, strategic acquisitions, investments and alliances subject us to the risk of non-performance by a counterparty, which may in turn lead to monetary losses that materially and adversely affect our business, financial condition and results of operations.
 
Our directors and officers as a group have significant voting power and may take actions that may not be in the best interest of all other stockholders.
 
Our directors and officers, as a group, control approximately 40% of the Company’s current outstanding shares of common stock. These directors and executive officers may be able to exert significant control over our management and affairs requiring stockholder approval, including approval of significant corporate transactions. This concentration of ownership may expedite approvals of Company decisions, or have the effect of delaying or preventing corporate actions that may be in the best interests of all our stockholders.
 
Our common stock is listed for trading on the OTC Bulletin Board and may fluctuate significantly.
 
Our common stock is currently traded and quoted on the OTC Bulletin Board.  The quotation of our common stock on a securities market or exchange does not assure that a meaningful, consistent and liquid trading market will ever exist.  Our stock is a penny stock and there are significant risks.
 
Stockholders should be aware that, according to the SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. These patterns include:
 
·  
Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;
 
·  
Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;
 
·  
“Boiler room” practices involving high pressure sales tactics and unrealistic price projections by inexperienced sales persons;
 
·  
Excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and
 
·  
The wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.
 
Furthermore, the “penny stock” designation may adversely affect the development of any public market for the Company’s shares of common stock or, if such a market develops, its continuation. Broker-dealers are required to personally determine whether an investment in “penny stock” is suitable for customers.
 
ITEM 1B.  UNRESOLVED STAFF COMMENTS
 
None.
 
ITEM 2.  PROPERTIES
 
On April 1, 2010, the Company moved its principal executive office to 6040 Upshaw Dr. #105, Humble, Texas 77396.  The space is sublet from Houston Industrial Materials at a monthly charge of $1,500.  Houston Industrial Materials is owned by the Company’s Chairman, Gerald Enloe.  This space is temporary until actual space needs for the Texas office are determined.  The Company also leases space in Montreal for its Canadian operations from Adessky Law Firm which is owned by the company’s CFO and Director, Kenneth Adessky.  The lease is month to month at a rate of $3,500 which includes computer service, secretarial service, telephones and office and conference room space.
 
 
ITEM 3.  LEGAL PROCEEDINGS
 
We currently have no legal proceedings pending nor have any legal proceeding been threatened against us or any of our officers, directors or control persons of which we are aware.
 
 
ITEM 4.  MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
 
Market Information
 
The Company’s common stock began trading on the OTC Bulletin Board (“OTCBB”) on October 3, 2008 under the trading symbol “GCEI”.
 
The following table shows the high and low bid prices of our common stock as quoted on the OTCBB by quarter since October 3, 2008 (when our shares began trading) and for each quarter thereafter through December 31, 2009, and for the first quarter of 2010.  These quotes reflect inter-dealer prices, without retail markup, markdown or commissions and may not represent actual transactions.
 
Fiscal Year
               
ended December 31
 
Quarter
 
High
   
Low
 
                 
2008
 
Fourth Quarter
(from October 3, 2008)
  $ 1.50     $ .10  
                     
2009
 
First Quarter
  $ .25       .05  
   
Second Quarter
    .41       .09  
   
Third Quarter
     .20        .04  
   
Fourth Quarter
    .10       .04  
                     
2010
 
First Quarter
(through April 13, 2010)
  $ .17        .06  
 
The high and low bid prices for shares of our common stock on April  12, 2010 was $.10 and $.06 per share, respectively.
 
Holders
 
As of April 12, 2010, we had 174 shareholders of record and 38,803,721 shares of Common Stock issued and outstanding.
 
Dividend Policy
 
We have not declared or paid any dividends on our common stock to date. We anticipate that any future earnings will be retained as working capital and used for business purposes. Accordingly, it is unlikely that we will declare or pay any such dividends in the foreseeable future.
 
Securities Authorized for Issuance under Equity Compensation Plans
 
The following table discloses information as of December 31, 2009 with respect to compensation plans (including individual compensation arrangements), if any, under which our equity securities are authorized for issuance.
 
 
               
Number of
 
               
securities
 
               
remaining
 
               
available for
 
   
Number of
         
future issuance
 
   
securities to be
   
Weighted
   
under equity
 
   
issued upon
   
average
   
compensation
 
   
exercise
   
exercise price of
   
plans
 
   
of outstanding
   
outstanding
   
(excluding
 
   
options,
   
options,
   
securities
 
   
warrants
   
warrants
   
reflected in
 
Plan category
 
and rights (a)
   
and rights (b)
   
column (a)) (c)
 
                   
Equity compensation plans approved by
                 
security holders
                 
                   
2007 EMPLOYEE STOCK COMPENSATION
                 
PLAN
    2,250,000       255,750       2,750,000  
                         
Equity compensation plans not approved by
                       
security holders
                       
                         
NONE
    N/A       N/A       N/A  
                         
Total
    2,250,000       255,750       2,750,000  
 
Recent Sales of Unregistered Securities
 
During the year ended December 31, 2009 we issued the following  securities that were not registered under the Securities Act of 1933, as amended (the “Securities Act”): In December 2009, we issued 2,750,000 shares to our directors and executive officers to satisfy outstanding compensation payable to them in the aggregate of $300,000.  The shares were exempt from registration under the provisions of Section 4(2) of the Securities Act and/or Regulation S promulgated thereunder.
 
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
 
There were no repurchases of equity securities by the issuer or affiliated purchasers during the fourth quarter of the fiscal year ended December 31, 2009.
 
