10-Q/A: Clean Energy Technologies Restates Financials Amid Accounting Errors

Clean Energy Technologies, Inc. files an amendment to its Q3 2025 report to restate financial statements due to material accounting errors related to receivables and warrant valuation.

Summary

• Clean Energy Technologies, Inc. (CETY) has filed an amendment (Form 10-Q/A) to its Quarterly Report for the period ended September 30, 2025, to restate previously issued financial statements for the fiscal years ended December 31, 2024 and 2023, and for the quarterly periods ended March 31, 2025, June 30, 2025, and September 30, 2025.
• The restatement is due to material accounting errors identified during the preparation of the fiscal year 2025 financial statements, primarily concerning the classification, valuation, and collectability assessment of long-term receivables and contract assets, as well as warrant issuance and revenue recognition timing.
• Key adjustments include reclassifications of receivables, recognition of write-offs, adjustments to the allowance for credit losses, present value adjustments for long-term financing receivables, and changes in the fair value of warrants.
• The company reported a net loss of $1,996,680 for the three months ended September 30, 2025, and a net loss of $3,712,941 for the nine months ended September 30, 2025.
• As of September 30, 2025, the company had total assets of $13,704,122 and total liabilities of $7,933,190, resulting in total stockholders' equity of $5,770,932.
• The company received net funding of $300,500 from Pacific Pier Capital II, LLC on April 7, 2025, and $223,400 from Pacific Pier Capital II, LLC on April 23, 2025, related to convertible notes.
• The company received net funding of $100,000 from Lucas Ventures, LLC on May 8, 2025, and $300,500 from Mast Hill Fund, L.P. on June 4, 2025, related to convertible notes.
• The company received net funding of $169,500 from Firstfire Global Opportunities Fund, LLC on July 18, 2025, and $132,000 from 1800 Diagonal Lending LLC on July 30, 2025, related to convertible notes.
• The company received net funding of $341,500 from Mast Hill Fund, L.P. on August 15, 2025, related to a convertible note.
• The company's stock was subject to a 1-for-15 reverse stock split effective October 6, 2025.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as negative due to the restatement of financial statements, continued net losses, and significant going concern risks, despite some positive revenue growth in specific segments.

Positives

• Revenue from the Heat Recovery Solutions (HRS) segment increased to $455,975 for the nine months ended September 30, 2025, from $158,829 in the prior year period, driven by higher product sales and an improving pipeline.
• Gross profit increased to $818,640 for the nine months ended September 30, 2025, from $641,575 in the prior year period, attributed to higher-margin refurbished systems and increased contributions from non-natural gas businesses.
• Stockholders' equity increased significantly to $5,770,932 as of September 30, 2025, from $1,897,145 as of December 31, 2024, primarily due to higher investment increases.
• The company received substantial funding through various convertible note agreements throughout the reporting period, indicating continued investor confidence.
• The company regained compliance with Nasdaq's minimum bid price requirement on October 20, 2025, and also regained compliance with the annual shareholder meeting requirement on April 30, 2025.

Negatives

• The company reported a net loss of $1,996,680 for the three months ended September 30, 2025, and $3,712,941 for the nine months ended September 30, 2025.
• Total revenue decreased to $1,451,769 for the nine months ended September 30, 2025, from $1,944,333 in the prior year period, primarily due to reduced contributions from the China natural gas business.
• Operating expenses increased to $3,301,052 for the nine months ended September 30, 2025, from $3,193,447 in the prior year period, largely due to consulting fees for a potential acquisition.
• Professional fees (legal & accounting) significantly increased to $1,073,709 for the nine months ended September 30, 2025, from $484,990 in the prior year period, mainly due to acquisition-related consulting.
• The company has substantial accumulated deficit of $32,187,587 as of September 30, 2025, and experienced negative cash flow from operations of $6,131,225 for the nine months ended September 30, 2025, raising substantial doubt about its ability to continue as a going concern.
• The company received a notice from Nasdaq on April 17, 2026, indicating non-compliance with filing requirements for its annual report, and on May 26, 2026, for its quarterly report, with potential delisting implications.

