UNITEDSTATES
SECURITIESAND EXCHANGE COMMISSION
Washington,D.C. 20549
FORM
(MarkOne)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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Indicateby check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities ExchangeAct of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days. ☒
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Asof November 18, 2025, there were shares of the Registrant’s common stock, par value $ per share, issued and outstanding.
CLEANENERGY TECHNOLOGIES, INC.
(ANevada Corporation)
TABLEOF CONTENTS
| Page | ||
| PART I. FINANCIAL INFORMATION | ||
| ITEM 1. | CONSOLIDATED FINANCIAL STATEMENTS | 3 |
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 44 |
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 54 |
| ITEM 4. | CONTROLS AND PROCEDURES | 54 |
| PART II. OTHER INFORMATION | ||
| ITEM 1. | LEGAL PROCEEDINGS | 55 |
| ITEM 1A. | RISK FACTORS | 55 |
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 55 |
| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES | 55 |
| ITEM 4. | MINE SAFETY DISCLOSURES | 55 |
| ITEM 5. | OTHER INFORMATION | 55 |
| ITEM 6. | EXHIBITS | 56 |
| 2 |
PartI – Financial Information
Item1. Financial Statements
CleanEnergy Technologies, Inc.
ConsolidatedFinancial Statements
(Expressedin US dollars)
September30, 2025 (unaudited)
| 3 |
CleanEnergy Technologies, Inc.
ConsolidatedBalance Sheets
(Unaudited)
| Unaudited | Audited | |||||||
| September 30,2025 | 31-Dec-24 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable - net | ||||||||
| Accounts receivable - Related Party | ||||||||
| Advance to supplier – Current | ||||||||
| Deferred Offering Costs | ||||||||
| Due from related party | ||||||||
| Loan Receivables | ||||||||
| Inventory, net | ||||||||
| Investment to Guangyuan Shuxin New Energy Co. | ||||||||
| Other Assets | ||||||||
| Total Current Assets | ||||||||
| Non-Current Assets | ||||||||
| Property & Equipment - Net | ||||||||
| Goodwill | ||||||||
| Investment LWL | ||||||||
| Investment Heze Hongyuan Natural Gas Co. | ||||||||
| Long Term Investment - Shuya | ||||||||
| Investment to Guangyuan Shuxin New Energy Co. | ||||||||
| Long-term financing receivables - net | ||||||||
| Advance to supplier - prepayment | ||||||||
| License | ||||||||
| Patents | ||||||||
| Right of use asset - long term | ||||||||
Deposits | ||||||||
| Total Non-Current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities | ||||||||
| Current Liabilities | ||||||||
| Accounts Payable | $ | $ | ||||||
| Accounts Payable - Related Party | ( | ) | ||||||
| Accrued Expenses | ||||||||
| Customer Deposits | ||||||||
| Warranty Liability | ||||||||
| Derivative liability | ||||||||
| Deferred Revenue | ||||||||
| Facility Lease Liability - Current | ||||||||
| Line of Credit | ||||||||
| Notes payable - GE | ||||||||
| Convertible Notes Payable | ||||||||
| Note payable | ||||||||
| Related party notes payable | ||||||||
| Total Current Liabilities | ||||||||
| Long-Term Debt | ||||||||
| Facility Lease Liability - Long Term | ||||||||
| Accrued Dividend | ||||||||
| Total Long-Term Debt | ||||||||
| Total Liabilities | ||||||||
| Equity | ||||||||
| Common stock, $ par value; shares authorized; and shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively | ||||||||
| 15% Series E Convertible preferred stock, $ par value; shares authorized; shares issued and outstanding as of September 30, 2025 and outstanding as of and December 31, 2024 | ||||||||
| Additional Paid-In Capital | ||||||||
| Accumulated other comprehensible loss | ( | ) | ( | ) | ||||
| Accumulated Deficit | ( | ) | ( | ) | ||||
| Total Equity | ||||||||
| Total Liabilities & Equity | $ | $ | ||||||
Theaccompanying footnotes are an integral part of these unaudited consolidated financial statements
| 4 |
CleanEnergy Technologies, Inc.
ConsolidatedStatements of Operations
forthe three and nine months ended September 30, 2025 and 2024 (Unaudited)
| Three Months | Nine Months | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Sales | $ | $ | $ | $ | ||||||||||||
| Sales - Related Party | ||||||||||||||||
| Total Income | ||||||||||||||||
| Cost of Goods Sold | ||||||||||||||||
| Gross Profit | ||||||||||||||||
| Expense | ||||||||||||||||
| General and Administrative Expense | ||||||||||||||||
| Salaries | ||||||||||||||||
| Travel | ||||||||||||||||
| Professional Fees Legal & Accounting | ||||||||||||||||
| Facility Lease and Maintenance | ||||||||||||||||
| Consulting Engineering | ||||||||||||||||
| Depreciation and Amortization | ||||||||||||||||
| Total Expense | ||||||||||||||||
| Net Profit / (Loss) From Operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other Income & Expense | ||||||||||||||||
| Other Income | ( | ) | ( | ) | ||||||||||||
| Change in Derivative Liability | ||||||||||||||||
| Investment income (loss) from Shuya | ( | ) | ||||||||||||||
| Gain / (Loss) on Debt Settlement and Write Down | ( | ) | ( | ) | ||||||||||||
| Interest and Financing fees | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net Profit / (Loss) Before Income Taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income Tax Expense | ( | ) | ||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other Comprehensive Item | ||||||||||||||||
| Foreign currency translation gain (loss) attributable to the Company | ||||||||||||||||
| Total Comprehensible Income / (Loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Per Share information | ||||||||||||||||
| Basic and diluted weighted average number of common shares outstanding* | ||||||||||||||||
| Net loss per common share basic and diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| * |
Theaccompanying footnotes are an integral part of these unaudited consolidated financial statements
| 5 |
CleanEnergy Technologies, Inc.
ConsolidatedStatements of Stockholders’ Equity
forthe three and nine months ended September 30, 2025 and 2024 (Unaudited)
| Common Stock .001 Par | Preferred Stock | Common Stock to be issued | Additional Paid in | Accumulated Comprehensive | Accumulated | Non Controlling | Total Stockholders’ | |||||||||||||||||||||||||||||||||
| Description | Shares | Amount | Shares | Amount | Amount | Capital | Income | Deficit | interest | Totals | ||||||||||||||||||||||||||||||
| December 31, 2023 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Shares issued for stock compensation | - | |||||||||||||||||||||||||||||||||||||||
| Shares issued for debt inducement | - | |||||||||||||||||||||||||||||||||||||||
| Shares issued for subscription | - | |||||||||||||||||||||||||||||||||||||||
| Shares issued for series E preferred conversion | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Accumulated Comprehensive | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Deconsolidation of Shuya | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Accrued Series E preferred dividend | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Subscription receivable | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| March 31, 2024 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Shares issued for stock compensation | - | |||||||||||||||||||||||||||||||||||||||
| Shares issued for debt inducement | - | - | ||||||||||||||||||||||||||||||||||||||
| Shares issued for subscription | - | |||||||||||||||||||||||||||||||||||||||
| Shares issued for series E preferred conversion | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Accumulated Comprehensive | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Accrued Series E preferred dividend | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| June 30, 2024 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Shares issued for debt inducement | - | |||||||||||||||||||||||||||||||||||||||
| Accumulated Comprehensive | - | - | ||||||||||||||||||||||||||||||||||||||
| Accrued Series E preferred dividend | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Subscription receivable | ||||||||||||||||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| September 30, 2024 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| 6 |
| Common Stock .001 Par | Preferred Stock | Common Stock to be issued | Additional Paid in | Accumulated Comprehensive | Accumulated | Non Controlling | Total Stock holders’ Deficit | |||||||||||||||||||||||||||||||||
| Description | Shares | Amount | Shares | Amount | Amount | Capital | Income | Deficit | interest | Totals | ||||||||||||||||||||||||||||||
| December 31, 2024 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| Shares issued for stock compensation | ||||||||||||||||||||||||||||||||||||||||
| Shares issued for debt conversion | ||||||||||||||||||||||||||||||||||||||||
| Shares issued for subscription | ||||||||||||||||||||||||||||||||||||||||
| Shares issued for series E preferred conversion | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Value of the warrants issued for Mast Hill | ||||||||||||||||||||||||||||||||||||||||
| Accumulated Comprehensive | ||||||||||||||||||||||||||||||||||||||||
| Non controlling interest ownership | ||||||||||||||||||||||||||||||||||||||||
| Accrued Series E preferred dividend | ||||||||||||||||||||||||||||||||||||||||
| Subscription receivable | ||||||||||||||||||||||||||||||||||||||||
| Net Loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||||||||||
| 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 | ||||||||||||||||||||||||||||||||||||||||
| Non controlling interest ownership | ||||||||||||||||||||||||||||||||||||||||
| Accrued Series E preferred dividend | ||||||||||||||||||||||||||||||||||||||||
| Net Loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||||
| 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 | - | - | ||||||||||||||||||||||||||||||||||||||
| Non controlling interest ownership | - | - | ||||||||||||||||||||||||||||||||||||||
| Accrued Series E preferred dividend | - | - | ||||||||||||||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| September 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||||
Theaccompanying footnotes are an integral part of these unaudited consolidated financial statements
| 7 |
CleanEnergy Technologies, Inc.
ConsolidatedStatements of Cash Flows
Forthe nine months ended September 30, 2025 and 2024 (Unaudited)
| 2025 | 2024 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Loss from deconsolidation of Shuya | ||||||||
| Stock compensation expense | ||||||||
| Amortization of debt discount | ||||||||
| Change in fair value of derivative liabilities | ( | ) | ||||||
| Attributable income per equity method - Shuya | ( | ) | ( | ) | ||||
| Reversal of inventory impairment reserve | ( | ) | ||||||
| (Increase)/ decrease in Right – of - use asset | ( | ) | ||||||
| Increase /(Decrease) in Lease liabilities | ( | ) | ||||||
| Increase in accounts receivable | ( | ) | ( | ) | ||||
| Increase in accounts receivable - related party | ( | ) | ( | ) | ||||
| (Increase)/ decrease in Tax receivable | ( | ) | ||||||
| (Increase)/decrease in prepaid expenses | ( | ) | ||||||
| (Increase)/decrease in other assets | ( | ) | ||||||
| (Increase)/ decrease in inventory | ( | ) | ||||||
| Increase in accounts payable | ||||||||
| Increase in accrued interest | ||||||||
| Increase (Decrease) in accrued expenses | ( | ) | ||||||
| Increase (Decrease) in customer deposits | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities | ||||||||
| Decrease in Loan receivables | ||||||||
| Purchase of fix assets | ( | ) | ||||||
| Net cash flows (used in) provided by investing activities | ( | ) | ||||||
| Cash Flows from Financing Activities | ||||||||
| Proceeds from notes payable and lines of credit | ||||||||
| Payments on notes payables and lines of credit | ( | ) | ( | ) | ||||
| Borrowing from related party | ||||||||
| Other receivable | ( | ) | ||||||
| Loan receivable | ( | ) | ||||||
| Stock issued for cash | ||||||||
| Net cash flows provided by financing activities | ||||||||
| Effect of currency exchange rate changes on cash | ( | ) | ||||||
| Net (decrease) increase in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
| Supplemental cashflow information: | ||||||||
| Interest paid | $ | $ | ||||||
| Taxes Paid | $ | $ | ||||||
| Supplemental non-cash disclosure | ||||||||
| Discounts on new notes | $ | $ | ||||||
| Shares issued for preferred conversions | $ | $ | ||||||
| Dividend accrued | $ | $ | ||||||
| Shares issued for accrued dividend | $ | $ | ||||||
| Shares issued for note conversion | $ | $ | ||||||
Theaccompanying footnotes are an integral part of these unaudited consolidated financial statements
| 8 |
CleanEnergy Technologies, Inc.
Notesto Consolidated Financial Statements (Unaudited)
NOTE1 – GENERAL
Theseunaudited interim consolidated financial statements as of and for the Nine months ended September 30, 2025, reflect all adjustments which,in the opinion of management, are necessary to fairly state the Company’s financial position and the results of its operationsfor the periods presented, in accordance with the accounting principles generally accepted in the United States of America. All adjustmentsare of a normal recurring nature.
Theseunaudited interim consolidated financial statements should be read in conjunction with the Company’s consolidated financial statementsand notes thereto included in the Company’s fiscal year end December 31, 2024 report. The Company assumes that the users of theinterim financial information herein have read, or have access to, the audited consolidated financial statements for the preceding period,and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operationsfor the nine months ended September 30, 2025 are not necessarily indicative of results for the entire year ending December 31, 2025.
Thesummary of significant accounting policies of Clean Energy Technologies, Inc. is presented to assist in the understanding of the Company’sconsolidated financial statements. The consolidated financial statements and notes are representations of the Company’s management,who is responsible for their integrity and objectivity.
CorporateHistory
Wewere incorporated in California in July 1995 under the name Probe Manufacturing Industries, Inc. We redomiciled to Nevada in April 2005under 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 CleanEnergy HRS, or “CE HRS”, our wholly owned subsidiary acquired the assets of Heat Recovery Solutions from General ElectricInternational. In November 2015, we changed our name to Clean Energy Technologies, Inc.
Ourprincipal executive offices are located at 1340 Reynolds Avenue, Irvine, CA 92614. Our common stock is listed on the Nasdaq Capital Marketunder the symbol “CETY.”
Ourinternet website address is www.cetyinc.com. The information contained on our website is not incorporated by reference into thisdocument, and you should not consider any information contained on, or that can be accessed through, our website as part of this document.
