Clean Energy Technologies, Inc. (CETY) - Form 8-K Summary
Business Context and Reporting Period
Clean Energy Technologies, Inc., a Nevada corporation, filed this Current Report on Form 8-K on September 7, 2021. The filing discloses the entry into a material definitive agreement to secure financing.
Key Financial Metrics and Transaction Details
The Company entered into a Securities Purchase Agreement and issued an Original Issue Discount (OID) Note to Geneva Roth Remark Holdings Inc. Key terms include:
- Note Face Value: $226,345
- Original Issue Discount: $23,345
- Net Proceeds to Company: $203,000
- Interest Rate: 10% per annum
- Maturity Date: September 7, 2022
- Repayment Schedule: 10 monthly payments of $23,828.44 commencing October 30, 2021.
The filing text does not provide broader financial metrics such as total revenue, net profit, operating cash flow, or aggregate debt levels outside of this specific transaction.
Material Changes and Default Provisions
This filing represents a new debt obligation. The Note contains strict default provisions. An event of default includes failure to pay principal or interest after a 5-day grace period, breach of covenants, bankruptcy, delisting, or failure to file timely SEC reports.
Upon default:
- The Note becomes immediately payable.
- The Company must pay 150% of the outstanding principal, accrued interest, and default interest (22%).
- If unpaid within 5 days of default, the lender may convert the amount into common stock at a 30% discount to the lowest closing bid price of the prior five trading days.
- Conversion is subject to a limitation preventing the lender from owning more than 4.99% of the Company's stock prior to full conversion.
Guidance, Risks, and Contingencies
The filing does not contain forward-looking guidance, management commentary on future operations, or specific risk factors beyond the terms of the Note. The primary contingency is the risk of default triggering immediate acceleration of debt and potential dilution through the conversion feature.
Investor Verification Checklist
- Verify the Company's ability to meet the first monthly payment of $23,828.44 due October 30, 2021.
- Review the full text of the Securities Purchase Agreement (Exhibit 10.130) and Note (Exhibit 10.131) for additional covenants not summarized here.
- Monitor the Company's stock price to assess the potential dilution impact if the 30% discount conversion feature is triggered.
- Confirm the Company's current aggregate debt load to evaluate the impact of this new $226,345 obligation.