Clean Energy Technologies, Inc. (CETY) · Oct 20, 2026 · New debt

CETY convertible note adds $500K but raises dilution risk

$500K convertible note — $500,000 principal; 85% of lowest traded price

Clean Energy Technologies secured a $500,000 convertible note, gaining near-term cash while accepting discounted conversion terms and investor protections.

Clean Energy Technologies is trying to move from a low-margin natural-gas revenue base toward higher-margin heat-recovery, waste-to-energy, and engineering projects, but its June 2026 filing showed a $1.7 million first-half loss, $1.66 million of operating cash burn, substantial doubt about going concern, and no waste-to-energy revenue yet. The financing buys time, not proof of a business inflection. CETY received $500,000 in cash that can be used for business development and paying service-provider obligations. 〔0〕 〔1〕 Against a backdrop of negative operating cash flow and dependence on outside capital, that is meaningful liquidity, but it is bridge financing rather than operating funding generated by the business.

The cost of that liquidity is unusually shareholder-unfriendly. The note carries 8% interest and can convert after six months at 85% of the lowest trading price over the prior ten trading days, meaning the conversion price floats down with the stock and includes a 15% discount. 〔2〕 The holder can also deduct $1,750 from each conversion, while the company acknowledges the note’s potentially dilutive effect.

The headline dilution is capped initially, but the cap is large relative to CETY’s current share base. CETY reported 12,166,106 shares outstanding as of September 30, 2026, while the note permits up to 2,432,004 shares before shareholder approval—roughly 20% of that stated base—and requires reserving at least that amount or twice the calculated full-conversion amount. The cap limits immediate issuance, not the underlying conversion economics; shareholder approval is required by December 31, 2026 for issuance beyond it. 〔3〕 〔4〕

The investor receives strong downside protections if CETY stumbles. A missed payment or covenant breach can trigger repayment at 150% of principal plus accrued interest, while failure to deliver conversion shares can create a 2% daily cash charge. The agreement also restricts asset sales, debt repayments, stock repurchases, dividends, and some future financings while the note remains outstanding. This improves Falcon’s protection but makes CETY’s already constrained financial flexibility tighter.

Bottom line: CETY has secured near-term cash for a capital-starved business, but the funding does not advance its clean-energy projects directly and comes with floating-price conversion, sizable potential dilution, and punitive default protections. It stabilizes liquidity in the short run while making the shareholder and financing overhang more complicated through 2027.

What to watch next

Shareholder approval deadline, December 31, 2026

Original filing on SEC EDGAR

More Clean Energy Technologies, Inc. news

CETY convertible note adds $500K but raises dilution risk | CETY Stock News
AllSight

Breaking down Wall Street's
information edge.

A buy-side analyst on every ticker — it reads every public company's filing the instant it drops and decodes it into plain English.

—
8-K events this week
—
filings analyzed in total
live · updated 30s ago
Live events · whole market · · --:--:-- ET
AllSight read
Straight from the 8-K
Verbatim from the filing AllSight decoded — highlighted above. Open on SEC EDGAR ↗
Limited-time offerFree 14-day Pro trial
AllSight

Sign in to AllSight

  • Follow any company — we email you the moment it files, free!
  • Your watchlist saved to your account, on every device — free!

by Signing in NOW, claim your FREE 14-day Pro trial!

No password. We email you a 6-digit code. By continuing you agree to our Terms & Privacy.
AllSight · Live plain-English 8-K decodes across the whole US market · Not investment advice.