TheCompany has four reportable segments: Clean Energy HRS (HRS) & CETY Europe, CETY Renewables waste to energy, and engineering, consulting& management services, and CETY HK NG trading.
GoingConcern
Theconsolidated financial statements have been prepared on a going concern basis, which contemplates continuity of operations, realizationof assets and liquidation of liabilities in the normal course of business. The Company had a total stockholder’s equity of $
Planof Operation
CETYis a clean energy technology company providing eco-friendly energy solutions, clean energy fuels, and alternative electric power forsmall to mid-sized projects across North America, Europe, and Asia. The company harnesses the power of heat and biomass to produce electricitywith 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.
| 9 |
Ourprincipal businesses
HeatRecovery Solutions – Clean Energy Technologies patented Clean Cycle Generator (CCG) is a heat recovery system that captureswaste heat from various sources and converts it into electricity. This system can be integrated into various industrial processes, helpingto reduce energy costs and carbon emissions.
Wasteto Energy Solutions - Clean Energy Technologies’ waste to energy solutions involve converting organic waste materials, suchas agricultural waste and food waste, into clean energy through its proprietary pyrolysis technology that produce a range of products,including electricity, heat, and biochar.
Engineering,Consulting and Project Management Solutions – Clean Energy Technologies provides power generation, waste to energy, and heatrecovery Engineering, Procurement and Construction (EPC) services to municipal and industrial customers and to design and incorporateclean energy solutions in their projects.
CleanEnergy Technologies (H.K.) Limited (“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 supplingNG to industries and municipalities, operated through our PRC Subsidiaries and Shuya. The NG is principally used for heavy truckrefueling stations and urban or industrial users. We purchase large quantities of NG from large wholesale NG depots at fixed priceswhich are prepaid for in advance at a discount to market. We sell the NG to our customers at prevailing daily spot prices for theduration 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, primarilylocated in the southwestern part of China. Our planned joint venture with Shenzhen Gas plans to acquire, with financing fromShenzhen Gas, natural gas pipeline operator facilities with the goal of aggregating and selling the facilities to Shenzhen Gas inthe future. The terms of the joint venture are subject to the execution of definitive agreements. CETY HK has not commenced businesswith Shenzhen Gas due to macro-economic factors such as falling NG prices and reduced industrial demand. CETY HK will wait untilmacro economic factors have improved before commencement of the Shenzhen Gas joint venture. On or about June 18, 2025, CETY HKacquired a holding company, Herbert YF Global Holding Limited, a limited company organized under the laws of Hong Kong.
OnSeptember 26, 2025, the Company’s Board of Directors approved a reverse stock split of its authorized and issued and outstandingshares of common stock, par value $ per share (the “Common Stock”), at a
Onor about July 1, 2025, Company subsidiary Herbert YF Global Holding Limited entered into a Consulting Agreement (the “LinkageConsulting Agreement”) with Linkage International Limited (the “Consultant”), a Hong Kong company and one of theCompany’s investors from the Company’s May 6, 2025, private placement, pursuant to which the Company had sold in theaggregate shares of Company common stock at a price of $per share (on a split-adjusted basis), for aggregate gross proceeds of $
NOTE2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Thesummary of significant accounting policies of Clean Energy Technologies, Inc. (formerly Probe Manufacturing, Inc.) is presented to assistin the understanding of the Company’s financial statements. The financial statements and notes are representations of the Company’smanagement, who is responsible for their integrity and objectivity.
Theconsolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted inthe United States of America (“US GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All materialintercompany balances and transactions have been eliminated in consolidation.
Useof Estimates
Thepreparation of financial statements in conformity with accounting principles generally accepted in the United States requires managementto make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets andliabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Suchestimates 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.
| 10 |
Cashand Cash Equivalents
Wemaintain the majority of our cash accounts at JP Morgan Chase bank. The total cash balance is insured by the Federal Deposit InsuranceCorporation (“FDIC”) up to $
AccountsReceivable
Ourability to collect receivables is affected by economic fluctuations in the geographic areas and industries served by us. Reserves forun-collectable amounts are provided, based on past experience and a specific analysis of the accounts. Although we expect to collectamounts due, actual collections may differ from the estimated amounts. As of September 30, 2025, and December 31, 2024, we had a reservefor potentially un-collectable accounts receivable of $
8customers accounted for approximately
Inventory
Inventoriesare valued at the lower of weighted average cost or market value. Our industry experiences changes in technology, changes in market valueand availability of raw materials, as well as changing customer demand. We make provisions for estimated excess and obsolete inventoriesbased on regular audits and cycle counts of our on-hand inventory levels and forecasted customer demands and at times additional provisionsare made. Any inventory write offs are charged to the reserve account. As of September 30, 2025 we had a reserve of $
Propertyand Equipment
Propertyand equipment are recorded at cost. Assets held under capital leases are recorded at lease inception at the lower of the present valueof the minimum lease payments or the fair market value of the related assets. The cost of ordinary maintenance and repairs is chargedto operations. Depreciation and amortization are computed on the straight-line method over the following estimated useful lives of therelated assets:
Furnitureand fixtures
Equipment
Long– Lived Assets
Long-livedassets, 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.
Recoverabilityof long-lived assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted futurecash 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. Fairvalue is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.
TheCompany reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the asset’s carryingamount may not be recoverable. The Company conducts its long-lived asset impairment analyses in accordance with ASC 360-10-15, “Impairmentor Disposal of Long-Lived Assets.” ASC 360-10-15 requires the Company to group assets and liabilities at the lowest level for whichidentifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group againstthe 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 basedon discounted cash flow analysis or appraisals. There was
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RevenueRecognition
TheCompany recognizes revenue under ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” (“ASC606”).
PerformanceObligations Satisfied Over Time
FASBASC 606-10-25-27 through 25-29, 25-36 through 25-37, 55-5 through 55-10
Anentity transfers control of a good or service over time and satisfies a performance obligation and recognizes revenue over time if oneof 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 FASBASC 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 iscreated 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 entityhas an enforceable right to payment for performance completed to date (as described in FASB ASC 606-10-25-29).
PerformanceObligations Satisfied at a Point in Time
FASBASC 606-10-25-30
Ifa performance obligation is not satisfied over time, the performance obligation is satisfied at a point in time. To determine the pointin time at which a customer obtains control of a promised asset and the entity satisfies a performance obligation, the entity shouldconsider the guidance on control in FASB ASC 606-10-25-23 through 25-26. In addition, it should consider indicators of the transfer ofcontrol, 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
Thecore principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or servicesto customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods orservices. The Company only applies the five-step model to contracts when it is probable that the Company will collect the considerationit is entitled to in exchange for the goods and services transferred to the customer. In addition, a) the company also does not havean alternative use for the asset if the customer were to cancel the contract, and b) has a fully enforceable right to receive paymentfor work performed (i.e., customers are required to pay as various milestones and/or timeframes are met)
Thefollowing 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 |
Thefollowing 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 |
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Thefollowing 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. |
Aprincipal 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. |
Ifthe entity obtains control over one of the above before the good or service is transferred to a customer, the entity could be considereda principal.
Additionally,the above five steps are applied to achieve core principle for our CETY Renewables Division:
Becausethe 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, CETYRenewables recognizes revenue according to accounting standards in accordance with ASC 606.
Inrecognizing 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. | |
| ● | 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 contractinception, CETY assesses the goods and services necessary to deliver the facility in accordance with its agreement with clients. Theagreement specifically laid out all deliverables necessary to achieve the permitting, design, procurement, construction, and commissioning.
CETYalso looks at 606-10-25-14(A). A bundle of goods or services is also present, in that CETY is delivering all work products associatedwith permitting, design, procurement, construction and commissioning of a commercially operable biomass power plant. A biomass powerplant is a distinct bundle of goods or services, so the individual goods or services on their own do not lend themselves to a fully integratedor functional system.
CETYin accordance with 606-10-32-1, CETY reviews measurement of the performance obligations. There is no exclusion of any amount of the ContractPrice due to constraints associated with 606-10-31-11 through 606-10-32-13.
Inreview of 606-10-32-2A, CETY did not exclude measurement from the measurement of the transaction price any taxes assessed by a governmentauthority as no such taxes will be due.
Inreviewing 606-10-32-3, CETY evaluated the nature, timing, and amount of consideration promised, and whether it impacts the estimate ofthe transaction price.
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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 withASC 606-10-25-33. The company adopts the input method for implementation. CETY recognizes revenue for performance obligations on thebasis of the entity’s efforts or inputs to the satisfaction of a performance obligation per 606-10-55-20.
ForCETY, the contracts with clients for the construction of biomass power plants are the basis for revenue recognition. In each separateEPC Agreement, the performance obligations include permitting, design, procurement, construction, and commissioning of the plant. Allof 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 ofand obtain substantially all of the remaining benefits of the assets. We recognize revenue over time, using timeline and milestone methodsto measure progress towards complete satisfaction of the performance obligation.
Duringthe complexity and duration of the biomass power plant construction projects, CETY will recognize revenue over time, consistent withthe criteria for over-time recognition under ASC 606. This approach reflects the continuous transfer of documents, permits, and the equipmentover to the customer, which is characteristic of long-term construction contracts.
Wehave a list of appropriate measures of progress: This is based on milestones achieved, among other measures.
Giventhe 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
Alsofrom time to time we require upfront deposits from our customers based on the contract. As of September 30, 2025, and December 31, 2024and, we had outstanding customer deposits of $
Derivativeliability
Aderivative is an instrument whose value is “derived” from an underlying instrument or index such as a future, forward, swap,option contract, or other financial instrument with similar characteristics, including certain derivative instruments embedded in othercontracts and for hedging activities.
TheCompany does not invest in separable financial derivatives or engage in hedging transactions. However, the Company entered into certaindebt financing transactions as disclosed in Note 9 containing certain conversion features that have resulted in the instruments beingdeemed derivatives. The Company evaluates such derivative instruments to properly classify such instruments within equity or as liabilitiesin the financial statements.
Theclassification of a derivative instrument is reassessed at each reporting date. If the classification changes as a result of events duringa reporting period, the instrument is reclassified as of the date of the event that caused the reclassification. There is no limit onthe number of times a contract may be reclassified.
Instrumentsclassified as derivative liability is remeasured using the Black-Scholes model at each reporting period (or upon reclassification) andthe change in fair value is recorded on the consolidated statement of operations. The Company had derivative liability of $
FairValue of Financial Instruments
TheFinancial Accounting Standards Board issued ASC (Accounting Standards Codification) 820-10 (SFAS No. 157), “Fair Value Measurementsand Disclosures” for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value and requires expandeddisclosures regarding fair value measurements. FASB ASC 820-10 defines fair value as the price that would be received for an asset orthe exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction betweenmarket participants on the measurement date. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximizethe use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that theCompany uses to measure fair value:
| ● | Level 1: Quoted prices in active markets for identical assets or liabilities. |
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| ● | 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 |
TheCompany’s financial instruments consist of cash, prepaid expenses, inventory, accounts payable, accrued expenses, and convertiblenotes payable. The estimated fair value of cash, prepaid expenses, investments, accounts payable, accrued expenses and convertible notespayable approximate their carrying amounts due to the short-term nature of these instruments.
ForeignCurrency Translation and Comprehensive Income (Loss)
Wehave 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 theChinese entities were translated into USD in accordance with FASB ASC Topic 830 “Foreign Currency Matters.” All assets andliabilities were translated at the exchange rate on the balance sheet date; stockholders’ equity is translated at historical ratesand the statements of operations and cash flows are translated at the weighted average exchange rate for the period. The resulting translationadjustments 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.
TheCompany 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, changesin additional paid-in capital and distributions to stockholders.
Changefrom fair value or equity method to consolidation
InJuly 2022, JHJ and other three shareholders agreed to form and make total capital contribution of RMB million ($ million) withlatest contribution due date in February 2066 into Sichuan Hongzuo Shuya Energy Limited (“Shuya”), JHK owns
Shuyawas set up as the operating entity for pipeline natural gas (PNG) and compressed natural gas (CNG) trading business, while the othertwo shareholders of Shuya have large supply relationships.
Forthe year ended December 31, 2022, the Company has determined that Shuya was not a VIE and has evaluated its consolidation analysis underthe voting interest model. Because the Company does not own greater than
JHJmade an investment of RMB
However,effective January 1, 2023, JHJ, SSEN and Chengdu Xiangyueheng Enterprise Management Co., Ltd (“Xiangyueheng), who is the
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Asa 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) Shuyais structured with disproportionate voting rights, and substantially all of the activities are conducted on behalf of an investor withdisproportionately few voting rights. Under ASC 810, a reporting entity has a controlling financial interest in a VIE, and must consolidatethat VIE, if the reporting entity has both of the following characteristics: (a) the power to direct the activities of the VIE that mostsignificantly 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.
Thechange 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 accountingpurposes. In identifying the Company as the accounting acquiror, the companies considered the structure of the transaction and otheractions contemplated by the Three-Parties Consistent Action Agreement, relative outstanding share ownership and market values, the compositionof the combined company’s board of directors, the relative size of Shuya, and the designation of certain senior management positionsof the combined company.
Inaccordance with ASC 805, the Company recorded the acquisition based on the fair value of the consideration transferred and then allocatedthe purchase price to the identifiable assets acquired and liabilities assumed based on their respective fair values as of the AcquisitionDate. 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 assetswith indefinite useful lives and goodwill will not be amortized but will be tested for impairment at least annually. All intangible assetsand goodwill will be tested for impairment when certain indicators are present. Determining the fair value of assets acquired and liabilitiesassumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates offuture revenues and cash flows, discount rates, and selection of comparable companies.
Thevaluation of purchase considerations was based on preliminary estimates that management believes are reasonable under the circumstances.