ITEM 5. SELECTED FINANCIAL DATA
 
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
 
 
ITEM 6.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
Overview
 
We caution you that reliance on any forward-looking statement involves risks and uncertainties, and that although we believe that the assumptions on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and, as a result, the forward-looking statements based on those assumptions could be incorrect. In light of these and other uncertainties, you should not conclude that we will necessarily achieve any plans and objectives or projected financial results referred to in any of the forward-looking statements. We do not undertake to release the results of any revisions of these forward-looking statements to reflect future events or circumstances. Some of the factors that may cause actual results, developments and business decisions to differ materially from those contemplated by such forward-looking statements include the following:
 
·  
our ability to complete construction of our BOO plants; the projected growth or contraction in the energy markets in which we will operate;
 
·  
fluctuations in the market price of primary outputs from our BOO plants, including syngas, methanol and ethanol;
 
·  
our business strategy for expanding, maintaining or contracting our presence in this market;
 
·  
our ability to obtain the necessary capital at a reasonable cost in order to finance our initiatives;
 
·  
anticipated trends in our financial condition and results of operations;
 
·  
our ability to distinguish ourselves from our current and future competitors;
 
·  
changes in or elimination of laws, tariffs, trade or other controls or enforcement practices such as:
 
·  
national, state or local energy policy;
 
·  
federal ethanol tax incentives;
 
·  
regulation currently under consideration pursuant to the passage of the Energy Policy Act of 2005, which contains a renewable fuel standard and other legislation mandating the usage of ethanol or other oxygenate additives; state and federal regulation restricting or banning the use of Methyl Tertiary Butyl Ether, or MTBE, a fuel derived from methanol;
 
·  
environmental laws and regulations applicable to our operations and the enforcement thereof; and
 
·  
regulations related to homeland security;
 
·  
changes in weather and general economic conditions;
 
·  
overcapacity within the ethanol and petroleum production and refining industries;
 
·  
total United States consumption of gasoline;
 
·  
availability and costs of products and raw materials
 
·  
labor relations; fluctuations in petroleum prices;
 
 
·  
our or our employees’ failure to comply with applicable laws and regulations;
 
·  
our ability to generate free cash flow to invest in our business and service our indebtedness; limitations and restrictions contained in the instruments and agreements governing our indebtedness;
 
·  
our ability to raise additional capital and secure additional financing;
 
·  
changes in interest rates;
 
·  
our ability to hire and retain key employees;
 
·  
liability resulting from actual or potential future litigation; competition;
 
·  
plant shutdowns or disruptions at our plant or plants whose products we will market;
 
·  
availability of shuttle trains, rail cars and trucks; risks regarding a loss of or substantial decrease in purchases by our major customers;
 
·  
risks related to hedging decisions, including whether or not to enter into hedging arrangements and the possibility of financial losses related to hedging arrangements; and
 
·  
risks related to diverting management’s attention from ongoing business operations.
 
Plan of Operation
 
We currently plan to raise additional funds through joint venture partnerships, project debt financings or through future sales of our common stock, until such time as our revenues are sufficient to meet our cost structure, and ultimately achieve profitable operations.  For the next 12 months, our Plan of Operations is to undertake the following:
 
·  
obtain additional operating capital from joint venture partnerships, debt financing or equity financing to fund ongoing operations and the development of BOO plants in Canada and North America;
 
·  
as available and as applicable to our business plans, apply for public funding to leverage the private capital we may raise;
 
·  
actively pursue mergers, acquisitions and joint ventures to increase shareholder value; and
 
·  
move quickly to secure additional opportunities to develop and operate state-of-the-art waste-to-energy plants for clients with long-term waste disposal and/or energy supply needs.
 
 
Results of Operations
 
During the year ended December 31, 2009 we had gross revenue $40,050, all of which was from our project in Valleyfield, Quebec.  Additionally, we have booked a receivable for $101,094 remaining to be paid on the contract.  The plan to turn research into revenue is succeeding and testing our proprietary equipment is making tremendous progress.   Our loss for the year was reduced to $144,843 versus a $668,231 loss in 2008.  The ability of the company to use consultants and operate with as little overhead as possible has made such a turnaround possible.  General and administrative cash outlays were reduced from $99,221 to $40,128.  Utilization of our stock to help offset our compensation expenses from $245,562 in 2008 to $92,083 in 2009.
 
Liquidity and Capital Resources
 
Our cash on hand totaled $3,280 on December 31, 2009.  During the same period our working capital deficit was $114,843.  This deficit resulted from ongoing expense related to implementing our business plan with limited revenues to date.  However we did record its’ first revenue of $40,050. Stockholders’ deficit was $2,289,474 at December 31, 2009.
 
We have yet to begin construction of BOO plants. Our continued existence is dependent upon our ability to obtain additional debt and/or equity financing at cost-effective rates. Management anticipates beginning construction of a plant within the next 12 to 18 months and expects to complete the project within the next 36 to 42 months. Management plans to raise additional funds through project financings or through future sales of our common stock, until such time as our revenues are sufficient to meet its cost structure and ultimately achieve profitable operations. There is no assurance we will be successful in raising additional capital at cost-effective rates or achieving profitable operations. Frequently, our board of directors will attempt to use non-cash consideration to satisfy obligations. In many instances, we believe that the non-cash consideration will consist of restricted shares of our common stock. These actions will result in dilution of the ownership interests of existing shareholders and may further dilute our common stock book value.
 
To date, we have financed our operations through the combination of equity and debt financing, loans from related parties, and the use of shares of our common stock issued as payment for services rendered to us by third parties. In the future we may have to issue shares of our common stock and warrants in private placement transactions to help finance our operations, and to pay for professional services (such as financial consulting, market development, legal services, and public relations services).
 
In order for our operations to continue, we will need to generate revenues from our intended operations sufficient to meet our anticipated cost structure. We may encounter difficulties in establishing these operations due to the time frame of developing, constructing and ultimately operating the planned BOO plants and bio-refinery projects.
 
To ensure sufficient funds to meet our future needs for capital, we will from time to time, evaluate opportunities to raise financing through some combination of the private sale of equity, or issuance of convertible debt securities. However, future equity or debt financing may not be available to us at all, or if available, may not be on terms acceptable to us. We have estimated our operating expenses for the period from January 2010 to December 2010 will approximate roughly $1,800,000, excluding engineering costs related to the development of our BOO plants.
 
If we do not raise additional capital, or we are unable to obtain additional financing, or begin to generate revenues from our intended operations, we may have to scale back or postpone the preliminary engineering design and permitting for our initial facility until such financing is available.
 
Critical Accounting Policies
 
Financial Reporting Release No. 60 of the SEC encourages all companies to include a discussion of critical accounting policies or methods used in the preparation of the financial statements. There are no current revenue generating activities that give rise to significant assumptions or estimates. Our most critical accounting policies relate to the accounting and disclosure of related party transactions. Our financial statements filed as part of this annual report include a summary of the significant accounting policies and methods used in the preparation of our financial statements.
 
