Filing Analysis
Clean Energy Technologies, Inc. (CETY) announced that its financial statements for nearly a four-year period from January 1, 2022, through September 30, 2025, can no longer be relied upon due to accounting errors. The errors relate to revenue recognition timing, valuation of long-term receivables, and interest income under U.S. GAAP.
Red Flags
- Extensive restatement period covering nearly four years of financial data.
- Errors involve core financial metrics including revenue recognition and asset valuation.
- Invalidation of previously issued earnings releases and investor presentations.
Key Facts
- The non-reliance period spans from January 1, 2022, to September 30, 2025.
- Accounting errors involve classification, valuation, and collectability of long-term receivables and contract assets.
- Errors also impacted the timing of revenue recognition and related interest income.
- The Company intends to file amended 10-K/A reports for fiscal years 2023 and 2024, and 10-Q/A reports for the first three quarters of 2025.
- The Board and Audit Committee discussed these matters with the independent auditor, TAAD, LLP.
Clean Energy Technologies (CETY) entered into a $406,000 convertible promissory note agreement with Pacific Pier Capital II, LP, receiving net proceeds of approximately $350,280. The note carries a 12% interest rate and features a variable conversion price set at 85% of the lowest daily VWAP during a 10-day lookback period.
Red Flags
- Variable-rate conversion feature (85% of lowest VWAP) is a 'death spiral' provision that can lead to extreme dilution.
- Significant Original Issue Discount (OID) where the company receives ~14% less than the principal amount immediately.
- Extremely tight deadline for shareholder approval (May 1, 2026) relative to the closing date (April 22, 2026).
- The note allows the holder to deduct up to $1,750 in fees from each individual conversion amount.
- Multiple 8-K items (1.01, 2.03, 3.02) triggered by a single financing event.
Key Facts
- Principal amount of the note is $406,000, issued for a purchase price of $357,280 (Original Issue Discount).
- Net funding received by the company was $350,280 after $7,000 in legal expenses.
- The note matures in 12 months (April 20, 2027) and carries a 12% annual interest rate.
- Conversion price is 85% of the lowest daily volume-weighted average price (VWAP) during the 10 trading days prior to conversion.
- The agreement requires shareholder approval by May 1, 2026, to issue shares in excess of a 2,000,000 share Exchange Cap.
- Proceeds are restricted from being used to repay debt owed to officers, directors, or affiliates.
Clean Energy Technologies, Inc. (CETY) received a deficiency notice from Nasdaq on April 17, 2026, due to its failure to timely file its Annual Report on Form 10-K for the fiscal year ended December 31, 2025. The company has 60 days to submit a plan to regain compliance and could potentially be granted an extension until October 12, 2026.
Red Flags
- Failure to file required annual financial reports (Form 10-K) on time.
- Potential for delisting from the Nasdaq Stock Market if compliance is not regained.
- Risk of reduced liquidity and limited access to public capital markets.
Key Facts
- Received Nasdaq notice on April 17, 2026, regarding non-compliance with Listing Rule 5250(c)(1).
- The non-compliance is due to the unfiled Form 10-K for the fiscal year ended December 31, 2025.
- The company must submit a plan to regain compliance within 60 calendar days.
- If the plan is accepted, Nasdaq may grant an extension of up to 180 days from the original due date (until October 12, 2026).
- The notice has no immediate effect on the listing or trading of CETY common stock.
Clean Energy Technologies, Inc. entered into three convertible promissory note agreements totaling approximately $1.47 million in principal. The financing includes a high-cost short-term note and the conversion of previous advances from two entities, one of which is a related party.
Red Flags
- Related-party transaction involving Noblebear Investment Holdings LLC.
- High cost of capital: The 1800 Diagonal note reflects an approximate 18% haircut between principal and net proceeds.
- Dilutive default terms: The 1800 Diagonal note converts at 85% of the lowest closing bid price during the 10 trading days prior to conversion upon default.
- Multiple financing items (1.01, 2.03, 3.02) in a single filing indicating urgent liquidity needs.
Key Facts
- Issued a $147,840 convertible note to 1800 Diagonal Lending LLC for net proceeds of $125,000 after fees and discounts.
- Issued a $664,916 convertible note to Mega Sincere Holdings Limited to formalize $604,469 in previous advances.
- Issued a $660,000 convertible note to Noblebear Investment Holdings LLC to formalize $600,000 in previous advances.
- The 1800 Diagonal note matures December 15, 2026, and carries a one-time 12% interest charge.
- The Mega and Noblebear notes carry 10% annual interest and a conversion price of $0.646 per share.
- Noblebear Investment Holdings LLC is controlled by a company shareholder and is identified as a related party.