Clean Energy Technologies, Inc.: Form 10-K for the period ended Dec 31, 2025

Filed with the SEC on Jun 5, 2026 and accepted by EDGAR at Jun 5, 2026, 10:57 ET.

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As filed, 47,976 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.

General

The Company’s business and operating results are directly affected by changes in overall customer demand, operational costs and performance and leverage of our fixed cost and selling, general and administrative (“SG&A”) infrastructure.

Product sales fluctuate in response to several factors including many that are beyond the Company’s control, such as general economic conditions, interest rates, government regulations, consumer spending, labor availability, and our customers’ production rates and inventory levels. Product sales consist of demand from customers in many different markets with different levels of cyclicality and seasonality.

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 costs.

Who We Are

We develop renewable energy products and solutions and establish partnerships in renewable energy that make environmental and economic sense. Our mission is to be a segment leader in the Zero Emission Revolution by offering turnkey energy solutions leveraging advanced technologies by delivering eco-friendly green energy solutions, clean energy fuels and alternative electric power for small and mid-sized projects in North America, Europe, and Asia. We target sustainable energy solutions that are profitable for us, profitable for our customers and represent the future of global energy production.

Our principal businesses

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 stored 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 char which are sold or used by our customers.

Engineering, Consulting and Project Management Solutions – We provide power generation, waste to energy, and heat recovery Engineering, Procurement and Construction (EPC) services to municipal and industrial customers and to design and incorporate clean energy solutions in their projects.

CETY HK

Clean Energy Technologies (H.K.) Limited (“CETY HK”) currently consists of two business verticals in mainland China:

(i) Natural Gas (“NG”) Trading Operations – CETY HK sources and supplies natural gas to industrial customers and municipalities through its PRC subsidiaries. The NG is primarily used for heavy-duty truck refueling stations as well as urban and industrial applications. CETY HK procures NG in bulk from wholesale suppliers at fixed, prepaid prices, typically at a discount to prevailing market rates, and sells to customers at daily spot prices over the contract term.

(ii) Planned Joint Venture with Shenzhen Gas – CETY HK has entered into a framework agreement with Shenzhen Gas (Hong Kong) International Co. Ltd. (“Shenzhen Gas”) to establish a joint venture focused on the acquisition of natural gas pipeline operator assets, primarily located in southwestern China. The joint venture is expected to acquire such assets with financing support from Shenzhen Gas, with the long-term objective of aggregating and ultimately transferring these assets to Shenzhen Gas.

Under the framework agreement, CETY HK is expected to contribute approximately $8 million to the joint venture, subject to future financing rounds and the execution of definitive agreements.

To date, CETY HK has not commenced operations under the Shenzhen Gas joint venture due to macroeconomic conditions, including declining natural gas prices and reduced industrial demand. CETY HK intends to defer commencement of this initiative until market conditions improve.

CETY HK no longer conducts any operations through Shuya, following the disposition of the Company’s equity interest in Shuya in December 2025.

Our Business Strategy

Our strategy is focused on further developing our existing Waste Heat Recovery business while expanding into the rapidly growing markets for Waste to Energy Solutions and power generation and integrated clean energy engineering, and project management services.

Our strategy focuses on three main elements:

Expanding our Waste Heat Recovery product line to include waste heat recovery ORC systems producing over 1 MW of power so we can qualify for midsized and large heat recovery projects in the United States, Europe, and Asia.
Establishing a Waste to Energy business by selling our ablative thermal processing products based on proprietary HTAP technology and building small and mid-sized waste to energy power plants producing electricity and RNG for the grid and methane, hydrogen and biochar.
Leveraging our engineering, procurement and manufacturing experience to assist our customers with turnkey energy solutions leveraging advanced technologies.

We intend to implement this strategy as follows:

We have added a new ORC system manufactured by Exergy for Heat Recovery applications that will enable us to implement projects in the markets producing between 1 MW and 10 MW of electricity.
To support the growing energy demands of data centers, we have added power generation and Battery Energy Storage System (BESS) capabilities to provide immediate and reliable power.
Taking advantage of Inflation Reduction Act of 2022 federal investment tax credits and state incentives that now include waste heat recovery as a recognized clean energy source, making our Clean Cycle Generator and ORC systems more profitable to install. On August 2022, Congress passed the Inflation Reduction Act offering 30% Investment Tax Credit and technology neutral tax credits offering clean electricity production credit and investment credit. CETY’s products directly benefit from these tax credits.
Benefiting from lack of energy capacity from the grid and higher energy costs, which provide higher returns on our Power Generation, Waste Heat Recovery, and Waste to Energy products and projects.
Improving our balance sheet and capital position to permit us to invest in more products and projects.

We are establishing a reliable network of global and domestic supply chain partners to drive scalability and cost efficiency in our solutions.
Leveraging our existing marketing channels to sell HTAP Waste to Energy products to industrial companies and government agencies.
We are collaborating with clean energy project development and finance companies to offer solutions that generate RNG, hydrogen, methane, and biochar from biomass, municipal waste, timber waste, and other organic materials.

Business and Segment Information

We design, produce and market clean energy products and integrated solutions focused on energy efficiency and renewable energy. Our aim is to become a leading provider of renewable and energy efficiency products and solutions by helping commercial companies and municipalities reduce energy waste and emissions, lower energy costs and generate incremental revenue by providing electricity, renewable natural gas and biochar to the grid.

Segment Information

Our four segments for accounting purposes are:

Clean Energy HRS & CETY Europe – Our Waste Heat Recovery Solutions, converting thermal energy to zero emission electricity.

CETY Renewables Waste to Energy Solutions – Providing Waste to Energy technologies and solutions.

Engineering and Manufacturing Business – providing customers with comprehensive design, manufacturing, power generation, BESS, and project management solutions.

CETY HK – The parent company of our NG 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.

Our Clean Energy Solutions Business

Waste Heat Recovery Solutions

We provide our customers with power plants that capture wasted heat energy and produce electricity using a unique Organic Rankine Cycle (ORC) system containing our Clean CycleTM generator. Our magnetic bearing Integrated Power Modules is at the heart of our Clean CycleTM generator which can fit into a standard cargo container we call our Containerized System Module, producing 140KW per Clean CycleTM generator and can be linked together for projects generating up to 1MW of power.

Our recent agreement with Exergy now permits us to install midsized and large ORC systems (between 1 MW and 10 MW) in the United States, allowing us to offer a full range of ORC systems to our customers. We believe this new capacity will enable us to expand our product offerings into larger scale waste recovery products in the United States. Enertime is a leader in producing ORC systems in Europe.

ORC waste heat recycling systems use pressurized working fluids that have a lower boiling point than water which make them ideal to repurpose waste heat into electricity. While most manufacturing processes do not produce enough heat to turn water into steam, there is enough heat to generate pressurized refrigerant in our ORC systems which is used to turn a turbine at high speeds to generate electricity.

We can link up to 10 Clean CycleTM Generators together which can generate up to 10 GWh of electricity per year from waste heat which we estimate would reduce up to 5000 metric tons of CO2 production per year in an industrial heat recovery system or the annual equivalent of the CO2 emissions of approximately 2000 cars per year.

We believe the most important component in any ORC system is the turbine generator because it converts the steam heat into electricity and accounts for approximately 60% of the cost of the system. The more efficiently the turbine generator works, the better the ORC power plant operates. The remaining components consisting of the low boiling point fluid, condensers, which cool the fluids, the feed pumps, which pressurize the fluids to reduce boiling points and the heat exchangers, which extract the heat from the heat sources. These are more commoditized products and tend to perform at similar levels of efficiencies at similar price points.

We believe our Clean CycleTM generator is one of the most efficient turbine generator in its class and size available in the market for ORC systems generating up to 1 MW. We estimate that the Clean CycleTM generator has higher efficiency of approximately 15% more than our competitors and its magnetic design eliminates the use of oils and lubricants, significantly reducing downtime, repairs and operating costs. Our Integrated Power Module is compact and fits into a standard cargo container that can be delivered on a turnkey basis, resulting in lower installation and implementation costs than on-site assembly.

We believe these features and benefits give us an important competitive advantage when building heat recovery power plants for our customers and provide us with the opportunity to compete with and obtain market share from the dominant industrial waste heat to power systems.

Over 123 Clean CycleTM generators have been deployed to date with 88 units used in biomass and waste to energy projects, 4 with diesel electric generators, 3 with turbine electric generators, and 26 in industrial electric production applications. We expect to raise additional funds to expand our capacity to install 6-8 units per year, which should approximately double our sales on a year-to-year basis.

The patented technology used in the Clean CycleTM generator was purchased from General Electric International, together with over 100 installation sites, making us one of the leading providers of small-scale industrial waste heat to power systems. We have an exclusive license from Calnetix to use their magnetic turbine for heat waste recovery applications.

Our Integrated Power Module Our Clean Cycle TM Generator

A complete ORC System with Integrated Power Module housed in a Containerized System Module (CSM)

Waste to Energy Solutions

We have added a new business line in our clean energy solutions segment consisting of Waste to Energy processing equipment, engineering services and Waste to Energy processing power plant joint ventures where we expect to retain an ownership interest in the project.

Waste-to-Energy technologies that process non-renewable waste can reduce environmental and health damages while generating sustainable energy. Waste-to-Energy technologies consist of waste treatment process that creates energy in the form of electricity, heat or fuels from a waste source. These technologies can be applied to several types of waste: from the biomass (e.g. woodchips) to semi-solid (e.g. thickened sludge from effluent treatment plants) to liquid (e.g. domestic sewage) and gaseous (e.g. refinery gases) waste.

Waste to Energy Solutions can be used:

In any town, city or province with established waste management and collection.
Where there is a consistent supply of solid waste.
Places where treatment costs increase with shortages of space to store waste.
In areas with high energy prices to allow for cost of recovery from waste.

Waste to Energy Solutions have many benefits:

Electricity from Waste to Energy plants can be generated from small amounts up to 30 MW providing for a wide range of opportunities to sell it back to the grid.
The synthetic renewable fuel gas produced from waste can be used for various production of recyclable energy such as hot water, thermo-oil or steam, renewable natural gas or hydrogen.
Landfill waste is reduced and so is leachate and methane released from decomposing landfills.
Waste is a reliable source of energy and production is typically predictable and low cost whereas fossil fuel prices can fluctuate dramatically.

Traditional Incineration Methods Have Significant Downsides:

Air pollution can increase because scrubbing technologies are very expensive to install.
Many industrial, agricultural, and mixed municipal solid wastes have high moisture content at the source and direct incineration of such waste requires burning fossil fuel to maintain thermal conversion process.
Carbon that otherwise would be stored in landfill is released into the air.
Ash and flue gas cleaning residues from incineration can also cause poisonous leachate problems if not properly disposed of which disposal is costly and causes downstream environmental issues.
Generating electricity from incineration releases more CO2, SO2, NOx and mercury than natural gas.

(Source: https://www.energyforgrowth.org/memo/waste-to-energy-one-solution-for-two-problems/)

The most common form of waste to energy systems is based on incinerators which simply burn waste using air. The Thermal Treatment on Grate is the most widespread technology being used by large waste landfills to generate electricity and heat. These systems produce substantial amounts of ash, heavy metals and carbon dioxide which need to be treated and disposed of to minimize its impact on the environment. They also require substantial amounts of pre-treatments prior to burning.

The Thermal on Grate incineration process, while wide-spread, is too expensive and complex for smaller and mid-sized waste to energy projects creating, what we believe, is a significant market opportunity in small and mid-sized waste processing applications to create not only electricity but valuable renewable natural gas, biodiesel oil, hydrogen, methane, and biochar.

Our solution is a patented High Temperature Ablative Pyrolysis (HTAP) Biomass Reactor as a viable commercial solution to the costs and environmental problems posed by traditional incineration methods. We have the exclusive license and right to sell the HTAP10 and HTAP5 and related products manufactured by Enex which has a proven installed commercial base of customers using its waste to energy solutions. We believe this is an ideal solution to process waste for small to mid-sized waste to energy generation applications needed for processing industrial and municipality solid waste, agriculture waste, and forestry waste.

Pyrolysis systems decompose waste without the use of oxygen under varying pressurized conditions and at temperatures ranging from 300 degrees Celsius to 1,300 degrees Celsius. The major advantage of pyrolysis is that it is a cost-effective technology and helps curb environmental pollution. Pyrolysis systems are gradually replacing traditional incineration and gaining momentum in the waste to energy processing market, because they address many of the pre-treatment issues and, when using high temperature and high-pressure, substantially reduce or eliminate pollutants. (Source: “Life Cycle Assessment of Waste-to-Bioenergy Processes: a Review” Pooja Ghosh,... Arunaditya Sahay, in Bioreactors, 2020)

Pyrolysis systems can produce hydrogen, renewable natural gas, bio-diesel oil, charcoal, and biochar which are used to power hydrogen, diesel, and natural gas engines or electrical turbines which can be sold and often are eligible for substantial tax and pricing benefits. When compared with the conventional incineration plant that runs in the capacity of kilotons per day, the scale of the pyrolysis plant is more flexible, and the output of pyrolysis can be integrated with other downstream technologies for product upgrading. (Source: Influential Aspects in Waste Management Practices. Karthik Rajendran PhD, Jerry D. Murphy PhD, in Sustainable Resource Recovery and Zero Waste Approaches, 2019) In addition, biochar stores and reduces atmospheric CO2 and can be used as a soil conditioner, an organic component of animal feeds, construction materials, wastewater treatment and in textiles. (Source: https://www.bioenergyconsult.com/applications-of-biochar/)

The ablative pyrolysis system is a waste to energy process that largely eliminates pre-treatment and the harmful pollutants and storage waste produced when using standard incineration and other pyrolysis technologies. It uses high pressure to generate fast pyrolysis and is designed so that the heat transferred from a hot reactor wall softens the feedstock under pressure and permits larger feedstock particles to be processed without pre-treatment. These systems create high relative motion between the reactor wall and the feedstock. The process avoids the need of inert gas and hence the processing equipment is small and the reaction system is more intense. (Source: http://biofuelsacademy.org/index.html%3Fp=608.html)

CETY has a licensed proprietary patented ablative pyrolysis system for commercial use that has been installed in 7 sites for use in waste to energy creating applications processing including peat, coal, flax waste, sawdust and wood scrap, straw, buckwheat husks, and cardboard, tapes, films and paper machine sludge. The technology has been implemented in over 1,500 onsite power generation projects in Russia working with major energy production companies such as Gazprom, Rosneft, Lukoil and Rostelecom as well as completing several projects for customers in the European Union, Middle East and United States. Due to the conflict in the Ukraine, ENEX is redomiciling and relocating key personnel to Turkey where it will complete an existing project and is expected to wind down its operations. CETY will develop additional ablative technology and expects to manufacture units in the United States. Sales and European distribution will be run out of a CETY office that has been established in Turkey.

