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.