Asthe Consistent Action Agreement did not quantify any considerations to gain the control, the deemed consideration paid is the fair valueof
| 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 | $ |
UnderASC-805-10-50-2, initial consolidation of an investee previously reported using fair value or the equity method should be accounted forprospectively as of the date the entity obtained a controlling financial interest. Therefore, the Company should provide pro forma informationas if the consolidation had occurred as of the beginning of each of the current and prior comparative reporting period per
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OnJanuary 1, 2024, and effective on the same date, JHJ, SSET and Xiangyueheng entered into the Agreement on the Termination of the ConcertedAction Agreement (the “Termination Agreement”), pursuant to which the parties released each other from any and all obligationsunder the CAA. Due to the Termination Agreement, the Company now holds less than
Basic(loss) per share is computed on the basis of the weighted average number of common shares outstanding. At September 30, 2025, we hadoutstanding common shares of . Basic Weighted average common shares and equivalents for the nine months ended September 30,2025, and September 30, 2024 were and respectively. As of September 30, 2025, we had convertible notes, convertible intoapproximately of additional common shares and outstanding warrants of shares. Fully diluted weighted average commonshares and equivalents were withheld from the calculation for the nine months ended September 30, 2025, and September 30, 2024 as theywere considered anti-dilutive.
Researchand Development
Wehad
SegmentDisclosure
FASBCodification Topic 280, Segment Reporting, establishes standards for reporting financial and descriptive information about anenterprise’s reportable segments. The Company has
Anoperating segment’s performance is evaluated based on its pre-tax operating contribution, or segment income. Segment income isdefined as net sales less cost of sales, and segment selling, general and administrative expenses, and does not include amortizationof intangibles, stock-based compensation, other charges (income), net and interest and other, net.
SelectedFinancial Data:
| For the nine months ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| 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 | $ | ( | ) | $ | ( | ) | ||
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| September 30, 2025 | December 31, 2024 | |||||||
| Total Assets | ||||||||
| Manufacturing and Engineering | $ | $ | ||||||
| Heat Recovery Solutions | ||||||||
| Waste to Energy | ||||||||
| NG Trading | ||||||||
| Total Assets | $ | $ | ||||||
Thefollowing table represents revenue by geographic area based on the sales location of our products and solutions:
| For the nine months ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| United States | ||||||||
| China include discontinued operation: $ | ||||||||
| Other international | ||||||||
| Total Sales | ||||||||
Share-BasedCompensation
TheCompany 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, “Accountingfor Stock Issued to Employees,” and its related implementation guidance and eliminates the alternative to use Opinion 25’sintrinsic value method of accounting that was provided in Statement 123 as originally issued. This Statement requires an entity to measurethe cost of employee services received in exchange for an award of an equity instruments, which includes grants of stock options andstock warrants, based on the fair value of the award, measured at the grant date (with limited exceptions). Under this standard, thefair value of each award is estimated on the grant date, using an option-pricing model that meets certain requirements. We use the Black-Scholesoption-pricing model to estimate the fair value of our equity awards, including stock options and warrants. The Black-Scholes model meetsthe requirements of SFAS No. 123R; however, the fair values generated may not reflect their actual fair values, as it does not considercertain factors, such as vesting requirements, employee attrition and transferability limitations. The Black-Scholes model valuationis affected by our stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate andexpected 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 isequal to the time until the option expires. The dividend yield is not applicable, as the Company has not paid any dividends, nor do weanticipate paying them in the foreseeable future. The fair value of our restricted stock is based on the market value of our free tradingcommon stock, on the grant date calculated using a 20-trading-day average. At the time of grant, the share-based compensation expenseis recognized in our financial statements based on awards that are ultimately expected to vest using historical employee attrition ratesand the expense is reduced accordingly. It is also adjusted to account for the restricted and thinly traded nature of the shares. Theexpense is reviewed and adjusted in subsequent periods if actual attrition differs from those estimates.
Were-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 anyremaining share-based compensation expense, based on any additions, cancellations or adjustments to the share-based awards. The expenseis recognized over the period during which an employee is required to provide service in exchange for the award—the requisite serviceperiod (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render therequisite service.
Leases
TheCompany adopted ASC Topic 842, Leases, or ASC 842, using the modified retrospective transition method with a cumulative effect adjustmentto be accumulated deficit as of January 1, 2019, and accordingly, modified its policy on accounting for leases as stated below. As describedunder “Recently Adopted Accounting Pronouncements,” below, the primary impact of adopting ASC 842 for the Company was therecognition in the consolidated balance sheet of certain lease-related assets and liabilities for operating leases with terms longerthan 12 months.
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TheCompany’s leases primarily consist of facility leases which are classified as operating leases. The Company assesses whether anarrangement contains a lease at inception. The Company recognizes a lease liability to make contractual payments under all leases withterms greater than twelve months and a corresponding right-of-use asset, representing its right to use the underlying asset for the leaseterm. The lease liability is initially measured at the present value of the lease payments over the lease term using the collateralizedincremental borrowing rate since the implicit rate is unknown. Options to extend or terminate a lease are included in the lease termwhen it is reasonably certain that the Company will exercise such an option. The right-of-use asset is initially measured as the contractuallease liability plus any initial direct costs and prepaid lease payments made, less any lease incentives. Lease expense is recognizedon a straight-line basis over the lease term.
Leasedright-of-use assets are subject to impairment testing as a long-lived asset at the asset-group level. The Company monitors its long-livedassets for indicators of impairment. As the Company’s leased right-of-use assets primarily relate to facility leases, early abandonmentof 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.
IncomeTaxes
FederalIncome taxes are not currently due since we have had losses since inception of Clean Energy Technologies.
Incometaxes are provided based upon the liability method of accounting pursuant to ASC 740-10-25 Income Taxes – Recognition. Underthis approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basisof assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferredtax assets if management does not believe the Company has met the “more likely than not” standard required by ASC 740-10-25-5.
Deferredincome tax amounts reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financialreporting purposes and the amounts used for income tax reporting purposes.
Asof December 31, 2024, we had a net operating loss carry-forward of approximately $
OnFebruary 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 $
OnFebruary 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 contemplatedthereunder, the “Financing”) pursuant to which the Corporation issued to CVL a convertible promissory Note (the “CVLNote”) in the principal amount of $
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Thisresulted in a change in control, which limited the net operating to that date forward. We are subject to taxation in the U.S. and thestates of California. Further, the Company currently has no open tax years’ subject to audit prior to December 31, 2015. The Companyis current on its federal and state tax returns.
Reclassification
Certainamounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassificationshad no effect on reported income, total assets, or stockholders’ equity as previously reported.
RecentlyIssued Accounting Standards
DeferredStock Issuance Costs
Deferredstock issuance costs represent amounts paid for legal, consulting, and other offering expenses in conjunction with the future raisingof additional capital to be performed within one year. These costs are netted against additional paid-in capital as a cost of the stockissuance upon closing of the respective stock placement. During the quarter ended September 30, 2025 no stock issuance costs were capitalized.
NOTE3 – ACCOUNTS AND NOTES RECEIVABLE
| September 30, 2025 | December 31, 2024 | |||||||
| Accounts Receivable | $ | |||||||
| Accounts Receivable Related Party | ||||||||
| Less reserve for uncollectable accounts | ( | ) | ( | ) | ||||
| Total | $ | |||||||
OurAccounts Receivable is pledged to Nations Interbanc, our line of credit.
| September 30, 2025 | December 31, 2024 | |||||||
| Long-term financing receivables | $ | $ | ||||||
| Less Reserve for uncollectable accounts | ( | ) | ( | ) | ||||
| Long-term financing receivables - net | $ | $ | ||||||
TheCompany is currently modifying the assets subject to lease to meet the provisions of the agreement, and as of September 30, 2025 anycollection on the lease payments was not yet considered probable, resulting in no derecognition of the underlying asset and no net leaseinvestments recognized on the sales-type lease pursuant to ASC 842-30-25-3.
Ona contract by contract basis or projects that require extensive work from multiple contractors or supply chain challenges or in responseto certain situations or installation difficulties, the Company may elect to allow non-interest bearing repayments in excess of 1 year.
Ourlong - term financing Receivable are pledged to Nations Interbanc, our line of credit.
NOTE4 – INVENTORIES, NET
Inventoriesby major classification were comprised of the following at:
| September 30, 2025 | December 31, 2024 | |||||||
| Inventory | $ | |||||||
| Less reserve | ( | ) | ( | ) | ||||
| Total | $ | |||||||
OurInventory is pledged to Nations Interbanc, our line of credit.
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NOTE5 – PROPERTY AND EQUIPMENT
Propertyand equipment were comprised of the following at:
| September 30, 2025 | December 31, 2024 | |||||||
| Property and Equipment | $ | |||||||
| Accumulated Depreciation | ( | ) | ( | ) | ||||
| Net Fixed Assets | $ | |||||||
Our Depreciation Expense for the nine months ended September 30, 2025, and 2024 was $
OurProperty Plant and Equipment is pledged to Nations Interbanc, our line of credit.
NOTE6 – INTANGIBLE ASSETS
Intangibleassets were comprised of the following at:
| September 30, 2025 | December 31, 2024 | |||||||
| Goodwill | $ | |||||||
| LWL Intangibles | ||||||||
| License | ||||||||
| Patents | ||||||||
| Accumulated Amortization | ( | ) | ( | ) | ||||
| Net Intangible Assets | $ | |||||||
OurAmortization Expense for the nine months ended September 30, 2025 and 2024 was $
Asof both September 30, 2025, and December 31, 2024, goodwill amounted to $
TheLWL Investment balance of $
TheLicense balance remained unchanged at $
ThePatents balance, after amortization, was $
LWLAcquisition - Based on the foregoing analysis of the facts surrounding the Company’s acquisition of LWL, it is the Company’sposition that the Company is the acquirer of LWL, under the acquisition method of accounting.
Assuch, as of November 8, 2021 (the acquisition date), the Company recognized, separately from goodwill, the identifiable assets acquiredand the liabilities assumed in the Business combination.
