Clean Energy Technologies (CETY) posts 2025 loss and receives going concern warning
Rhea-AI Filing Summary
Clean Energy Technologies, Inc. provides waste heat recovery, waste-to-energy, engineering services and Chinese natural gas trading through four segments, targeting small and mid-sized clean energy projects globally. The company focuses on Organic Rankine Cycle systems and patented High Temperature Ablative Pyrolysis technology, plus LNG trading in China.
For the year ended December 31, 2025, it reported a net loss of $6,808,895 and an accumulated deficit of $35,299,999. Its auditors issued a going concern opinion, citing ongoing losses and negative operating cash flow. Stockholders’ equity was $6,246,597 with working capital of $260,863. The firm has faced prior Nasdaq listing deficiencies but regained compliance after a 1‑for‑15 reverse split and holding a delayed annual meeting.
Operations include PRC subsidiaries and a recently disposed 49% interest in Shuya, creating exposure to Chinese legal, regulatory, FX and HFCAA risks. As of this report, the company had transferred $2,671,700 to PRC subsidiaries and $730,932 into Shuya, with no dividends remitted and no near‑term distributions expected.
Positive
- None.
Negative
- Going concern uncertainty: Auditors expressed substantial doubt about the company’s ability to continue as a going concern, citing ongoing net losses, negative operating cash flow and limited working capital.
- Persistent losses and leverage pressure: Net loss of $6.8M in 2025 and an accumulated deficit of $35.3M, combined with significant current liabilities, constrain flexibility and increase dependence on new financing.
- Nasdaq compliance history: Prior deficiencies on minimum bid price and annual meeting requirements underscore listing risk; future non-compliance could trigger delisting and defaults under outstanding convertible notes.
- Regulatory and China exposure: PRC legal, capital controls, CSRC filing regime and HFCAA-related audit risks could impair capital access and restrict cash movement from Chinese subsidiaries.
Insights
Going concern warning and Nasdaq history highlight elevated financial and listing risk.
Clean Energy Technologies operates attractive waste heat recovery and waste-to-energy platforms but remains loss-making, with a net loss of $6.8M in 2025 and an accumulated deficit of $35.3M. Despite modest operating improvement, cash burn and thin working capital of $260,863 pressure liquidity.
Auditors issued a going concern opinion, reflecting substantial doubt about the company’s ability to continue without new capital. Debt levels, prior Nasdaq bid-price and annual-meeting deficiencies, and reliance on future financings heighten balance sheet and refinancing risk, even though the company has recently regained listing compliance.
Chinese operations and past exposure to Shuya introduce additional regulatory, FX and HFCAA-related uncertainty. Dependence on policy-driven markets, project financing, and component supply chains adds execution risk. Subsequent filings and capital-raising transactions will be key to clarifying how the company addresses its funding gap and maintains exchange listing.
Key Figures
Key Terms
Organic Rankine Cycle technical
High Temperature Ablative Pyrolysis technical
Holding Foreign Companies Accountable Act regulatory
Renewable Portfolio Standard regulatory
going concern financial
derivative liabilities financial
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the fiscal year ended:
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _______________________ to ____________________________________
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The number of shares of common stock outstanding on June 4, 2026, was shares.
DOCUMENTS INCORPORATED BY REFERENCE
None.
TABLE OF CONTENTS
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Part I | ||
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Item 1. |
Business |
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Item 1A. |
Risk Factors |
18 |
Item 1B. |
Unresolved Staff Comments |
33 |
Item 1C. |
Cybersecurity |
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Item 2. |
Properties |
34 |
Item 3. |
Legal Proceedings |
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Item 4. |
Mine Safety Disclosures |
34 |
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Part II | ||
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Item 5. |
Market for Registrant’s Common Equity, related Shareholder Matters and Issuer Purchases of Equity Securities |
35 |
Item 6. |
Selected Financial Data |
37 |
Item 7. |
Management’s Discussion and Analysis of Financial Condition and Results of Operation |
37 |
Item 7A. |
Quantitative and Qualitative Disclosure about Market Risk |
49 |
Item 8. |
Financial Statements and Supplementary Data |
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Item 9. |
Changes and Disagreements with Accountants on Accounting and Financial Disclosure |
98 |
Item 9A. |
Controls and Procedures |
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Item 9B. |
Other Information |
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Item 9C. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |
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Part III | ||
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Directors, Executive Officers and Corporate Governance |
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Item 11 |
Executive Compensation |
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Item 12 |
Security Ownership of Certain Beneficial Owners, management and Related Stockholder Matters |
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Item 13 |
Certain Relationships and Related Transactions and Director Independence |
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Item 14 |
Principal Accounting Fees and Services |
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Item 15 |
Exhibits |
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Signatures |
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Note about Forward-Looking Statements
This Annual Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify forward-looking statements by the following words: “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements are not a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this report.
Forward-looking statements include, but are not limited to, statements concerning the following:
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our possible or assumed future results of operations; |
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our business strategies; |
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our ability to attract and retain customers; |
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our ability to sell additional products and services to customers; |
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our cash needs and financing plans; |
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our competitive position; |
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our industry environment; |
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our potential growth opportunities; |
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expected technological advances by us or by third parties and our ability to leverage them; |
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the effects of future regulation; |
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our ability to protect or monetize our intellectual property; |
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changes in United States and China trade policies and relations, as well as relations with other countries, and/or changes in regulations and/or sanctions; |
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actions the Chinese government may take to intervene in or influence our operations; |
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uncertainties in the Chinese legal system, such as Chinese regulations regarding acquisitions of companies based in mainland China by foreign investors and the ability of our Chinese subsidiaries to make payments to us; and |
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approval, filing, or procedural requirements imposed by the China Securities Regulatory Commission (“CSRC”) or other Chinese regulatory authorities in connection with issuing securities to foreign investors under Chinese law. |
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You should read any other cautionary statements made in this Annual Report as being applicable to all related forward-looking statements wherever they appear in this Annual Report. We cannot assure you that the forward-looking statements in this Annual Report will prove to be accurate and therefore prospective investors are encouraged not to place undue reliance on forward-looking statements. You should read this Annual Report completely. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.
Disclosures Relating to Our Chinese Operations
Clean Energy Technologies, Inc. is a Nevada corporation with operations in North America, Europe and Asia, including the People’s Republic of China (the “PRC” or “China”). Our PRC subsidiaries and Shuya, an entity in which we previously held a 49% equity interest, conduct natural gas trading activities in China to source and supply natural gas to industrial customers and municipalities located in China.
Throughout this Annual Report, unless the context otherwise requires: (i) the “Company,” “we,” “us,” and “our” refer to Clean Energy Technologies, Inc. together with its consolidated subsidiaries; (ii) the “PRC Subsidiaries” refer to our wholly-owned subsidiaries located in the PRC, including Hong Kong, which include Clean Energy Technologies (H.K.) Limited, Meishan Clean Energy Technologies, Inc., Hainan Clean Energy Technologies, Inc., Element Capital International Limited (H.K.), Sichuan Hunya Jieneng New Energy Co., Ltd., and Jiangsu Huanya Jieneng New Energy Co., Ltd.; and (iii) “Shuya” refers to Sichuan Hongzuo Shuya Energy Limited, in which we previously indirectly held a 49% equity interest, and which interest was disposed as of December of 2025.
Because a portion of our operations are conducted in China, we are subject to certain legal and operational risks associated with doing business in the PRC. The PRC legal system is based in part on written statutes and regulations, and the interpretation and enforcement of these laws and regulations may involve uncertainties. Rules and regulations in China may change quickly with limited advance notice, and administrative authorities and courts in China may exercise discretion in interpreting and implementing statutory provisions and contractual arrangements. As a result, it may be difficult to evaluate the outcome of administrative or court proceedings or the level of legal protection available to us.
The PRC government also exercises oversight over business operations conducted within China and may intervene in or influence the operations of companies operating in China as it deems appropriate to further regulatory, political, or societal objectives. Such actions could affect our operations in China and could materially and adversely affect our business, financial condition, and results of operations.
In recent years, PRC regulatory authorities have issued statements and implemented regulatory measures related to areas such as cybersecurity, data protection, anti-monopoly enforcement, and overseas securities offerings. Based on our current business operations, we do not believe that our PRC subsidiaries or Shuya are subject to cybersecurity review requirements applicable to online platform operators or data processors handling significant volumes of personal information. However, because the regulatory environment in China continues to evolve, we cannot assure investors that new laws, regulations, or interpretations will not be adopted in the future that could affect our operations or our ability to conduct business or raise capital.
On February 17, 2023, the China Securities Regulatory Commission (“CSRC”) issued the Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”), which became effective on March 31, 2023. The Trial Measures establish a filing-based regulatory regime for overseas offerings and listings by PRC domestic companies. Under the Trial Measures, companies that are determined to be PRC domestic enterprises conducting overseas securities offerings may be required to complete filing procedures with the CSRC. Based on our current corporate structure and operations, we do not believe that we are currently required to complete such filings. However, if PRC authorities determine that our future securities offerings are subject to the Trial Measures or other regulatory approvals, we may be required to complete such procedures, and there can be no assurance that we would be able to do so in a timely manner or at all. Any such requirement could affect our ability to raise capital in the future.
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We are also subject to risks associated with the Holding Foreign Companies Accountable Act (“HFCAA”). The HFCAA is a US law that provides that if the Public Company Accounting Oversight Board (“PCAOB”) is unable to inspect or investigate completely the registered public accounting firm that audits a company’s financial statements for two consecutive years, the securities of such company may be prohibited from trading on U.S. securities exchanges. Our current independent registered public accounting firm, TAAD LLP, is headquartered in the United States and is subject to inspection by the PCAOB. However, if the PCAOB were to determine in the future that it is unable to inspect or investigate our auditor completely, or if regulatory developments were to limit the ability of our auditor to provide audit documentation related to our operations in China, trading in our securities could be prohibited under the HFCAA and our securities could be delisted from U.S. exchanges.
Cash may be transferred within our organization in the following ways: (i) Clean Energy Technologies, Inc. may transfer funds to our PRC Subsidiaries through capital contributions or loans, either directly or through intermediate holding companies; and (ii) our PRC subsidiaries may distribute dividends or other distributions to Clean Energy Technologies, Inc. through intermediate holding companies.
Our ability to transfer cash from PRC entities to entities outside of the PRC is subject to certain restrictions under PRC laws and regulations. Under current PRC regulations, wholly foreign-owned enterprises may pay dividends to their offshore parent companies only from accumulated profits determined in accordance with PRC accounting standards and regulations. In addition, a significant portion of the revenues of our PRC subsidiaries and Shuya are denominated in Renminbi (“RMB”), and foreign exchange controls may limit their ability to convert RMB into foreign currencies and remit such funds outside of China.
As of the date of this Annual Report, (i) we have transferred an aggregate of $2,671,700 to our PRC Subsidiaries, and (ii) Jiangsu Huanya Jieneng New Energy Co., Ltd., our wholly owned subsidiary in the PRC, had contributed an aggregate of $730,932 to Shuya as capital contributions for its formation, The Company disposed of its equity interest in Shuya in December 2025. No other material cash transfers or transfers of other assets have occurred between Clean Energy Technologies, Inc., our PRC Subsidiaries, and Shuya. As of the date of this Annual Report, none of our PRC Subsidiaries or Shuya had declared or paid any dividends or other distributions to the Company, and we do not anticipate such distributions in the near term.
Investors should carefully consider the risks associated with our operations in China described in “Risk Factors – Risks Related to Doing Business in China.”
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PART I
Item 1. Business
General
The Company’s business and operating results are directly affected by changes in overall customer demand, operational costs and performance and leverage of our fixed cost and selling, general and administrative (“SG&A”) infrastructure.
Product sales fluctuate in response to several factors including many that are beyond the Company’s control, such as general economic conditions, interest rates, government regulations, consumer spending, labor availability, and our customers’ production rates and inventory levels. Product sales consist of demand from customers in many different markets with different levels of cyclicality and seasonality.
Operating performance is dependent on the Company’s ability to manage changes in input costs for items such as raw materials, labor, and overhead operating costs. Performance is also affected by manufacturing efficiencies, including items such as on time delivery, quality, scrap, and productivity. Market factors of supply and demand can impact operating costs.
Who We Are
We develop renewable energy products and solutions and establish partnerships in renewable energy that make environmental and economic sense. Our mission is to be a segment leader in the Zero Emission Revolution by offering turnkey energy solutions leveraging advanced technologies by delivering eco-friendly green energy solutions, clean energy fuels and alternative electric power for small and mid-sized projects in North America, Europe, and Asia. We target sustainable energy solutions that are profitable for us, profitable for our customers and represent the future of global energy production.
Our principal businesses
Waste Heat Recovery Solutions – we recycle wasted heat produced in manufacturing, waste to energy and power generation facilities using our patented Clean CycleTM generator to create electricity which can be stored or sold to the grid.
Waste to Energy Solutions - we convert waste products created in manufacturing, agriculture, wastewater treatment plants and other industries to electricity, renewable natural gas (“RNG”), hydrogen and bio char which are sold or used by our customers.
Engineering, Consulting and Project Management Solutions – We provide power generation, waste to energy, and heat recovery Engineering, Procurement and Construction (EPC) services to municipal and industrial customers and to design and incorporate clean energy solutions in their projects.
CETY HK
Clean Energy Technologies (H.K.) Limited (“CETY HK”) currently consists of two business verticals in mainland China:
(i) Natural Gas (“NG”) Trading Operations – CETY HK sources and supplies natural gas to industrial customers and municipalities through its PRC subsidiaries. The NG is primarily used for heavy-duty truck refueling stations as well as urban and industrial applications. CETY HK procures NG in bulk from wholesale suppliers at fixed, prepaid prices, typically at a discount to prevailing market rates, and sells to customers at daily spot prices over the contract term.
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(ii) Planned Joint Venture with Shenzhen Gas – CETY HK has entered into a framework agreement with Shenzhen Gas (Hong Kong) International Co. Ltd. (“Shenzhen Gas”) to establish a joint venture focused on the acquisition of natural gas pipeline operator assets, primarily located in southwestern China. The joint venture is expected to acquire such assets with financing support from Shenzhen Gas, with the long-term objective of aggregating and ultimately transferring these assets to Shenzhen Gas.
Under the framework agreement, CETY HK is expected to contribute approximately $8 million to the joint venture, subject to future financing rounds and the execution of definitive agreements.
To date, CETY HK has not commenced operations under the Shenzhen Gas joint venture due to macroeconomic conditions, including declining natural gas prices and reduced industrial demand. CETY HK intends to defer commencement of this initiative until market conditions improve.
CETY HK no longer conducts any operations through Shuya, following the disposition of the Company’s equity interest in Shuya in December 2025.
Our Business Strategy
Our strategy is focused on further developing our existing Waste Heat Recovery business while expanding into the rapidly growing markets for Waste to Energy Solutions and power generation and integrated clean energy engineering, and project management services.
Our strategy focuses on three main elements:
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Expanding our Waste Heat Recovery product line to include waste heat recovery ORC systems producing over 1 MW of power so we can qualify for midsized and large heat recovery projects in the United States, Europe, and Asia. |
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Establishing a Waste to Energy business by selling our ablative thermal processing products based on proprietary HTAP technology and building small and mid-sized waste to energy power plants producing electricity and RNG for the grid and methane, hydrogen and biochar. |
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Leveraging our engineering, procurement and manufacturing experience to assist our customers with turnkey energy solutions leveraging advanced technologies. |
We intend to implement this strategy as follows:
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We have added a new ORC system manufactured by Exergy for Heat Recovery applications that will enable us to implement projects in the markets producing between 1 MW and 10 MW of electricity. |
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To support the growing energy demands of data centers, we have added power generation and Battery Energy Storage System (BESS) capabilities to provide immediate and reliable power. |
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Taking advantage of Inflation Reduction Act of 2022 federal investment tax credits and state incentives that now include waste heat recovery as a recognized clean energy source, making our Clean Cycle Generator and ORC systems more profitable to install. On August 2022, Congress passed the Inflation Reduction Act offering 30% Investment Tax Credit and technology neutral tax credits offering clean electricity production credit and investment credit. CETY’s products directly benefit from these tax credits. |
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Benefiting from lack of energy capacity from the grid and higher energy costs, which provide higher returns on our Power Generation, Waste Heat Recovery, and Waste to Energy products and projects. |
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Improving our balance sheet and capital position to permit us to invest in more products and projects. |
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We are establishing a reliable network of global and domestic supply chain partners to drive scalability and cost efficiency in our solutions. |
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Leveraging our existing marketing channels to sell HTAP Waste to Energy products to industrial companies and government agencies. |
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We are collaborating with clean energy project development and finance companies to offer solutions that generate RNG, hydrogen, methane, and biochar from biomass, municipal waste, timber waste, and other organic materials. |
Business and Segment Information
We design, produce and market clean energy products and integrated solutions focused on energy efficiency and renewable energy. Our aim is to become a leading provider of renewable and energy efficiency products and solutions by helping commercial companies and municipalities reduce energy waste and emissions, lower energy costs and generate incremental revenue by providing electricity, renewable natural gas and biochar to the grid.
Segment Information
Our four segments for accounting purposes are:
Clean Energy HRS & CETY Europe – Our Waste Heat Recovery Solutions, converting thermal energy to zero emission electricity.
CETY Renewables Waste to Energy Solutions – Providing Waste to Energy technologies and solutions.
Engineering and Manufacturing Business – providing customers with comprehensive design, manufacturing, power generation, BESS, and project management solutions.
CETY HK – The parent company of our NG trading operations in China. Prior to the first quarter of 2022 the Company had three reportable segments but added the CETY HK segment to reflect its recent new businesses in China.
Our Clean Energy Solutions Business
Waste Heat Recovery Solutions
We provide our customers with power plants that capture wasted heat energy and produce electricity using a unique Organic Rankine Cycle (ORC) system containing our Clean CycleTM generator. Our magnetic bearing Integrated Power Modules is at the heart of our Clean CycleTM generator which can fit into a standard cargo container we call our Containerized System Module, producing 140KW per Clean CycleTM generator and can be linked together for projects generating up to 1MW of power.
Our recent agreement with Exergy now permits us to install midsized and large ORC systems (between 1 MW and 10 MW) in the United States, allowing us to offer a full range of ORC systems to our customers. We believe this new capacity will enable us to expand our product offerings into larger scale waste recovery products in the United States. Enertime is a leader in producing ORC systems in Europe.
ORC waste heat recycling systems use pressurized working fluids that have a lower boiling point than water which make them ideal to repurpose waste heat into electricity. While most manufacturing processes do not produce enough heat to turn water into steam, there is enough heat to generate pressurized refrigerant in our ORC systems which is used to turn a turbine at high speeds to generate electricity.
We can link up to 10 Clean CycleTM Generators together which can generate up to 10 GWh of electricity per year from waste heat which we estimate would reduce up to 5000 metric tons of CO2 production per year in an industrial heat recovery system or the annual equivalent of the CO2 emissions of approximately 2000 cars per year.
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We believe the most important component in any ORC system is the turbine generator because it converts the steam heat into electricity and accounts for approximately 60% of the cost of the system. The more efficiently the turbine generator works, the better the ORC power plant operates. The remaining components consisting of the low boiling point fluid, condensers, which cool the fluids, the feed pumps, which pressurize the fluids to reduce boiling points and the heat exchangers, which extract the heat from the heat sources. These are more commoditized products and tend to perform at similar levels of efficiencies at similar price points.
We believe our Clean CycleTM generator is one of the most efficient turbine generator in its class and size available in the market for ORC systems generating up to 1 MW. We estimate that the Clean CycleTM generator has higher efficiency of approximately 15% more than our competitors and its magnetic design eliminates the use of oils and lubricants, significantly reducing downtime, repairs and operating costs. Our Integrated Power Module is compact and fits into a standard cargo container that can be delivered on a turnkey basis, resulting in lower installation and implementation costs than on-site assembly.
We believe these features and benefits give us an important competitive advantage when building heat recovery power plants for our customers and provide us with the opportunity to compete with and obtain market share from the dominant industrial waste heat to power systems.
Over 123 Clean CycleTM generators have been deployed to date with 88 units used in biomass and waste to energy projects, 4 with diesel electric generators, 3 with turbine electric generators, and 26 in industrial electric production applications. We expect to raise additional funds to expand our capacity to install 6-8 units per year, which should approximately double our sales on a year-to-year basis.
The patented technology used in the Clean CycleTM generator was purchased from General Electric International, together with over 100 installation sites, making us one of the leading providers of small-scale industrial waste heat to power systems. We have an exclusive license from Calnetix to use their magnetic turbine for heat waste recovery applications.
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Our Integrated Power Module |
Our Clean Cycle TM Generator |
A complete ORC System with Integrated Power Module housed in a Containerized System Module (CSM)
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Waste to Energy Solutions
We have added a new business line in our clean energy solutions segment consisting of Waste to Energy processing equipment, engineering services and Waste to Energy processing power plant joint ventures where we expect to retain an ownership interest in the project.
Waste-to-Energy technologies that process non-renewable waste can reduce environmental and health damages while generating sustainable energy. Waste-to-Energy technologies consist of waste treatment process that creates energy in the form of electricity, heat or fuels from a waste source. These technologies can be applied to several types of waste: from the biomass (e.g. woodchips) to semi-solid (e.g. thickened sludge from effluent treatment plants) to liquid (e.g. domestic sewage) and gaseous (e.g. refinery gases) waste.
Waste to Energy Solutions can be used:
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In any town, city or province with established waste management and collection. |
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Where there is a consistent supply of solid waste. |
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Places where treatment costs increase with shortages of space to store waste. |
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In areas with high energy prices to allow for cost of recovery from waste. |
Waste to Energy Solutions have many benefits:
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Electricity from Waste to Energy plants can be generated from small amounts up to 30 MW providing for a wide range of opportunities to sell it back to the grid. |
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The synthetic renewable fuel gas produced from waste can be used for various production of recyclable energy such as hot water, thermo-oil or steam, renewable natural gas or hydrogen. |
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Landfill waste is reduced and so is leachate and methane released from decomposing landfills. |
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Waste is a reliable source of energy and production is typically predictable and low cost whereas fossil fuel prices can fluctuate dramatically. |
Traditional Incineration Methods Have Significant Downsides:
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Air pollution can increase because scrubbing technologies are very expensive to install. |
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Many industrial, agricultural, and mixed municipal solid wastes have high moisture content at the source and direct incineration of such waste requires burning fossil fuel to maintain thermal conversion process. |
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Carbon that otherwise would be stored in landfill is released into the air. |
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Ash and flue gas cleaning residues from incineration can also cause poisonous leachate problems if not properly disposed of which disposal is costly and causes downstream environmental issues. |
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Generating electricity from incineration releases more CO2, SO2, NOx and mercury than natural gas. |
(Source: https://www.energyforgrowth.org/memo/waste-to-energy-one-solution-for-two-problems/)
The most common form of waste to energy systems is based on incinerators which simply burn waste using air. The Thermal Treatment on Grate is the most widespread technology being used by large waste landfills to generate electricity and heat. These systems produce substantial amounts of ash, heavy metals and carbon dioxide which need to be treated and disposed of to minimize its impact on the environment. They also require substantial amounts of pre-treatments prior to burning.
The Thermal on Grate incineration process, while wide-spread, is too expensive and complex for smaller and mid-sized waste to energy projects creating, what we believe, is a significant market opportunity in small and mid-sized waste processing applications to create not only electricity but valuable renewable natural gas, biodiesel oil, hydrogen, methane, and biochar.
Our solution is a patented High Temperature Ablative Pyrolysis (HTAP) Biomass Reactor as a viable commercial solution to the costs and environmental problems posed by traditional incineration methods. We have the exclusive license and right to sell the HTAP10 and HTAP5 and related products manufactured by Enex which has a proven installed commercial base of customers using its waste to energy solutions. We believe this is an ideal solution to process waste for small to mid-sized waste to energy generation applications needed for processing industrial and municipality solid waste, agriculture waste, and forestry waste.
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Pyrolysis systems decompose waste without the use of oxygen under varying pressurized conditions and at temperatures ranging from 300 degrees Celsius to 1,300 degrees Celsius. The major advantage of pyrolysis is that it is a cost-effective technology and helps curb environmental pollution. Pyrolysis systems are gradually replacing traditional incineration and gaining momentum in the waste to energy processing market, because they address many of the pre-treatment issues and, when using high temperature and high-pressure, substantially reduce or eliminate pollutants. (Source: “Life Cycle Assessment of Waste-to-Bioenergy Processes: a Review” Pooja Ghosh,... Arunaditya Sahay, in Bioreactors, 2020)
Pyrolysis systems can produce hydrogen, renewable natural gas, bio-diesel oil, charcoal, and biochar which are used to power hydrogen, diesel, and natural gas engines or electrical turbines which can be sold and often are eligible for substantial tax and pricing benefits. When compared with the conventional incineration plant that runs in the capacity of kilotons per day, the scale of the pyrolysis plant is more flexible, and the output of pyrolysis can be integrated with other downstream technologies for product upgrading. (Source: Influential Aspects in Waste Management Practices. Karthik Rajendran PhD, Jerry D. Murphy PhD, in Sustainable Resource Recovery and Zero Waste Approaches, 2019) In addition, biochar stores and reduces atmospheric CO2 and can be used as a soil conditioner, an organic component of animal feeds, construction materials, wastewater treatment and in textiles. (Source: https://www.bioenergyconsult.com/applications-of-biochar/)
The ablative pyrolysis system is a waste to energy process that largely eliminates pre-treatment and the harmful pollutants and storage waste produced when using standard incineration and other pyrolysis technologies. It uses high pressure to generate fast pyrolysis and is designed so that the heat transferred from a hot reactor wall softens the feedstock under pressure and permits larger feedstock particles to be processed without pre-treatment. These systems create high relative motion between the reactor wall and the feedstock. The process avoids the need of inert gas and hence the processing equipment is small and the reaction system is more intense. (Source: http://biofuelsacademy.org/index.html%3Fp=608.html)
CETY has a licensed proprietary patented ablative pyrolysis system for commercial use that has been installed in 7 sites for use in waste to energy creating applications processing including peat, coal, flax waste, sawdust and wood scrap, straw, buckwheat husks, and cardboard, tapes, films and paper machine sludge. The technology has been implemented in over 1,500 onsite power generation projects in Russia working with major energy production companies such as Gazprom, Rosneft, Lukoil and Rostelecom as well as completing several projects for customers in the European Union, Middle East and United States. Due to the conflict in the Ukraine, ENEX is redomiciling and relocating key personnel to Turkey where it will complete an existing project and is expected to wind down its operations. CETY will develop additional ablative technology and expects to manufacture units in the United States. Sales and European distribution will be run out of a CETY office that has been established in Turkey.
CETY has global rights (except in Russia and CIS countries) to design, build, manufacture, sell and operate renewable energy and waste recovery facilities HTAP10 and HTAP5 systems and other products and technologies we expect to develop in the future.
The patented HTAP technology utilizes a higher temperature that uses a cleaner gas for the heating process and a more efficient biogas turbine. The units can be customized to produce hydrogen, natural gas, diesel oil and biochar in varying quantities which can be sold or used to produce electricity. We believe that the key benefits of the HTAP Biomass Reactor are:
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Flexibility in waste sourcing and mixing. |
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Customized outputs of hydrogen, synthetic fuels, natural gas, methane, biochar, carbon black, or construction materials. |
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Better waste sourcing and mixing flexibility. |
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Near-zero emissions. |
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Modular design. |
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Zero liquid discharge. |
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Zero solid waste residue waste. |
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Modular, containerized design reducing implementation costs. |
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Proven commercial implementation. |
We are targeting industrial and municipality solid waste, landfill waste, agriculture waste (straw, stems, plant biomass, manure, crop waste), and forestry waste from tree cuttings and shredded products.
We are in the process of identifying projects domestically and internationally for the HTAP Biomass Reactor. We believe the first project where we expect to implement the HTAP10 technology is with Vermont Renewable Gas to develop a biomass renewable energy processing facility. The project is planned for a location in Lyndon, Vermont to convert forest and agriculture biomass waste products to renewably generated electricity and biochar fertilizer. We expect to annually deliver up to 18,000 MWh of renewable electricity and 1,500 tons of biochar. The Vermont Renewable Gas project is one of the many renewable energy processing facilities we plan to commission.
ENEX HTAP 10 Waste to Energy Processing Plant.
We established a wholly owned subsidiary called CETY Capital that we expect will help us finance our customers renewable energy projects producing low carbon energy. CETY Capital, when implemented, should add flexibility to the capacity CETY offers its customers and fund projects utilizing its products and clean energy solutions. The in-house financing arm is expected to support our sales and build new renewable energy facilities. To date we have conducted no material operations in this subsidiary.
Our Clean Energy Initiatives in China
According to the U.S. Energy Information Administration (EIA) and other industry sources, China’s natural gas consumption has continued to grow significantly, reaching approximately 390–400 billion cubic meters (bcm) in 2023, up from 280 bcm in 2018. Long-term projections indicate continued strong growth through 2050, driven by industrial demand, urbanization, and energy transition policies.
Natural gas accounted for approximately 8–9% of China’s total primary energy mix in recent years, and the Chinese government continues to target an increase to approximately 15% by 2030 as part of its broader decarbonization and air quality initiatives.
China remains one of the largest drivers of global natural gas demand growth, supported by policies aimed at reducing coal consumption, including the country’s ongoing air quality initiatives and energy transition strategies. Post-COVID economic recovery and industrial activity have further supported sustained demand growth.
China is also the world’s largest importer of natural gas, with imports delivered through both pipeline infrastructure (primarily from Central Asia and Russia) and liquefied natural gas (LNG) shipments via coastal terminals.
Liquid Natural Gas in the Chinese energy market produces half as much carbon dioxide, less than a third as much nitrogen oxides, and 1 percent as much sulfur oxides at the power plant compared to the average air emissions from coal-fired generation. In addition to reduced air emissions, natural gas has other environmental benefits that make it a smart fuel choice. Natural gas-fired power plants use about 60 percent less water than coal plants and 75 percent less water than nuclear power plants for the same electricity output. (Source: Conoco Phillips)
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In 2021, we acquired through our subsidiary, CETY Hong Kong, a liquefied natural gas trading operation called Jiangsu Huanya Jieneng (“JHJ”) which sources LNG from large LNG producers and distributors and sells it to non-state-owned industries and downstream customers in mainland China.
CETY also plans to sell its waste heat recovery and waste to energy products in China as well as provide consulting services relating to the same to projects in China.
The JHJ team has more than 10 years of experience in the natural gas and clean energy industry and has maintained relationships and partners with many natural gas enterprises in China.
CETY HK
NG Trading Operations
JHJ’s principal service is to source and supply NG to industries and municipalities located in the southern part of Sichuan Province and portions of Yunnan Province. The NG is principally used for heavy truck refueling stations and urban or industrial users in areas that do not have a connection to local NG pipeline systems. We purchase large quantities of NG from large wholesale NG depots at fixed prices which are prepaid for in advance at a discount to market. We sell the NG to our customers at prevailing daily spot prices for the duration of the contracts.
Either our sources or customers arrange for delivery of the NG. Our profitability depends on our ability to purchase NG at volume discounts at the beginning of a season and sell it at a delivered price that is higher than the price we pay.
JHJ traders are experienced NG traders, familiar with the spot and future markets and have relationships with the major users of NG in the areas that we serve. Our customers may be local or may be as far as 700km from each depot.
We compete with other NG trading based on availability and price. We target our discount with our sources to partially hedge against falling spot prices and give us a gross profit targeted at a substantially higher rate than our competitors which are approximately 20-30 percent margins compared against what we believe are 1-5 percent margins by our competitors. So long as there are no major fluctuations in the spot market, we can offer more competitive prices due to the discounts we receive from the large volumes purchased and the prepayments for the NG. JHJ has currently established a supply of approximately 8,000 tons of NG for distribution.
We are able to purchase NG at a significant discount from our suppliers because our prepayments offer suppliers more certainty with respect to the sales of their inventory, address their cash flow issues, and allow them to better plan for production. We believe our downstream customers get better prices from us because of our bulk buying power, ease of inventory management and cash flow.
Both our suppliers and customers can reduce costs by using JHJ as a centralized procurement center and establishing professional logistics distribution based on stable supply and downstream demand.
Our convertible note investment in Heze Hongyuan Natural Gas co. is subject to dilution by additional equity investment into HHNG by third parties. We do not expect the project to require additional investment from us, JHJ or HHNG. The project has constructed a portion of the pipelines in the Heze area that links the local industrial users to the national gas pipeline. Certain parts of the pipeline construction have been delayed due to the permitting process. The project is expected to generate cash flow by the end of 2025. We do not expect to make further direct minority investments in other pipeline operators.
Engineering, Consulting and Project Management Services
Engineering. Our global engineering team supports the design, build, installation, and maintenance of our solutions and supports our technology customers and innovative start-ups with a broad range of electrical, mechanical and software engineering services. CETY has assembled a team of experts from around the globe to assist customers at any point in the design cycle. These services include design processes from electrical, software, mechanical and Industrial design. Utilization of CETY’s design services can provide our customers with a complete end to end solution.
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Supply Chain Management. CETY’s supply chain solution provides maximum flexibility and responsiveness through a collaborative and strategic approach with our customers. CETY can assume supply chain responsibility from component sourcing through delivery of the finished product. CETY’s focus on the supply chain allows us to build internal and external systems and better our relationships with our customers, which allows us to capitalize on our expertise to align with our partners’ and customers’ objectives and integrate with their respective processes.
The Market for Our Products
Waste to Energy.
Globally, there are over 2,500 waste-to-energy (WTE) facilities, with Europe and Asia accounting for the majority of installed capacity, and Europe alone hosting approximately 500–600 plants. The sector continues to expand, particularly in Asia, driven by urbanization, waste management challenges, and decarbonization policies.
The global waste-to-energy market has demonstrated steady growth and is projected to reach approximately $80–100 billion by 2030, growing at a compound annual growth rate (CAGR) of approximately 6–7% over the forecast period. Growth is supported by increasing regulatory pressure to reduce landfill usage, rising energy demand, and government incentives promoting renewable and circular economy solutions.
While the COVID-19 pandemic temporarily disrupted supply chains and delayed certain project developments, the market has since recovered, with renewed momentum driven by government policies supporting sustainable waste management, energy security, and emissions reduction.
Increasing government regulations regarding the waste to energy in various countries is one of the major factors driving the growth of global waste to energy market. For instance, the Federal Power Act gives federal authority over parts of the electric utilities in U.S. Also acts like Public Utility Regulatory Policy Act (PURPA) and Energy Policy Act are applied by the government to increase the waste to energy and decrease the CO2 emission by fossil fuels. In addition, escalating investments in R&D by different countries is also fostering the growth of global waste to energy market. (Source: https://www.epa.gov/laws-regulations/summary-energy-policy-act)
Advanced thermal conversion technologies, including pyrolysis, gasification, and plasma gasification are gaining increased attention as lower-emission alternatives to traditional mass-burn waste-to-energy systems. These technologies enable the conversion of waste streams into syngas, fuels, and other value-added products, supporting decarbonization objectives and improved resource efficiency.
The global waste-to-energy market continues to expand, driven by the transition away from landfilling, increasing energy demand, and government policies supporting circular economy initiatives. The market is estimated to be valued at approximately $70–80 billion in the mid-2020s and is projected to reach approximately $100 billion by 2030, reflecting a compound annual growth rate (CAGR) in the range of 5–7%.
Growth is further supported by global efforts to reduce reliance on fossil fuels, enhance energy security, and lower greenhouse gas emissions, positioning advanced waste-to-energy technologies as an important component of the broader energy transition.
Waste Heat Recovery
The global waste heat recovery (WHR) market continues to expand, driven by rising energy costs, industrial decarbonization efforts, and increasing demand for energy efficiency. Recent industry estimates place the market at approximately $65–75 billion in the mid-2020s, with projections to reach approximately $110–130 billion by 2030, representing a compound annual growth rate (CAGR) of approximately 7–9%.
Key drivers of growth include increasing industrial energy consumption, higher electricity prices, and regulatory initiatives aimed at improving energy efficiency and reducing greenhouse gas emissions. Industries such as cement, steel, glass, and refining are increasingly adopting waste heat recovery technologies to improve operational efficiency and lower energy costs.
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In addition, government policies and incentives promoting energy conservation and emissions reduction continue to support adoption. As energy efficiency becomes a critical priority, waste heat recovery is emerging as a cost-effective solution for converting excess thermal energy into usable power, contributing to both economic and environmental objectives.
In 2020, North America constituted the largest share of the market accounting for approximately 33% of the global total, but countries in Asia and the Asia Pacific constitute the fasting growing geographic sectors due to rapid industrial expansion.
Recent federal legislation has modified the availability and duration of certain energy-related tax incentives in the United States. In July 2025, the U.S. Congress enacted the One Big Beautiful Bill Act, which amended and accelerated the phase-out of several clean energy tax credits originally established under prior legislation. Under this framework, certain energy efficiency and clean energy investment incentives remain available for qualifying projects placed in service before their applicable phase-out dates. These incentives may support investments in technologies that improve industrial energy efficiency, including waste heat recovery and Organic Rankine Cycle (“ORC”) power generation systems that convert industrial waste heat into electricity. Federal tax incentives, together with state and local programs, may improve the economic attractiveness of waste heat recovery installations by reducing capital costs and supporting broader adoption of energy efficiency technologies in industrial facilities. However, the availability, duration, and eligibility requirements of such incentives are subject to change through future legislation, regulatory guidance, or administrative interpretation.
A Renewable Portfolio Standard (RPS) is a state incentive program that requires a certain percentage of electricity sold by utilities in the state to come from renewable resources. It diversifies the energy portfolio of the state while encouraging economic development. By establishing an RPS a state creates a market for Renewable Energy Credits (RECs). Each utility must obtain and retire a certain number of RECs annually. Several states, including Colorado, Wisconsin, Illinois and California among others, have now listed waste heat to power as an eligible resource in their RPS program.
LNG Trading and Joint Venture
Historically, the Company participated in natural gas trading activities in the People’s Republic of China through its PRC subsidiaries and through Shuya, an entity in which the Company previously held a 49% equity interest. In December 2025, the Company divested its equity interest in Shuya as part of a strategic shift to focus on its core clean energy technology and distributed energy project development activities. Following the disposition of this investment, the Company no longer holds an ownership interest in Shuya. The Company continues to evaluate its remaining international operations in connection with its broader strategic focus on energy efficiency, waste heat recovery, and distributed power generation solutions.
China has also been one of the world’s largest importers and consumers of natural gas, driven by industrial demand, urbanization, and policies encouraging the substitution of natural gas for higher-emission fuels. Government planning initiatives, including national five-year plans and regional development programs, have historically supported the expansion of natural gas supply infrastructure and transportation fuel networks in various provinces, including southwestern regions such as Sichuan, Yunnan, and Guizhou.
In these regions, LNG production facilities and refueling infrastructure have been developed to support transportation fleets and industrial users. These developments historically created opportunities for natural gas trading and supply activities involving regional distribution networks and downstream commercial customers.