 
Off-Balance Sheet Arrangements
 
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
 
ITEM 6A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
 
ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY FINANCIAL DATA
 
Our audited financial statements for the years ended December 31, 2009 and 2008 and the audit report thereon of Larry O’Donnell, CPA, P.C., are included in this annual report beginning on page F-1.
 

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
 
None.
 
ITEM 8A.  CONTROLS AND PROCEDURES.
 
(a) Management’s Annual Report on Internal Control Over Financial Reporting. Under the supervision and with the participation of our senior management, consisting of our chief executive officer and our chief financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 as of the end of the period covered by this report (the “Evaluation Date”). Based upon that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are effective as of the Evaluation Date.
 
Our management is responsible for establishing and maintaining an adequate system of internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Specifically, our internal control over financial reporting includes those policies and procedures that:
 
·  
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
 
·  
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations by our management and/or directors; and
 
·  
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
 
Under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO Framework”). Based on this evaluation under the COSO Framework, management concluded that our internal control over financial reporting was effective as of December 31, 2009.
 
 
This annual report does not include an attestation report by our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission (the “SEC”) that allows us to provide only management’s report in this annual report.
 
(b) Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting that occurred during the last fiscal quarter of the period covered by this report that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
 
ITEM 8A. (T)  CONTROLS AND PROCEDURES.
 
Not applicable.
 
ITEM 8B.  OTHER INFORMATION
 
None.
 
 
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE GOVERNANCE
 
The following table sets forth the names, ages, years elected and principal offices and positions of our current directors and executive officers as of April 12, 2010:
 
Name
 
Age
 
Position(s) with the Company
             
Gerald Enloe
   
61
   
Chairman of the Board
             
Earl Azimov
   
47
   
President, Chief Executive Officer and Director
             
Kenneth S. Adessky
   
46
   
Chief Financial Officer, Secretary and Director
             
Paul Whitton
   
64
   
Vice-President and Director
 
Gerald Enloe:. Mr. Enloe has served as a director and as Chairman of the Board since April 30, 2009.  Since 1991, Mr. Enloe has served as President and CEO of Houston Industrial Materials, Inc., a construction materials supplier.  He has 25 years of experience in the environmental remediation business.  He has also served as Chairman and a Director of other public companies.  Mr Enloe was Chairman of Element 21 Golf , Inc from 2002-2006.
 
Dr. Earl Azimov: Dr. Azimov has served as a Director since August 2006. Mr. Azimov served as our Chairman from August 2006 to April 30, 2009.  Dr. Azimov is currently the Chief Executive Officer of Miazzi Ventures Inc., a merchant bank that he co-founded that has assumed leadership roles in early stage companies since 1996, including Mamma.com, which was sold in 1999 for an eight-figure valuation. In addition, from 2003 through early 2007, Dr. Azimov was the co-founder and Director of Business Development for GospelCity.Com, Inc., a world leader of on-line faith-based gospel entertainment. From 1992 through 1995, Dr. Azimov was the President of Zellers Optical Centers, a company he co-founded that employed over 70 optometrists and 200 support personnel that was later sold to National Vision Associates of Atlanta, who operate the Wal-Mart Vision Centers. Dr. Azimov brings 20 years of private equity experience, focusing on seed capital investments in startup companies. He has a Bachelor of Science from the University of South Carolina and a Doctorate of Optometry from the University of Montreal — School of Optometry, in Montreal, Quebec, Canada.
 
 
Kenneth S. Adessky: Mr. Adessky has been our Chief Financial Officer, Secretary and a Director since August 2006. Mr. Adessky is currently a Senior Partner of Adessky Lesage, a corporate commercial law firm located in Montreal, Canada that he co-founded in 1995. As a Senior Partner, Mr. Adessky focuses his legal practice on private and public financings, mergers and acquisitions and public offerings of small capital public companies. Over the past decade, Mr. Adessky has completed in excess of $100 million dollars of financing. Mr. Adessky received his Bachelor of Civil Law from McGill University in Montreal, Quebec, Canada in 1990.
 
Paul Whitton: Mr. Whitton currently serves as our Vice-President, and he has served as a Director since June 2007. Since 1998, Mr. Whitton has been the owner of JK, Inc., an environmental consulting company based in Houston, Texas. Mr. Whitton holds numerous patents relating to industrial environmental quality and is a nationally recognized speaker on abatement. Prior to 1988, he spent 22 years with Brown & Root Construction Company where he was an area superintendent for construction and maintenance of oil and gas refineries, nuclear power plants, and paper mills throughout the world but primarily the Mideast and United Kingdom. He was also a construction supervisor with Boeing Air and in the United States Navy for four years. Mr. Whitton brings industrial plant management and construction experience as well as his environmental expertise to the Company.
 
There are no family relationships among our officers and directors.
 
Involvement in Certain Legal Proceedings
 
None of our directors or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates that are required to be disclosed pursuant to the rules and regulations of the SEC other than as set forth in “Item 13. Certain Relationships and Related Transactions, and Director Independence” below. None of the directors or executive officers to our knowledge has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement.
 
Section 16(a) Beneficial Ownership Reporting Compliance
 
Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s directors, executive officers and holders of more than 10% of the Company’s common stock to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Except as set forth below, the Company believes that during the year ended December 31, 2008, its officers, directors and holders of more than 10% of the Company’s common stock complied with all Section 16(a) filing requirements. In making these statements, the Company has relied solely upon its review of copies of the Section 16(a) reports filed for the fiscal year ended December 31, 2009 on behalf of the Company’s directors, officers and holders of more than 10% of the Company’s common stock.   Messrs. Enloe, Azimov, Adessky and Whitton failed to file a Form 4 to report shares received by them in September 2009
 
Term of Office
 
Each year the stockholders elect the members of our Board of Directors.
 
Board Meetings and Committees.
 
The Board held eight meetings in Fiscal 2009.  We expect each director to attend every meeting of the Board as well as the annual meeting.   All directors were present at the meetings of the Board in Fiscal 2009.
 
 
We do not have a standing nominating committee as our entire board of directors currently serves these functions.  There were no changes in procedures for nominating directors during the year ended December 31, 2009.  The term of office of the current directors shall continue until new directors are elected or appointed.  Nominations for election to the Board of Directors may be made by the Board of Directors or by any shareholder entitled to vote for the election of directors.  The nominating committee does not have a fixed policy with regard to the consideration of any director candidate recommended by shareholders.  The Board of Directors carefully considers nominees regardless of whether they are nominated by shareholders or existing board-members.
 