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Thefollowing table presents the purchase price allocation:
| Consideration: | ||||
| Cash and cash equivalents | $ | |||
| Total purchaser consideration | $ | |||
| 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: | $ |
NOTE7 – CONVERTIBLE NOTE RECEIVABLE
EffectiveJanuary 10, 2022, JHJ (“note holder”) entered a convertible note agreement with Chengdu Rongjun Enterprise Consulting Co.,Ltd (“Rongjun” or “the borrower”) with
NOTE8 – ACCRUED EXPENSES
| September 30, 2025 | December 31, 2024 | |||||||
| Accrued Wages | $ | $ | ||||||
| Sales tax payable | ||||||||
| Accrued Taxes and other | ||||||||
| Total accrued expenses | $ | $ | ||||||
NOTE9 – LINE OF CREDIT AND NOTES PAYABLE
OnNovember 11, 2013, we entered into an accounts receivable financing agreement with American Interbanc (now Nations Interbanc). Amountsoutstanding under the agreement bear interest at the rate of
OnApril 1, 2021, we entered into an amendment to the purchase order financing agreement with DHN Capital, LLC dba Nations Interbanc. NationsInterbanc has lowered the accrued fees balance by $
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ConvertibleNotes Payable, Net
OnMay 6, 2022, we entered into a Securities Purchase Agreement with Mast Hill, L.P. (“Mast Hill”) pursuant to which the Companyissued to Mast Hill a $
OnSeptember 16, 2022, we entered into a Securities Purchase Agreement with Mast Hill pursuant to which the Company issued to Mast Hilla $
OnDecember 26, 2022, we entered into a Securities Purchase Agreement with Mast Hill pursuant to which the Company issued to Mast Hill a$
OnJanuary 19, 2023, we entered into a Securities Purchase Agreement with Mast Hill pursuant to which the Company issued to Mast Hill a$
OnMarch 8, 2023, we entered into a Securities Purchase Agreement with Mast Hill pursuant to which the Company issued to Mast Hill a $
OnJuly 20, 2023, the Company closed the transactions contemplated by the Securities Purchase Agreement with Mast Hill, dated July 18, 2023,pursuant to which the Company issued to Mast Hill a $
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OnOctober 13, 2023, the company entered into a promissory note with Diagonal in the amount of $
OnNovember 17, 2023, the Company entered into a promissory note with Diagonal in the amount of $
OnNovember 30, 2023, the Company entered into a promissory note with Diagonal in the amount of $
OnDecember 19, 2023, the Company entered into a promissory note in the amount of $
OnJanuary 3, 2024, the Company entered into a securities purchase agreement with FirstFire, pursuant to which the Company agreed to issueand sell to FirstFire the promissory note of the Company in the principal amount of $
OnFebruary 2, 2024, the Company entered into a securities purchase agreement with Coventry Enterprises LLC, a Delaware limited liabilitycompany Coventry pursuant to which the Company agreed to issue and sell to the Buyer the promissory note of the Company in the principalamount of $
OnMarch 4, 2024, the Company entered into a securities purchase agreement with FirstFire, pursuant to which the Company agreed to issueand sell to the FirstFire the promissory note of the Company in the principal amount of $
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OnJune 21, 2024, Vermont Renewable Gas LLC (“VRG”), a Vermont limited liability company in which the Company retains
OnAugust 22, 2024, the Company entered into a securities purchase agreement with 1800 Diagonal Lending LLC, a Virginia limited liabilitycompany (“Diagonal”), pursuant to which the Company agreed to issue and sell to Diagonal a convertible promissory note ofthe Company in the principal amount of $
OnSeptember 2, 2024, the Company entered into a securities purchase agreement with Coventry pursuant to which the Company agreed to issueand sell to Coventry a convertible promissory note of the Company in the principal amount of $
OnSeptember 10, 2024, the Company, and Mast Hill Fund, L.P., a Delaware limited partnership (“Mast”), entered into (i) an amendmentto the promissory note that was issued by the Company to Mast on May 6, 2022, in the original principal amount of $
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OnSeptember 10, 2024, the Company entered into a securities purchase agreement with Mast pursuant to which the Company agreed to issueand sell to Mast a convertible promissory note of the Company in the principal amount of $
OnSeptember 30, 2024, the Company entered into a securities purchase agreement with Diagonal, pursuant to which the Company agreed to issueand sell to Diagonal a convertible promissory note of the Company in the principal amount of $
OnOctober 15, 2024, the Company entered into a securities purchase agreement with Diagonal, pursuant to which the Company agreed to issueand sell to Diagonal a convertible promissory note of the Company in the principal amount of $
OnNovember 8, 2024, the Company entered into a securities purchase agreement with Coventry, pursuant to which the Company agreed to issueand sell to Coventry a convertible promissory note of the Company in the principal amount of $
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OnNovember 18, 2024, as stated in the 3rd quarter of 2024 10Q filed on November 19, 2024, the Company and Mast, entered intoan amendment to that certain promissory note originally issued by the Company to Mast on September 9, 2024, in the original principalamount of $
OnNovember 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 amountof $
OnDecember 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 ($
OnDecember 11, 2024, the Company and Mast Hill entered into an amendment to that certain promissory note originally issued by the Companyto Mast on September 10, 2024, in the original principal amount of $
OnDecember 12, 2024, the Company entered into a securities purchase agreement with Diagonal, pursuant to which the Company agreed to issueand sell to Diagonal a convertible promissory note of the Company in the principal amount of $
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EffectiveJanuary 16, 2025, the Company, entered into a securities purchase agreement with Mast Hill, pursuant to which the Company sold, and MastHill purchased, (i) a junior secured convertible promissory note in the principal amount of $
Theconvertible promissory note is convertible into a variable number of shares of common stock. Based on the requirements of ASC 815 Derivativesand Hedging, the conversion feature represented an embedded derivative that is required to be bifurcated and accounted for as a separatederivative liability. The derivative liability is originally recorded at its estimated fair value and is required to be revalued at eachconversion event and reporting period. Changes in the derivative liability fair value are reported in operating results for each reportingperiod. The Company valued the conversion feature of the convertible note on the date of issuance resulting in an initial liability of$
Duringthe nine months ended September 30, 2025, there was $
EffectiveFebruary 28, 2025, the Company, entered into a securities purchase agreement with Mast Hill, pursuant to which the Company sold, andMast Hill purchased, (i) a junior secured convertible promissory note in the principal amount of $
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Theconvertible promissory note is convertible into a variable number of shares of common stock. Based on the requirements of ASC 815 Derivativesand Hedging, the conversion feature represented an embedded derivative that is required to be bifurcated and accounted for as a separatederivative liability. The derivative liability is originally recorded at its estimated fair value and is required to be revalued at eachconversion event and reporting period. Changes in the derivative liability fair value are reported in operating results for each reportingperiod. The Company valued the conversion feature of the convertible note on the date of issuance resulting in an initial liability of$
Duringthe three and nine months ended September 30, 2025, there was no conversion for the convertible note with principal and accrued interest.On September 30, 2025, the derivative liabilities on the outstanding convertible note were revalued at $
OnApril 4, 2025, the Company entered into a securities purchase agreement with Pacific Pier Capital II, LLC, a Delaware limited liabilitycompany (“Pacific Pier”), pursuant to which the Company sold, and Pacific Pier purchased, (i) a convertible promissory notein the principal amount of $
Theconvertible promissory note is convertible into a variable number of shares of common stock. Based on the requirements of ASC 815 Derivativesand Hedging, the conversion feature represented an embedded derivative that is required to be bifurcated and accounted for as a separatederivative liability. The derivative liability is originally recorded at its estimated fair value and is required to be revalued at eachconversion event and reporting period. Changes in the derivative liability fair value are reported in operating results for each reportingperiod. The Company valued the conversion feature of the convertible note on the date of issuance resulting in an initial liability of$
Duringthe three and nine months ended September 30, 2025, there was no conversion for the convertible note with principal and accrued interest.On September 30, 2025, the derivative liabilities on the outstanding convertible note were revalued at $
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EffectiveApril 23, 2025, the Company entered into a securities purchase agreement with Pacific Pier, pursuant to which the Company sold, and PacificPier purchased, (i) a convertible promissory note in the principal amount of $
Duringthe nine months ended September 30, 2025, there was no conversion for the convertible note with principal and accrued interest. On September30, 2025, the derivative liabilities on the outstanding convertible note were revalued at $
OnMay 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 theprincipal amount of $
OnMay 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 inthe original principal amount of $
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EffectiveJune 4, 2025, the Company entered into a securities purchase agreement with Mast Hill, pursuant to which the Company sold, and Mast Hillpurchased, (i) a junior secured convertible promissory note in the principal amount of $
Duringthe nine months ended September 30, 2025, there was no conversion for the convertible note with principal and accrued interest. On September30, 2025, the derivative liabilities on the outstanding convertible note were revalued at $
EffectiveJuly 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 amountof $
Duringthe nine months ended September 30, 2025, there was $
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OnJuly 30, 2025, the Company entered into a securities purchase agreement with 1800 Diagonal Lending LLC, a Virginia limited liabilitycompany (“1800 Diagonal”), pursuant to which the Company sold, and 1800 Diagonal purchased, a convertible promissory notein the principal amount of $
Duringthe nine months ended September 30, 2025, there was $
EffectiveAugust 15, 2025, the Company entered into a securities purchase agreement with Mast Hill, pursuant to which the Company sold, and MastHill purchased, (i) a junior secured convertible promissory note in the principal amount of $
Duringthe nine months ended September 30, 2025, there was no conversion for the convertible note with principal and accrued interest. On September30, 2025, the derivative liabilities on the outstanding convertible note were revalued at $
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Thefollowing is the change in derivative liability for the nine Months ended September 30, 2025:
| Balance, January 1, 2025 | $ | |||
| Issuance of new derivative liability | ||||
| Conversions | ||||
| Change in fair market value of derivative liability | ( | ) | ||
| Balance, September 30, 2025 | $ |
Totaldue to Convertible Notes
| September 30, 2025 | December 31, 2024 | |||||||
| Total convertible notes | $ | |||||||
| Accrued interest | ||||||||
| Debt discount | ( | ) | ( | ) | ||||
| Amortization of debt discount | ||||||||
| Total | $ | |||||||
NOTE10 – COMMITMENTS AND CONTINGENCIES
OperatingRental Leases
ASBASU 2016-02 “Leases (Topic 842)” – In February 2016, the FASB issued ASU 2016-02, which requires lessees to recognizealmost all leases on their balance sheet as a right-of-use asset and a lease liability. For income statement purposes, the FASB retaineda dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largelysimilar to those applied in current lease accounting, but without explicit bright lines. Lessor accounting is similar to the currentmodel but has been updated to align with certain changes to the lessee model and the new revenue recognition standard. This ASU is effectivefor fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We have adopted the above ASUas of January 1, 2019. The right of use asset and lease liability have been recorded at the present value of the future minimum leasepayments, utilizing an average borrowing rate and the company is utilizing the transition relief and “running off” on currentleases.
Asof May 1, 2017, our corporate headquarters were located at 2990 Redhill Unit A, Costa Mesa, CA. On March 10, 2017, the Company signeda lease agreement for an
Wehave relocated our corporate office to 1340 Reynolds Avenue Unit 120, Irvine, CA 92614. On December 1, 2023, the Company signed a leaseagreement for a
OnApril 9, 2025, we entered a lease for our office in City of Irvine, California, on June 4, 2025, we amended this lease for additionalarea. The lease is for the period
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Thecomponents of lease costs, lease term and discount rate with respect of these two leases with an initial term of more than 12 monthsare as the following:
Balancesheet information related to the Company’s operating leases:
As of September 30, 2025 | As of December 31, 2024 | |||||||
| Right-of-used assets | $ | |||||||
| Lease liabilities – current | $ | |||||||
| Lease liabilities – non-current | ||||||||
| Total lease liabilities | $ | |||||||
Theweighted-average remaining lease term and the weighted-average discount rate of the above three leases are as follows:
Nine Months Ended September 30, 2025 | ||||
| Weighted average remaining lease term (years) | ||||
| Weighted average discount rate | % | |||
Thefollowing is a schedule, by year of lease payment for above nine leases as of September 30, 2025:
| For the 12 months ending | Lease Payment | |||
| September 30, 2026 | ||||
| September 30, 2027 | ||||
| September 30,2028 | ||||
| Total undiscounted cash flows | ||||
| Imputed Interest | ||||
| Present value of lease liabilities | $ | |||
Ourlease expense for the nine months ended September 30, 2025 and 2024 was $
SeveranceBenefits
Mr.Mahdi will receive a severance benefit consisting of a single lump sum cash payment equal the salary that Mr. Mahdi would have been entitledto receive through the remainder or the Employment Period or One (1) year, whichever is greater.
NOTE11 – CAPITAL STOCK TRANSACTIONS
OnApril 21, 2005, our Board of Directors and shareholders approved the re-domicile of the Company in the State of Nevada, in connectionwith which we increased the number of our authorized common shares to and designated a par value of $ per share.
OnMay 25, 2006, our Board of Directors and shareholders approved an amendment to our Articles of Incorporation to authorize a new seriesof preferred stock, designated as Series C, and consisting of authorized shares.
OnJune 30, 2017, our Board of Directors and shareholders approved an increase in the number of our authorized common shares to andin the number of our authorized preferred shares to . The amendment effecting the increase in our authorized capital was filedand effective on July 5, 2017.
OnAugust 28, 2018, our Board of Directors and shareholders approved an increase in the number of our authorized common shares to .The amendment effecting the increase in our authorized capital was filed and effective on August 23, 2018.
OnJune 10, 2019, our Board of Directors and shareholders approved an increase in the number of our authorized common shares to .The amendment effecting the increase in our authorized capital was effective on September 27, 2019.
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OnJanuary 6, 2023, our board of directors and majority shareholders approved a reverse stock split. Effective upon the filing of our Certificateof Amendment of Articles of Incorporation with the Secretary of State of the State of Nevada, the shares of the Corporation’s CommonStock issued and outstanding immediately prior to the Effective Time of January 6, 2023, will be automatically reclassified as and combinedinto
CommonStock Transactions
OnJanuary 19, 2023, the Company entered into a Securities Purchase Agreement and a warrant agreement with Mast Hill pursuant to which theCompany issued to Mast Hill the Company issued Mast Hill a five-yearwarrant to purchase
OnJanuary 27, 2023 we issued shares of our common stock due to rounding post the reverse stock split.
OnMarch 23, 2023 we sold shares of our common stock in an underwritten offering to R.F. Lafferty & CO and Phillip US. The initialpublic offering price per share is $ per share. Net proceeds from this offering was $
Inthe second quarter of 2023, the Company issued shares to a consultant at fair value of $
OnMarch 8, 2023 the Company entered into a Securities Purchase Agreement and a warrant agreement with Mast Hill, L.P. (Mast Hill”)pursuant to which the Company issued to Mast Hill the Company issued Mast Hill a five-year warrant to purchase
OnApril 18, 2023 Mast Hill exercised the right to purchase
OnMay 10, 2023 Mast Hill exercised the right to purchase
OnJune 14, 2023 Mast Hill exercised the right to purchase
OnJune 23, 2023 Mast Hill exercised the right to purchase
OnSeptember 12, 2023 Mast Hill exercised the right to purchase
OnSeptember 13, 2023 Mast Hill exercised the right to purchase
OnOctober 27, 2023 Mast Hill exercised the right to purchase
OnJanuary 3, 2024, the Company entered into a securities purchase agreement with FirstFire, As a condition to the sale of the Note, theCompany issued to the Buyer shares of Common Stock.
OnFebruary 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.
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OnFebruary 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.
OnMarch 4, 2024, the Company entered into a securities purchase agreement with FirstFire. As a condition to the sale of the Note, the Companyissued to the Buyer shares of Common Stock.
OnMarch 15, 2024, the Company and certain Subscribers entered into a subscription agreement pursuant to which the Company agreed to sellup to units to the Subscribers for an aggregate purchase price of $
OnJune 18, 2024, the Company and certain Subscribers entered into a subscription agreement pursuant to which the Company agreed to sellapproximately units to the Subscribers for an aggregate purchase price of $
Duringthe year ended December 31, 2024, the Company issued shares of common stock for conversion of Series E Preferred shareand
OnSeptember 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.
OnOctober 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 $
OnNovember 8, 2024, Clean Energy Technologies, Inc. (the “Company”) entered into a securities purchase agreement with CoventryEnterprises LLC, a Delaware limited liability company (the “Buyer”). As a condition to the sale of the Note, the Companyissued to the Buyer shares (the “Commitment Shares”) of Common Stock.
OnNovember 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 Companyissued to the Buyer shares (the “Commitment Shares”) of Common Stock.
OnNovember 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, theCompany issued to the Buyer shares (the “Commitment Shares”) of Common Stock.
OnDecember 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.
OnJanuary 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.
OnMarch 4, 2025, the Company entered into a securities purchase agreement with FirstFire. Pursuant to the agreement, FirstFire acceptedshares of the Company’s common stock as final payment on the loan. As of September 30, 2025, the outstanding balance of theloan was $
Asof September 30, 2025, the Company has issued shares for the conversion of Series E Preferred shares, with a total value of $
Onor about April 7, 2025, pursuant to the securities purchase agreement with Pacific Pier dated April 4, 2025, described above, the Companyissued shares of Company common stock to Pacific Pier.