While the Company previously engaged in natural gas trading activities in China through its subsidiaries and Shuya, the Company continues to evaluate its international operations and strategic priorities, including the potential restructuring, reduction, or disposition of certain activities outside its core clean energy technology and project development focus.
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Sales and Marketing
We utilize both a direct sales force and global distribution group with expertise in heat recovery solutions and clean energy markets.
CETY maintains an online presence through our web portal and social media. We also have established cross-sale agreements with synergistic technology providers promoting our solutions to our respective customers. We utilize email campaigns to keep the marketplace abreast of the recent developments with our solutions. We work with the municipalities to identify incentive programs that could utilize our solutions.
Our application engineers assist in converting the opportunities into projects. We provide technical support to our Clean CycleTM generator clients and recently introduced waste to energy plants through providing maintenance and product support.
Our market focus is segmented by the engine heat recovery, waste to energy plants, engineering & procurement, and renewable energy trade, wastewater treatment plants and boiler applications with excess heat.
Our experienced team of LNG traders identify producers and customers for the LNG trading business as well as originate acquisition opportunities for our Shenzhen Gas joint venture.
Suppliers
Our heat recovery solutions systems are manufactured primarily from components available from multiple suppliers and to a lesser extend from custom fabricated components available from various sources. We purchase our components from suppliers based on price and availability. Our significant suppliers in the Waste Heat Recovery business include Powerhouse, Concise Instrument, and Grainger.
Our waste to energy components are sourced globally, including in the US, with the exception of the core components originally sourced in Russia and now being transitioned to Turkey and US. We are in the process of establishing an inhouse center of competence and technology development based out of Turkey to source these components in Europe and US with the ability to deploy the product globally. Although future impacts cannot be predicted the company does not foresee any negative impact from the Russia and Ukraine conflict.
The natural gas in China is obtained from various local production plants in Southeast China based on price and quality. Deliveries of the NG are made through third party trucking companies. We purchase large quantities of NG from large wholesale NG depots at fixed prices which are discounted and prepaid for in advance at a discount to market.
Competition
ORMAT, Exergy, TAS and Turboden are the leaders in ORC system power plants with more than 75% of installed capacity and plants, Exergy and TAS are following with around 13% and 6% of the market respectively, while Turboden has recently penetrated the geothermal market with about 2% of the installed capacity.
The Waste to Energy Market is dominated by Hitachi Zosen Inova AG, Suez, Veolia, Ramboll Group A/S, Covanta Holding Corporation, China Everbright International Ltd., Abu Dhabi National Energy Company PJSC, Babcock & Wilcox Enterprises lnc., Whaleboater Technologies lnc., Xcel Energy lnc. (Source: https://www.polarismarketresearch.com/industry-analysis/waste-to-energy-market)
We also compete with numerous companies that are smaller than the major companies who are focused on the small to medium-sized installations in Waste Heat Recovery and Waste to Energy. We believe our waste to energy products are more efficient for use in small and medium sized operations than our competitors’ and provide us with a competitive advantage on that basis.
In China, our NG trading operations compete with large state-owned LNG producers and importers such as Sinopec and many smaller local energy trading companies in the PRC. We compete based on price and consistency of services.
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Company Information
We were incorporated in California in July 1995 under the name Probe Manufacturing Industries, Inc. We redomiciled to Nevada in April 2005 under the name Probe Manufacturing, Inc. We manufactured electronics and provided services to original equipment manufacturers (OEMs) of industrial, automotive, semiconductor, medical, communication, military, and high technology products. On September 11, 2015, Clean Energy HRS, or “CE HRS”, our wholly owned subsidiary, acquired the assets of Heat Recovery Solutions from General Electric International. In November 2015, we changed our name to Clean Energy Technologies, Inc.
Our principal executive offices are located at 1340 Reynolds Avenue Unit 120, Irvine, California, 92614. Our telephone number is (949) 273-4990. Our common stock is listed on the Nasdaq Capital Market under the symbol “CETY.”
Our internet website address is www.cetyinc.com, and our subsidiary’s website is www.heatrecoverysolutions.com. The information contained on our websites are not incorporated by reference into this document, and you should not consider any information contained on, or that can be accessed through, our website as part of this document.
The Company has four reportable segments: Clean Energy HRS (HRS), CETY Europe, the legacy electronic manufacturing services (Electronic Assembly) division, and CETY Hong Kong.
Patents
We hold 11 patents in 4 countries, including the US, which were acquired from General Electric International relating to our magnetic turbine technology.
Intellectual Property
As part of our asset acquisition from General Electric International, we acquired an exclusive, irrevocable, sublicensable, limited transferable, royalty free, fully paid, worldwide perpetual license to develop, improve and commercialize Calnetix’s magnetic turbine in any Organic Rankine Cycle based application where heat is sourced from a reciprocating combustion engine of any type, except marine vessels, any gas or steam turbine systems for electrical power generation applications or any type of biomass boiler system.
The Company has entered into an intellectual property rights purchase and transfer agreement with ENEX relating to its pyrolysis technology originally developed in Russia. Under this agreement, the Company has acquired and been assigned certain intellectual property rights associated with the pyrolysis system, subject to the terms and conditions set forth therein.
Accordingly, the Company’s rights to this technology are based on an ownership interest in the transferred intellectual property, rather than a license arrangement.
Facilities
We are headquartered in Irvine, California, and we have a 3,000 sq-ft office in Irvine. Our Heat Recovery Solutions business unit operates from a 6,000 sq-ft state-of-the-art facility in Irvine, California. We have in-house electro-mechanical assembly and testing capabilities. Our products are compliant with American Society of Mechanical Engineers and are UL and CE approved. We also have a 1,000 sq-ft sales and service center located in Treviso, Italy. We also have a 2,000 sq-ft R&D center in Antalya, Turkey. Our Asian headquarters is located in Hong Kong, and our 3,000 sq-ft Engineering consultancy and Natural Gas Trading company is located in Chengdu, China.
Employees
We presently have approximately 15 total employees, including operational, engineering, accounting and marketing personnel. We utilize an extensive number of consultants as well and have never experienced work stoppages, and we are not a party to any collective bargaining agreement. We also have 7 employees in JHJ & SHJ in China.
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Government Regulation
Our operations are subject to certain foreign, federal, state and local regulatory requirements relating to environmental, waste management, and health and safety matters. We believe we operate in substantial compliance with all applicable requirements. However, material costs and liabilities may arise from these requirements or from new, modified or more stringent requirements. Material cost may rise due to additional manufacturing cost of raw or made parts with the application of new regulations. Our liabilities may also increase due to additional regulations imposed by foreign, federal, state and local regulatory requirements relating to environmental, waste management, and health and safety matters. In addition, our past, current and future operations and those of businesses we acquire, may give rise to claims of exposure by employees or the public or to other claims or liabilities relating to environmental, waste management or health and safety concerns.
Our markets can be positively or negatively impacted by the effects of governmental and regulatory matters. We are affected not only by energy policy, laws, regulations and incentives of governments in the markets into which we sell, but also by rules, regulations and costs imposed by utilities. Utility companies or governmental entities could place barriers on the installation of our product or the interconnection of the product with the electric grid. Further, utility companies may charge additional fees to customers who install on-site power generation, thereby reducing the electricity they take from the utility, or for having the capacity to use power from the grid for back-up or standby purposes. These types of restrictions, fees or charges could hamper the ability to install or effectively use our products or may increase the cost to our potential customers for using our systems in the future. This could make our systems less desirable, thereby adversely affecting our revenue and profitability potential. In addition, utility rate reductions can make our products less competitive which would have a material adverse effect on our future operations. These costs, incentives and rules are not always the same as those faced by technologies with which we compete. However, rules, regulations, laws and incentives could also provide an advantage to our Heat Recovery Solutions as compared with competing technologies if we are able to achieve required compliance at a lower cost when our Clean CycleTM generators are commercialized. Additionally, reduced emissions and higher fuel efficiency could help our future customers combat the effects of global warming. Accordingly, we may benefit from increased government regulations that impose tighter emission and fuel efficiency standards.
Due to our operations in China, we are subject to additional regulations that apply to companies doing business in mainland China. See “Disclosures Relating to Our Chinese Operations” for more information.
Research and Development
We had no expenses in Research and Development costs during the years ended December 31, 2025, and 2024.
WHERE YOU CAN GET ADDITIONAL INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy our reports or other filings made with the SEC at the SEC’s Public Reference Room, located at 100 F Street, N.E., Washington, DC 20549. You can obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You can also access these reports and other filings electronically on the SEC’s web site, www.sec.gov.
Item 1A. Risk Factors.
An investment in our common stock involves a high degree of risk. Before deciding to purchase, hold, or sell our common stock, you should consider carefully the risks described below in addition to the cautionary statements and risks described elsewhere in this Annual Report and in our other filings with the SEC, including our registration statements and reports on Forms 10-K, 10-Q and 8-K. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. If any of these known or unknown risks or uncertainties actually occur, our business, financial condition, results of operations or cash flows could be seriously harmed. This could cause the trading price of our common stock to decline, resulting in a loss of all or part of your investment.
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RISKS RELATED TO OUR BUSINESS
OUR INDEPENDENT ACCOUNTANTS HAVE ISSUED A GOING CONCERN OPINION AND IF WE CANNOT OBTAIN ADDITIONAL FINANCING AND/OR REDUCE OUR OPERATING COSTS SUFFICIENTLY, WE MAY HAVE TO CURTAIL OPERATIONS AND MAY ULTIMATELY CEASE TO EXIST.
The financial statements have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets and liquidation of liabilities in the normal course of business. The Company had a total stockholder’s equity of $6,246,597 and a working capital of $260,863 and an accumulated deficit of $35,299,999 as of December 31, 2025, and used $7,922,347 in net cash from operating activities for the year ended December 31, 2025.
For the fiscal year ending December 31, 2025, our company reported a net loss of $6,808,895 compared to a net loss of $4,550,296 for the year 2024 (Restated). The increase in net loss during 2025 was primarily attributable to non-cash and non-operating items, including losses related to debt settlement and write down, changes in derivative liabilities, and higher interest and financing-related expenses.
Despite the increase in net loss, the Company improved its operating performance, with loss from operations decreasing from approximately $3.33 million in 2024 to approximately $2.50 million in 2025. The improvement was primarily driven by continued strategic expansion into higher-margin waste-to-energy opportunities, improved operational efficiencies, and reduced operating expenses in certain categories.
The Company continues to evaluate more cost-effective financing alternatives and strategic capital solutions moving forward.
Although our financial statements have been prepared under the assumption that we would continue our operations as a going concern, there is substantial doubt about our ability to continue as a going concern, based on our financial statements and results of operations at that time. Specifically, as noted above, we have experienced losses from operations and negative cash flows from operating activities. Although our audited financial statements for the years ended December 31, 2025 and 2024, were prepared under the assumption that we would continue our operations as a going concern, the report of our independent registered public accounting firm that accompanies our financial statements for the years ended December 31, 2025 and 2024, contains a going concern qualification in which such firm expressed substantial doubt about our ability to continue as a going concern, based on our financial statements and results at that time.
We expect to continue to incur significant expenses and operating losses for the foreseeable future. These prior losses and expected future losses have had, and will continue to have, an adverse effect on our financial condition. In addition, continued operations and our ability to continue as a going concern may be dependent on our ability to obtain additional financing in the near future and thereafter, and there are no assurances that such financing will be available to us at all or will be available in sufficient amounts or on reasonable terms. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty. If we are unable to generate additional funds in the future through sales of our products, financings or from other sources or transactions, we will exhaust our resources and will be unable to continue operations. If we cannot continue as a going concern, our shareholders would likely lose most or all of their investment in us.
WE HAVE AN ACCUMULATED DEFICIT AND MAY INCUR ADDITIONAL LOSSES; THEREFORE, WE MAY NOT BE ABLE TO OBTAIN THE ADDITIONAL FINANCING NEEDED FOR WORKING CAPITAL, CAPITAL EXPENDITURES AND TO MEET OUR DEBT SERVICE OBLIGATIONS.
As of December 31, 2025, we had current liabilities of $5,995,088 and total current assets of $6,255,951.
Our debt could limit our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, or other purposes in the future, as needed; to plan for, or react to, changes in technology and in our business and competition; and to react in the event of an economic downturn.
We may not be able to meet our debt service obligations. If we are unable to generate sufficient cash flow or obtain funds for required payments, or if we fail to comply with covenants in our revolving lines of credit, we will be in default.
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We have previously received Nasdaq deficiency notices, and future non-compliance with Nasdaq listing requirements could result in delisting; if we are not able to regain compliance with those requirements within the time periods permitted by Nasdaq, our common stock may be delisted, which would likely impair our ability to raise capital and could constitute an event of default under our outstanding promissory notes.
On November 5, 2024, the Company received a written notice from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) indicating that the Company was not in compliance with the $1.00 minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market (the “Minimum Bid Price Requirement”). The Nasdaq listing rules require listed securities to maintain a minimum bid price of $1.00 per share, and, based upon the closing bid price of the Company’s common stock for the prior 30 consecutive business days, the Company no longer met this requirement. The Nasdaq rules initially provided the Company a compliance period of 180 calendar days from the date of the notice (or until May 5, 2025) in which to regain compliance with the Minimum Bid Price Requirement. On May 7, 2025, Nasdaq granted the Company an additional 180-day extension (or until November 3, 2025) to regain compliance with the Minimum Bid Price Requirement.
To assist in regaining compliance with the Minimum Bid Price Requirement, the Company effected a 1-for-15 reverse stock split of its issued and outstanding common stock on October 6, 2025. As a result of the reverse stock split and the subsequent increase in the market price of the Company’s common stock, the Company regained compliance with the Minimum Bid Price Requirement. Nasdaq subsequently notified the Company on October 20, 2025 that it had regained compliance with Nasdaq Listing Rule 5550(a)(2), and the matter was closed.
On January 8, 2025, the Company received a written notice from Nasdaq indicating that the Company was not in compliance with Nasdaq’s annual shareholder meeting requirement as set forth in Listing Rules 5620(a) and 5810(c)(2)(G) (the “Annual Shareholder Meeting Requirement”). The Nasdaq listing rules require the Company to have an annual meeting of shareholders within twelve months of the end of the Company’s fiscal year end, and the Company has not had an annual meeting within twelve months of the Company’s 2023 fiscal year end as required. The Nasdaq rules provided the Company 45 calendar days to submit a plan to regain compliance with the Annual Shareholder Meeting Requirement. The Company submitted such plan as required, and on February 27, 2025, Nasdaq provided the Company an extension of until June 3, 2025, to regain compliance with the Annual Shareholder Meeting Requirement. On April 30, 2025, the Company held its annual meeting of shareholders, and the Company regained compliance with the Annual Shareholder Meeting Requirement.
There is no assurance that the Company will continue to satisfy Nasdaq’s continued listing requirements in the future. If the Company’s common stock ultimately were to be delisted for any reason, including because the Company cannot regain compliance with the Minimum Bid Price Requirement, it could negatively impact the Company by (i) reducing the liquidity and market price of the Company’s common stock; (ii) reducing the number of investors willing to hold or acquire the Company’s common stock, which could negatively impact the Company’s ability to raise equity financing; (iii) limiting the Company’s ability to use a registration statement to offer and sell freely tradable securities, thereby preventing the Company from accessing the public capital markets; and (iv) impairing the Company’s ability to provide equity incentives to its employees. Additionally, delisting of the Company’s common stock from the Nasdaq Capital Market could constitute an event of default under its outstanding convertible promissory notes, resulting in those notes becoming immediately due and payable, and resulting in default penalties being applied to those notes.
OUR BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION MAY BE ADVERSELY AFFECTED BY PUBLIC HEALTH EPIDEMICS.
Our business, results of operations and financial condition may be adversely affected if a public health epidemic such as COVID-19 interferes with the ability of us, our employees, workers, contractors, suppliers, customers and other business partners to perform our and their respective responsibilities and obligations relative to the conduct of our business. We maintain offices in various countries throughout the world with employees and workers upon whom we rely to, among other things, identify sources of supply, conduct factory inspections, place orders for merchandise, perform factory monitoring with respect to production, quality control and other requirements, and arrange shipping. A public health epidemic, like the coronavirus, poses the risk that we or our employees, workers, contractors, suppliers, customers and other business partners may be prevented from conducting business activities for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities. We face similar risks if a public health epidemic affects other geographic areas where our employees, workers, contractors, suppliers, customers and other business partners are located.
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IF DEMAND FOR THE PRODUCTS AND SERVICES THAT THE COMPANY OFFERS SLOWS, OUR BUSINESS WOULD BE MATERIALLY AFFECTED.
Demand for products which the company intends to sell depends on many factors, including:
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the economy, and in periods of rapidly declining economic conditions, customers may defer purchases or may choose alternate products; |
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the cost of oil, gas and solar energy; |
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the competitive environment in the heat to power sectors may force us to reduce prices below our desired pricing level or increase promotional spending or both; |
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our ability to maintain efficient, timely and cost-effective production and delivery of the products and services; and, |
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All of these factors could result in immediate and longer term declines in the demand for the products and services that we offer, which could adversely affect our sales, cash flows and overall financial condition. |
WE OPERATE IN A HIGHLY COMPETITIVE MARKET. IF WE DO NOT COMPETE EFFECTIVELY, OUR PROSPECTS, OPERATING RESULTS, AND FINANCIAL CONDITION COULD BE ADVERSELY AFFECTED.
The markets for our products and services are highly competitive, with companies offering a variety of competitive products and services. We expect competition in our markets to intensify in the future as new and existing competitors introduce new or enhanced products and services that are potentially more competitive than our products and services. We believe many of our competitors and potential competitors have significant competitive advantages, including longer operating histories, ability to leverage their sales efforts and marketing expenditures across a broader portfolio of products and services, larger and broader customer bases, more established relationships with a larger number of suppliers, contract manufacturers, and channel partners, greater brand recognition, and greater financial, research and development, marketing, distribution, and other resources than we do and the ability to offer financing for projects. Our competitors and potential competitors may also be able to develop products or services that are equal or superior to ours, achieve greater market acceptance of their products and services, and increase sales by utilizing different distribution channels than we do. Some of our competitors may aggressively discount their products and services in order to gain market share, which could result in pricing pressures, reduced profit margins, lost market share, or a failure to grow market share for us. If we are not able to compete effectively against our current or potential competitors, our prospects, operating results, and financial condition could be adversely affected.
WE MAY LOSE OUT TO LARGER AND BETTER-ESTABLISHED COMPETITORS.
The alternative power industry is intensely competitive. Most of our competitors have significantly greater financial, technical, marketing and distribution resources as well as greater experience in the industry than we have. Our products may not be competitive with other technologies, both existing at the current time and in the future. If this happens, our sales and revenues may decline, or fail to develop at all. In addition, our current and potential competitors may establish cooperative relationships with larger companies to gain access to greater development or marketing resources. Competition may result in price reductions, reduced gross margins and loss of market share.
OUR INTERNATIONAL OPERATIONS SUBJECT US TO RISKS, WHICH COULD ADVERSELY AFFECT OUR OPERATING RESULTS.
Our international operations are exposed to the following risks, several of which are out of our control:
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preference for locally branded products, and laws and business practices favoring local competition; |
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unusual or burdensome foreign laws or regulations, and unexpected changes to those laws or regulations; |
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higher costs of customizing products for foreign countries; |
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increased difficulty in managing inventory; |
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less effective protection of intellectual property; and |
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difficulties and costs of staffing and managing foreign operations. |
Any or all of these factors could adversely affect our ability to execute any geographic expansion strategies or could have a material adverse effect on our business and results of operations.
OUR PRODUCTS MAY BE DISPLACED BY NEWER TECHNOLOGY.
The alternative power industry is undergoing rapid and significant technological change. Third parties may succeed in developing or marketing technologies and products that are more effective than those developed or marketed by us, or that would make our technology obsolete or non-competitive. Accordingly, our success will depend, in part, on our ability to respond quickly to technological changes. We may, however, not have the resources to do this.
WE MUST HIRE QUALIFIED ENGINEERING, DEVELOPMENT AND PROFESSIONAL SERVICES PERSONNEL.
We cannot be certain that we can attract or retain a sufficient number of highly qualified mechanical engineers, industrial technology and manufacturing process developers and professional services personnel. To deploy our products quickly and efficiently, and effectively maintain and enhance them, we will require an increasing number of technology developers. We expect customers that license our technology will typically engage our professional engineering staff to assist with support, training, consulting and implementation. We believe that growth in sales depends on our ability to provide our customers with these services and to attract and educate third-party consultants to provide similar services. As a result, we plan to hire professional services personnel to meet these needs. New technical and professional services personnel will require training and education, and it will take time for them to reach full productivity. To meet our needs for engineers and professional services personnel, we also may use costlier third-party contractors and consultants to supplement our own staff. Competition for qualified personnel is intense, particularly because our technology is specialized and only a limited number of individuals have acquired the needed skills. Additionally, we will rely on third-party implementation providers for these services. Our business may be harmed if we are unable to establish and maintain relationships with third-party implementation providers.
WE MAY BE ADVERSELY AFFECTED BY SHORTAGES OF REQUIRED COMPONENTS. IN ADDITION, WE DEPEND ON A LIMITED NUMBER OF SUPPLIERS TO PROCURE OUR PARTS FOR PRODUCTION WHICH IF AVAILABILITY OF PRODUCTS BECOMES COMPROMISED, COULD ADD TO OUR COST OF GOODS SOLD AND AFFECT OUR REVENUE GROWTH.
At various times, there have been shortages of some of the components that we use, as a result of strong demand for those components or problems experienced by suppliers. These unanticipated component shortages have resulted in curtailed production or delays in production, which prevented us from making scheduled shipments to customers in the past and may do so in the future. Our inability to make scheduled shipments could cause us to experience a reduction in our sales and an increase in our costs and could adversely affect our relationship with existing customers as well as prospective customers. Component shortages may also increase our cost of goods sold because we may be required to pay higher prices for components in short supply and redesign or reconfigure products to accommodate substitute components.
OUR PRINCIPAL SHAREHOLDERS, DIRECTORS AND EXECUTIVE OFFICERS, IN THE AGGREGATE, BENEFICIALLY OWN MORE THAN 50% OF OUR OUTSTANDING COMMON STOCK AND THESE SHAREHOLDERS, IF ACTING TOGETHER, WILL BE ABLE TO EXERT SUBSTANTIAL INFLUENCE OVER ALL MATTERS REQUIRING APPROVAL OF OUR SHAREHOLDERS.
Our principal shareholders, directors and executive officers in the aggregate, beneficially own more than 50% of our outstanding common stock on a fully diluted basis as of the date of the filing of this annual report. These shareholders, if acting together, will be able to exert substantial influence over all matters requiring approval of our shareholders, including amendments to our Articles of Incorporation, fundamental corporate transactions such as mergers, acquisitions, the sale of the company, and other matters involving the direction of our business and affairs and specifically the ability to determine the members of our board of directors. (See “Security Ownership of Certain Beneficial Owners and Managements”).
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IF WE LOSE KEY SENIOR MANAGEMENT PERSONNEL, OUR BUSINESS COULD BE NEGATIVELY AFFECTED. FURTHER, WE WILL NEED TO RECRUIT AND RETAIN ADDITIONAL SKILLED MANAGEMENT PERSONNEL AND IF WE ARE NOT ABLE TO DO SO, OUR BUSINESS AND OUR ABILITY TO CONTINUE TO GROW COULD BE HARMED.
Our success depends to a large extent upon the continued services of our executive officers. We could be seriously harmed by the loss of any of our executive officers. In order to manage our growth, we will need to recruit and retain additional skilled management personnel and if we are not able to do so, our business and our ability to continue to grow could be harmed. Although a number of companies in our industry have implemented workforce reductions, there remains substantial competition for highly skilled employees.
WE ARE SUBJECT TO ENVIRONMENTAL COMPLIANCE RISKS AND UNEXPECTED COSTS THAT WE MAY INCUR WITH RESPECT TO ENVIRONMENTAL MATTERS MAY RESULT IN ADDITIONAL LOSS CONTINGENCIES, THE QUANTIFICATION OF WHICH CANNOT BE DETERMINED AT THIS TIME.
We are subject to various federal, state, local and foreign environmental laws and regulations, including those governing the use, storage, discharge and disposal of hazardous substances in the ordinary course of our manufacturing process. If more stringent compliance or cleanup standards under environmental laws or regulations are imposed, or the results of future testing and analyses at our current or former operating facilities indicate that we are responsible for the release of hazardous substances, we may be subject to additional remediation liability. Further, additional environmental matters may arise in the future at sites where no problem is currently known or at sites that we may acquire in the future. Currently unexpected costs that we may incur with respect to environmental matters may result in additional loss contingencies, the quantification of which cannot be determined at this time.
OUR SALES AND CONTRACT FULFILLMENT CYCLES CAN BE LONG, UNPREDICTABLE AND VARY SEASONALLY, WHICH CAN CAUSE SIGNIFICANT VARIATION IN REVENUES AND PROFITABILITY IN A PARTICULAR QUARTER.
The timing of our sales and related customer contract fulfillment are difficult to predict. Many of our customers are large enterprises, whose purchasing decisions, budget cycles and constraints and evaluation processes are unpredictable and out of our control. Further, the timing of our sales is difficult to predict. The length of our sales cycle, from initial evaluation to payment for our products and services, can range from several months to well over a year and can vary substantially from customer to customer. Our sales efforts involve significant investment in resources in field sales, marketing and educating our customers about the use, technical capabilities and benefits of our products and services. Customers often undertake a prolonged evaluation process. As a result, it is difficult to predict exactly when, or even if, we will make a sale to a potential customer or if we can increase sales to our existing customers. Large individual sales have, in some cases, occurred in quarters subsequent to those we anticipated, or have not occurred at all. In addition, the fulfillment of our customer contracts is partially dependent on other factors related to our customers’ businesses that are not in our control. As with the sales cycle, this can also cause revenues and earnings to fluctuate from quarter to quarter. If our sales and/or contract fulfillment cycles lengthen or our substantial upfront investments do not result in sufficient revenue to justify our investments, our operating results could be adversely affected.
We have experienced seasonal and end-of-quarter concentration of our transactions and variations in the number and size of transactions that close in a particular quarter, which impacts our ability to grow revenue over the long term and plan and manage cash flows and other aspects of our business and cost structure. Our transactions vary by quarter, with the fourth quarter typically being our largest. If expectations for our business turn out to be inaccurate, our revenue growth may be adversely affected over time and we may not be able to adjust our cost structure on a timely basis and our cash flows may suffer.
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OUR OPERATING MARGINS MAY DECLINE AS A RESULT OF INCREASING PRODUCT COSTS.
Our business is subject to significant pressure on pricing and costs caused by many factors, including competition, the cost of components used in our products, labor costs, constrained sourcing capacity, inflationary pressure, pressure from customers to reduce the prices we charge for our products and services, and changes in consumer demand. Costs for the raw materials used in the manufacture of our products are affected by, among other things, energy prices, consumer demand, fluctuations in commodity prices and currency, and other factors that are generally unpredictable and beyond our control. Increases in the cost of raw materials used to manufacture our products or in the cost of labor and other costs of doing business in the United States and internationally could have an adverse effect on, among other things, the cost of our products, gross margins, operating results, financial condition, and cash flows.
OUR SALES AND PROFITABLITY OF OPERATIONS IN THE UNITED STATES AND IN THE PRC ARE DEPENDENT ON THE PRICE OF OIL AND NATURAL GAS.
Our Waste Heat Recovery products and Waste Recovery products are dependent on the prices of traditional energy sources. Our products reuse wasted heat and create electricity or reusable fuel. As the price of energy increases, the economic justification for our products increases. At the same time, as the price for traditional fuel decreases, there is less incentive for customers to purchase our products and may impair our ability to sell our products.
IF THE SPOT PRICE OF NG IN CHINA DROPS BELOW THE PURCHASE PRICE OUR TRADERS NEGOTIATE WITH OUR SUPPLIERS, WE MAY NOT BE ABLE TO SELL OUR LNG OR MAY HAVE TO SELL IT AT A LOSS.
Our traders at JHJ purchase NG at a fixed price in large volumes. If the spot prices for NG drop below our purchase price, we may not be able to sell our NG to our customers or may have to sell the NG at a substantial loss. We do not purchase a sufficient volume of LNG to be able to hedge against price declines of this commodity. If we believe that NG prices are too high and we are unable to purchase because we believe that prices will drop, we will not have sufficient supply of NG to conduct trading operations until the market pricing returns to a level at which we can conduct operations.
WE MAY NOT HAVE SUFFICENT FUNDS TO CONDUCT OUR TRADING OPERATIONS IN THE PRC.
We are funding our trading operations through cash flow generated by JHJ and from funds provided by our parent. If we or JHJ does not have sufficient funds, we may not be able to conduct trading operations.
OUR WASTE TO ENERGY PRODUCTS FROM UKRAINE AND RUSSIA HAVE NOT BEEN TESTED IN THE UNITED STATES AND DEPEND ON DATA OBTAINED FROM OPERATIONS IN THE UKRAINE AND RUSSIA.
HTAP 5 and 10 have not been installed in the United States. In order to commence sales, our purchasers will need to accept data from Russia or the Ukraine that they may not deem reliable. We cannot give any assurances that we will be able to finance the bonds or find an EPC willing to guarantee performance.
THE IMPLEMENTATION OF OUR WASTE TO ENERGY JOINT VENTURES DEPENDS ON US FINDING FUNDING FOR THE PROJECTS.
In order to implement the HTAP system in our waste to energy joint ventures, we will need to finance directly or obtain third party financing for these projects. We cannot give any assurances that we will be able to directly finance these projects or be able to find a third party to provide financing for them. If we are not able to finance the projects, we will not be able to implement our business plan in this sector.
FLUCTUATIONS IN EXCHANGE RATES COULD HAVE AN EFFECT ON THE RESULTS OF OPERATIONS OF OUR HONG KONG AND CHINA SUBSIDIARIES.
The value of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions in China and by China’s foreign exchange policies. Since June 2010, the Renminbi has fluctuated against the U.S. dollar, at times significantly and unpredictably. In the fourth quarter of 2016, the Renminbi has depreciated significantly against the backdrop of a surging U.S. dollar and persistent capital outflows from China. This depreciation halted in 2017, and the RMB appreciated approximately 7% against the U.S. dollar during this one-year period. With the development of the foreign exchange market and progress towards interest rate liberalization and Renminbi internationalization, the PRC government may in the future announce further changes to the exchange rate system, and we cannot assure you that the Renminbi will not appreciate or depreciate significantly in value against the U.S. dollar in the future which may impact the profitability of our operations in China.
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WE MAY NEED TO RAISE ADDITIONAL CAPITAL REQUIRED TO GROW OUR BUSINESS, AND WE MAY NOT BE ABLE TO RAISE CAPITAL ON TERMS ACCEPTABLE TO US OR AT ALL.
Growing and operating our business will require significant cash outlays and capital expenditures and commitments. We have utilized cash on hand and cash generated from operations as sources of liquidity. If cash on hand and cash generated from operations are not sufficient to meet our cash requirements, we will need to seek additional capital, potentially through equity or debt financing, to fund our growth. Our ability to access the credit and capital markets in the future as a source of liquidity, and the borrowing costs associated with such financing, are dependent upon market conditions.
In addition, any equity securities we issue, including any preferred stock, may be on terms that are dilutive or potentially dilutive to our stockholders, and the prices at which new investors would be willing to purchase our securities may be lower than the offering price per share of our Common Stock. The holders of any equity securities we issue, including any preferred stock, may also have rights, preferences or privileges which are senior to those of existing holders of Common Stock. If new sources of financing are required, but are insufficient or unavailable, we will be required to modify our growth and operating plans based on available funding, if any, which would harm our ability to grow our business.
NATURAL DISASTERS AND OTHER CATASTROPHIC EVENTS BEYOND OUR CONTROL COULD ADVERSELY AFFECT OUR BUSINESS OPERATIONS AND FINANCIAL PERFORMANCE.
The occurrence of one or more natural disasters, such as fires, hurricanes, tornados, tsunamis, floods and earthquakes; geo-political events, such as civil unrest in a country in which our suppliers are located or terrorist or military activities disrupting transportation, communication or utility systems; or other highly disruptive events, such as nuclear accidents, pandemics, unusual weather conditions or cyber-attacks, could adversely affect our operations and financial performance. Such events could result, among other things, in operational disruptions, physical damage to or destruction or disruption of one or more of our properties or properties used by third parties in connection with the supply of products or services to us, the lack of an adequate workforce in parts or all of our operations and communications and transportation disruptions. These factors could also cause consumer confidence and spending to decrease or result in increased volatility in the United States and global financial markets and economy. Such occurrences could have a material adverse effect on us and could also have indirect consequences such as increases in the costs of insurance if they result in significant loss of property or other insurable damage.
WE HAVE ISSUED A SUBSTANTIAL NUMBER OF CONVERTIBLE SECURITIES WHICH IF CONVERTED WILL SUBSTANTIALLY DILUTE ALL OF OUR STOCKHOLDERS.
We have issued a substantial number of convertible securities which, if converted, would result in substantial dilution to our stockholders. We also have outstanding other convertible securities, including shares of preferred stock, warrants and other equity instruments convertible into shares of common stock. As of December 31, 2025, these convertible securities include the following:
| Convertible Notes - and Approximate common share equivalents | 1,441,565 | |||
| Warrants and Common Stock equivalents | 2,664,010 | |||
| Total Convertible Common Stock equivalents | 4,105,575 |
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OUR ISSUANCE OF ADDITIONAL CAPITAL STOCK IN CONNECTION WITH FINANCINGS, ACQUISITIONS, INVESTMENTS, OUR EQUITY INCENTIVE PLANS, OR OTHERWISE WILL DILUTE ALL OTHER STOCKHOLDERS.
We expect to issue additional capital stock in the future that will result in dilution to all other stockholders. We expect to grant equity awards to employees, directors, and consultants under our equity incentive plans. We may also raise capital through equity financings in the future. As part of our business strategy, we may acquire or make investments in complementary companies, products, or technologies, and issue equity securities to pay for any such acquisition or investment. Any such issuances of additional capital stock may cause stockholders to experience significant dilution of their ownership interests and may cause the per share value of our common stock to decline.
WE MAY MAKE ACQUISITIONS THAT ARE DILUTIVE TO EXISTING STOCKHOLDERS. IN ADDITION, OUR LIMITED EXPERIENCE IN ACQUIRING OTHER BUSINESSES, PRODUCT LINES AND TECHNOLOGIES MAY MAKE IT DIFFICULT FOR US TO OVERCOME PROBLEMS ENCOUNTERED IN CONNECTION WITH ANY ACQUISITIONS WE MAY UNDERTAKE.
We intend to evaluate and explore strategic opportunities as they arise, including business combinations, strategic partnerships, and the purchase, licensing or sale of assets. In connection with any such future transaction, we could issue dilutive equity securities, incur substantial debt, reduce our cash reserves or assume contingent liabilities.
Our experience in acquiring other businesses, product lines and technologies is limited. Our inability to overcome problems encountered in connection with any acquisitions could divert the attention of management, utilize scarce corporate resources and otherwise harm our business. Any potential future acquisitions also involve numerous risks, including:
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adverse effects on existing business relationships with suppliers and customers; |
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risks associated with entering markets in which we have no or limited prior experience; |
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potential loss of key employees of purchased organizations; and |
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potential litigation arising from the acquired company’s operations before the acquisition. |
Furthermore, acquisitions may require material charges and could result in adverse tax consequences, substantial depreciation, deferred compensation charges, in-process research and development charges, the amortization of amounts related to deferred compensation and identifiable purchased intangible assets or impairment of goodwill, any of which could negatively affect our results of operations.
WE MAY BE SUBJECT TO GOVERNMENT LAWS AND REGULATIONS PARTICULAR TO OUR OPERATIONS WITH WHICH WE MAY BE UNABLE TO COMPLY.
We may not be able to comply with all current and future government regulations which are applicable to our business. Our business operations are subject to all government regulations normally incident to conducting business (e.g., occupational safety and health acts, workers’ compensation statutes, unemployment insurance legislation, income tax, and social security laws and regulations, environmental laws and regulations, consumer safety laws and regulations, etc.) as well as to governmental laws and regulations applicable to small public companies and their capital formation efforts. Although we will make every effort to comply with applicable laws and regulations, we can provide no assurance of our ability to do so, nor can we predict the effect of those regulations on our proposed business activities. Our failure to comply with material regulatory requirements would likely have an adverse effect on our ability to conduct our business and could result in our cessation of active business operations.
COMPLIANCE WITH CHANGING REGULATION OF CORPORATE GOVERNANCE AND PUBLIC DISCLOSURE WILL RESULT IN ADDITIONAL EXPENSES.
Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and related SEC regulations, have created uncertainty for public companies and significantly increased the costs and risks associated with accessing the public markets and public reporting. Our management team will need to invest significant management time and financial resources to comply with both existing and evolving standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.
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OUR REVENUE GROWTH RATE DEPENDS PRIMARILY ON OUR ABILITY TO EXECUTE OUR BUSINESS PLAN.
We may not be able to identify and maintain the necessary relationships within our industry. Our ability to execute our business plan also depends on other factors, including the ability to:
1. Negotiate and maintain contracts and agreements with acceptable terms;
2. Hire and train qualified personnel;
3. Maintain marketing and development costs at affordable rates; and,
4. Maintain an affordable labor force.
WE MAY BE SUBJECT TO SECURITIES LITIGATION, WHICH IS EXPENSIVE AND COULD DIVERT MANAGEMENT ATTENTION.
The market price of the shares of our common stock may be volatile, and in the past companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.
RISKS RELATED TO DOING BUSINESS IN CHINA
We face various legal and operational risks and uncertainties related to being based in and having significant operations in China, and therefore are subject to risks associated with doing business in China generally. Risks and uncertainties related to doing business in China could result in a material adverse change in our operations in China and/or the value of the securities we are registering for sale, and may significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. Such risks and uncertainties include the following:
THERE ARE UNCERTAINTIES REGARDING THE INTERPRETATION AND ENFORCEMENT OF PRC LAWS, RULES AND REGULATIONS.
The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions may be cited for reference but have limited precedential value. In 1979, the PRC government began to promulgate a comprehensive system of laws, rules and regulations governing economic matters in general. The overall effect of legislation over the past four decades has significantly enhanced the protections afforded to various forms of foreign investment in China. However, China has not developed a fully integrated legal system, and recently enacted laws, rules and regulations may not sufficiently cover all aspects of economic activities in China or may be subject to various degrees of interpretation and discretion by PRC regulatory agencies. In particular, because these laws, rules and regulations are relatively new, and because of the limited number of published decisions and the nonbinding nature of such decisions, the interpretation and enforcement of these laws, rules and regulations involve uncertainties and are not always uniform and predictable. These uncertainties may affect our judgment on the relevance of legal requirements and our ability to enforce our contractual rights or tort claims. In addition, the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all, and which may have a retroactive effect. As a result, we may not be aware of our violation of these policies and rules until some time after the occurrence of the violation.
