Clean Energy Technologies, Inc. quarterly report, Q2 FY2026

Clean Energy Technologies, Inc. (CETY) - 10-Q Summary

Business Context and Reporting Period

This summary covers the quarterly period ended June 30, 2026. Clean Energy Technologies, Inc. is a smaller reporting company incorporated in Nevada, trading on Nasdaq under the symbol CETY. The company operates four segments: Heat Recovery Solutions, Waste to Energy, Engineering & Manufacturing, and Natural Gas Trading (CETY HK). As of August 19, 2026, there were 12,166,106 shares of common stock outstanding.

Key Financial Metrics (Six Months Ended June 30, 2026)

Metric Value (USD)
Total Revenue $1,155,641
Gross Profit $3,689
Net Loss $(1,735,079)
Net Loss Per Share (Basic & Diluted) $(0.15)
Cash and Cash Equivalents $19,735
Working Capital $(37,355) Deficit
Total Assets $13,939,748
Total Liabilities $7,949,726
Stockholders' Equity $5,990,022
Accumulated Deficit $(37,035,080)

Material Changes vs. Prior Period

  • Revenue Growth: Revenue increased 70% to $1.16 million from $678,215 in the prior year period, driven almost entirely by the Natural Gas Trading segment ($1.14 million vs. $7,130 previously).
  • Margin Compression: Gross profit collapsed to $3,689 from $635,535. This reflects a shift in revenue mix toward lower-margin natural gas trading and a lack of sales in higher-margin Heat Recovery and Waste-to-Energy segments.
  • Operating Expenses: Total expenses decreased to $1.48 million from $1.77 million, primarily due to reduced salary costs ($571k vs. $873k) as the Vermont Renewable Gas project entered final permitting stages.
  • Financing Costs: Interest and financing fees increased significantly to $1.18 million from $866k due to new interim financings.
  • Derivative Gains: The company recorded a non-cash gain of $283,640 from changes in the fair value of derivative liabilities, partially offsetting operating losses.

Outlook, Risks, and Management Commentary

  • Going Concern: The filing explicitly states there is substantial doubt about the company's ability to continue as a going concern. This is due to a working capital deficit, an accumulated deficit of over $37 million, and negative cash flow from operations of $1.66 million for the six-month period.
  • Liquidity Strategy: Management plans to alleviate liquidity issues through additional debt and equity financing, restructuring existing debt, and pursuing project-level financing (e.g., Vermont Renewable Gas project).
  • Segment Outlook:
    • Heat Recovery: No product sales in the period; sales cycles are long due to integration complexity.
    • Waste to Energy: Zero revenue; pending final approval from the Vermont Public Utility Commission.
    • Natural Gas: Revenue is high but margins are low; management is strategically reducing focus on this segment.
  • Controls: Management concluded that disclosure controls and procedures were not effective as of June 30, 2026.
  • Subsequent Events: The company entered into multiple new convertible note agreements in July and August 2026 (e.g., with Coventry Enterprises, 1800 Diagonal, and Pacific Pier) to secure working capital.

Investor Verification Checklist

  • Cash Runway: Verify the sufficiency of cash ($19,735) against immediate debt maturities and operating burn rates.
  • Debt Structure: Review the terms of recent convertible notes (high interest rates, conversion discounts, and potential dilution) detailed in Note 10 and Subsequent Events.
  • Related Party Receivables: Assess the collectibility of the $2.35 million receivable from Vermont Renewable Gas (VRG), a related party joint venture.
  • Regulatory Approvals: Monitor the status of the Vermont Public Utility Commission approval for the Waste-to-Energy project, which is critical for future revenue.
  • Derivative Liabilities: Understand the volatility impact of the $758,918 derivative liability on future earnings.