CETY 10-K & 10-Q changes, risk factors and insider trading

RISKS RELATDRELATED TO OUR BUSINESS

The financial statements have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets and liquidation of liabilities in the normal course of business. The Company had a total stockholder’s equity of $2,938,502$6,246,597 and and a deficit working capital of $3,240,008$260,863 and an accumulated deficit of $27,443,231$35,299,999 as of December 31, 2024,2025, and used $3,560,950 $7,922,347 in net cash from operating activities for the year ended December 31, 2024.2025.

For the fiscal year ending December 31, 2024,2025, our company reported a net loss of $4,416,319$6,808,895 compared to a net loss of $5,782,666$4,550,296 for the year 2023.2024 (Restated). The reductionincrease in net loss forduring 20242025 iswas primarily attributedattributable to severalnon-cash keyand factors,non-operating items, including losses ourrelated strategicto expansiondebt into higher-marginsettlement waste-to-energyand businesswrite unit,down, also a reductionchanges in derivative liabilities, and higher interest and financingfinancing-related fees compared to the previous year. Despite the persistently high interest rates, we are actively exploring more cost-effective financing options moving forward.expenses.

WEWe AREhave NOTpreviously CURRENTLYreceived INNasdaq COMPLIANCEdeficiency WITHnotices, NASDAQ’Sand MINIMUMfuture BIDnon-compliance PRICEwith LISTINGNasdaq REQUIREMENTlisting ORrequirements NASDAQ’Scould ANNUALresult SHAREHOLDERin MEETINGdelisting; LISTINGif REQUIREMENT;we IFare WEnot AREable NOTto ABLEregain TOcompliance REGAINwith COMPLIANCEthose WITHrequirements THOSEwithin REQUIREMENTSthe WITHINtime THEperiods TIMEpermitted PERIODSby PERMITTEDNasdaq, BYour NASDAQ,common OURstock may be COMMONdelisted, STOCKwhich MAYwould BElikely DELISTED,impair WHICHour WOULDability LIKELYto IMPAIRraise OURcapital ABILITYand TOcould RAISEconstitute CAPITALan ANDevent COULDof CONSTITUTEdefault ANunder EVENTour OFoutstanding DEFAULT UNDER OURpromissory OUTSTANDING PROMISSORY NOTES.notes.

On November 5, 2024, the Company received a written notice from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) indicating that the Company was not in compliance with the $1.00 minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market (the “Minimum Bid Price Requirement”). The Nasdaq listing rules require listed securities to maintain a minimum bid price of $1.00 per share, and, based upon the closing bid price of the Company’s common stock for the prior 30 consecutive business days, the Company no longer met this requirement. The Nasdaq rules initially provided the Company a compliance period of 180 calendar days from the date of the notice (or until May 5, 2025) in which to regain compliance with the Minimum Bid Price Requirement. On May 7, 2025, Nasdaq granted the Company an additional 180-day extension (or until November 3, 2025) to regain compliance with the Minimum Bid Price Requirement.

On January 8, 2025, the Company received a written notice from Nasdaq indicating that the Company was not in compliance with Nasdaq’s annual shareholder meeting requirement as set forth in Listing Rules 5620(a) and 5810(c)(2)(G) (the “Annual Shareholder Meeting Requirement”). The Nasdaq listing rules require the Company to have an annual meeting of shareholders within twelve months of the end of the Company’s fiscal year end, and the Company has not had an annual meeting within twelve months of the Company’s 2023 fiscal year end as required. The Nasdaq rules provided the Company 45 calendar days to submit a plan to regain compliance with the Annual Shareholder Meeting Requirement. The Company submitted such plan as required, and on February 27, 2025, Nasdaq provided the Company an extension of until June 3, 2025, to regain compliance with the Annual Shareholder Meeting Requirement. On April 30, 2025, the Company held its annual meeting of shareholders, and the Company regained compliance with the Annual Shareholder Meeting Requirement.

There is no guaranteeassurance that the Company will be ablecontinue to regainsatisfy complianceNasdaq’s withcontinued eitherlisting requirements in the Minimum Bid Price Requirement or the Annual Shareholder Meeting Requirement.future. If the Company’s common stock ultimately were to be delisted for any reason, including because the Company cannot regain compliance with the Minimum Bid Price Requirement or the Annual Shareholder Meeting Requirement, it could negatively impact the Company by (i) reducing the liquidity and market price of the Company’s common stock; (ii) reducing the number of investors willing to hold or acquire the Company’s common stock, which could negatively impact the Company’s ability to raise equity financing; (iii) limiting the Company’s ability to use a registration statement to offer and sell freely tradable securities, thereby preventing the Company from accessing the public capital markets; and (iv) impairing the Company’s ability to provide equity incentives to its employees. Additionally, delisting of the Company’s common stock from the Nasdaq Capital Market could constitute an event of default under its outstanding convertible promissory notes, resulting in those notes becoming immediately due and payable, and resulting in default penalties being applied to those notes.