Risks

• The company is not currently in compliance with Nasdaq's listing requirements and faces potential delisting if compliance is not regained, which could impair its ability to raise capital and trigger default clauses in outstanding notes.
• The company has substantial accumulated deficit and negative operating cash flows, indicating substantial doubt about its ability to continue as a going concern.
• The company's financial statements were restated due to material accounting errors, raising concerns about the accuracy of previous disclosures and internal controls.
• The company's reliance on equity sales for funding means future issuances will result in dilution to existing stockholders.
• The company's ability to achieve profitable operations is dependent on obtaining sufficient debt and/or equity capital and generating positive cash flow from operations.

Future Outlook

The company anticipates stronger revenue contributions from its Waste-to-Energy, Heat Recovery, and EPC segments in the latter half of the year, which are expected to deliver higher gross margins. CETY expects to continue executing its corporate strategy to build sustained and profitable growth by providing end-to-end integrated solutions, expanding global sales and marketing, production, and R&D, and seeking synergistic acquisition opportunities.

Management Comments

• Management believes this 4-segment strategy has created many operational synergies and cross-selling opportunities across different markets.
• The growth in the non-China operations in the nine months ended of 2025 vs. same period in 2024 was a result of this strategy.
• CETY believes that it will continue to deliver growth on these segments this year.
• The main macro factor benefiting us is the global commitment to push renewable energy to the forefront from governments across the world.
• Another catalyst that will potentially help our Company, is a continuously improving our global supply chain and lowering our cost.

Industry Context

StockSavvy.ai notes that the company's strategic shift towards higher-margin segments like Heat Recovery Solutions and Waste-to-Energy, coupled with a global push for renewable energy, positions it to potentially capitalize on market trends. However, the ongoing Nasdaq compliance issues and the need for significant capital raise present considerable headwinds.

Legal Proceedings

• The company is not presently involved in any legal proceedings which in the opinion of management are likely to have a material adverse effect on the Company's consolidated financial position or results of operations.

Related Party Transactions

• Accounts receivable from Vermont Renewable Gas (VRG) totaled $2,356,829 as of September 30, 2025.
• CETY Renewables invoiced VRG $409,698 in 2025 for design, construction, and delivery of an organics-to-energy plant.
• The RMB 5 million ($702,500) loan provided by Shuya to JHJ is a non-interest-bearing, one-year term loan from September 26, 2025, to September 26, 2026, for JHJ's general business development.
• The company entered into a consulting agreement with Linkage International Limited, an investor from a May 6, 2025, private placement, for services related to the potential acquisition of Ortus Climate Mitigation LLC's Italian operations.
• The company paid HKD 5,000,000 ($640,902.52) as a non-refundable consulting fee and HKD 25,000,000 ($3,204,513) as a refundable deposit to Linkage International Limited.

Stakeholder Impact

• Shareholders may experience further dilution due to ongoing equity sales for capital raising.
• The potential delisting from Nasdaq could negatively impact the liquidity and market price of the company's common stock.
• Creditors and noteholders face increased risk due to the company's going concern issues and potential Nasdaq delisting, which could trigger default clauses.
• Employees may be concerned about job security given the company's financial challenges and potential delisting.

Next Steps

• Regain compliance with Nasdaq listing requirements.
• Secure sufficient debt and/or equity capital.
• Generate positive cash flow from operations.
• Continue executing corporate strategy to build sustained and profitable growth.
• Expand global sales and marketing, production, and research & development.
• Search for synergistic acquisition opportunities.

Key Dates

Recommendation

While the company shows some operational improvements in specific segments and has secured funding, the material accounting errors, restatement of financials, significant accumulated deficit, negative cash flow, and ongoing Nasdaq compliance issues create substantial uncertainty. The company's ability to execute its strategy and achieve profitability remains highly dependent on external financing and regulatory compliance. Therefore, a 'hold' recommendation is appropriate, pending clearer signs of sustained operational improvement and resolution of compliance issues.

Keywords

Clean Energy Technologies, CETY, SEC Filing, 10-Q/A, Restatement, Accounting Errors, Financial Statements, Receivables, Warrants, Convertible Notes, Reverse Stock Split, Nasdaq Compliance, Going Concern