8-K: Clean Energy Technologies Secures $104,000 Investment via Convertible Note and Stock Sale to Lucas Ventures

Clean Energy Technologies, Inc. has entered into a securities purchase agreement with Lucas Ventures, LLC, resulting in a $104,000 investment in exchange for a convertible promissory note and shares of common stock.

Summary

• Clean Energy Technologies, Inc. (CETY) entered into a securities purchase agreement (SPA) with Lucas Ventures, LLC on May 19, 2025.
• Under the SPA, CETY sold a convertible promissory note with an original principal amount of $109,500 and 40,000 shares of common stock to Lucas Ventures for a purchase price of $104,000.
• The purchase price was paid, and the note and shares were issued on the same day.
• The note matures on August 15, 2025, and accrues interest at 8% per annum.
• Lucas Ventures can convert the note into CETY's common stock 90 days after the note funding at a conversion price of $0.50 per share.
• However, Lucas Ventures cannot convert the note if it would result in them owning more than 4.99% of CETY's outstanding common stock (or 9.99% if CETY's market capitalization falls below $2,500,000).

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. The company secured funding, which is good, but it comes with debt and potential dilution. The terms are fairly standard for this type of financing.

Positives

• The company has secured immediate funding of $104,000.
• The convertible note structure allows for potential future equity conversion, which could be beneficial if the company's stock price increases.
• The interest rate of 8% is relatively standard for this type of financing.

Negatives

• The company is taking on debt, which must be repaid with interest.
• The conversion of the note could dilute existing shareholders' equity.
• The conversion cap may limit Lucas Ventures' potential upside.

Risks

• The company may face challenges in repaying the note if it does not generate sufficient cash flow.
• The conversion of the note could put downward pressure on the company's stock price.
• The company's market capitalization could fall below $2,500,000, increasing the potential ownership stake of Lucas Ventures upon conversion.

Future Outlook

The company intends to use the proceeds from the sale of the note and shares for general corporate purposes. The conversion of the note into equity is contingent on the company's stock price and market capitalization.

Industry Context

Small cap companies often use convertible notes as a means of raising capital, particularly when access to traditional financing is limited. This type of financing can be attractive to investors seeking higher returns but also carries higher risk.

Comparison to Industry Standards

• Convertible notes are a common financing tool for small-cap companies, similar to offerings from companies like FuelCell Energy or Ballard Power Systems, which have used similar instruments to fund operations and growth.
• The 8% interest rate is within the typical range for convertible notes issued by companies with similar risk profiles; however, rates can vary based on the specific terms and the overall market conditions at the time of issuance.
• The conversion price of $0.50 per share will be compared to the market price of CETY's stock at the time of conversion, similar to how investors evaluate the conversion terms of notes issued by companies like Plug Power.

Stakeholder Impact

• Shareholders may experience dilution if the note is converted into equity.
• The company's employees and customers may benefit from the additional funding, which could support operations and growth.
• Creditors may be impacted by the new debt, which could affect the company's ability to meet its existing obligations.

Next Steps

• Lucas Ventures will monitor the company's performance and stock price to determine when and if to convert the note.
• Clean Energy Technologies will need to manage its cash flow to ensure it can meet its obligations under the note.
• The company will need to file the agreement as an exhibit to its SEC filings.

Key Dates

Keywords

convertible note, securities purchase agreement, Lucas Ventures, Clean Energy Technologies, funding, common stock, investment