We do not have a standing compensation committee of the Board. Compensation committee functions are performed by our Board of Directors. Mr. Adessky and Mr. Azimov, who serve on our board, are also employees of the Company.  Our Board of Directors makes decisions concerning salaries and incentive compensation for our officers, including our Chief Executive Officer, Chief Financial Officer and employees.  Messrs. Adessky and Azimov do not participate on decisions regarding executive compensation.
 
The Board of Directors is the acting Audit Committee and does not have an audit committee charter.
 
The Board has reviewed and discussed the audited financial statements with management; has discussed with our independent auditors the matters required to by discussed by the statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T; the Board has received the written disclosures and the letter from our independent accountants required by applicable requirements of the Public Company Accounting Oversight Board regarding our independent accountant’s communications with the Board concerning independence, and has discussed with our independent accountant their independence; and based upon the foregoing, the Board had determined that the audited financial statements set forth herein be included in this Annual Report on Form 10-K.
 
Our Board of Directors has determined that there is no person on our Board of Directors who qualifies as an audit committee financial expert as that term is defined by applicable SEC.  The Board of Directors believes that obtaining the services of an audit committee financial expert is not economically rational at this time in light of the costs associated with identifying and retaining an individual who would qualify as an audit committee financial expert.
 
Code of Ethics
 
We have adopted a Code of Ethics for our senior officers, including our principal executive officer, principal financial officer, principal accounting officer or controller and any person who may perform similar functions.  We will report the nature of any change or waiver of our Code of Ethics.  A copy of our Code of Ethics was filed as Exhibit 14 on the Company’s Form 10-KSB for the year ended December 31, 2003 and incorporated herein by reference.  A copy of our Code of Ethics will be provided to any person requesting same without charge.
 
COMPENSATION OF DIRECTORS
 
The Company has no standard arrangements in place or currently contemplated to compensate the Company’s directors for their service as directors or as members of any committee of directors.  Except as set forth in the Summary Compensation Table below, no director has received any compensation from the Company.
 
Director Compensation
 
Name
 
Fees earned or
Paid in Cash
   
All other
compensation (i)
   
Total
 
                   
   
($)
   
($)
   
($)
 
(a)
 
(b)
   
(g)
   
(h)
 
Gerald Enloe
    0       0       0  
Earl Azimov
    0       0       0  
Kenneth Adessky
    0       0       0  
Paul Whitton
    0       0       0  

 
Securities Authorized for Issuance under Equity Compensation Plans
 
None, except for 5,000,000 shares of common stock reserved for issuance under the Company’s 2007 Stock Plan.
 
ITEM 10.  EXECUTIVE COMPENSATION
 
Summary Compensation Table
 
The following Summary Compensation Table sets forth, for the years indicated, all cash compensation paid, distributed or accrued for services, including salary and bonus amounts, rendered in all capacities by our Chief Executive Officer.  No other executive officer or other employee received or is entitled to receive remuneration in excess of $100,000 during the stated periods.
 
Name and Principal
Position
 
Year
 
Salary (1)(2)
($)
   
Option Grants
($)
   
All Other
Compensation ($)
   
Total
($)
 
(a)
 
(b)
 
(c)
   
(e)
   
(f)
   
(g)
 
Earl Azimov,
Chief Executive Officer
 
2009
2008
 
$
$
72,000
72,000
     
 --
--
     
 --
 
   
$
$
 72,000
72,000
 
                                     
Kenneth Adessky,
Chief Financial Officer
 
2009
2008
 
$
$
96,000
72,000
                   
$
$
 96,000
72,000
 
                                 
Paul Whitton,
Vice President
 
2009
2008
 
$
$
7,000
7,000
                   
$
$
 7,000
7,000
 
_____________
 
(1)           Salary consists of compensation fees.
 
(2)           In December 2009, $100,000 of accrued compensation indirectly owed to each of Dr. Azimov and Mr. Adessky was satisfied through the issuance of 2,500,000 shares of Common Stock at a value of $.04 per share.
 
Employment Agreements
 
We do not have employment agreements with any of our executive officers or directors. We have verbal understandings with our executive officers regarding monthly retainers and reimbursement for actual out-of-pocket expenses.
 
Termination of Employment
 
There are no compensatory plans or arrangements, including payments to be received from the Company, with respect to any person named in the Summary Compensation Table set forth above that would in any way result in payments to any such person because of his or her resignation, retirement or other termination of such person’s employment with us.
 
Indemnification of Officers and Directors
 
We indemnify to the fullest extent permitted by, and in the manner permissible under, the laws of the State of Maryland, any person made, or threatened to be made, a party to an action or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he/she is or was a director or officer of our Company, or served any other enterprise as director, officer or employee at our request. Our board of directors, in its discretion, shall have the power on behalf of the Company to indemnify any person, other than a director or officer, made a party to any action, suit or proceeding by reason of the fact that he/she is or was our employee.
 
 
Employee Benefit Plans
 
2007 Stock Incentive Plan
 
We have adopted the 2007 Stock Incentive Plan for our employees, officers, directors and advisors (the “2007 Plan”). We have reserved a maximum of 5,000,000 common shares to be issued upon the grant of awards under the 2007 Plan. Employees will recognize taxable income upon the grant of common stock equal to the fair market value of the common stock on the date of the grant and the Company will recognize a compensating deduction for compensation expense at such time. The 2007 Plan will be administered by our board of directors or a committee of directors, and will terminate June 12, 2017.  As of December  31, 2009, 2,750,000 shares have been awarded under the 2007 Plan to consultants who are not related parties for services rendered.
 
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
 
The following table sets forth, as of April 12, 2010, the stock ownership of (i) each of our named executive officers and directors, (ii) all executive officers and directors as a group, and (iii) each person known by us to be a beneficial owner of 5% or more of our common stock. No person listed below has any option, warrant or other right to acquire additional securities from us, except as may be otherwise noted. We believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them except as stated therein.
 
