Clean Energy Technologies, Inc.

Clean Energy Technologies, Inc. operates in the clean energy industry, focusing on waste heat recovery, waste-to-energy, and natural gas trading. The company targets small and mid-sized projects in North America, Europe, and Asia, leveraging patented technologies like the Clean Cycle generator and HTAP pyrolysis systems. The global waste-to-energy market is projected to reach approximately $80–100 billion by 2030, growing at a CAGR of approximately 6–7%, while the waste heat recovery market is estimated at approximately $65–75 billion in the mid-2020s, with projections to reach approximately $110–130 billion by 2030 at a CAGR of approximately 7–9%. China's natural gas consumption reached approximately 390–400 billion cubic meters in 2023, with the government targeting an increase to approximately 15% of total primary energy mix by 2030. Key structural forces include rising energy costs, industrial decarbonization, regulatory pressure to reduce landfill usage, and government incentives like the Inflation Reduction Act's 30% Investment Tax Credit.

Primary competitors named in the filing include ORMAT, Exergy, TAS, and Turboden in ORC systems, with ORMAT holding more than 75% of installed capacity, Exergy approximately 13%, TAS approximately 6%, and Turboden approximately 2%. In waste-to-energy, competitors include Hitachi Zosen Inova AG, Suez, Veolia, Ramboll Group A/S, Covanta Holding Corporation, China Everbright International Ltd., Abu Dhabi National Energy Company PJSC, Babcock & Wilcox Enterprises Inc., Whaleboater Technologies Inc., and Xcel Energy Inc. In China's NG trading, competitors include large state-owned producers like Sinopec and many smaller local energy trading companies. The company's stated competitive advantages include the Clean Cycle generator's estimated 15% higher efficiency than competitors, its magnetic design eliminating oils and lubricants, and the ability to purchase NG at significant discounts through prepayments, targeting gross margins of approximately 20-30% compared to competitors' estimated 1-5% margins.

The company generates revenue through four reportable segments: Clean Energy HRS & CETY Europe (waste heat recovery solutions), CETY Renewables (waste-to-energy solutions), Engineering and Manufacturing Business (design, manufacturing, power generation, BESS, and project management), and CETY HK (natural gas trading operations in China). Revenue is a mix of transactional product sales and over-time revenue recognition for long-term EPC contracts. Primary customer segments include industrial companies, municipalities, and natural gas users in China. The company utilizes a direct sales force and global distribution group, with cross-sale agreements with synergistic technology providers.

The Clean Energy HRS & CETY Europe segment provides waste heat recovery solutions using Organic Rankine Cycle systems containing the patented Clean Cycle generator, which produces 140KW per generator and can be linked for projects up to 1MW. Over 123 Clean Cycle generators have been deployed to date, with 88 units used in biomass and waste-to-energy projects, 4 with diesel electric generators, 3 with turbine electric generators, and 26 in industrial electric production applications. The company has added a new ORC system manufactured by Exergy for projects between 1 MW and 10 MW. The CETY Renewables segment provides waste-to-energy solutions using patented High Temperature Ablative Pyrolysis technology, with the HTAP10 and HTAP5 systems. The technology has been implemented in over 1,500 onsite power generation projects in Russia and installed in 7 sites for waste-to-energy applications. The company has global rights (except Russia and CIS countries) to design, build, manufacture, sell, and operate these systems.

The Engineering and Manufacturing Business segment provides comprehensive design, manufacturing, power generation, BESS, and project management solutions. The CETY HK segment sources and supplies natural gas to industrial customers and municipalities in China, primarily for heavy-duty truck refueling stations and urban/industrial applications. JHJ has established a supply of approximately 8,000 tons of NG for distribution. The company also has a planned joint venture with Shenzhen Gas to acquire natural gas pipeline operator assets in southwestern China, with CETY HK expected to contribute approximately $8 million to the joint venture. Additionally, the company holds a convertible note investment in Heze Hongyuan Natural Gas Co., and has established CETY Capital as a financing arm for customer renewable energy projects, though no material operations have been conducted in this subsidiary to date.

During the period, the company completed the disposal of its equity interest in Shuya in December 2025, derecognizing the investment and recognizing a gain of $318,426 from the disposition. The company entered into a consulting and business development arrangement with Linkage, with approximately HKD 30 million (approximately US$3.2 million) advanced under the agreement. The company also entered into multiple convertible note financing arrangements with Mast Hill Fund, Pacific Pier Capital, Firstfire Global Opportunities Fund, 1800 Diagonal Lending, and Lucas Ventures. A 1-for-15 reverse stock split was effected on October 6, 2025 to regain compliance with Nasdaq's minimum bid price requirement. The company also added power generation and Battery Energy Storage System capabilities to support data center energy demands.

For the fiscal year ended December 31, 2025, total revenue was $2,161,626 ¹ compared to $2,424,659 ² in 2024. Gross profit was $595,568 ³ versus $846,555 ⁴ in the prior year. The company reported a net loss of $6,808,895 ⁵ compared to a net loss of $4,550,296 ⁶ in 2024. Loss from operations improved to approximately $2.50 million ⁷ from approximately $3.33 million ⁸ in 2024. The increase in net loss was primarily attributable to non-cash items including losses related to debt settlement and write-down, changes in derivative liabilities, and higher interest and financing expenses.

The company states it expects to continue to incur significant expenses and operating losses for the foreseeable future.

The company's primary growth vector is expanding its Waste Heat Recovery product line to include ORC systems producing over 1 MW of power, enabled by the new agreement with Exergy for systems between 1 MW and 10 MW. The company expects to raise additional funds to expand its capacity to install 6-8 units per year, which should approximately double sales on a year-to-year basis. The company is also targeting the growing energy demands of data centers by adding power generation and BESS capabilities. The Inflation Reduction Act's 30% Investment Tax Credit and technology-neutral tax credits are expected to make Clean Cycle Generator and ORC systems more profitable to install.