CETY has global rights (except in Russia and CIS countries) to design, build, manufacture, sell and operate renewable energy and waste recovery facilities HTAP10 and HTAP5 systems and other products and technologies we expect to develop in the future.

The patented HTAP technology utilizes a higher temperature that uses a cleaner gas for the heating process and a more efficient biogas turbine. The units can be customized to produce hydrogen, natural gas, diesel oil and biochar in varying quantities which can be sold or used to produce electricity. We believe that the key benefits of the HTAP Biomass Reactor are:

Flexibility in waste sourcing and mixing.
Customized outputs of hydrogen, synthetic fuels, natural gas, methane, biochar, carbon black, or construction materials.
Better waste sourcing and mixing flexibility.
Near-zero emissions.
Modular design.
Zero liquid discharge.

Zero solid waste residue waste.
Modular, containerized design reducing implementation costs.
Proven commercial implementation.

We are targeting industrial and municipality solid waste, landfill waste, agriculture waste (straw, stems, plant biomass, manure, crop waste), and forestry waste from tree cuttings and shredded products.

We are in the process of identifying projects domestically and internationally for the HTAP Biomass Reactor. We believe the first project where we expect to implement the HTAP10 technology is with Vermont Renewable Gas to develop a biomass renewable energy processing facility. The project is planned for a location in Lyndon, Vermont to convert forest and agriculture biomass waste products to renewably generated electricity and biochar fertilizer. We expect to annually deliver up to 18,000 MWh of renewable electricity and 1,500 tons of biochar. The Vermont Renewable Gas project is one of the many renewable energy processing facilities we plan to commission.

ENEX HTAP 10 Waste to Energy Processing Plant.

We established a wholly owned subsidiary called CETY Capital that we expect will help us finance our customers renewable energy projects producing low carbon energy. CETY Capital, when implemented, should add flexibility to the capacity CETY offers its customers and fund projects utilizing its products and clean energy solutions. The in-house financing arm is expected to support our sales and build new renewable energy facilities. To date we have conducted no material operations in this subsidiary.

Our Clean Energy Initiatives in China

According to the U.S. Energy Information Administration (EIA) and other industry sources, China’s natural gas consumption has continued to grow significantly, reaching approximately 390–400 billion cubic meters (bcm) in 2023, up from 280 bcm in 2018. Long-term projections indicate continued strong growth through 2050, driven by industrial demand, urbanization, and energy transition policies.

Natural gas accounted for approximately 8–9% of China’s total primary energy mix in recent years, and the Chinese government continues to target an increase to approximately 15% by 2030 as part of its broader decarbonization and air quality initiatives.

China remains one of the largest drivers of global natural gas demand growth, supported by policies aimed at reducing coal consumption, including the country’s ongoing air quality initiatives and energy transition strategies. Post-COVID economic recovery and industrial activity have further supported sustained demand growth.

China is also the world’s largest importer of natural gas, with imports delivered through both pipeline infrastructure (primarily from Central Asia and Russia) and liquefied natural gas (LNG) shipments via coastal terminals.

Liquid Natural Gas in the Chinese energy market produces half as much carbon dioxide, less than a third as much nitrogen oxides, and 1 percent as much sulfur oxides at the power plant compared to the average air emissions from coal-fired generation. In addition to reduced air emissions, natural gas has other environmental benefits that make it a smart fuel choice. Natural gas-fired power plants use about 60 percent less water than coal plants and 75 percent less water than nuclear power plants for the same electricity output. (Source: Conoco Phillips)

In 2021, we acquired through our subsidiary, CETY Hong Kong, a liquefied natural gas trading operation called Jiangsu Huanya Jieneng (“JHJ”) which sources LNG from large LNG producers and distributors and sells it to non-state-owned industries and downstream customers in mainland China.

CETY also plans to sell its waste heat recovery and waste to energy products in China as well as provide consulting services relating to the same to projects in China.

The JHJ team has more than 10 years of experience in the natural gas and clean energy industry and has maintained relationships and partners with many natural gas enterprises in China.

CETY HK

NG Trading Operations

JHJ’s principal service is to source and supply NG to industries and municipalities located in the southern part of Sichuan Province and portions of Yunnan Province. The NG is principally used for heavy truck refueling stations and urban or industrial users in areas that do not have a connection to local NG pipeline systems. We purchase large quantities of NG from large wholesale NG depots at fixed prices which are prepaid for in advance at a discount to market. We sell the NG to our customers at prevailing daily spot prices for the duration of the contracts.

Either our sources or customers arrange for delivery of the NG. Our profitability depends on our ability to purchase NG at volume discounts at the beginning of a season and sell it at a delivered price that is higher than the price we pay.

JHJ traders are experienced NG traders, familiar with the spot and future markets and have relationships with the major users of NG in the areas that we serve. Our customers may be local or may be as far as 700km from each depot.

We compete with other NG trading based on availability and price. We target our discount with our sources to partially hedge against falling spot prices and give us a gross profit targeted at a substantially higher rate than our competitors which are approximately 20-30 percent margins compared against what we believe are 1-5 percent margins by our competitors. So long as there are no major fluctuations in the spot market, we can offer more competitive prices due to the discounts we receive from the large volumes purchased and the prepayments for the NG. JHJ has currently established a supply of approximately 8,000 tons of NG for distribution.

We are able to purchase NG at a significant discount from our suppliers because our prepayments offer suppliers more certainty with respect to the sales of their inventory, address their cash flow issues, and allow them to better plan for production. We believe our downstream customers get better prices from us because of our bulk buying power, ease of inventory management and cash flow.

Both our suppliers and customers can reduce costs by using JHJ as a centralized procurement center and establishing professional logistics distribution based on stable supply and downstream demand.

Our convertible note investment in Heze Hongyuan Natural Gas co. is subject to dilution by additional equity investment into HHNG by third parties. We do not expect the project to require additional investment from us, JHJ or HHNG. The project has constructed a portion of the pipelines in the Heze area that links the local industrial users to the national gas pipeline. Certain parts of the pipeline construction have been delayed due to the permitting process. The project is expected to generate cash flow by the end of 2025. We do not expect to make further direct minority investments in other pipeline operators.

Engineering, Consulting and Project Management Services

Engineering. Our global engineering team supports the design, build, installation, and maintenance of our solutions and supports our technology customers and innovative start-ups with a broad range of electrical, mechanical and software engineering services. CETY has assembled a team of experts from around the globe to assist customers at any point in the design cycle. These services include design processes from electrical, software, mechanical and Industrial design. Utilization of CETY’s design services can provide our customers with a complete end to end solution.

Supply Chain Management. CETY’s supply chain solution provides maximum flexibility and responsiveness through a collaborative and strategic approach with our customers. CETY can assume supply chain responsibility from component sourcing through delivery of the finished product. CETY’s focus on the supply chain allows us to build internal and external systems and better our relationships with our customers, which allows us to capitalize on our expertise to align with our partners’ and customers’ objectives and integrate with their respective processes.

The Market for Our Products

Waste to Energy.

Globally, there are over 2,500 waste-to-energy (WTE) facilities, with Europe and Asia accounting for the majority of installed capacity, and Europe alone hosting approximately 500–600 plants. The sector continues to expand, particularly in Asia, driven by urbanization, waste management challenges, and decarbonization policies.

The global waste-to-energy market has demonstrated steady growth and is projected to reach approximately $80–100 billion by 2030, growing at a compound annual growth rate (CAGR) of approximately 6–7% over the forecast period. Growth is supported by increasing regulatory pressure to reduce landfill usage, rising energy demand, and government incentives promoting renewable and circular economy solutions.

While the COVID-19 pandemic temporarily disrupted supply chains and delayed certain project developments, the market has since recovered, with renewed momentum driven by government policies supporting sustainable waste management, energy security, and emissions reduction.

Increasing government regulations regarding the waste to energy in various countries is one of the major factors driving the growth of global waste to energy market. For instance, the Federal Power Act gives federal authority over parts of the electric utilities in U.S. Also acts like Public Utility Regulatory Policy Act (PURPA) and Energy Policy Act are applied by the government to increase the waste to energy and decrease the CO2 emission by fossil fuels. In addition, escalating investments in R&D by different countries is also fostering the growth of global waste to energy market. (Source: https://www.epa.gov/laws-regulations/summary-energy-policy-act)

Advanced thermal conversion technologies, including pyrolysis, gasification, and plasma gasification are gaining increased attention as lower-emission alternatives to traditional mass-burn waste-to-energy systems. These technologies enable the conversion of waste streams into syngas, fuels, and other value-added products, supporting decarbonization objectives and improved resource efficiency.

The global waste-to-energy market continues to expand, driven by the transition away from landfilling, increasing energy demand, and government policies supporting circular economy initiatives. The market is estimated to be valued at approximately $70–80 billion in the mid-2020s and is projected to reach approximately $100 billion by 2030, reflecting a compound annual growth rate (CAGR) in the range of 5–7%.

Growth is further supported by global efforts to reduce reliance on fossil fuels, enhance energy security, and lower greenhouse gas emissions, positioning advanced waste-to-energy technologies as an important component of the broader energy transition.

Waste Heat Recovery

The global waste heat recovery (WHR) market continues to expand, driven by rising energy costs, industrial decarbonization efforts, and increasing demand for energy efficiency. Recent industry estimates place the market at approximately $65–75 billion in the mid-2020s, with projections to reach approximately $110–130 billion by 2030, representing a compound annual growth rate (CAGR) of approximately 7–9%.

Key drivers of growth include increasing industrial energy consumption, higher electricity prices, and regulatory initiatives aimed at improving energy efficiency and reducing greenhouse gas emissions. Industries such as cement, steel, glass, and refining are increasingly adopting waste heat recovery technologies to improve operational efficiency and lower energy costs.

In addition, government policies and incentives promoting energy conservation and emissions reduction continue to support adoption. As energy efficiency becomes a critical priority, waste heat recovery is emerging as a cost-effective solution for converting excess thermal energy into usable power, contributing to both economic and environmental objectives.

In 2020, North America constituted the largest share of the market accounting for approximately 33% of the global total, but countries in Asia and the Asia Pacific constitute the fasting growing geographic sectors due to rapid industrial expansion.

Recent federal legislation has modified the availability and duration of certain energy-related tax incentives in the United States. In July 2025, the U.S. Congress enacted the One Big Beautiful Bill Act, which amended and accelerated the phase-out of several clean energy tax credits originally established under prior legislation. Under this framework, certain energy efficiency and clean energy investment incentives remain available for qualifying projects placed in service before their applicable phase-out dates. These incentives may support investments in technologies that improve industrial energy efficiency, including waste heat recovery and Organic Rankine Cycle (“ORC”) power generation systems that convert industrial waste heat into electricity. Federal tax incentives, together with state and local programs, may improve the economic attractiveness of waste heat recovery installations by reducing capital costs and supporting broader adoption of energy efficiency technologies in industrial facilities. However, the availability, duration, and eligibility requirements of such incentives are subject to change through future legislation, regulatory guidance, or administrative interpretation.

A Renewable Portfolio Standard (RPS) is a state incentive program that requires a certain percentage of electricity sold by utilities in the state to come from renewable resources. It diversifies the energy portfolio of the state while encouraging economic development. By establishing an RPS a state creates a market for Renewable Energy Credits (RECs). Each utility must obtain and retire a certain number of RECs annually. Several states, including Colorado, Wisconsin, Illinois and California among others, have now listed waste heat to power as an eligible resource in their RPS program.

LNG Trading and Joint Venture

Historically, the Company participated in natural gas trading activities in the People’s Republic of China through its PRC subsidiaries and through Shuya, an entity in which the Company previously held a 49% equity interest. In December 2025, the Company divested its equity interest in Shuya as part of a strategic shift to focus on its core clean energy technology and distributed energy project development activities. Following the disposition of this investment, the Company no longer holds an ownership interest in Shuya. The Company continues to evaluate its remaining international operations in connection with its broader strategic focus on energy efficiency, waste heat recovery, and distributed power generation solutions.

China has also been one of the world’s largest importers and consumers of natural gas, driven by industrial demand, urbanization, and policies encouraging the substitution of natural gas for higher-emission fuels. Government planning initiatives, including national five-year plans and regional development programs, have historically supported the expansion of natural gas supply infrastructure and transportation fuel networks in various provinces, including southwestern regions such as Sichuan, Yunnan, and Guizhou.

In these regions, LNG production facilities and refueling infrastructure have been developed to support transportation fleets and industrial users. These developments historically created opportunities for natural gas trading and supply activities involving regional distribution networks and downstream commercial customers.

While the Company previously engaged in natural gas trading activities in China through its subsidiaries and Shuya, the Company continues to evaluate its international operations and strategic priorities, including the potential restructuring, reduction, or disposition of certain activities outside its core clean energy technology and project development focus.

Sales and Marketing

We utilize both a direct sales force and global distribution group with expertise in heat recovery solutions and clean energy markets.

CETY maintains an online presence through our web portal and social media. We also have established cross-sale agreements with synergistic technology providers promoting our solutions to our respective customers. We utilize email campaigns to keep the marketplace abreast of the recent developments with our solutions. We work with the municipalities to identify incentive programs that could utilize our solutions.

Our application engineers assist in converting the opportunities into projects. We provide technical support to our Clean CycleTM generator clients and recently introduced waste to energy plants through providing maintenance and product support.