Name and Address
 
Amount & Nature
       
of Beneficial
 
of Beneficial
   
Percent
 
Owner (1)
 
Ownership
   
of Class (2)
 
   
Kenneth S. Adessky
   
9.437,500
     
24.3
%
4150 Sainte-Catherine Street W.
Suite 525
Montreal, Quebec H3Z 2Y5
               
                 
Dr. Earl Azimov
   
8,850,000
     
         22.8
%
5737 Blossom
Cote St Luc, Quebec H4W 2T2
               
                 
Gerald Enloe
6040 Upshaw Dr. #105
Humble, TX 77396
   
103,920
      *  
                 
Paul Whitton
   
50,000
     
*
 
2415 Shakespeare #3
Houston, Texas 77936
               
                 
    All officers and directors
   
18,441,420
     
47.53
%
as a group (3 persons)
               
_____________
 
*Less than 1%.
 
 
(1)
Beneficial ownership is determined in accordance with the Rule 13d-3(a) of the Securities Exchange Act of 1934, as amended, and generally includes voting or investment power with respect to securities. Except as subject to community property laws, where applicable, the person named above has sole voting and investment power with respect to all shares of our common stock shown as beneficially owned by him.
 
(2)
The beneficial ownership percent in the table is calculated with respect to the number of outstanding shares 38,803,721 of the Company’s common stock as of April 12, 2010, and each stockholder’s ownership is calculated as the number of shares of common stock owned plus the number of shares of common stock into which any preferred stock, warrants, options or other convertible securities owned by that stockholder can be converted within 60 days.
 
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
 
Related Party Transaction Procedures.
 
The Board reviews and approves all transactions between us and any director or executive officer that will, or is reasonably likely to require disclosure under the SEC’s rules. In determining whether to approve any transaction with any of our directors or executive officers, the Board will consider the following factors, among others, to the extent relevant to the transaction:
 
·  
whether the terms of the transaction are fair to us and on the same basis as would apply if the transaction did not involve a related person;
 
·  
whether there are business reasons for us to enter into the transaction;
 
·  
whether the transaction would impair the independence of an outside director; and
 
·  
whether the transaction would present an improper conflict of interest for a director or executive officer, taking into consideration such factors as the Board deems relevant, such as the size of the transaction, the overall financial position of the individual, the direct or indirect nature of the individual’s interest in the transaction and the ongoing nature of any proposed relationship.
 
Related Party Transactions.
 
During 2009, we paid legal fees totaling $3,782 to a law firm of which Mr. Adessky, our CFO, Secretary and Director, is a partner.
 
As of December 10, 2009 the Company and Janory Capital Corporation cancelled an ongoing agreement and Janory Capital agreed to continue research and development with the Company on a pay-as-you-go basis.  Both Dr. Earl Azimov and Ken Adessky, directors and officers of the Company, have an interest in Janory.  In connection with this Agreement the Company’s $95,550 payable to Janory was cancelled.  The company removed such amount as a payable.  In 2009 the Company paid to Janory a total of $103,465 of which Janory paid bills on behalf of the Company a aggregating $73,468 leaving a balance of $30,000 which was earned as a consulting fee.
 
The Board of Directors approved a payment of $100,000 to be accrued payable to Vision Capital for work done on behalf of the Company in 2009.  Vision Capital is controlled by Dr. Earl Azimov and Ken Adessky.  As Directors of the Company they abstained from such payment authorization.  In September 2009, Dr. Azimov and Mr. Adessky agreed and the Board approved the issuance of 2,500,000 shares of common stock in payment for $100,000 to each of them at the value of $.04.
 
Director Independence
 
Our current directors are Gerald Enloe, Dr. Earl Azimov, Paul Whitton, and Kenneth Adessky. We are not currently subject to corporate governance standards defining the independence of our directors. We have not yet adopted an independence standard or policy, although we intend to do so in the near future. Accordingly, the Company’s Board currently determines the independence of each Director and nominee for election as a Director. The Board has determined that none of the Company’s directors currently qualifies as an independent director.
 
 
ITEM 13.  PRINCIPAL ACCOUNTANT FEES AND SERVICES
 
Audit Fees
 
The aggregate fees billed by the Company’s auditors for professional services rendered in connection with the audit of the Company’s annual financial statements and reviews of the financial statements included in the Company’s Form 10-Qs or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for fiscal years 2009, and  2008  were $0 and $5,000, respectively.
 
Audit Related Fees
 
None.
 
Tax Fees
 
None.
 
All Other Fees
 
None.
 
Pre-Approval Policies and Procedures
 
Our Board of Directors has adopted resolutions in accordance with the Sarbanes-Oxley Act of 2002 requiring pre-approval of all auditing services and all audit related, tax or other services not prohibited under Section 10A(g) of the Securities Exchange Act of 1934, as amended to be performed for us by our independent auditor, subject to the de minimus exception described in Section 10A(i)(1)(B) of the Exchange Act. These resolutions authorized our independent auditor to perform audit services required in connection with the annual audit relating to our fiscal year ended December 31, 2009 and the quarterly reviews for the subsequent fiscal quarters of 2009 through the quarter ended September 30, 2009, at which time additional pre-approvals for any additional services to be performed by our auditors would be sought from the Board. Our Board of Directors also appointed and authorized Kenneth Adessky to grant pre-approvals of other audit, audit-related, tax and other services requiring board approval to be performed for us by our independent auditor, provided that the designee, following any such pre-approvals, thereafter reports the pre-approvals of such services at the next following regular meeting of the Board.
 
The percentage of audit-related, and other services that were approved by the Board of Directors is 100%.
 
ITEM 14.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 
(a)          1.           The financial statements beginning at page F-1 are filed as a part of this Annual Report on Form 10-K.

2.           Financial statement schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

3.           Exhibits included or incorporated herein:   See Exhibit Index below.

(b)
 
 
Exhibit
       
Number
 
Exhibit Description
   
         
2.1
 
November 7, 2007 Agreement and Plan of Merger between Newsearch, Inc. and Global Clean Energy, Inc. (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on November 13, 2007).
   
         
3.1
 
Amended and Restated Articles of Incorporation (Incorporated by reference to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2006 filed with the Commission on May 7, 2007).
   
         
3.2
 
Bylaws of Global Clean Energy, Inc. (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on November 13, 2007).
   
         
4.1
 
Specimen Common Stock Certificate (Incorporated by reference to the Company’s Registration Statement on Form 10SB-12G filed with the Commission on April 12, 2000).
   
         
4.2
 
$100,000, 7.5% Promissory Note dated January 20, 2008 payable Profit Consultants, Inc. (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on March 27, 2008).
 