Any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention. Since PRC administrative and court authorities have different degrees of discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems. These uncertainties may impede our ability to enforce the contracts we have entered into and could materially and adversely affect our business, financial condition and results of operations.
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THE PRC GOVERNMENT EXERTS SUBSTANTIAL INFLUENCE OVER THE MANNER IN WHICH WE CONDUCT OUR BUSINESS OPERATIONS. IT MAY INFLUENCE OR INTERVENE IN OUR OPERATIONS AT ANY TIME AS PART OF ITS EFFORTS TO ENFORCE PRC LAW, WHICH COULD RESULT IN A MATERIAL ADVERSE CHANGE IN OUR OPERATIONS AND THE VALUE OF THE SECURITIES WE ARE OFFERING.
A portion of our business is conducted in the PRC, and is governed by PRC laws, rules and regulations. The PRC government exerts substantial influence over the manner in which we conduct our business, and it may intervene in or influence our operations at any time. The PRC government has recently published new policies that substantially affected certain industries. We cannot rule out the possibility that it will in the future release regulations or policies that directly or indirectly affect our industry or require us to seek additional permission to continue our operations, which could result in a material adverse change in our operation in China and/or the value of our securities. Therefore, investors of our company and our business face potential uncertainty from actions taken by the PRC government affecting our business.
The Chinese government has exerted more oversight and control over offerings that are conducted overseas and foreign investment in China-based issuers. Such actions could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. For more details, see “— The approval or record filing of the CSRC, CAC, or other PRC government authorities may be required in connection with our future capital raising activities under the PRC laws.”
A RECENT JOINT STATEMENT BY THE SEC AND THE PCAOB, RULE CHANGES BY NASDAQ, AND THE HOLDING FOREIGN COMPANIES ACCOUNTABLE ACT ALL CALL FOR ADDITIONAL AND MORE STRINGENT CRITERIA TO BE APPLIED TO COMPANIES WITH OPERATIONS IN EMERGING MARKETS UPON ASSESSING THE QUALIFICATION OF THEIR AUDITORS, ESPECIALLY THE NON-U.S. AUDITORS WHO ARE NOT INSPECTED BY THE PCAOB. THESE DEVELOPMENTS COULD ADD UNCERTAINTIES TO OUR CONTINUED LISTING OR FUTURE OFFERINGS OF OUR SECURITIES IN THE U.S.
On April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the risks associated with investing in companies based in or having substantial operations in emerging markets including China. The joint statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers in China and higher risks of fraud in emerging markets.
On May 18, 2020, Nasdaq filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating in “Restrictive Market”, (ii) adopt a new requirement relating to the qualification of management or board of directors for Restrictive Market companies, and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the company’s auditors.
On May 20, 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act requiring a foreign company to certify it is not owned or controlled by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the PCAOB is unable to inspect the company’s auditors for three consecutive years, the issuer’s securities are prohibited to trade on a national exchange. On December 2, 2020, the U.S. House of Representatives approved the Holding Foreign Companies Accountable Act. On December 18, 2020, the Holding Foreign Companies Accountable Act was signed into law.
On March 24, 2021, the SEC announced the adoption of interim final amendments to implement the submission and disclosure requirements of the Holding Foreign Companies Accountable Act. In the announcement, the SEC clarified that before any issuer will have to comply with the interim final amendments, the SEC must implement a process for identifying covered issuers. The announcement also stated that the SEC staff was actively assessing how best to implement the other requirements of the Holding Foreign Companies Accountable Act, including the identification process and the trading prohibition requirements.
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On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if passed by the U.S. House of Representatives and signed into law, would reduce the number of consecutive non-inspection years required for triggering the prohibitions under the Holding Foreign Companies Accountable Act from three years to two. On December 29, 2022, a legislation entitled “Consolidated Appropriations Act, 2023” (the “Consolidated Appropriations Act”), was signed into law by President Biden. The Consolidated Appropriations Act contained, among other things, an identical provision to HFCAA, which reduces the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two.
On September 22, 2021, the PCAOB adopted a final rule implementing the Holding Foreign Companies Accountable Act, which provides a framework for the PCAOB to use when determining, as contemplated under the Holding Foreign Companies Accountable Act, whether the board of directors of a company is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.
On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the Holding Foreign Companies Accountable Act. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions. The final amendments were effective on January 10, 2022. The SEC began to identify and list Commission-Identified Issuers on its website shortly after registrants began filing their annual reports for 2021.
On December 16, 2021, the PCAOB announced the PCAOB Holding Foreign Companies Accountable Act determinations (the “PCAOB determinations”) relating to the PCAOB’s inability to inspect or investigate completely registered public accounting firms headquartered in China of the PRC or Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in the PRC or Hong Kong.
On August 26, 2022, the PCAOB signed a Statement of Protocol with the CSRC and the Ministry of Finance of the People’s Republic of China governing inspections and investigations of audit firms based in China and Hong Kong.
On December 15, 2022, the PCAOB announced in the 2022 Determination its determination that the PCAOB was able to secure complete access to inspect and investigate accounting firms headquartered in mainland China and Hong Kong, and the PCAOB Board voted to vacate previous determinations to the contrary.
Should the PCAOB again encounter impediments to inspections and investigations in mainland China or Hong Kong as a result of positions taken by any authority in either jurisdiction, including by the CSRC or the MOF, the PCAOB will make determinations under the HFCAA as and when appropriate. The inability of the PCAOB to conduct inspections of auditors in PRC makes it more difficult to evaluate the effectiveness of these accounting firms’ audit procedures or quality control procedures as compared to auditors outside of PRC that are subject to the PCAOB inspections, which could cause investors and potential investors in our Common stock to lose confidence in our audit procedures and reported financial information and the quality of our financial statements.
Our auditor, TAAD LLP, is headquartered in the United States, and, as a PCAOB-registered public accounting firm, it is required to undergo regular inspections by the PCAOB to assess its compliance with the laws of the U.S. and professional standards. TAAD LLP has been subject to PCAOB inspections and is not among the PCAOB-registered public accounting firms headquartered in the PRC or Hong Kong that are subject to the PCAOB’s determination of having been unable to inspect or investigate completely. Notwithstanding the foregoing, if it is later determined that the PCAOB is unable to inspect or investigate our auditor completely, if there is any regulatory change or step taken by PRC regulators that does not permit our auditor to provide audit documentations located in China or Hong Kong to the PCAOB for inspection or investigation, or the PCAOB expands the scope of the Determination so that we are subject to the HFCAA, as the same may be amended, our common stock may be delisted from or prohibited from trading on a national securities exchange, including the Nasdaq, the exchange on which our common stock is currently listed.
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The recent developments would add uncertainties to our offering and we cannot predict whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us. Furthermore, the Consolidated Appropriations Act reduces the period for foreign companies to comply with PCAOB audits to two consecutive years instead of three, thus reducing the time period for triggering the prohibition on trading, and this ultimately could result in our common stock being delisted by an exchange.
THE APPROVAL OR RECORD FILING OF THE CSRC, CAC, OR OTHER PRC GOVERNMENT AUTHORITIES MAY BE REQUIRED IN CONNECTION WITH OUR FUTURE CAPITAL RAISING ACTIVITIES UNDER THE PRC LAWS.
Recent statements by the Chinese government have indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investments in PRC based issuers. The PRC has recently promulgated new rules that require companies collecting or holding large amounts of data to undergo a cybersecurity review prior to listing in foreign countries, a move that will significantly tighten oversight over PRC-based internet giants. The Measures for Cybersecurity Review (2021 version) was promulgated on December 28, 2021 and became effective on February 15, 2022. These measures specify that any “online platform operators” controlling the personal information of more than one million users which seek to list on a foreign stock exchange are subject to prior cybersecurity review.
On November 14, 2021, the Cyberspace Administration of China (the “CAC”) published the Draft Regulations on the Network Data Security Administration (Draft for Comments) (the “Security Administration Draft”), which provides that data processing operators engaging in data processing activities that affect or may affect national security must be subject to cybersecurity review by the relevant Cyberspace Administration of the PRC. According to the Security Administration Draft, data processing operators shall apply for a cybersecurity review by the relevant Cyberspace Administration of the PRC under certain circumstances, such as (i) mergers, restructurings, and divisions of Internet platform operators that hold a large amount of data relating to national security, economic development, or public interest which affects or may affect the national security, (ii) overseas listings of data processors that process personal data for more than one million individuals, (iii) Hong Kong listings of data processors that affect or may affect national security, and (iv) other data processing activities that affect or may affect the national security. The deadline for public comments on the Security Administration Draft was December 13, 2021.
The PRC Data Security Law, which was promulgated by the Standing Committee of the National People’s Congress (the “SCNPC”) on June 10, 2021 and took effect on September 1, 2021, requires data collection to be conducted in a legitimate and proper manner, and stipulates that, for the purpose of data protection, data processing activities must be conducted based on data classification and hierarchical protection system for data security.
On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law of the People’s Republic of China, or the Personal Information Protection Law, which integrates the scattered rules with respect to personal information rights and privacy protection and took effect on November 1, 2021.
Our business in China does not involve the collection of user data, implicate cybersecurity, or involve any other type of restricted industry. Based on our understanding of currently applicable PRC laws and regulations, our registered public offering in the U.S. is not subject to the review or prior approval of the CAC. As of the date of this Annual Report, we have not received any notice from any authorities identifying the operating entities as CIIOs or requiring us to go through cybersecurity review or network data security review by the CAC. Uncertainties still exist, however, due to the possibility that laws, regulations, or policies in the PRC could change rapidly in the future. Any future action by the PRC government expanding the categories of industries and companies whose foreign securities offerings are subject to review by the CAC could significantly limit our ability to offer or continue to offer securities to investors and could cause the value of such securities to significantly decline or be worthless.
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On February 17, 2023, the CSRC released Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies with five interpretive guidelines (the “Trial Measures”), which came into effect on March 31, 2023. Pursuant to the Trial Measures, a PRC domestic company that seeks to offer and list securities in overseas markets, either in direct or indirect overseas offering, shall fulfill the filing procedure with the CSRC and report relevant information to the CSRC. Direct overseas offering and listing by domestic companies refers to such overseas offering and listing by a joint-stock company incorporated domestically. Any overseas offering and listing made by an issuer that meets both the following conditions will be deemed an indirect offering and listing in an overseas market and, therefore, be subject to filing requirement: (i) 50% or more of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting year is accounted for by domestic companies; and (ii) the main parts of the issuer’s business activities are conducted in the Mainland China, or its main places of business are located in the Mainland China, or the senior managers in charge of its business operation and management are mostly Chinese citizens or domiciled in the Mainland China. The determination as to whether or not an overseas offering and listing by domestic companies is indirect shall be made on substance over form basis. If we ever are required by the CSRC to submit and complete the filing procedures for our future offerings of our securities, we cannot assure you that we will be able to complete such filings in a timely manner, or even at all, which could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless. Any failure by us to comply with such filing requirements under the Trial Measures may result in rectification, warnings, and a fine between RMB 1 million and RMB 10 million on our PRC subsidiaries, which could adversely and materially affect our business operations and financial outlook and could cause the value of our common stock to significantly decline or, in extreme cases, become worthless.
On February 24, 2023, the CSRC, together with other PRC government authorities, released the Provisions on Strengthening the Confidentiality and Archives Administration Related to the Overseas Securities Offering and Listing by Domestic Enterprises (the “Confidentiality and Archives Administration Provisions”), which come into effect on March 31, 2023. The Confidentiality and Archives Administration Provisions require, among others, that PRC domestic enterprises seeking to offer and list securities in overseas markets, either directly or indirectly, shall establish the confidentiality and archives system, and shall complete approval and filing procedures with competent authorities, if such PRC domestic enterprises or their overseas listing entities provide or publicly disclose documents or materials involving state secrets and work secrets of PRC government agencies to relevant securities companies, securities service institutions, overseas regulatory agencies and other entities and individuals. It further stipulates that providing or publicly disclosing documents and materials which may adversely affect national security or public interests, and accounting files or copies of important preservation value to the state and society shall be subject to corresponding procedures in accordance with relevant laws and regulations. As of the date of this Annual Report, we are not subject to the approval to the competent authorities since we do not possess any documents or materials involving state secrets and work secrets of PRC government agencies.
We have been closely monitoring regulatory developments in the PRC regarding any necessary approvals from the CSRC or other PRC governmental authorities required for overseas listings. However, there remains significant uncertainty as to the enactment, interpretation and implementation of regulatory requirements related to overseas securities offerings and other capital markets activities, which could materially and adversely impact our business and financial outlook and may impact our ability to accept foreign investments, or continue to list on a U.S. or other foreign exchange.
CHINA’S ANTI-MONOPOLY LAW, M&A RULES AND CERTAIN OTHER PRC LAWS AND REGULATIONS ALSO ESTABLISH COMPLEX PROCEDURES FOR ACQUISITIONS CONDUCTED BY FOREIGN INVESTORS THAT COULD MAKE IT MORE DIFFICULT FOR US TO GROW THROUGH ACQUISITIONS IN CHINA.
A number of regulations also established additional procedures and requirements that are expected to make merger and acquisition activities in China by foreign investors more time-consuming and complex. For example, the M&A rules require that the Ministry of Commerce, or the MOFCOM, be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise if (i) any important industry is concerned, (ii) such transaction involves factors that have or may have impact on the national economic security, or (iii) such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark or PRC time-honored brand.
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The approval from the MOFCOM shall be obtained in circumstances where overseas companies established or controlled by PRC enterprises or residents acquire affiliated domestic companies. Mergers, acquisitions or contractual arrangements that allow one market player to take control of or to exert decisive impact on another market player must also be notified in advance to the anti-monopoly authority under the State Council when the threshold under the Provisions on Thresholds for Prior Notification of Concentrations of Undertakings, or the Prior Notification Rules, issued by the State Council in August 2008 and amended in September 2018, is triggered. In addition, the Rules of the Ministry of Commerce on Implementation of Security Review System of Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the Security Review Rule issued by the MOFCOM that became effective in September 2011 specify that mergers and acquisitions by foreign investors that raise “national defense and security” concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise “national security” concerns are subject to strict review by the MOFCOM, and the rules prohibit any activities attempting to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement.
Furthermore, on December 19, 2020, the National Development and Reform Commission, or the NDRC, and MOFCOM promulgated the Measures for Security Review of Foreign Investment, or the Foreign Investment Security Review Measures, which took effect on January 18, 2021. Under the Foreign Investment Security Review Measures, investment in certain key areas which results in acquiring the actual control of the assets is required to obtain approval from designated governmental authorities in advance. We may grow our business in part by acquiring other companies operating in our industry. Complying with the requirements of the new regulations to complete such transactions could be time-consuming, and any required approval processes, including approval from the MOFCOM, the State Administration for Industry and Commerce and other governmental authorities, may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share. It is unclear whether our business would be deemed to be in an industry that raises “national defense and security” or “national security” concerns. However, MOFCOM or other government agencies may publish explanations in the future determining that our business is in an industry subject to the security review, in which case our future acquisitions in China may be closely scrutinized or prohibited. Our ability to expand our business or maintain or expand our market share through future acquisitions would as such be materially and adversely affected.
OUR PRC SUBSIDIARIES ARE SUBJECT TO RESTRICTIONS ON PAYING DIVIDENDS OR MAKING OTHER PAYMENTS TO US, WHICH MAY RESTRICT OUR ABILITY TO SATISFY OUR LIQUIDITY REQUIREMENTS IN THE FUTURE.
We may need dividends and other distributions on equity from our PRC Subsidiaries to satisfy our liquidity requirements. Current PRC regulations permit our PRC Subsidiaries to pay dividends to their respective shareholders only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, such companies are required to set aside at least 10% of their accumulated profits each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of its registered capital. Our PRC Subsidiaries may also, at the respective subsidiary’s discretion, allocate a portion of its after-tax profits based on its articles of association and PRC accounting standards to certain reserve funds. These reserves are not distributable as cash dividends. Furthermore, if our PRC Subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us. Any limitation on the ability of our PRC Subsidiaries to distribute dividends or to make payments to us may restrict our ability to satisfy our future liquidity requirements.
In addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by PRC companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC-resident enterprises are incorporated. If we are deemed by the PRC tax authorities as a PRC tax resident enterprise for tax purposes, any dividends we pay to our non-PRC resident shareholders may be regarded as China-sourced income and as a result, may be subject to PRC withholding tax at a rate of up to 10.0%. Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be reduced to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC entity. However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including, without limitation, that (a) the Hong Kong entity must be the beneficial owner of the relevant dividends; and (b) the Hong Kong entity must directly hold no less than 25% share ownership in the PRC entity during the 12 consecutive months preceding its receipt of the dividends. In practice, a Hong Kong entity must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot be certain that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to any dividends to be paid by our subsidiaries in mainland China to our Hong Kong subsidiary, Clean Energy Technologies (H.K.) Limited.
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We can give no assurance that we will declare dividends of any amounts, at any rate or at all in the future. The declaration of future dividends, if any, will be at the discretion of our board of directors and will depend upon our future operations and earnings, capital requirements, general financial conditions, legal and contractual restrictions and other factors that our board of directors may deem relevant.
PRC REGULATION OF LOANS TO AND DIRECT INVESTMENT IN PRC ENTITIES BY OFFSHORE HOLDING COMPANIES AND GOVERNMENTAL CONTROL OF CURRENCY CONVERSION MAY DELAY OR PREVENT US FROM MAKING LOANS OR ADDITIONAL CAPITAL CONTRIBUTIONS TO OUR PRC SUBSIDIARIES.
We are a U.S. based company conducting a portion of our operations in China. We may make loans to our PRC subsidiaries subject to the approval, registration, and filing with governmental authorities and limitation of amount, or we may make additional capital contributions to our subsidiaries in China and Hong Kong. Any loans to our wholly foreign-owned subsidiaries in mainland China, which are treated as foreign-invested enterprises under PRC law, are subject to foreign exchange loan registrations. In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals or filings on a timely basis, if at all, with respect to future loans by us to our PRC Subsidiaries or with respect to future capital contributions by us to our PRC Subsidiaries. If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds from securities offerings and to capitalize or otherwise fund our Chinese operations may be negatively affected.
FLUCTUATIONS IN EXCHANGE RATES COULD HAVE AN EFFECT ON THE RESULTS OF OPERATIONS OF OUR PRC SUBSIDIARIES.
The value of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions in China and by China’s foreign exchange policies. Since June 2010, the Renminbi has fluctuated against the U.S. dollar, at times significantly and unpredictably. With the development of the foreign exchange market and progress towards interest rate liberalization and Renminbi internationalization, the PRC government may in the future announce further changes to the exchange rate system, and we cannot assure you that the Renminbi will not appreciate or depreciate significantly in value against the U.S. dollar in the future, which may impact the profitability of our operations in China.
Item 1B. Unresolved Staff Comments.
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 1C. Cybersecurity.
Risk Management and Strategy
As one of the critical elements of our overall ERM approach, our cybersecurity efforts are focused on the following key areas:
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Governance:
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Collaborative Approach: We have implemented a cross-functional approach to identifying, preventing and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made by management in a timely manner. |
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Technical Safeguards: We deploy technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence. |
Third
parties also play a role in our cybersecurity. We engage
While we have experienced cybersecurity threats in the past in the normal course of business and expect to continue to experience such threats from time to time, to date, none have had a material adverse effect on our business, financial condition, results of operations or cash flows. Even with the approach we take to cybersecurity, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us.
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WE ARE NOT CURRENTLY IN COMPLIANCE WITH NASDAQ’S LISTING REQUIREMENTS; IF WE ARE NOT ABLE TO REGAIN COMPLIANCE WITH THOSE REQUIREMENTS WITHIN THE TIME PERIODS PERMITTED BY NASDAQ, OUR COMMON STOCK MAY BE DELISTED, WHICH WOULD LIKELY IMPAIR OUR ABILITY TO RAISE CAPITAL AND COULD CONSTITUTE AN EVENT OF DEFAULT UNDER OUR OUTSTANDING PROMISSORY NOTES.
On November 5, 2024, the Company received a written notice from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) indicating that the Company was not in compliance with the $1.00 minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market (the “Minimum Bid Price Requirement”). The Nasdaq listing rules require listed securities to maintain a minimum bid price of $1.00 per share, and, based upon the closing bid price of the Company’s common stock for the prior 30 consecutive business days, the Company no longer met that requirement. The Nasdaq rules initially provided the Company a compliance period of 180 calendar days from the date of the notice (or until May 5, 2025) in which to regain compliance with the Minimum Bid Price Requirement. On May 7, 2025, Nasdaq granted the Company an additional 180-day extension (or until November 3, 2025) to regain compliance with the Minimum Bid Price Requirement. On October 20, 2025, Nasdaq notified the Company that the Company had regained compliance with the Minimum Bid Price Requirement, and the matter was closed.
On January 8, 2025, the Company received a written notice from Nasdaq indicating that the Company was not in compliance with Nasdaq’s annual shareholder meeting requirement as set forth in Listing Rules 5620(a) and 5810(c)(2)(G) (the “Annual Shareholder Meeting Requirement”). The Nasdaq listing rules require the Company to have an annual meeting of shareholders within twelve months of the end of the Company’s fiscal year end, and the Company has not had an annual meeting within twelve months of the Company’s 2023 fiscal year end as required. The Nasdaq rules provided the Company 45 calendar days to submit a plan to regain compliance with the Annual Shareholder Meeting Requirement. The Company submitted such plan as required, and on February 27, 2025, Nasdaq provided the Company an extension of until June 3, 2025, to regain compliance with the Annual Shareholder Meeting Requirement. On April 30, 2025, the Company held its annual meeting of shareholders, and the Company regained compliance with the Annual Shareholder Meeting Requirement.
On April 17, 2026, the Company received a written notice Nasdaq indicating that the Company was not in compliance with Nasdaq Listing Rule 5250(c)(1) because the Company had not yet filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2025. That rule requires listed companies to timely file all required periodic reports with the Securities and Exchange Commission. Under Nasdaq rules, the Company has 60 calendar days from receipt of the notice to submit a plan to regain compliance. If Nasdaq accepts the Company’s plan, then Nasdaq may grant an exception of up to 180 calendar days from the due date of the Form 10-K, or until October 12, 2026, to regain compliance.
On May 26, 2026, the Company received a written notice Nasdaq indicating that the Company was not in compliance with Nasdaq Listing Rule 5250(c)(1) because the Company had not yet filed its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2026. That rule requires listed companies to timely file all required periodic reports with the Securities and Exchange Commission. Under Nasdaq rules, the Company has 60 calendar days from receipt of the notice to submit a plan to regain compliance. If Nasdaq accepts the Company’s plan, then Nasdaq may grant an exception of up to 180 calendar days from the due date of the Form 10-Q, or until November 16, 2026, to regain compliance.
The Company intends to submit a plan to Nasdaq regarding regaining compliance with Nasdaq’s rules. However, there can be no assurance that Nasdaq will accept the Company’s plan to regain compliance or that the Company will be able to regain compliance within any extension period granted by Nasdaq. If Nasdaq does not accept the Company’s plan, then the Company will have the opportunity to appeal that decision to a Nasdaq hearings panel.
If the Company’s common stock ultimately were to be delisted for any reason, it could negatively impact the Company by (i) reducing the liquidity and market price of the Company’s common stock; (ii) reducing the number of investors willing to hold or acquire the Company’s common stock, which could negatively impact the Company’s ability to raise equity financing; (iii) limiting the Company’s ability to use a registration statement to offer and sell freely tradable securities, thereby preventing the Company from accessing the public capital markets; and (iv) impairing the Company’s ability to provide equity incentives to its employees. Additionally, delisting of the Company’s common stock from the Nasdaq Capital Market could constitute an event of default under its outstanding convertible promissory notes, resulting in those notes becoming immediately due and payable, and resulting in default penalties being applied to those notes.
Item 2. Properties.
Our corporate headquarters was located at 2990 Redhill Unit A, Costa Mesa, CA., which ended in November 2023. On March 10, 2016, the Company signed a lease agreement for an 18,200-square foot CTU Industrial Building. Lease term was seven years and two months beginning July 1, 2017. In October of 2018 we signed a sublease agreement with our facility in Italy with an indefinite term that may be terminated by either party with a 60-day notice for 1,000 Euro per month. Due to the short termination clause, we are treating this as a month-to-month lease.
We have relocated our corporate offices to 1340 Reynolds Avenue, Unit 120, Irvine, CA 92614. On December 1, 2023, the Company signed a lease agreement for a 3,000-square foot of office space with Metro Creekside California, LLC. Lease term is thirty-eight months beginning December 1, 2023, and expiring on January 31, 2027. This location is used as CETY’s headquarters and coordination center for all domestic and global business units. On October 16, 2023, we signed a sublease agreement to relocate the HRS operations from Costa Mesa to Irvine, California for one year and 7 months commencing December 1, 2023 and ending June 30, 2025. This location is used for Heat Recovery Solutions design, manufacturing, testing, and support. We also signed a temporary storage lease and due to the short termination clause, we are treating this as a month-to-month lease. The lease payments for the years ending December 31, 2025 and 2024, are:
| Year | Lease Payment | |||
| 2025 | $ | 139,979 | ||
| 2024 | $ | 173,931 | ||
Our lease expense for the years ended December 31, 2025, and 2024 was $216,812 and $250,267 respectively, which also included common area maintenance.
We also operate offices in Chengdu, China, which serve as operational bases for our NG trading business, and a gas storage and pumping station in Chengdu, China, as well.
Item 3. Legal Proceedings.
From time to time, we may be party to litigation matters occurring in the ordinary course of our business. As of the date of this Annual Report, however, there are no material pending legal or governmental proceedings relating to our Company to which we are a party, and to our knowledge there are no material proceedings to which any of our directors, executive officers or affiliates are a party adverse to us or which have a material interest adverse to us.
Item 4. Mine Safety Disclosures
Not Applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Bid and ask quotations for our common shares are routinely submitted by registered broker dealers who are members of the National Association of Securities Dealers on the NASD Over-the-Counter Electronic Bulletin Board. These quotations reflect inner-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. The high and low bid information for our shares for each quarter for the last two years, so far as information is reported, through the year ended December 31, 2025, as reported by the Nasdaq Markets, are as follows (and such share prices have been adjusted for our reverse stock split effected on October 6, 2025):
| 2025 FISCAL YEAR | High | Low | ||||||
| First Quarter | $ | 10.84 | $ | 6.44 | ||||
| Second Quarter | $ | 7.78 | $ | 3.69 | ||||
| Third Quarter | $ | 5.00 | $ | 3.01 | ||||
| Fourth Quarter | $ | 3.19 | $ | 0.71 | ||||
| 2024 FISCAL YEAR | High | Low | ||||||
| First Quarter | $ | 1.53 | $ | 0.50 | ||||
| Second Quarter | $ | 1.74 | $ | 1.13 | ||||
| Third Quarter | $ | 1.29 | $ | 0.88 | ||||
| Fourth Quarter | $ | 1.05 | $ | 0.53 | ||||
Record Holders
As of April 15, 2026, there were 12,166,106 shares of the registrant’s $0.001 par value common stock issued and outstanding, which shares were owned by approximately 5,000 holders of record, based on information provided by our transfer agent and NOBO.
Dividend Policy
We have never declared a cash dividend on our common stock and our Board of Directors does not anticipate that we will pay cash dividends in the foreseeable future. Any future determination to pay cash dividends will be at the discretion of our Board of Directors and will depend upon our financial condition, operating results, capital requirements, restrictions contained in our agreements and other factors which our Board of Directors deems relevant.
Recent Sales of Unregistered Securities
During the fiscal quarter ended December 31, 2025, the Company issued the following unregistered securities:
On or about October 6, 2025, the Company issued 19,100 shares of common stock to Mast Hill Fund, L.P. (“Mast Hill”) pursuant to its conversion of $50,032 in principal, interest and fees owed under the convertible promissory note issued to Mast Hill dated January 16, 2025.
On or about October 8, 2025, the Company issued 44,500 shares of common stock to Mast Hill pursuant to its conversion of $100,249 in principal, interest and fees owed under the convertible promissory note issued to Mast Hill dated January 16, 2025.
On or about October 10, 2025, the Company issued 45,000 shares of common stock to Mast Hill pursuant to its conversion of $101,376 in principal, interest and fees owed under the convertible promissory note issued to Mast Hill dated January 16, 2025.
On or about October 13, 2025, the Company issued 33,258 shares of common stock to Pacific Pier Capital II, LLC (“Pacific Pier”) pursuant to its conversion of $74,461.47 in principal, interest and fees owed under the convertible promissory note issued to Pacific Pier dated April 04, 2025.
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On or about October 14, 2025, the Company issued 46,000 shares of common stock to Mast Hill pursuant to its conversion of $102,987 in principal, interest and fees owed under the convertible promissory note issued to Mast Hill dated January 16, 2025.
On or about October 16, 2025, the Company issued 161,994 shares of common stock to Mast Hill pursuant to its conversion of $362,679 in principal, interest and fees owed under the convertible promissory note issued to Mast Hill dated January 16, 2025.
On or about October 23, 2025, the Company issued 34,619 shares of common stock to Pacific Pier pursuant to its conversion of $73,032.40 in principal, interest and fees owed under the convertible promissory note issued to Pacific Pier dated April 04, 2025.
On or about November 3, 2025, the Company issued 100,000 shares of common stock to Mast Hill pursuant to its conversion of $190,790 in principal, interest and fees owed under the convertible promissory note issued to Mast Hill dated January 16, 2025.
On or about November 10, 2025, the Company issued 34,861 shares of common stock to Pacific Pier pursuant to its conversion of $43,715 in principal, interest and fees owed under the convertible promissory note issued to Pacific Pier dated April 4, 2025.
On or about November 21, 2025, the Company issued 152,000 shares of common stock to Mast Hill pursuant to its conversion of $150,951 in principal, interest and fees owed under the convertible promissory note issued to Mast Hill dated February 27, 2025.
On or about November 25, 2025, the Company issued 252,884 shares of common stock to Mast Hill pursuant to its conversion of $242,890.02 in principal, interest and fees owed under the convertible promissory note issued to Mast Hill dated February 27, 2025.
On or about November 25, 2025, the Company issued 75,132 shares of common stock to Mast Hill pursuant to its conversion of $72,164 in principal, interest and fees owed under the convertible promissory note issued to Mast Hill dated February 27, 2025.
On or about November 25, 2025, the Company issued 90,773 shares of common stock to Mast Hill pursuant to its conversion of $87,185.92 in principal, interest and fees owed under the convertible promissory note issued to Mast Hill dated February 27, 2025.
On or about November 26, 2025, the Company issued 1,264,420 shares of common stock to Mast Hill pursuant to its exercise of warrants issued to Mast Hill dated January 16, 2025.
On or about December 1, 2025, the Company issued 195,867 shares of common stock to Mast Hill pursuant to its exercise of warrants issued to Mast Hill dated January 16, 2025.
On or about December 1, 2025, the Company issued 141,009 shares of common stock to Mast Hill pursuant to its exercise of warrants issued to Mast Hill dated January 16, 2025.
On or about December 1, 2025, the Company issued 106,097 shares of common stock to Pacific Pier pursuant to its notice of conversion of $101,904 in principal, interest and fees owed under the convertible promissory note issued to Pacific Pier dated April 4, 2025.
On or about December 5, 2025, the Company issued 272,532 shares of common stock to Mast Hill pursuant to its notice of conversion of $261,762 in principal, interest and fees owed under the convertible promissory note issued to Mast Hill dated June 3, 2025.
On or about December 11, 2025, the Company issued 105,647 shares of common stock to Mast Hill pursuant to its notice of conversion of $93,751 in principal, interest and fees owed under the convertible promissory note issued to Mast Hill dated June 3, 2025.
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On or about December 19, 2025, the Company issued 11,665 shares of common stock to Lucas Ventures, LLC (“Lucas Ventures”) as required by a true-up provision with respect to commitment shares under the Company’s security purchase agreement with Lucas Ventures dated May 19, 2025.
On or about December 24, 2025, the Company issued 913,842 shares of Company common stock to an investor for a purchase price of $395,328.
On or about December 24, 2025, the Company issued 461,631 shares of Company common stock to an investor for a purchase price of $199,702.
On or about December 29, 2025, the Company issued 194,527 shares of Company common stock to an investor for a purchase price of $84,152.
As to the shares of common stock issued for (i) conversion of convertible promissory notes, or (ii) exercise of warrants described above, the share were issued pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) provided by Section 3(a)(9) of the Securities Act, as the shares of common stock were issued in exchange for and conversion of convertible promissory notes or warrants issued by the Company, there was no additional consideration for the exchanges, and there was no remuneration for the solicitation of the exchanges. As to the other issuances of common stock described above, such shares were issued pursuant to the exemption from the registration requirements of the Securities Act provided by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder, as the shareholders were accredited and/or financially sophisticated and had adequate access, through business or other relationships, to information about the Company, and the sales did not involve a public offering of securities or any general solicitation.
Item 6. Selected Financial Data.
Not Applicable.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read this section together with our consolidated financial statements and related notes thereto included elsewhere in this report.
Restatement of Previously Issued Financial Statements
The following discussion and analysis of our financial condition and results of operations reflects the restatement of our previously issued consolidated financial statements as of and for the year ended December 31, 2024. As described in Note 19 to the consolidated financial statements included in Item 8 of this Annual Report, and as previously disclosed in Amendment No. 3 to our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on June 4, 2026 (the “2024 Form 10-K/A”), we identified historical accounting errors during the preparation of our consolidated financial statements for the year ended December 31, 2025 relating primarily to the classification, valuation, and collectability of long-term financing receivables and contract assets; the timing of revenue recognition and recognition of related interest income; and the accounting for warrant transactions. The Company concluded, in accordance with Staff Accounting Bulletin No. 99 and No. 108, that the errors were material to its previously issued consolidated financial statements for the years ended December 31, 2024 and 2023, and accordingly restated those financial statements. All references in this Management’s Discussion and Analysis to financial information for the year ended December 31, 2024 are to the restated amounts. The Company also amended its Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2025, June 30, 2025, and September 30, 2025 to restate the financial statements included in those Quarterly Reports. This Item 7 should be read in conjunction with the restated consolidated financial statements and related notes included in Item 8, and with Note 19.
Forward-Looking Statements
This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, adopted pursuant to the Private Securities Litigation Reform Act of 1995. Statements that are not purely historical may be forward-looking. For example, statements in this Annual Report regarding our plans, strategy and focus areas are forward-looking statements. You can identify some forward-looking statements by the use of words such as “believe,” “anticipate,” “expect,” “intend,” “goal,” “plan,” and similar expressions. Forward-looking statements involve inherent risks and uncertainties regarding events, conditions and financial trends that may affect our future plans of operation, business strategy, results of operations and financial position.
A number of important factors could cause actual results to differ materially from those included within or contemplated by such forward-looking statements, including, but not limited to risks relating to pandemics, the ongoing war in Ukraine and the conflict in Israel and their impact on the global economy, trade tariffs and threats of trade tariffs and their impact on localized economies, our history of losses, our dependence on key members of our management and development team, and our ability to generate and/or obtain adequate capital to fund future operations.
For a discussion of these and other factors that could cause actual results to differ from those contemplated in the forward-looking statements, please see the discussion under “Risk Factors” in our other publicly available filings with the Securities and Exchange Commission. Forward-looking statements reflect our analysis only as of the date of this Annual Report on Form 10-K.
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Because actual events or results may differ materially from those discussed in or implied by forward-looking statements made by us or on our behalf, you should not place undue reliance on any forward-looking statement. We do not undertake responsibility to update or revise any of these factors or to announce publicly any revision to forward-looking statements, whether as a result of new information, future events or otherwise.
The following discussion and analysis should be read in conjunction with the consolidated financial statements and the notes thereto included in Item 8 of this Annual Report on Form 10-K.
Company Information
We were incorporated in California in July 1995 under the name Probe Manufacturing Industries, Inc. We redomiciled to Nevada in April 2005 under the name Probe Manufacturing, Inc. We manufactured electronics and provided services to original equipment manufacturers (OEMs) of industrial, automotive, semiconductor, medical, communication, military, and high technology products. On September 11, 2015 Clean Energy HRS, or “CE HRS”, our wholly owned subsidiary acquired the assets of Heat Recovery Solutions from General Electric International. In November 2015, we changed our name to Clean Energy Technologies, Inc.
Our principal executive offices are located at 1340 Reynolds Avenue Unit 120, Irvine, California 92614. Our common stock is listed on the NASDAQ Markets under the symbol “CETY.”
Our internet website address is www.cetyinc.com. The information contained on our websites is not incorporated by reference into this document, and you should not consider any information contained on, or that can be accessed through, our website as part of this document.
The Company has four reportable segments: Clean Energy HRS (HRS) and CETY Europe, CETY Renewables, CETY HK and CETY engineering solution services division. During the reporting period, the Company made the strategic decision to dispose of its Shuya interests in China. This decision reflects a broader effort to sharpen the Company’s focus on its core competencies and highest-value opportunities in waste-to-energy, heat recovery, and eco-friendly energy solutions.
We offer turnkey energy solutions leveraging our technologies and solutions to provide green energy solutions, clean energy fuels and alternative electricity. We provide engineering and manufacturing electronics services to original equipment manufacturers (OEMs) of clean energy, industrial, automotive, semiconductor, medical, communication, military, and high technology products.
With the vision to combat climate change and creating a better, cleaner and environmentally sustainable future, we formed Clean Energy HRS, LLC a wholly owned subsidiary of Clean Energy Technologies, Inc. and acquired the assets of Heat Recovery Solutions from General Electric International on September 11, 2015. In November 2015, we changed our name to Clean Energy Technologies, Inc. Our principal executive offices are located at 1340 Reynolds Avenue Unit 120, Irvine, CA 92614. We have 22 full-time employees. All employees and overhead are shared between Clean Energy Technologies, Inc, Clean Energy HRS, LLC, waste to energy business unit, engineering solutions, and our natural gas trading business.
Clean Energy Technologies, Inc. established a new company, CETY Europe, SRL (CETY Europe) as a wholly owned subsidiary. CETY Europe is a Sales and Service Center in Silea (Treviso), Italy established in 2017. The service center became operational in November 2018. Their offices are located at Alzaia Sul Sile, 26D, 31057 Silea (TV) and they have 1 full time employee.
Clean Energy Technologies, Inc. established a wholly owned subsidiary called CETY Capital, a financing arm of CETY to fund captive renewable energy projects producing low carbon energy. CETY Capital will add flexibility to the capacity CETY offers its customers and fund projects utilizing its products and clean energy solutions.
CETY Capital retains 49% ownership interest in Vermont Renewable Gas LLC, established to develop a biomass plant in Vermont utilizing CETY’s High Temperature Ablative Pyrolysis system.
Clean Energy Technologies (H.K.) Limited., a wholly owned subsidiary of Clean Energy Technologies Inc. acquired 100% ownership of Leading Wave Limited, a natural gas trading company in China.