Demand for products which itthe company intends to sell depends on many factors, including:

The alternative power industry is intensely competitive. Most of our competitors have significantly greater financial, technical, marketing and distribution resources as well as greater experience in the industry than we have. Our products may not be competitive with other technologies, both existing at the current time and in the future. If this happens, our sales and revenues willmay decline, or fail to develop at all. In addition, our current and potential competitors may establish cooperative relationships with larger companies to gain access to greater development or marketing resources. Competition may result in price reductions, reduced gross margins and loss of market share.

Any or all of these factors could adversely affect our ability to execute any geographic expansion strategies or could have a material adverse adverse effect on our business and results of operations.

The alternative power industry is undergoing rapid and significant technological change. Third parties may succeed in developing or marketing technologies and products that are more effective than those developed or marketed by us, or that would make our technology obsolete or non-competitive. Accordingly, our success will depend, in part, on our ability to respond quickly to technological changes. We maymay, however, not have the resources to do this.

We cannot be certain that we can attract or retain a sufficient number of highly qualified mechanical engineers, industrial technology and and manufacturing process developers and professional services personnel. To deploy our products quickly and efficiently, and effectively effectively maintain and enhance them, we will require an increasing number of technology developers. We expect customers that license our technology will typically engage our professional engineering staff to assist with support, training, consulting and implementation. We believe that growth in sales depends on our ability to provide our customers with these services and to attract and educate third-party consultants to provide similar services. As a result, we plan to hire professional services personnel to meet these needs. New technical and professional services personnel will require training and educationeducation, and it will take time for them to reach full productivity. To meet our needs for engineers and professional services personnel, we also may use costlier third-party contractors and consultants to supplement our own staff. Competition for qualified personnel is intense, particularly because our technology is specialized and only a limited number of individuals have acquired the needed skills. Additionally, we will rely on third-party implementation providers for these services. Our business may be harmed if we are unable to establish and maintain relationships with third-party implementation providers.

WE MAY BE ADVERSELY AFFECTED BY SHORTAGES OF REQUIRED COMPONENTS. IN ADDITION, WE DEPEND ON A LIMITED NUMBER OF SUPPLIERS TO PROCURE OUR PARTS FOR PRODUCTION WHICH IF AVAILABILITY OF PRODUCTS BECOMES COMPROMISED ITCOMPROMISED, COULD ADD TO OUR COST OF GOODS SOLD AND AFFECT OUR REVENUE GROWTH.

Our principal shareholders, directors and executive officers in the aggregate, beneficially own more than 50% of our outstanding common common stock on a fully diluted basis as of the date of the filing of this annual report. These shareholders, if acting together, will be able to exert substantial influence over all matters requiring approval of our shareholders, including amendments to our Articles of Incorporation, fundamental corporate transactions such as mergers, acquisitions, the sale of the company, and other matters involving the direction of our business and affairs and specifically the ability to determine the members of our board of directors. (See “Security Ownership of Certain Beneficial Owners and Managements”).

IF WE LOSE KEY SENIOR MANAGEMENT PERSONNELPERSONNEL, OUR BUSINESS COULD BE NEGATIVELY AFFECTED. FURTHER, WE WILL NEED TO RECRUIT AND RETAIN ADDITIONAL SKILLED MANAGEMENT PERSONNEL AND IF WE ARE NOT ABLE TO DO SO, OUR BUSINESS AND OUR ABILITY TO CONTINUE TO GROW COULD BE HARMED.

The timing of our sales and related customer contract fulfillment isare difficult to predict. Many of our customers are large enterprises, whose purchasing decisions, budget cycles and constraints and evaluation processes are unpredictable and out of our control. Further, the timing of our sales is difficult to predict. The length of our sales cycle, from initial evaluation to payment for our products and services, can range from several months to well over a year and can vary substantially from customer to customer. Our sales efforts involve significant investment in resources in field sales, marketing and educating our customers about the use, technical capabilities and benefits of our products and services. Customers often undertake a prolonged evaluation process. As a result, it is difficult to predict exactly when, or even if, we will make a sale to a potential customer or if we can increase sales to our existing customers. Large individual sales have, in some cases, occurred in quarters subsequent to those we anticipated, or have not occurred at all. In addition, the fulfillment of our customer contracts is partially dependent on other factors related to our customers’ businesses that are not in our control. asAs with the sales cycle, this can also cause revenues and earnings to fluctuate from quarter to quarter. If our sales and/or contract fulfillment cycles lengthen or our substantial upfront investments do not result in sufficient revenue to justify our investments, our operating results could be adversely affected.

OUR SALES AND PROFITABLITY OF OPERATIONS IN THE UNITED STATES AND IN THE PRC ARE DEPENDANTDEPENDENT ON THE PRICE OF OIL AND NATURAL GAS.

Our Waste Heat Recovery products and Waste Recovery products are dependent on the prices of traditional energy sources. Our products reuse wasted heat and create electricity or reusable fuel. As the price of energy increases, the economic justification for our products increases. At the same time, as the price for traditional fuel decreases, there is less incentive for customers to purchase our products and it may impair our ability to sell our products.