Our market focus is segmented by the engine heat recovery, waste to energy plants, engineering & procurement, and renewable energy trade, wastewater treatment plants and boiler applications with excess heat.

Our experienced team of LNG traders identify producers and customers for the LNG trading business as well as originate acquisition opportunities for our Shenzhen Gas joint venture.

Suppliers

Our heat recovery solutions systems are manufactured primarily from components available from multiple suppliers and to a lesser extend from custom fabricated components available from various sources. We purchase our components from suppliers based on price and availability. Our significant suppliers in the Waste Heat Recovery business include Powerhouse, Concise Instrument, and Grainger.

Our waste to energy components are sourced globally, including in the US, with the exception of the core components originally sourced in Russia and now being transitioned to Turkey and US. We are in the process of establishing an inhouse center of competence and technology development based out of Turkey to source these components in Europe and US with the ability to deploy the product globally. Although future impacts cannot be predicted the company does not foresee any negative impact from the Russia and Ukraine conflict.

The natural gas in China is obtained from various local production plants in Southeast China based on price and quality. Deliveries of the NG are made through third party trucking companies. We purchase large quantities of NG from large wholesale NG depots at fixed prices which are discounted and prepaid for in advance at a discount to market.

Competition

ORMAT, Exergy, TAS and Turboden are the leaders in ORC system power plants with more than 75% of installed capacity and plants, Exergy and TAS are following with around 13% and 6% of the market respectively, while Turboden has recently penetrated the geothermal market with about 2% of the installed capacity.

The Waste to Energy Market is dominated by Hitachi Zosen Inova AG, Suez, Veolia, Ramboll Group A/S, Covanta Holding Corporation, China Everbright International Ltd., Abu Dhabi National Energy Company PJSC, Babcock & Wilcox Enterprises lnc., Whaleboater Technologies lnc., Xcel Energy lnc. (Source: https://www.polarismarketresearch.com/industry-analysis/waste-to-energy-market)

We also compete with numerous companies that are smaller than the major companies who are focused on the small to medium-sized installations in Waste Heat Recovery and Waste to Energy. We believe our waste to energy products are more efficient for use in small and medium sized operations than our competitors’ and provide us with a competitive advantage on that basis.

In China, our NG trading operations compete with large state-owned LNG producers and importers such as Sinopec and many smaller local energy trading companies in the PRC. We compete based on price and consistency of services.

Patents

We hold 11 patents in 4 countries, including the US, which were acquired from General Electric International relating to our magnetic turbine technology.

Intellectual Property

As part of our asset acquisition from General Electric International, we acquired an exclusive, irrevocable, sublicensable, limited transferable, royalty free, fully paid, worldwide perpetual license to develop, improve and commercialize Calnetix’s magnetic turbine in any Organic Rankine Cycle based application where heat is sourced from a reciprocating combustion engine of any type, except marine vessels, any gas or steam turbine systems for electrical power generation applications or any type of biomass boiler system.

The Company has entered into an intellectual property rights purchase and transfer agreement with ENEX relating to its pyrolysis technology originally developed in Russia. Under this agreement, the Company has acquired and been assigned certain intellectual property rights associated with the pyrolysis system, subject to the terms and conditions set forth therein.

Accordingly, the Company’s rights to this technology are based on an ownership interest in the transferred intellectual property, rather than a license arrangement.

Facilities

We are headquartered in Irvine, California, and we have a 3,000 sq-ft office in Irvine. Our Heat Recovery Solutions business unit operates from a 6,000 sq-ft state-of-the-art facility in Irvine, California. We have in-house electro-mechanical assembly and testing capabilities. Our products are compliant with American Society of Mechanical Engineers and are UL and CE approved. We also have a 1,000 sq-ft sales and service center located in Treviso, Italy. We also have a 2,000 sq-ft R&D center in Antalya, Turkey. Our Asian headquarters is located in Hong Kong, and our 3,000 sq-ft Engineering consultancy and Natural Gas Trading company is located in Chengdu, China.

Employees

We presently have approximately 15 total employees, including operational, engineering, accounting and marketing personnel. We utilize an extensive number of consultants as well and have never experienced work stoppages, and we are not a party to any collective bargaining agreement. We also have 7 employees in JHJ & SHJ in China.

Government Regulation

Our operations are subject to certain foreign, federal, state and local regulatory requirements relating to environmental, waste management, and health and safety matters. We believe we operate in substantial compliance with all applicable requirements. However, material costs and liabilities may arise from these requirements or from new, modified or more stringent requirements. Material cost may rise due to additional manufacturing cost of raw or made parts with the application of new regulations. Our liabilities may also increase due to additional regulations imposed by foreign, federal, state and local regulatory requirements relating to environmental, waste management, and health and safety matters. In addition, our past, current and future operations and those of businesses we acquire, may give rise to claims of exposure by employees or the public or to other claims or liabilities relating to environmental, waste management or health and safety concerns.

Our markets can be positively or negatively impacted by the effects of governmental and regulatory matters. We are affected not only by energy policy, laws, regulations and incentives of governments in the markets into which we sell, but also by rules, regulations and costs imposed by utilities. Utility companies or governmental entities could place barriers on the installation of our product or the interconnection of the product with the electric grid. Further, utility companies may charge additional fees to customers who install on-site power generation, thereby reducing the electricity they take from the utility, or for having the capacity to use power from the grid for back-up or standby purposes. These types of restrictions, fees or charges could hamper the ability to install or effectively use our products or may increase the cost to our potential customers for using our systems in the future. This could make our systems less desirable, thereby adversely affecting our revenue and profitability potential. In addition, utility rate reductions can make our products less competitive which would have a material adverse effect on our future operations. These costs, incentives and rules are not always the same as those faced by technologies with which we compete. However, rules, regulations, laws and incentives could also provide an advantage to our Heat Recovery Solutions as compared with competing technologies if we are able to achieve required compliance at a lower cost when our Clean CycleTM generators are commercialized. Additionally, reduced emissions and higher fuel efficiency could help our future customers combat the effects of global warming. Accordingly, we may benefit from increased government regulations that impose tighter emission and fuel efficiency standards.

Due to our operations in China, we are subject to additional regulations that apply to companies doing business in mainland China. See “Disclosures Relating to Our Chinese Operations” for more information.

Research and Development

We had no expenses in Research and Development costs during the years ended December 31, 2025, and 2024.

WHERE YOU CAN GET ADDITIONAL INFORMATION

We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy our reports or other filings made with the SEC at the SEC’s Public Reference Room, located at 100 F Street, N.E., Washington, DC 20549. You can obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You can also access these reports and other filings electronically on the SEC’s web site, www.sec.gov (http://www.sec.gov).

Risk factors

As filed, 69,640 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.

An investment in our common stock involves a high degree of risk. Before deciding to purchase, hold, or sell our common stock, you should consider carefully the risks described below in addition to the cautionary statements and risks described elsewhere in this Annual Report and in our other filings with the SEC, including our registration statements and reports on Forms 10-K, 10-Q and 8-K. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. If any of these known or unknown risks or uncertainties actually occur, our business, financial condition, results of operations or cash flows could be seriously harmed. This could cause the trading price of our common stock to decline, resulting in a loss of all or part of your investment.

RISKS RELATED TO OUR BUSINESS

OUR INDEPENDENT ACCOUNTANTS HAVE ISSUED A GOING CONCERN OPINION AND IF WE CANNOT OBTAIN ADDITIONAL FINANCING AND/OR REDUCE OUR OPERATING COSTS SUFFICIENTLY, WE MAY HAVE TO CURTAIL OPERATIONS AND MAY ULTIMATELY CEASE TO EXIST.

For the fiscal year ending December 31, 2025, our company reported a net loss of $6,808,895 compared to a net loss of $4,550,296 for the year 2024 (Restated). The increase in net loss during 2025 was primarily attributable to non-cash and non-operating items, including losses related to debt settlement and write down, changes in derivative liabilities, and higher interest and financing-related expenses.

Despite the increase in net loss, the Company improved its operating performance, with loss from operations decreasing from approximately $3.33 million in 2024 to approximately $2.50 million in 2025. The improvement was primarily driven by continued strategic expansion into higher-margin waste-to-energy opportunities, improved operational efficiencies, and reduced operating expenses in certain categories.

The Company continues to evaluate more cost-effective financing alternatives and strategic capital solutions moving forward.

Although our financial statements have been prepared under the assumption that we would continue our operations as a going concern, there is substantial doubt about our ability to continue as a going concern, based on our financial statements and results of operations at that time. Specifically, as noted above, we have experienced losses from operations and negative cash flows from operating activities. Although our audited financial statements for the years ended December 31, 2025 and 2024, were prepared under the assumption that we would continue our operations as a going concern, the report of our independent registered public accounting firm that accompanies our financial statements for the years ended December 31, 2025 and 2024, contains a going concern qualification in which such firm expressed substantial doubt about our ability to continue as a going concern, based on our financial statements and results at that time.

We expect to continue to incur significant expenses and operating losses for the foreseeable future. These prior losses and expected future losses have had, and will continue to have, an adverse effect on our financial condition. In addition, continued operations and our ability to continue as a going concern may be dependent on our ability to obtain additional financing in the near future and thereafter, and there are no assurances that such financing will be available to us at all or will be available in sufficient amounts or on reasonable terms. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty. If we are unable to generate additional funds in the future through sales of our products, financings or from other sources or transactions, we will exhaust our resources and will be unable to continue operations. If we cannot continue as a going concern, our shareholders would likely lose most or all of their investment in us.

WE HAVE AN ACCUMULATED DEFICIT AND MAY INCUR ADDITIONAL LOSSES; THEREFORE, WE MAY NOT BE ABLE TO OBTAIN THE ADDITIONAL FINANCING NEEDED FOR WORKING CAPITAL, CAPITAL EXPENDITURES AND TO MEET OUR DEBT SERVICE OBLIGATIONS.

As of December 31, 2025, we had current liabilities of $5,995,088 and total current assets of $6,255,951.

Our debt could limit our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, or other purposes in the future, as needed; to plan for, or react to, changes in technology and in our business and competition; and to react in the event of an economic downturn.

We may not be able to meet our debt service obligations. If we are unable to generate sufficient cash flow or obtain funds for required payments, or if we fail to comply with covenants in our revolving lines of credit, we will be in default.

We have previously received Nasdaq deficiency notices, and future non-compliance with Nasdaq listing requirements could result in delisting; if we are not able to regain compliance with those requirements within the time periods permitted by Nasdaq, our common stock may be delisted, which would likely impair our ability to raise capital and could constitute an event of default under our outstanding promissory 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.

To assist in regaining compliance with the Minimum Bid Price Requirement, the Company effected a 1-for-15 reverse stock split of its issued and outstanding common stock on October 6, 2025. As a result of the reverse stock split and the subsequent increase in the market price of the Company’s common stock, the Company regained compliance with the Minimum Bid Price Requirement. Nasdaq subsequently notified the Company on October 20, 2025 that it had regained compliance with Nasdaq Listing Rule 5550(a)(2), and the matter was closed.

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 assurance that the Company will continue to satisfy Nasdaq’s continued listing requirements in the 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, 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.

OUR BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION MAY BE ADVERSELY AFFECTED BY PUBLIC HEALTH EPIDEMICS.

Our business, results of operations and financial condition may be adversely affected if a public health epidemic such as COVID-19 interferes with the ability of us, our employees, workers, contractors, suppliers, customers and other business partners to perform our and their respective responsibilities and obligations relative to the conduct of our business. We maintain offices in various countries throughout the world with employees and workers upon whom we rely to, among other things, identify sources of supply, conduct factory inspections, place orders for merchandise, perform factory monitoring with respect to production, quality control and other requirements, and arrange shipping. A public health epidemic, like the coronavirus, poses the risk that we or our employees, workers, contractors, suppliers, customers and other business partners may be prevented from conducting business activities for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities. We face similar risks if a public health epidemic affects other geographic areas where our employees, workers, contractors, suppliers, customers and other business partners are located.

IF DEMAND FOR THE PRODUCTS AND SERVICES THAT THE COMPANY OFFERS SLOWS, OUR BUSINESS WOULD BE MATERIALLY AFFECTED.

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

the economy, and in periods of rapidly declining economic conditions, customers may defer purchases or may choose alternate products;
the cost of oil, gas and solar energy;
the competitive environment in the heat to power sectors may force us to reduce prices below our desired pricing level or increase promotional spending or both;
our ability to maintain efficient, timely and cost-effective production and delivery of the products and services; and,
All of these factors could result in immediate and longer term declines in the demand for the products and services that we offer, which could adversely affect our sales, cash flows and overall financial condition.

WE OPERATE IN A HIGHLY COMPETITIVE MARKET. IF WE DO NOT COMPETE EFFECTIVELY, OUR PROSPECTS, OPERATING RESULTS, AND FINANCIAL CONDITION COULD BE ADVERSELY AFFECTED.

The markets for our products and services are highly competitive, with companies offering a variety of competitive products and services. We expect competition in our markets to intensify in the future as new and existing competitors introduce new or enhanced products and services that are potentially more competitive than our products and services. We believe many of our competitors and potential competitors have significant competitive advantages, including longer operating histories, ability to leverage their sales efforts and marketing expenditures across a broader portfolio of products and services, larger and broader customer bases, more established relationships with a larger number of suppliers, contract manufacturers, and channel partners, greater brand recognition, and greater financial, research and development, marketing, distribution, and other resources than we do and the ability to offer financing for projects. Our competitors and potential competitors may also be able to develop products or services that are equal or superior to ours, achieve greater market acceptance of their products and services, and increase sales by utilizing different distribution channels than we do. Some of our competitors may aggressively discount their products and services in order to gain market share, which could result in pricing pressures, reduced profit margins, lost market share, or a failure to grow market share for us. If we are not able to compete effectively against our current or potential competitors, our prospects, operating results, and financial condition could be adversely affected.

WE MAY LOSE OUT TO LARGER AND BETTER-ESTABLISHED COMPETITORS.

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 may 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.