         
4.3
 
$125,000, 7.5% Promissory Note dated April 25, 2008 payable Profit Consultants, Inc. (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on June 30, 2008).
   
         
4.4
 
$145,000, 7.5% Promissory Note dated July 10, 2008, payable to Clean Energy Funding, Inc. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the Commission on November 13, 2008).
   
         
4.5
 
$80,000, 7.5% Promissory Note dated August 15, 2008, payable to Vision Capital Partners AA, Ltd. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the Commission on November 13, 2008).
   
         
10.1
 
2007 Stock Incentive Plan (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on June 12, 2007).
   
         
10.2
 
License Agreement dated December 15, 2006, between EnviroClean Energy Corporation and the Company (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on January 4, 2007).
   
         
10.3
 
March 27, 2008 Agreement converting the March 21, 2007 $100,000 7.5% Promissory Note payable to Vision Capital Partners AA Ltd. into shares of the Company’s common stock (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the Commission on May 15, 2008).
   
         
10.4
 
March 27, 2008 Agreement converting the August 16, 2007 $75,000 7.5% Promissory Note payable to Profit Consultants, Inc. into shares of the Company’s common stock (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the Commission on May 15, 2008).
   
         
10.5
 
March 27, 2008 Agreement converting the October 20, 2007 $75,000 7.5% Promissory Note payable to Profit Consultants, Inc. into shares of the Company’s common stock (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the Commission on May 15, 2008).
   
         
10.6
 
Memorandum of Understanding between Global Clean Energy, Inc. and UK Coal Mining Limited of Harworth Park, dated April 7, 2008 (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on May 30, 2008).
   
 
 
10.7
 
Memorandum of Understanding between Global Clean Energy, Inc. and UK Coal Mining Limited of Harworth Park, dated April 7, 2008 (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on May 30, 2008).
   
         
10.8
 
April 24, 2008 Purchase Order Between Global Clean Energy, Inc. and Cascades Engineering & Projects Inc. (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on May 30, 2008).
   
         
10.9
 
Assignment Agreement between Global Clean Energy, Inc. and Philip Azimov dated June 26, 2008 (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on June 26, 2008).
   
         
14
 
Code of Ethics (Incorporated by reference to the Company’s Annual Report on Form 10-KSB of the Company for the year ended December 31, 2003 filed with the Commission on November 17, 2004).
   
         
21
 
Subsidiaries
   
         
31.1
 
Rule 13a-14(a)/15d-14(a) Certification by the Principal Executive Officer*
   
         
31.2
 
Rule 13a-14(a)/15d-14(a) Certification by the Principal Financial Officer*
   
         
32.1
 
Section 1350 Certification by the Principal Executive Officer*
   
         
32.2
 
Section 1350 Certification by the Principal Financial Officer*
   
         
*                           Filed herewith.
   
 
 
SIGNATURES
 
In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant caused this Report on Form 10-K to be signed on its behalf by the undersigned, thereto duly authorized.
 
Date: April 15, 2010
 
 
GLOBAL CLEAN ENERGY, INC.
 
 
 
By /s/ Kenneth S. Adessky  
 
 
Kenneth S. Adessky
 
 
Chief Financial Officer 
 
 
 
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
Signature
 
Title
 
Date
         
/s/ Gerald Enloe
 
Director and Chairman
 
April 15, 2010
Gerald Enloe
       
         
/s/Dr. Earl Azimov
 
Director and President
 
April 15, 2010
Dr. Earl Azimov
 
(Principal Executive Officer)
   
         
/s/ Kenneth S. Adessky
 
Director, CFO and Secretary
 
April 15, 2010
Kenneth S. Adessky
 
(Principal Financial Officer and Principal Accounting Officer)
   
         
/s/ Paul Whitton
 
Director
 
April 15, 2010
Paul Whitton        
 
36

 
GLOBAL CLEAN ENERGY, INC.
 
Financial Statements
 
Table of Contents
 
         
   
Page
 
         
Report of Independent Registered Public Accounting Firm
   
F-1
 
         
Financial Statements:
       
         
Balance Sheet
   
F-2
 
         
Statements of Operations
   
F-3
 
         
Statements of Changes in Stockholders’ Equity
   
F-4
 
         
Statements of Cash Flows
   
F-5
 
         
Notes to Financial Statements
   
F-6 - F-10
 
 

 
Larry O’Donnell, CPA, P.C.
     
Telephone (303) 745-4545
 
2228 South Fraser Street
   
Unit I
   
Aurora, Colorado 80014
     

 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
The Board of Directors
 
GLOBAL CLEAN ENERGY, Inc.
 
I have audited the accompanying balance sheet of GLOBAL CLEAN ENERGY, Inc. as of December 31, 2009, and the related statements of operations, changes in stockholders’ equity and cash flows for each of the years in the two-year period ended December 31, 2009. These financial statements are the responsibility of the Company’s management. My responsibility is to express an opinion on these financial statements based on my audits.
 
I conducted my audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.
 
In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of GLOBAL CLEAN ENERGY, Inc. as of December 31, 2009, and the results of its operations and their cash flows for each of the years in the two-year period ended December 31, 2009, in conformity with generally accepted accounting principles in the United States of America.
 
/s/ Larry O’Donnell, CPA, P.C.
 
F-1

 
GLOBAL CLEAN ENERGY, INC.
Balance Sheet
DECEMBER 31, 2009

ASSETS

   
Year Ended December 31,
 
   
2009
   
2008
 
Current assets:
           
Cash
  $ 3,280     $ 45,858  
Accounts Receivable – Valleyfield
    101,094          
                 
Sub-Total
    104,374       45,858  
                 
                 
Other assets:
               
Cyclonic Dredging Pump Rights and Patent
    450,000       450,000  
Hybrid Gasification Rights and Patent
    1,000,000          
                 
                 
Total assets
  $ 1,554,374     $ 495,858  
                 
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
                 
CURRENT LIABILITIES:
               
Accrued compensation—officers, directors and consultants
    219,786       523,968  
Accounts payable
    317,979       125,688  
Promissory notes
    535,150       486,900  
                 
    $ 1,072,915     $ 1,136,556  
                 
Stockholders’ equity:
               