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Onor about April 23, 2025, pursuant to the securities purchase agreement with Pacific Pier dated April 23, 2025, described above, the Companyissued shares of Company common stock to Pacific Pier.
OnMay 6, 2025, the Company entered into a Subscription Agreement with various investors, pursuant to which the purchasers acquired in theaggregate
OnMay 7, 2025, the Company received a letter from the Nasdaq Listing Qualifications Department of the Nasdaq Stock Market LLC, grantingthe Company an additional 180-day period, or until November 3, 2025, to regain compliance with Nasdaq’s minimum $ bid priceper share requirement.
Onor about May 9, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $100,120 in interestsand fees owed under the convertible promissory note issued to Mast Hill dated May 6, 2022.
Onor about May 19, 2025, pursuant to the securities purchase agreement with Lucas Ventures dated May 19, 2025, described above, the Companyissued shares of Company common stock to Lucas Ventures.
Onor about May 23, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
Onor about May 23, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
Onor about May 23, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
Onor about May 23, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of the remaining $
Onor about June 4, 2025, pursuant to the securities purchase agreement with Mast Hill dated June 3, 2025, described above, the Companyissued shares of Company common stock to Mast Hill.
Onor about June 10, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
Onor about June 17, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
Onor about June 20, 2025, the Company issued shares of common stock to 1800 Diagonal pursuant to its conversionof $
Onor about June 23, 2025, the Company issued shares of common stock to 1800 Diagonal pursuant to its conversion of $
Onor about June 23, 2025, the Company issued shares of common stock to Lucas Ventures as true-up shares under the securities purchaseagreement with Lucas Ventures dated November 29, 2024.
Onor about July 8, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
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Onor about July 11, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
Onor 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 agreementwith First Fire dated July 18, 2025, described above, the Company issued shares of Company common stock to First Fire.
Onor about July 21, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
Onor about August 1, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
Onor about August 1, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
Onor 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 agreementwith 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 conversionof $
CommonStock
OurArticles of Incorporation authorize us to issue shares of common stock, par value $ per share. As of September 30, 2025there were shares of common stock outstanding. All outstanding shares of common stock are, and the common stock to be issuedwill be, fully paid and non-assessable. Each share of our common stock has identical rights and privileges in every respect. The holdersof our common stock are entitled to vote upon all matters submitted to a vote of our shareholders and are entitled to one vote for eachshare of common stock held. There are no cumulative voting rights.
Theholders of our common stock are entitled to share equally in dividends and other distributions that our Board of Directors may declarefrom time to time out of funds legally available for that purpose, if any, after the satisfaction of any prior rights and preferencesof any outstanding preferred stock. If we liquidate, dissolve or wind up, the holders of common stock shares will be entitled to shareratably in the distribution of all of our assets remaining available for distribution after satisfaction of all our liabilities and ourobligations to holders of our outstanding preferred stock.
PreferredStock
OurArticles of Incorporation authorize us to issue shares of preferred stock, par value $ per share. Our Board of Directorshas the authority to issue additional shares of preferred stock in one or more series, and fix for each series, the designation of andnumber 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 orrestrictions of the shares of each such series.
Unlessour Board of Directors provides otherwise, the shares of all series of preferred stock will rank on parity with respect to the paymentof dividends and to the distribution of assets upon liquidation. Any issuance by us of shares of our preferred stock may have the effectof delaying, deferring or preventing a change of our control or an unsolicited acquisition proposal. The issuance of preferred stockalso could decrease the amount of earnings and assets available for distribution to the holders of common stock or could adversely affectthe rights and powers, including voting rights, of the holders of common stock.
Wepreviously 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.
EffectiveAugust 7, 2013, .
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Thefollowing are primary terms of the Series D Preferred Stock.
OnOctober 31, 2023, Clean Energy Technologies, Inc. (the “Company”) filed with the Nevada Secretary of State a certificateof designation designating shares of the undesignated and authorized preferred stock of the Company, par value $ per share,as the
TheSeries E Preferred Stock has a stated value of $ (the “Stated Value”) per share. Each holder of the Series E PreferredStock is entitled to receive dividends payable on the Stated Value of the Series E Preferred Stock at a rate of 15% per annum.
OnNovember 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 tothe Holder shares of the newly designated
TheCompany has designated the rights of the Holder with respect to its shares of Series E Preferred Stocks pursuant to that certain Certificateof Designations, Preferences, and Rights of Series E Convertible Preferred Stock (the “Certificate of Designation”). Additionally,$
Warrants
Asummary of warrant activity for the periods is as follows:
OnMay 6, 2022, we issued
OnAugust 5, 2022, we issued
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OnAugust 17, 2022, we issued
OnSeptember 1, 2022, we issued
OnSeptember 16, 2022, we issued
OnNovember 10, 2022 we issued
OnNovember 21, 2022 we issued
OnDecember 26, 2022, we issued
OnJanuary 19, 2023 we issued
OnFebruary 13, 2023 we issued
OnMarch 8, 2023 we issued
OnMarch 2023, the company issued Craft Capital Management, L.L.C. and R.F. Lafferty & Co. Inc. a
OnOctober 25, 2023 Mast Hill exercised the right to purchase of the shares of Common Stock (“Warrant Shares”) of CleanEnergy Technologies, Inc., because of the Common Stock Purchase Warrant (the “Warrant”) issued on March 08, 2023. The exerciseprice is $
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OnMarch 15, 2024, we issued
OnJune 18, 2024, we issued
OnDecember 5, 2024, we issued
OnJanuary 16, 2025, we issued
OnFebruary 28, 2025, we issued
| Warrants - Common Share Equivalents | Weighted Average | Warrants exercisable - Common Share Equivalents | Aggregate Intrinsic Value | |||||||||||||
| Outstanding December 31, 2024 | $ | $ | ||||||||||||||
| Expired | ( | ) | ( | ) | - | |||||||||||
| Additions | - | |||||||||||||||
| Additions | - | |||||||||||||||
| Outstanding September 30, 2025 | $ | $ | ||||||||||||||
StockOptions
Wecurrently have no outstanding stock options.
NOTE12 – RELATED PARTY TRANSACTIONS
OnMay 13, 2021, the Company formed CETY Capital LLC a wholly owned subsidiary of CETY. In addition, the company established VRG with ourpartner, Synergy Bioproducts Corporation (“SBC”) The purpose of the joint venture is the development of a pyrolysis plantestablished to convert wood feedstock into electricity and BioChar by using high temperature ablative fast pyrolysis reactor for whichClean 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
OnJune 2, 2023, CETY Renewables executed a turnkey agreement with VRG for the design, construction, and delivery of an organics-to-energyplant. As a result of this agreement, HRS and CETY Renewables invoiced VRG $
CETYcurrently has $
OnJune 21, 2024, VRG, a Vermont limited liability company in which the Company retains
TheLender is currently in default and has been served notice of default. The Lender has failed to disburse the first and second Trancheas 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.
Onor about July 1, 2025, Company subsidiary Herbert YF Global Holding Limited entered into a Consulting Agreement (the “Linkage ConsultingAgreement”) with Linkage International Limited (the “Consultant”), a Hong Kong company and one of the Company’sinvestors 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 grossproceeds of $
The RMB
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Note13 - WARRANTYLIABILITY
Forthe nine ended September 30, 2025 and 2024 there was
NOTE14 – NON-CONTROLLING INTEREST
OnJune 24, 2021 the Company formed CETY Capital LLC a wholly owned subsidiary of CETY. In addition, on or about the same time the companyestablished 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 establishedto convert woody feedstock into electricity and BioChar by using high temperature ablative fast pyrolysis reactor for which Clean EnergyTechnology, 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
Theconsolidated financial statements have deconsolidated the CRA business unit. The Liabilities of CRA has been transferred to VRG, a newlyformed entity. CETY retains
OnApril 2, 2023 the Company formed CETY Capital LLC a wholly owned subsidiary of CETY. In addition, the company established VRG with ourpartner, SBC. The purpose of the joint venture is the development of a pyrolysis plant established to convert wood feedstock into electricityand 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
TheCompany 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 asa VIE. The Joint Venture qualifies as a VIE based on the fact the JV does not have sufficient equity to operate without financial supportfrom 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 provisionsin 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 3members. Two of the three members are from Synergy Bioproducts Corporation, and one is from CETY. Both parties do not have substantialcapital at risk and CETY does not have voting interest. However, SBC has controlling interest and more board votes therefore SBC is thebeneficiary of the VIE and as a result we record it as an equity investment. Accordingly, the Company has elected to account for thejoint venture as an equity method investment in accordance with ASC 323 Investments – Equity Method and Joint Ventures. This decisionis a result of the company’s evaluation of its involvement with potential variable interest entities and their respective riskand reward scenarios, which collectively affirm that the conditions necessitating the application of the variable interest model arenot present.
NOTE15 – THE STATUTORY RESERVES
TheCompany’s ability to pay dividends primarily depends on it receiving funds from its subsidiaries. PRC laws and regulations permitpayments of dividends by the Company’s PRC subsidiaries only out of the subsidiary’s retained earnings, if any, as determinedin accordance with PRC accounting standards and regulations. The results of operations reflected in the financial statements preparedin accordance with US GAAP differ from those reflected in the statutory financial statements of the Company’s PRC subsidiaries.
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Inaccordance 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 reportedin 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 annualafter-tax profit until such reserve has reached
Asa result of these PRC laws and regulations that require annual appropriations of
Inaddition, according to Administrative Measures for the Collection and Utilization of Enterprise Work Safety Funds issued by the PRC Ministryof Finance and the State Administration of Work Safety, for the companies with dangerous goods production or storage, the company isrequired to make a special reserve for the use of enhancing and improving its safe production conditions. Under PRC GAAP, the reserveis recorded as selling expense; however, under US GAAP, since the expense has not been incurred and the Company will record cost of salesfor safety related expenses when it is actually happened or incurred, this special reserve was recorded as an appropriation of its after-taxincome. The reserve is calculated at a rate of
NOTE16 – SUBSEQUENT EVENTS
Onor about October 06, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
Onor about October 08, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
Onor 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 conversionof $
Onor about October 14, 2025, the Company issued shares of common stock to Mast Hill pursuant to its conversion of $
Onor 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, theCompany issued shares of common stock to Pacific Pier pursuant to its notice of conversion of $
Onor 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, theCompany issued shares of common stock to Pacific Pier pursuant to its notice of conversion of $
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ITEM2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION
FORWARD-LOOKINGSTATEMENTS
ThisManagement’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statementsthat involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity,performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed,or implied, by those forward-looking statements. You can identify forward-looking statements using the words may, will, should, could,expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms.These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actualresults to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-lookingstatements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Therefore, actual resultsmay differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or updatepublicly any forward-looking statements for any reason.
Descriptionof the Company
Wedesign, produce and market clean energy products and integrated solutions focused on energy efficiency and renewable energy. Our aimis to become a leading provider of renewable and energy efficiency products and solutions by helping commercial companies and municipalitiesreduce energy waste and emissions, lower energy costs and generate incremental revenue by providing electricity, renewable natural gasand biochar to the grid.
Ourprincipal executive offices are located at 1340 Reynolds Avenue, Irvine, CA 92614. Our telephone number is (949) 273-4990. Our commonstock is listed on the NASDAQ Markets under the symbol “CETY.”
Ourinternet website address is www.cetyinc.com the information contained on our websites are not incorporated by reference into thisdocument, and you should not consider any information contained on, or that can be accessed through, our website as part of this document.
SegmentInformation
Ourfour segments for accounting purposes are:
CleanEnergy HRS & CETY Europe – Our Waste Heat Recovery Solutions, converting thermal energy to zero emission electricity.
CETYRenewables Waste to Energy Solutions – Providing Waste to Energy technologies and solutions.
Engineeringand Manufacturing Business – providing customers with comprehensive design, manufacturing, and project management solutions.
CETYHK – The parent company of our NG trading operations in China. Prior to the first quarter of 2022 the Company had three reportablesegments but added the CETY HK segment to reflect its recent new businesses in China.
Wespecialize in renewable energy & energy efficiency systems design, manufacturing and project implementation. We were incorporatedin California in July 1995 under the name Probe Manufacturing Industries, Inc. We redomiciled to Nevada in April 2005 under the nameProbe Manufacturing, Inc. We provided engineering and manufacturing electronics services to original equipment manufacturers (OEMs) ofclean energy, industrial, automotive, semiconductor, medical, communication, military, and high technology products.
Withthe 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 ElectricInternational on September 11, 2015. In November 2015, we changed our name to Clean Energy Technologies, Inc. We have 24 full-time employees.
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CleanEnergy Technologies, Inc. established a new company, CETY Europe, SRL (CETY Europe) as a wholly owned subsidiary. CETY Europe is a Salesand Service Center in Silea (Treviso), Italy established in 2017. The service center became operational in November 2018. Their officesare located at Alzaia Sul Sile, 26D, 31057 Silea (TV) and they have 1 full time employee.
CleanEnergy Technologies, Inc. established a wholly owned subsidiary called CETY Capital, a financing arm of CETY to fund captive renewableenergy projects producing low carbon energy. CETY Capital will add flexibility to the capacity CETY offers its customers and fund projectsutilizing its products and clean energy solutions.
CETYCapital retains 49% ownership interest in Vermont Renewable Gas LLC established to develop a biomass plant in Vermont utilizing CETY’sHigh Temperature Ablative Pyrolysis system.
CleanEnergy Technologies (H.K.) Limited., a wholly owned subsidiary of Clean Energy Technologies Inc. acquired 100% ownership of Leading WaveLimited a liquid natural gas trading company in China.
BusinessOverview
General
TheCompany’s business and operating results are directly affected by changes in overall customer demand, operational costs and performanceand leverage of our fixed cost and selling, general and administrative (“SG&A”) infrastructure.
