8-K: Clean Energy Technologies Secures $125K Via Convertible Note

Clean Energy Technologies, Inc. has entered into a securities purchase agreement for a $147,840 convertible promissory note, receiving $125,000 in net funding for working capital.

Summary

• Clean Energy Technologies, Inc. (the Company) entered into a securities purchase agreement (1800 SPA) with 1800 Diagonal Lending LLC on July 29, 2026.
• The agreement involves the sale of a convertible promissory note (1800 Note) with a principal amount of $147,840.
• The purchase price for the note was $132,000, from which $2,500 was paid for legal expenses and $4,500 was retained as a due diligence fee by 1800 Diagonal.
• The Company received net funding of $125,000, intended for general working capital purposes.
• The 1800 Note matures on April 30, 2027, and accrues a one-time 12% interest charge on the issuance date.
• Repayments are scheduled in 9 monthly installments of $18,397.78, starting August 30, 2026.
• The note is convertible into the Company's common stock at 85% of the lowest closing bid price over the 10 trading days prior to conversion, subject to a 4.99% beneficial ownership limit and Nasdaq Rule 5635(d) shareholder approval requirements for issuances exceeding 19.99%.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as a neutral event; while it provides necessary working capital, the terms of the convertible note, including potential dilution and repayment obligations, present both opportunities and risks.

Positives

• Secured $125,000 in net funding to support general working capital.
• The convertible note provides a flexible financing option with potential for future equity conversion.

Negatives

• The note carries a significant interest charge and monthly repayment obligations.
• The conversion price is set at a discount (85% of the lowest closing bid price), which could lead to substantial dilution for existing shareholders if conversion occurs.
• The company incurred legal and due diligence fees totaling $7,000 from the transaction.

Risks

• Potential for significant dilution of common stock if the note is converted, especially given the conversion price discount.
• The conversion is subject to beneficial ownership limits (4.99%) and Nasdaq shareholder approval rules (19.99%), which could complicate conversion or trigger further compliance issues.
• The repayment schedule and interest charges represent a financial obligation that could strain working capital if not managed effectively.

Future Outlook

The proceeds from this financing are intended for general working capital purposes, suggesting a focus on operational stability and short-term needs. The terms of the convertible note indicate potential future equity issuance, which will depend on market conditions and the company's stock performance.

Industry Context

StockSavvy.ai notes that the use of convertible notes is a common, albeit often dilutive, financing method for companies in growth or transitional phases, particularly in technology and clean energy sectors where access to traditional debt may be limited. This type of financing can provide necessary capital but requires careful management to mitigate shareholder dilution.

Stakeholder Impact

• Shareholders: Potential for dilution if the convertible note is converted into common stock at a discount.
• Creditors: The company has taken on a new debt obligation with specific repayment terms.
• Management: Responsible for managing the working capital and ensuring timely repayment of the note.

Next Steps

• Utilize the $125,000 in net funding for general working capital purposes.
• Manage monthly repayment obligations of $18,397.78 starting August 30, 2026.
• Monitor stock price performance to assess potential conversion scenarios and associated dilution.

Key Dates

Recommendation

The company has secured essential working capital, which is positive. However, the dilutive nature of the convertible note and the associated repayment obligations warrant a cautious approach. A 'hold' recommendation reflects the balance between immediate operational support and potential long-term shareholder value impact.

Keywords

Convertible Promissory Note, Securities Purchase Agreement, Working Capital, Financing, Dilution, Nasdaq Compliance, Debt Financing