IF THE SPOT PRICE OF NG IN CHINA DROPS BELIOWBELOW THE PURCHASE PRICE OUR TRADERS NETOTIATENEGOTIATE WITH OUR SUPPLIERS, WE MAY NOT BE ABLE TO SELL OUR LNG OR MAY HAVE TO SELL IT AT A LOSS.

OUR WASTE TO ENERGY PRODUCTS FROM ENEXUKRAINE AND RUSSIA HAVE NOT BEEN TESTED IN THE UNITED STATES AND DEPEND ON DATA OBTAINED FROM OPERATIONS IN THE UKRAINE AND RUSSIA.

ENEX’sHTAP HTAP 5 and 10 have not been installed in the United States. In order to commence sales, our purchasers will need to accept data from Russia Russia or the Ukraine that they may not deem reliable. We cannot give any assurances that we will be able to finance the bonds or find an EPC willing to guarantyguarantee performance.

THE IMPLEMENTAIONIMPLEMENTATION OF OUR WASTE TO ENERGY JOINT VENTURES DEPENDS ON US FINDING FUNDING FOFOR THE PROJECTS.

In order to implement the ENEXHTAP system in our waste to energy joint ventures, we will need to finance directly or obtain third party financing for these projects. We cannot give any assurances that we will be able to directly finance these projects or be able to find a third party to provide financing tofor them. If we are not able to finance the projectsprojects, we will not be able to implement our business plan in this sector.

FLUCTUATIONS IN EXCHANGE RATES COULD HAVE A AN EFFECT ON THE RESULTS OF OPERATIONS OF OUR HONG KONG AND CHINA SUBSIDIARIES.

The value of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions in China and by China’s foreign exchange policies. Since June 2010, the Renminbi has fluctuated against the U.S. dollar, at times significantly and unpredictably. In the fourth quarter of 2016, the Renminbi has depreciated significantly inagainst the backdrop of a surging U.S. dollar and persistent capital outflows offrom China. This depreciation halted in 2017, and the RMB appreciated approximately 7% against the U.S. dollar during this one-year period. With the development of the foreign exchange market and progress towards interest rate liberalization and Renminbi internationalization, the PRC government may in the future announce further changes to the exchange rate system, and we cannot assure you that the Renminbi will not appreciate or depreciate significantly in value against the U.S. dollar in the future which may impact the profitability of our operations in China.

WE HAVE ISSUED A SUBSTANTIAL AMOUNTNUMBER OF CONVERTIBLE SECURITIES WHICH IF CONVERTED WILL SUBSTANTIALLY DILUTE ALL OF OUR STOCKHOLDERS.

We expect to issue additional capital stock in the future that will result in dilution to all other stockholders. We expect to grant equity equity awards to employees, directors, and consultants under our equity incentive plans. We may also raise capital through equity financings financings in the future. As part of our business strategy, we may acquire or make investments in complementary companies, products, or technologies, and issue equity securities to pay for any such acquisition or investment. Any such issuances of additional capital stock may cause stockholders to experience significant dilution of their ownership interests and may cause the per share value of our common stock to decline.

We may not be able to comply with all current and future government regulations which are applicable to our business. Our business operations are subject to all government regulations normally incident to conducting business (e.g., occupational safety and health acts, workmen’sworkers’ compensation statutes, unemployment insurance legislation, income tax, and social security laws and regulations, environmental laws and regulations, consumer safety laws and regulations, etc.) as well as to governmental laws and regulations applicable to small public companies and their capital formation efforts. Although we will make every effort to comply with applicable laws and regulations, we can provide no assurance of our ability to do so, nor can we predict the effect of those regulations on our proposed business activities. Our failure to comply with material regulatory requirements would likely have an adverse effect on our ability to conduct our business and could result in our cessation of active business operations.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and related SEC regulations, have created uncertainty for public companies and significantly increased the costs and risks associated with accessing the public markets and public reporting. Our management team will need to invest significant management time and financial resources to comply with both existing and evolving standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and attention from revenue generatingrevenue-generating activities to compliance activities.

Due to our operations in China, weWe face various legal and operational risks and uncertainties related to being based in and having significant operations in China, and therefore are subject to risks associated with doing business in China generally. Risks and uncertainties related to doing business in China could result in a material adverse change in our operations in China and/or the value of the securities we are registering for sale, and may significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. Such risks and uncertainties include the following:

Should the PCAOB again encounter impediments to inspections and investigations in mainland China or Hong Kong as a result of positions taken by any authority in either jurisdiction, including by the CSRC or the MOF, the PCAOB will make determinations under the HFCAA as and when appropriate. The inability of the PCAOB to conduct inspections of auditors in PRC makes it more difficult to evaluate the effectiveness of these accounting firm’sfirms’ audit procedures or quality control procedures as compared to auditors outside of PRC that are subject to the PCAOB inspections, which could cause investors and potential investors in our Common stock to lose confidence in our audit procedures and reported financial information and the quality of our financial statements.