Productsales 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 inventorylevels. Product sales consist of demand from customers in many different markets with different levels of cyclicality and seasonality.
Operatingperformance is dependent on the Company’s ability to manage changes in input costs for items such as raw materials, labor, andoverhead 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.
WhoWe Are
Wedevelop 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 recyclable energy solutions, clean energy fuels andalternative electric power for small and mid-sized projects in North America, Europe, and Asia. We target sustainable energy solutionsthat are profitable for us, profitable for our customers and represent the future of global energy production.
Ourprincipal businesses
WasteHeat Recovery Solutions – we recycle wasted heat produced in manufacturing, waste to energy and power generation facilitiesusing our patented Clean CycleTM generator to create electricity which can be recycled or sold to the grid.
Wasteto Energy Solutions - we convert waste products created in manufacturing, agriculture, wastewater treatment plants and other industriesto 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 municipaland industrial customers and Engineering, Procurement and Construction (EPC) companies so they can identify, design and incorporate cleanenergy solutions in their projects.
CETYHK
CleanEnergy 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. Natural Gas is principally used for heavy truck refuelingstations and urban or industrial users. We purchase large quantities of NG from large wholesale NG depots at fixed prices which are prepaidfor in advance at a discount to the market. We sell the NG to our customers at fixed prices or prevailing daily spot prices for the durationof the contracts.
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Businessand Segment Information
Wedesign, produce and market clean energy products and integrated solutions focused on energy efficiency and renewable energy. Our aimis to become a leading provider of renewable and energy efficiency products and solutions by helping commercial companies and municipalitiesreduce energy waste and emissions, lower energy costs and generate incremental revenue by providing electricity, renewable natural gasand biochar to the grid.
Summaryof Operating Results the Nine months Ended September 30, 2025 Compared to the same period in 2024
GoingConcern
Thefinancial statements have been prepared on a going concern basis, which contemplates continuity of operations, realization of assetsand liquidation of liabilities in the normal course of business. The Company had a total stockholder’s equity of $7,095,133 anda working capital deficit of 1,523,862 as of September 30, 2025, The company also had an accumulated deficit of $30,922,858 as of September30, 2025 and used 6,218,085 in net cash from operating activities for the nine months ended September 30, 2025. Therefore, there is substantialdoubt about the ability of the Company to continue as a going concern. There can be no assurance that the Company will achieve its goalsand reach profitable operations and is still dependent upon its ability (1) to obtain sufficient debt and/or equity capital and/or (2)to generate positive cash flow from operations.
Forthe nine months ended September 30, 2025, our total revenue was $1,801,769, compared to $1,944,333 for the same period in 2024. The decreasewas primarily due to minimal contributions (less than 3%) from our Vermont Renewable Gas project, as the project is currently undergoingreview for a Certificate of Public Good with the Public Utility Commission. We currently have an estimated $10 million backlog associatedwith this project.
Forthe nine months ended September 30, 2025, our gross profit was $1,135,315, compared to $641,575 for the same period in 2024. The increasein gross profit and margin was primarily due to the sale of higher-margin refurbished systems, which contributed more favorably to overallprofitability compared to prior periods.
Forthe nine months ended September 30, 2025, our operating expenses were $3,301,052, compared to $3,193,447 for the same period in 2024.The increase in expenses was primarily due to costs associated with a consulting agreement related to a potential acquisition, partiallyoffset by lower reduction in general and administrative costs.
Forthe nine months ended September 30, 2025, we recorded a net loss of $3,522,342, compared to $3,550,669 for the same period in 2024. Thenet loss remained relatively steady year-over-year, reflecting reduced salary expenses, lower general, legal and accounting costs, andimproved margins from our U.S.-based business activities.
Forthe quarter ended September 30, 2025, stockholders’ equity increased to $7,095,133, compared to $2,938,502 as of December 31, 2024,primarily due to higher increase from investments.
CETYhas successfully repositioned itself as a diversified clean energy solutions provider by establishing four distinct business segmentsdesigned to support scalable, stable, and diversified revenue growth. These segments include:
| ● | Clean Energy HRS (Heat Recovery Systems) | |
| ● | Waste-to-Energy (via Pyrolysis Technology) | |
| ● | Engineering, Procurement, and Consulting (EPC) | |
| ● | CETY HK (Natural Gas Trading and Acquisitions) |
Revenuefor the first quarter was primarily driven by the Clean Energy HRS and CETY Renewables segments. Looking ahead, the company anticipatesstronger revenue contributions from its Waste-to-Energy, Heat Recovery, and EPC segments in the latter half of the year, segments whichare expected to deliver higher gross margins.
CETY’spilot Waste-to-Energy facility in Vermont, which integrates all of the company’s proprietary technologies and operational expertiseinto a unified, turnkey solution, is currently pending final approval from the Vermont Public Utility Commission.
Meanwhile,demand for Heat Recovery solutions is accelerating across both the U.S. and Europe. In parallel, CETY is actively scaling its Engineeringand project management operations to deliver comprehensive self-generation energy solutions on a global scale.
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Managementbelieves this 4-segment strategy has created many operational synergies and cross-selling opportunities across different markets. Thegrowth in the non-China operations in the nine months ended of 2025 vs. same period in 2024 was a result of this strategy. CETY believesthat it will continue to deliver growth on these segments this year. The main macro factor benefiting us is the global commitment topush renewable energy to the forefront from governments across the world. Another catalyst that will potentially help our Company, isa continuously improving our global supply chain and lowering our cost.
CETYexpects to and will continue to execute its corporate strategy to build sustained and profitable growth by providing end to end fullyintegrated solutions and technologies, expand our global sales and marketing, production, research & development, as well as searchfor synergistic acquisition opportunities.
Seenote 1 to the notes to the financial statements for a discussion on critical accounting policies
RELATEDPARTY TRANSACTIONS
Seenote 12 to the notes to the financial statements for a discussion on related party transaction
Resultsof the Nine Months Ended September 30, 2025, Compared to the Nine Months Ended September 30, 2024
NetSales
Forthe nine months ended September 30, 2025, our total revenue was $1,801,769 compared to 1,944,333 for the same period in 2024. The lowerrevenue was contributed to primarily due to minimal contributions from our China natural gas business.
Segmentbreakdown
Forthe nine months ended September 30, 2025, our revenue from the Heat Recovery Solutions (HRS) segment was $805,975, compared to $158,829for the same period in 2024. The increase was primarily driven by higher product sales and ongoing progress in our HRS pipeline. We continueto work diligently on completing engineering and design efforts, which will enable us to execute contractual agreements and close additionalopportunities.
Thesales cycle for these projects tends to be longer due to cost considerations and the integration complexity of our technology. We arealso engaging with financial institutions to support project financing, as customers increasingly adopt Independent Power Producer (IPP)models. Additionally, general economic uncertainty and evolving federal clean-energy legislation have influenced the timing of certainproject commitments.
For the nine months ended September 30, 2025, revenuefrom the CETY Renewables segment was $409,699, compared to $ 590,985 for the same period in 2024. This segment is expected to remainrelatively stable until construction activities commence later this year.
Forthe nine months ended September 30, 2025, CETY reported no revenue from its Engineering and Manufacturing segments, compared to $9,341for the same period in 2024. This segment is still in its early stages and much of the related activity is currently being integratedinto the HRS and CETY Renewables segments. However, with a developing pipeline of opportunities, CETY expects to see gradual revenuegrowth from this segment over the coming quarters.
Forthe nine months ended September 30, 2025, revenue from our natural gas (NG) business was $586,095, a decrease from $1,185,178 for thesame period in 2024. This decline is primarily due to macroeconomic factors and our strategic decision to reduce focus on lower-marginbusiness activities.
GrossProfit
Forthe nine months ended September 30, 2025, our gross profit totaled $1,135,315, representing an increase from $641,575 for the same periodin 2024. The improvement in gross profit and margin was primarily driven by the sale of higher-margin refurbished systems and greatercontributions from CETY’s non-natural gas business in China, where our operations and technologies generate substantially highermargins compared to our NG segment.
Segmentbreakdown
Forthe nine months ended September 30, 2025, our gross profit from Engineering and Manufacturing amounted to $0, compared to $7,806 for thesame period in 2024. This segment is a recent addition to CETY’s portfolio, currently serving as a support for our ongoing internalprojects. Nevertheless, it is anticipated to expand notably as CETY shifts its focus towards providing comprehensive end-to-end powergeneration and integrated solutions.
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Forthe nine months ended September 30, 2025, our gross profit from the Heat Recovery Solutions (HRS) segment was $715,709, compared to $83,822for the same period in 2024. This significant increase in gross profit was primarily driven by higher revenues, including the sale ofrefurbished, higher-margin systems, as well as equipment and engineering service sales.
Forthe nine months ended September 30, 2025, our gross profit from the CETY Renewables segment was $407,265, compared to $549,947 for thesame period in 2024. The Company’s operations have remained steady as we progress through the Certificate of Public Good (CPG)process and approach the final stages of permitting.
Forthe nine months ended September 30, 2025, our gross profit from our wholly owned subsidiary, JHJ, was $12,341, down from $0 for the sameperiod in 2024. This decrease was primarily due to minimal business activity in China, which was partly a result of our strategic decisionto reduce focus on lower-margin businesses in the region.
Selling,General and Administrative (SG&A) Expenses
Forthe nine months ended September 30, 2025, our selling, general and administrative (SG&A) expenses totaled $3,301,052, compared to$3,193,447 for the same period in 2024. The increase was primarily due to costs associated with a consulting agreement related to a potentialacquisition, partially offset by lower operating and salary expenses from our China operations and a reduction in certain general andadministrative costs.
SalariesExpense
Forthe nine months ended September 30, 2025, our salary expenses totaled $1,329,800, compared to $1,481,316 for the same period in 2024.The decrease was primarily due to reduced activity within our CETY Renewables business, while salary levels across other segments remainedrelatively stable.
TravelExpense
Forthe nine months ended September 30, 2025, our travel expenses were $127,312, compared to $135,964 for the same period in 2024. This slightdecrease reflects stable activity levels within our service and marketing operations.
Professionalfees legal and accounting
Forthe nine months ended September 30, 2025, our professional fees totaled $1,073,709, compared to $484,990 for the same period in 2024.The increase was primarily due to costs associated with a consulting agreement related to a potential acquisition, partially offset bylower legal and registration-related expenses compared to the prior year, which included higher costs associated with our S-3 registrationprocess.
FacilityLease and Maintenance Expense
Forthe nine months ended September 30, 2025, our facility lease and maintenance expenses totalled $190,944, compared to $230,798 for thesame period in 2024. This slight decrease reflects normal fluctuations, with no significant changes in underlying operations.
Depreciationand Amortization Expense
Forthe nine months ended September 30, 2025, our depreciation and amortization expense was $8,907, compared to $8,907 for the same periodin 2024. There were no significant changes, as the majority of our equipment has already been fully depreciated.
Changein Derivative Liability
Forthe nine months ended September 30, 2025 and 2024, we recorded derivative liabilities of $924,588 and $0, respectively. The increasein derivative liability was primarily due to the issuance of new convertible instruments and mark-to-market adjustments resulting fromchanges in our stock price and volatility. These fair value remeasurements are required each reporting period in accordance with ASC815.
Interestand Finance Fees
Forthe nine months ended September 30, 2025, interest and finance fees totaled $2,399,193, compared to $902,002 for the same period in 2024.The increase was primarily due to two larger interim financings obtained to bridge the Company through the finalization of funding forthe Vermont Renewable Gas Project, address approximately $1.7 million in accounts receivable, and support the completion of the S-3 registration,as well as certain applied default amounts.
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NetLoss
Forthe nine months ended September 30, 2025, our net loss was $3,522,342, compared to a net loss of $3,550,669 for the same period in 2024.The results remained relatively steady year-over-year, primarily reflecting higher-margin revenue from the Heat Recovery Solutions (HRS)segment—driven by equipment and refurbished system sales—as well as stable contributions from CETY Renewables supportingthe Vermont Renewable Gas Project. Additionally, reduced activity in the lower-margin China natural gas business contributed to maintaininga stable overall financial performance.
Liquidityand Capital Resources
CleanEnergy Technologies, Inc.
CondensedConsolidated Statements of Cash Flows
forthe nine months ended September 30,
(unaudited)
| 2025 | 2024 | |||||||
| Net cash (used in) operating activities | $ | (6,218,085 | ) | $ | (2,788,608 | ) | ||
| Net cash provided by investing activities | (12,624 | ) | 83,340 | |||||
| Net cash provided by financing activities | 6,986,908 | 2,660,036 | ||||||
| Foreign Currency Transaction | 8,486 | (244 | ) | |||||
| Net increase in cash and cash equivalents | $ | 764,685 | $ | (45,476 | ) | |||
CapitalRequirements for Long-Term Obligations
None.
CriticalAccounting Policies
Ourfinancial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principlesapplied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principlesrequires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingentassets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reportingperiods.
Weregularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of thesepolicies 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 andcircumstances. Actual results could differ from those estimates made by management.
RevenueRecognition
TheCompany recognizes revenue under ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” (“ASC606”).
PerformanceObligations Satisfied Over Time
FASBASC 606-10-25-27 through 25-29, 25-36 through 25-37, 55-5 through 55-10
Anentity transfers control of a good or service over time and satisfies a performance obligation and recognizes revenue over time if oneof 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 FASBASC 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 iscreated or enhanced (as described in FASB ASC 606-10-55-7).
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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 entityhas an enforceable right to payment for performance completed to date (as described in FASB ASC 606-10-25-29).