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Business Overview
General
The Company’s business and operating results are directly affected by changes in overall customer demand, operational costs and performance and leverage of our fixed cost and selling, general and administrative (“SG&A”) infrastructure.
Product sales fluctuate in response to several factors including many that are beyond the Company’s control, such as general economic conditions, interest rates, government regulations, consumer spending, labor availability, and our customers’ production rates and inventory levels. Product sales consist of demand from customers in many different markets with different levels of cyclicality and seasonality.
Operating performance is dependent on the Company’s ability to manage changes in input costs for items such as raw materials, labor, and overhead operating costs. Performance is also affected by manufacturing efficiencies, including items such as on time delivery, quality, scrap, and productivity. Market factors of supply and demand can impact operating costs.
Who We Are
We provide turnkey energy solutions leveraging our technologies, including power generation, heat recovery, and waste to energy to deliver green energy solutions, clean energy fuels, and alternative electricity to small and midsize projects in North America, Europe, and ASEAN markets that make environmental and economic sense. Our mission is to be a segment leader in the Zero Emission Revolution by offering eco-friendly energy solutions for a sustainable future. We target sustainable energy solutions that are profitable for us, profitable for our customers and represent the future of global energy production.
Our principal businesses
Waste Heat Recovery Solutions – we recycle wasted heat produced in manufacturing, waste to energy and power generation facilities using our patented Clean CycleTM generator to create electricity which can be stored or sold to the grid.
Waste to Energy Solutions - we convert waste products created in manufacturing, agriculture, wastewater treatment plants and other industries to electricity, renewable natural gas (“RNG”), hydrogen and biochar which are sold or used by our customers.
Engineering, Consulting and Project Management Solutions – we bring a wealth of experience in developing clean energy projects for municipal and industrial customers and Engineering, Project Development companies so they can identify, design, and incorporate clean energy solutions in their projects.
CETY HK
Clean Energy Technologies (H.K.) Limited (“CETY HK”) consists of a ventures in mainland China: (i) our natural gas (“NG”) trading operations sourcing and suppling NG to industries and municipalities. The NG is principally used for heavy truck refueling stations and urban or industrial users. We purchase large quantities of NG from large wholesale NG depots at fixed prices which are prepaid for in advance at a discount to market. We sell the NG to our customers at prevailing daily spot prices for the duration of the contracts.
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Business and Segment Information
We design, produce and market clean energy products and integrated solutions focused on energy efficiency and renewable energy. Our aim is to become a leading provider of renewable and energy efficiency products and solutions by helping commercial companies and municipalities reduce energy waste and emissions, lower energy costs and generate incremental revenue by providing electricity, renewable natural gas, hydrogen and biochar to the grid.
Segment Information
Our four segments for accounting purposes are:
Clean Energy HRS & CETY Europe – Our Waste Heat Recovery Solutions, converting thermal energy to zero emission electricity.
CETY Renewables Waste to Energy Solutions – Providing Waste to Energy technologies and solutions.
Engineering and Manufacturing Business – Providing customers with comprehensive design, manufacturing, and project management solutions.
CETY HK – The parent company of our NG trading operations in China. Prior to the first quarter of 2022, the Company had three reportable segments but added the CETY HK segment to reflect its recent new businesses in China.
Summary of Operating Results for the year ended December 31, 2025, compared to the year ended December 31, 2024 (Restated)
Going Concern
The financial statements have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets and liquidation of liabilities in the normal course of business. The Company had a total stockholder’s equity of $6,246,597 and a working capital of $260,863 and an accumulated deficit of $35,299,999 as of December 31, 2025 and used $7,922,347 in net cash from operating activities for the year ended December 31, 2025. Management’s plans to alleviate the conditions raising substantial doubt about the Company’s ability to continue as a going concern include obtaining additional debt and equity financing, including efforts to restructure certain existing debt obligations through capital raising activities in the equity markets. The Company is also pursuing strategic partnerships, joint ventures, and other business opportunities, including collaborations with parties such as Exergy and Metis Power, to support project development, execution, and access to capital. In addition, management continues to pursue project-level financing for development projects, including the Vermont Renewable Gas project and other clean energy initiatives. The Company is also implementing cost-reduction initiatives within its Heat Recovery Solutions business, including utilizing Sagacity as a supply chain partner to improve operating efficiencies and reduce procurement and manufacturing costs. Management continues to focus on generating revenue and cash flow from existing operations, project development activities, and strategic growth opportunities while preserving liquidity and managing operating expenses. While management believes these plans are achievable, there can be no assurance that such plans will be successfully implemented or that the Company will attain profitable operations and positive cash flows.
The company reported a net loss of $6,808,895, for the year ended December 31, 2025, compared to a net loss of $4,550,296 for the same period in 2024 (Restated) before non-controlling interest and tax we achieved during the equivalent period in 2024 (Restated). The increase in net loss was primarily attributable to the write-off of the LWL-related asset in China, as well as substantial interest and financing expenses associated with convertible notes during the period.
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RELATED PARTY TRANSACTIONS
See note 12 to the notes to the financial statements for a discussion on related party transaction
Results for the year ended December 31, 2025, compared to the year ended December 31, 2024 (Restated).
Net Sales
For the year ending December 31, 2025, our total revenue was $2,161,626 compared to $2,424,659 for the same period in 2024. The Company has four reportable segments: CETY Renewables division, Clean Energy HRS (HRS), the engineering and integrated solutions division, and CETY HK.
Segment Breakdown
For the fiscal year ended December 31, 2025, the Company reported engineering services revenue of $0. During the year, the Company integrated its engineering services into its Heat Recovery Solutions (HRS) and Waste-to-Energy business segments, compared to 2024 when such services were reported separately as $9,341. Going forward, engineering services will be recognized within each respective operating segment and reported accordingly.
For the year ended December 31, 2025, our revenue from HRS was $503,878 compared to $158,141 for the same period in 2024. The increase in revenue for Heat Recovery Solutions (HRS) and ORC systems in 2025 compared to 2024 was primarily due to higher project activity, including the advancement and execution of customer projects, as well as improved timing of revenue recognition on engineering and system delivery milestones.
For the fiscal year ending December 31, 2025, our revenue from CETY Renewables, our newly launched waste-to-energy business, amounted to $484,955 compared to $1,064,757 for the same period in 2024. The decrease in revenue from CETY Renewables in 2025 compared to 2024 was primarily attributable to the timing of project execution and revenue recognition, including a longer-than-anticipated review process by the Public Utility Commission (PUC) for the VRG project, which delayed the advancement of certain project milestones. The Company continues to make progress on its development pipeline and expects activity to increase as projects move forward.
For the fiscal year ending December 31, 2025, our revenue from the NG business reached $1,172,793, compared to $1,192,420 in the corresponding period of 2024. The variance reflects relatively consistent performance year over year.
Gross Profit
For the year ending December 31, 2025, our gross profit increased to $595,568 compared to $846,555 for the same period in 2024. The increase was primarily driven by the sale of systems with higher margins, as well as improved cost efficiencies.
Segment Breakdown
For the year ended December 31, 2025, our gross profit from Engineering and Manufacturing amounted to $0, compared to $7,806 for the same period in 2024. This segment is a recent addition to CETY’s portfolio, currently serving as a support for our ongoing internal projects. Nevertheless, it is anticipated to expand notably as CETY shifts its focus towards providing comprehensive end-to-end power generation and integrated solutions.
For the year ended December 31, 2025, our gross profit from HRS was $386,069 compared to $15,160 for the same period in 2024; The increase was primarily driven by higher revenue volumes and improved margins on system sales, reflecting a more favorable project mix and execution during the year.
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For the year ended December 31, 2025, our gross profit from CETY Renewables decreased to $157,405, compared to $829,784 for the same period in 2024. Gross profit in both periods reflects work performed during the engineering and development phase of projects, which typically carries higher margins relative to later-stage execution activities.
For the year ended December 31, 2025, our gross profit from CETY HK improved to $52,094, compared to $(6,195) for the same period in 2024. The improvement was primarily attributable to more stable operations and improved margins within the natural gas trading business in China.
Selling, General and Administrative (SG&A) Expenses
For the year ending December 31, 2025, our Selling, General, and Administrative (SG&A) expenses decreased to $3,096,780, compared to $4,176,986 in 2024 (Restated). The decrease was primarily driven by reductions in salaries and general and administrative expenses.
General & Administrative expense
For the fiscal year ended December 31, 2025, our total General and administrative expense decreased to $553,522, compared to $1,015,102 in 2024 (Restated).
Salary Expense
For the fiscal year ended December 31, 2025, our total salaries decreased to $1,399,073, compared to $1,906,701 in 2024, primarily reflecting reductions in headcount and personnel-related costs.
Travel Expense
For the year ending December 31, 2025, our travel expenses totaled $198,122, compared to $185,876 for the same period in 2024. The increase was not significant and reflects normal variations in business activity.
Facility Lease Expense
For the fiscal year ending December 31, 2025, our Facility Lease expense amounted to $216,812 a decrease from $285,823 in 2024. This reduction reflects our ongoing efforts to lower lease costs through renegotiations and our focus on more efficient operations. We have continuously worked to optimize our space utilization and streamline processes, contributing to this modest reduction in lease expenses.
Consulting Expense
For the fiscal year ending December 31, 2025, our total expenses for Investor Relations (IR), marketing, and contractors related to the VRG project were $10,597, compared to $195,640 for the same period in 2024. The decrease was primarily due to reduced activity and spending associated with the VRG project during the period.
Depreciation and Amortization Expense
For the year ended December 31, 2025, our depreciation and amortization expense was $11,876 compared to $8,907 for the same period in 2024.
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Professional fees legal and accounting
For the fiscal year ending December 31, 2025, our Professional Fees expense amounted to $706,778, up from $578,937 in the same period of 2024. For the fiscal year ended December 31, 2025, The increase was primarily attributable to higher legal and advisory costs related to the Company’s S-3 registration and increased expenses associated with being a Nasdaq-listed company.
Net (Loss) from operations
For the fiscal year ending December 31, 2025, our net loss from operations totaled $2,501,212, a decrease compared to the net loss of $3,330,431 for the same period in 2024 (Restated). The decrease in net loss reflects improved operating performance during the period.
Other income/expense
For the year ended December 31, 2025, the Company recorded a loss of $179,983, compared to a gain of $12,583 for the same period in 2024. The decrease was primarily driven by the discount recognized on the modified Heze loan receivable and the recognition of a CECL allowance based on amortized cost.
Change in Derivative Liability
For the year ended December 31, 2025, the Company recorded a gain of $370,707 from changes in derivative liabilities, compared to no such gain or loss in 2024.
Change in FV of warrant liability
For the years ended December 31, 2025 and 2024 (Restated), we had $57,674 and $26,596 gain on warrant liability related to Equity Line of Credit Agreement entered December 5, 2024.
Investment from Shuya
For the year ended December 31, 2025, we recorded a gain of $318,426 from investment from Shuya compared to $125,148 in losses in year ended in December 31, 2024. This gain is because of the disposition of the Shuya assets.
Gain on debt settlement and write off
For the year ended December 31, 2025, we recorded a loss of 1,573,939 compared to a gain of $8,135 for the same period in 2024. The loss in 2025 was primarily attributable to the write-off related to the LWL investment in China.
Interest and Finance Fees
For the year ended December 31, 2025, interest and finance fees totaled $3,300,520, compared to $1,142,031 for the year ended December 31, 2024 (Restated), representing an increase of $2,158,489, or 189%.
The increase was primarily attributable to higher financing costs associated with the Company’s convertible notes and bridge financing activities, including increased interest expense, amortization of original issue discounts (“OID”), amortization of debt discounts associated with derivative liabilities, and other financing-related charges recognized during 2025. In addition, the Company incurred higher costs related to the issuance, modification, and settlement of financing instruments compared to the prior year.
Management believes the increase reflects the Company’s greater reliance on short-term and convertible financing arrangements to fund operations, project development activities, and working capital requirements during 2025.
Liquidity and Capital Resources
Cash Flow Summary
For the years ended December 31, 2025
| 2025 | 2024 | |||||||
| Net Cash used in operating activities | $ | (7,922,347 | ) | $ | (3,560,951 | ) | ||
| Cash flows used in investing activities | 245,748 | 161,240 | ||||||
| Cash flows provided by financing activities | 8,215,547 | 3,373,903 | ||||||
| Net decrease in cash and cash equivalents | $ | 540,360 | $ | (27,525 | ) | |||
Capital Requirements for long-term obligations
The following table presents the Company’s material contractual obligations as of December 31, 2025:
| Contractual Obligations | Total | Less than 1 year | 1–3 years | |||||||||
| Operating lease obligations | $ | 337,573 | $ | 154,805 | $ | 182,768 | ||||||
| $ | 337,573 | $ | 154,805 | $ | 182,768 | |||||||
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Critical Accounting Policies
Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.
Revenue Recognition
The Company recognizes revenue under ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” (“ASC 606”).
Performance Obligations Satisfied Over Time
FASB ASC 606-10-25-27 through 25-29, 25-36 through 25-37, 55-5 through 55-10
An entity transfers control of a good or service over time and satisfies a performance obligation and recognizes revenue over time if one of the following criteria is met:
a. The customer receives and consumes the benefits provided by the entity’s performance as the entity performs (as described in FASB ASC 606-10-55-5 through 55-6).
b. The entity’s performance creates or enhances an asset (for example, work in process) that the customer controls as the asset is created or enhanced (as described in FASB ASC 606-10-55-7).
c. The entity’s performance does not create an asset with an alternative use to the entity (see FASB ASC 606-10-25-28), and the entity has an enforceable right to payment for performance completed to date (as described in FASB ASC 606-10-25-29).
Performance Obligations Satisfied at a Point in Time
FASB ASC 606-10-25-30
If a performance obligation is not satisfied over time, the performance obligation is satisfied at a point in time. To determine the point in time at which a customer obtains control of a promised asset and the entity satisfies a performance obligation, the entity should consider the guidance on control in FASB ASC 606-10-25-23 through 25-26. In addition, it should consider indicators of the transfer of control, which include, but are not limited to, the following:
a. The entity has a present right to payment for the asset
b. The customer has legal title to the asset
c. The entity has transferred physical possession of the asset
d. The customer has the significant risks and rewards of ownership of the asset
e. The customer has accepted the asset
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The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods and services transferred to the customer. In addition a) the company also does not have an alternative use for the asset if the customer were to cancel the contract, and b) has a fully enforceable right to receive payment for work performed (i.e., customers are required to pay as various milestones and/or timeframes are met)
The following five steps are applied to achieve that core principle for our HRS and CETY Europe Divisions:
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Identify the contract with the customer |
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Identify the performance obligations in the contract |
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Determine the transaction price |
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Allocate the transaction price to the performance obligations in the contract |
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Recognize revenue when the company satisfies a performance obligation |
The following steps are applied to our legacy engineering and manufacturing division:
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We generate a quotation |
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We receive Purchase orders from our customers. |
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We build the product to their specification |
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We invoice at the time of shipment |
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The terms are typically Net 30 days |
The following step is applied to our CETY HK business unit:
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CETY HK is primarily responsible for fulfilling the contract / promise to provide the specified good or service. |
A principal obtains control over any one of the following (ASC 606-10-55-37A):
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a. |
A good or another asset from the other party which the entity then transfers to the customer. Note that momentary control before transfer to the customer may not qualify. |
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b. |
A right to a service to be performed by the other party, which gives the entity the ability to direct that party to provide the service to the customer on the entity’s behalf. |
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c. |
A good or service from the other party that it then combines with other goods or services in providing the specified good or service to the customer. |
If the entity obtains control over one of the above before the good or service is transferred to a customer, the entity could be considered a principal.
During the project development and engineering phase of our CETY Renewable projects such as VRG, we employ the input method of revenue recognition to estimate revenue based on projected costs. This approach involves forecasting future costs and revenues to determine the amount of revenue we recognize in the current period. It’s important to understand, however, that these recognized revenue figures are not final and are subject to adjustments. Changes may occur as we gain more clarity on actual costs compared to our initial projections, affecting the revenue recognized accordingly.
For the VRG project, management considered the contractual arrangements, commercial substance of the transaction, probability of collection, expected project financing sources, and anticipated economic benefits associated with the project when determining the appropriateness of revenue recognition under ASC 606. Although VRG is an equity-method investee of the Company and project financing has experienced delays, management concluded that the project remained commercially viable and that the applicable criteria for revenue recognition over time were satisfied. Management continues to evaluate these assumptions and will adjust its estimates as facts and circumstances evolve.
Management evaluated the criteria under ASC 606, including commercial substance and collectability, throughout the term of the EPC Agreement. Although VRG is a related-party entity in which the Company holds a 49% ownership interest, VRG is a separate legal entity with independent contractual obligations under the EPC Agreement. The contract was entered into for the development, design, permitting, construction, and delivery of the VRG-Lyndon facility and management concluded that the arrangement has commercial substance. Although VRG is a related-party customer, management evaluated the material terms of the EPC Agreement, including the scope of work, contract price, payment provisions, project deliverables, and enforceable rights and obligations. Based on this evaluation, management concluded that the agreement has commercial substance and was entered into for a substantive business purpose related to the development, design, permitting, construction, and delivery of the VRG-Lyndon facility. Revenue is recognized over time using a cost-to-cost input method based on costs incurred relative to total estimated project costs. As of December 31, 2025, the project continued to advance through the Vermont Section 248 permitting process and management continued to pursue multiple financing sources for the project. Although one potential financing source subsequently failed to fund as expected, management determined that the project was not dependent on a single financing source and concluded that collection of substantially all consideration under the contract remained probable. No amounts due under the EPC Agreement were considered past due as of December 31, 2025.
CETY Renewables currently has $2,431,485 of accounts receivable from Vermont Renewable Gas.
The projected costs of the VRG project are based on estimates and profitability will be impacted depending on actual costs. Using the input method for revenue recognition, the amount of recorded revenue is also affected depending on the estimated total costs. The purchase price allocation for Shuya was also based on estimates and comparable data selected by the Company. The inputs for the valuation of the Series E preferred shares were also based on estimates and comparable data selected by the Company.
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Additionally, the following five steps are applied to achieve the core principle for our CETY Renewables Division:
Because the CETY Renewables Division is presently engaged in the Engineering, Procurement, and Construction (EPC) of biomass power facilities, CETY Renewables has developed a process of executing EPC Agreements with customers for this work. In contracting these engagements, CETY Renewables recognizes revenue according to accounting standards in accordance with ASC 606.
In recognizing this revenue, CETY Renewables first identifies the relevant contract with its customer according to 606-10-25-1.
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● |
The entities, together known as the Parties, approved the contract in writing, through signatures and commitment to the performance of permitting, design, procurement, construction, and commissioning. |
|
● |
CETY’s work product includes permits, engineering designs, equipment, and full balance of plant specific to permitting, design, procurement, construction, and commissioning. |
|
● |
CETY and customer agree to a total EPC Contract price. |
|
● |
The EPC Agreement has commercial substance because it establishes enforceable rights and obligations between the parties for the permitting, design, procurement, construction, commissioning, and delivery of a biomass power generation facility. The agreement provides for a defined contract price, milestone-based billing provisions, and the transfer of goods and services that are expected to result in future economic benefits to the customer. |
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● |
In assessing collectability under ASC 606-10-25-1(e), management considers the customer’s ability and intent to satisfy its payment obligations. For the VRG EPC Agreement, management considered the continued advancement of the project through the Vermont Section 248 permitting process, the existence of a long-term power purchase framework, selection of the project for Quantified Ventures’ GGRF pipeline, ongoing discussions with multiple potential financing sources, including infrastructure and climate-focused investors, and the availability of grant funding opportunities, including investment tax credits, Wood Innovation Grant Award, and USDA grant agreement. Although one potential financing source subsequently failed to fund as expected, management determined that the project was not dependent upon a single financing source and concluded that collection of substantially all consideration under the contract remained probable as of the reporting date. |
Secondly, CETY identifies the performance obligations of the Parties in performance of the EPC Agreement in accordance with 606-10-25-14. At contract inception, CETY assesses the goods and services necessary to deliver the facility in accordance with the agreement with its clients. The agreement specifically laid out all deliverables necessary to achieve the permitting, design, procurement, construction, and commissioning.
CETY also looks at 606-10-25-14(A). A bundle of goods or services is also present, in that CETY is delivering all work products associated with permitting, design, procurement, construction and commissioning of a commercially operable biomass power plant. A biomass power plant is a distinct bundle of goods or services, so the individual goods or services on their own do not lend themselves to a fully integrated or functional system.
CETY in accordance with 606-10-32-1, reviews measurement of the performance obligations. There is no exclusion of any amount of the Contract Price due to constraints associated with 606-10-31-11 through 606-10-32-13.
In review of 606-10-32-2A, CETY did not exclude from the measurement of the transaction price any taxes assessed by a government authority as no such taxes will be due.
In reviewing 606-10-32-3, CETY evaluated the nature, timing, and amount of consideration promised, and whether it impacts the estimate of the transaction price.
Finally, in identifying a single method of measuring progress for each performance obligation satisfied over time, in accordance with 606-10-25-32, CETY applies the methodology of 606-10-25-36. CETY adopted and implemented the input method for revenue recognition in accordance with ASC 606-10-25-33. CETY recognizes revenue for performance obligations on the basis of the entity’s efforts or inputs to the satisfaction of a performance obligation per 606-10-55-20.
For CETY, the contracts with clients for the construction of biomass power plants are the basis for revenue recognition. In each separate EPC Agreement, the performance obligations include permitting, design, procurement, construction, and commissioning of the plant. All of these work products satisfy Section 606-10-25-27(b) as these work products create or enhance an asset under customer’s control. Upon delivery of the work product, the customer takes control of the work products and has full right and ability to direct the use of and obtain substantially all of the remaining benefits of the assets. We recognize revenue over time, using timeline and milestone methods to measure progress towards complete satisfaction of the performance obligation.
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During the complexity and duration of the biomass power plant construction projects, CETY will recognize revenue over time, consistent with the criteria for over-time recognition under ASC 606. This approach reflects the continuous transfer of documents, permits, and the equipment over to the customer, which is characteristic of long-term construction contracts.
We have a list of appropriate measures of progress: This is based on milestones achieved, among other measures.
Given the long-term nature of the projects, CETY regularly reviews and, if necessary, updates its estimates of progress towards completion, transaction price, and the allocation of the transaction price to performance obligations.
Also, from time-to-time, our contracts state that the customer is not obligated to pay a final payment until the units are commissioned, i.e. a final payment of 10%. As of December 31, 2025 and 2024 we had $33,000 and $33,000 of deferred revenue.
Also, from time-to-time, we require upfront deposits from our customers based on the contract. As of December 31, 2025 and 2024 (Restated), we had outstanding customer deposits of $759,611 and $172,061, respectively.
Change from fair value or equity method to consolidation
In July 2022, JHJ and other three shareholders agreed to form and make total capital contribution of RMB 20 million ($2.81 million) with latest contribution due date in February 2066 into Sichuan Hongzuo Shuya Energy Limited (“Shuya”), JHJ owns 20% of Shuya. In August 2022, JHJ purchased 100% ownership of Sichuan Shunengwei Energy Technology Limited (“SSET”) for $0, which owns 29% of Shuya; Shunengwei is a holding company and did not have any operations nor make any capital contribution into Shuya as of the ownership purchase date by JHJ; right after the ownership purchase of SSET by JHJ, JHJ ultimately owns 49% of Shuya.
Shuya was set up as the operating entity for pipeline natural gas (PNG) and compressed natural gas (CNG) trading business, while the other two shareholders of Shuya have large supply relationships.
For the year ended December 31, 2022, the Company has determined that Shuya was not a VIE and has evaluated its consolidation analysis under the voting interest model. Because the Company does not own greater than 50% of the outstanding voting shares, either directly or indirectly, it has accounted for its investment in Shuya under the equity method of accounting. Under this method, the investor (“JHJ”) recognizes its share of the profits and losses of the investee (“Shuya”) in the periods when these profits and losses are also reflected in the accounts of the investee. Any profit or loss recognized by the investing entity appears in its income statement. Also, any recognized profit increases the investment recorded by the investing entity, while a recognized loss decreases the investment.
JHJ made an investment of RMB 3.91 million ($0.55 million) into Shuya during the 12 months ended December 31, 2022, recorded in accordance with ASC 323. Shuya had a net loss of approximately $10,750 during the year ending December 31, 2022, of which approximately $5,000 was allocated to the Company, reducing the investment by that amount.
However, effective January 1, 2023, JHJ, SSET and Chengdu Xiangyueheng Enterprise Management Co., Ltd (“Xiangyueheng), who is the 10% shareholder of Shuya, entered a Three-Parties Consistent Action Agreement, wherein these three shareholders (or three parties) guaranteed that the voting rights will be expressed in the same way at the shareholders’ meeting of Shuya to consolidate the controlling position of the three parties in Shuya. The three parties agreed that within the validity period of this agreement, before the party intends to propose the motions to the shareholders or the board of directors on the major matters related to the voting rights of the shareholders or the board of directors, the three parties internally will discuss, negotiate and coordinate the motion topics for consistency; in the event of disagreement, the opinions of JHJ shall prevail.
As a result of Consistent Action Agreement, the Company re-analyzed and determined that Shuya is the variable interest entity (“VIE”) of JHJ because 1) the equity investors at risk, as a group, lack the characteristics of a controlling financial interest, and 2) Shuya is structured with disproportionate voting rights, and substantially all of the activities are conducted on behalf of an investor with disproportionately few voting rights. Under ASC 810, a reporting entity has a controlling financial interest in a VIE, and must consolidate that VIE, if the reporting entity has both of the following characteristics: (a) the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance; and (b) the obligation to absorb losses, or the right to receive benefits, that could potentially be significant to the VIE. The Company concluded JHJ is deemed the primary beneficiary of the VIE. Accordingly, the Company consolidates Shuya effective on January 1, 2023.
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The change of control interest was accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification, referred to as ASC, 805, Business Combinations. The management determined that the Company was the acquiror for financial accounting purposes. In identifying the Company as the accounting acquiror, the companies considered the structure of the transaction and other actions contemplated by the Three-Parties Consistent Action Agreement, relative outstanding share ownership and market values, the composition of the combined company’s board of directors, the relative size of Shuya, and the designation of certain senior management positions of the combined company.
In accordance with ASC 805, the Company recorded the acquisition based on the fair value of the consideration transferred and then allocated the purchase price to the identifiable assets acquired and liabilities assumed based on their respective fair values as of the Acquisition Date. The excess of the value of consideration transferred over the aggregate fair value of those net assets was recorded as goodwill. Any identified definite lived intangible assets will be amortized over their estimated useful lives and any identified intangible assets with indefinite useful lives and goodwill will not be amortized but will be tested for impairment at least annually. All intangible assets and goodwill will be tested for impairment when certain indicators are present. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenues and cash flows, discount rates, and selection of comparable companies. The valuation of purchase considerations was based on preliminary estimates that management believes are reasonable under the circumstances.
As the Consistent Action Agreement did not quantify any considerations to gain the control, the deemed consideration paid is the fair value of 51% non-controlling interest as of January 1, 2023. The following table summarizes the fair value of the consideration paid and the fair value of assets acquired, and liabilities assumed on January 1, 2023, the acquisition date.
| Fair value of non-controlling interests | $ | 650,951 | ||
| Fair value of previously held equity investment | 556,096 | |||
| Subtotal | $ | 1,207,047 | ||
| Recognized value of 100% of identifiable net assets | (1,207,047 | ) | ||
| Goodwill Recognized | $ | - | ||
| Recognized amounts of identifiable assets acquired and liabilities assumed (preliminary): | ||||
| Inventories | $ | 516,131 | ||
| Cash and cash equivalents | 50,346 | |||
| Trade and other receivables | 952,384 | |||
| Advanced deposit | 672,597 | |||
| Net fixed assets | 6,704 | |||
| Trade and other payables | (1,021,897 | ) | ||
| Advanced payments | (5,317 | ) | ||
| Salaries and wages payables | (4,692 | ) | ||
| Other receivable | 40,791 | |||
| Total identifiable net assets | $ | 1,207,047 |
Under ASC-805-10-50-2, initial consolidation of an investee previously reported using fair value or the equity method should be accounted for prospectively as of the date the entity obtained a controlling financial interest. Therefore, the Company should provide pro forma information as if the consolidation had occurred as of the beginning of each of the current and prior comparative reporting period.
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On January 1, 2024, and effective on the same date, JHJ, SSET and Xiangyueheng entered into the Agreement on the Termination of the Concerted Action Agreement (the “Termination Agreement”), pursuant to which the parties released each other from any and all obligations under the CAA. Due to the Termination Agreement, the Company now holds less than 50% of the voting rights in Shuya. The Company analyzed whether Shuya should be consolidated under ASC 810 and determined Shuya is no longer required to be consolidated on January 1, 2024 after the execution of the Termination Agreement. Accordingly, the Company will not consolidate Shuya into its consolidated financial statements on or after January 1, 2024.
During the year ended December 31, 2025, the Company completed the disposal of its investment in Shuya through a series of equity transfer transactions, as evidenced by executed equity transfer agreements and shareholder resolutions. Pursuant to these transactions, the Company transferred its ownership interest in Shuya and no longer retains any equity interest, control, or significant influence over the entity. Accordingly, the Company determined that Shuya no longer meets the criteria for recognition under the equity method or fair value method.
As a result, the Company derecognized its investment in Shuya and recognized the resulting gain or loss on disposal in the consolidated statements of operations in accordance with U.S. GAAP.
Series E Valuation
Additionally, the inputs for the valuation of the Series E preferred shares were also based on estimates and comparable data selected by the Company and fair value measurements, furthermore, the purchase price allocation was based on estimates of fair market values.
Future Financing
We will continue to rely on equity sales of our common shares to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund planned acquisitions and exploration activities.
Off-balance Sheet Arrangement
We have no significant 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 are material to stockholders.
Recently Issued Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by us as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our consolidated financial position or results of operations upon adoption.
During 2025, the Company entered into a consulting and business development arrangement with Linkage, pursuant to which approximately HKD 30 million (approximately US$3.2 million) was advanced under the agreement. Linkage also participated as an investor in the Company’s May 2025 private placement financing.
Management evaluated the substance of the arrangement and determined that the amounts advanced should be recorded as a refundable deposit and other receivable rather than as a current period expense, based on the contractual terms of the agreement and the Company’s expectation of recovery. Management periodically assesses the recoverability of the receivable by considering the financial condition of the counterparty, contractual rights, subsequent events, and other available evidence. Based on management’s evaluation as of December 31, 2025, the Company believes the recorded balance is recoverable.
Item 7A. 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.
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Item 8. Financial Statements and Supplemental Data.
CLEAN ENERGY TECHNOLOGIES, INC.
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025
FINANCIAL STATEMENT TABLE OF CONTENTS
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Report of independent registered public accounting firm (PCAOB ID NO. 0 |
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Consolidated Balance Sheets as of December 31, 2025 and 2024 (Restated) |
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54 |
Consolidated Statement of Operations and Other Comprehensive Income for the years ended December 31, 2025 and 2024 (Restated) |
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55 |
Consolidated Statements of Stockholders Equity for the years ended December 31, 2025 and 2024 (Restated) |
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56 |
Consolidated Statements of Cash flows for the years ended December 31, 2025 and 2024 (Restated) |
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57 |
Footnotes to the Consolidated Financial Statements |
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Clean Energy Technologies, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of Clean Energy Technologies, Inc. (the Company) as of December 31, 2025 and 2024, and the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2025, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and 2024 and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
As discussed in Note 1, Management’s plans to alleviate the conditions raising substantial doubt about the Company’s ability to continue as a going concern include obtaining additional debt and equity financing, securing project-level financing for its development projects, advancing the Vermont Renewable Gas project and other clean energy initiatives toward construction and commercialization, pursuing strategic business opportunities and partnerships, and continuing efforts to generate revenue from existing operations while managing operating costs. While management believes these plans are achievable, there can be no assurance that such plans will be successfully implemented or that the Company will attain profitable operations and positive cash flows.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
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Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Revenue Recognition for Performance Obligations Satisfied Over Time
Description of the Critical Audit Matter: As discussed in Note 2 to the consolidated financial statements, recognizing revenue from Engineering, Procurement, and Construction (EPC) agreement(s) is based on reasonable measures of progress toward complete satisfaction of the performance obligation.
How the Critical Audit Matter Was Addressed in the Audit: The related audit effort in evaluating management’s judgments in determining revenue recognition for these agreements was extensive and required a high degree of auditor judgment.
Our audit procedures related to evaluating the Company’s accounting for revenue recognized from these revenue agreements, among others:
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We reviewed the contract terms and evaluated that the agreement has commercial substance, given the related party nature of the transaction, and that all of the considerations have a reasonable probability to be substantially collected based on supporting evidence. |
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We reviewed and verified the performance obligation(s) in the contract to be a series of distinct goods and services that are substantially the same and have the same pattern of transfer to the customer. |
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We confirmed the transaction price with the related party and evaluated the reasonableness of the gross profit margin and budgeted costs allocated to the completion of the performance obligation. |
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We evaluated whether billing methods were aligned with the satisfaction of performance obligations guidance under revenue recognition accounting principles generally accepted in the United States. |
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We verified whether costs under the input method directly contributed to the completion of the performance obligation based on audit evidence. |
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We have obtained the evidence of founding program and other founding source to ensure the collectability of the project when it is commissioning. |
| ● | We have obtained the evidence that the project for physical construction will commence in the fourth quarter of 2026. |
Deconsolidation of Shuya and Change to Equity Method to Consolidation in 2024
Description of the Critical Audit Matter: As described in Note 15, effective January 1, 2024, the Company determined that Shuya is no longer a variable interest entity of JHJ as a result of the removal of Consistent Action Agreements so we begin to deconsolidate Shuya on January 1, 2024 and change from consolidation in 2023 to equity method in 2024.
How the Critical Audit Matter Was Addressed in the Audit: We identified the Company’s enterprise value and consideration paid as a critical audit matter because of the significant estimates and assumptions management used in the estimate of the acquisition date fair value, including forecasts of future revenues and expenses and the selection of the discount rates. Auditing management’s forecasts of future revenues and expenses as well as the selection of the discount rates involved a high degree of auditor judgment and increased audit effort, including the use of our valuation specialists, as changes in these assumptions could have a significant impact on the value of the purchase consideration.
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Our audit procedures consisted of the following, among others:
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We read the termination of the Consistent Action Agreements to understand and evaluate the terms of the transaction to determine that the Company no longer has control and change from consolidation in 2023 to equity method in 2024. |
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We obtained the Company’s third-party expert valuation report to gain an understanding of the processes and key assumptions for estimating the fair value of the equity investment based on the business enterprise value and fair value of non-controlling interest on January 1, 2024 to calculate the gain and loss from the deconsolidation. |
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We utilized our internal valuation specialists to evaluate the adequacy and appropriateness of the methodologies and assumptions, including the weighted-average cost of capital, the discount rate, the discounted cash flows method used by the Company’s third-party valuation expert in developing the estimated fair value of the equity investment as of January 1, 2024, fair value of con-controlling interest, and to calculate the gain and loss from the deconsolidation. |
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We assessed the reasonableness of management’s cash flow forecasts based on historical results, revenue growth assumptions and expected inflation. |
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We performed independent calculations to test the reasonableness and mathematical accuracy of the fair values concluded by the Company. |
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We evaluated the qualifications of the Company’s third-party valuation expert based on credentials, reputation and experience. |
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We assessed the appropriateness of the disclosures in the consolidated financial statements. |
Impairment of Goodwill and Indefinite-Lived Assets
Description of the Critical Audit Matter: As described in Note 2 and further in Note 6 to the consolidated financial statements, indefinite-lived assets are reviewed for impairment on an annual basis as of December 31, or more frequently if events or circumstances indicate that the asset may be impaired. For the Company’s intangible assets, the Company performed a quantitative assessment which involved determining the fair value of the asset and comparing that amount to the asset’s carrying value. At December 31, 2025, the total carrying value of the Company definite and indefinite-lived intangible asset was approximately $1.17 million.
How the Critical Audit Matter was Addressed in the Audit: We determined the assessment of the fair values of the Goodwill and LWL Intangibles as a critical audit matter due to complex and highly judgmental due to the significant estimation required in determining the fair value of the asset. The fair value estimate was sensitive to significant assumptions such as forecasted revenues, margin and an overall discount rate, each of which is affected by expectations about future market or economic conditions. As a result of the subjectivity of the assumptions, adverse changes to management’s estimates could reduce the underlying cash flows used to estimate fair value and trigger impairment charges.
Our audit procedures consisted of the following, among others:
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We specifically tested the estimated fair value of the Company’s China intangible asset (LWL Intangibles), we performed audit procedures that included, among others, assessing the fair value methodology used by management and evaluating the significant assumptions used in the valuation model including forecasted cash flow, profit and loss, growth rate, and margin. |
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We compared significant assumptions to current industry, market and economic trends, and to the Company’s historical results. |
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We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the China intangible asset that would result from changes in assumptions. |
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We also involved an internal valuation specialist to assist in our evaluation of the Company’s consultant report and legal due diligence report. |
/s/
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We have served as the Company’s auditor since 2023. | |
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June 04, 2026 |
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Clean Energy Technologies, Inc.
Consolidated Balance Sheets
| December 31, 2025 | December 31, 2024 (Restated) | |||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable - net | ||||||||
| Accounts receivable – related party | ||||||||
| Advance to Supplier | ||||||||
| Deferred Equity Issuance Cost | ||||||||
| Deferred Offering Cost | - | 127,494 | ||||||
| Due from related party | ||||||||
| Loan Receivables | ||||||||
| Inventory | ||||||||
| Total Current Assets | ||||||||
| Property and Equipment - Net | ||||||||
| Goodwill | ||||||||
| LWL Intangibles | ||||||||
| Investment Heze Hongyuan Natural Gas co. | ||||||||
| Long Term Investment - Shuya | ||||||||
| Investment to Guangyuan Shuxin New Energy Co. | ||||||||
| Long-term financing receivables - net | ||||||||
| Contract assets | ||||||||
| Advance to Supplier - Prepayment | ||||||||
| License | ||||||||
| Patents | ||||||||
| Right of use asset - long term | ||||||||
| Other Assets | ||||||||
| Total Non Current assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued Expenses | ||||||||
| Customer Deposits | ||||||||
| Warranty Liability | ||||||||
| Warrant Liability | ||||||||
| Deferred Revenue | ||||||||
| Derivative Liability | ||||||||
| Facility Lease Liability - current | ||||||||
| Line of Credit | ||||||||
| Advances paid off - Related Party | ||||||||
| Convertible Notes Payable | ||||||||
| Notes payables | ||||||||
| Related Party Notes Payable | ||||||||
| Total Current Liabilities | ||||||||
| Long-Term Debt: | ||||||||
| Facility Lease Liability - long term | ||||||||
| Accrued Dividend | ||||||||
| Total Long-Term Debt | ||||||||
| Total Liabilities | $ | $ | ||||||
| Stockholders’ Equity | ||||||||
| Common stock, $ par value; shares authorized; and shares issued and outstanding as of December 31, 2025 and 2024 respectively | ||||||||
| 15% Series E Convertible preferred stock, $ shares authorized; shares issued and outstanding as of December 31, 2025 and outstanding as of December 31, 2024 | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated Other Comprehensive Income | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity attributable to Clean Energy Technologies, Inc. | ||||||||
| Non-controlling interest | ||||||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
The accompanying footnotes are an integral part of these financial statements
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Clean Energy Technologies, Inc.