The recent developments would add uncertainties to our offering and we cannot assure youpredict whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us. Furthermore, the Consolidated Appropriations Act reduces the period for foreign companies to comply with PCAOB audits to two consecutive years instead of three, thus reducing the time period for triggering the prohibition on trading, and this ultimately could result in our common stock being delisted by an exchange.

On November 14, 2021, the Cyberspace Administration of China (the “CAC”) published the Draft Regulations on the Network Data Data Security Administration (Draft for Comments) (the “Security Administration Draft”), which provides that data processing operators engaging in data processing activities that affect or may affect national security must be subject to cybersecurity review by the relevant Cyberspace Administration of the PRC. According to the Security Administration Draft, data processing operators shall apply for a cybersecurity review by the relevant Cyberspace Administration of the PRC under certain circumstances, such as (i) mergers, restructurings, and divisions of Internet platform operators that hold a large amount of data relating to national security, economic development, or public interest which affects or may affect the national security, (ii) overseas listings of data processors that process personal data for more than one million individuals, (iii) Hong Kong listings of data processors that affect or may affect national security, and (iv) other data processing activities that affect or may affect the national security. The deadline for public comments on the Security Administration Draft was December 13, 2021.

On February 17, 2023, the CSRC released Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies with five interpretive guidelines (the “Trial Measures”), which came into effect on March 31, 2023. Pursuant to the Trial Measures, a PRC domestic company that seeks to offer and list securities in overseas markets, either in direct or indirect overseas offering, shall fulfill the filing procedure with the CSRC and report relevant information to the CSRC. Direct overseas offering and listing by domestic companies refers to such overseas offering and listing by a joint-stock company incorporated domestically. Any overseas offering and listing made by an issuer that meets both the following conditions will be deemed an indirect offering and listing in an overseas market and, therefore, be subject to filing requirement: (i) 50% or more of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting year is accounted for by domestic companies; and (ii) the main parts of the issuer’s business activities are conducted in the Mainland China, or its main places of business are located in the Mainland China, or the senior managers in charge of its business operation and management are mostly Chinese citizens or domiciled in the Mainland China. The determination as to whether or not an overseas offering and listing by domestic companies is indirect shall be made on substance over form basis. If we ever are required by the CSRC to submit and complete the filing procedures for our future offerings of our securities, we cannot assure you that we will be able to complete such filings in a timely manner, or even at all, which could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless. Any failure by us to comply with such filing requirements under the Trial Measures may result in rectification, warnings, and a fine between RMB 1 million and RMB 10 million on our PRC Subsidiaries or Shuya,subsidiaries, which could adversely and materially affect our business operations and financial outlook and could cause the value of our common stock to significantly decline or, in extreme cases, become worthless.

OUR PRC SUBSIDIARIES AND SHUYA ARE SUBJECT TO RESTRICTIONS ON PAYING DIVIDENDS OR MAKING OTHER PAYMENTS TO US, WHICH MAY RESTRICT OUR ABILITY TO SATISFY OUR LIQUIDITY REQUIREMENTS IN THE FUTURE.

We may need dividends and other distributions on equity from our PRC Subsidiaries or Shuya to satisfy our liquidity requirements. Current PRC regulations permit our PRC Subsidiaries and Shuya to pay dividends to their respective shareholders only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, such companies are required to set aside at least 10% of their accumulated profits each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of its registered capital. Our PRC Subsidiaries or Shuya may also, at the respective subsidiary’s discretion, allocate a portion of its after-tax profits based on its articles of association and PRC accounting standards to certain reserve funds. These reserves are not distributable as cash dividends. Furthermore, if our PRC Subsidiaries or Shuya incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us. Any limitation on the ability of our PRC Subsidiaries or Shuya to distribute dividends or to make payments to us may restrict our ability to satisfy our future liquidity requirements.

PRC REGULATION OF LOANS TO AND DIRECT INVESTMENT IN PRC ENTITIES BY OFFSHORE HOLDING COMPANIES AND GOVERNMENTAL CONTROL OF CURRENCY CONVERSION MAY DELAY OR PREVENT US FROM MAKING LOANS OR ADDITIONAL CAPITAL CONTRIBUTIONS TO OUR PRC SUBSIDIARIES OR SHUYA.SUBSIDIARIES.

We are a U.S. based company conducting a portion of our operations in China. We may make loans to our PRC subsidiaries orsubject Shuya subject to the approval, registration, and filing with governmental authorities and limitation of amount, or we may make additional capital contributions to our subsidiaries in China and Hong Kong. Any loans to our wholly foreign-owned subsidiaries in mainland China, which are treated as foreign-invested foreign-invested enterprises under PRC law, are subject to foreign exchange loan registrations. In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals or filings on a timely basis, if at all, with respect to future loans by us to our PRC Subsidiaries and Shuya or with respect to future capital contributions by us to our PRC Subsidiaries and Shuya.Subsidiaries. If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds from securities offeringofferings and to capitalize or otherwise fund our Chinese operations may be negatively affected.