OUR INTERNATIONAL OPERATIONS SUBJECT US TO RISKS, WHICH COULD ADVERSELY AFFECT OUR OPERATING RESULTS.

Our international operations are exposed to the following risks, several of which are out of our control:

political and economic instability, international terrorism and anti-American sentiment, particularly in emerging markets;
preference for locally branded products, and laws and business practices favoring local competition;
unusual or burdensome foreign laws or regulations, and unexpected changes to those laws or regulations;

|import and export license requirements, tariffs, taxes and other barriers;
higher costs of customizing products for foreign countries;
increased difficulty in managing inventory;
less effective protection of intellectual property; and
difficulties and costs of staffing and managing foreign operations.

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

OUR PRODUCTS MAY BE DISPLACED BY NEWER TECHNOLOGY.

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 may, however, not have the resources to do this.

WE MUST HIRE QUALIFIED ENGINEERING, DEVELOPMENT AND PROFESSIONAL SERVICES PERSONNEL.

We cannot be certain that we can attract or retain a sufficient number of highly qualified mechanical engineers, industrial technology and manufacturing process developers and professional services personnel. To deploy our products quickly and efficiently, and 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 education, 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, COULD ADD TO OUR COST OF GOODS SOLD AND AFFECT OUR REVENUE GROWTH.

At various times, there have been shortages of some of the components that we use, as a result of strong demand for those components or problems experienced by suppliers. These unanticipated component shortages have resulted in curtailed production or delays in production, which prevented us from making scheduled shipments to customers in the past and may do so in the future. Our inability to make scheduled shipments could cause us to experience a reduction in our sales and an increase in our costs and could adversely affect our relationship with existing customers as well as prospective customers. Component shortages may also increase our cost of goods sold because we may be required to pay higher prices for components in short supply and redesign or reconfigure products to accommodate substitute components.

OUR PRINCIPAL SHAREHOLDERS, DIRECTORS AND EXECUTIVE OFFICERS, IN THE AGGREGATE, BENEFICIALLY OWN MORE THAN 50% OF OUR OUTSTANDING COMMON STOCK AND THESE SHAREHOLDERS, IF ACTING TOGETHER, WILL BE ABLE TO EXERT SUBSTANTIAL INFLUENCE OVER ALL MATTERS REQUIRING APPROVAL OF OUR SHAREHOLDERS.

Our principal shareholders, directors and executive officers in the aggregate, beneficially own more than 50% of our outstanding 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 PERSONNEL, 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.

Our success depends to a large extent upon the continued services of our executive officers. We could be seriously harmed by the loss of any of our executive officers. In order to manage our growth, 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. Although a number of companies in our industry have implemented workforce reductions, there remains substantial competition for highly skilled employees.

WE ARE SUBJECT TO ENVIRONMENTAL COMPLIANCE RISKS AND UNEXPECTED COSTS THAT WE MAY INCUR WITH RESPECT TO ENVIRONMENTAL MATTERS MAY RESULT IN ADDITIONAL LOSS CONTINGENCIES, THE QUANTIFICATION OF WHICH CANNOT BE DETERMINED AT THIS TIME.

We are subject to various federal, state, local and foreign environmental laws and regulations, including those governing the use, storage, discharge and disposal of hazardous substances in the ordinary course of our manufacturing process. If more stringent compliance or cleanup standards under environmental laws or regulations are imposed, or the results of future testing and analyses at our current or former operating facilities indicate that we are responsible for the release of hazardous substances, we may be subject to additional remediation liability. Further, additional environmental matters may arise in the future at sites where no problem is currently known or at sites that we may acquire in the future. Currently unexpected costs that we may incur with respect to environmental matters may result in additional loss contingencies, the quantification of which cannot be determined at this time.

OUR SALES AND CONTRACT FULFILLMENT CYCLES CAN BE LONG, UNPREDICTABLE AND VARY SEASONALLY, WHICH CAN CAUSE SIGNIFICANT VARIATION IN REVENUES AND PROFITABILITY IN A PARTICULAR QUARTER.

The timing of our sales and related customer contract fulfillment are 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. As 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.

We have experienced seasonal and end-of-quarter concentration of our transactions and variations in the number and size of transactions that close in a particular quarter, which impacts our ability to grow revenue over the long term and plan and manage cash flows and other aspects of our business and cost structure. Our transactions vary by quarter, with the fourth quarter typically being our largest. If expectations for our business turn out to be inaccurate, our revenue growth may be adversely affected over time and we may not be able to adjust our cost structure on a timely basis and our cash flows may suffer.

OUR OPERATING MARGINS MAY DECLINE AS A RESULT OF INCREASING PRODUCT COSTS.

Our business is subject to significant pressure on pricing and costs caused by many factors, including competition, the cost of components used in our products, labor costs, constrained sourcing capacity, inflationary pressure, pressure from customers to reduce the prices we charge for our products and services, and changes in consumer demand. Costs for the raw materials used in the manufacture of our products are affected by, among other things, energy prices, consumer demand, fluctuations in commodity prices and currency, and other factors that are generally unpredictable and beyond our control. Increases in the cost of raw materials used to manufacture our products or in the cost of labor and other costs of doing business in the United States and internationally could have an adverse effect on, among other things, the cost of our products, gross margins, operating results, financial condition, and cash flows.

OUR SALES AND PROFITABLITY OF OPERATIONS IN THE UNITED STATES AND IN THE PRC ARE DEPENDENT 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 may impair our ability to sell our products.

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

Our traders at JHJ purchase NG at a fixed price in large volumes. If the spot prices for NG drop below our purchase price, we may not be able to sell our NG to our customers or may have to sell the NG at a substantial loss. We do not purchase a sufficient volume of LNG to be able to hedge against price declines of this commodity. If we believe that NG prices are too high and we are unable to purchase because we believe that prices will drop, we will not have sufficient supply of NG to conduct trading operations until the market pricing returns to a level at which we can conduct operations.

WE MAY NOT HAVE SUFFICENT FUNDS TO CONDUCT OUR TRADING OPERATIONS IN THE PRC.

We are funding our trading operations through cash flow generated by JHJ and from funds provided by our parent. If we or JHJ does not have sufficient funds, we may not be able to conduct trading operations.

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

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 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 guarantee performance.

THE IMPLEMENTATION OF OUR WASTE TO ENERGY JOINT VENTURES DEPENDS ON US FINDING FUNDING FOR THE PROJECTS.

In order to implement the HTAP 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 for them. If we are not able to finance the projects, we will not be able to implement our business plan in this sector.

FLUCTUATIONS IN EXCHANGE RATES COULD HAVE 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 against the backdrop of a surging U.S. dollar and persistent capital outflows from 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 MAY NEED TO RAISE ADDITIONAL CAPITAL REQUIRED TO GROW OUR BUSINESS, AND WE MAY NOT BE ABLE TO RAISE CAPITAL ON TERMS ACCEPTABLE TO US OR AT ALL.

Growing and operating our business will require significant cash outlays and capital expenditures and commitments. We have utilized cash on hand and cash generated from operations as sources of liquidity. If cash on hand and cash generated from operations are not sufficient to meet our cash requirements, we will need to seek additional capital, potentially through equity or debt financing, to fund our growth. Our ability to access the credit and capital markets in the future as a source of liquidity, and the borrowing costs associated with such financing, are dependent upon market conditions.

In addition, any equity securities we issue, including any preferred stock, may be on terms that are dilutive or potentially dilutive to our stockholders, and the prices at which new investors would be willing to purchase our securities may be lower than the offering price per share of our Common Stock. The holders of any equity securities we issue, including any preferred stock, may also have rights, preferences or privileges which are senior to those of existing holders of Common Stock. If new sources of financing are required, but are insufficient or unavailable, we will be required to modify our growth and operating plans based on available funding, if any, which would harm our ability to grow our business.

NATURAL DISASTERS AND OTHER CATASTROPHIC EVENTS BEYOND OUR CONTROL COULD ADVERSELY AFFECT OUR BUSINESS OPERATIONS AND FINANCIAL PERFORMANCE.

The occurrence of one or more natural disasters, such as fires, hurricanes, tornados, tsunamis, floods and earthquakes; geo-political events, such as civil unrest in a country in which our suppliers are located or terrorist or military activities disrupting transportation, communication or utility systems; or other highly disruptive events, such as nuclear accidents, pandemics, unusual weather conditions or cyber-attacks, could adversely affect our operations and financial performance. Such events could result, among other things, in operational disruptions, physical damage to or destruction or disruption of one or more of our properties or properties used by third parties in connection with the supply of products or services to us, the lack of an adequate workforce in parts or all of our operations and communications and transportation disruptions. These factors could also cause consumer confidence and spending to decrease or result in increased volatility in the United States and global financial markets and economy. Such occurrences could have a material adverse effect on us and could also have indirect consequences such as increases in the costs of insurance if they result in significant loss of property or other insurable damage.

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

We have issued a substantial number of convertible securities which, if converted, would result in substantial dilution to our stockholders. We also have outstanding other convertible securities, including shares of preferred stock, warrants and other equity instruments convertible into shares of common stock. As of December 31, 2025, these convertible securities include the following:


Convertible Notes - and Approximate common share equivalents	1,441,565
Warrants and Common Stock equivalents	2,664,010
Total Convertible Common Stock equivalents	4,105,575

OUR ISSUANCE OF ADDITIONAL CAPITAL STOCK IN CONNECTION WITH FINANCINGS, ACQUISITIONS, INVESTMENTS, OUR EQUITY INCENTIVE PLANS, OR OTHERWISE WILL DILUTE ALL OTHER 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 awards to employees, directors, and consultants under our equity incentive plans. We may also raise capital through equity 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 MAKE ACQUISITIONS THAT ARE DILUTIVE TO EXISTING STOCKHOLDERS. IN ADDITION, OUR LIMITED EXPERIENCE IN ACQUIRING OTHER BUSINESSES, PRODUCT LINES AND TECHNOLOGIES MAY MAKE IT DIFFICULT FOR US TO OVERCOME PROBLEMS ENCOUNTERED IN CONNECTION WITH ANY ACQUISITIONS WE MAY UNDERTAKE.

We intend to evaluate and explore strategic opportunities as they arise, including business combinations, strategic partnerships, and the purchase, licensing or sale of assets. In connection with any such future transaction, we could issue dilutive equity securities, incur substantial debt, reduce our cash reserves or assume contingent liabilities.

Our experience in acquiring other businesses, product lines and technologies is limited. Our inability to overcome problems encountered in connection with any acquisitions could divert the attention of management, utilize scarce corporate resources and otherwise harm our business. Any potential future acquisitions also involve numerous risks, including:

problems assimilating the purchased operations, technologies or products;
costs associated with the acquisition;
adverse effects on existing business relationships with suppliers and customers;
risks associated with entering markets in which we have no or limited prior experience;
potential loss of key employees of purchased organizations; and
potential litigation arising from the acquired company’s operations before the acquisition.

Furthermore, acquisitions may require material charges and could result in adverse tax consequences, substantial depreciation, deferred compensation charges, in-process research and development charges, the amortization of amounts related to deferred compensation and identifiable purchased intangible assets or impairment of goodwill, any of which could negatively affect our results of operations.

WE MAY BE SUBJECT TO GOVERNMENT LAWS AND REGULATIONS PARTICULAR TO OUR OPERATIONS WITH WHICH WE MAY BE UNABLE TO COMPLY.

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, workers’ 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.

COMPLIANCE WITH CHANGING REGULATION OF CORPORATE GOVERNANCE AND PUBLIC DISCLOSURE WILL RESULT IN ADDITIONAL EXPENSES.

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-generating activities to compliance activities.

OUR REVENUE GROWTH RATE DEPENDS PRIMARILY ON OUR ABILITY TO EXECUTE OUR BUSINESS PLAN.

We may not be able to identify and maintain the necessary relationships within our industry. Our ability to execute our business plan also depends on other factors, including the ability to:

1. Negotiate and maintain contracts and agreements with acceptable terms;

2. Hire and train qualified personnel;

3. Maintain marketing and development costs at affordable rates; and,

4. Maintain an affordable labor force.

WE MAY BE SUBJECT TO SECURITIES LITIGATION, WHICH IS EXPENSIVE AND COULD DIVERT MANAGEMENT ATTENTION.

The market price of the shares of our common stock may be volatile, and in the past companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.

RISKS RELATED TO DOING BUSINESS IN CHINA

We 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:

THERE ARE UNCERTAINTIES REGARDING THE INTERPRETATION AND ENFORCEMENT OF PRC LAWS, RULES AND REGULATIONS.

The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions may be cited for reference but have limited precedential value. In 1979, the PRC government began to promulgate a comprehensive system of laws, rules and regulations governing economic matters in general. The overall effect of legislation over the past four decades has significantly enhanced the protections afforded to various forms of foreign investment in China. However, China has not developed a fully integrated legal system, and recently enacted laws, rules and regulations may not sufficiently cover all aspects of economic activities in China or may be subject to various degrees of interpretation and discretion by PRC regulatory agencies. In particular, because these laws, rules and regulations are relatively new, and because of the limited number of published decisions and the nonbinding nature of such decisions, the interpretation and enforcement of these laws, rules and regulations involve uncertainties and are not always uniform and predictable. These uncertainties may affect our judgment on the relevance of legal requirements and our ability to enforce our contractual rights or tort claims. In addition, the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all, and which may have a retroactive effect. As a result, we may not be aware of our violation of these policies and rules until some time after the occurrence of the violation.

Any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention. Since PRC administrative and court authorities have different degrees of discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems. These uncertainties may impede our ability to enforce the contracts we have entered into and could materially and adversely affect our business, financial condition and results of operations.

THE PRC GOVERNMENT EXERTS SUBSTANTIAL INFLUENCE OVER THE MANNER IN WHICH WE CONDUCT OUR BUSINESS OPERATIONS. IT MAY INFLUENCE OR INTERVENE IN OUR OPERATIONS AT ANY TIME AS PART OF ITS EFFORTS TO ENFORCE PRC LAW, WHICH COULD RESULT IN A MATERIAL ADVERSE CHANGE IN OUR OPERATIONS AND THE VALUE OF THE SECURITIES WE ARE OFFERING.