Consolidated Statements of Operations
for the years ended December 31,
| 2025 | 2024 (Restated) | |||||||
| Sales | $ | $ | ||||||
| Sales -related party | ||||||||
| Total revenue | ||||||||
| Cost of Goods Sold | ||||||||
| Gross Profit | ||||||||
| General and Administrative | ||||||||
| General and Administrative expense | ||||||||
| Salaries | ||||||||
| Travel | ||||||||
| Professional Fees | ||||||||
| Facility lease and Maintenance | ||||||||
| Consulting | ||||||||
| Depreciation and Amortization | ||||||||
| Total Expenses | ||||||||
| Net Loss from Operations | ( | ) | ( | ) | ||||
| Other Income | ( | ) | ||||||
| Change in derivative liability | ||||||||
| Change in FV of warrant liability | ||||||||
| Investment gain (loss) from Shuya | ( | ) | ||||||
| Gain/(Loss) on debt settlement and write down | ( | ) | ||||||
| Interest Income | ||||||||
| Interest and Financing fees | ( | ) | ( | ) | ||||
| Net Loss before income taxes | ( | ) | ( | ) | ||||
| Income Tax Expense | ||||||||
| Net loss before non-controlling interest from continuing operations 58, | ( | ) | ( | ) | ||||
| Net income before non-controlling interest from discontinued operation | ||||||||
| Net loss before non-controlling interest from continuing operations | ( | ) | ( | ) | ||||
| Income Tax Expense | ( | ) | ||||||
| Net Loss | ( | ) | ( | ) | ||||
| Net income attributable to non-controlling interest | ||||||||
| Net loss attributable to Clean Energy Technologies, Inc. | ( | ) | ( | ) | ||||
| Accumulative other comprehensive income | ||||||||
| Foreign Currency Translation Loss | ( | ) | ||||||
| Total Comprehensive Loss | $ | ( | ) | $ | ( | ) | ||
| Per Share Information: | ||||||||
| Basic and diluted weighted average number of common shares outstanding | ||||||||
| Net Loss per common share basic and diluted | ) | ) | ||||||
The accompanying footnotes are an integral part of these financial statements
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Clean Energy Technologies, Inc.
Consolidated Statements of Stockholders Equity
December 31, 2025 and 2024 (Restated)
| Common Stock .001 Par | Preferred Stock Shares | Additional Paid in | Accumulated Other Comprehensive | Accumulated | Non - Controlling | Stockholders’ Equity | ||||||||||||||||||||||||||||||
| Description | Shares | Amount | Shares | Amount | Capital | Loss | Deficit | Interest | Totals | |||||||||||||||||||||||||||
| December 31, 2023 (restated) | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | | ||||||||||||||||||||||||
| Shares issued for stock compensation | - | |||||||||||||||||||||||||||||||||||
| Shares issued for debt inducement | - | |||||||||||||||||||||||||||||||||||
| Shares issued for subscription | - | |||||||||||||||||||||||||||||||||||
| Shares issued for series E preferred conversion | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Value of the warrants issued for Mast Hill | - | - | ||||||||||||||||||||||||||||||||||
| Accumulated Comprehensive | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Deconsolidation of Shuya | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Accrued Series E preferred dividend | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| December 31, 2024 (restated) | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||||||||||
| Rounding due to share reverse split | - | |||||||||||||||||||||||||||||||||||
| Shares issued for stock compensation | - | |||||||||||||||||||||||||||||||||||
| Shares issued for debt conversion | - | |||||||||||||||||||||||||||||||||||
| Shares issued for debt inducement | - | |||||||||||||||||||||||||||||||||||
| Shares issued for subscription | - | |||||||||||||||||||||||||||||||||||
| Shares issued for series E preferred conversion | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Value of the warrants issued for Mast Hill | - | |||||||||||||||||||||||||||||||||||
| Accumulated Comprehensive | - | |||||||||||||||||||||||||||||||||||
| Accrued Series E preferred dividend | - | - | ( | ) | ||||||||||||||||||||||||||||||||
| Deferred offering cost | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| December 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||||||||||
The accompanying footnotes are an integral part of these financial statements
| 56 |
Clean Energy Technologies, Inc.
Consolidated Statements of Cash Flows
for the year ended December 31,
| 2025 | 2024 (Restated) | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss before discontinued operations | ( | ) | ( | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Stock compensation expense | ||||||||
| Investment Income | ( | ) | ||||||
| Loss on deconsolidation of Shuya | ||||||||
| Loss from investment of Leading Weave Ltd | ||||||||
| Bad debt expense | ||||||||
| Amortization of debt discount | ||||||||
| Deferred offering expense | ( | ) | ||||||
| Change in derivative liability | ( | ) | ||||||
Change in FV of warrant liability | ( | ) | ( | ) | ||||
| Reversal of inventory impairment reserve | ( | ) | ||||||
| Changes in assets and liabilities: | ||||||||
| (Increase) decrease in right of use asset | ( | ) | ||||||
| (Increase) decrease in lease liability | ( | ) | ||||||
| (Increase) decrease in accounts receivable | ||||||||
| (Increase) decrease in accounts receivable – related party | ( | ) | ( | ) | ||||
| (Increase) decrease in prepayments | ( | ) | ||||||
| (Increase) decrease in contract asset | ( | ) | ( | ) | ||||
| (Increase) decrease in other assets | ( | ) | ||||||
| (Increase) decrease in inventory | ||||||||
| (Decrease) increase in accounts payable | ||||||||
| (Decrease) increase in accrued interest | ||||||||
| Other (Decrease) increase in accrued expenses | ( | ) | ||||||
| Other (Decrease) increase in other payables - related party | ||||||||
| Other (Decrease) increase in customer deposits | ( | ) | ||||||
| Net Cash Used In Operating Activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities | ||||||||
| Investment to Guangyuan Shuxin New Energy Co. | ||||||||
| Proceed to Heze Hongyuan Natural Gas Co. | ||||||||
| Purchase of fixed assets | ( |
) | ||||||
| Loan receivables | ||||||||
| Cash Flows Provided By Investing Activities | ||||||||
| Cash Flows from Financing Activities | ||||||||
| Proceeds from notes payable and lines of credit | ||||||||
| Due from related party | ( | ) | ( | ) | ||||
| Payments on notes payable and line of credit | ( | ) | ( | ) | ||||
| Stock issued for cash | ||||||||
| Cash Flows Provided By Financing Activities | ||||||||
| Foreign Currency Transaction | ( | ) | ||||||
| Net (Decrease) Increase in Cash and Cash Equivalents | ( | ) | ||||||
| Cash and Cash Equivalents at Beginning of Period | ||||||||
| Cash and Cash Equivalents at End of Period | ||||||||
| Analysis of balances of cash and cash equivalents | ||||||||
| Cash and Cash equivalents | ||||||||
| Supplemental Cashflow Information: | ||||||||
| Interest Paid | $ | $ | ||||||
| Supplemental Non-Cash Disclosure | ||||||||
| Discount on new notes | $ | $ | ||||||
| Shares issued for note conversions | $ | $ | ||||||
| Dividend accrued | $ | $ | ||||||
The accompanying footnotes are an integral part of these financial statements
| 57 |
Clean Energy Technologies, Inc.
Notes to Consolidated Financial Statements
NOTE 1 –GENERAL
Corporate History
We were incorporated in California in July 1995 under the name Probe Manufacturing Industries, Inc. We redomiciled to Nevada in April 2005 under the name Probe Manufacturing, Inc. We manufactured electronics and provided services to original equipment manufacturers (OEMs) of industrial, automotive, semiconductor, medical, communication, military, and high technology products. On September 11, 2015, Clean Energy HRS, or “CE HRS”, our wholly owned subsidiary acquired the assets of Heat Recovery Solutions from General Electric International. In November 2015, we changed our name to Clean Energy Technologies, Inc. Our common stock is listed on the Nasdaq Markets under the symbol “CETY.”
Our internet website address is www.cetyinc.com. The information contained on our websites are not incorporated by reference into this document, and you should not consider any information contained on, or that can be accessed through, our website as part of this document.
The Company has four reportable segments: Clean Energy HRS (HRS) and CETY Europe, CETY Renewables waste to energy business unit, the Engineering and Manufacturing services division and CETY Hong Kong.
Going Concern
The
financial statements have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets
and liquidation of liabilities in the normal course of business. The Company had a total stockholder’s equity of $
Plan of Operation
Our mission is to be a leader in the zero-emission revolution by providing eco-friendly energy solutions, clean energy fuels, and alternative electric power for small to mid-sized projects across North America, Europe, and Asia. The company harnesses the power of heat and biomass to produce electricity with zero emissions and minimal cost. Additionally, the company offers Waste to Energy Solutions, converting waste materials from manufacturing, agriculture, and wastewater treatment plants into electricity and biochar. Clean Energy Technologies also provides engineering, consulting, and project management solutions, leveraging its expertise to develop clean energy projects for both municipal and industrial customers, as well as Engineering, Procurement, and Construction (EPC) companies.
Our principal businesses
Heat Recovery Solutions – Clean Energy Technologies patented frictionless, lubricant and maintenance free magnetic bearing turbine Clean Cycle Generator (CCG) is a heat recovery system that captures waste heat from various sources and converts it into electricity. This system can be integrated into various industrial processes, helping to reduce energy costs and carbon emissions.
Waste to Energy Solutions – Clean Energy Technologies’ waste to energy solutions involve decomposing organic waste materials, such as agricultural waste and food waste at high temperatures into clean energy through its proprietary gasification technology that produce a range of products, including electricity, heat, and biochar.
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Engineering, Consulting and Project Management Solutions – Clean Energy Technologies offers engineering and manufacturing services to help clients bring their sustainable energy products to market. This includes design, prototyping, testing, and production services. Clean Energy Technologies’ expertise in engineering and manufacturing enables it to provide customized solutions to meet clients’ specific needs.
CETY HK
Clean Energy Technologies (H.K.) Limited (“CETY HK”) consists of two business ventures in mainland China:(i) our natural gas (“NG”) trading operations sourcing and suppling NG to industries and municipalities. NG is principally used for heavy truck refueling stations and urban or industrial users. We purchase large quantities of NG from large wholesale NG depots at fixed prices which are prepaid for in advance at a discount to market. We sell the NG to our customers at prevailing daily spot prices for the duration of the contracts; and (ii) our planned joint venture with a large state-owned gas enterprise in China called Shenzhen Gas (Hong Kong) International Co. Ltd. (“Shenzhen Gas”),, acquiring natural gas pipeline operator facilities, primarily located in the southwestern part of Sichuan Province and portions of Yunnan Province. Our planned joint venture with Shenzhen Gas plans to acquire, with financing from Shenzhen Gas, natural gas pipeline operator facilities with the goal of aggregating and selling the facilities to Shenzhen Gas in the future. The terms of the joint venture are subject to the execution of definitive agreements.
NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
A summary of significant accounting policies of Clean Energy Technologies, Inc. (formerly Probe Manufacturing, Inc.) is presented to assist in the understanding of the Company’s financial statements. The financial statements and notes are representations of the Company’s management, who is responsible for their integrity and objectivity.
The consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Such estimates may be materially different from actual financial results. Significant estimates include the recoverability of long-lived assets, the collection of accounts receivable and valuation of inventory and reserves.
Cash and Cash Equivalents
We
maintain most of our cash accounts at a commercial bank. The total cash balance is insured by the Federal Deposit Insurance Corporation
(“FDIC”) up to $
Credit losses
On January 1, 2023, the Company adopted Accounting Standards Update 2016-13 “Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments,” which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. The adoption of the credit loss accounting standard has no material impact on the Company’s consolidated financial statements as of January 1, 2023.
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The Company’s account receivables, prepayments, other receivables and other current assets in the balance sheet are within the scope of ASC Topic 326. As the Company has limited customers and debtors, the Company uses the loss-rate method to evaluates the expected credit losses on an individual basis. When establishing the loss rate, the Company makes the assessment on various factors, including historical experience, creditworthiness of customers and debtors, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from the customers and debtors. The Company also provides specific provisions for allowance when facts and circumstances indicate that the receivable is unlikely to be collected.
Expected credit losses are recorded as allowance for credit losses on the consolidated statements of operations. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. In the event the Company recovers amount that is previously reserved for, the Company will reduce the specific allowance for credit losses.
Accounts Receivable
Our
ability to collect receivables is affected by economic fluctuations in the geographic areas and industries served by us. Reserves
for uncollectable amounts are provided, based on past experience and a specific analysis of the accounts. Although we expect to
collect amounts due, actual collections may differ from the estimated amounts. As of December 31, 2025, and December 31, 2024
(Restated), we had a reserve for potentially un-collectable accounts receivable of $
and $.
Our policy for reserves for our long-term financing receivables is determined on a contract-by-contract basis and considers the
length of the financing arrangement. As of December 31, 2025, and December 31, 2024 (Restated), we had a reserve for potentially
un-collectable long-term financing receivables of $
Six
(6) customers accounted for approximately
Inventory
Inventories
are valued at the lower of weighted average cost or market value. Our industry experiences changes in technology, changes in market value
and availability of raw materials, as well as changing customer demand. We make provisions for estimated excess and obsolete inventories
based on regular audits and cycle counts of our on-hand inventory levels and forecasted customer demands and at times additional provisions
are made. Any inventory write offs are charged to the reserve account. As of December 31, 2025 we had a reserve of $
Property and Equipment
Property and equipment are recorded at cost. Assets held under capital leases are recorded at lease inception at the lower of the present value of the minimum lease payments or the fair market value of the related assets. The cost of ordinary maintenance and repairs is charged to operations. Depreciation and amortization are computed on the straight-line method over the following estimated useful lives of the related assets:
Furniture
and fixtures
Equipment
Long – Lived Assets
Long-lived assets, which include property, plant and equipment and intangible assets with finite lives, and operating lease right-of-use assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.
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Recoverability of long-lived assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.
The
Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the asset’s carrying
amount may not be recoverable. The Company conducts its long-lived asset impairment analyses in accordance with ASC 360-10-15, “Impairment
or Disposal of Long-Lived Assets.” ASC 360-10-15 requires the Company to group assets and liabilities at the lowest level for which
identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against
the sum of the undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset is recoverable,
an impairment charge is measured as the amount by which the carrying amount of the asset group asset group exceeds its fair value based
on discounted cash flow analysis or appraisals. There is
Revenue Recognition
The Company recognizes revenue under ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” (“ASC 606”).
Performance Obligations Satisfied Over Time
FASB ASC 606-10-25-27 through 25-29, 25-36 through 25-37, 55-5 through 55-10
An entity transfers control of a good or service over time and satisfies a performance obligation and recognizes revenue over time if one of the following criteria is met:
a. The customer receives and consumes the benefits provided by the entity’s performance as the entity performs (as described in FASB ASC 606-10-55-5 through 55-6).
b. The entity’s performance creates or enhances an asset (for example, work in process) that the customer controls as the asset is created or enhanced (as described in FASB ASC 606-10-55-7).
c. The entity’s performance does not create an asset with an alternative use to the entity (see FASB ASC 606-10-25-28), and the entity has an enforceable right to payment for performance completed to date (as described in FASB ASC 606-10-25-29).
Performance Obligations Satisfied at a Point in Time
FASB ASC 606-10-25-30
If a performance obligation is not satisfied over time, the performance obligation is satisfied at a point in time. To determine the point in time at which a customer obtains control of a promised asset and the entity satisfies a performance obligation, the entity should consider the guidance on control in FASB ASC 606-10-25-23 through 25-26. In addition, it should consider indicators of the transfer of control, which include, but are not limited to, the following:
a. The entity has a present right to payment for the asset
b. The customer has legal title to the asset
c. The entity has transferred physical possession of the asset
d. The customer has the significant risks and rewards of ownership of the asset
e. The customer has accepted the asset
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The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods and services transferred to the customer. In addition, a) the company also does not have an alternative use for the asset if the customer were to cancel the contract, and b) has a fully enforceable right to receive payment for work performed (i.e., customers are required to pay as various milestones and/or timeframes are met)
The following five steps are applied to achieve that core principle for our HRS and CETY Europe Divisions:
| ● | Identify the contract with the customer | |
| ● | Identify the performance obligations in the contract | |
| ● | Determine the transaction price | |
| ● | Allocate the transaction price to the performance obligations in the contract | |
| ● | Recognize revenue when the company satisfies a performance obligation |
The following steps are applied to our legacy engineering and manufacturing division:
| ● | We generate a quotation | |
| ● | We receive Purchase orders from our customers. | |
| ● | We build the product to their specification | |
| ● | We invoice at the time of shipment | |
| ● | The terms are typically Net 30 days |
The following step is applied to our CETY HK business unit:
| ● | CETY HK is primarily responsible for fulfilling the contract / promise to provide the specified good or service. |
A principal obtains control over any one of the following (ASC 606-10-55-37A):
| a. | A good or another asset from the other party which the entity then transfers to the customer. Note that momentary control before transfer to the customer may not qualify. | |
| b. | A right to a service to be performed by the other party, which gives the entity the ability to direct that party to provide the service to the customer on the entity’s behalf. | |
| c. | A good or service from the other party that it then combines with other goods or services in providing the specified good or service to the customer. |
If the entity obtains control over one of the above before the good or service is transferred to a customer, the entity could be considered a principal.
Additionally, the above five steps are applied to achieve core principle for our CETY Renewables Division:
Because the CETY Renewables division is presently engaged in the Engineering, Procurement, and Construction (EPC) of biomass power facilities, CETY Renewables has developed a process of executing EPC Agreements with customers for this work. In contracting these engagements, CETY Renewables recognizes revenue according to accounting standards in accordance with ASC 606.
In recognizing this revenue, CETY Renewables first identifies the relevant contract with its customer according to 606-10-25-1.
| ● | The entities, together known as the Parties, approved the contract in writing, through signatures and commitment to the performance of permitting, design, procurement, construction, and commissioning. |
| ● | CETY’s work product includes permits, engineering designs, equipment, and full balance of plant specific to permitting, design, procurement, construction, and commissioning. |
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| ● | CETY and customer agree to a total EPC Contract price. |
| ● | The contract has commercial substance. The risk associated with this EPC Agreement is that payment of the EPC contract price. |
| ● | Per the EPC Agreement, CETY expects to collect substantially all of the consideration for its goods and services. |
Secondly, CETY identifies the performance obligations of the Parties in performance of the EPC Agreement in accordance with 606-10-25-14. At contract inception, CETY assesses the goods and services necessary to deliver the facility in accordance with its agreement with clients. The agreement specifically laid out all deliverables necessary to achieve the permitting, design, procurement, construction, and commissioning.
CETY also looks at 606-10-25-14(A). A bundle of goods or services is also present, in that CETY is delivering all work products associated with permitting, design, procurement, construction and commissioning of a commercially operable biomass power plant. A biomass power plant is a distinct bundle of goods or services, so the individual goods or services on their own do not lend themselves to a fully integrated or functional system.
CETY in accordance with 606-10-32-1, CETY reviews measurement of the performance obligations. There is no exclusion of any amount of the Contract Price due to constraints associated with 606-10-31-11 through 606-10-32-13.
In review of 606-10-32-2A, CETY did not exclude measurement from the measurement of the transaction price any taxes assessed by a government authority as no such taxes will be due.
In reviewing 606-10-32-3, CETY evaluated the nature, timing, and amount of consideration promised, and whether it impacts the estimate of the transaction price.
Finally, in identifying a single method of measuring progress for each performance obligation satisfied over time, in accordance with 606-10-25-32, CETY applies the methodology of 606-10-25-36. CETY adopted and implemented the input method for revenue recognition in accordance with ASC 606-10-25-33. The company adopts the input method for implementation. CETY recognizes revenue for performance obligations on the basis of the entity’s efforts or inputs to the satisfaction of a performance obligation per 606-10-55-20.
For CETY, the contracts with clients for the construction of biomass power plants are the basis for revenue recognition. In each separate EPC Agreement, the performance obligations include permitting, design, procurement, construction, and commissioning of the plant. All of these work products satisfy Section 606-10-25-27(b) as these work products create or enhance an asset under customer’s control. Upon delivery of the work product, the customer takes control of the work products and has full right and ability to direct the use of and obtain substantially all of the remaining benefits of the assets. We recognize revenue over time, using timeline and milestone methods to measure progress towards complete satisfaction of the performance obligation.
During the complexity and duration of the biomass power plant construction projects, CETY will recognize revenue over time, consistent with the criteria for over-time recognition under ASC 606. This approach reflects the continuous transfer of documents, permits, and the equipment over to the customer, which is characteristic of long-term construction contracts.
We have a list of appropriate measures of progress: This is based on milestones achieved, among other measures.
Given the long-term nature of the projects, CETY regularly reviews and, if necessary, updates its estimates of progress towards completion, transaction price, and the allocation of the transaction price to performance obligations.
Also,
from time to time our contracts state that the customer is not obligated to pay a final payment until the units are commissioned, i.e.
a final payment of
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Also
from time to time we require upfront deposits from our customers based on the contract. As of December 31, 2025 and 2024 (Restated), we had
outstanding customer deposits of $
Fair Value of Financial instruments
The Financial Accounting Standards Board issued ASC (Accounting Standards Codification) 820-10 (SFAS No. 157), “Fair Value Measurements and Disclosures” for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. FASB ASC 820-10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:
| ● | Level 1: Quoted prices in active markets for identical assets or liabilities. | |
| ● | Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. | |
| ● | Level 3: Unobservable inputs
that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company’s
derivative liabilities have been valued as Level 3 instruments. We value the derivative liability using a lattice model, with a volatility
of |
The Company’s financial instruments consist of cash, prepaid expenses, inventory, accounts payable, accrued expenses, and convertible notes payable. The estimated fair value of cash, prepaid expenses, investments, accounts payable, accrued expenses and convertible notes payable approximate their carrying amounts due to the short-term nature of these instruments.
Foreign Currency Translation and Comprehensive Income (Loss)
We have no material components of other comprehensive income (loss) and accordingly, net loss is equal to comprehensive loss in all periods. The accounts of the Company’s Chinese entities are maintained in RMB. The accounts of the Chinese entities were translated into USD in accordance with FASB ASC Topic 830 “Foreign Currency Matters.” All assets and liabilities were translated at the exchange rate on the balance sheet date; stockholders’ equity is translated at historical rates and the statements of operations and cash flows are translated at the weighted average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income (loss) in accordance with FASB ASC Topic 220, “Comprehensive Income.” Gains and losses resulting from foreign currency transactions are reflected in the statements of operations.
The Company follows FASB ASC Topic 220-10, “Comprehensive Income (loss).” Comprehensive income (loss) comprises net income (loss) and all changes to the statements of changes in stockholders’ equity, except those due to investments by stockholders, changes in additional paid-in capital and distributions to stockholders.
Change from fair value or equity method to consolidation.
In
July 2022, JHJ, a wholly owned subsidiary of CETY HK and other three shareholders agreed to form and make total capital contribution
of RMB million ($ million) with latest contribution due date in February 2066 into Sichuan Hongzuo Shuya Energy Limited (“Shuya”),
JHK owns
Shuya was set up as the operating entity for pipeline natural gas (PNG) and compressed natural gas (CNG) trading business, while the other two shareholders of Shuya have large supply relationships.
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For the year ended December 31, 2022, the Company has determined that Shuya is not a VIE and has evaluated its consolidation analysis under the voting interest model. Because the Company does not own greater than 50% of the outstanding voting shares, either directly or indirectly, it has accounted for its investment in Shuya under the equity method of accounting. Under this method, the investor (“JHJ”) recognizes its share of the profits and losses of the investee (“Shuya”) in the periods when these profits and losses are also reflected in the accounts of the investee. Any profit or loss recognized by the investing entity appears in its income statement. Also, any recognized profit increases the investment recorded by the investing entity, while a recognized loss decreases the investment.
JHJ
made an investment of RMB
However,
effective January 1, 2023, JHJ, SSET and Chengdu Xiangyueheng Enterprise Management Co., Ltd (“Xiangyueheng), who is the
As a result of Consistent Action Agreement, the Company re-analyzed and determined that Shuya is the variable interest entity (“VIE”) of JHJ because 1) the equity investors at risk, as a group, lack the characteristics of a controlling financial interest, and 2) Shuya is structured with disproportionate voting rights, and substantially all of the activities are conducted on behalf of an investor with disproportionately few voting rights. Under ASC 810, a reporting entity has a controlling financial interest in a VIE, and must consolidate that VIE, if the reporting entity has both of the following characteristics: (a) the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance; and (b) the obligation to absorb losses, or the right to receive benefits, that could potentially be significant to the VIE. The Company concluded JHJ is deemed the primary beneficiary of the VIE. Accordingly, the Company consolidates Shuya effective on January 1, 2023.
The change of control interest was accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification, referred to as ASC, 805, Business Combinations. The management determined that the Company was the acquiror for financial accounting purposes. In identifying the Company as the accounting acquiror, the companies considered the structure of the transaction and other actions contemplated by the Three-Parties Consistent Action Agreement, relative outstanding share ownership and market values, the composition of the combined company’s board of directors, the relative size of Shuya, and the designation of certain senior management positions of the combined company.
In accordance with ASC 805, the Company recorded the acquisition based on the fair value of the consideration transferred and then allocated the purchase price to the identifiable assets acquired and liabilities assumed based on their respective fair values as of the Acquisition Date. The excess of the value of consideration transferred over the aggregate fair value of those net assets was recorded as goodwill. Any identified definite lived intangible assets will be amortized over their estimated useful lives and any identified intangible assets with indefinite useful lives and goodwill will not be amortized but will be tested for impairment at least annually. All intangible assets and goodwill will be tested for impairment when certain indicators are present. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenues and cash flows, discount rates, and selection of comparable companies. The valuation of purchase considerations was based on preliminary estimates that management believes are reasonable under the circumstances.
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As
the Consistent Action Agreement did not quantify any considerations to gain the control, the deemed consideration paid is the fair value
of
| Fair value of non-controlling interests | $ | |||
| Fair value of previously held equity investment | ||||
| Subtotal | $ | |||
| Recognized value of 100% of identifiable net assets | ( | ) | ||
| Goodwill Recognized | $ | |||
| Recognized amounts of identifiable assets acquired and liabilities assumed (preliminary): | ||||
| Inventories | $ | |||
| Cash and cash equivalents | ||||
| Trade and other receivables | ||||
| Advanced deposit | ||||
| Net fixed assets | ||||
| Trade and other payables | ( | ) | ||
| Advanced payments | ( | ) | ||
| Salaries and wages payables | ( | ) | ||
| Other receivable | ||||
| Total identifiable net assets | $ |
Under ASC-805-10-50-2, initial consolidation of an investee previously reported using fair value or the equity method should be accounted for prospectively as of the date the entity obtained a controlling financial interest. Therefore, the Company should provide pro forma information as if the consolidation had occurred as of the beginning of each of the current and prior comparative reporting period per
On
January 1, 2024, and effective on the same date, JHJ, SSET and Xiangyueheng entered into the Agreement on the Termination of the Concerted
Action Agreement (the “Termination Agreement”), pursuant to which the parties released each other from any and all obligations
under the CAA. Due to the Termination Agreement, the Company now holds less than
Basic
profit / (loss) per share is computed based on the weighted average number of common shares outstanding. At December 31, 2025, we
had outstanding common shares of
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Research and Development
We
had
Segment Disclosure
FASB
Codification Topic 280, Segment Reporting, establishes standards for reporting financial and descriptive information about an
enterprise’s reportable segments. The Company has
An operating segment’s performance is evaluated based on its pre-tax operating contribution, or segment income. Segment income is defined as net sales less cost of sales, and segment selling, general and administrative expenses, and does not include amortization of intangibles, stock-based compensation, other charges (income), net and interest and other, net.
| For the years ended December 31, | ||||||||
| 2025 | 2024 (Restated) | |||||||
| Net Sales | ||||||||
| Manufacturing and Engineering | $ | $ | ||||||
| Heat Recovery Solutions | ||||||||
| NG Trading | ||||||||
| Waste to Energy | ||||||||
| Total Sales | $ | $ | ||||||
| Segment income and reconciliation before tax | ||||||||
| Manufacturing and Engineering | ||||||||
| Heat Recovery Solutions | ||||||||
| LNG Trading | ( | ) | ||||||
| Waste to Energy | ||||||||
| Total Segment income | ||||||||
| Less: operating expense | ( | ) | ( | ) | ||||
| Less: other income and expenses | ( | ) | ( | ) | ||||
| Net (loss) before income tax | $ | ( | ) | $ | ( | ) | ||
| December 31, 2025 | December 31, 2024 (Restated) | |||||||
| Total Assets | ||||||||
| Manufacturing and Engineering | $ | $ | ||||||
| Heat Recovery Solutions | ||||||||
| Waste to Energy | ||||||||
| LNG Trading | ||||||||
| Total Assets | $ | $ | ||||||
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The following table represents revenue by geographic area based on the sales location of our products and solutions:
| For the years ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| United States | ||||||||
| China include discontinued operation: | ||||||||
| Other international | ||||||||
| Total Sales | ||||||||
Share-Based Compensation
The Company has adopted the use of Statement of Financial Accounting Standards No. 123R, “Share-Based Payment” (SFAS No. 123R) (now contained in FASB Codification Topic 718, Compensation-Stock Compensation), which supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and its related implementation guidance and eliminates the alternative to use Opinion 25’s intrinsic value method of accounting that was provided in Statement 123 as originally issued. This Statement requires an entity to measure the cost of employee services received in exchange for an award of an equity instruments, which includes grants of stock options and stock warrants, based on the fair value of the award, measured at the grant date (with limited exceptions). Under this standard, the fair value of each award is estimated on the grant date, using an option-pricing model that meets certain requirements. We use the Black-Scholes option-pricing model to estimate the fair value of our equity awards, including stock options and warrants. The Black-Scholes model meets the requirements of SFAS No. 123R; however, the fair values generated may not reflect their actual fair values, as it does not consider certain factors, such as vesting requirements, employee attrition and transferability limitations. The Black-Scholes model valuation is affected by our stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. We estimate the expected volatility and estimated life of our stock options at grant date based on historical volatility. For the “risk-free interest rate,” we use the Constant Maturity Treasury rate on 90-day government securities. The term is equal to the time until the option expires. The dividend yield is not applicable, as the Company has not paid any dividends, nor do we anticipate paying them in the foreseeable future. The fair value of our restricted stock is based on the market value of our free trading common stock, on the grant date calculated using a 20-trading-day average. At the time of grant, the share-based compensation expense is recognized in our financial statements based on awards that are ultimately expected to vest using historical employee attrition rates and the expense is reduced accordingly. It is also adjusted to account for the restricted and thinly traded nature of the shares. The expense is reviewed and adjusted in subsequent periods if actual attrition differs from those estimates.
We re-evaluate the assumptions used to value our share-based awards on a quarterly basis and, if changes warrant different assumptions, the share-based compensation expense could vary significantly from the amount expensed in the past. We may be required to adjust any remaining share-based compensation expense, based on any additions, cancellations or adjustments to the share-based awards. The expense is recognized over the period during which an employee is required to provide service in exchange for the award—the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service. As of December 31, 2025, we had no further non-vested expense to be recognized.
Leases
The Company adopted ASC Topic 842, Leases, or ASC 842, using the modified retrospective transition method with a cumulative effect adjustment to be accumulated deficit as of January 1, 2019, and accordingly, modified its policy on accounting for leases as stated below. As described under “Recently Adopted Accounting Pronouncements,” below, the primary impact of adopting ASC 842 for the Company was the recognition in the consolidated balance sheet of certain lease-related assets and liabilities for operating leases with terms longer than 12 months.
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The Company’s leases primarily consist of facility leases which are classified as operating leases. The Company assesses whether an arrangement contains a lease at inception. The Company recognizes a lease liability to make contractual payments under all leases with terms greater than twelve months and a corresponding right-of-use asset, representing its right to use the underlying asset for the lease term. The lease liability is initially measured at the present value of the lease payments over the lease term using the collateralized incremental borrowing rate since the implicit rate is unknown. Options to extend or terminate a lease are included in the lease term when it is reasonably certain that the Company will exercise such an option. The right-of-use asset is initially measured as the contractual lease liability plus any initial direct costs and prepaid lease payments made, less any lease incentives. Lease expense is recognized on a straight-line basis over the lease term.
Leased right-of-use assets are subject to impairment testing as a long-lived asset at the asset-group level. The Company monitors its long-lived assets for indicators of impairment. As the Company’s leased right-of-use assets primarily relate to facility leases, early abandonment of all or part of facility as part of a restructuring plan is typically an indicator of impairment. If impairment indicators are present, the Company tests whether the carrying amount of the leased right-of-use asset is recoverable including consideration of sublease income, and if not recoverable, measures impairment loss for the right-of-use asset or asset group.
Income Taxes
Federal Income taxes are not currently due since we have had losses since inception of Clean Energy Technologies.
Income taxes are provided based upon the liability method of accounting pursuant to ASC 740-10-25 Income Taxes – Recognition. Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the “more likely than not” standard required by ASC 740-10-25-5.
Deferred income tax amounts reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes.
As
of December 31, 2025, we had a net operating loss carry-forward of approximately $
On
February 13, 2018, Clean Energy Technologies, Inc., a Nevada corporation (the “Registrant” or “Corporation”)
entered into a Common Stock Purchase Agreement (“Stock Purchase Agreement”) by and between MGW Investment I Limited (“MGWI”)
and the Corporation. The Corporation received $
On
February 13, 2018 the Corporation and Confections Ventures Limited. (“CVL”) entered into a Convertible Note Purchase
Agreement (the “Convertible Note Purchase Agreement,” together with the Stock Purchase Agreement and the transactions
contemplated thereunder, the “Financing”) pursuant to which the Corporation issued to CVL a convertible promissory Note
(the “CVL Note”) in the principal amount of $
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This resulted in a change in control, which limited the net operating to that date forward. We are subject to taxation in the U.S. and the states of California. Further, the Company currently has no open tax years’ subject to audit prior to December 31, 2018. The Company is current on its federal and state tax returns.
Recently Issued Accounting Standards
The Company’s management reviewed all recently issued ASU’s not yet adopted by the Company and does not believe the future adoptions of any such ASU’s may be expected to cause a material impact on the Company’s consolidated financial condition or the results of its operations.
Deferred Stock Issuance Costs
Deferred
stock issuance costs represent amounts paid for legal, consulting, and other offering expenses in conjunction with the future
raising of additional capital to be performed within one year. These costs are netted against additional paid-in capital as a cost
of the stock issuance upon closing of the respective stock placement. During the year ended December 31, 2025, $
NOTE 3 – ACCOUNTS AND NOTES RECEIVABLE
| December 31, 2025 | December 31, 2024 (Restated) | |||||||
| Accounts Receivable | $ | $ | ||||||
| Accounts Receivable - RP | ||||||||
| Less reserve for uncollectable accounts | ||||||||
| Total | $ | $ | ||||||
Our Accounts Receivable is pledged to Nations Interbanc, our line of credit.
Management considered the requirements of ASC 326 and evaluated the collectability of the related-party receivable as of December 31, 2025. While a significant portion of the receivable balance relates to VRG and other related-party amounts, management concluded that an allowance was not required based on the specific facts and circumstances existing at year-end.
The receivable primarily relates to project development activities associated with the VRG project. Management’s assessment considered the underlying economics of the project, contractual rights, expected sources of capital, project-level financing alternatives, potential strategic investors, anticipated future funding arrangements, and the overall recoverability of the amounts advanced. Based on these factors, management believes the receivable is recoverable and that an allowance for expected credit losses was not warranted as of December 31, 2025.
| December 31, 2025 | December 31, 2024 (Restated) | |||||||
| Long-term receivables | $ | $ | ||||||
| Less reserve for uncollectable accounts | ( | ) | ( | ) | ||||
| Net Long-term receivables | ||||||||
The Company is currently modifying the assets subject to lease to meet the provisions of the agreement, and as of December 31, 2025 any collection on the lease payments was not yet considered probable, resulting in no derecognition of the underlying asset and no net lease investments recognized on the sales-type lease pursuant to ASC 842-30-25-3.
On a contract-by-contract basis or in response to certain situations or installation difficulties, the Company may elect to allow non-interest bearing repayments in excess of 1 year.
Our long - term financing Receivable are pledged to Nations Interbanc, our line of credit.
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NOTE 4 – INVENTORY
Inventories by major classification were comprised of the following at:
| December 31, 2025 | December 31, 2024 | |||||||
| Inventory | $ | $ | ||||||
| Less reserve for obsolescence parts | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
Our Inventory is pledged to Nations Interbanc, our line of credit.
NOTE 5 – PROPERTY AND EQUIPMENT
Property and equipment were comprised of the following at:
| December 31, 2025 | December 31, 2024 | |||||||
| Property and Equipment | $ | $ | ||||||
| Accumulated Depreciation | ( | ) | ( | ) | ||||
| Net Fixed Assets | $ | $ | ||||||
Our
Depreciation Expense for the years ended December 31, 2025 and 2024 was $
Our Property Plant and Equipment is pledged to Nations Interbanc, our line of credit.
NOTE 6 – INTANGIBLE ASSETS
Intangible assets were comprised of the following at:
| December 31, 2025 | December 31, 2024 | |||||||
| Goodwill | $ | $ | ||||||
| LWL Intangibles | ||||||||
| License | ||||||||
| Patents | ||||||||
| Accumulated Amortization-Patents | ( | ) | ( | ) | ||||
| Net Intangible Assets | $ | $ | ||||||
As
of December 31, 2025, the Company reports intangible assets totaling $
As
of both December 31, 2025, and December 31, 2024, goodwill amounted to $
The
LWL Investment, previously classified as an indefinite-lived asset, had a carrying value of $
As a result of this impairment, no value is reflected on the Company’s balance sheet as of December 31, 2025.
The
License balance remained unchanged at $
| 71 |
The
Patents balance, after amortization, was $
Our
Amortization Expense for the years ended December 31, 2025 and 2024 was $
Based on the foregoing analysis of the facts surrounding the Company’s acquisition of LWL, it is the Company’s position that the Company is the acquirer of LWL, under the acquisition method of accounting.
As such, as of November 8, 2021 (the acquisition date), the Company recognized, separately from goodwill, the identifiable assets acquired and the liabilities assumed in the Business combination.