FLUCTUATIONS IN EXCHANGE RATES COULD HAVE AN EFFECT ON THE RESULTS OF OPERATIONS OF OUR PRC SUBSIDIARIES AND SHUYA.SUBSIDIARIES.

The value of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions in China and by China’s foreign exchange policies. Since June 2010, the Renminbi has fluctuated against the U.S. dollar, at times significantly and unpredictably. With the development of the foreign exchange market and progress towards interest rate liberalization and Renminbi internationalization, the PRC government may in the future announce further changes to the exchange rate system, and we cannot assure you that the Renminbi will not appreciate or depreciate significantly in value against the U.S. dollar in the futurefuture, which may impact the profitability of our operations in China.

Our internet website address is www.cetyinc.com. The information contained on our websites areis not incorporated by reference into this document, and you should not consider any information contained on, or that can be accessed through, our website as part of this document.

We offer turnkey energy solutions leveraging our technologies and solutions to provide green energy solutions, clean energy fuels and alternative electricity. We were incorporated in California in July 1995 under the name Probe Manufacturing Industries, Inc. We redomiciled to Nevada in April 2005 under the name Probe Manufacturing, Inc. We providedprovide engineering and manufacturing electronics services to original equipment manufacturers (OEMs) of clean energy, industrial, automotive, semiconductor, medical, communication, military, and high technology products.

Clean Energy Technologies, Inc. established a new company, CETY Europe, SRL (CETY Europe) as a wholly owned subsidiary. CETY Europe is a Sales and Service Center in Silea (Treviso), Italy established in 2017. The service center became operational in November 2018. Their offices are located at Alzaia Sul Sile, 26D, 31057 Silea (TV) and thethey have 1 full time employee.

CETY Capital retains 49% ownership interest in Vermont Renewable Gas LLCLLC, established to develop a biomass plant in Vermont utilizing CETY’s High Temperature Ablative Pyrolysis system.

Clean Energy Technologies (H.K.) Limited., a wholly owned subsidiary of Clean Energy Technologies Inc. acquired 100% ownership of Leading Wave LimitedLimited, a natural gas trading company in China.

Operating performance is dependent on the Company’s ability to manage changes in input costs for items such as raw materials, labor, and overhead operating costs. Performance is also affected by manufacturing efficiencies, including items such as on time delivery, quality, scrap, and productivity. Market factors of supply and demand can impact operating costscosts.

Waste Heat Recovery Solutions – we recycle wasted heat produced in manufacturing, waste to energy and power generation facilities using our patented Clean CycleTM generator to create electricity which can be recycledstored or sold to the grid.

Waste to Energy Solutions - we convert waste products created in manufacturing, agriculture, wastewater treatment plants and other industries to electricity, renewable natural gas (“RNG”), hydrogen and bio charbiochar which are sold or used by our customers.

Summary of Operating Results for the year ended December 31, 2024,2025, Comparedcompared to the year ended December 31, 20232024 (Restated)

Results for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023.2024 (Restated).

For the year ending December 31, 2024,2025, our total revenue was $2,424,659$2,161,626 compared to $6,693,844$2,424,659 for the same period in 2023.2024. The Company has four reportable segments: CETY Renewables division, Clean Energy HRS (HRS) and CETY Europe,, the engineering and programintegrated managementsolutions services division, and CETY HK.

For the year ended December 31, 2024,2025, our revenue from HRS was $158,141$503,878 compared to $497,584$158,141 for the same period in 2023.2024. The decreaseincrease in revenue for Heat Recovery Solutions (HRS) and ORC systems in 20242025 compared to 20232024 was primarily due to higher project delaysactivity, including the advancement and longerexecution sales cyclesof associatedcustomer withprojects, supplyas chainwell disruptionsas improved timing of revenue recognition on engineering and extendedsystem customer decision-making processes. Additionally, some key contracts thatdelivery were expected to close in 2024 were pushed into 2025 due to permitting and financing challenges faced by customers. The lower revenue also reflects a strategic shift toward larger-scale projects, which have longer development timelines but are expected to generate higher future revenues.milestones.

For the fiscal year ending December 31, 2024,2025, our revenue from CETY Renewables, our newly launched waste-to-energy business, amounted to $1,064,757$484,955 compared to $429,999$1,064,757 for the same period in 2023.2024. The increasedecrease in revenue from CETY Renewables in 20242025 compared to 20232024 was primarily drivenattributable to the timing of project execution and revenue recognition, including a longer-than-anticipated review process by the continuedPublic developmentUtility andCommission progress(PUC) offor the VRG project, which advanceddelayed throughthe criticaladvancement permittingof certain project milestones. The Company continues to make progress on its development pipeline and early-stage constructionexpects design phases. The rise in revenue also aligns with our strategic effortsactivity to scaleincrease operationsas andprojects establishmove a stronger market presence in the renewable energy sector.forward.