A portion of our business is conducted in the PRC, and is governed by PRC laws, rules and regulations. The PRC government exerts substantial influence over the manner in which we conduct our business, and it may intervene in or influence our operations at any time. The PRC government has recently published new policies that substantially affected certain industries. We cannot rule out the possibility that it will in the future release regulations or policies that directly or indirectly affect our industry or require us to seek additional permission to continue our operations, which could result in a material adverse change in our operation in China and/or the value of our securities. Therefore, investors of our company and our business face potential uncertainty from actions taken by the PRC government affecting our business.

The Chinese government has exerted more oversight and control over offerings that are conducted overseas and foreign investment in China-based issuers. Such actions 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 be worthless. For more details, see “— The approval or record filing of the CSRC, CAC, or other PRC government authorities may be required in connection with our future capital raising activities under the PRC laws.”

A RECENT JOINT STATEMENT BY THE SEC AND THE PCAOB, RULE CHANGES BY NASDAQ, AND THE HOLDING FOREIGN COMPANIES ACCOUNTABLE ACT ALL CALL FOR ADDITIONAL AND MORE STRINGENT CRITERIA TO BE APPLIED TO COMPANIES WITH OPERATIONS IN EMERGING MARKETS UPON ASSESSING THE QUALIFICATION OF THEIR AUDITORS, ESPECIALLY THE NON-U.S. AUDITORS WHO ARE NOT INSPECTED BY THE PCAOB. THESE DEVELOPMENTS COULD ADD UNCERTAINTIES TO OUR CONTINUED LISTING OR FUTURE OFFERINGS OF OUR SECURITIES IN THE U.S.

On April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the risks associated with investing in companies based in or having substantial operations in emerging markets including China. The joint statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers in China and higher risks of fraud in emerging markets.

On May 18, 2020, Nasdaq filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating in “Restrictive Market”, (ii) adopt a new requirement relating to the qualification of management or board of directors for Restrictive Market companies, and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the company’s auditors.

On May 20, 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act requiring a foreign company to certify it is not owned or controlled by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the PCAOB is unable to inspect the company’s auditors for three consecutive years, the issuer’s securities are prohibited to trade on a national exchange. On December 2, 2020, the U.S. House of Representatives approved the Holding Foreign Companies Accountable Act. On December 18, 2020, the Holding Foreign Companies Accountable Act was signed into law.

On March 24, 2021, the SEC announced the adoption of interim final amendments to implement the submission and disclosure requirements of the Holding Foreign Companies Accountable Act. In the announcement, the SEC clarified that before any issuer will have to comply with the interim final amendments, the SEC must implement a process for identifying covered issuers. The announcement also stated that the SEC staff was actively assessing how best to implement the other requirements of the Holding Foreign Companies Accountable Act, including the identification process and the trading prohibition requirements.

On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if passed by the U.S. House of Representatives and signed into law, would reduce the number of consecutive non-inspection years required for triggering the prohibitions under the Holding Foreign Companies Accountable Act from three years to two. On December 29, 2022, a legislation entitled “Consolidated Appropriations Act, 2023” (the “Consolidated Appropriations Act”), was signed into law by President Biden. The Consolidated Appropriations Act contained, among other things, an identical provision to HFCAA, which reduces the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two.

On September 22, 2021, the PCAOB adopted a final rule implementing the Holding Foreign Companies Accountable Act, which provides a framework for the PCAOB to use when determining, as contemplated under the Holding Foreign Companies Accountable Act, whether the board of directors of a company is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.

On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the Holding Foreign Companies Accountable Act. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions. The final amendments were effective on January 10, 2022. The SEC began to identify and list Commission-Identified Issuers on its website shortly after registrants began filing their annual reports for 2021.

On December 16, 2021, the PCAOB announced the PCAOB Holding Foreign Companies Accountable Act determinations (the “PCAOB determinations”) relating to the PCAOB’s inability to inspect or investigate completely registered public accounting firms headquartered in China of the PRC or Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in the PRC or Hong Kong.

On August 26, 2022, the PCAOB signed a Statement of Protocol with the CSRC and the Ministry of Finance of the People’s Republic of China governing inspections and investigations of audit firms based in China and Hong Kong.

On December 15, 2022, the PCAOB announced in the 2022 Determination its determination that the PCAOB was able to secure complete access to inspect and investigate accounting firms headquartered in mainland China and Hong Kong, and the PCAOB Board voted to vacate previous determinations to the contrary.

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 firms’ 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.

Our auditor, TAAD LLP, is headquartered in the United States, and, as a PCAOB-registered public accounting firm, it is required to undergo regular inspections by the PCAOB to assess its compliance with the laws of the U.S. and professional standards. TAAD LLP has been subject to PCAOB inspections and is not among the PCAOB-registered public accounting firms headquartered in the PRC or Hong Kong that are subject to the PCAOB’s determination of having been unable to inspect or investigate completely. Notwithstanding the foregoing, if it is later determined that the PCAOB is unable to inspect or investigate our auditor completely, if there is any regulatory change or step taken by PRC regulators that does not permit our auditor to provide audit documentations located in China or Hong Kong to the PCAOB for inspection or investigation, or the PCAOB expands the scope of the Determination so that we are subject to the HFCAA, as the same may be amended, our common stock may be delisted from or prohibited from trading on a national securities exchange, including the Nasdaq, the exchange on which our common stock is currently listed.

The recent developments would add uncertainties to our offering and we cannot predict 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.

THE APPROVAL OR RECORD FILING OF THE CSRC, CAC, OR OTHER PRC GOVERNMENT AUTHORITIES MAY BE REQUIRED IN CONNECTION WITH OUR FUTURE CAPITAL RAISING ACTIVITIES UNDER THE PRC LAWS.

Recent statements by the Chinese government have indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investments in PRC based issuers. The PRC has recently promulgated new rules that require companies collecting or holding large amounts of data to undergo a cybersecurity review prior to listing in foreign countries, a move that will significantly tighten oversight over PRC-based internet giants. The Measures for Cybersecurity Review (2021 version) was promulgated on December 28, 2021 and became effective on February 15, 2022. These measures specify that any “online platform operators” controlling the personal information of more than one million users which seek to list on a foreign stock exchange are subject to prior cybersecurity review.

On November 14, 2021, the Cyberspace Administration of China (the “CAC”) published the Draft Regulations on the Network 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.

The PRC Data Security Law, which was promulgated by the Standing Committee of the National People’s Congress (the “SCNPC”) on June 10, 2021 and took effect on September 1, 2021, requires data collection to be conducted in a legitimate and proper manner, and stipulates that, for the purpose of data protection, data processing activities must be conducted based on data classification and hierarchical protection system for data security.

On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law of the People’s Republic of China, or the Personal Information Protection Law, which integrates the scattered rules with respect to personal information rights and privacy protection and took effect on November 1, 2021.

Our business in China does not involve the collection of user data, implicate cybersecurity, or involve any other type of restricted industry. Based on our understanding of currently applicable PRC laws and regulations, our registered public offering in the U.S. is not subject to the review or prior approval of the CAC. As of the date of this Annual Report, we have not received any notice from any authorities identifying the operating entities as CIIOs or requiring us to go through cybersecurity review or network data security review by the CAC. Uncertainties still exist, however, due to the possibility that laws, regulations, or policies in the PRC could change rapidly in the future. Any future action by the PRC government expanding the categories of industries and companies whose foreign securities offerings are subject to review by the CAC could significantly limit our ability to offer or continue to offer securities to investors and could cause the value of such securities to significantly decline or be worthless.

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, 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.

On February 24, 2023, the CSRC, together with other PRC government authorities, released the Provisions on Strengthening the Confidentiality and Archives Administration Related to the Overseas Securities Offering and Listing by Domestic Enterprises (the “Confidentiality and Archives Administration Provisions”), which come into effect on March 31, 2023. The Confidentiality and Archives Administration Provisions require, among others, that PRC domestic enterprises seeking to offer and list securities in overseas markets, either directly or indirectly, shall establish the confidentiality and archives system, and shall complete approval and filing procedures with competent authorities, if such PRC domestic enterprises or their overseas listing entities provide or publicly disclose documents or materials involving state secrets and work secrets of PRC government agencies to relevant securities companies, securities service institutions, overseas regulatory agencies and other entities and individuals. It further stipulates that providing or publicly disclosing documents and materials which may adversely affect national security or public interests, and accounting files or copies of important preservation value to the state and society shall be subject to corresponding procedures in accordance with relevant laws and regulations. As of the date of this Annual Report, we are not subject to the approval to the competent authorities since we do not possess any documents or materials involving state secrets and work secrets of PRC government agencies.

We have been closely monitoring regulatory developments in the PRC regarding any necessary approvals from the CSRC or other PRC governmental authorities required for overseas listings. However, there remains significant uncertainty as to the enactment, interpretation and implementation of regulatory requirements related to overseas securities offerings and other capital markets activities, which could materially and adversely impact our business and financial outlook and may impact our ability to accept foreign investments, or continue to list on a U.S. or other foreign exchange.

CHINA’S ANTI-MONOPOLY LAW, M&A RULES AND CERTAIN OTHER PRC LAWS AND REGULATIONS ALSO ESTABLISH COMPLEX PROCEDURES FOR ACQUISITIONS CONDUCTED BY FOREIGN INVESTORS THAT COULD MAKE IT MORE DIFFICULT FOR US TO GROW THROUGH ACQUISITIONS IN CHINA.

A number of regulations also established additional procedures and requirements that are expected to make merger and acquisition activities in China by foreign investors more time-consuming and complex. For example, the M&A rules require that the Ministry of Commerce, or the MOFCOM, be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise if (i) any important industry is concerned, (ii) such transaction involves factors that have or may have impact on the national economic security, or (iii) such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark or PRC time-honored brand.

The approval from the MOFCOM shall be obtained in circumstances where overseas companies established or controlled by PRC enterprises or residents acquire affiliated domestic companies. Mergers, acquisitions or contractual arrangements that allow one market player to take control of or to exert decisive impact on another market player must also be notified in advance to the anti-monopoly authority under the State Council when the threshold under the Provisions on Thresholds for Prior Notification of Concentrations of Undertakings, or the Prior Notification Rules, issued by the State Council in August 2008 and amended in September 2018, is triggered. In addition, the Rules of the Ministry of Commerce on Implementation of Security Review System of Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the Security Review Rule issued by the MOFCOM that became effective in September 2011 specify that mergers and acquisitions by foreign investors that raise “national defense and security” concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise “national security” concerns are subject to strict review by the MOFCOM, and the rules prohibit any activities attempting to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement.

Furthermore, on December 19, 2020, the National Development and Reform Commission, or the NDRC, and MOFCOM promulgated the Measures for Security Review of Foreign Investment, or the Foreign Investment Security Review Measures, which took effect on January 18, 2021. Under the Foreign Investment Security Review Measures, investment in certain key areas which results in acquiring the actual control of the assets is required to obtain approval from designated governmental authorities in advance. We may grow our business in part by acquiring other companies operating in our industry. Complying with the requirements of the new regulations to complete such transactions could be time-consuming, and any required approval processes, including approval from the MOFCOM, the State Administration for Industry and Commerce and other governmental authorities, may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share. It is unclear whether our business would be deemed to be in an industry that raises “national defense and security” or “national security” concerns. However, MOFCOM or other government agencies may publish explanations in the future determining that our business is in an industry subject to the security review, in which case our future acquisitions in China may be closely scrutinized or prohibited. Our ability to expand our business or maintain or expand our market share through future acquisitions would as such be materially and adversely affected.

OUR PRC SUBSIDIARIES 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 to satisfy our liquidity requirements. Current PRC regulations permit our PRC Subsidiaries 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 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 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 to distribute dividends or to make payments to us may restrict our ability to satisfy our future liquidity requirements.

In addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by PRC companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC-resident enterprises are incorporated. If we are deemed by the PRC tax authorities as a PRC tax resident enterprise for tax purposes, any dividends we pay to our non-PRC resident shareholders may be regarded as China-sourced income and as a result, may be subject to PRC withholding tax at a rate of up to 10.0%. Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be reduced to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC entity. However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including, without limitation, that (a) the Hong Kong entity must be the beneficial owner of the relevant dividends; and (b) the Hong Kong entity must directly hold no less than 25% share ownership in the PRC entity during the 12 consecutive months preceding its receipt of the dividends. In practice, a Hong Kong entity must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot be certain that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to any dividends to be paid by our subsidiaries in mainland China to our Hong Kong subsidiary, Clean Energy Technologies (H.K.) Limited.

We can give no assurance that we will declare dividends of any amounts, at any rate or at all in the future. The declaration of future dividends, if any, will be at the discretion of our board of directors and will depend upon our future operations and earnings, capital requirements, general financial conditions, legal and contractual restrictions and other factors that our board of directors may deem relevant.

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.

We are a U.S. based company conducting a portion of our operations in China. We may make loans to our PRC subsidiaries 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 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 or with respect to future capital contributions by us to our PRC Subsidiaries. If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds from securities offerings 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.

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 future, which may impact the profitability of our operations in China.

Cybersecurity

As filed, 8,151 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.

Our board of directors and senior management recognize the critical importance of maintaining the trust and confidence of our clients, business partners and employees. Our management, led by our Chief Executive Officer and Chief Financial Officer, are actively involved in oversight of our risk management efforts, and cybersecurity represents an important component of the Company’s overall approach to enterprise risk management (“ERM”). Our cybersecurity processes and practices are fully integrated into the Company’s ERM efforts. In general, we seek to address cybersecurity risks through a cross-functional approach that is focused on preserving the confidentiality, security and availability of the information that we collect and store by identifying, preventing and mitigating cybersecurity threats and effectively responding to cybersecurity incidents when they occur. In addition, we regularly review cybersecurity trends and, partially as a result of our prior cybersecurity exposure, have moved some of our internal servers to off-site locations.