Thefollowing five steps are applied to achieve that core principle for our business:
| ● | 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 |
PerformanceObligations Satisfied at a Point in Time
FASBASC 606-10-25-30
Ifa performance obligation is not satisfied over time, the performance obligation is satisfied at a point in time. To determine the pointin time at which a customer obtains control of a promised asset and the entity satisfies a performance obligation, the entity shouldconsider the guidance on control in FASB ASC 606-10-25-23 through 25-26. In addition, it should consider indicators of the transfer ofcontrol, 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
Thecore principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or servicesto customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods orservices. The Company only applies the five-step model to contracts when it is probable that the Company will collect the considerationit is entitled to in exchange for the goods and services transferred to the customer. In addition a) the company also does not have analternative use for the asset if the customer were to cancel the contract, and b) has a fully enforceable right to receive payment forwork performed (i.e., customers are required to pay as various milestones and/or timeframes are met)
Thefollowing 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 |
Thefollowing 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 |
Thefollowing 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. |
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Aprincipal 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. |
Ifthe entity obtains control over one of the above before the good or service is transferred to a customer, the entity could be considereda principal.
Duringthe project development and engineering phase of our CETY Renewable projects such as VRG, we employ the input method of revenue recognitionto estimate revenue based on projected costs. This approach involves forecasting future costs and revenues to determine the amount ofrevenue we recognize in the current period. It’s important to understand, however, that these recognized revenue figures are notfinal 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.
Theprojected costs of the VRG project is based on estimates and profitability will be impacted depending on actual costs. Using the inputmethod for revenue recognition, the amount of recorded revenue is also affected depending on the estimated total costs. The purchaseprice allocation for Shuya was also based on estimates and comparable data selected by the Company. The inputs for the valuation of theSeries E preferred shares were also based on estimates and comparable data selected by the Company.
Additionally,the above five steps are applied to achieve core principle for our CETY Renewables Division:
Becausethe 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, CETYRenewables recognizes revenue according to accounting standards in accordance with ASC 606.
Inrecognizing 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. | |
| ● | 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 contractinception, CETY assesses the goods and services necessary to deliver the facility in accordance with the its agreement with its clients.The agreement specifically laid out all deliverables necessary to achieve the permitting, design, procurement, construction, and commissioning.
CETYalso looks at 606-10-25-14(A). A bundle of goods or services is also present, in that CETY is delivering all work products associatedwith permitting, design, procurement, construction and commissioning of a commercially operable biomass power plant. A biomass powerplant is a distinct bundle of goods or services, so the individual goods or services on their own do not lend themselves to a fully integratedor functional system.
CETYin accordance with 606-10-32-1, CETY reviews measurement of the performance obligations. There are no exclusion of any amount of theContract Price due to constraints associated with 606-10-31-11 through 606-10-32-13.
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Inreview of 606-10-32-2A, CETY did not exclude measurement from the measurement of the transaction price any taxes assessed by a governmentauthority as no such taxes will be due.
Inreviewing 606-10-32-3, CETY evaluated the nature, timing, and amount of consideration promised, and whether it impacts the estimate ofthe 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 withASC 606-10-25-33. The company adopts the input method for implementation. CETY recognizes revenue for performance obligations on thebasis of the entity’s efforts or inputs to the satisfaction of a performance obligation per 606-10-55-20.
ForCETY, the contracts with clients for the construction of biomass power plants are the basis for revenue recognition. In each separateEPC Agreement, the performance obligations include permitting, design, procurement, construction, and commissioning of the plant. Allof 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 ofand obtain substantially all of the remaining benefits of the assets. We recognize revenue over time, using timeline and milestone methodsto measure progress towards complete satisfaction of the performance obligation.
Duringthe complexity and duration of the biomass power plant construction projects, CETY will recognize revenue over time, consistent withthe criteria for over-time recognition under ASC 606. This approach reflects the continuous transfer of documents, permits, and the equipmentover to the customer, which is characteristic of long-term construction contracts.
Wehave a list of appropriate measures of progress: This is based on milestones achieved, among other measures.
Giventhe 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 September 30, 2025 and December 31, 2024 we had $33,000 and 33,000 of deferred revenue, which is expectedto be recognized in the fourth quarter of year 2025.
Alsofrom time to time we require upfront deposits from our customers based on the contract. As of September 30, 2025, and December 31, 2024,we had outstanding customer deposits of $197,220 and $30,061 respectively.
Changefrom fair value or equity method to consolidation
InJuly 2022, JHJ and other three shareholders agreed to form and make total capital contribution of RMB 20 million ($2.81 million) withlatest contribution due date in February 2066 into Sichuan Hongzuo Shuya Energy Limited (“Shuya”), JHK owns 20% of Shuya.In August 2022, JHJ purchased 100% ownership of Sichuan Shunengwei Energy Technology Limited (“SSET”) for $0, who owns 29%of Shuya; Shunengwei is a holding company and did not have any operations nor made any capital contribution into Shuya as of the ownershippurchase date by JHJ; right after the ownership purchase of SSET, JHJ ultimately owns 49% of Shuya.
Shuyawas set up as the operating entity for pipeline natural gas (PNG) and compressed natural gas (CNG) trading business, while the othertwo shareholders of Shuya have large supply relationships.
Forthe year ended December 31, 2022, the Company has determined that Shuya was not a VIE and has evaluated its consolidation analysis underthe 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 arealso 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.
JHJmade a investment of RMB 3.91 million ($0.55 million) into Shuya during the 12 months ended December 31, 2022 recorded in accordancewith ASC 323. Shuya had a net loss of approximately $10,750 during the year ending December 31, 2022, of which approximately $5,000 wasallocated to the company, reducing the investment by that amount.
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However,effective January 1, 2023, JHJ, SSET and Chengdu Xiangyueheng Enterprise Management Co., Ltd (“Xiangyueheng), who is the 10% shareholderof Shuya, entered a Three-Parties Consistent Action Agreement, wherein these three shareholders (or three parties) will guarantee thatthe voting rights will be expressed in the same way at the shareholders’ meeting of Shuya to consolidate the controlling positionof the three parties in Shuya. The three parties agree that within the validity period of this agreement, before the party intends topropose the motions to the shareholders or the board of directors on the major matters related to the voting rights of the shareholdersor the board of directors, the three parties internally will discuss, negotiate and coordinate the motion topics for consistency; inthe event of disagreement, the opinions of JHJ shall prevail.
Asa 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) Shuyais structured with disproportionate voting rights, and substantially all of the activities are conducted on behalf of an investor withdisproportionately few voting rights. Under ASC 810, a reporting entity has a controlling financial interest in a VIE, and must consolidatethat VIE, if the reporting entity has both of the following characteristics: (a) the power to direct the activities of the VIE that mostsignificantly 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.
Thechange 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 accountingpurposes. In identifying the Company as the accounting acquiror, the companies considered the structure of the transaction and otheractions contemplated by the Three-Parties Consistent Action Agreement, relative outstanding share ownership and market values, the compositionof the combined company’s board of directors, the relative size of Shuya, and the designation of certain senior management positionsof the combined company.
Inaccordance with ASC 805, the Company recorded the acquisition based on the fair value of the consideration transferred and then allocatedthe purchase price to the identifiable assets acquired and liabilities assumed based on their respective fair values as of the AcquisitionDate. 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 assetswith indefinite useful lives and goodwill will not be amortized but will be tested for impairment at least annually. All intangible assetsand goodwill will be tested for impairment when certain indicators are present. Determining the fair value of assets acquired and liabilitiesassumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates offuture revenues and cash flows, discount rates, and selection of comparable companies. The valuation of purchase considerations was basedon preliminary estimates that management believes are reasonable under the circumstances.
Asthe Consistent Action Agreement did not quantify any considerations to gain the control, the deemed consideration paid is the fair valueof 51% non-controlling interest as of January 1, 2023. The following table summarizes the fair value of the consideration paid and thefair 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 |
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UnderASC-805-10-50-2, initial consolidation of an investee previously reported using fair value or the equity method should be accounted forprospectively as of the date the entity obtained a controlling financial interest. Therefore, the Company should provide pro forma informationas if the consolidation had occurred as of the beginning of each of the current and prior comparative reporting period per ASC 805-10-50-2(h)and Rule 3-05 of Regulation S-X.
OnJanuary 1, 2024, and effective on the same date, JHJ, SSET and Xiangyueheng entered into the Agreement on the Termination of the ConcertedAction Agreement (the “Termination Agreement”), pursuant to which the parties released each other from any and all obligationsunder the CAA. Due to the Termination Agreement, the Company now holds less than 50% of the voting rights in Shuya. The Company analyzedwhether Shuya should be consolidated under ASC 810 and determined Shuya is no longer required to be consolidated on January 1, 2024 afterthe execution of the Termination Agreement. Accordingly, the Company will not consolidate Shuya into its consolidated financial statementson or after January 1, 2024.
SeriesE Valuation
Additionally,the inputs for the valuation of the Series E preferred shares were also based on estimates and comparable data selected by the Companyand fair value measurements, furthermore, the purchase price allocation was based on estimates of fair market values.
FutureFinancing
Wewill continue to rely on equity sales of our common shares to continue to fund our business operations. Issuance of additional shareswill result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securitiesor arrange for debt or other financing to fund planned acquisitions and exploration activities.
Off-BalanceSheet Arrangements
Wehave no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financialcondition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resourcesthat are material to stockholders.
RecentlyIssued Accounting Pronouncements
Fromtime to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standardsetting bodies that are adopted by us as of the specified effective date. Unless otherwise discussed, we believe that the impact of recentlyissued standards that are not yet effective will not have a material impact on our consolidated financial position or results of operationsupon adoption.
Item3. Quantitative and Qualitative Disclosure about Market Risk.
Weare a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the informationunder this item.
Item4. Controls and Procedures.
Evaluationof Disclosure Controls and Procedures
Underthe supervision and with the participation of our management, including our principal executive officer and principal financial and accountingofficer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the nine months endedSeptember 30, 2025, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principalexecutive officer and principal financial officer have concluded that during the period covered by this report, our disclosure controlsand procedures were not effective as of September 30, 2025.
Changesin Internal Control over Financial Reporting
Therewere no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the ExchangeAct) during the nine months ended September 30, 2025, that have materially affected, or are reasonably likely to materially affect, ourinternal control over financial reporting.
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PARTII—OTHER INFORMATION
Item1. Legal Proceedings.
Fromtime to time, the Company is involved in litigation incidental to the conduct of its business. The Company is presently not involvedin any legal proceedings which in the opinion of management are likely to have a material adverse effect on the Company’s consolidatedfinancial position or results of operations.
Item1A. Risk Factors.
Factorsthat could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our AnnualReport on Form 10-K filed with the SEC on April 14, 2025, and our registration statement on Form S-3 filed with the SEC on March 13,2025. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition.Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.
Item2. Unregistered Sales of Equity Securities
Onor about July 8, 2025, the Company issued 34,000 shares of common stock to Mast Hill pursuant to its conversion of $97,629.30 in principal,interest and fees owed under the convertible promissory note issued to Mast Hill dated September 16, 2022.
Onor about July 11, 2025, the Company issued 31,180 shares of common stock to Mast Hill pursuant to its conversion of $86,544 in principal,interest and fees owed under the convertible promissory note issued to Mast Hill dated September 16, 2022.
Onor about July 18, 2025, the Company issued 33,333 shares of common stock to Mast Hill pursuant to its conversion of $97,695 in principal,interest and fees owed under the convertible promissory note issued to Mast Hill dated January 16, 2025.
On or about July 18, 2025, pursuant to the securities purchase agreementwith First Fire dated July 18, 2025, described above, the Company issued 8,333 shares of Company common stock to First Fire.
Onor about July 21, 2025, the Company issued 66,667 shares of common stock to Mast Hill pursuant to its conversion of $195,390 in principal,interest and fees owed under the convertible promissory note issued to Mast Hill dated January 16, 2025.
Onor about August 1, 2025, the Company issued 66,667 shares of common stock to Mast Hill pursuant to its conversion of $192,150 in principal,interest and fees owed under the convertible promissory note issued to Mast Hill dated January 16, 2025.
Onor about August 1, 2025, the Company issued 20,000 shares of common stock to Mast Hill pursuant to its conversion of $55,895 in principal,interest and fees owed under the convertible promissory note issued to Mast Hill dated January 16, 2025.
Onor about August 6, 2025, the Company issued 100,000 shares of common stock to Mast Hill pursuant to its conversion of $286,475 in principal,interest and fees owed under the convertible promissory note issued to Mast Hill dated January 16, 2025.
On or about August 18, 2025, pursuant to the securities purchase agreementwith Mast Hill dated August 15, 2025, described above, the Company issued 10,000 shares of Company common stock to Mast Hill.
On or about September 12, 2025, the Company issued 66,667 shares of common stock to Mast Hill pursuant to its conversionof $212,760 in principal, interest and fees owed under the convertible promissory note issued to Mast Hill dated January 16, 2025.
Asto the shares of common stock issued for conversion of convertible promissory notes described above, the share were issued pursuant tothe exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) providedby Section 3(a)(9) of the Securities Act, as the shares of common stock were issued in exchange for and conversion of convertible promissorynotes issued by the Company, there was no additional consideration for the exchanges, and there was no remuneration for the solicitationof the exchanges. As to the other issuances of common stock described above, such shares were issued pursuant to the exemption from theregistration requirements of the Securities Act provided by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgatedthereunder, 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.
Item3. Defaults upon Senior Securities
None.
Item4. Mine Safety Disclosures
NotApplicable.