For the year ended December 31, 2024,2025, our gross profit from HRS was $19,206$386,069 compared to $121,905$15,160 for the same period in 20232024; ThisThe decrease increase was primarily due to delays in booking and shipping products, as customers were evaluating their sites and waiting for clarity on economic factors driven by thehigher U.S.revenue government’s pending tax incentive programsvolumes and theimproved releasemargins ofon newsystem guidelinessales, atreflecting a more favorable project mix and execution during the end of 2024, compounded by the election year uncertainties.year.

For the year ended December 31, 2024,2025, our gross profit from CETY HKRenewables improveddecreased to $(6,195),$157,405, compared to $(35,379)$829,784 for the same period in 2024. Gross profit in 2023. Whileboth overallperiods marketreflects conditionswork forperformed during the naturalengineering gasand businessdevelopment inphase Chinaof remainedprojects, challenging,which wetypically carries werehigher ablemargins relative to mitigatelater-stage someexecution losses through operational efficiencies and pricing adjustments.activities.

For the year ending December 31, 2024,2025, our Selling, General, and Administrative (SG&A) expenses increaseddecreased to $797,518,$3,096,780, compared to $4,176,986 $679,004 in 2023.2024 This(Restated). increaseThe decrease was primarily driven by expanded investmentsreductions in Mediasalaries and Investor Relations, marketing efforts,general and sales initiativesadministrative aimed at supporting business growth. Increased spending on subscription services and IT infrastructure. Furthermore, the rise in SG&A includes expenses related to inducement shares issued in connection with inducement shares for various notes, contributing to the overall increase in administrative costs.expenses.

For the year ending December 31, 2024,2025, our travel expenses totaled $185,876,$198,122, compared to $247,124$185,876 for the same period in 2023.2024. ThisThe reductionincrease inwas expenditurenot issignificant primarilyand duereflects tonormal a decreasevariations in travelbusiness costs from both the US and Europe.activity.

For the fiscal year ending December 31, 2024,2025, our Facility Lease expense amounted to $285,823,$216,812 a slight decrease from $310,004$285,823 in 2023.2024. This reduction reduction reflects our ongoing efforts to lower lease costs through renegotiations and our focus on more efficient operations. We have continuously continuously worked to optimize our space utilization and streamline processes, contributing to this modest reduction in lease expenses.

For the fiscal year ending December 31, 2024,2025, our total expenses for Investor Relations (IR), marketing, and contractors related to the VRG project were $195,640,$10,597, compared to $196,301$195,640 for the same period in 2023.2024. This represents a very slightThe decrease inwas expenses,primarily reflecting our continued focus on cost management while maintaining effortsdue to supportreduced activity and spending associated with the VRG project.project during the period.

For the fiscal year ending December 31, 2024,2025, our Professional Fees expense amounted to $578,937,$706,778, up from $356,785$578,937 in the same period of 2023. This2024. For the fiscal year ended December 31, 2025, The increase was primarily due attributable to higher legal and advisory costs associatedrelated with engaging a new auditor, as well asto the increasedCompany’s expensesS-3 tied to our status as a Nasdaq-listed companyregistration and increased expenses associated with being oura SECNasdaq-listed filings.company.

For the year ended December 31, 2024,2025, we recorded gain a loss of $8,135,1,573,939 compared to a lossgain of $1,124,654$8,135 for the same period in 2023.2024. The loss in 2024 2025 was primarily attributable to the deconsolidationwrite-off of Shuya, while the 2023 loss was duerelated to the fairLWL marketinvestment valuationin of preferred shares.China.

CETY HK – The parent company of our NGNatural Gas trading operations in China. Prior to the first quarter of 2022 the Company had three reportable segments but added the CETY HK segment to reflect its recent new businesses in China.

Summary of Operating Results the threesix months Endedended MarchJune 31,30, 2026 Compared to the same period in MarchJune 31,30, 2025 (Restated)

The financial statements have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets and liquidation of liabilities in the normal course of business. The Company had a total stockholder’s equity of $7,030,646$5,990,022 and and a working capital deficit of $1,036,272$37,355 as of MarchJune 31,30, 2026, The company also had an accumulated deficit of $35,962,199$37,035,080 as of March 31,June 30, 2026 and used $836,618$1,664,648 in net cash from operating activities for the threesix months ended MarchJune 31,30, 2026. Therefore, there is substantial doubt about the ability of the Company to continue as a going concern. There can be no assurance that the Company will achieve its goals and reach profitable operations and is still dependent upon its ability (1) to obtain sufficient debt and/or equity capital and/or (2) to generate positive cash flow from operations.

For the threesix months ended MarchJune 31,30, 2026, total revenue was $783,705,$1,155,641, compared to $441,940$678,215 for the same period in 2025. The increase was primarily primarily attributable to higher revenue generated by our natural gas business in China.