Risk Management and Strategy

As one of the critical elements of our overall ERM approach, our cybersecurity efforts are focused on the following key areas:

Governance: Management oversees cybersecurity risk mitigation and reports to the board of directors any cybersecurity incidents.
Collaborative Approach: We have implemented a cross-functional approach to identifying, preventing and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made by management in a timely manner.
Technical Safeguards: We deploy technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence.

Third parties also play a role in our cybersecurity. We engage third-party service providers to conduct evaluations of our security controls, independent audits or consult on best practices to address new challenges.

While we have experienced cybersecurity threats in the past in the normal course of business and expect to continue to experience such threats from time to time, to date, none have had a material adverse effect on our business, financial condition, results of operations or cash flows. Even with the approach we take to cybersecurity, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us.

WE ARE NOT CURRENTLY IN COMPLIANCE WITH NASDAQ’S LISTING REQUIREMENTS; IF WE ARE NOT ABLE TO REGAIN COMPLIANCE WITH THOSE REQUIREMENTS WITHIN THE TIME PERIODS PERMITTED BY NASDAQ, OUR COMMON STOCK MAY BE DELISTED, WHICH WOULD LIKELY IMPAIR OUR ABILITY TO RAISE CAPITAL AND COULD CONSTITUTE AN EVENT OF DEFAULT UNDER OUR OUTSTANDING PROMISSORY 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 that 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 October 20, 2025, Nasdaq notified the Company that the Company had regained compliance with the Minimum Bid Price Requirement, and the matter was closed.

On April 17, 2026, the Company received a written notice Nasdaq indicating that the Company was not in compliance with Nasdaq Listing Rule 5250(c)(1) because the Company had not yet filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2025. That rule requires listed companies to timely file all required periodic reports with the Securities and Exchange Commission. Under Nasdaq rules, the Company has 60 calendar days from receipt of the notice to submit a plan to regain compliance. If Nasdaq accepts the Company’s plan, then Nasdaq may grant an exception of up to 180 calendar days from the due date of the Form 10-K, or until October 12, 2026, to regain compliance.

On May 26, 2026, the Company received a written notice Nasdaq indicating that the Company was not in compliance with Nasdaq Listing Rule 5250(c)(1) because the Company had not yet filed its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2026. That rule requires listed companies to timely file all required periodic reports with the Securities and Exchange Commission. Under Nasdaq rules, the Company has 60 calendar days from receipt of the notice to submit a plan to regain compliance. If Nasdaq accepts the Company’s plan, then Nasdaq may grant an exception of up to 180 calendar days from the due date of the Form 10-Q, or until November 16, 2026, to regain compliance.

The Company intends to submit a plan to Nasdaq regarding regaining compliance with Nasdaq’s rules. However, there can be no assurance that Nasdaq will accept the Company’s plan to regain compliance or that the Company will be able to regain compliance within any extension period granted by Nasdaq. If Nasdaq does not accept the Company’s plan, then the Company will have the opportunity to appeal that decision to a Nasdaq hearings panel.

If the Company’s common stock ultimately were to be delisted for any reason, 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.

Properties

As filed, 1,897 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.

Our corporate headquarters was located at 2990 Redhill Unit A, Costa Mesa, CA., which ended in November 2023. On March 10, 2016, the Company signed a lease agreement for an 18,200-square foot CTU Industrial Building. Lease term was seven years and two months beginning July 1, 2017. In October of 2018 we signed a sublease agreement with our facility in Italy with an indefinite term that may be terminated by either party with a 60-day notice for 1,000 Euro per month. Due to the short termination clause, we are treating this as a month-to-month lease.

We have relocated our corporate offices to 1340 Reynolds Avenue, Unit 120, Irvine, CA 92614. On December 1, 2023, the Company signed a lease agreement for a 3,000-square foot of office space with Metro Creekside California, LLC. Lease term is thirty-eight months beginning December 1, 2023, and expiring on January 31, 2027. This location is used as CETY’s headquarters and coordination center for all domestic and global business units. On October 16, 2023, we signed a sublease agreement to relocate the HRS operations from Costa Mesa to Irvine, California for one year and 7 months commencing December 1, 2023 and ending June 30, 2025. This location is used for Heat Recovery Solutions design, manufacturing, testing, and support. We also signed a temporary storage lease and due to the short termination clause, we are treating this as a month-to-month lease. The lease payments for the years ending December 31, 2025 and 2024, are:

Year	Lease Payment
2025	$139,979
2024	$173,931

Our lease expense for the years ended December 31, 2025, and 2024 was $216,812 and $250,267 respectively, which also included common area maintenance.

We also operate offices in Chengdu, China, which serve as operational bases for our NG trading business, and a gas storage and pumping station in Chengdu, China, as well.

Legal proceedings

As filed, 460 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.

From time to time, we may be party to litigation matters occurring in the ordinary course of our business. As of the date of this Annual Report, however, there are no material pending legal or governmental proceedings relating to our Company to which we are a party, and to our knowledge there are no material proceedings to which any of our directors, executive officers or affiliates are a party adverse to us or which have a material interest adverse to us.

Management's discussion and analysis

As filed, 50,880 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.

You should read this section together with our consolidated financial statements and related notes thereto included elsewhere in this report.

Restatement of Previously Issued Financial Statements

The following discussion and analysis of our financial condition and results of operations reflects the restatement of our previously issued consolidated financial statements as of and for the year ended December 31, 2024. As described in Note 19 to the consolidated financial statements included in Item 8 of this Annual Report, and as previously disclosed in Amendment No. 3 to our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on June 4, 2026 (the “2024 Form 10-K/A”), we identified historical accounting errors during the preparation of our consolidated financial statements for the year ended December 31, 2025 relating primarily to the classification, valuation, and collectability of long-term financing receivables and contract assets; the timing of revenue recognition and recognition of related interest income; and the accounting for warrant transactions. The Company concluded, in accordance with Staff Accounting Bulletin No. 99 and No. 108, that the errors were material to its previously issued consolidated financial statements for the years ended December 31, 2024 and 2023, and accordingly restated those financial statements. All references in this Management’s Discussion and Analysis to financial information for the year ended December 31, 2024 are to the restated amounts. The Company also amended its Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2025, June 30, 2025, and September 30, 2025 to restate the financial statements included in those Quarterly Reports. This Item 7 should be read in conjunction with the restated consolidated financial statements and related notes included in Item 8, and with Note 19.

Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, adopted pursuant to the Private Securities Litigation Reform Act of 1995. Statements that are not purely historical may be forward-looking. For example, statements in this Annual Report regarding our plans, strategy and focus areas are forward-looking statements. You can identify some forward-looking statements by the use of words such as “believe,” “anticipate,” “expect,” “intend,” “goal,” “plan,” and similar expressions. Forward-looking statements involve inherent risks and uncertainties regarding events, conditions and financial trends that may affect our future plans of operation, business strategy, results of operations and financial position.

A number of important factors could cause actual results to differ materially from those included within or contemplated by such forward-looking statements, including, but not limited to risks relating to pandemics, the ongoing war in Ukraine and the conflict in Israel and their impact on the global economy, trade tariffs and threats of trade tariffs and their impact on localized economies, our history of losses, our dependence on key members of our management and development team, and our ability to generate and/or obtain adequate capital to fund future operations.

For a discussion of these and other factors that could cause actual results to differ from those contemplated in the forward-looking statements, please see the discussion under “Risk Factors” in our other publicly available filings with the Securities and Exchange Commission. Forward-looking statements reflect our analysis only as of the date of this Annual Report on Form 10-K.

Because actual events or results may differ materially from those discussed in or implied by forward-looking statements made by us or on our behalf, you should not place undue reliance on any forward-looking statement. We do not undertake responsibility to update or revise any of these factors or to announce publicly any revision to forward-looking statements, whether as a result of new information, future events or otherwise.

The following discussion and analysis should be read in conjunction with the consolidated financial statements and the notes thereto included in Item 8 of this Annual Report on Form 10-K.

Business Overview

General

Who We Are

We provide turnkey energy solutions leveraging our technologies, including power generation, heat recovery, and waste to energy to deliver green energy solutions, clean energy fuels, and alternative electricity to small and midsize projects in North America, Europe, and ASEAN markets that make environmental and economic sense. Our mission is to be a segment leader in the Zero Emission Revolution by offering eco-friendly energy solutions for a sustainable future. We target sustainable energy solutions that are profitable for us, profitable for our customers and represent the future of global energy production.

Our principal businesses

Engineering, Consulting and Project Management Solutions – we bring a wealth of experience in developing clean energy projects for municipal and industrial customers and Engineering, Project Development companies so they can identify, design, and incorporate clean energy solutions in their projects.

CETY HK

Clean Energy Technologies (H.K.) Limited (“CETY HK”) consists of a ventures in mainland China: (i) our natural gas (“NG”) trading operations sourcing and suppling NG to industries and municipalities. The NG is principally used for heavy truck refueling stations and urban or industrial users. We purchase large quantities of NG from large wholesale NG depots at fixed prices which are prepaid for in advance at a discount to market. We sell the NG to our customers at prevailing daily spot prices for the duration of the contracts.

Business and Segment Information

Segment Information

Our four segments for accounting purposes are:

Clean Energy HRS & CETY Europe – Our Waste Heat Recovery Solutions, converting thermal energy to zero emission electricity.

CETY Renewables Waste to Energy Solutions – Providing Waste to Energy technologies and solutions.

Engineering and Manufacturing Business – Providing customers with comprehensive design, manufacturing, and project management solutions.

CETY HK – The parent company of our NG 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 for the year ended December 31, 2025, compared to the year ended December 31, 2024 (Restated)

Going Concern

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 $6,246,597 and a working capital of $260,863 and an accumulated deficit of $35,299,999 as of December 31, 2025 and used $7,922,347 in net cash from operating activities for the year ended December 31, 2025. Management’s plans to alleviate the conditions raising substantial doubt about the Company’s ability to continue as a going concern include obtaining additional debt and equity financing, including efforts to restructure certain existing debt obligations through capital raising activities in the equity markets. The Company is also pursuing strategic partnerships, joint ventures, and other business opportunities, including collaborations with parties such as Exergy and Metis Power, to support project development, execution, and access to capital. In addition, management continues to pursue project-level financing for development projects, including the Vermont Renewable Gas project and other clean energy initiatives. The Company is also implementing cost-reduction initiatives within its Heat Recovery Solutions business, including utilizing Sagacity as a supply chain partner to improve operating efficiencies and reduce procurement and manufacturing costs. Management continues to focus on generating revenue and cash flow from existing operations, project development activities, and strategic growth opportunities while preserving liquidity and managing operating expenses. While management believes these plans are achievable, there can be no assurance that such plans will be successfully implemented or that the Company will attain profitable operations and positive cash flows.

The company reported a net loss of $6,808,895, for the year ended December 31, 2025, compared to a net loss of $4,550,296 for the same period in 2024 (Restated) before non-controlling interest and tax we achieved during the equivalent period in 2024 (Restated). The increase in net loss was primarily attributable to the write-off of the LWL-related asset in China, as well as substantial interest and financing expenses associated with convertible notes during the period.

RELATED PARTY TRANSACTIONS

See note 12 to the notes to the financial statements for a discussion on related party transaction

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

Net Sales

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

Segment Breakdown

For the fiscal year ended December 31, 2025, the Company reported engineering services revenue of $0. During the year, the Company integrated its engineering services into its Heat Recovery Solutions (HRS) and Waste-to-Energy business segments, compared to 2024 when such services were reported separately as $9,341. Going forward, engineering services will be recognized within each respective operating segment and reported accordingly.

For the year ended December 31, 2025, our revenue from HRS was $503,878 compared to $158,141 for the same period in 2024. The increase in revenue for Heat Recovery Solutions (HRS) and ORC systems in 2025 compared to 2024 was primarily due to higher project activity, including the advancement and execution of customer projects, as well as improved timing of revenue recognition on engineering and system delivery milestones.

For the fiscal year ending December 31, 2025, our revenue from CETY Renewables, our newly launched waste-to-energy business, amounted to $484,955 compared to $1,064,757 for the same period in 2024. The decrease in revenue from CETY Renewables in 2025 compared to 2024 was primarily attributable to the timing of project execution and revenue recognition, including a longer-than-anticipated review process by the Public Utility Commission (PUC) for the VRG project, which delayed the advancement of certain project milestones. The Company continues to make progress on its development pipeline and expects activity to increase as projects move forward.

For the fiscal year ending December 31, 2025, our revenue from the NG business reached $1,172,793, compared to $1,192,420 in the corresponding period of 2024. The variance reflects relatively consistent performance year over year.

Gross Profit

For the year ending December 31, 2025, our gross profit increased to $595,568 compared to $846,555 for the same period in 2024. The increase was primarily driven by the sale of systems with higher margins, as well as improved cost efficiencies.

Segment Breakdown

For the year ended December 31, 2025, our gross profit from Engineering and Manufacturing amounted to $0, compared to $7,806 for the same period in 2024. 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 notably as CETY shifts its focus towards providing comprehensive end-to-end power generation and integrated solutions.

For the year ended December 31, 2025, our gross profit from HRS was $386,069 compared to $15,160 for the same period in 2024; The increase was primarily driven by higher revenue volumes and improved margins on system sales, reflecting a more favorable project mix and execution during the year.

For the year ended December 31, 2025, our gross profit from CETY Renewables decreased to $157,405, compared to $829,784 for the same period in 2024. Gross profit in both periods reflects work performed during the engineering and development phase of projects, which typically carries higher margins relative to later-stage execution activities.

For the year ended December 31, 2025, our gross profit from CETY HK improved to $52,094, compared to $(6,195) for the same period in 2024. The improvement was primarily attributable to more stable operations and improved margins within the natural gas trading business in China.

Selling, General and Administrative (SG&A) Expenses

For the year ending December 31, 2025, our Selling, General, and Administrative (SG&A) expenses decreased to $3,096,780, compared to $4,176,986 in 2024 (Restated). The decrease was primarily driven by reductions in salaries and general and administrative expenses.

General & Administrative expense

For the fiscal year ended December 31, 2025, our total General and administrative expense decreased to $553,522, compared to $1,015,102 in 2024 (Restated).