Item5. Other Information
Onor about July 1, 2025, Company subsidiary Herbert YF Global Holding Limited entered into a Consulting Agreement (the “LinkageConsulting Agreement”) with Linkage International Limited (the “Consultant”), a Hong Kong company and one of theCompany’s investors from the Company’s May 6, 2025, private placement, pursuant to which the Company had sold in theaggregate 715,447 shares of Company common stock at a price of $6.15 per share (on a split-adjusted basis), for aggregate grossproceeds of $4,400,000. Pursuant to the Consulting Agreement, the Consultant would provide services in connection with the potentialacquisition of Ortus Climate Mitigation LLC’s Italian operations (the “Acquisition Target”), and the Company wouldpay the Consultant HKD 5,000,000 as a non-refundable consulting fee, and HKD 25,000,000 as a refundable deposit for the acquisitionof the Acquisition Target. The Consultant has rendered such acquisition services to the Company, on July 8, 2025, paid the HKD5,000,000 consulting fee to the Consultant ($640,902.52), and between July 10, 2025 and August 8, 2025, paid HKD 25,000,000($3,204,513) as a refundable deposit towards the acquisition of the Acquisition Target. On or about November 18, 2025, the Company and the Consultantentered into an amendment to the Consulting Agreement providing that if the deposit is not refunded as agreed, the Consultant would ensurethat 715,447 shares of Company common stock would be returned to the Company for cancellation.
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Item6. Exhibits
Thefollowing exhibits are filed or furnished as a part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
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| 57 |
| 58 |
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| 31.01 | Certification of Principal Executive Officer Pursuant to Rule 13a-14 | Filed herewith. | |
| 31.02 | Certification of Principal Financial Officer Pursuant to Rule 13a-14 | Filed herewith. | |
| 32.01 | Certification of CEO Pursuant to Section 906 of the Sarbanes-Oxley Act | Filed herewith. | |
| 32.02 | Certification of CFO Pursuant to Section 906 of the Sarbanes-Oxley Act | Filed herewith. | |
| 101.INS* | Inline XBRL Instance Document | Furnished herewith. | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | Furnished herewith. | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | Furnished herewith. | |
| 101.LAB* | Inline XBRL Taxonomy Extension Labels Linkbase Document | Furnished herewith. | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | Furnished herewith. | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | Furnished herewith. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
*Pursuantto Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statementor prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
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SIGNATURES
Pursuantto the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signedon its behalf by the undersigned, thereunto duly authorized.
| Clean Energy Technologies, Inc. | ||
| REGISTRANT | ||
| /s/ Kambiz Mahdi | ||
| By: | Kambiz Mahdi | |
| Chief Executive Officer and Director | ||
| Date: | November 19, 2025 | |
| /s/ Calvin Pang | ||
| By: | Calvin Pang | |
| Chief Financial Officer and Director | ||
| Date: | November 19, 2025 | |
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Exhibit10.87
CONSULTINGAGREEMENT
ThisCONSULTING AGREEMENT (this “Agreement”) is made and entered into as of 1 July 2025 by and between LinkageInternational Limited, a Hong Kong registered company (The “Consultant”), and Herbert YF Global Holding Limited, aHong Kong registered company (“The Company”).
Uponthe following terms and conditions of this Agreement, the Company desires to retain the Consultant to perform the following:
| 1. | CONSULTINGSERVICES. Commencing on 1 July 2025 (the “Effective Date”) until 1 July 2026 (the “ConsultingPeriod”), the Consultant will provide exclusive access to the founders, shareholders, and management team of OrtusClimate Mitigation LLC (OCM) to the Company in relation to the potential investment and or acquisition of OCM, particularly OCM’sItalian operations. Additional services will include a due diligence report on OCM’s Italian operations, introduction to strategicand financing partners such as EPC companies and investors, advice on deal structuring, and other services as mutually agreed to betweenthe Consultant and the Company. The expected transaction value is EUR 60 million. |
| 2. | COMPENSATION. As compensation for the performance of the Services, the Company will pay the Consultant a fixed amount of HKD 5,000,000, which is approximately 1% of the expected transaction value. This amount is non-refundable as the compensation covers costs on travel and due diligence of 96 project sites. |
| 3. | DEPOSIT. In order to hold exclusive access with OCM during the due diligence and negotiation process, The Company shall place a deposit in the amount of HKD 25,000,000, which is approximately 4.5% of the expected transaction value. This amount is fully refundable if The Company does not pursue the investment or acquisition transaction with OCM. |
| 4. | CONFIDENTIALITY. The existence and provisions of this Agreement will be held in strictest confidence by the Company and the Consultant and will not be publicized or disclosed in any manner whatsoever; provided, however, that each party may disclose this Agreement in confidence to its attorneys, accountants, auditors, tax preparers, and financial advisors and insofar as such disclosure may be necessary to enforce its terms or as otherwise required by law. |
| 5. | NO EXPLOITATION OF COMPANY’S CONFIDENTIAL INFORMATION. The Company retains thesole discretion to request for the destruction or return of the Confidential Information from The Company and upon such request. TheConsultant will, subject to the requirements of law and regulations and to the extent practicable, promptly either destroy or redeliverto The Company the Confidential Information provided in relation to the Purpose and all copies thereof, without retaining any paper copythereof or any electronic media containing such Confidential Information. Notwithstanding the foregoing, the Company’s legal departmentand the legal departments of the Company’s Representatives may maintain a copy of the Confidential Information in its restrictedaccess files for actual or anticipated litigation, regulatory compliance or corporate record keeping purposes in accordance with applicabledocument retention policies. |
| 6. | NO EXPLOITATION OF CONSULTANTS’ CONFIDENTIAL INFORMATION. The Company agrees thatit may make only such use of the Confidential Information from, or pertaining to, potential investors referred from The Consultant, eitherdirectly or indirectly, as is contemplated by this Agreement or as may otherwise be specifically authorized in writing by the Consultant.The Company agrees to use the Consultant as the exclusive intermediary for the Purpose. |
| 7. | LIMITATION OF LIABILITY. In no event shall either party be liable for any indirect, incidental, punitive, special or consequential damages, including loss of profits, revenue, data, or use, incurred by either party or any third party, whether in an action in contract or tort, even if the other party or any other person has been advised of the possibility of such damages. In no event shall either party’s liability exceed the amount due or payable under this agreement. |
| 8. | GOVERNING LAW. This Agreement shall be governed by and construed under the laws of the Hong Kong as applied to agreements among residents of Hong Kong entered into and to be performed entirely within Hong Kong. |
| 9. | SEVERABILITY. In the event any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions of this Agreement will remain in full force and effect. |
| 10. | AMENDMENT AND WAIVER. This Agreement may be amended and the observance of any provision may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the mutual written consent of The Company and The Consultant. |
| 11. | BINDING AGREEMENT. This Agreement constitutes a valid and binding agreement of the parties hereto, enforceable against each party in accordance with Hong Kong law. Neither party may assign any of its rights under this Agreement without the prior written consent of the other party. |
| 12. | ENTIRE AGREEMENT. This Agreement constitutes the complete agreement between the parties and supersedes all previous agreements or representations, whether written or oral, with respect to the subject matter described herein. This Agreement may be executed in two (2) signed counterparts, each of which shall constitute an original, but all of which taken together shall constitute one and the same instrument. |
SIGNEDby The Company
Name:Calvin Pang
Title:Director
/s/Calvin Pang
SIGNEDby The Consultant
Name:Lu Mo
Title:Director
/s/Lu Mo
[ENDOF AGREEMENT]
Exhibit10.88
AMENDMENTNO. 1
TO
CONSULTING AGREEMENT
ThisAMENDMENT NO. 1 (this “Amendment”) to that certain Consulting Agreement dated on or about July 1, 2025 (the“Consulting Agreement”), entered into by and between Herbert YF Global Holding Limited (the “Company”)and Linkage International Limited (the “Consultant”), is entered into effective as November 17, 2025, by and betweenthe Company and the Consultant.
RECITALS:
WHEREAS,pursuant to the Consulting Agreement, the Company was required to pay a refundable deposit in the amount of HKD 25,000,000 as a refundabledeposit for the acquisition of Ortus Climate Mitigation LLC’s Italian operations.
WHEREAS,the Company is a subsidiary of Clean Energy Technologies, Inc., a Nevada corporation (“CETY”), and the Consultantand other Hong Kong investors purchased 715,447 shares of CETY common stock on or about May 6, 2025 (the “CETY Shares”).
WHEREAS,the Company and the Consultant now desire to amend the Consulting Agreement to agree that the refundability of the deposit shall be securedby the CETY Shares on the terms set forth herein.
WHEREAS,capitalized terms used in this Amendment but not otherwise defined herein shall have the meanings ascribed to such terms in the ConsultingAgreement.
AGREEMENT:
NOW,THEREFORE, for good and valuable consideration, the recitals set forth above, and the covenants set forth herein, the parties agree thatthe Subscription Agreement is hereby amended as follows:
1. Amendment of Consulting Agreement. Paragraph 3 of the Consulting Agreement is amended as set forth below (with the language initalics added):
3.DEPOSIT. In order to hold exclusive access with OCM during the due diligence and negotiation process, The Company shall place a depositin the amount of HKD 25,000,000, which is approximately 4.5% of the expected transaction value. This amount is fully refundable if TheCompany does not pursue the investment or acquisition transaction with OCM. Such deposit refundability shall be secured by 715,447shares of common stock of the Company’s parent corporation, Clean Energy Technologies, Inc. (the “Shares”),and if the deposit is not refunded in the event the Company does not pursue the transaction with OCM, the Consultant shall ensure thatthe Shares are immediately returned to Clean Energy Technologies, Inc. for cancellation.
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2. Continued Validity. Except as otherwise expressly stated in this Amendment, all other terms and provisions of the Consulting Agreementshall remain in full force and effect, without amendment or modification.
3. Entire Agreement. This Amendment, together with the Consulting Agreement and any other documents referenced therein, representsthe entire agreement of the parties to the Amendment and shall supersede any and all previous contracts, arrangements or understandingsbetween the parties with respect to the subject matter herein.
4. Governing Law. This Amendment shall be governed by and construed and enforced in accordance with, and all questions concerningthe construction, validity, interpretation and performance of this Amendment shall be governed by, the internal laws of Hong Kong, withoutgiving effect to any choice of law or conflict of law provision or rule that would cause the application of the laws of any jurisdictionsother than Hong Kong.
5. Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Amendment shall inure to the benefitof and be binding upon the respective successors and assigns of the parties.
6. Counterparts. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all ofwhich together shall constitute one and the same instrument. Counterparts may be delivered via electronic mail or other transmissionmethod, and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
[Thenext page is the signature page]
| 2 |
INWITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year first above written.
COMPANY:
| Herbert YF Global Holding Limited | ||
| By: | /s/ Calvin Pang | |
| Calvin Pang, Director | ||
CONSULTANT:
| Linkage International Limited | ||
| By: | /s/ Lu Mo | |
| Lu Mo, Director | ||
| 3 |
Exhibit21.1
Listof Subsidiaries
CleanEnergy HRS LLC
CETYEurope, SRL
CETYCapital LLC
CleanEnergy Technologies (H.K.) Limited
HainanClean Energy Technologies, Inc.
MeishanClean Energy Technologies, Inc.
LeadingWave Limited
ElementCapital International Limited
SichuanHunya Jieneng New Energy Co. LTD
JiangsuHuanya Jieneng New Energy Co., Ltd.
HerbertYF Global Holding Limited
Exhibit31.01
CERTIFICATIONOF CHIEF EXECUTIVE OFFICER
Pursuantto Section 302 of the Sarbanes-Oxley Act of 2002
I,Kambiz Mahdi, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Clean Energy Technologies, Inc. for the nine months ended September 30, 2025;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessaryto make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to theperiod covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all materialrespects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in thisreport;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange ActRules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by otherswithin those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed underour supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statementsfor external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusionsabout the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’smost recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financialreporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performingthe equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’sinternal control over financial reporting.
| Date: November 19, 2025 | By: | /s/ KAMBIZ MAHDI |
| Kambiz Mahdi, | ||
| Chief Executive Officer |
Exhibit31.02
CERTIFICATIONOF CHIEF EXECUTIVE OFFICER
Pursuantto Section 302 of the Sarbanes-Oxley Act of 2002
I,Calvin Pang, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Clean Energy Technologies, Inc. for the nine months ended September 30, 2025;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessaryto make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to theperiod covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all materialrespects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in thisreport;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange ActRules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by otherswithin those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed underour supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statementsfor external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusionsabout the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’smost recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financialreporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performingthe equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’sinternal control over financial reporting.
| Date: November 19, 2025 | By: | /s/ Calvin Pang |
| Calvin Pang, | ||
| Chief Financial Officer |
Exhibit32.01
CERTIFICATIONOF CHIEF EXECUTIVE OFFICER
Pursuantto Section 906 of the Sarbanes-Oxley Act of 2002
Pursuantto 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Clean Energy Technologies,Inc. (the “Company”) hereby certifies, to his knowledge, that:
(i)the accompanying Quarterly Report on Form 10-Q of the Company for the nine months ended September 30, 2025 (the “Report”)fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended;and
(ii)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operationsof the Company.
| Date: November 19, 2025 | By: | /s/ Kambiz Mahdi |
| Kambiz Mahdi | ||
| Chief Executive Officer |
Exhibit32.02
CERTIFICATIONOF CHIEF EXECUTIVE OFFICER
Pursuantto Section 906 of the Sarbanes-Oxley Act of 2002
Pursuantto 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Clean Energy Technologies,Inc. (the “Company”) hereby certifies, to his knowledge, that:
(i)the accompanying Quarterly Report on Form 10-Q of the Company for the nine months ended September 30, 2025 (the “Report”)fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended;and
(ii)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operationsof the Company.
| Date: November 19, 2025 | By: | /s/ Calvin Pang |
| Calvin Pang | ||
| Chief Financial Officer |