For the threesix months ended MarchJune 31,30, 2026, our gross profit was $(13,930),$3,689, compared to $411,878$635,535 for the same period in 2025. The decrease in gross profit and gross margin was primarily attributable to a shift in our revenue mix, with a greater proportion of revenue generated by our lower-margin natural gas business, as well as the absence of higher-margin clean energy system sales during the period.

For the threesix months ended MarchJune 31,30, 2026, our operating expenses were $705,354, $1,479,117, compared to $824,656$1,766,687 for the same period in 2025. The decrease in operating expenses was primarily attributable to lower salary and related personnel costs as fewer resources were required for our Vermont Renewable Gas (“VRG”) projects, which are progressing into the final phase of the permitting process.

For the threesix months ended MarchJune 31,30, 2026, we recorded a net loss of $662,200,$ 1,735,079, compared to $660,007$1,699,754 for the same period in 2025. The net loss remained relatively steady year-over-year, reflecting reduced salary expenses, lowerwhile general,professional legalfees and accounting costs, the impact of financial results, the change in FV of the note receivable, and improved marginsincreased from our$333,318 U.S.-basedto business activities.$449,420.

For the quarter ended MarchJune 31,30, 2026, stockholders’ equity increaseddecreased to $7,030,646$5,990,022 compared to $6,246,597 as of December 31, 2025, primarily due to higher increase from investmentsinterest and interestfinancing income.fees.

Revenue for the first and second quarter was primarily driven by the CETY HK natural gas trading business. Looking ahead, the company anticipates stronger revenue contributions from its Waste-to-Energy, Heat Recovery, and EPC segments with higher margins.

Results of the threeSix Ended MarchJune 31,30, 2026, Compared to the threesix ended MarchJune 31,30, 2025 (Restated)

For the threesix months ended MarchJune 31,30, 2026, our total revenue was $783,705$1,155,641 compared to $441,940$678,215 for the same period in 2025. The higher revenue was was contributed to primarily due to our China natural gas business.

For the threesix months ended MarchJune 31,30, 2026, our revenue from the Heat Recovery Solutions (HRS) segment was $7,538,$16,977, compared to $262,354$339,488 for the the same period in 2025. The decrease was primarily driven by no product sales from our HRS business unit. We continue to work diligently on current requirements and engineering and design, which will enable us to execute contractual agreements and close additional opportunities.

For the threesix months ended MarchJune 31,30, 2026, revenue from the CETYWaste Renewablesto Energy segment was $0, compared to $176,105$331,597 for the same period in 2025. The segment generated no revenue during the period as the related projects remain pending final review by the Vermont Public Utility Commission and issuance of the Certificate of Public Good. Revenue-generating construction activities are expected to commence following receipt of the required regulatory approvals.

For the threesix months ended MarchJune 31,30, 2026, CETY reported 0nil revenue from its EngineeringManufacturing and ManufacturingEngineering segments, compared to nonil for the the same period in 2025. This segment is still in its early stages and much of the related activity is currently being integrated into the HRS and CETY Renewables segments. However, with a developing pipeline of opportunities, CETY expects to see gradual revenue growth from this segment.

For the threesix months ended MarchJune 31,30, 2026, revenue from our naturalNatural gasGas (NG) business was $776,167$1,138,664 an increase from $3,481$7,130 for the same period in in 2025. The increase primarily reflects higher revenue from our China natural gas business, despite the impact of macroeconomic conditions and our strategic decision to reduce our focus on lower-margin business activities.

For the threesix months ended MarchJune 31,30, 2026, gross profit was $(13,930),$3,689, compared to $411,878$635,535 for the same period in 2025. The decrease was primarily primarily attributable to the absence of sales of our higher-margin clean energy systems during the period, combined with a greater proportion of revenue generated by our natural gas business in China, which operates at lower gross margins.

For the threesix months ended MarchJune 31,30, 2026, our gross profit from Engineering and Manufacturing amounted to $0,$nil, compared to $0$ nil for the same period in 2025. This segment is a recent addition to CETY’s portfolio, currently serving as a support for our ongoing internal projects. Nevertheless, it is anticipated to expand as CETY shifts its focus towards providing comprehensive end-to-end power generation and integrated solutions.

For the threesix months ended MarchJune 31,30, 2026, we had a negative gross profit from our Heat Recovery Solutions (“HRS”) segment wasof $(25,223),$19, 620 compared to $235,658$303,699 for the same period in 2025. The decrease in gross profit was primarily attributable to the absence of product sales during the period, combined with higher freight costs.

For the threesix months ended MarchJune 31,30, 2026, our gross profit from the CETY RenewablesWaste to Energy segment was $0,$nil, compared to $57,159$331,597 for the same period in 2025. The Company is working through the Certificate of Public Good (CPG) process and approach the final stages of permitting.

For the threesix months ended MarchJune 31,30, 2026, our gross profit from our whollyNatural ownedGas subsidiary, JHJ,segment, was $11,293,$23,308, up from $115$239 for the same period period in 2025. This increase was primarily due to increase business activity in China.

