Clean Energy Technologies, Inc. - Form 8-K Summary
Business Context and Reporting Period
Clean Energy Technologies, Inc. (CETY), a Nevada corporation, filed this Current Report on Form 8-K on June 8, 2020. The filing discloses the entry into a Material Definitive Agreement with GHS Investments LLC to secure potential equity financing.
Key Financial Metrics and Transaction Details
- Financing Capacity: GHS Investments LLC agreed to purchase up to $2,000,000 of the Company's common stock.
- Initial Issuance: The Company issued 764,526 shares of Common Stock to GHS upon execution of the agreement.
- Purchase Price Mechanism: Shares are priced at 80% of the average of the lowest two closing prices for the 10 days prior to the Put notice.
- Put Limits: Individual Put notices must be between $10,000 and the lesser of $400,000 or 200% of the average daily trading volume over the preceding 10 days.
- Ownership Cap: GHS and its affiliates are restricted from purchasing shares that would result in beneficial ownership exceeding 4.99% of outstanding Common Stock.
- Term: The agreement is valid for 36 months, until the $2,000,000 cap is reached, or until the Registration Statement is no longer effective.
Material Changes and Agreements
The primary material change is the execution of the Equity Financing Agreement and Registration Rights Agreement. The Company is obligated to file a Form S-1 Registration Statement within 30 days of the agreement and use reasonable commercial efforts to have it declared effective within 30 days of filing (no later than 90 days post-filing). The Company is also obligated to issue an additional $5,000 worth of Common Stock upon the delivery of the second and third Puts.
Outlook, Risks, and Contingencies
The ability to raise the full $2,000,000 is contingent upon the effectiveness of the Form S-1 Registration Statement. The filing does not provide specific financial guidance, revenue projections, or liquidity metrics beyond the terms of this financing agreement. The Company is not an emerging growth company.
Investor Verification Checklist
- Verify the status and effectiveness of the Form S-1 Registration Statement referenced in the agreement.
- Monitor the Company's average daily trading volume to assess the practical limits on Put delivery amounts.
- Review the full text of Exhibits 10.108 and 10.109 for complete terms regarding the Equity Financing and Registration Rights.
- Track the dilution impact of the initial 764,526 shares and potential future issuances up to the $2,000,000 cap.