Preferred stock; $.001 par value; authorized – 15,000,000
               
shares; issued - none
            --  
Common stock; $.001 par value; authorized – 300,000,000
               
shares; issued and outstanding – 36,628,721 shares
    36,628       25,378  
Additional paid-in capital
    2,734,305       1,478,555  
Accumulated deficit
    (2,289,474 )     (2,144,631 )
                 
Total liabilities and stockholders’ equity
  $ 1,554,374     $ 495,858  
 
F-2

 
GLOBAL CLEAN ENERGY, INC.
STATEMENTS OF OPERATIONS
 
   
Year Ended December 31,
 
   
2009
   
2008
 
             
Revenues
  $ 40,050        
Costs and expenses:
             
Compensation – officers, directors and consultants
  $ 92,083     $ 245,562  
Professional fees
    52,682       145,320  
                 
General and administrative
    40,128       99,221  
                 
                 
Interest and Bank Charges
    149       1,744  
                 
                 
                 
Net loss applicable to common shareholders
  $ (144,843 )   $ (668,231 )
                 
Basic and diluted net loss per common share**
               
                 
Weighted average number of common shares outstanding
    29,128,721       25,378,721  
 
** Less than $(.01) per share
 
F-3

 
 GLOBAL CLEAN ENERGY, INC.
Statements of Changes in Stockholders’ Equity (Deficit)

               
Additional
       
   
Common Stock
   
Paid-in
   
Accumulated
 
   
Shares
   
Amount
   
Capital
   
Deficit
 
                         
Balances, January 1, 2009
    25,378,721     $ 25,378     $ 1,478,555       (2,144,631 )
Technology Patent Assignment
    1,000,000       1,000       1,000,000          
Employee Defined Benefit Plan
    2,750,000       2,750       255,750          
Conversion of Accrued Payables
    7,500,000       7,500                  
Net loss
                            (144,843 )
                                 
Balances, December 31, 2009
    36,628,721       36,628     $ 2,734,305       (2,289,474 )
 
F-4

 
 GLOBAL CLEAN ENERGY, INC.
STATEMENTS OF CASH FLOWS
 
(UNAUDITED)

   
Year Ended December 31,
 
   
2009
   
2008
 
             
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net loss
    (144,843 )     $ (668,231 )
               
Adjustments to reconcile net loss to net cash used in operating activities:
               
Common stock issued for services
    255,750          
                 
                 
                 
Changes in operating assets and liabilities:
               
                 
Accounts Payable
            125,688  
Advances
               
Accrued compensation – officers, directors and consultants
            523,968  
Other accrued expenses
               
                 
Net cash used in operating activities
    (248,308 )     (221,493 )
                 
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Proceeds from promissory notes
    67,135       492,300  
                 
Net cash provided by financing activities
    67,135       492,300  
                 
NET INCREASE (DECREASE) IN CASH
    (42,578 )     45,807  
                 
CASH AT BEGINNING OF YEAR
    45,858       51  
                 
CASH AT END OF YEAR
    3,280       45,858  
                 
                 
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND
               
FINANCING ACTIVITIES:
               
Common Stock issued for services
    255,750          
Technology Patent Assignments
    1,450,000       450,000  
Conversion of Promissory Notes
            263,200  
Conversion of Accrued Payables
    300,000          

F-5

 
GLOBAL CLEAN ENERGY, Inc.
Notes to Financial Statements
 
Note 1 - Organization

Global Clean Energy, Inc. (“Global Clean Energy” or the “Company”) was incorporated in Colorado on December 3, 1999.  Prior to July 2004, Global Clean Energy through its subsidiary, Panache, Inc. (“Panache”), operated as a women’s fashion apparel wholesaler in Colorado.  On August 16, 2006, Global Clean Energy elected new officers and directors and moved its offices to Boulder, Colorado for corporate and administrative purposes.
 
The Company has now moved its’ administrative offices to 6040 Upshaw Dr. #105, Houston, Texas.
 
The Company has determined that the most effective method of profitably providing renewable energy within its’ corporate framework is to develop proprietary equipment, to be tested and utilized with governmental agencies within North America and research and prepare to use the most efficient feedstocks.  The Company acquired for common stock the rights, title and interest in a Hybrid Gasification System. Such acquisition is a complement to our AirPump System acquired in 2008. The Company now has an ongoing testing system in place at Valleyfield, Quebec funded partially with Canadian Federal Government assistance.  The Company received its’ first revenue in 2009.  The Company is also researching scientific progress on utilization of the most efficient feedstocks through its’ Houston, Texas office.  The Company also is preparing grant applications in both the United States and Canada for developmental funds which are now  available.
 
The financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.  Global Clean Energy has an accumulated deficit of $2,289,474 for the year ending December 31, 2009.  The Company has raised funds over the last year and is actively pursuing additional sources of equity or debt financing to implement our business model.
 
Note 2 - Summary of Significant Accounting Policies

Use of Estimates
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reporting amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods.  Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from these estimates.
 
Equipment
 
Equipment is recorded at cost and depreciated using the straight-line method over estimated useful lives of three to five years.  Both straight-line and accelerated methods of depreciation are used for income tax purposes.
 
F-6

 
Impairment of Long-Lived Assets
 
Global Clean Energy records impairment losses on long-lived assets used in operations and finite lived intangible assets when events and circumstances indicate the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts.  The impairment loss is measured by comparing the fair value of the asset to its carrying amount.
 
Financial Instruments
 
Unless otherwise indicated, the fair value of all reported assets and liabilities which represent financial instruments (none of which are held for trading purposes) approximate the carrying values of such amounts.
 
Stock-Based Compensation
 
Global Clean Energy accounts for stock-based compensation in accordance with SFAS No. 123(R) Share-Based Payment.  Under the fair value recognition provisions of this statement, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service period, which is the vesting period.  The Company elected the modified-prospective method, under which prior periods are not revised for comparative purposes.  The valuation provisions of SFAS 123R apply to new grants and to grants that were outstanding as of the effective date and subsequently modified.
 
During the years ended December 31, 2009 and 2008, there were no stock options granted or outstanding.
 
Comprehensive Income
 
SFAS No. 130, Reporting Comprehensive Income, establishes requirements for disclosure of comprehensive income (loss).  During the years ended December 31, 2009 and 2008, Global Clean Energy did not have any components of comprehensive income (loss) to report.
 