Salary Expense

For the fiscal year ended December 31, 2025, our total salaries decreased to $1,399,073, compared to $1,906,701 in 2024, primarily reflecting reductions in headcount and personnel-related costs.

Travel Expense

For the year ending December 31, 2025, our travel expenses totaled $198,122, compared to $185,876 for the same period in 2024. The increase was not significant and reflects normal variations in business activity.

Facility Lease Expense

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

Consulting Expense

For the fiscal year ending December 31, 2025, our total expenses for Investor Relations (IR), marketing, and contractors related to the VRG project were $10,597, compared to $195,640 for the same period in 2024. The decrease was primarily due to reduced activity and spending associated with the VRG project during the period.

Depreciation and Amortization Expense

For the year ended December 31, 2025, our depreciation and amortization expense was $11,876 compared to $8,907 for the same period in 2024.

Professional fees legal and accounting

For the fiscal year ending December 31, 2025, our Professional Fees expense amounted to $706,778, up from $578,937 in the same period of 2024. For the fiscal year ended December 31, 2025, The increase was primarily attributable to higher legal and advisory costs related to the Company’s S-3 registration and increased expenses associated with being a Nasdaq-listed company.

Net (Loss) from operations

For the fiscal year ending December 31, 2025, our net loss from operations totaled $2,501,212, a decrease compared to the net loss of $3,330,431 for the same period in 2024 (Restated). The decrease in net loss reflects improved operating performance during the period.

Other income/expense

For the year ended December 31, 2025, the Company recorded a loss of $179,983, compared to a gain of $12,583 for the same period in 2024. The decrease was primarily driven by the discount recognized on the modified Heze loan receivable and the recognition of a CECL allowance based on amortized cost.

Change in Derivative Liability

For the year ended December 31, 2025, the Company recorded a gain of $370,707 from changes in derivative liabilities, compared to no such gain or loss in 2024.

Change in FV of warrant liability

For the years ended December 31, 2025 and 2024 (Restated), we had $57,674 and $26,596 gain on warrant liability related to Equity Line of Credit Agreement entered December 5, 2024.

Investment from Shuya

For the year ended December 31, 2025, we recorded a gain of $318,426 from investment from Shuya compared to $125,148 in losses in year ended in December 31, 2024. This gain is because of the disposition of the Shuya assets.

Gain on debt settlement and write off

For the year ended December 31, 2025, we recorded a loss of 1,573,939 compared to a gain of $8,135 for the same period in 2024. The loss in 2025 was primarily attributable to the write-off related to the LWL investment in China.

Interest and Finance Fees

For the year ended December 31, 2025, interest and finance fees totaled $3,300,520, compared to $1,142,031 for the year ended December 31, 2024 (Restated), representing an increase of $2,158,489, or 189%.

The increase was primarily attributable to higher financing costs associated with the Company’s convertible notes and bridge financing activities, including increased interest expense, amortization of original issue discounts (“OID”), amortization of debt discounts associated with derivative liabilities, and other financing-related charges recognized during 2025. In addition, the Company incurred higher costs related to the issuance, modification, and settlement of financing instruments compared to the prior year.

Management believes the increase reflects the Company’s greater reliance on short-term and convertible financing arrangements to fund operations, project development activities, and working capital requirements during 2025.

Liquidity and Capital Resources

Cash Flow Summary

For the years ended December 31, 2025

	2025	2024
Net Cash used in operating activities	$(7,922,347)	$(3,560,951)
Cash flows used in investing activities	245,748	161,240
Cash flows provided by financing activities	8,215,547	3,373,903
Net decrease in cash and cash equivalents	$540,360	$(27,525)

Capital Requirements for long-term obligations

The following table presents the Company’s material contractual obligations as of December 31, 2025:

Contractual Obligations	Total	Less than 1 year	1–3 years
Operating lease obligations	$337,573	$154,805	$182,768
	$337,573	$154,805	$182,768

Critical Accounting Policies

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

Revenue Recognition

The Company recognizes revenue under ASU No. 2014-09, “*Revenue from Contracts with Customers (Topic 606),” (“*ASC 606”).

Performance Obligations Satisfied Over Time

FASB ASC 606-10-25-27 through 25-29, 25-36 through 25-37, 55-5 through 55-10

An entity transfers control of a good or service over time and satisfies a performance obligation and recognizes revenue over time if one of the following criteria is met:

a. The customer receives and consumes the benefits provided by the entity’s performance as the entity performs (as described in FASB ASC 606-10-55-5 through 55-6).

b. The entity’s performance creates or enhances an asset (for example, work in process) that the customer controls as the asset is created or enhanced (as described in FASB ASC 606-10-55-7).

c. The entity’s performance does not create an asset with an alternative use to the entity (see FASB ASC 606-10-25-28), and the entity has an enforceable right to payment for performance completed to date (as described in FASB ASC 606-10-25-29).

Performance Obligations Satisfied at a Point in Time

FASB ASC 606-10-25-30

If a performance obligation is not satisfied over time, the performance obligation is satisfied at a point in time. To determine the point in time at which a customer obtains control of a promised asset and the entity satisfies a performance obligation, the entity should consider the guidance on control in FASB ASC 606-10-25-23 through 25-26. In addition, it should consider indicators of the transfer of control, which include, but are not limited to, the following:

a. The entity has a present right to payment for the asset

b. The customer has legal title to the asset

c. The entity has transferred physical possession of the asset

d. The customer has the significant risks and rewards of ownership of the asset

e. The customer has accepted the asset

The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods and services transferred to the customer. In addition a) the company also does not have an alternative use for the asset if the customer were to cancel the contract, and b) has a fully enforceable right to receive payment for work performed (i.e., customers are required to pay as various milestones and/or timeframes are met)

The following five steps are applied to achieve that core principle for our HRS and CETY Europe Divisions:

Identify the contract with the customer
Identify the performance obligations in the contract
Determine the transaction price
Allocate the transaction price to the performance obligations in the contract
Recognize revenue when the company satisfies a performance obligation

The following steps are applied to our legacy engineering and manufacturing division:

We generate a quotation
We receive Purchase orders from our customers.
We build the product to their specification
We invoice at the time of shipment
The terms are typically Net 30 days

The following step is applied to our CETY HK business unit:

CETY HK is primarily responsible for fulfilling the contract / promise to provide the specified good or service.

A principal obtains control over any one of the following (ASC 606-10-55-37A):

a. A good or another asset from the other party which the entity then transfers to the customer. Note that momentary control before transfer to the customer may not qualify.

b. A right to a service to be performed by the other party, which gives the entity the ability to direct that party to provide the service to the customer on the entity’s behalf.

c. A good or service from the other party that it then combines with other goods or services in providing the specified good or service to the customer.

If the entity obtains control over one of the above before the good or service is transferred to a customer, the entity could be considered a principal.

During the project development and engineering phase of our CETY Renewable projects such as VRG, we employ the input method of revenue recognition to estimate revenue based on projected costs. This approach involves forecasting future costs and revenues to determine the amount of revenue we recognize in the current period. It’s important to understand, however, that these recognized revenue figures are not final and are subject to adjustments. Changes may occur as we gain more clarity on actual costs compared to our initial projections, affecting the revenue recognized accordingly.

For the VRG project, management considered the contractual arrangements, commercial substance of the transaction, probability of collection, expected project financing sources, and anticipated economic benefits associated with the project when determining the appropriateness of revenue recognition under ASC 606. Although VRG is an equity-method investee of the Company and project financing has experienced delays, management concluded that the project remained commercially viable and that the applicable criteria for revenue recognition over time were satisfied. Management continues to evaluate these assumptions and will adjust its estimates as facts and circumstances evolve.

Management evaluated the criteria under ASC 606, including commercial substance and collectability, throughout the term of the EPC Agreement. Although VRG is a related-party entity in which the Company holds a 49% ownership interest, VRG is a separate legal entity with independent contractual obligations under the EPC Agreement. The contract was entered into for the development, design, permitting, construction, and delivery of the VRG-Lyndon facility and management concluded that the arrangement has commercial substance. Although VRG is a related-party customer, management evaluated the material terms of the EPC Agreement, including the scope of work, contract price, payment provisions, project deliverables, and enforceable rights and obligations. Based on this evaluation, management concluded that the agreement has commercial substance and was entered into for a substantive business purpose related to the development, design, permitting, construction, and delivery of the VRG-Lyndon facility. Revenue is recognized over time using a cost-to-cost input method based on costs incurred relative to total estimated project costs. As of December 31, 2025, the project continued to advance through the Vermont Section 248 permitting process and management continued to pursue multiple financing sources for the project. Although one potential financing source subsequently failed to fund as expected, management determined that the project was not dependent on a single financing source and concluded that collection of substantially all consideration under the contract remained probable. No amounts due under the EPC Agreement were considered past due as of December 31, 2025.

CETY Renewables currently has $2,431,485 of accounts receivable from Vermont Renewable Gas.

The projected costs of the VRG project are based on estimates and profitability will be impacted depending on actual costs. Using the input method for revenue recognition, the amount of recorded revenue is also affected depending on the estimated total costs. The purchase price allocation for Shuya was also based on estimates and comparable data selected by the Company. The inputs for the valuation of the Series E preferred shares were also based on estimates and comparable data selected by the Company.

Additionally, the following five steps are applied to achieve the core principle for our CETY Renewables Division:

Because the CETY Renewables Division is presently engaged in the Engineering, Procurement, and Construction (EPC) of biomass power facilities, CETY Renewables has developed a process of executing EPC Agreements with customers for this work. In contracting these engagements, CETY Renewables recognizes revenue according to accounting standards in accordance with ASC 606.

In recognizing this revenue, CETY Renewables first identifies the relevant contract with its customer according to 606-10-25-1.

The entities, together known as the Parties, approved the contract in writing, through signatures and commitment to the performance of permitting, design, procurement, construction, and commissioning.
CETY’s work product includes permits, engineering designs, equipment, and full balance of plant specific to permitting, design, procurement, construction, and commissioning.
CETY and customer agree to a total EPC Contract price.
The EPC Agreement has commercial substance because it establishes enforceable rights and obligations between the parties for the permitting, design, procurement, construction, commissioning, and delivery of a biomass power generation facility. The agreement provides for a defined contract price, milestone-based billing provisions, and the transfer of goods and services that are expected to result in future economic benefits to the customer.
In assessing collectability under ASC 606-10-25-1(e), management considers the customer’s ability and intent to satisfy its payment obligations. For the VRG EPC Agreement, management considered the continued advancement of the project through the Vermont Section 248 permitting process, the existence of a long-term power purchase framework, selection of the project for Quantified Ventures’ GGRF pipeline, ongoing discussions with multiple potential financing sources, including infrastructure and climate-focused investors, and the availability of grant funding opportunities, including investment tax credits, Wood Innovation Grant Award, and USDA grant agreement. Although one potential financing source subsequently failed to fund as expected, management determined that the project was not dependent upon a single financing source and concluded that collection of substantially all consideration under the contract remained probable as of the reporting date.

Secondly, CETY identifies the performance obligations of the Parties in performance of the EPC Agreement in accordance with 606-10-25-14. At contract inception, CETY assesses the goods and services necessary to deliver the facility in accordance with the agreement with its clients. The agreement specifically laid out all deliverables necessary to achieve the permitting, design, procurement, construction, and commissioning.

CETY also looks at 606-10-25-14(A). A bundle of goods or services is also present, in that CETY is delivering all work products associated with permitting, design, procurement, construction and commissioning of a commercially operable biomass power plant. A biomass power plant is a distinct bundle of goods or services, so the individual goods or services on their own do not lend themselves to a fully integrated or functional system.

CETY in accordance with 606-10-32-1, reviews measurement of the performance obligations. There is no exclusion of any amount of the Contract Price due to constraints associated with 606-10-31-11 through 606-10-32-13.

In review of 606-10-32-2A, CETY did not exclude from the measurement of the transaction price any taxes assessed by a government authority as no such taxes will be due.

In reviewing 606-10-32-3, CETY evaluated the nature, timing, and amount of consideration promised, and whether it impacts the estimate of the transaction price.

Finally, in identifying a single method of measuring progress for each performance obligation satisfied over time, in accordance with 606-10-25-32, CETY applies the methodology of 606-10-25-36. CETY adopted and implemented the input method for revenue recognition in accordance with ASC 606-10-25-33. CETY recognizes revenue for performance obligations on the basis of the entity’s efforts or inputs to the satisfaction of a performance obligation per 606-10-55-20.

For CETY, the contracts with clients for the construction of biomass power plants are the basis for revenue recognition. In each separate EPC Agreement, the performance obligations include permitting, design, procurement, construction, and commissioning of the plant. All of these work products satisfy Section 606-10-25-27(b) as these work products create or enhance an asset under customer’s control. Upon delivery of the work product, the customer takes control of the work products and has full right and ability to direct the use of and obtain substantially all of the remaining benefits of the assets. We recognize revenue over time, using timeline and milestone methods to measure progress towards complete satisfaction of the performance obligation.

During the complexity and duration of the biomass power plant construction projects, CETY will recognize revenue over time, consistent with the criteria for over-time recognition under ASC 606. This approach reflects the continuous transfer of documents, permits, and the equipment over to the customer, which is characteristic of long-term construction contracts.

We have a list of appropriate measures of progress: This is based on milestones achieved, among other measures.

Given the long-term nature of the projects, CETY regularly reviews and, if necessary, updates its estimates of progress towards completion, transaction price, and the allocation of the transaction price to performance obligations.

Also, from time-to-time, our contracts state that the customer is not obligated to pay a final payment until the units are commissioned, i.e. a final payment of 10%. As of December 31, 2025 and 2024 we had $33,000 and $33,000 of deferred revenue.

Also, from time-to-time, we require upfront deposits from our customers based on the contract. As of December 31, 2025 and 2024 (Restated), we had outstanding customer deposits of $759,611 and $172,061, respectively.