The following table presents the purchase price allocation:
| Consideration: | ||||
| Cash and cash equivalents | $ | |||
| Total purchaser consideration – cash paid | $ | |||
| Assets acquired: | ||||
| Cash and cash equivalents | $ | |||
| Prepayment | ||||
| Other receivable | ||||
| Trading Contracts | ||||
| Shenzhen Gas Relationship | ||||
| Total assets acquired | ||||
| Liabilities assumed: | ||||
| Advance Receipts | ( | ) | ||
| Taxes Payable | ||||
| Net Assets Acquired: | $ | |||
NOTE 7 – CONVERTIBLE NOTE RECEIVABLE
Effective
January 10, 2022, JHJ (the “Note Holder”) entered into a convertible loan agreement with Chengdu Rongjun Enterprise Consulting
Co., Ltd. (“Rongjun” or the “Borrower”), pursuant to which JHJ advanced RMB
In
October 2022, the Company amended the terms of the loan by reducing the stated interest rate from
Following the modification, the loan is accounted for at amortized cost using the effective interest method. Although the modified loan bears no stated interest, interest income is recognized through the accretion of the initial discount, representing the difference between the fair value at recognition and the contractual principal amount, over the remaining term of the loan. As a result, the carrying value of the loan increases over time and is expected to accrete to its contractual principal amount at maturity.
The following table presents the accretion of the loan receivable:
Loan Receivable Accretion Schedule
| Description | PV (at Modification) | 12/31/2022 | 12/31/2023 | 12/31/2024 | 12/31/2025 | |||||||||||||||
| Interest Income (Accretion) | ||||||||||||||||||||
| Ending Balance | 3,071,974 | 3,163,881 | 3,543,547 | 3,968,773 | 4,445,025 | |||||||||||||||
The Company evaluated the collectability of the loan receivable in accordance with ASC 326, Financial Instruments – Credit Losses (CECL). Based on the Borrower’s financial condition, the underlying project economics, and forward-looking information, The Company evaluated the collectability of the loan receivable in accordance with ASC 326, Financial Instruments—Credit Losses (CECL). In estimating expected credit losses, management considered the borrower’s financial condition, the related-party nature of the investment, the status and expected economics of the underlying pipeline project, the remaining contractual term through January 2027, and other forward-looking information available as of December 31, 2025. Based on this assessment, the Company recorded an allowance for expected credit losses equal to approximately 20% of the amortized cost basis of the loan receivable.
The Company also evaluated the embedded conversion feature under ASC 815, Derivatives and Hedging, and concluded that bifurcation as a derivative is not required, as the underlying equity interests are not readily convertible to cash and the feature does not meet the criteria for derivative accounting.
| 72 |
NOTE 8 – ACCRUED EXPENSES
| December 31, 2025 | December 31, 2024 (Restated) | |||||||
| Accrued Wages | $ | $ | ||||||
| Sales tax payable | ||||||||
| Accrued Taxes and other | ||||||||
| Total Accrued Expenses | $ | $ | ||||||
NOTE 9 – WARRANT LIABILITY
On December 5, 2024, the Company entered into an Equity
Line of Credit Agreement with Mast Hill Fund, L.P. (the “Investor”), pursuant to which the Investor committed to provide up
to $
In connection with the agreement, the Company issued
a purchase warrant to the Investor to purchase up to 33,333 shares of common stock at an initial exercise price of $
The warrant contains a down-round provision whereby the exercise price will be reduced if the Company issues common stock, options, or convertible securities at a price below the then-current exercise price of the warrant.
The warrant was classified as a liability and initially
recorded at fair value of $
The following table presents a reconciliation of the credit line warrant liability measured and recorded at fair value on a recurring basis:
| Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Fair value-beginning of period | $ | $ | ||||||
| Change in fair value | ( | ) | ( | ) | ||||
| Fair value-end of period | $ | 20,474 | $ | 78,148 | ||||
NOTE 10 – NOTES PAYABLE
On
November 11, 2013, we entered into an accounts receivable financing agreement with American Interbanc (now Nations Interbanc). Amounts
outstanding under the agreement bear interest at the rate of
On
April 1, 2021, we entered into an amendment to the purchase order financing agreement with DHN Capital, LLC dba Nations Interbanc. Nations
Interbanc has lowered the accrued fees balance by $
During the year, the Company entered into several “sale of future receipts” / merchant cash-advance arrangements with Reliance Financial FL LLC, as well as a subordinated business loan with Agile Lending, LLC and a purchase order financing facility with Nations Interbanc. Although certain Reliance contracts are legally structured as non-recourse “sales” of future business receipts, management concluded that these arrangements do not involve the transfer of discrete existing financial assets that would qualify for derecognition under ASC 860. Instead, the Company continues to generate and collect its operating cash receipts and remits amounts to the lenders until the contractual repayment amounts have been satisfied.
Accordingly, the Reliance, Agile and Nations Interbanc arrangements are accounted for as interest-bearing financing liabilities within the scope of ASC 470 and ASC 835. The Company records the net proceeds received as short-term debt and recognizes the excess of the total contractual repayment amounts (including any origination fees, daily fees and make-whole or prepayment charges) over the net proceeds as debt discounts or financing costs, which are amortized to interest expense using the simple interest method over the expected repayment periods. Legal and other third-party costs that are directly attributable to obtaining these financings are capitalized as debt issuance costs and presented as a direct deduction from the related liabilities.
On
or about October 31, 2024, and December 24, 2024, the Company borrowed approximately $
On
or about July 15, 2024, August 6, 2024, and October 10, 2024, the Company borrowed approximately $
On
or about November 6, 2025, and December 31, 2025, the Company borrowed approximately $
On
January 10, 2025, and May 22, 2025 the Company borrowed approximately $
On
June 30, 2025, the Company borrowed approximately $
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Convertible Notes Payable, Net
On
January 3, 2024, the Company entered into a securities purchase agreement with FirstFire, pursuant to which the Company agreed to issue
and sell to FirstFire the promissory note of the Company in the principal amount of $
On
February 2, 2024, the Company entered into a securities purchase agreement with Coventry Enterprises LLC, a Delaware limited liability
company Coventry pursuant to which the Company agreed to issue and sell to the Buyer the promissory note of the Company in the principal
amount of $
On
March 4, 2024, the Company entered into a securities purchase agreement with FirstFire, pursuant to which the Company agreed to issue
and sell to the FirstFire the promissory note of the Company in the principal amount of $
On
June 21, 2024, Vermont Renewable Gas LLC (“VRG”), a Vermont limited liability company in which the Company retains
On
August 22, 2024, the Company entered into a securities purchase agreement with 1800 Diagonal Lending LLC, a Virginia limited liability
company (“Diagonal”), pursuant to which the Company agreed to issue and sell to Diagonal a convertible promissory note of
the Company in the principal amount of $
On
September 2, 2024, the Company entered into a securities purchase agreement with Coventry pursuant to which the Company agreed to issue
and sell to Coventry a convertible promissory note of the Company in the principal amount of $
On
September 10, 2024, the Company, and Mast Hill Fund, L.P., a Delaware limited partnership (“Mast”), entered into (i) an amendment
to the promissory note that was issued by the Company to Mast on May 6, 2022, in the original principal amount of $
| 74 |
On
September 10, 2024, the Company entered into a securities purchase agreement with Mast pursuant to which the Company agreed to issue
and sell to Mast a convertible promissory note of the Company in the principal amount of $
On
September 30, 2024, the Company entered into a securities purchase agreement with Diagonal, pursuant to which the Company agreed to issue
and sell to Diagonal a convertible promissory note of the Company in the principal amount of $
On
October 15, 2024, the Company entered into a securities purchase agreement with Diagonal, pursuant to which the Company agreed to issue
and sell to Diagonal a convertible promissory note of the Company in the principal amount of $
On
November 8, 2024, the Company entered into a securities purchase agreement with Coventry, pursuant to which the Company agreed to issue
and sell to Coventry a convertible promissory note of the Company in the principal amount of $
| 75 |
On
November 18, 2024, as stated in the 3rd quarter of 2024 10Q filed on November 19, 2024, the Company and Mast, entered into
an amendment to that certain promissory note originally issued by the Company to Mast on September 9, 2024, in the original principal
amount of $
On
November 29, 2024, the Company entered into a securities purchase agreement with Lucas Ventures, LLC, a Arizona limited liability company,
pursuant to which the Company agreed to issue and sell to Lender (i) a convertible promissory note of the Company in the principal amount
of $
On
December 5, 2024, the Company, entered into an equity purchase agreement (the “Equity Line of Credit Agreement”) with Mast,
pursuant to which the Investor agreed to provide an equity line of up to Five Million Dollars ($
On
December 11, 2024, the Company and Mast Hill entered into an amendment to that certain promissory note originally issued by the Company
to Mast on September 10, 2024, in the original principal amount of $
| 76 |
On
December 12, 2024, the Company entered into a securities purchase agreement with Diagonal, pursuant to which the Company agreed to issue
and sell to Diagonal a convertible promissory note of the Company in the principal amount of $
Effective
January 16, 2025, the Company, entered into a securities purchase agreement with Mast Hill, pursuant to which the Company sold, and
Mast Hill purchased, (i) a junior secured convertible promissory note in the principal amount of $
The
convertible promissory note is convertible into a variable number of shares of common stock. Based on the requirements of ASC 815 Derivatives
and Hedging, the conversion feature represented an embedded derivative that is required to be bifurcated and accounted for as a separate
derivative liability. The derivative liability is originally recorded at its estimated fair value and is required to be revalued at each
conversion event and reporting period. Changes in the derivative liability fair value are reported in operating results for each reporting
period. The Company valued the conversion feature of the convertible note on the date of issuance resulting in an initial liability of
$
During the twelve months ended December 31, 2025, this note was fully converted
for the convertible note with principal and accrued interest. On December 31, 2025, the derivative liabilities on the outstanding convertible
note were revalued at $
| 77 |
Effective February 28, 2025, the Company, entered into a securities purchase
agreement with Mast Hill, pursuant to which the Company sold, and Mast Hill purchased, (i) a junior secured convertible promissory note
in the principal amount of $
The
convertible promissory note is convertible into a variable number of shares of common stock. Based on the requirements of ASC 815 Derivatives
and Hedging, the conversion feature represented an embedded derivative that is required to be bifurcated and accounted for as a separate
derivative liability. The derivative liability is originally recorded at its estimated fair value and is required to be revalued at each
conversion event and reporting period. Changes in the derivative liability fair value are reported in operating results for each reporting
period. The Company valued the conversion feature of the convertible note on the date of issuance resulting in an initial liability of
$
During the twelve months ended December 31, 2025, this note was fully converted for the convertible note with principal and accrued interest. On December 31, 2025, the derivative liabilities on the outstanding
convertible note were revalued at $
On April 4, 2025, the Company entered into a securities purchase agreement
with Pacific Pier Capital II, LLC, a Delaware limited liability company (“Pacific Pier”), pursuant to which the Company sold,
and Pacific Pier purchased, (i) a convertible promissory note in the principal amount of $
| 78 |
The
convertible promissory note is convertible into a variable number of shares of common stock. Based on the requirements of ASC 815 Derivatives
and Hedging, the conversion feature represented an embedded derivative that is required to be bifurcated and accounted for as a separate
derivative liability. The derivative liability is originally recorded at its estimated fair value and is required to be revalued at each
conversion event and reporting period. Changes in the derivative liability fair value are reported in operating results for each reporting
period. The Company valued the conversion feature of the convertible note on the date of issuance resulting in an initial liability of
$
During the twelve months ended December 31, 2025, there was $
Effective April 23, 2025, the Company entered into a securities purchase
agreement with Pacific Pier, pursuant to which the Company sold, and Pacific Pier purchased, (i) a convertible promissory note in the
principal amount of $
During the twelve months ended December 31, 2025, there was no conversion
for the convertible note with principal and accrued interest. On December 31, 2025, the derivative liabilities on the outstanding convertible
note were revalued at $
| 79 |
On
May 8, 2025, the Company entered into a securities purchase agreement with 1800 Diagonal Lending LLC, a Virginia limited liability company
(“1800 Diagonal”), pursuant to which the Company sold, and 1800 Diagonal purchased, a convertible promissory note in the
principal amount of $
On
May 19, 2025, the Company entered into a securities purchase agreement with Lucas Ventures, LLC, an Arizona limited liability company
(“Lucas Ventures”), pursuant to which the Company sold, and Lucas Ventures purchased, (i) a convertible promissory note in
the original principal amount of $
Effective
June 4, 2025, the Company entered into a securities purchase agreement with Mast Hill, pursuant to which the Company sold, and Mast Hill
purchased, (i) a junior secured convertible promissory note in the principal amount of $
| 80 |
During the year ended December 31, 2025, there was no conversion
for the convertible note with principal and accrued interest. On December 31, 2025, the derivative liabilities on the outstanding convertible
note were revalued at $
Effective July 18, 2025, the Company entered into a securities purchase
agreement with Firstfire Global Opportunities Fund LLC (“Firstfire”), pursuant to which the Company sold, and Firstfire purchased,
(i) a junior secured convertible promissory note in the principal amount of $
During
the year ended December 31, 2025, there was no conversion for the convertible note with principal and accrued interest. On
December 31, 2025, the derivative liabilities on the outstanding convertible note were revalued at $
On
July 30, 2025, the Company entered into a securities purchase agreement with 1800 Diagonal Lending LLC, a Virginia limited liability
company (“1800 Diagonal”), pursuant to which the Company sold, and 1800 Diagonal purchased, a convertible promissory note
in the principal amount of $
| 81 |
Effective August 15, 2025, the Company entered into a securities purchase
agreement with Mast Hill, pursuant to which the Company sold, and Mast Hill purchased, (i) a junior secured convertible promissory note
in the principal amount of $
During the twelve months ended December 31, 2025, there was no conversion
for the convertible note with principal and accrued interest. On December 30, 2025, the derivative liabilities on the outstanding convertible
note were revalued at $
The following is the change in derivative liability for the twelve Months ended December 31, 2025:
| Balance, January 1, 2025 | $ | |||
| Issuance of new derivative liability | ||||
| Conversions | ( | ) | ||
| Change in fair market value of derivative liability | ( | ) | ||
| Balance, December 31, 2025 | $ | |||
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Total due to Convertible Notes
| December 31, 2025 | December 31, 2024 | |||||||
| Total convertible notes | $ | $ | ||||||
| Accrued Interest | ||||||||
| Debt Discount | ( | ) | ( | ) | ||||
| Amortization of debt discount | ||||||||
| Total | $ | $ | ||||||
NOTE 11 – COMMITMENTS AND CONTINGENCIES
Operating Rental Leases
ASB ASU 2016-02 “Leases (Topic 842)” – In February 2016, the FASB issued ASU 2016-02, which requires lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. Lessor accounting is similar to the current model but has been updated to align with certain changes to the lessee model and the new revenue recognition standard. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We have adopted the above ASU as of January 1, 2019. The right of use asset and lease liability have been recorded at the present value of the future minimum lease payments, utilizing an average borrowing rate and the company is utilizing the transition relief and “running off” on current leases.
As
of May 1, 2017, our corporate headquarters were located at 2990 Redhill Unit A, Costa Mesa, CA. On March 10, 2017, the Company signed
a lease agreement for an
We
have relocated our corporate office to 1340 Reynolds Avenue Unit 120, Irvine, CA 92614. On December 1, 2023, the Company signed a lease
agreement for a
The components of lease costs, lease term and discount rate with respect of these two leases with an initial term of more than 12 months are as the following:
Balance sheet information related to the Company’s operating leases:
As of December 31, 2025 | As of December 31, 2024 | |||||||
| Right-of-used assets | $ | |||||||
| Lease liabilities – current | $ | |||||||
| Lease liabilities – non-current | ||||||||
| Total lease liabilities | $ | |||||||
| 83 |
The weighted-average remaining lease term and the weighted-average discount rate of the above two leases are as follows:
| Year Ended December 31, 2025 | ||||
| Weighted average remaining lease term (years) | ||||
| Weighted average discount rate | % |
The following is a schedule, by year of lease payment for above two leases as of December 31, 2025:
| For the 12 months ending | Lease Payment | |||
| December 31, 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| Total undiscounted cash flows | ||||
| Imputed Interest | ||||
| Present value of lease liabilities | $ |
Our
lease expense ASC 842 lease for the year ended December 31, 2025 and 2024 was $
Severance Benefits
Mr. Mahdi will receive a severance benefit consisting of a single lump sum cash payment equal the salary that Mr. Mahdi would have been entitled to receive through the remainder or the Employment Period or One (1) year, whichever is greater.
NOTE 12 – CAPITAL STOCK TRANSACTIONS
On January 6, 2023, our board of directors and majority shareholders approved a reverse stock split. Effective upon the filing of our Certificate of Amendment of Articles of Incorporation with the Secretary of State of the State of Nevada, the shares of the Corporation’s Common Stock issued and outstanding immediately prior to the Effective Time of January 6, 2023, will be automatically reclassified as and combined into shares of Common Stock such that each (40) shares of Old Common Stock shall be reclassified as and combined into one (1) share of New Common Stock. All per share references to common stock have been retroactively represented throughout the financials.
On September 26, 2025, the Company filed a Certificate of Change Pursuant
to Nevada Revised Statutes Section 78.209 with the Secretary of State of the State of Nevada effecting a
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Common Stock Transactions
On January 3, 2024, the Company entered into a securities purchase agreement with FirstFire, As a condition to the sale of the Note, the Company issued to the Buyer shares of Common Stock.
On February 2, 2024, the Company entered into a securities purchase agreement (the “Agreement”) with Coventry Enterprises LLC, a Delaware limited liability company (the “Buyer”). As a condition to the sale of the Note, the Company issued to the Buyer shares of Common Stock.
On February 24, 2024, the Company entered into a consulting agreement with Hudson Global Ventures, LLC. As a condition to the agreement, the Company issued shares of Common Stock to the consultant.
On March 4, 2024, the Company entered into a securities purchase agreement with FirstFire. As a condition to the sale of the Note, the Company issued to the Buyer shares of Common Stock.
On
March 15, 2024, the Company and certain Subscribers entered into a subscription agreement pursuant to which the Company agreed to sell
up to units to the Subscribers for an aggregate purchase price of $
On
June 18, 2024, the Company and certain Subscribers entered into a subscription agreement pursuant to which the Company agreed to sell
approximately units to the Subscribers for an aggregate purchase price of $
During
the year ended December 31, 2024, the Company issued shares of common stock for conversion of Series E Preferred share
and
On September 2, 2024, Clean Energy Technologies, Inc. (the “Company”) entered into a securities purchase agreement (the “Agreement”) with Coventry Enterprises LLC, a Delaware limited liability company (the “Buyer”). As a condition to the sale of the Note, the Company issued to the Buyer shares (the “Commitment Shares”) of Common Stock.
On
October 20, 2024, Clean Energy Technologies, Inc., a Nevada corporation, (the “Company”) and certain individual investors
(“Subscribers”) entered into a subscription agreement pursuant to which the Company agreed to sell approximately units
(each a “Unit” and together the “Units”) to the Subscribers for an aggregate purchase price of $
On November 8, 2024, Clean Energy Technologies, Inc. (the “Company”) entered into a securities purchase agreement with Coventry Enterprises LLC, a Delaware limited liability company (the “Buyer”). As a condition to the sale of the Note, the Company issued to the Buyer shares (the “Commitment Shares”) of Common Stock.
On November 18, 2024, Clean Energy Technologies, Inc. (the “Company”) entered into a securities purchase agreement (the “Agreement”) with Mast Hill Fund LP, a Delaware limited liability company (the “Buyer”). As a condition to the sale of the Note, the Company issued to the Buyer shares (the “Commitment Shares”) of Common Stock.
On November 29, 2024, Clean Energy Technologies, Inc. (the “Company”) entered into a securities purchase agreement (the “Agreement”) with Lucas Ventures, LLC, a Delaware limited liability company (the “Buyer”). As a condition to the sale of the Note, the Company issued to the Buyer shares (the “Commitment Shares”) of Common Stock.
| 85 |
On December 23, 2024, Clean Energy Technologies, Inc. (the “Company”) entered into a securities purchase agreement (the “Agreement”) with Coventry Enterprises LLC, a Delaware limited liability company (the “Buyer”). As a condition to the sale of the Note, the Company issued to the Buyer shares (the “Commitment Shares”) of Common Stock.
On January 20, 2025, the Company entered into a consulting agreement with Hudson Global Ventures, LLC. As a condition to the agreement, the Company issued shares of Common Stock to the consultant.
On
March 4, 2025, the Company entered into a securities purchase agreement with FirstFire. Pursuant to the agreement, FirstFire accepted
shares of the Company’s common stock as final payment on the loan. As of December 30, 2025, the outstanding balance of the
loan was $
As of December 31, 2025, the Company has issued shares for the conversion of Series E Preferred shares, with a total value of $ year-to-date.
On or about April 7, 2025, pursuant to the securities purchase agreement with Pacific Pier dated April 4, 2025, described above, the Company issued shares of Company common stock to Pacific Pier.
On or about April 23, 2025, pursuant to the securities purchase agreement with Pacific Pier dated April 23, 2025, described above, the Company issued shares of Company common stock to Pacific Pier.
On
May 6, 2025, the Company entered into a Subscription Agreement with various investors, pursuant to which the purchasers acquired in the
aggregate
On May 7, 2025, the Company received a letter from the Nasdaq Listing Qualifications Department of the Nasdaq Stock Market LLC, granting the Company an additional 180-day period, or until November 3, 2025, to regain compliance with Nasdaq’s minimum $bid price per share requirement.
On
or about May 9, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
On or about May 19, 2025, pursuant to the securities purchase agreement with Lucas Ventures dated May 19, 2025, described above, the Company issued shares of Company common stock to Lucas Ventures.
On
or about May 23, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
On
or about May 23, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
On
or about May 23, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
On
or about May 23, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of the remaining $
On or about June 4, 2025, pursuant to the securities purchase agreement with Mast Hill dated June 3, 2025, described above, the Company issued shares of Company common stock to Mast Hill.
On
or about June 10, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
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On
or about June 17, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
On
or about June 20, 2025, the Company issued shares of common stock to 1800 Diagonal pursuant to its conversion of $
On
or about June 23, 2025, the Company issued shares of common stock to 1800 Diagonal pursuant to its conversion of $
On or about June 23, 2025, the Company issued shares of common stock to Lucas Ventures as true-up shares under the securities purchase agreement with Lucas Ventures dated November 29, 2024.
On
or about July 8, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
On
or about July 11, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
On
or about July 18, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
On or about July 18, 2025, pursuant to the securities purchase agreement with First Fire dated July 18, 2025, described above, the Company issued shares of Company common stock to First Fire.
On
or about July 21, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
On
or about August 1, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
On
or about August 1, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
On
or about August 6, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
On or about August 18, 2025, pursuant to the securities purchase agreement with Mast Hill dated August 15, 2025, described above, the Company issued shares of Company common stock to Mast Hill.
On
or about September 12, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
On
or about October 06, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
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On
or about October 08, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
On
or about October 10, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
On
or about October 13, 2025, the Company issued shares of common stock to Pacific Pier pursuant to its conversion of $
On
or about October 14, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
On
or about October 16, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
On
or about October 23, 2025, the Company issued shares of common stock to Pacific Pier pursuant to its notice of conversion of $
On
or about November 3, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
On
or about November 10, 2025, the Company issued shares of common stock to Pacific Pier pursuant to its notice of conversion of
$
On
or about November 21, 2025, the Company issued
shares of common stock to Mast Hill pursuant to its notice
of conversion of $
On
or about November 25, 2025, the Company issued shares of common stock to Mast Hill pursuant to its notice of conversion of $
On
or about November 25, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
On or about November 25, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
On
or about November 26, 2025, the Company issued shares of common stock to Mast Hill pursuant to its notice of conversion of
$
On
or about December 1, 2025, the Company issued shares of common stock to Mast Hill pursuant to its notice of conversion of $
On
or about December 1, 2025, the Company issued shares of common stock to Mast Hill pursuant to its notice of conversion of $
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On
or about December 1, 2025, the Company issued shares of common stock to Pacific Pier pursuant to its notice of conversion of
$
On
or about December 5, 2025, the Company issued shares of common stock to Mast Hill pursuant to its notice of conversion of $
On
or about December 11, 2025, the Company issued shares of common stock to Mast Hill pursuant to its notice of conversion of $
On or about December 19, 2025, the Company issued True-up shares of common stock to Lucas Venturew, LLC pursuant to a security purchase agreement dated May 19, 2025,
On
or about December 24, 2025, the Company issued shares of Company common stock with an investor pursuant to a subscription
agreement for $
On
or about December 24, 2025, the Company issued shares of Company common stock with an investor pursuant to a subscription
agreement for $
On
or about December 29, 2025, the Company issued shares of Company common stock with an investor pursuant to a subscription
agreement for $
Common Stock
Our Articles of Incorporation authorize us to issue shares of common stock, par value $ per share. As of December 31, 2025 there were shares of common stock outstanding. All outstanding shares of common stock are, and the common stock to be issued will be, fully paid and non-assessable. Each share of our common stock has identical rights and privileges in every respect. The holders of our common stock are entitled to vote upon all matters submitted to a vote of our shareholders and are entitled to one vote for each share of common stock held. There are no cumulative voting rights.
The holders of our common stock are entitled to share equally in dividends and other distributions that our Board of Directors may declare from time to time out of funds legally available for that purpose, if any, after the satisfaction of any prior rights and preferences of any outstanding preferred stock. If we liquidate, dissolve or wind up, the holders of common stock shares will be entitled to share ratably in the distribution of all of our assets remaining available for distribution after satisfaction of all our liabilities and our obligations to holders of our outstanding preferred stock.
Preferred Stock
Our Articles of Incorporation authorize us to issue shares of preferred stock, par value $ per share. Our Board of Directors has the authority to issue additional shares of preferred stock in one or more series, and fix for each series, the designation of and number of shares to be included in each such series. Our Board of Directors is also authorized to set the powers, privileges, preferences, and relative participating, optional or other rights, if any, of the shares of each such series and the qualifications, limitations or restrictions of the shares of each such series.
Unless our Board of Directors provides otherwise, the shares of all series of preferred stock will rank on parity with respect to the payment of dividends and to the distribution of assets upon liquidation. Any issuance by us of shares of our preferred stock may have the effect of delaying, deferring or preventing a change of our control or an unsolicited acquisition proposal. The issuance of preferred stock also could decrease the amount of earnings and assets available for distribution to the holders of common stock or could adversely affect the rights and powers, including voting rights, of the holders of common stock.
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We previously authorized shares of Series A Convertible Preferred Stock, shares of Series B Convertible Preferred Stock, and shares Series C Convertible Preferred Stock. As of August 20, 2006, all series A, B, and C preferred had been converted into common stock.
Effective August 7, 2013,
The
following are primary terms of the Series D Preferred Stock.
On
October 31, 2023, Clean Energy Technologies, Inc. (the “Company”) filed with the Nevada Secretary of State a certificate
of designation designating shares of the undesignated and authorized preferred stock of the Company, par value $ per share,
as the
The
Series E Preferred Stock has a stated value of $ (the “Stated Value”) per share. Each holder of the Series E Preferred
Stock is entitled to receive dividends payable on the Stated Value of the Series E Preferred Stock at a rate of 15% per annum.
On
November 8, 2023, Clean Energy Technologies, Inc. (the “Company”) entered into an exchange agreement (the “Agreement”)
with Mast Hill Fund, L.P., a Delaware limited partnership (the “Holder”), pursuant to which the Company agreed to issue to
the Holder shares of the newly designated
The
Company has designated the rights of the Holder with respect to its shares of Series E Preferred Stocks pursuant to that certain Certificate
of Designations, Preferences, and Rights of Series E Convertible Preferred Stock (the “Certificate of Designation”). Additionally,
$
Warrants
A summary of warrant activity for the periods is as follows:
On May 6, 2022, we issued
On August 5, 2022, we issued
On August 17, 2022, we issued
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On September 1, 2022, we issued
On September 16, 2022, we issued
On November 10, 2022 we issued
On November 21, 2022 we issued
On December 26, 2022, we issued
On January 19, 2023 we issued
On
February 13, 2023 we issued
On March 8, 2023 we issued
On
March 2023, the company issued Craft Capital Management, L.L.C. and R.F. Lafferty & Co. Inc. a
On
March 15, 2024, we issued
On
June 18, 2024, we issued
On
December 5, 2024, we issued
On
January 16, 2025, we issued
On
February 28, 2025, we issued
| Warrants - Common Share Equivalents | Weighted Average Exercise price | Warrants exercisable - Common Share Equivalents | Aggregate Intrinsic Value | |||||||||||||
| Outstanding December 31, 2024 | $ | |||||||||||||||
| Expired | - | |||||||||||||||
| Mar 15, 2024 – Subscription agreement | $ | - | - | |||||||||||||
| Jun 18, 2024 – Subscription agreement | $ | - | - | |||||||||||||
| Additions | ||||||||||||||||
| Jan 16, 2025 – Mast Hill | $ | - | - | |||||||||||||
| Feb 28, 2025 – Mast Hill | $ | - | ||||||||||||||
| Exercised | - | - | ||||||||||||||
| Outstanding December 31, 2025 | $ | |||||||||||||||
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As of the reporting date, all warrants issued to Mast Hill on January 16, 2025, have been exercised.
Stock Options
We currently have outstanding stock options
NOTE 13 – RELATED PARTY TRANSACTIONS
On
May 13, 2021, the Company formed CETY Capital LLC a wholly owned subsidiary of CETY. In addition, the company established VRG with our
partner, Synergy Bioproducts Corporation (“SBC”) The purpose of the joint venture is the development of a pyrolysis plant
established to convert wood feedstock into electricity and BioChar by using high temperature ablative fast pyrolysis reactor for which
Clean Energy Technology, Inc. holds the license for. The VRG is in Lyndon, Vermont. Based upon the terms of the members’ agreement,
CETY Capital LLC owns a
On
June 2, 2023, CETY Renewables executed a turnkey agreement with VRG for the design, construction, and delivery of an organics-to-energy
plant. As a result of this agreement, CETY invoiced VRG $
CETY Renewables currently has $
On
June 21, 2024, VRG, a Vermont limited liability company in which the Company retains
The Lender is currently in default and has been served notice of default. The Lender has failed to disburse the first and second Tranche as outlined in the Milestone Schedule of the Agreement. While the Lender has communicated that they are working to cure this default, the company retains the right to amend the agreement once the cure is completed.
On or about July 1, 2025, Company’ subsidiary, Herbert YF Global Holding Limited (“Herbert”), entered into a Consulting
Agreement (the “Linkage Consulting Agreement”) with Linkage International Limited (the “Consultant”), a Hong Kong
company and one of the Company’s investors from the Company’s May 6, 2025, private placement (pursuant to which the Company
had sold in the aggregate shares of Company common stock at a price of $ per share (on a split-adjusted basis), for aggregate
gross proceeds of $
The
RMB
NOTE 14 - WARRANTY LIABILITY
For
the year ended December 31, 2025 and 2024 there was no change in our warranty liability. We estimate our warranty liability based on
past experiences and estimated replacement cost of material and labor to replace the critical turbine in the units that are still under
warranty. The outstanding balance as of December 31, 2025, and 2024 was
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NOTE 15 – NON-CONTROLLING INTEREST
On
June 24, 2021 the Company formed CETY Capital LLC a wholly owned subsidiary of CETY. In addition, on or about the same time the company
established CETY Renewables Ashfield LLC (“CRA”) a wholly owned subsidiary of Ashfield Renewables Ag Development LLC(“ARA”)
with our partner, Ashfield AG (“AG”). The purpose of the joint venture was the development of a pyrolysis plant established
to convert woody feedstock into electricity and BioChar by using high temperature ablative fast pyrolysis reactor for which Clean Energy
Technology, Inc. holds the license for. The CRA was located in Ashfield, Massachusetts. Based upon the terms of the members’ agreement,
the CETY Capital LLC owned
The
consolidated financial statements have deconsolidated the CRA business unit. The Liabilities of CRA has been transferred to VRG, a newly
formed entity. CETY retains
On
April 2, 2023 the Company formed CETY Capital LLC a wholly owned subsidiary of CETY. In addition, the company established VRG with our
partner, SBC. The purpose of the joint venture is the development of a pyrolysis plant established to convert wood feedstock into electricity
and BioChar by using high temperature ablative fast pyrolysis reactor for which Clean Energy Technology, Inc. holds the license for.
The VRG is in Lyndon, Vermont. Based upon the terms of the members’ agreement, CETY Capital LLC owns a
The Company analyzed the transaction under ASC 810 Consolidation, to determine if the joint venture classifies as a Variable Interest Entity (“VIE”). The Company analyzed the transaction under ASC 810 Consolidation, to determine if the joint venture classifies as a VIE. The Joint Venture qualifies as a VIE based on the fact the JV does not have sufficient equity to operate without financial support from both parties. According to ASC 810-25-38, a reporting entity shall consolidate a VIE when that reporting entity has a variable interest (or combination of variable interests) that provides the reporting entity with a controlling financial interest on the basis of the provisions in paragraphs 810-10-25-38A through 25-38J. The reporting entity that consolidates a VIE is called the primary beneficiary of that VIE. According to the JV operating agreement, the ownership interests are 49/51 and the agreement provides for a Management Committee of 3 members. Two of the three members are from Synergy Bioproducts Corporation, and one is from CETY. Both parties do not have substantial capital at risk and CETY does not have voting interest. However, SBC has controlling interest and more board votes therefore SBC is the beneficiary of the VIE and as a result we record it as an equity investment. Accordingly, the Company has elected to account for the joint venture as an equity method investment in accordance with ASC 323 Investments – Equity Method and Joint Ventures. This decision is a result of the company’s evaluation of its involvement with potential variable interest entities and their respective risk and reward scenarios, which collectively affirm that the conditions necessitating the application of the variable interest model are not present.
In
July 2022 JHJ and other three shareholders agreed to form and make total capital contribution of RMB million ($ million) with
latest contribution due date in February 2066 into Sichuan Hongzuo Shuya Energy Limited (“Shuya”), JHJ owns
On January 1, 2024 and effective on the same date., JHJ, SSET and Xiangyueheng entered into the Agreement on the Termination of the Concerted Action Agreement (the “Termination Agreement”), pursuant to which the parties release each other from any and all obligations under the CAA. Due to the Termination Agreement, the Company now holds less than 50% of the voting rights in Shuya. The Company has determined that Shuya no longer constitutes a VIE and the Company will not consolidate Shuya into its consolidated financial statements on or after January 1, 2024.
NOTE 16 – DiSPOSAL OF SUBSIDIARY
Background
In
July 2022, the Company, through its wholly-owned subsidiary Jiangsu Huanya Jieneng New Energy Co., Ltd. (‘JHJ’), acquired
a
On January 1, 2023, JHJ entered into a Consistent Action Agreement with other shareholders of Shuya, which resulted in the Company obtaining control over Shuya. Accordingly, the Company began consolidating Shuya as a variable interest entity effective January 1, 2023 in accordance with ASC 810.
On
January 1, 2024, the Consistent Action Agreement was terminated. As a result, the Company lost control over Shuya and deconsolidated
the entity effective January 1, 2024. The Company recognized a loss on deconsolidation of $
Disposal Transaction
On
December 12, 2025, the Company completed the disposal of its entire
●Cash consideration of approximately $
Gain on Disposal
The
Company recognized a gain on disposal of $
| Fair value of consideration received: | ||||
| Cash | $ | |||
| [Non-cash consideration] | $ | |||
| Total consideration | $ | |||
| Less: Carrying value of investment at disposal: | ||||
| Beginning balance (January 1, 2025) | $ | |||
| Equity method loss (2025) | ( | ) | ||
| Effect of foreign currency translation | ||||
| Carrying value at disposal | ||||
| Gain on disposal | $ | |||
The fair value of consideration received consisted primarily of cash proceeds and was measured based on the contractual cash amounts received at closing. Accordingly, no significant Level 3 valuation inputs were required under ASC 820.
| 93 |
Discontinued Operations Assessment
The Company evaluated whether the disposal of Shuya met the criteria for presentation as a discontinued operation under ASC 205-20 and concluded that it did not represent a strategic shift that has, or will have, a major effect on the Company’s operations or financial results. Although the Company’s China operations generated approximately $1.17 million of revenue during 2025, those operating activities and related revenues were generated by JHJ, which remains part of the Company’s continuing operations. Shuya was not the primary operating entity generating such revenues, and the Company did not receive dividend distributions from Shuya. The disposal did not result in the exit of a major business line, customer base, geographic market, or strategic initiative and did not alter the Company’s core business strategy. Accordingly, management concluded that the disposal of Shuya does not qualify for discontinued operations presentation under ASC 205-20.
Results of Operations
For the period from January 1, 2025 through December 12, 2025, the Company recognized equity in net income of Shuya
totaling $
Additionally, the Company received actual payment of $
Cash Flow Impact
The
disposal resulted in cash proceeds of $
Strategic Rationale
The Company disposed of its investment in Shuya as part of a strategic shift to focus on its core clean energy technology and distributed energy project development activities in North America and Europe, and to exit natural gas trading operations in China.
NOTE 17 – INCOME TAX
CETY Europe
CETY
Europe is one of the Company’s subsidiaries in Italy, and is subject to
Hong Kong
CETY
HK is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial
statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate for the first HKD
CETY HK did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception.
PRC
Under
the Enterprise Income Tax (“EIT”) Law of the PRC, domestic enterprises and Foreign Investment Enterprises (the “FIE”)
are usually subject to a unified
The
current PRC EIT Law imposes a
The following table reconciles the statutory tax rate to the Company’s effective tax rate:
For the year ended December 31,2025 | For the year ended December 31,2024 (Restate) |
|||||||
| Federal statutory tax expense (benefit) | ( | )% | (21.00 |
)% | ||||
| State statutory | ( | )% | (5.82 |
)% | ||||
| Tax rate difference | % | 2.54 |
% | |||||
| Permanent difference | % | 0.13 |
% | |||||
| Change in valuation allowance | % | 24.15 |
% | |||||
| Effective tax rate | % | - | % | |||||
The components of deferred tax assets (liabilities) are as follows:
As of December 31, 2025 | As of December 31, 2024 (Restate) |
|||||||
| Deferred tax: | ||||||||
| Allowance for doubtful accounts | $ | $ | ||||||
| Net operating loss (“NOL”) carrying forwards | ||||||||
| Inventory provision | ||||||||
| Change in fair value of derivative liability | ||||||||
| Operating lease liabilities, net of right of use assets | ||||||||
| Change in fair value of warrant liabilities | ||||||||
| Total deferred tax assets, net | ||||||||
| Less: valuation allowance | ||||||||
| Total deferred tax assets, net | ||||||||
| Deferred tax liability: | $ | $ | ||||||
| License and Patents | $ | $ | ||||||
| Deferred tax liability, net of deferred tax assets | $ | $ | ||||||
| 94 |
The
Company evaluates its valuation allowance requirements at the end of each reporting period by reviewing all available evidence, both
positive and negative, and considering whether, based on the weight of that evidence, a valuation allowance is needed. When circumstances
cause a change in management’s judgement about the realizability of deferred tax assets, the impact of the change on the valuation
allowance is generally reflected in income from operations. The future realization of the tax benefit of an existing deductible temporary
difference ultimately depends on the existence of sufficient taxable income of the appropriate character within the carry forward period
available under applicable tax law. As of December 31, 2025, the Company’s PRC operating entities had $
As of December 31, 2025 and 2024, the Company had no significant uncertain tax positions that qualify for either recognition or disclosure in the financial statements. The Company recognizes interest and penalties related to significant uncertain income tax positions in other expense if any; however, there were no such interest and penalties as of December 31, 2025 and 2024.