Net Loss Per Share
 
SFAS No. 128, Earnings per Share, requires dual presentation of basic and diluted earnings or loss per share (“EPS”) for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation.  Basic EPS excludes dilution; diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.
 
Basic loss per share is computed by dividing net loss applicable to common shareholders by the weighted average number of common shares outstanding during the period.  Diluted loss per share reflects the potential dilution that could occur if dilutive securities and other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of Global Clean Energy, unless the effect is to reduce a loss or increase earnings per share.  Global Clean Energy had no potential common stock instruments which would result in a diluted loss per share.  Therefore, diluted loss per share is equivalent to basic loss per share.
 
F-7

 
Recently Issued Accounting Pronouncements
 
In June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109, (“FIN 48”).  FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes.  FIN 48 also prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return that results in a tax benefit.  Additionally, FIN 48 provides guidance on de-recognition, income statement classification of interest and penalties, accounting in interim periods, disclosure, and transition.  This interpretation is effective for fiscal years beginning after December 15, 2006.  Global Clean Energy does not expect the application of FIN 48 to have a material affect on its financial statements.
 
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements.  This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements.  This statement applies under other accounting pronouncements that require or permit fair value measurements.  SFAS 157 is effective for fiscal years beginning after November 15, 2006.  Global Clean Energy does not expect the application of SFAS No. 157 to have a material affect on its financial statements.
 
Note 3 – AIRPUMP™ PATENT ASSIGNMENT AND HYBRID GASIFICATION ASSIGNMENT
 
Global Clean Energy, Inc., acquired the entire right, title and interest in and to a static fluid mixing pump device, set forth in a Patent application for Letters Patent of the United States, filed on June 30th, 2008 as U.S. Application No. 61/129, 484; as well as the inventions and Application for Letters Patent of the United States, and in and to any Letters Patent of the United States to be obtained therefore and thereon from Mr. Philip Azimov for the consideration of 300,000 common shares.
 
On  April 29, 2009, the Company acquired the entire right, title and interest in a proprietary Hybrid Gasification System , set forth in a Patent application for Letters Patent of the United States, filed on March 24, 2009 under #61/202,671. as well as the inventions and Application for Letters Patent of the United States, and in and to any Letters Patent of the United States to be obtained therefore and thereon from Mr. Philip Azimov and Mr. Louis-Phillipe Senecal for the consideration of 1,000,000 shares of restricted common stock valued at $1,000,000 for such assignment. Such transaction was detailed in the Company’s 8-K filed on such date.
 
Note 4 – Borrowings

In 2008, Global Clean Energy obtained five unsecured loans which were due in one year, each with an interest rate of 7.5% per annum those notes have been renewed for an additional year from each respective anniversary date.
 
On May 15, 2009 Sylvain McMahon loaned to the company $25,500 due in one year at an interest rate of 8.50%.
 
F-8

 
On September 15, 2009 Mario Nadeau loaned to the company $22,750 due in one year at an interest rate of 8.50%.
 
Note 5 - Stockholders’ Equity
 
Common Stock
 
In April, 2009 the Company issued 1,000,000 restricted shares of common stock for the assignment of all rights, title and interests in a Hybrid Gasification System, the transaction has a value of $1,000,000.
 
In September, 2009 the Company issued 2,750,000 shares of common stock for payment of services under the company’s 2007 Plan for services rendered.  The value of the transaction was $225,750.
 
Global Clean Energy is authorized to issue 300,000,000 shares of $.001 par value common stock.  The Company has 36,628,721 shares of common stock issued and outstanding at December 31, 2009.  Dividends may be paid on the outstanding shares as declared by our board of directors.  Each share of common stock is entitled to one vote.
 
Preferred Stock
 
Global Clean Energy is authorized to issue 15,000,000 shares of $.001 par value preferred stock.  No shares of preferred stock have been issued or are outstanding.  Dividends, voting rights and other terms, rights and preferences of the preferred shares have not been designated but may be designated by our board of directors from time to time.
 
Employee Stock Compensation Plans
 
Global Clean Energy has adopted the 2007 Incentive Plan (the “2007 Plan”) for its employees, officers, directors and consultants.  We have reserved a maximum of 5,000,000 shares of common stock to be issued under the 2007 Plan.  As of  December 31, 2009 2,750,000 shares were issued for services rendered leaving a balance of 2,250,000 available for issuance under the 2007 Plan.
 
Note 6 - Income Taxes
 
Global Clean Energy recognizes deferred income tax liabilities and assets for the expected future tax consequences of events that have been recognized in the financial statements or tax returns.  Under this method, deferred tax liabilities and assets are determined based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse.
 
Global Clean Energy incurred no income taxes for the years ended December 31, 2009 and 2008.
 
Net operating loss carryforwards may be limited under the Change of Control provisions of the Internal Revenue Code section 382.
 
F-9


Note 7 - Commitments and Related Party Transactions

As of December 10, 2009 the Company and Janory Capital Corporation cancelled their ongoing agreement and Janory Capital agreed to continue research and development with the Company on a pay-as-you-go basis.  Both Dr. Earl Azimov and Ken Adessky have an interest in Janory.  In 2009 the Company paid to Janory a total of $103,465 of which Janory paid bills on behalf of the Company a total of $73,468 leaving a balance of $30,000 which was earned as a consulting fee.  Both parties agreed that the $95,550 payable to Janory is no longer due from the company.  The company removed such amount as a payable.
 
The Board of Directors approved a payment of $100,000 to be accrued payable to Vision Capital for work done on behalf of the company in 2009.  Vision Capital is controlled by Dr. Earl Azimov and Ken Adessky, as Directors of the company they abstained from such payment authorization.
 
Dr. Earl Azimov, Ken Adessky and Consultant Randy Renken agreed and the Board approved the issuance of common stock of the company in payment for $100,000 each at the value of $.04.  Such $300,000 was removed as a payable and stock has yet to have been issued, which was agreeable to all parties concerned.
 
During 2009, we paid legal fees totaling $3,280 to a law firm of which Mr. Adessky, our CFO, Secretary and a Director, is a partner.
 
Note 8 - Subsequent Event

In the First Quarter of 2010 the Company issued 2,175,000 of common stock for services rendered under the 2007 Stock Incentive Plan, leaving 75,000 shares available for issuance under this plan.  Under such issuance Earl Azimov and Kenneth Adessky received 800,000 shares each for services rendered.
 
 
F-10