Clean Energy Technologies (CETY) raises cash via $178K 12% convertible note
Rhea-AI Filing Summary
Clean Energy Technologies, Inc. entered into a securities purchase agreement with Pacific Pier Capital II, LP under which it issued a convertible promissory note with $178,410 principal for a purchase price of $150,000.80. After payment of $7,000 of Pacific Pier’s legal expenses, the company received $143,000.80 in net proceeds. The note bears 12% annual interest, matures 12 months after its August 7, 2026 issue date, and is convertible at the holder’s election, starting six months after issuance, at 85% of the lowest daily VWAP during the 10 trading days before conversion, subject to a 4.99% beneficial ownership cap. The agreement limits the use of proceeds to business development and payments to service providers, excluding repayments to insiders or corporate finance debt. It also imposes a 2,000,000-share exchange cap until shareholder approval under Nasdaq Listing Rule 5635 is obtained, which the company must secure by November 7, 2026. The note was issued as an unregistered offering relying on Section 4(a)(2) of the Securities Act.
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Insights
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8-K Event Classification
4 items: 1.01, 2.03, 3.02, 9.01
4 items
Item 1.01
Entry into a Material Definitive Agreement
Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
Financial
The company incurred a new significant debt or off-balance-sheet obligation.
Item 3.02
Unregistered Sales of Equity Securities
Securities
The company sold equity securities in a private placement or other unregistered transaction.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Note principal: $178,410
Purchase price: $150,000.80
Net proceeds: $143,000.80
+5 more
8 metrics
Note principal
$178,410
Principal amount of the convertible promissory note issued to Pacific Pier
Purchase price
$150,000.80
Amount paid by Pacific Pier for the note
Net proceeds
$143,000.80
Cash received by the company after $7,000 of legal expenses
Interest rate
12% per annum
Annual interest accruing on the note
Conversion discount
85% of lowest daily VWAP
Conversion price based on lowest daily VWAP in prior 10 trading days
Exchange cap
2,000,000 shares
Maximum shares issuable to Pacific Pier before shareholder approval
Beneficial ownership limit
4.99%
Cap on Pacific Pier’s beneficial ownership of common stock upon conversion
Conversion fee deduction
$1,750 or $500
Amount deducted per conversion, with $500 applied if conversion amount is $25,000 or less
Key Terms
securities purchase agreement, convertible promissory note, Nasdaq Listing Rule 5635, beneficial ownership, +1 more
5 terms
securities purchase agreement financial
"entered into a securities purchase agreement (the “SPA”) with Pacific Pier"
A securities purchase agreement is a written contract between a buyer and a seller outlining the terms for buying or selling financial assets such as stocks or bonds. It specifies details like the price, quantity, and conditions of the transaction, similar to a shopping list with agreed-upon terms. For investors, it provides clarity and legal protection when transferring ownership of these financial instruments.
convertible promissory note financial
"purchased, a convertible promissory note in the principal amount of $178,410"
A convertible promissory note is a loan a company takes now that can later be turned into shares instead of being repaid in cash. Think of it as lending money with the option to accept ownership in the business down the road; that matters to investors because it affects who gets paid first, how much ownership existing shareholders keep, and the company’s future valuation and cash needs. Terms such as conversion price, interest and maturity determine the financial impact.
Nasdaq Listing Rule 5635 regulatory
"requires the Company to satisfy the shareholder approval requirements of Nasdaq Listing Rule 5635"
Nasdaq Listing Rule 5635 is a stock-exchange rule that requires a listed company to get shareholder approval before issuing a large number of new shares or other securities that can convert into shares or carry voting power beyond set thresholds. Investors should care because these approvals prevent unexpected dilution of existing ownership and sudden shifts in voting control—think of it like needing agreement from current owners before cutting the pizza into many more slices that shrink each person’s piece.
beneficial ownership financial
"conversion would result in the holder’s beneficial ownership of the Company’s common stock"
Beneficial ownership means the person or entity that actually enjoys the benefits of owning shares or other assets — such as receiving dividends, voting rights, or price gains — even if the legal title is held in another name. For investors it matters because knowing who truly controls and profits from a company reveals who can influence decisions, exposes potential conflicts of interest or hidden concentration of power, and affects transparency and risk in the stock.
Section 4(a)(2) of the Securities Act of 1933 regulatory
"The Note was sold in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933"
FAQ
What financing did Clean Energy Technologies (CETY) arrange with Pacific Pier Capital II, LP?
Clean Energy Technologies issued a convertible promissory note with $178,410 principal to Pacific Pier Capital II, LP for a $150,000.80 purchase price, providing $143,000.80 in net cash proceeds after payment of legal fees.
What are the key terms of CETY’s new convertible note?
The note has $178,410 principal, bears 12% annual interest, matures 12 months after the August 7, 2026 issue date, and is convertible after six months at 85% of the lowest daily VWAP over the prior 10 trading days.
How and when can Pacific Pier convert the CETY note into common stock?
Pacific Pier may convert the note starting six months after August 7, 2026 at a price equal to 85% of the lowest daily VWAP in the 10 trading days before conversion, subject to a 4.99% beneficial ownership cap.
How must Clean Energy Technologies (CETY) use the proceeds from this transaction?
Proceeds must fund business development and payments to the company’s service providers. They cannot be used to repay indebtedness to officers, directors, employees or affiliates, corporate finance debt, or make loans or investments outside existing operations.
Under what exemption was CETY’s note issuance conducted?
The company relied on Section 4(a)(2) of the Securities Act of 1933, issuing the note without general solicitation and without a public offering, treating it as an unregistered private placement of securities.
AI-generated analysis. How Rhea-AI works. Not financial advice.
