Clean Energy Technologies, Inc. (CETY) - 10-K Summary
Business Context and Reporting Period
Company: Clean Energy Technologies, Inc. (CETY)
Filing Type: Form 10-K (Annual Report)
Period Ended: December 31, 2025
Reporting Status: Smaller Reporting Company; Non-accelerated filer.
Going Concern: The independent auditor has issued a "Going Concern" opinion, expressing substantial doubt about the Company's ability to continue operations without additional financing.
The Company operates in four segments: Clean Energy HRS (Waste Heat Recovery), CETY Renewables (Waste to Energy), Engineering and Manufacturing, and CETY HK (Natural Gas Trading in China). In December 2025, the Company disposed of its 49% equity interest in Shuya, a Chinese natural gas trading entity, to refocus on core clean energy technologies.
Key Financial Metrics (Year Ended Dec 31, 2025)
| Metric | 2025 (Actual) | 2024 (Restated) |
|---|---|---|
| Total Revenue | $2,161,626 | $2,424,659 |
| Gross Profit | $595,568 | $846,555 |
| Net Loss | $(6,808,895) | $(4,550,296) |
| Net Loss from Operations | $(2,501,212) | $(3,330,431) |
| Operating Cash Flow | $(7,922,347) | $(3,560,951) |
| Working Capital | $260,863 | $(3,478,090) |
| Total Assets | $12,412,290 | $8,684,271 |
| Total Liabilities | $6,165,693 | $6,787,126 |
| Stockholders' Equity | $6,246,597 | $1,897,145 |
Debt & Liquidity: The Company holds significant convertible notes payable ($880,052 net current) and related party notes ($722,350). Cash and cash equivalents totaled $602,461 at year-end. The Company relies heavily on short-term convertible financing and equity issuances to fund operations.
Material Changes vs. Prior Period
- Revenue Decline: Total revenue decreased by approximately 11% ($263k) compared to 2024. This was driven by a 54% drop in CETY Renewables revenue ($485k vs $1.06M) due to project timing delays, partially offset by a 219% increase in Heat Recovery Solutions (HRS) revenue ($504k vs $158k).
- Increased Net Loss: Net loss widened by $2.26M (49% increase). The increase was primarily due to non-cash items, including a $1.57M loss on debt settlement/write-off (LWL investment), higher interest and financing fees ($3.3M vs $1.1M), and changes in derivative liabilities.
- Improved Operating Loss: Despite the wider net loss, the loss from operations improved by $829k (from $3.33M to $2.50M) due to reduced SG&A expenses and higher margins in HRS.
- Disposal of Shuya: The Company recognized a gain of $318,426 from the disposal of its investment in Shuya in December 2025.
- Restatement: The 2024 financial statements were restated to correct errors related to revenue recognition, receivables valuation, and warrant accounting.
Guidance, Outlook, and Risks
Management Commentary: Management plans to alleviate going concern doubts through additional debt/equity financing, restructuring existing debt, and pursuing project-level financing (e.g., Vermont Renewable Gas). The Company is implementing cost-reduction initiatives and leveraging tax credits from the Inflation Reduction Act.
Key Risks:
- Going Concern: Substantial doubt exists regarding the ability to continue as a going concern without securing additional capital.
- Nasdaq Compliance: The Company received notices regarding non-compliance with Nasdaq listing rules (minimum bid price and annual meeting requirements) in 2024/2025. While it regained compliance via a reverse stock split and holding a meeting, it received a new notice in April 2026 regarding the late filing of the 2025 10-K.
- China Operations: Significant risks related to PRC regulations, currency controls, and the Holding Foreign Companies Accountable Act (HFCAA) regarding auditor inspections.
- Internal Controls: Management concluded that internal controls over financial reporting were not effective as of December 31, 2025, citing material weaknesses in revenue recognition, complex financial instruments, and receivables valuation.
Investor Verification Checklist
- Capital Adequacy: Verify the status of ongoing financing efforts and the timeline for securing the capital required to meet the "Going Concern" warning.
- Debt Structure: Review the terms of outstanding convertible notes, specifically the conversion prices, default interest rates, and potential for immediate dilution or default.
- Related Party Receivables: Scrutinize the $2.35M receivable from Vermont Renewable Gas (VRG), a related party, and the assumptions regarding its collectability.
- Nasdaq Status: Monitor the Company's progress in resolving the April 2026 Nasdaq deficiency notice regarding the late 10-K filing to avoid delisting.
- Restatement Impact: Confirm that the restatement of 2024 figures has been fully addressed and that no further material weaknesses in accounting controls remain unremediated.