NOTE 18 – THE STATUTORY RESERVES
The Company’s ability to pay dividends primarily depends on it receiving funds from its subsidiaries. PRC laws and regulations permit payments of dividends by the Company’s PRC subsidiaries only out of the subsidiary’s retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the financial statements prepared in accordance with US GAAP differ from those reflected in the statutory financial statements of the Company’s PRC subsidiaries.
In
accordance with the PRC Regulations on Enterprises with Foreign Investment and their articles of association, a foreign-invested enterprise
(“FIE”) established in the PRC is required to provide statutory reserves, which are appropriated from net profit as reported
in the FIE’s PRC statutory accounts. An FIE is required to allocate at least
Additionally,
in accordance with the Company Laws of the PRC, a domestic enterprise is required to provide surplus reserve at least 10% of its annual
after-tax profit until such reserve has reached
As
a result of these PRC laws and regulations that require annual appropriations of
In
addition, according to Administrative Measures for the Collection and Utilization of Enterprise Work Safety Funds issued by the PRC Ministry
of Finance and the State Administration of Work Safety, for the companies with dangerous goods production or storage, the company is
required to make a special reserve for the use of enhancing and improving its safe production conditions. Under PRC GAAP, the reserve
is recorded as selling expense; however, under US GAAP, since the expense has not been incurred and the Company will record cost of sales
for safety related expenses when it is actually happened or incurred, this special reserve was recorded as an appropriation of its after-tax
income. The reserve is calculated at a rate of
NOTE 19 – RESTATEMENT
During the preparation of the Company’s financial statements for the fiscal year ended December 31, 2025, the Company determined that historical accounting errors existed related primarily to the classification, valuation, and collectability assessment of long-term receivables and contract assets, as well as the timing of revenue recognition and related interest income under U.S. GAAP. In accordance with Staff Accounting Bulletin (“SAB”) 99, Materiality, and SAB 108, Considering the Effects of Prior Period Misstatements when Quantifying Misstatements in Current Period Financial Statements, the Company evaluated the materiality of the errors from qualitative and quantitative perspectives, individually and in aggregate, and concluded that the impact of the errors was material to the Company’s consolidated financial statements as of and for the fiscal years ended December 31, 2024 and 2023. The Company has restated the financial statements for those periods and presented the effects of the restatement adjustments to the financial statements below.
The
restatement adjustments relate to the following items: (i) the reclassification of certain long-term receivables to contract assets in
the amount of $
Certain of the revenue recognition adjustments described above were reflected through the reclassification and valuation of contract assets and long-term receivables and therefore are not separately presented as standalone revenue line-item adjustments within the reconciliation tables below.
For
the year ended December 31, 2024, the restatement resulted in an increase of $
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SCHEDULE OF RESTATEMENT FOR THE FINANCIAL STATEMENTS
The following table presents the effects of the restatement to the accompanying consolidated balance sheet at December 31, 2024:
| As Previously Reported | Restated | Net Adjustment | ||||||||||
| Accounts receivable, net | $ | $ | $ | ( | ) | |||||||
| Deferred Equity Issuance cost | ||||||||||||
| Long-term financing receivables-net | ( | ) | ||||||||||
| Contract assets | ||||||||||||
| Total Assets | ( | ) | ||||||||||
| Customer Deposits | ||||||||||||
| Warrant Liability | ||||||||||||
| Total Liabilities | ||||||||||||
| Additional paid-in capital | ( | ) | ||||||||||
| Accumulated deficit | ( | ) | ( | ) | ( | ) | ||||||
| Total stockholders’ Equity | ( | ) | ||||||||||
| Total Liabilities and stockholders’ Equity | $ | $ | $ | ( | ) | |||||||
The following table presents the effects of the restatement to the accompanying consolidated statement of operations and comprehensive loss for the year ended December 31, 2024:
| As Previously Reported | Restated | Net Adjustment | ||||||||||
| General and Administrative expense | $ | $ | $ | |||||||||
| Net Loss from Operations | ( | ) | ( | ) | ( | ) | ||||||
| Change in FV of warrant liability | ||||||||||||
| Interest Income | ||||||||||||
| Net Loss before income taxes | ( | ) | ( | ) | ( | ) | ||||||
| Net loss attributable to Clean Energy Technologies, Inc. | ( | ) | ( | ) | ( | ) | ||||||
| Total Comprehensive Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
The following table presents the effects of the restatement ton the accompanying consolidated statement of cash flows for the year ended December 31, 2024:
| As Previously Reported | Restated | Net Adjustment | ||||||||||
| Net loss before discontinued operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Bad debt expense | ||||||||||||
| Change in FV of warrant liability | ( | ) | ( | ) | ||||||||
| (Increase) decrease in contract asset | ( | ) | ( | ) | ||||||||
| Other (Decrease) increase in accrued expenses | ( | ) | ( | ) | ( | ) | ||||||
| Net Cash Used in Operating Activities | $ | ( | ) | $ | ( | ) | $ | |||||
NOTE 20 – SUBSEQUENT EVENTS
The Company has evaluated subsequent events through the date the financial statements were issued. The Company has determined that there are no other such events that warrant disclosure or recognition in the financial statements, except as noted below.
On January 2, 2026, Pacific Pier converted $
On
January 16, 2026, the Company issued shares of common stock to Pacific Pier pursuant to its conversion of $
On
January 21, 2026, the Company issued shares of common stock to First Fire pursuant to its conversion of $
On
January 29, 2026, the Company issued shares of common stock to Pacific Pier pursuant to its conversion of $
On
January 12, 2026, the Company entered into a note purchase agreement (the “Filled Purchase Agreement”) with Filled Converge
Limited, a limited liability company formed under the laws of the British Virgin Islands (“Filled”) and Li Xiaoguang (collectively
the “Sellers”), pursuant to which the Company would acquire from the Sellers a HK$
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On
or about March 4, 2026, the Company entered into a securities purchase agreement (the “1800 SPA”) with 1800 Diagonal Lending
LLC, a Virginia limited liability company (“1800 Diagonal”), pursuant to which the Company sold, and 1800 Diagonal purchased,
a convertible promissory note in the principal amount of $
The
Transaction was funded by 1800 Diagonal and closed on March 4, 2026, and pursuant to the 1800 SPA, 1800 Diagonal’s legal expenses
of $
The
1800 SPA includes customary representations, warranties and covenants by the Company and customary closing conditions. The 1800 SPA requires
that the proceeds from the Transaction be used for general working capital purposes. The 1800 Note matures on
On
or about March 6, 2026, in consideration of (i) $
The
Mega and Noblebear SPAs include customary representations, warranties and covenants by the Company. Each of the Mega and Noblebear
Notes accrues interest at
Effective April 20, 2026, Clean Energy Technologies,
Inc. (the “Company”) entered into a securities purchase agreement (the “PPC SPA”) with Pacific Pier Capital II,
LP, a Delaware limited partnership (“Pacific Pier”), pursuant to which the Company sold, and Pacific Pier purchased, a convertible
promissory note in the principal amount of $
The PPC Transaction was funded by Pacific Pier and
closed on April 20, 2026, and pursuant to the SPA, Pacific Pier’s legal expenses of $
On
May 12, 2026, and May 27, 2026, the Company borrowed approximately $
On
January 8, 2026, Pacific Pier Capital II, LLC issued a forgiveness letter to the Company confirming that the remaining unpaid balance
of $
Effective
April 23, 2025, the Company entered into a Securities Purchase Agreement with Pacific Pier, pursuant to which the Company sold, and Pacific
Pier purchased, (i) a convertible promissory note in the principal amount of $
Additionally, subsequent to year-end, Noblebear Capital acquired from Mast Hill Fund the Company’s existing convertible note originally
issued on August 15, 2025, in the principal amount of $
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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports pursuant to the Securities Exchange Act, of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms, and that such information is accumulated and communicated to us, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
As required by Rules 13a-15(b) of the Exchange Act, an evaluation as of December 31, 2025 was conducted under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective as of December 31, 2025.
(b) Report of Management on Internal Control over Financial Reporting
We are responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act. Under the supervision and with the participation of our management including our of our chief executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the 2013 framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO.
Based on our evaluation under the 2013 Internal Control—Integrated Framework, our Chief Executive Officer and Chief Financial Officer concluded that our internal control over financial reporting was not effective as of December 31, 2025. The material weaknesses identified by management included:
● Deficiencies in controls over financial reporting that resulted in the restatement of previously issued financial statements.
● Deficiencies in controls over revenue recognition and the application of ASC 606.
● Deficiencies in controls over the accounting for complex financial instruments.
● Deficiencies in controls over the valuation and collectability of certain receivables and other assets.
● Deficiencies in controls over the financial statement close and review process.
During 2025 and in connection with the restatement process, management performed additional reviews and analyses related to revenue recognition, receivables, complex financial instruments, and financial statement preparation. Management also engaged external accounting advisors to assist in evaluating the appropriate accounting treatment for certain transactions and in strengthening the financial reporting process. Management continues to evaluate and implement additional remediation measures designed to address the material weaknesses described above. Consistent with the auditor’s letter, management is in the process of evaluating and implementing changes in internal control to address these matters.
(c) Changes in Internal Control over Financial Reporting
During the preparation of the restated financial statements, management performed additional reviews and analyses related to revenue recognition, accounts receivable, warrant accounting, and certain historical accounting matters. Management also worked with external accounting advisors and the Company’s independent registered public accounting firm to evaluate the appropriate accounting treatment for these matters. While these activities enhanced management’s review process, they did not constitute a material change in the Company’s internal control over financial reporting during the period.
ITEM 9B. OTHER INFORMATION
(a) Information Required to Be Disclosed in a Current Report on Form 8-K But Not Reported.
None.
(b) Director and Officer 10b5-1 Trading Arrangements.
During
the fourth quarter of 2025, none of the Company’s directors or officers
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None. See “Disclosures Relating to Our Chinese Operations” for more information.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
Our officers and directors are the individuals listed below as of December 31, 2025:
| Name | Age | Position | ||
| Kambiz Mahdi | 60 | President, CEO, Director | ||
| Calvin Pang | 41 | CFO, Director | ||
| Lauren Morrison | 70 | Independent Director | ||
| Xiaotian Xiao | 41 | Independent Director | ||
| Ted Hsu | 68 | Independent Director |
There are no family relationships among any of the directors or the executive officers.
Biographical Information.
Mr. Kambiz Mahdi, served as President and Chief Executive Officer of the Company from 1996 until December of 2005 and again from July 2009 until present. Mr. Mahdi also started Billet Electronics a global supply chain provider of products, services and solutions in the technology sector in 2007. Mr. Mahdi has a BS degree in Electrical Engineering from California State University of Northridge. Mr. Mahdi has not served on any other boards of public companies in the past five years.
Our Board of Directors selected Mr. Mahdi to serve as a director because he is our Chief Executive Officer and has served in various executive roles with our company for 15 years, with a focus on electrical design & manufacturing, sales and operations and his insight into the development, marketing, finance, and operations aspects of our company. He has expansive knowledge of engineering and manufacturing industry and relationships with chief executives and other senior management at technology companies. Our Board of Directors believes that Mr. Mahdi brings a unique and valuable perspective to our Board of Directors.
Mr. Calvin Pang has served as our Chief Financial Officer since March 9, 2020. Since 2015 Mr. Pang has been the Managing Director of Megawell Capital Limited. From 2007 to 2015, he was a banker at UBS AG managing portfolios of Hong Kong and China based investors. Mr. Pang graduated from the Olin School of Business at Washington University in St. Louis with a bachelor’s degree in business and finance. We believe that Mr. Pang is well qualified to serve as a member of our Board of Directors due to his extensive experience in U.S. and Asian corporate finance and may assist us in developing relationships with financial institutions.
Mr. Ted Hsu has almost 3 decades of experience as a commercial banker. He joined Preferred Bank in 1992 and currently serves as the bank’s Executive Vice President. Preferred Bank is one of the largest independent commercial banks in California. He has extensive experience in servicing clients in various sectors including real estate, construction, commercial and industrial. Recently, Mr. Hsu began to cover companies in the renewable energy sector as it is the growing trend. We believe Mr. Hsu is well qualified to serve as a member of our Board of Directors due to his experience in commercial lending.
Ms. Lauren Morrison is an international business development consultant whose career has had a major focus in the clean energy, smart building, and sustainability sectors. She has worked with companies of all sizes and areas of specialization, from concept to early-stage and maturity, on global growth strategies, branding, and product development. Lauren is interested in the integration and optimization of technologies that measurably increase energy efficiency, and the application of monitoring and data analysis that iteratively improves building processes, practices, and net functionality. As part of a leading-edge model smart city development in Asia, Lauren saw first-hand the critical imperative for global collaboration to address climate challenges as they rapidly eclipse geographic boundaries. She is passionate about expanding the conversation on this topic to include the widest possible audience of stakeholders. Our Board of Directors believes that Ms. Morrison brings a unique and valuable international perspective and clean energy experience to our Board of Directors
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Mr. Xiaotian Xiao currently serves as an equity investment partner at Goldendeavor Capital covering investments in the new energy and robotic/automobile industry. Prior to that, he was the special assistant to the chairman at Hybrid Kinetic Motors (1188.HK) from May 2015 to August 2020, and the chief operation officer at Yegiaro Group, a subsidiary of Hybrid Kinetic Motors, from May 2015 to August 2020. Mr. Xiao received his Master of Business Administration degree from the Marshal School of Business, University of Southern California in 2015.
Each director holds office until the earlier of his or her death, resignation, removal from office by the stockholders, or his or her respective successor is duly elected and qualified. There are no arrangements or understandings between any of our nominees or directors and any other person pursuant to which any of our nominees or directors have been selected for their respective positions. No nominee or director is related to any executive officer or any other nominee or director.
Corporate Governance
Director Attendance at Meetings of the Board of Directors
Our Board of Directors held two meetings during the fiscal year ended December 31, 2025, and executed multiple written consents to action without a meeting. Each of our incumbent directors attended at least 75.0% of the aggregate total number of meetings of our Board of Directors held during the period for which they served as a director.
Director Attendance at Annual Meetings of the Shareholders
Although we have no policy with regard to attendance by the members of our Board of Directors at our annual meetings, we invite and encourage the members of our Board of Directors to attend our annual meetings to foster communication between Shareholders and our Board of Directors.
Stockholder Communication with the Board of Directors
Any stockholder who desires to contact members of our Board of Directors, or a specified committee of our Board of Directors, may do so by writing to: Clean Energy Technologies, Inc., Board of Directors, 1340 Reynolds Avenue, Irvine, California 92614, Attention: Secretary. Communications received will be distributed by our Secretary to such member or members of our Board of Directors as deemed appropriate by our Secretary, depending on the facts and circumstances outlined in the communication received.
Director Independence
We had five members of our Board of Directors as of December 31, 2025, of which three members are considered independent.
Committees of our Board of Directors
Audit Committee. Our audit committee consists of Lauren Morrison, Xiaotian Xiao and Ted Hsu. Lauren Morrison is the chairperson of the audit committee. We have determined that Lauren Morrison, Xiaotian Xiao and Ted Hsu each satisfy the “independence” requirements of Nasdaq Listing Rule 5605(a)(2) and meets the independence standards under Rule 10A-3 under the Exchange Act. We have determined that Ted Hsu qualifies as an “audit committee financial expert.” The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company. The audit committee is responsible for, among other things: (a) representing and assisting the Board in its oversight responsibilities regarding the Company’s accounting and financial reporting processes, the audits of the Company’s financial statements, including the integrity of the financial statements, and the independent auditors’ qualifications and independence; (b) overseeing the preparation of the report required by SEC rules for inclusion in the Company’s annual proxy statement; (c) retaining and terminating the Company’s independent auditors; (d) approving in advance all audit and permissible non-audit services to be performed by the independent auditors; and (e) approving related person transactions.
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Compensation Committee. Our compensation committee consists of Lauren Morrison and Ted Hsu. Ted Hsu is the chairperson of our compensation committee. We have determined that Lauren Morrison and Ted Hsu are “independent,” as such term is defined for directors and compensation committee members in the listing standards of the NASDAQ Stock Market LLC. Additionally, each qualify as “non-employee directors” for purposes of Rule 16b-3 under the Securities Exchange Act of 1934 and as “outside directors” for purposes of Section 162(m) of the Internal Revenue Code. The Committee has been established to: (a) assist the Board in seeing that a proper system of long-term and short-term compensation is in place to provide performance oriented incentives to attract and retain management, and that compensation plans are appropriate and competitive and properly reflect the objectives and performance of management and the Company; (b) assist the Board in discharging its responsibilities relating to compensation of the Company’s executive officers; (c) evaluate the Company’s Chief Executive Officer and set his or her remuneration package; and (d) make recommendations to the Board with respect to incentive compensation plans and equity-based plans.
Nominating and Corporate Governance Committee. Our nominating and corporate governance committee consists of Lauren Morrison and Ted Hsu. Lauren Morrison is the chairperson of our nominating and corporate governance committee. We have determined that each of Lauren Morrison and Ted Hsu qualify as “independent” as that term is defined by Nasdaq Listing Rule 5605(a)(2). The Committee is responsible for: (a) assisting the Board in determining the desired experience, mix of skills and other qualities to provide for appropriate Board composition, taking into account the current Board members and the specific needs of the Company and the Board; (b) identifying qualified individuals meeting those criteria to serve on the Board; (c) proposing to the Board the Company’s slate of director nominees for election by the shareholders at the Annual Meeting of Shareholders and nominees to fill vacancies and newly created directorships; (d) reviewing candidates recommended by shareholders for election to the Board and shareholder proposals submitted for inclusion in the Company’s proxy materials; (e) advising the Board regarding the size and composition of the Board and its committees; (f) proposing to the Board directors to serve as chairpersons and members on committees of the Board; (g) coordinating matters among committees of the Board; (h) proposing to the Board the slate of corporate officers of the Company and reviewing the succession plans for the executive officers; (i) recommending to the Board and monitoring matters with respect to governance of the Company; and (j) overseeing the Company’s compliance program.
Term of Office
Our directors hold office until the next annual meeting of shareholders of the Company and until their successors have been elected and qualified. Our officers are elected by the board of directors and serve at the discretion of the board of directors.
Family Relationships
There are no other family relationships between any of our directors or executive officers. There are no arrangements or understandings between our directors and directors and any other person pursuant to which they were appointed as an officer and director of the Company.
Involvement in Certain Legal Proceedings
During the past ten years no current director, executive officer, promoter or control person of the Company has been involved in the following:
(1) A petition under the Federal bankruptcy laws or any state insolvency law which was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;
(2) Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
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(3) Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:
i. Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
ii. Engaging in any type of business practice; or
iii. Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;
(4) Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;
(5) Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
(6) Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
(7) Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:
i. Any Federal or State securities or commodities law or regulation; or
ii. Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or
iii. Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
(8) Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
Shareholder Communications to the Board
Shareholders who are interested in communicating directly with members of the Board, or the Board as a group, may do so by writing directly to the individual Board member c/o Secretary, Clean Energy Technologies, Inc., 1340 Reynolds Avenue, Irvine, CA 92614. The Company’s Secretary will forward communications directly to the appropriate Board members. If the correspondence is not addressed to the particular member, the communication will be forwarded to a Board member to bring to the attention of the Board. The Company’s Secretary will review all communications before forwarding them to the appropriate Board member.
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Director Nomination Procedures and Diversity
As outlined above, in selecting a qualified nominee, our Board of Directors considers such factors as it deems appropriate, which may include: the current composition of our Board of Directors; the range of talents of a nominee that would best complement those already represented on our Board of Directors; the extent to which a nominee would diversify our Board of Directors; a nominee’s standards of integrity, commitment and independence of thought and judgment; a nominee’s ability to represent the long-term interests of our shareholders as a whole; a nominee’s relevant expertise and experience upon which to be able to offer advice and guidance to management; a nominee who is accomplished in his or her respective field, with superior credentials and recognition; and the need for specialized expertise. While we do not have a formal diversity policy, we believe that the backgrounds and qualifications of our directors, considered as a group, should provide a significant composite mix of experience, knowledge and abilities that will allow our Board of Directors to fulfill its responsibilities. Applying these criteria, our Board of Directors considers candidates for membership on our Board of Directors suggested by its members, as well as by our Shareholders. Members of our Board of Directors annually review our Board of Directors’ composition by evaluating whether our Board of Directors has the right mix of skills, experience and backgrounds.
Our Board of Directors may also consider an assessment of its diversity, in its broadest sense, reflecting, but not limited to, age, geography, gender and ethnicity.
Our Board of Directors identifies nominees by first evaluating the current members of our Board of Directors willing to continue in service. Current members of our Board of Directors with skills and experience relevant to our business and who are willing to continue in service are considered for re-nomination. If any member of our Board of Directors does not wish to continue in service or if our Board of Directors decides not to nominate a member for re-election, our Board of Directors will review the desired skills and experience of a new nominee in light of the criteria set forth above.
Our Board of Directors also considers nominees for our Board of Directors recommended by Shareholders. Notice of proposed stockholder nominations for our Board of Directors must be delivered in accordance with the requirements set forth in our bylaws and SEC Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Nominations must include the full name of the proposed nominee, a brief description of the proposed nominee’s business experience for at least the previous five years and a representation that the nominating stockholder is a beneficial or record owner of our common stock. Any such submission must be accompanied by the written consent of the proposed nominee to be named as a nominee and to serve as a director if elected. Nominations should be delivered to: Clean Energy Technologies, Inc., Board of Directors, 1340 Reynolds Avenue, Unit 120, Irvine, CA 92614, Attention: Chief Executive Officer.
Our Board of Directors will recommend the slate of directors to be nominated for election at the annual meeting of shareholders. We have not and do not currently employ or pay a fee to any third party to identify or evaluate, or assist in identifying or evaluating, potential director nominees.
Board of Directors Role in Risk Oversight
Our Board of Directors oversees our shareholders’ interest in the long-term success of our business strategy and our overall financial strength.
Our Board of Directors is actively involved in overseeing risks associated with our business strategies and decisions. It does so, in part, through its approval of all acquisitions and business-related investments and all assumptions of debt, as well as its oversight of our executive officers pursuant to annual reviews. Our Board of Directors is also responsible for overseeing risks related to corporate governance and the selection of nominees to our Board of Directors.
In addition, the Board reviews the potential risks related to our financial reporting. The Board meets with our Chief Financial Officer and communicates with representatives of our independent registered public accounting firm on a quarterly basis to discuss and assess the risks related to our internal controls. Additionally, material violations of our Code of Ethics and related corporate policies are reported to our Board of Directors.
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Code of Business Conduct and Ethics
We have adopted our Code of Ethics, which contains general guidelines for conducting our business and is designed to help our directors, employees and independent consultants resolve ethical issues in an increasingly complex business environment. Our Code of Ethics applies to our Principal Executive Officer, Principal Financial Officer, and persons performing similar functions and all members of our Board of Directors. Our Code of Ethics covers topics including, but not limited to, conflicts of interest, confidentiality of information, and compliance with laws and regulations. Shareholders may request a copy of our Code of Ethics, which will be provided without charge, by writing to: Clean Energy Technologies, Inc., Board of Directors, 1340 Reynolds Avenue, Unit 120, Irvine California 92614; Attention: Chief Executive Officer.
Compensation of Directors
The key objective of our non-employee directors’ compensation program is to attract and retain highly qualified directors with the necessary skills, experience and character to oversee our management. We currently use equity-based compensation to compensate our directors due to our restricted cash flow position; however, we may in the future provide cash compensation to our directors. The use of equity-based compensation is designed to recognize the time commitment, expertise and potential liability relating to active Board service, while aligning the interests of our Board of Directors with the long-term interests of our shareholders.
In addition to any compensation provided to our non-employee directors, which is detailed below, each non-employee director is reimbursed for any reasonable out-of-pocket expenses incurred in connection with attending in-person meetings of the Board of Directors and Board committees, as well for any fees incurred in attending continuing education courses for directors.
Fiscal years 2025 and 2024 Annual Cash Compensation
We currently do not provide cash compensation to our directors and as such did not provide any cash compensation during the years ended December 31, 2025 and 2024.
Fiscal years 2025 and 2024 Equity Compensation
Yearly Restricted Share Awards
Under the terms of the discretionary restricted share unit grant provisions of our 2006 Incentive Stock Plan and our 2011 Omnibus Incentive Plan, which we refer to as the 2006 Plan and 2011 Plan, respectively, each non-employee director is eligible to receive grants of restricted common stock share awards at the discretion of our Board of Directors. These yearly restricted share unit awards vest in full on the grant date.
For the years ended December 31, 2025, and 2024, there were no stock options granted.
Discretionary Grants
Under the terms of the discretionary option grant provisions of the 2006 Plan and the 2011 Plan, non-employee directors are eligible to receive stock options or other stock awards granted at the discretion of the Board of Directors. No director received stock awards pursuant to the discretionary grant program during fiscal years ended December 31, 2025 or 2024.
Director Summary Compensation in fiscal years 2025 and 2024
None.
Change of Control and Termination Provisions
None.
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Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers and persons who beneficially own more than ten percent of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of change in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to us under Rule 16a-3(e) during the year ended December 31, 2025, Forms 5 and any amendments thereto furnished to us with respect to the year ended December 31, 2025, and the representations made by the reporting persons to us, we believe that during the year ended December 31, 2025, our executive officers and directors and all persons who own more than ten percent of a registered class of our equity securities complied with all Section 16(a) filing requirements.
Item 11. Executive Compensation.
The following discussion and analysis of compensation arrangements should be read together with the compensation tables and related disclosures that follow. This discussion contains forward-looking statements that are based on our current plans and expectations regarding future compensation programs. Actual compensation programs that we adopt may differ materially from the programs summarized in this discussion. The following discussion may also contain statements regarding corporate performance targets and goals. These targets and goals are disclosed in the limited context of our compensation programs and should not be understood to be statements of management’s expectations or estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts.
Summary Compensation Table – Years Ended December 31, 2025, and 2024
The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to the named persons for services rendered in all capacities during the noted periods.
Summary Compensation Table
| Name and Principal | Salary | Bonus | Stock Awards | Option Awards | Non-equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation | Total | |||||||||||||||||||||||||||
| Position | Year | ($)(1) | ($)(2) | ($)(3) | ($)(4) | ($) | ($) | ($)(5) | ($) | ||||||||||||||||||||||||||
| Kambiz Mahdi (6) Chief Executive Officer | 2025 | $ | 275,000 | $ | 137,500 | $ | - | $ | - | $ | - | $ | - | $ | 18,000 | $ | 430,500 | ||||||||||||||||||
| 2024 | $ | 275,000 | $ | 137,500 | $ | - | $ | - | $ | - | $ | - | $ | 18,000 | $ | 430,500 | |||||||||||||||||||
| Calvin Pang (7) Chief Financial Officer | 2025 | $ | 150,000 | $ | 75,000 | $ | 75,000 | $ | - | $ | - | $ | - | $ | - | $ | 225,000 | ||||||||||||||||||
| 2024 | $ | 150,000 | $ | 75,000 | $ | 75,000 | $ | - | $ | - | $ | - | $ | 18,000 | $ | 225,000 | |||||||||||||||||||
| Lance Woolley(8) Dir. Of operations | 2024 | 190,284 | - | - | - | - | - | 7,988 | 198,272 | ||||||||||||||||||||||||||
| 2025 | 190,284 | 7,988 | 198,272 | ||||||||||||||||||||||||||||||||
| Jamie Burrows(9) Dir. Of operations | 2025 | 180,244 | - | - | - | - | - | 6,880 | 187,124 | ||||||||||||||||||||||||||
| 2024 | 180,244 | - | - | - | - | - | 6,880 | 187,124 | |||||||||||||||||||||||||||
| (1) | The dollar value of salary (cash and non-cash) earned. |
| (2) | The dollar value of bonus (cash and non-cash) earned. |
| (3) | The value of the shares of common stock issued as compensation for services computed in accordance with ASC 718 on the date of grant. |
| (4) | The value of all stock options computed in accordance with ASC 718 on the date of grant. |
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| (5) | All other compensation received that could not be properly reported in any other column of the table; consists of (i) $750.00 per month for health insurance and $750.00 per month for a car allowance for Mr. Mahdi, (ii) $316 per month for health insurance and $350 per month for a car allowance for Mr. Wooley, and (iii) $463 per month for health insurance and $110 per month for a phone allowance for Mr. Burrows. |
| (6) | On or about October 18, 2018, we entered into an at-will employment agreement with Mr. Mahdi, providing Mr. Mahdi an annual salary of $275,000, and a 50% cash bonus upon approval by the board of directors. The agreement may be terminated at any time. |
| (7) | On or about March 24, 2023, we entered into an at-will employment agreement with Mr. Pang, providing Mr. Pang an annual salary of $150,000, and a 50% cash bonus upon approval by the board of directors. The agreement may be terminated at any time. |
| (8) | Non-executive officer of the Company (disclosure for Mr. Wooley included per Item 402(a)(3)(iv) of Regulation S-K). On or about March 30, 2023, we entered into an at-will employment with Mr. Woolley as the director of operations, providing Mr. Woolley an annual salary of $190,284. |
| (9) | Non-executive officer of the Company (disclosure for Mr. Burrows included per Item 402(a)(3)(iv) of Regulation S-K). On or about December 17, 2015, we entered into an at-will employment with Mr. Burrows as the director of manufacturing, providing Mr. Burrows an annual salary of $165,000. On or about August 29, 2022, Mr. Burrows received a salary increase to $180,244. |
Outstanding Equity Awards at 2024 Fiscal Year-End
There are 9,421,047 outstanding options or stock awards held by our named executive officers as of December 31, 2025.
Executive Employment Agreements
On October 18, 2018, we entered into an at-will employment agreement with Mr. Mahdi, with an annual salary of $275,000, a payment of 50% cash bonus upon approval by the board of directors, and $750.00 per month for health insurance, and $750.00 for a car allowance. This agreement may be terminated at any time. In addition, as part of the agreement Mr. Mahdi was issued 500,000 shares of our common stock, as additional compensation.
In approving the bonus for fiscal year 2025, the Board considered Mr. Mahdi’s performance during the year, including his management of the Company’s operations, financing activities, identification of growth opportunities and strategic initiatives, and ongoing regulatory compliance efforts. Based on its evaluation, the Board approved the bonus in accordance with the terms of the employment agreement.
On March 24, 2023, we entered into an at-will employment agreement with Mr. Pang, with an annual salary of $150,000. This agreement may be terminated at any time.
Potential Payments upon Termination or Change of Control
Severance Benefits
Mr. Mahdi will receive a severance benefit consisting of a single lump sum cash payment equal the salary that Mr. Mahdi would have been entitled to receive through the remainder or the Employment Period or One (1) year, whichever is greater.
Mr. Pang will receive a severance benefit consisting of a single lump sum cash payment equal the salary that Mr. Pang would have been entitled to receive through the remainder or the Employment Period or One (1) year, whichever is greater.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth certain information with respect to the beneficial ownership of our common stock and voting preferred stock as of April 15, 2026, for (i) each of our named executive officers and directors; (ii) all of our named executive officers and directors as a group; and (iii) each other shareholder known by us to be the beneficial owner of more than 5% of our outstanding common stock. The following table assumes that the underwriters have not exercised the over-allotment option.
Beneficial ownership is determined in accordance with SEC rules and generally includes voting or investment power with respect to securities. For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares of common stock that such person or any member of such group has the right to acquire within sixty (60) days thereafter. For purposes of computing the percentage of outstanding shares of our common stock held by each person or group of persons named above, any shares that such person or persons has the right to acquire within sixty (60) days are deemed to be outstanding for such person, but not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial ownership by any person.
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The percentages below are calculated based on 9,421,047 shares of our common stock, and 0 shares of our series E preferred stock, issued and outstanding as of December 31, 2025. We do not have any outstanding options, warrants exercisable for, or other securities convertible into shares of our common stock within the next 60 days which are deemed beneficially owned by the holder thereof, which are required to be disclosed below. Unless otherwise indicated, the address of each beneficial owner listed in the table below is care of our company, Clean Energy Technologies, Inc., 1340 Reynolds Avenue, Unit 120, Irvine, California, 92614.
| Name of Beneficial Owners (1) | Number of Shares of Common Stock Beneficially Owned | Percentage | ||||||
| 5% Holders | ||||||||
| Calvin Pang (1) | 1,602,941 | 13.20 | % | |||||
| Officers and Directors | ||||||||
| Calvin Pang(1) | 1,602,941 | 13.20 | % | |||||
| Kambiz Mahdi (2) | 154,503 | 1.3 | % | |||||
| All directors and officers as a group | 1,757,444 | 55.52 | % | |||||
| (1) | Consists of 1,602,941 shares of common stock held by MGW Investment I Limited (“MGWI”). Our CFO and director, Calvin Pang, has voting and investment power with respect to common stock held by MGW Investment I Limited |
| (2) | Consists of 154,503 shares of common stock held by the Kambiz and Bahareh Mahdi Living Trust, and deemed to be beneficially owned by our CEO and director, Kambiz Mahdi, and his spouse, Bahareh Mahdi, as trustees of the trust. |
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Director Independence
We have five members of our Board of Directors, of which three members qualify as “independent” under the listing rules of the Nasdaq.
Review of Related Person Transactions
Our Code of Business Conduct and Ethics provides guidance for addressing actual or potential conflicts of interests, including those that may arise from transactions and relationships between us and our executive officers or directors, such as:
| ● | Business transaction between the company and any executive are prohibited, unless otherwise approved by the Board; | |
| ● | Activities that may interfere with an executive’s performance in carrying out company responsibilities; | |
| ● | Activities that call for the use of the company’s influence, resources or facilities; and | |
| ● | Activities that may discredit the name or reputation of the company. |
We have various procedures in place to identify potential related person transactions, and the Board of Directors and a separate compliance committee work together in reviewing and considering whether any identified transactions or relationships are covered by the Code of Business Conduct and Ethics.
Transactions with Related Persons
Please see note 13 in the notes to the financial statement for a discussion on transactions with related parties.
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Item 14. Principal Accounting Fees and Services.
The aggregate fees billed to us by our principal accountant (TAAD LLP) for services rendered during the fiscal years ended December 31, 2025 and December 31, 2024, are set forth in the table below:
| Services: | 2025 | 2024 | ||||||
| Audit Fees (1) | $ | 318,489 | $ | 307,611 | ||||
| Audit Related Fees (2) | 43,986 | |||||||
| Tax Fees (3) | - | |||||||
| All Other fees | - | - | ||||||
| Total | $ | 362,475 | $ | 307,611 | ||||
| (1) | Audit fees billed in 2025 and 2024 consisted of fees related to the audit of our annual financial statements, reviews of our quarterly financial statements, and statutory and regulatory audits, consent and other services related to filings with the SEC. |
| (2) | Audit-related fees related to S-3 financial accounting and reporting consultations, assurance and related services. |
| (3) | Tax services consist of tax compliance and tax planning and advice. |
The Board of Directors pre-approves all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for us by our independent registered public accounting firm, subject to the de minimis exceptions for non-audit services described in Section 10A(i)(1)(b) of the Exchange Act and the rules and regulations of the SEC. All services rendered by our principal auditor for the years ended December 31, 2025 and 2024, were pre-approved in accordance with the policies and procedures described above.
Auditor Independence
The Board of Directors has considered whether the provision of the above noted services is compatible with maintaining our independent registered public accounting firm’s independence and has concluded that the provision of such services has not adversely affected the independent registered public accounting firm’s independence.
Board of Directors Audit Report to Shareholders
Since we do have a standing Audit Committee our full Board of Directors oversees our financial reporting process. Our management has the primary responsibility for our financial statements as well as our financial reporting process, principles and internal controls. The independent registered public accounting firm is responsible for performing an audit of our financial statements and expressing an opinion as to the conformity of such financial statements with accounting principles generally accepted in the United States of America.
In this context, the Board of Directors has reviewed and discussed our audited financial statements as of December 31, 2025 and 2024, with management and the independent registered public accounting firm. The Board of Directors has discussed with the independent registered public accounting firm the matters required to be discussed by the Statement on Auditing Standards No. 61, Professional Standards, as amended. In addition, the Board of Directors has received the written disclosures and the letter from the independent registered public accounting firm required by Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees, as currently in effect, and it has discussed their independence with us.
Item 15. Exhibits, Financial Statement Schedules.
(a)(1) Financial Statements:
The consolidated financial statements and the related notes are included in Item 8 herein.
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(a)(2) Financial Statement Schedule:
All schedules have been omitted as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes.
(a)(3) Exhibits:
The exhibits listed on the Exhibit Index (following the signatures section of this report) are included, or incorporated by reference, in this annual report.
(b) Exhibits:
See Item 15(a)(3) above.