For the threesix months ended MarchJune 31,30, 2026, our selling, general and administrative (SG&A) expenses totaled $147,729$1,479,117 compared to $222,557$1,766,687 for for the same period in 2025. The decrease was primarily due to lower costs associated with a consulting agreement related to IR activities and Nasdaq subscription.

For the threesix months ended MarchJune 31,30, 2026, our salary expenses totaled $294,433$571,175 compared to $433,799$873,268 for the same period in 2025. The decrease was was primarily due to reduced activity within our CETY Renewables business, while salary levels across other segments remained relatively stable.

For the threesix months ended MarchJune 31,30, 2026, our travel expenses were $28,062,$78,157, compared to $32,377$79,737 for the same period in 2025. This slight decrease decrease reflects stable activity levels within our service and marketing operations.

For the threesix months ended MarchJune 31,30, 2026, our professional fees totaled $167,021,$449,420 compared to $66,213$333,319 for the same period in 2025. The increase was primarily due to costs associated with a audit fees.

For the threesix months ended MarchJune 31,30, 2026, our facility lease and maintenance expenses totaled $65,140,$130,181 compared to $66,741$133,399 for the same period period in 2025. This slight decrease reflects normal fluctuations, with no significant changes in underlying operations.

For the threesix months ended MarchJune 31,30, 2026, our depreciation and amortization expense was $2,969,$5,938, compared to $2,969$5,938 for the same period in 2025. 2025. There were no significant changes, as the majority of our equipment has already been fully depreciated.

For the threesix months ended MarchJune 31,30, 2026 and 2025, we recorded derivativegains liabilitiesfrom changes in fair value recognized in earnings of $721,678$283,640 and $493,308,$112,672, respectively. The increase in derivative liability was primarily due to the issuance of new convertible instruments and mark-to-market adjustments resulting from changes in our stock price and volatility. These fair value remeasurements are required each reporting period in accordance with ASC 815.

For the threesix months ended MarchJune 31,30, 2026 and 2025, we had $3,100$5,828 and $17,837$13,893 lossgain on warrant liability related to Equity Line of Credit Agreement Agreement entered December 5, 2024.

For the threesix months ended MarchJune 31,30, 2026, interest income from Florya associated with long-termcontract financing receivableassets totaled $0$31,120 compared to $14,050$28,418 for the same period in 2025 (Restated).

Interest income included in other income consists primarily of interest earned on the Company’s convertible note receivable. During the threesix months ended MarchJune 31,30, 2026, the Company recognized $64,110$138,082 of interest income related to the accrual of interest under the terms of of the convertible note agreement.

Other income includes a gain of $584,613$406,197 resulting from the remeasurement of the Company’s investment in the Filled Converge convertible note to its estimated fair value of $435,053, recognition of forgiveness of debt of $85,558 and interest income of convertible note as of March 31, 2026, compared to 21,413 as of March 31, 2025.$1,910,489.

For the threesix months ended MarchJune 31,30, 2026, interest and finance fees totaled $515,128,$1,177,937, compared to $348,186$865,734 for the same period in 2025. The increase was primarily due to two larger interim financings obtained to bridge the Company through the finalization of funding for the Vermont Renewable Gas Project and monetizing HRS projects.

For the threesix months ended MarchJune 31,30, 2026, our net loss was $662,200,$1,735,079, compared to a net loss of $660,056$1,699,803 for the same period in 2025 (Restated). The increase in net loss was primarily attributable to the absence of higher-margin sales from our Heat Recovery Solutions (“HRS”) segment, a shift in revenue mix toward our lower-margin China natural gas business, changes in Fv convertible, and lower gross margins during the period, and interest and financing fee variations. Although operating expenses declined due to reduced personnel costs associated with our Vermont Renewable Gas (“VRG”) projects as they progressed through the final permitting phase, these savings were not sufficient to offset the decline in gross profit.

Condensed Consolidated Statements of Cash Flows for the threesix months ended MarchJune 31,30, (unaudited)

Net cash used in operating activities was $833,538 $(1,664,648) for the threesix months ended MarchJune 31,30, 2026, compared to $776,047$(1,540,526) for the same period in 2025. The increase in cash used in operating activities was primarily attributable to the Company’s operating loss and increases in inventory, interest receivable, and other assets. These uses of cash were partially offset by non-cash items, including amortization of debt discount and the fair value gain recognized on the Company’s note receivable, as well as increases in accounts payable, accrued interest, customer deposits, and accrued expenses.

Net cash used in investing activities was $702,746 $(702,769) for the threesix months ended MarchJune 31,30, 2026, compared to $2,932$nil for the same period in 2025. The increase in cash used in investing activities was primarily attributable to the Company’s $700,000 investment in a note receivable and a $2,746$2,768 investment in a long-term investment during the current period.

Net cash provided by financing activities was $975,557 $1,783,373 for the threesix months ended MarchJune 31,30, 2026, compared to $759,002$5,903,311 for the same period in 2025. The increasedecrease was primarily attributable to higherlower net proceeds from notes payable and lines of credit, partially offset by repayments of outstanding borrowingscredit during the period.