Clean Energy Technologies, Inc. (CETY) - Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K, dated August 18, 2025, discloses a material definitive agreement entered into by Clean Energy Technologies, Inc. The company, headquartered in Irvine, CA, and listed on The Nasdaq Stock Market under the symbol "CETY," executed a securities purchase agreement to raise capital for working capital and business development.
Key Financial Metrics and Transaction Details
- Transaction Type: Sale of a junior secured convertible promissory note and common stock.
- Investor: Mast Hill Fund, L.P.
- Aggregate Purchase Price: $350,000.
- Net Proceeds to Company: $341,500 (after deducting $8,500 in legal expenses paid from gross proceeds).
- Securities Issued:
- Convertible Promissory Note: Principal amount of $388,888.
- Common Stock: 150,000 shares.
- Note Terms:
- Maturity: 12 months from issue date.
- Interest Rate: 10% per annum (guaranteed).
- Security Status: Described as "junior secured" in the agreement title but explicitly stated as "unsecured" in the terms description.
- Conversion Price: Lesser of $2.50/share or 90% of the lowest VWAP during the 5 trading days prior to conversion.
- Beneficial Ownership Limit: Conversion restricted to prevent holder ownership exceeding 4.99%.
Material Changes and Covenants
The filing does not provide comparative financial data (revenue, profit, or cash flow) for the period. The material change is the creation of a new direct financial obligation and equity issuance. Key covenants include:
- Use of Proceeds: Restricted to working capital and business development. Explicitly prohibited from repaying debt owed to officers, directors, employees, or affiliates, or repaying debt from corporate finance transactions.
- Shareholder Approval Requirement: The company must hold a special shareholder meeting within 60 calendar days if the stock trades below $0.50 per share to approve issuing shares in excess of the "Exchange Cap."
- Exchange Cap: Issuance of more than 12,370,000 shares to Mast Hill is prohibited until shareholder approval is obtained.
Guidance, Risks, and Unusual Items
The filing does not contain forward-looking guidance, management commentary on future performance, or specific risk factors beyond the transaction terms. The transaction was executed under Section 4(a)(2) of the Securities Act of 1933 as an unregistered sale of equity securities.
Investor Verification Checklist
- Verify the discrepancy in the Note's security status (described as "junior secured" in the title but "unsecured" in the terms).
- Confirm the current trading price of CETY to assess the likelihood of triggering the $0.50 threshold requiring a special shareholder meeting.
- Review the full text of Exhibits 10.1 (Securities Purchase Agreement) and 10.2 (Promissory Note) for complete terms regarding the conversion fee deduction ($1,750 per conversion).
- Assess the dilution impact of the 150,000 shares issued immediately and the potential future issuance up to the 12,370,000 share cap.