(c) Financial Statement Schedule:
All schedules have been omitted as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Irvine, State of California on the 4th day of June, 2026.
| REGISTRANT | ||
| CLEAN ENERGY TECHNOLOGIES, INC. | ||
| By: | /s/ Kambiz Mahdi | |
| Kambiz Mahdi | ||
| Chief Executive Officer | ||
| Date: June 4, 2026 | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
| Signature | Title | ||
| /s/ Kambiz Mahdi | Chief Executive Officer and Director | ||
| By: | Kambiz Mahdi | (principal executive officer) | |
| Date: | June 4, 2026 | ||
| /s/ Calvin Pang | Chief Financial Officer and Director | ||
| By: | Calvin Pang | (principal financial and accounting officer) | |
| Date: | June 4, 2026 | ||
| /s/ Ted Hsu | Director | ||
| By: | Ted Hsu | ||
| Date: | June 4, 2026 | ||
| /s/ Lauren Morrison | Director | ||
| By: | Lauren Morrison | ||
| Date: | June 4, 2026 | ||
| /s/ Xiaotian Xiao | Director | ||
| By: | Xiaotian Xiao | ||
| Date: | June 4, 2026 | ||
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EXHIBIT INDEX
EXHIBIT NUMBER |
DESCRIPTION | |
| 3.1 | Articles of Incorporation (included as exhibit 3.1 to the Form SB-2/A filed on June 10, 2005). | |
| 3.2 | Bylaws (included as exhibit 3.2 to the Form SB-2/A filed on June 10, 2005). | |
| 3.3 | Amended ByLaws (included as exhibit 3.03 to our Current Report on Form 8-K dated February 15, 2018). | |
| 3.4 | Certificate of Amendment of Articles of Incorporation, dated November 13, 2015, filed with the Nevada Secretary of State (included as exhibit 3.1 to our Current Report on Form 8-K dated January 12, 2016). | |
| 3.5 | Amended and Restated Articles dated, June 30, 2016, filed with the Nevada Secretary of State (included as exhibit 3.1 to our Current Report on Form 8-K dated July 6, 2016). | |
| 3.6 | Amended By-Laws, dated June 30, 2016 (included as exhibit 3.2 to our Current Report on Form 8-K dated July 6, 2016). | |
| 3.7 | Certificate of Amendment of Articles of Incorporation filed with the Nevada Secretary of State on August 23, 2017 (included as exhibit 10.1 to the Form S-8 filed on August 28, 2017). | |
| 3.8 | Amended and Restated Bylaws (included as exhibit 3.8 to the Form S-1/A filed on January 31, 2023). | |
| 4.1 | Certificate of Designation for Series A Convertible Preferred Stock, dated May 20, 2004 (included as exhibit 4.2 to the Form SB-2/A filed on June 10, 2005). | |
| 4.3 | Certificate of Designation for Series B Convertible Preferred Stock dated December 31, 2004 (included as exhibit 4.2 to the Form SB-2/A filed on June 10, 2005). | |
| 4.4 | Sample Series A Warrant Purchase Agreement (included as exhibit 4.3 to the Form SB-2/A filed on October 26, 2005). | |
| 4.5 | Sample Series B Warrant Purchase Agreement (included as exhibit 4.4 to the Form SB-2/A filed on October 26, 2005). | |
| 4.6 | Sample Amended Series A Warrant Purchase Agreement (included as exhibit 4.5 to the Form SB-2/A filed on November 25, 2005). | |
| 4.7 | Sample Amended Series B Warrant Purchase Agreement (included as exhibit 4.6 to the Form SB-2/A filed on November 25, 2005). | |
| 4.9 | Amended Series A Warrant Agreement (included as exhibit 4.1 to the Form 8-K filed on November 10, 2008 and amended on November 18, 2008). | |
| 4.10 | Amended Series B Warrant Agreement (included as exhibit 4.2 to the Form 8-K filed on November 10, 2008 and amended on November 18, 2008). | |
| 4.11 | Probe Manufacturing, Inc. 2011 Omnibus Incentive Plan (included as exhibit 4.2 to the Form S-8 filed on April 18, 2011). | |
| 4.12 | Voting Agreement, dated February 13, by and among, the Corporation, ETI IV, Kambiz Mahadi, John Bennett and the Kambiz & Bahareh Mahdi Living Trust (included as exhibit 4.24 to the Form 8-K filed on February 14,). |
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| 4.13 | Description of Securities (included as exhibit 4.13 to the Annual Report on Form 10-K filed on May 28, 2020). | |
| 4.14 | Subscription Agreement (included as exhibit 4.13 to the Form 1-A/A filed on December 19, 2019). | |
| 4.15 | Form of Representative Warrant (included as exhibit 4.14 to the Form S-1/A filed on January 31, 2023). | |
| 10.1 | Lease Agreement between Probe Manufacturing, Inc. (F.K.A. Probe Manufacturing Industries, Inc. and Reza Zarif and Kambiz Mahdi, dated May 2, 1997 (included as exhibit 10.1 to the Form SB-2/A filed on June 10, 2005). | |
| 10.2 | Consulting Agreement between Probe Manufacturing Industries and Anthony Reed dated December 31, 2004 (included as exhibit 10.2 to the Form SB-2/A filed on June 10, 2005). | |
| 10.3 | Legal Retainer Agreement between Probe Manufacturing, Inc. and Jeffrey Conrad dated May 20, 2004 (included as exhibit 10.3 to the Form SB-2/A filed on June 10, 2005). | |
| 10.4 | Line of Credit agreement between Probe Manufacturing, Inc. and eFund Capital Partners, LLC dated January 1, 2005 (included as exhibit 10.4 to the Form SB-2/A filed on June 10, 2005). | |
| 10.5 | Line of Credit agreement between Probe Manufacturing, Inc. and Ashford Capital, LLC dated January 1, 2005 (included as exhibit 10.5 to the Form SB-2/A filed on June 10, 2005). | |
| 10.6 | Line of Credit agreement between Probe Manufacturing, Inc. and Benner Exemption Trust dated March 8, 2005 (included as exhibit 10.6 to the Form SB-2/A filed on June 10, 2005). | |
| 10.7 | Line of Credit agreement between Probe Manufacturing, Inc. and Edward Lassiter dated March 22, 2005 (included as exhibit 10.7 to the Form SB-2/A filed on June 10, 2005). | |
| 10.8 | Line of Credit agreement between Probe Manufacturing, Inc. and Rufina V. Paniego dated January 1, 2005 (included as exhibit 10.8 to the Form SB-2/A filed on June 10, 2005). | |
| 10.9 | Promissory Note between Probe Manufacturing, Inc and Ashford Transitional Fund, L.P. dated September 20, 2004 (included as exhibit 10.10 to the Form SB-2/A filed on June 10, 2005). | |
| 10.10 | Engagement Letter between Probe Manufacturing, Inc. and eFund Capital Partners, LLC dated May 20, 2004 (included as exhibit 10.11 to the Form SB-2/A filed on June 10, 2005). | |
| 10.11 | Series A Convertible Preferred Stock Purchase Agreement with eFund Capital Partners, LLC dated May 20, 2004 (included as exhibit 10.12 to the Form SB-2/A filed on June 10, 2005). | |
| 10.12 | Series A Convertible Preferred Stock Purchase Agreement with Reza Zarif dated May 20, 2004 (included as exhibit 10.13 to the Form SB-2/A filed on June 10, 2005). | |
| 10.13 | Series A Convertible Preferred Stock Purchase Agreement with Kambiz Mahdi dated May 20, 2004. (included as exhibit 10.14 to the Form SB-2/A filed on June 10, 2005). | |
| 10.14 | Series B Convertible Preferred Stock Purchase Agreement with eFund Capital Partners, LLC dated December 31, 2004 (included as exhibit 10.15 to the Form SB-2/A filed on June 10, 2005). | |
| 10.15 | Series B Convertible Preferred Stock Purchase Agreement with Reza Zarif dated December 31, 2004 (included as exhibit 10.16 to the Form SB-2/A filed on June 10, 2005). | |
| 10.16 | Series B Convertible Preferred Stock Purchase Agreement with Kambiz Mahdi dated December 31, 2004 (included as exhibit 10.17 to the Form SB-2/A filed on June 10, 2005). |
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| 10.17 | Agreement to Cancel and Return shares of common stock between Probe and eFund Capital Partners, LLC, Ashford Capital, LLC, Reza Zarif, Kambiz Mahdi, dated December 31, 2004 (included as exhibit 10.18 to the Form SB-2/A filed on June 10, 2005). | |
| 10.18 | Promissory note with eFund Capital Partners, LLC dated October 12, 2004 (included as exhibit 10.19 to the Form SB-2/A filed on June 10, 2005). | |
| 10.19 | Promissory note with Rufina V. Paniego dated July 14, 2004 (included as exhibit 10.20 to the Form SB-2/A filed on June 10, 2005). | |
| 10.20 | Sample purchase order agreement with Celerity, Inc (included as exhibit 10.20 to the Form SB-2/A filed on October 26, 2005). | |
| 10.21 | Sample purchase order agreement with Newport Corporation (included as exhibit 10.21 to the Form SB-2/A filed on October 26, 2005). | |
| 10.22 | Sample purchase order agreement with Asymteck Corporation (included as exhibit 10.22 to the Form SB-2/A filed on October 26, 2005). | |
| 10.23 | Sample purchase order agreement with Jetline Engineering Corporation (included as exhibit 10.23 to the Form SB-2/A filed on October 26, 2005). | |
| 10.24 | Sample purchase order agreement with our supplier Future Active, Inc (included as exhibit 10.24 to the Form SB-2/A filed on October 26, 2005). | |
| 10.25 | Sample purchase order agreement with our supplier Arrow Electronics, Inc. (included as exhibit 10.25 to the Form SB-2/A filed on October 26, 2005). | |
| 10.26 | Intentionally Omitted | |
| 10.27 | Sublease Agreement with Quantum Fuel System Technologies, Inc. (included as exhibit 10.1 to the Form 8-K filed on September 21, 2006). | |
| 10.28 | Form Of Stock Subscription Agreement By And Between Quantum Fuel Systems Technologies Worldwide, Inc. And Probe Manufacturing, Inc. (included as exhibit 99 to our definitive 14D filed on October 5, 2006). | |
| 10.29 | Employment Agreement with Reza Zarif, Chief Executive Officer of Probe Manufacturing, Inc. (included as exhibit 10.1 to Form 8-K filed on June 14, 2006). | |
| 10.30 | Series C Convertible Preferred Exchange Agreement with eFund Capital Partners, LLC (included as exhibit 10.2 to Form 8-K filed on June 14, 2006). | |
| 10.31 | Series C Convertible Preferred Exchange Agreement with Reza Zarif (included as exhibit 10.3 to Form 8-K filed on June 14, 2006). | |
| 10.32 | Series C Convertible Preferred Exchange Agreement with Kambiz Mahdi (included as exhibit 10.4 to Form 8-K filed on June 14, 2006). | |
| 10.33 | Amended Series C Convertible Preferred Exchange Agreement with eFund Capital Partners, LLC (included as exhibit 10.1 to Form 8-K filed on August 14, 2006). | |
| 10.34 | Amended Series C Convertible Preferred Exchange Agreement with Reza Zarif (included as exhibit 10.2 to Form 8-K filed on August 14, 2006). |
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| 10.35 | Amended Series C Convertible Preferred Exchange Agreement with Kambiz Mahdi (included as exhibit 10.3 to Form 8-K filed on August 14, 2006). | |
| 10.36 | Amended Line of Credit agreement between Probe Manufacturing, Inc. and Kambiz Mahdi dated August 10, 2006 (included as exhibit 10.1 to the Form 8-K filed on August 23, 2006). | |
| 10.37 | Amended Line of Credit agreement between Probe Manufacturing, Inc. and Reza Zarif dated August 10, 2006 (included as exhibit 10.2 to the Form 8-K filed on August 23, 2006). | |
| 10.38 | Amended Line of Credit agreement between Probe Manufacturing, Inc. and Frank Kavanaugh dated August 10, 2006 (included as exhibit 10.3 to the Form 8-K filed on August 23, 2006). | |
| 10.39 | Amended Line of Credit agreement between Probe Manufacturing, Inc. and Kambiz Mahdi dated August 10, 2006 (included as exhibit 10.4 to the Form 8-K filed on August 23, 2006). | |
| 10.40 | Amended Line of Credit agreement between Probe Manufacturing, Inc. and Reza Zarif dated August 10, 2006 (included as exhibit 10.5 to the Form 8-K filed on August 23, 2006). | |
| 10.41 | Amended Line of Credit agreement between Probe Manufacturing, Inc. and Rufina Paniego dated August 10, 2006 (included as exhibit 10.6 to the Form 8-K filed on August 23, 2006). | |
| 10.42 | Amended Line of Credit agreement between Probe Manufacturing, Inc. and eFund Capital Partners, LLC dated August 10, 2006 (included as exhibit 10.7 to the Form 8-K filed on August 23, 2006). | |
| 10.43 | Amended Line of Credit agreement between Probe Manufacturing, Inc. and Benner Exemption Trust dated August 10, 2006 (included as exhibit 10.8 to the Form 8-K filed on August 23, 2006). | |
| 10.44 | Amended Line of Credit agreement between Probe Manufacturing, Inc. and Ed Lassiter dated August 10, 2006 (included as exhibit 10.9 to the Form 8-K filed on August 23, 2006). | |
| 10.45 | Amended Line of Credit agreement between Probe Manufacturing, Inc. and William Duncan dated August 10, 2006 (included as exhibit 10.10 to the Form 8-K filed on August 23, 2006). | |
| 10.46 | Amended Line of Credit agreement between Probe Manufacturing, Inc. and Hoa Mai dated August 10, 2006 (included as exhibit 10.11 to the Form 8-K filed on August 23, 2006). | |
| 10.47 | Amended Line of Credit agreement between Probe Manufacturing, Inc. and Ashford Transition Fund dated August 10, 2006 (included as exhibit 10.12 to the Form 8-K filed on August 23, 2006). | |
| 10.48 | Employee Profit Sharing Plan (included as exhibit 10.13 to the Form 8-K filed on August 23, 2006). | |
| 10.49 | Probe Manufacturing 2006 Employee Incentive Stock Option Plan (included as exhibit 10.14 to the Form 8-K filed on August 23, 2006). | |
| 10.50 | Amended and Restated Series A Warrant Agreement (included as exhibit 10.1 to the Form 8-K filed on November 15, 2006). | |
| 10.51 | Amended and Restated Series B Warrant Agreement (included as exhibit 10.2 to the Form 8-K filed on November 15, 2006). | |
| 10.52 | Contract Services Agreement for purchase order No. 43103 between Probe Manufacturing, Inc. and Mettler Electronics Corp. dated May 8, 2007. (included as exhibit 10.1 to the Form 8-K filed on May 22, 2007). |
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| 10.53 | Contract Services Agreement for purchase order No. 43104 between Probe Manufacturing, Inc. and Mettler Electronics Corp. dated May 8, 2007. (included as exhibit 10.1 to the Form 8-K filed on May 22, 2007). | |
| 10.55 | Contract Services Agreement for purchase order No. 43104 between Probe Manufacturing, Inc. and Mettler Electronics Corp. dated May 8, 2007. (included as exhibit 10.1 to the Form 8-K filed on May 22, 2007) | |
| 10.56 | Probe Manufacturing, Inc. 2008 Directors Stock Compensation Plan (included as attachment to PRE14A Form 8-K filed on November 19, 2007). | |
| 10.57 | Employment Letter of John Bennett date February 28, 2008 (included as exhibit 10.1 to the Form 8-K filed on February 29, 2008 and March 27, 2008). | |
| 10.58 | Amended Sublease Agreement dated May 19, 2008 (included as exhibit 10.1 to the Form 8-K filed on May 23, 2008). | |
| 10.59 | Letter of Intent between Probe Manufacturing and Solar Masters (included as exhibit 10.1 to the Form 8-K filed on July 28, 2008). | |
| 10.60 | Amended Letter of intent to acquire the assets of Solar Master Company (included as exhibit 10.1 to the Form 10-Q filed on August 12, 2008). | |
| 10.61 | Agreement for the sale and purchase of business assets of Solar Masters, LLC date August 13, 2008 (included as exhibit 10.1 to the Form 8-K filed on August 21, 2008). | |
| 10.62 | Executive Consulting Agreement with Barrett Evans (included as exhibit 10.1 to the Form 8-K filed on September 12, 2008). | |
| 10.63 | Engagement Letter of W. T. Uniack & Co. CPA’s P.C. (included as exhibit 10.1 to the Form 8-K filed on November 10, 2008 and amended on November 18, 2008). | |
| 10.64 | Letter to Reza Zarif regarding Resignation Letter (included as exhibit 10.2 to the Form 8-K filed on November 10, 2008 and amended on November 18, 2008). | |
| 10.65 | Resignation letter from Board of Directors. (included as exhibit 10.3 to the Form 8-K filed on November 10, 2008 and amended on November 18, 2008). | |
| 10.66 | Response from Reza Zarif Regarding 8-K dated September 25, 2008 (included as exhibit 10.4 to the Form 8-K filed on November 10, 2008 and amended on November 18, 2008). | |
| 10.67 | Settlement Agreement and General release with Reza Zarif, dated June 2009. (included as exhibit 10.1 to the Form 8-K filed on August 12, 2009). | |
| 10.68 | Sale of Solar Masters to Solar Masters Acquisition Company dated July 2009 (included as exhibit 10.2 to the Form 8-K filed on August 12, 2009). | |
| 10.69 | Sale of Common Stock to KB Development Group, LLC (included as exhibit 10.3 to the Form 8-K filed on August 12, 2009). | |
| 10.70 | Resignation Letters of Barrett Evans and Jeffrey Conrad (included as exhibit 10.4 to the Form 8-K filed on August 12, 2009). |
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| 10.71 | Summary of lease terms regarding Lease Agreement between Probe Manufacturing, Inc. and Benhard Family Trust dated October 14, 2009 (included as exhibit 10.1 to the Form 8-K filed on November 20, 2009). | |
| 10.72 | Accounts Receivable Purchasing Agreement by and between Probe Manufacturing, Inc. and DSCH Capital Partners, LLC d/b/a Far West Capital, dated February 17, 2011 and effective as of February 18, 2011 (included as exhibit 10.1 to the Form 8-K filed on February 24, 2011). | |
| 10.73 | Inventory Finance Rider to Accounts Receivable Purchasing Agreement by and between Probe Manufacturing, Inc. and DSCH Capital Partners, LLC d/b/a Far West Capital, dated February 17, 2011 and effective as of February 18, 2011. (included as exhibit 10.2 to the Form 8-K filed on February 24, 2011). | |
| 10.74 | Agreement and Plan of Acquisition between Probe Manufacturing, Inc., Trident Manufacturing, Inc. and the Shareholders of Trident Manufacturing, Inc., dated March 13, 2013 (included as exhibit 10.1 to the Form 8-K filed on March 15, 2013). | |
| 10.75 | Form of Series D Preferred Stock Purchase Agreement. (included as exhibit 10.1 to the Form 8-K filed on August 8, 2013). | |
| 10.76 | Form of Series F Warrant Agreement (included as exhibit 10.2 to the Form 8-K filed on August 8, 2013). | |
| 10.77 | Form of Series G Warrant Agreement (included as exhibit 10.3 to the Form 8-K filed on August 8, 2013). | |
| 10.78 | OEM Agreement between the Company and S-Ray, Incorporated, dated November 21, 2014 (included as exhibit 10.1 to the Form 8-K filed on November 24, 2014). | |
| 10.79 | Form of Stock Purchase Agreement (included as exhibit 10.1 to the Form 8-K filed on December 17, 2014). | |
| 10.80 | Registration Rights Agreement, by and between the Company and ETI Partners IV LLC, dated as of September 11, 2015 (included as exhibit 4.1 to the Form 8-K filed on September 21, 2015). | |
| 10.81 | Asset Purchase Agreement, by and between the Company and General Electric International, Inc., dated as of September 11, 2015 (included as exhibit 10.1 to the Form 8-K filed on September 21, 2015) | |
| 10.82 | Transaction Completion and Financing Agreement, by and between the Company and ETI Partners IV LLC, dated as of September 11, 2015 (included as exhibit 10.2 to the Form 8-K filed on September 21, 2015). | |
| 10.83 | Loan, Guarantee, and Collateral Agreement, by and between the Company and ETI Partners IV LLC, dated as of September 11, 2015. (included as exhibit 10.3 to the Form 8-K filed on September 21, 2015). | |
| 10.84 | Securities Purchase agreement between the company and Peak One Opportunity Fund, LP (included as exhibit 10.4 to the Form 10-Q filed on August 22, 2016). | |
| 10.85 | Subscription Agreement by and between the Company and Cyberfuture One LP, dated October 31, 2016. (included as exhibit 10.1 to the Form 8-K/A filed on April 20, 2017). | |
| 10.86 | Securities Purchase agreement between the company and Peak One Opportunity Fund, LP (included as exhibit 10.4 to the Form 10-Q filed on November 18, 2016). |
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| 10.87 | Subscription Agreement by and between the Company and Cyberfuture One LP, dated October 31, 2016 (included as exhibit 10.1 to the Form 8-K/A filed on April 20, 2017). | |
| 10.88 | Escrow Funding Agreement dated November 1, 2016 between Red Dot Investment, Inc., a California corporation and the Registrant (included as exhibit 10.2 to the Form 8-K/A filed on April 20, 2018). | |
| 10.89 | Partial Debt Settlement Agreement by and between EMA Financial, LLC, a Delaware limited liability company and the Registrant, dated January 9, 2017 (included as exhibit 10.1 to the Form 8-K filed on April 20, 2017). | |
| 10.90 | Payoff Agreement by and between the Registrant and JSJ Investments, Inc., dated February 13, 2017 (included as exhibit 10.2 to the Form 8-K filed on April 20, 2017). | |
| 10.91 | Credit Agreement and Promissory Note by and between Megawell USA Technology Investment Fund I LLC, a Wyoming limited liability company in formation and the Registrant, dated December 31, 2016 (included as exhibit 10.3 to the Form 8-K filed on April 20, 2017). | |
| 10.92 | Common Stock Purchase Agreement by and between MGW Investment I Limited and the Registrant, dated February 13, 2018 (included as exhibit 10.20 to the Form 8-K filed on February 15, 2018). | |
| 10.93 | Convertible Note Stock Purchase Agreement by and between the Registrant and Confections Ventures, Inc., dated February 13, 2018 (included as exhibit 10.21 to the Form 8-K filed on February 15, 2018). | |
| 10.94 | $939,500 Convertible Promissory Note by and between Confections Ventures, Inc. and the Registrant, dated February 13, 2018 (included as exhibit 10.22 to the Form 8-K filed on February 15, 2018). | |
| 10.95 | ETI IV LLC Settlement Agreement by and between the Registrant and ETI IV LLC, dated February 13, 2018 (included as exhibit 10.23 to the Form 8-K filed on February 15, 2018). | |
| 10.96 | Reddot Settlement Agreement by and between the Registrant and Reddot Investment Inc., dated February 13, 2018 (included as exhibit 10.24 to the Form 8-K filed on February 15, 2018). | |
| 10.97 | $153,123 Convertible Promissory Note of the Corporation to MGW Investment I Limited, dated February 8, 2018 (included as exhibit 10.25 to the Form 8-K filed on February 15, 2018). | |
| 10.98 | Form of $83,000 Convertible Promissory Note, dated 13, 2018 of Clean Energy Technologies Inc to Power Up Lending Group LTD. (Included as exhibit 10.98 to the Form 1-A/A filed on September 27, 2019) | |
| 10.99 | Form of $138,000 Convertible Promissory Note of Clean Energy Technologies, Inc. to Power Up Lending LTD dated February 13, 2019. (Included as exhibit 10.99 to the Form 1-A/A filed on September 27, 2019) | |
| 10.100 | Form of Executive Employment Agreement between Clean Energy Technologies, Inc and John Bennett dated May 17, 2019 and effective May 1, 2019. (Included as exhibit 10.100 to the Form 1-A/A filed on September 27, 2019) | |
| 10.101 | Form of Subscription Agreement between Clean Energy Technologies, Inc. and MGW Investment I Limited, dated May 31, 2019. (Included as exhibit 10.101 to the Form 8-K filed on June 5, 2019). | |
| 10.102 | Form of Securities Purchase Agreement between Power-Up Lending Group Ltd. and Clean Energy Technologies, Inc., dated October 29, 2019 (Included as exhibit 10.102 to the Form 8-K filed on November 4, 2019). |
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| 10.103 | Form of Convertible Promissory Note between Power-Up Lending Group Ltd. and Clean Energy Technologies, Inc., dated October 29, 2019 (Included as exhibit 10.102 to the Form 8-K filed on November 4, 2019). | |
| 10.104 | Form of Securities Purchase Agreement between Power-Up Lending Group Ltd. and Clean Energy Technologies, Inc., dated January 8, 2020 (Included as exhibit 10.104 to the Form 10-K filed on June 4, 2020). | |
| 10.105 | Form of Convertible Promissory Note between Power-Up Lending Group Ltd. and Clean Energy Technologies, Inc., dated January 8, 2020 (Included as exhibit 10.105 to the Form 10-K filed on June 4, 2020). | |
| 10.106 | Form of Securities Purchase Agreement between Power-Up Lending Group Ltd. and Clean Energy Technologies, Inc., dated February 20, 2020 (Included as exhibit 10.106 to the Form 10-K filed on June 4, 2020). | |
| 10.107 | Form of Convertible Promissory Note between Power-Up Lending Group Ltd. and Clean Energy Technologies, Inc., dated October 29, 2019 (Included as exhibit 10.107 to the Form 10-K filed on June 4, 2020). | |
| 10.108 | Employment Agreement between Kambiz Mahdi and Form of Convertible Promissory Note between Power-Up Lending Group Ltd. and Clean Energy Technologies, Inc., effective July 1, 2019 (Included as exhibit 10.108 to the Form 10-K filed on June 4, 2020). | |
| 10.109 | Form of Equity Financing Agreement with GHS Investments, LLC, dated as of June 8, 2020 (Included as exhibit 10.109 to the Form 8-K filed on June 10, 2020). | |
| 10.110 | Form of Registration Rights Agreement with GHS Investments, LLC, dated as of June 8, 2020 (Included as exhibit 10.110 to the Form 8-K filed on June 10, 2020). | |
| 10.111 | Form of Securities Purchase Agreement, dated July 6, 2020, by and between Clean Energy Technologies, Inc. and LGH Investments, LLC (Included as exhibit 10.111 to the Form 8-K filed on July 8, 2020). | |
| 10.112 | Form of $164,800 Convertible Promissory Note, dated July 6, 2020, issued by Clean Energy Technologies, Inc. to LGH Investments, LLC(Included as exhibit 10.112 to the Form 8-K filed on July 8, 2020). | |
| 10.113 | Form of Common Stock Purchase Warrant, dated July 6, 2020, issued by Clean Energy Technologies, Inc. to LGH Investments, LLC (Included as exhibit 10.113 to the Form 8-K filed on July 8, 2020). | |
| 10.114 | Form of Securities Purchase Agreement, dated July 6, 2020, by and between Clean Energy Technologies, Inc. and LGH Investments, LLC (Included as exhibit 10.114 to the Form 8-K filed on August 25, 2020). | |
| 10.115 | Form of $164,800 Convertible Promissory Note, dated August 18, 2020, issued by Clean Energy Technologies, Inc. to LGH Investments, LLC (Included as exhibit 10.115 to the Form 8-K filed on August 25, 2020). | |
| 10.116 | Form of Common Stock Purchase Warrant, dated August 18, 2020, issued by Clean Energy Technologies, Inc. to LGH Investments, LLC (Included as exhibit 10.116 to the Form 8-K filed on August 25, 2020). | |
| 10.117 | Form of Securities Purchase Agreement between PowerUp Lending Group Ltd. and Clean Energy Technologies, Inc., dated July 15, 2020 (Included as exhibit 10.117 to the Form 8-K filed on August 25, 2020). |
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| 10.118 | Form of Convertible $128,000 Promissory Note between PowerUp Lending Group Ltd. and Clean Energy Technologies, Inc., dated July 15, 2020. (Included as exhibit 10.118 to the Form 8-K filed on August 25, 2020). | |
| 10.119 | Form of Securities Purchase Agreement, dated October 14, 2020, by and between Clean Energy Technologies, Inc. and LGH Investments, LLC (Included as exhibit 10.119 to the Form 8-K filed on October 19, 2020). | |
| 10.120 | Form of $164,800 Convertible Promissory Note, dated October 14, 2020, issued by Clean Energy Technologies, Inc. to LGH Investments, LLC. (Included as exhibit 10.120 to the Form 8-K filed on October 19, 2020). | |
| 10.121 | Form of Common Stock Purchase Warrant, dated October 14, 2020, issued by Clean Energy Technologies, Inc. to LGH Investments, LLC. (Included as exhibit 10.121 to the Form 8-K filed on October 19, 2020). | |
| 10.122 | Form of Securities Purchase Agreement between PowerUp Lending Group Ltd. and Clean Energy Technologies, Inc., dated September 9, 2020. (Included as exhibit 10.122 to the Form 8-K filed on October 19, 2020) | |
| 10.123 | Form of Convertible $63,000 Promissory Note between PowerUp Lending Group Ltd. and Clean Energy Technologies, Inc., dated September 9, 2020. (Included as exhibit 10.123 to the Form 8-K filed on October 19, 2020). | |
| 10.124 | Form of Securities Purchase Agreement between Power Up Lending Group Ltd. and Clean Energy Technologies, Inc., dated as of November 10, 2020. (Included as exhibit 10.124 to the Form 8-K filed on November 20, 2020) | |
| 10.125 | Form of Convertible $53,000 Promissory Note between Power Up Lending Group Ltd. and Clean Energy Technologies, Inc., dated as of November 10, 2020 (Included as exhibit 10.125 to the Form 8-K filed on November 20, 2020). | |
| 10.126 | Form of Securities Purchase Agreement between Power Up Lending Group Ltd. and Clean Energy Technologies, Inc., dated as of December 18, 2020. (Included as exhibit 10.126 to the Form 8-K filed on December 23, 2020) | |
| 10.127 | Form of Convertible $53,000 Promissory Note between Power Up Lending Group Ltd. and Clean Energy Technologies, Inc., dated as of December 18, 2020. (Included as exhibit 10.126 to the Form 8-K filed on December 23, 2020). | |
| 10.128 | Form of Equity Financing Agreement with GHS Investments, LLC, dated as of August 31, 2021 (Included as exhibit 10.132 to the Form 8-K filed on September 2, 2021. | |
| 10.129 | Form of Registration Rights Agreement with GHS Investments, LLC, dated as of August 31, 2021 (Included as exhibit 10.132 to the Form 8-K filed on September 2, 2021. | |
| 10.130 | Form of Securities Purchase Agreement with Geneva Roth Remark Holdings Inc., dated as of August 31, 2021 (Included as exhibit 10.132 to the Form 8-K filed on September 10, 2021). | |
| 10.131 | Form of $226,345 Original Issue Discount Note, due September 7, 2022, with Geneva Roth Remark Holdings Inc. carrying 10% interest per annum (Included as exhibit 10.132 to the Form 8-K filed on September 10, 2021). | |
| 10.132 | Form of $226,345 Original Issue Discount Note, due September 7, 2022, with Geneva Roth Remark Holdings Inc. carrying 10% interest per annum dated September 28, 2021 (Included as exhibit 10.132 to the Form 8-K filed on October 5, 2021). |
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| 10.133 | Form of Securities Purchase Agreement with Geneva Roth Remark Holdings Inc., dated as of August 31, 2021 (Included as exhibit 10.133 to the Form 8-K filed on October 5, 2021). | |
| 10.134 | Form of The Conditional Stock Purchase Agreement between Clean Energy Technologies (H.K.) Limited., a wholly owned subsidiary of Clean Energy Technologies Inc. and Mr. Li Chin-kun, dated as of November 8, 2020. (Included as exhibit 10.134 to the Form 8-K filed on November 10, 2021) | |
| 10.135 | Form of Convertible $650,000 Promissory Note between Universal Scope, Inc. and Clean Energy Technologies, Inc., dated as of December 18, 2020. (Included as exhibit 10.135 to the Form 8-K filed on December 28, 2021) | |
| 10.136 | Translated Form of Strategic Cooperation Framework Agreement between Shenzhen Gas between Shenzhen Gas (Hong Kong) International Co., Limited and Leading Wave Limited, dates August 20, 2021 (included as exhibit 10.136 to the annual report on Form 10-K/A filed on April 19, 2024). | |
| 10.137 | Translated Form of 12% Convertible Promissory Note of Chengdu Rongjun Enterprise Consulting Co., Ltd to Jiangsu Huanya Jieneng New Energy Co., Ltd. Yuan 5,000,000 (included as exhibit 10.137 to the annual report on Form 10-K/A filed on April 19, 2024). | |
| 10.138 | Form of Securities Purchase Agreement between Clean Energy Technologies, Inc. and Mast Hill Fund, L.P. dated May 6, 2022. (Included as exhibit 10.138 to the Form 8-K filed on May 9, 2022) | |
| 10.139 | Form of $750,000 Convertible Promissory Note dated May 6, 2022. (Included as exhibit 10.139 to the Form 8-K filed on May 9, 2022) | |
| 10.140 | Form of Warrant (Included as exhibit 10.140 to the Form 8-K filed on May 9, 2022) | |
| 10.141 | 2006 Incentive Stock Plan of the Company (Included as Exhibit 10.14 of Probe Manufacturing to the Form 8-K filed on August 23, 2006) | |
| 10.142 | Form of Securities Purchase Agreement between Clean Energy Technologies, Inc. and Jefferson Street Capital, LLC. dated August 5, 2022. (Included as Exhibit 10.142 of the Company on Form 8-K filed on August 16, 2022) | |
| 10.143 | Form of $138,888.88 Convertible Promissory Note dated August 5, 2022. (Included as Exhibit 10.143 of the Company on Form 8-K filed on August 16, 2022) | |
| 10.144 | Form of Jefferson Warrant (Included as Exhibit 10.144 of the Company on Form 8-K filed on August 16, 2022) | |
| 10.145 | Form of $750,000 Convertible Promissory Note dated August 17, 2022. (Included as Exhibit 10.145 of the Company on Form 8-K filed on August 26, 2022) | |
| 10.146 | Form of Securities Purchase Agreement between Clean Energy Technologies, Inc. and FirstFire Global Opportunities Fund, LLC. dated August 17, 2022. (Included as Exhibit 10.146 of the Company on Form 8-K filed on August 25, 2022) | |
| 10.147 | Form of First Fire Warrant (Included as Exhibit 10.147 of the Company on Form 8-K filed on August 25, 2022) | |
| 10.148 | Form of Securities Purchase Agreement between Clean Energy Technologies, Inc. and Pacific Global Opportunities Fund, LLC. dated September 1, 2022. (Included as Exhibit 10.148 of the Company on Form 8-K filed on September 9, 2022) | |
| 10.149 | Form of $138,888.88 Convertible Promissory Note dated September 1, 2022. (Included as Exhibit 10.149 of the Company on Form 8-K filed on September 9, 2022) |
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| 10.150 | Form of Warrant (Included as Exhibit 10.150 of the Company on Form 8-K filed on September 9, 2022) | |
| 10.151 | Form of Securities Purchase Agreement between Clean Energy Technologies, Inc. and Mast Hill Fund, L.P. dated September 16, 2022. (Included as Exhibit 10.151 of the Company on Form 8-K filed on September 23, 2022) | |
| 10.152 | Form of $300,000 Convertible Promissory Note dated September 23, 2022. (Included as Exhibit 10.152 of the Company on Form 8-K filed on September 9, 2022) | |
| 10.153 | Form of Warrant (Included as Exhibit 10.153 of the Company on Form 8-K filed on September 23, 2022) | |
| 10.154 | Form of Securities Purchase Agreement between Clean Energy Technologies, Inc. and Mast Hill Fund, L.P. dated October 25, 2022. (Included as Exhibit 10.154 of the Company on Form 8-K filed on October 28, 2022) | |
| 10.155 | Form of Promissory Note dated October 25, 2022. (Included as Exhibit 10.155 of the Company on Form 8-K filed on October 28, 2022) | |
| 10.156 | Form of Warrant (Included as Exhibit 10.155 of the Company on Form 8-K filed on October 28, 2022) | |
| 10.157 | Form of Securities Purchase Agreement between Clean Energy Technologies, Inc. and Mast Hill Fund, L.P. dated November 10, 2022. (Included as Exhibit 10.157 of the Company on Form 8-K filed on November 22, 2022) | |
| 10.158 | Form of Promissory Note dated November 10, 2022. (Included as Exhibit 10.158 of the Company on Form 8-K filed on November 22, 2022) | |
| 10.159 | Form of Warrant (Included as Exhibit 10.159 of the Company on Form 8-K filed on November 22, 2022) | |
| 10.160 | Form of Securities Purchase Agreement between Clean Energy Technologies, Inc. and 1800 Diagonal Lending, LLC dated December 5, 2022 (Included as Exhibit 10.160 of the Company on Form 8-K filed on December 12, 2022). | |
| 10.161 | Form of Promissory Note dated December 5, 2022 (Included as Exhibit 10.161 of the Company on Form 8-K filed on December 12, 2022). | |
| 10.162 | Form of Operating Agreement between CETY Capital LLC and Synergy Bioproducts Corporation, dated December 14, 2022 (Included as Exhibit 10.162 of the Company on Form 8-K filed on December 15, 2022). | |
| 10.163 | Form of Securities Purchase Agreement between Clean Energy Technologies, Inc. and Mast Hill Fund, L.P. dated December 26, 2022 (Included as Exhibit 10.163 of the Company on Form 8-K filed on January 3, 2023). | |
| 10.164 | Form of $123,000 Convertible Promissory Note dated December 26, 2022 (Included as Exhibit 10.164 of the Company on Form 8-K filed on January 3, 2023). | |
| 10.165 | Form of Warrant (Included as Exhibit 10.165 of the Company on Form 8-K filed on January 3, 2023). | |
| 10.166 | Form of Securities Purchase Agreement between Clean Energy Technologies, Inc. and Mast Hill Fund, L.P. dated January 19, 2023 (Included as Exhibit 10.166 of the Company on Form 8-K filed on January 25, 2023). |
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| 10.167 | Form of $187,000 Convertible Promissory Note dated January 19, 2023 (Included as Exhibit 10.167 of the Company on Form 8-K filed on January 25, 2023). | |
| 10.168 | Form of Warrant (Included as Exhibit 10.168 of the Company on Form 8-K filed on January 25, 2023) | |
| 10.169 | Form of Calvin Pang Employment Agreement (Included as Exhibit 10.169 of the Company on Form S-1/A filed on February 14, 2023) | |
| 10.170 | Securities Purchase Agreement between Clean Energy Technologies, Inc. and 1800 Diagonal Lending LLC, dated February 10, 2023 (Included as Exhibit 10.170 of the Company on Form S-1/A filed on March 2, 2023) | |
| 10.171 | Form of $258,521 Promissory Note of Clean Energy Technologies to 1800 Diagonal Lending LLC, February 10, 2023 (Included as Exhibit 10.171 of the Company on Form S-1/A filed on March 2, 2023) | |
| 10.172 | Form of Master Services Agreement between RPG Global LLC and Clean Energy Technologies, Inc. (Included as Exhibit 10.172 of the Company on Form S-1/A filed on March 2, 2023) | |
| 10.173 | Form of Securities Purchase Agreement between Clean Energy Technologies, Inc. and Mast Hill Fund, L.P. dated March 8, 2023 (Included as Exhibit 10.173 of the Company on Form 8-K filed on March 15, 2023). | |
| 10.174 | Form of $734,000 Convertible Promissory Note dated March 8, 2023 (Included as Exhibit 10.174 of the Company on Form 8-K filed on March 15, 2023). | |
| 10.175 | Form of Warrant (Included as Exhibit 10.175 of the Company on Form 8-K filed on March 15, 2023) | |
| 10.176 | Form of $135,005 Promissory Note of Clean Energy Technologies to 1800 Diagonal Lending LLC, March 6, 2023 (Included as Exhibit 10.176 of the Company on Form S-1/A filed on March 20, 2023) | |
| 10.177 | Form of Securities Purchase Agreement, dated as of March 6, 2023 between Clean Energy Technologies, Inc. and 1800 Diagonal Lending LLC. (Included as Exhibit 10.177 of the Company on Form S-1/A filed on March 20, 2023) | |
| 14.1 | Amended and Restated Code of Business Conduct and Ethics, adopted September 23, 2011 (included as exhibit 14.1 to the Form 8-K filed on September 29, 2011). | |
| 21.1 | List of Subsidiaries (included as exhibit 21.1 to the annual report on Form 10-K/A filed on April 19, 2024). | |
| 23.1* | Consent of the Independent Auditor | |
| 31.1* | Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2* | Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1* | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 32.2* | Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 101.INS* | Inline XBRL Instance Document | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
* Filed herewith
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