A second growth vector is establishing a Waste to Energy business by selling HTAP-based products and building small and mid-sized waste-to-energy power plants. The first planned project is with Vermont Renewable Gas in Lyndon, Vermont, expected to annually deliver up to 18,000 MWh of renewable electricity and 1,500 tons of biochar. The company is collaborating with clean energy project development and finance companies to offer solutions generating RNG, hydrogen, methane, and biochar from biomass, municipal waste, timber waste, and other organic materials. CETY Capital, when implemented, is expected to add flexibility to finance customer renewable energy projects. The planned joint venture with Shenzhen Gas for natural gas pipeline operator assets in southwestern China is deferred until market conditions improve. However, management notes that the company is implementing cost-reduction initiatives within its Heat Recovery Solutions business, including utilizing Sagacity as a supply chain partner to improve operating efficiencies and reduce procurement and manufacturing costs. The company's gross profit increased to $595,568 ⁹ in 2025 from $846,555 ¹⁰ in 2024, driven by sale of systems with higher margins and improved cost efficiencies. SG&A expenses decreased to $3,096,780 ¹¹ from $4,176,986 ¹² in 2024, primarily due to reductions in salaries and general and administrative expenses.

The company is establishing a reliable network of global and domestic supply chain partners to drive scalability and cost efficiency. Waste-to-energy components are sourced globally, with core components being transitioned from Russia to Turkey and the US. The company has established a 2,000 sq-ft R&D center in Antalya, Turkey, and expects to manufacture HTAP units in the United States. The company has approximately 15 total employees plus 7 employees in JHJ & SHJ in China. The company utilizes an extensive number of consultants.

The company had no expenses in Research and Development costs during the years ended December 31, 2025, and 2024 ¹³. Capital expenditure plans are not explicitly quantified in the filing. The company issued shares for cash of $5,079,183 ¹⁴ during 2025. The company has never declared a cash dividend on its common stock and does not anticipate paying cash dividends in the foreseeable future. The company has an Equity Line of Credit Agreement with Mast Hill Fund for up to $5,000,000 ¹⁵, with a warrant to purchase up to 33,333 shares at an initial exercise price of $30 per share.

The company faces a significant going concern risk, with an accumulated deficit of $35,299,999 ¹⁶ as of December 31, 2025, and net cash used in operating activities of $7,922,347 ¹⁷ for the year. The independent registered public accounting firm has issued a going concern opinion. The company has substantial doubt about its ability to continue as a going concern. The company's ability to continue operations is dependent on obtaining additional financing, and there are no assurances that such financing will be available. The company has experienced Nasdaq deficiency notices and future non-compliance could result in delisting, which would impair the ability to raise capital and could constitute an event of default under outstanding convertible promissory notes.

The company faces risks related to its operations in China, including uncertainties in the interpretation and enforcement of PRC laws, potential government intervention, and restrictions on paying dividends or making other payments to the US parent. The company is subject to the Holding Foreign Companies Accountable Act, and if the PCAOB is unable to inspect the company's auditor completely, trading in securities could be prohibited. The company also faces risks from fluctuations in the Renminbi against the U.S. dollar, which could impact profitability of Chinese operations. The company's NG trading operations face the risk that if spot prices drop below purchase prices, the company may have to sell NG at a substantial loss.

The company faces a material going concern risk, with an accumulated deficit of $35,299,999 ¹⁸ and net cash used in operating activities of $7,922,347 ¹⁹ for 2025. The independent auditors have expressed substantial doubt about the company's ability to continue as a going concern. The company has $5,995,088 ²⁰ in current liabilities versus $6,255,951 ²¹ in current assets, resulting in working capital of only $260,863 ²². The company has issued a substantial number of convertible securities, with 1,441,565 ²³ common share equivalents from convertible notes and 2,664,010 ²⁴ from warrants and other equivalents, totaling 4,105,575 ²⁵ convertible common stock equivalents as of December 31, 2025, which would cause substantial dilution upon conversion. The company's NG trading operations in China face the risk that if spot prices drop below purchase prices, the company may have to sell NG at a loss, and the company does not purchase sufficient volume to hedge against price declines. The company's operations in China are subject to uncertainties in PRC legal interpretation and enforcement, potential government intervention, and restrictions on dividend payments to the US parent, with a withholding tax rate of up to 10% ²⁶ applicable to dividends payable by PRC companies to non-PRC-resident enterprises.

Management's message emphasizes a strategic shift to focus on core clean energy technology and distributed energy project development activities, as evidenced by the disposition of the Shuya investment in December 2025. The company reported a net loss of $6,808,895 ²⁷ for 2025 compared to $4,550,296 ²⁸ for 2024, but management highlights that loss from operations improved from approximately $3.33 million ²⁹ in 2024 to approximately $2.50 million ³⁰ in 2025, driven by strategic expansion into higher-margin waste-to-energy opportunities and improved operational efficiencies. Management's three strategic priorities are: (1) expanding the Waste Heat Recovery product line to include larger ORC systems producing over 1 MW, (2) establishing a Waste to Energy business through HTAP technology and building small to mid-sized waste-to-energy power plants, and (3) leveraging engineering, procurement, and manufacturing experience to assist customers with turnkey energy solutions. Management states it is pursuing strategic partnerships, joint ventures, and other business opportunities, including collaborations with Exergy and Metis Power, to support project development and access to capital. The company is also implementing cost-reduction initiatives and focusing on generating revenue and cash flow from existing operations while preserving liquidity.