Change from fair value or equity method to consolidation

In July 2022, JHJ and other three shareholders agreed to form and make total capital contribution of RMB 20 million ($2.81 million) with latest contribution due date in February 2066 into Sichuan Hongzuo Shuya Energy Limited (“Shuya”), JHJ owns 20% of Shuya. In August 2022, JHJ purchased 100% ownership of Sichuan Shunengwei Energy Technology Limited (“SSET”) for $0, which owns 29% of Shuya; Shunengwei is a holding company and did not have any operations nor make any capital contribution into Shuya as of the ownership purchase date by JHJ; right after the ownership purchase of SSET by JHJ, JHJ ultimately owns 49% of Shuya.

Shuya was set up as the operating entity for pipeline natural gas (PNG) and compressed natural gas (CNG) trading business, while the other two shareholders of Shuya have large supply relationships.

For the year ended December 31, 2022, the Company has determined that Shuya was not a VIE and has evaluated its consolidation analysis under the voting interest model. Because the Company does not own greater than 50% of the outstanding voting shares, either directly or indirectly, it has accounted for its investment in Shuya under the equity method of accounting. Under this method, the investor (“JHJ”) recognizes its share of the profits and losses of the investee (“Shuya”) in the periods when these profits and losses are also reflected in the accounts of the investee. Any profit or loss recognized by the investing entity appears in its income statement. Also, any recognized profit increases the investment recorded by the investing entity, while a recognized loss decreases the investment.

JHJ made an investment of RMB 3.91 million ($0.55 million) into Shuya during the 12 months ended December 31, 2022, recorded in accordance with ASC 323. Shuya had a net loss of approximately $10,750 during the year ending December 31, 2022, of which approximately $5,000 was allocated to the Company, reducing the investment by that amount.

However, effective January 1, 2023, JHJ, SSET and Chengdu Xiangyueheng Enterprise Management Co., Ltd (“Xiangyueheng), who is the 10% shareholder of Shuya, entered a Three-Parties Consistent Action Agreement, wherein these three shareholders (or three parties) guaranteed that the voting rights will be expressed in the same way at the shareholders’ meeting of Shuya to consolidate the controlling position of the three parties in Shuya. The three parties agreed that within the validity period of this agreement, before the party intends to propose the motions to the shareholders or the board of directors on the major matters related to the voting rights of the shareholders or the board of directors, the three parties internally will discuss, negotiate and coordinate the motion topics for consistency; in the event of disagreement, the opinions of JHJ shall prevail.

As a result of Consistent Action Agreement, the Company re-analyzed and determined that Shuya is the variable interest entity (“VIE”) of JHJ because 1) the equity investors at risk, as a group, lack the characteristics of a controlling financial interest, and 2) Shuya is structured with disproportionate voting rights, and substantially all of the activities are conducted on behalf of an investor with disproportionately few voting rights. Under ASC 810, a reporting entity has a controlling financial interest in a VIE, and must consolidate that VIE, if the reporting entity has both of the following characteristics: (a) the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance; and (b) the obligation to absorb losses, or the right to receive benefits, that could potentially be significant to the VIE. The Company concluded JHJ is deemed the primary beneficiary of the VIE. Accordingly, the Company consolidates Shuya effective on January 1, 2023.

The change of control interest was accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification, referred to as ASC, 805, Business Combinations. The management determined that the Company was the acquiror for financial accounting purposes. In identifying the Company as the accounting acquiror, the companies considered the structure of the transaction and other actions contemplated by the Three-Parties Consistent Action Agreement, relative outstanding share ownership and market values, the composition of the combined company’s board of directors, the relative size of Shuya, and the designation of certain senior management positions of the combined company.

In accordance with ASC 805, the Company recorded the acquisition based on the fair value of the consideration transferred and then allocated the purchase price to the identifiable assets acquired and liabilities assumed based on their respective fair values as of the Acquisition Date. The excess of the value of consideration transferred over the aggregate fair value of those net assets was recorded as goodwill. Any identified definite lived intangible assets will be amortized over their estimated useful lives and any identified intangible assets with indefinite useful lives and goodwill will not be amortized but will be tested for impairment at least annually. All intangible assets and goodwill will be tested for impairment when certain indicators are present. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenues and cash flows, discount rates, and selection of comparable companies. The valuation of purchase considerations was based on preliminary estimates that management believes are reasonable under the circumstances.

As the Consistent Action Agreement did not quantify any considerations to gain the control, the deemed consideration paid is the fair value of 51% non-controlling interest as of January 1, 2023. The following table summarizes the fair value of the consideration paid and the fair value of assets acquired, and liabilities assumed on January 1, 2023, the acquisition date.


Fair value of non-controlling interests	$650,951
Fair value of previously held equity investment	556,096
Subtotal	$1,207,047
Recognized value of 100% of identifiable net assets	(1,207,047)
Goodwill Recognized	$-
Recognized amounts of identifiable assets acquired and liabilities assumed (preliminary):
Inventories	$516,131
Cash and cash equivalents	50,346
Trade and other receivables	952,384
Advanced deposit	672,597
Net fixed assets	6,704
Trade and other payables	(1,021,897)
Advanced payments	(5,317)
Salaries and wages payables	(4,692)
Other receivable	40,791
Total identifiable net assets	$1,207,047

Under ASC-805-10-50-2, initial consolidation of an investee previously reported using fair value or the equity method should be accounted for prospectively as of the date the entity obtained a controlling financial interest. Therefore, the Company should provide pro forma information as if the consolidation had occurred as of the beginning of each of the current and prior comparative reporting period.

On January 1, 2024, and effective on the same date, JHJ, SSET and Xiangyueheng entered into the Agreement on the Termination of the Concerted Action Agreement (the “Termination Agreement”), pursuant to which the parties released each other from any and all obligations under the CAA. Due to the Termination Agreement, the Company now holds less than 50% of the voting rights in Shuya. The Company analyzed whether Shuya should be consolidated under ASC 810 and determined Shuya is no longer required to be consolidated on January 1, 2024 after the execution of the Termination Agreement. Accordingly, the Company will not consolidate Shuya into its consolidated financial statements on or after January 1, 2024.

During the year ended December 31, 2025, the Company completed the disposal of its investment in Shuya through a series of equity transfer transactions, as evidenced by executed equity transfer agreements and shareholder resolutions. Pursuant to these transactions, the Company transferred its ownership interest in Shuya and no longer retains any equity interest, control, or significant influence over the entity. Accordingly, the Company determined that Shuya no longer meets the criteria for recognition under the equity method or fair value method.

As a result, the Company derecognized its investment in Shuya and recognized the resulting gain or loss on disposal in the consolidated statements of operations in accordance with U.S. GAAP.

Series E Valuation

Additionally, the inputs for the valuation of the Series E preferred shares were also based on estimates and comparable data selected by the Company and fair value measurements, furthermore, the purchase price allocation was based on estimates of fair market values.

Future Financing

We will continue to rely on equity sales of our common shares to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund planned acquisitions and exploration activities.

Off-balance Sheet Arrangement

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by us as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our consolidated financial position or results of operations upon adoption.

During 2025, the Company entered into a consulting and business development arrangement with Linkage, pursuant to which approximately HKD 30 million (approximately US$3.2 million) was advanced under the agreement. Linkage also participated as an investor in the Company’s May 2025 private placement financing.

Management evaluated the substance of the arrangement and determined that the amounts advanced should be recorded as a refundable deposit and other receivable rather than as a current period expense, based on the contractual terms of the agreement and the Company’s expectation of recovery. Management periodically assesses the recoverability of the receivable by considering the financial condition of the counterparty, contractual rights, subsequent events, and other available evidence. Based on management’s evaluation as of December 31, 2025, the Company believes the recorded balance is recoverable.

Market risk

As filed, 163 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Controls and procedures

As filed, 4,028 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.

Evaluation of Disclosure Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports pursuant to the Securities Exchange Act, of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms, and that such information is accumulated and communicated to us, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rules 13a-15(b) of the Exchange Act, an evaluation as of December 31, 2025 was conducted under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective as of December 31, 2025.

(b) Report of Management on Internal Control over Financial Reporting

We are responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act. Under the supervision and with the participation of our management including our of our chief executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the 2013 framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO.

Based on our evaluation under the 2013 Internal Control—Integrated Framework, our Chief Executive Officer and Chief Financial Officer concluded that our internal control over financial reporting was not effective as of December 31, 2025. The material weaknesses identified by management included:

Deficiencies in controls over financial reporting that resulted in the restatement of previously issued financial statements.
Deficiencies in controls over revenue recognition and the application of ASC 606.
Deficiencies in controls over the accounting for complex financial instruments.
Deficiencies in controls over the valuation and collectability of certain receivables and other assets.
Deficiencies in controls over the financial statement close and review process.

During 2025 and in connection with the restatement process, management performed additional reviews and analyses related to revenue recognition, receivables, complex financial instruments, and financial statement preparation. Management also engaged external accounting advisors to assist in evaluating the appropriate accounting treatment for certain transactions and in strengthening the financial reporting process. Management continues to evaluate and implement additional remediation measures designed to address the material weaknesses described above. Consistent with the auditor’s letter, management is in the process of evaluating and implementing changes in internal control to address these matters.

(c) Changes in Internal Control over Financial Reporting

During the preparation of the restated financial statements, management performed additional reviews and analyses related to revenue recognition, accounts receivable, warrant accounting, and certain historical accounting matters. Management also worked with external accounting advisors and the Company’s independent registered public accounting firm to evaluate the appropriate accounting treatment for these matters. While these activities enhanced management’s review process, they did not constitute a material change in the Company’s internal control over financial reporting during the period.

Figures reported in this filing

Standardized line items from the XBRL in this filing, for the period ended 2025-12-31. Comparative periods it repeats are left out.

Figures reported in this filing
Line item	Period	Value	XBRL concept
Revenue	12 months2025-01-01 to 2025-12-31	$2.2m	us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax
Cost of revenue	12 months2025-01-01 to 2025-12-31	$1.6m	us-gaap:CostOfGoodsAndServicesSold
Gross profit	12 months2025-01-01 to 2025-12-31	$595.6k	us-gaap:GrossProfit
Research and development	12 months2025-01-01 to 2025-12-31	$0	us-gaap:ResearchAndDevelopmentExpense
Operating income	12 months2025-01-01 to 2025-12-31	−$2.6m	us-gaap:OperatingIncomeLoss
Net income	12 months2025-01-01 to 2025-12-31	−$6.8m	us-gaap:NetIncomeLoss
Diluted EPS	12 months2025-01-01 to 2025-12-31	−$1.55	us-gaap:EarningsPerShareDiluted
Basic EPS	12 months2025-01-01 to 2025-12-31	−$1.55	us-gaap:EarningsPerShareBasic
Diluted shares (weighted)	12 months2025-01-01 to 2025-12-31	4,386,446 shares	us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding
Operating cash flow	12 months2025-01-01 to 2025-12-31	−$7.9m	us-gaap:NetCashProvidedByUsedInOperatingActivities
Capital expenditure	12 months2025-01-01 to 2025-12-31	$12.7k	us-gaap:PaymentsToAcquirePropertyPlantAndEquipment
Cash and equivalents	At period end2025-12-31	$602.5k	us-gaap:CashAndCashEquivalentsAtCarryingValue
Current assets	At period end2025-12-31	$6.3m	us-gaap:AssetsCurrent
Total assets	At period end2025-12-31	$12.4m	us-gaap:Assets
Current liabilities	At period end2025-12-31	$6.0m	us-gaap:LiabilitiesCurrent
Total liabilities	At period end2025-12-31	$6.2m	us-gaap:Liabilities
Shareholders' equity	At period end2025-12-31	$6.2m	us-gaap:StockholdersEquity

Source: SEC EDGAR, the filing index for accession 0001493152-26-027409. Last ingested by Listed: Oct 24, 2026, 15:11 ET. Listed shows no prices and gives no investment advice.

Business

General

Who We Are

Our principal businesses

CETY HK

Our Business Strategy

Our strategy focuses on three main elements:

Business and Segment Information

Segment Information

Our Clean Energy Solutions Business

Waste Heat Recovery Solutions

Waste to Energy Solutions

Waste to Energy Solutions can be used:

Waste to Energy Solutions have many benefits:

Traditional Incineration Methods Have Significant Downsides:

Our Clean Energy Initiatives in China

CETY HK

NG Trading Operations

Engineering, Consulting and Project Management Services

The Market for Our Products

Waste Heat Recovery

LNG Trading and Joint Venture

Sales and Marketing

Suppliers

Competition

Company Information

Patents

Intellectual Property

Facilities

Employees

Government Regulation

Research and Development

WHERE YOU CAN GET ADDITIONAL INFORMATION

Risk factors

RISKS RELATED TO OUR BUSINESS

WE MAY LOSE OUT TO LARGER AND BETTER-ESTABLISHED COMPETITORS.

OUR PRODUCTS MAY BE DISPLACED BY NEWER TECHNOLOGY.

OUR OPERATING MARGINS MAY DECLINE AS A RESULT OF INCREASING PRODUCT COSTS.

WE MAY NOT HAVE SUFFICENT FUNDS TO CONDUCT OUR TRADING OPERATIONS IN THE PRC.

RISKS RELATED TO DOING BUSINESS IN CHINA

Cybersecurity

Risk Management and Strategy

Properties

Legal proceedings

Management's discussion and analysis

Restatement of Previously Issued Financial Statements

Forward-Looking Statements

Company Information

Business Overview

General

Who We Are

Our principal businesses

CETY HK

Business and Segment Information

Segment Information

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

Going Concern

RELATED PARTY TRANSACTIONS

See note 12 to the notes to the financial statements for a discussion on related party transaction

Net Sales

Segment Breakdown

Gross Profit

Segment Breakdown

Selling, General and Administrative (SG&A) Expenses

General & Administrative expense

Salary Expense

Travel Expense

Facility Lease Expense

Consulting Expense

Depreciation and Amortization Expense

Professional fees legal and accounting

Net (Loss) from operations

Other income/expense

Change in Derivative Liability

Change in FV of warrant liability

Investment from Shuya

Gain on debt settlement and write off

Interest and Finance Fees

Liquidity and Capital Resources

Capital Requirements for long-term obligations