| BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE
2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A
summary of significant accounting policies of Clean Energy Technologies, Inc. (formerly Probe Manufacturing, Inc.) is presented to assist
in the understanding of the Company’s financial statements. The financial statements and notes are representations of the Company’s
management, who is responsible for their integrity and objectivity. The
consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in
the United States of America (“US GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All material
intercompany balances and transactions have been eliminated in consolidation. Estimates The
preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Such
estimates may be materially different from actual financial results. Significant estimates include the recoverability of long-lived assets,
the collection of accounts receivable and valuation of inventory and reserves. Cash
and Cash Equivalents We
maintain most of our cash accounts at a commercial bank. The total cash balance is insured by the Federal Deposit Insurance Corporation
(“FDIC”) up to $ 250,000 Accounts
Receivable Our
ability to collect receivables is affected by economic fluctuations in the geographic areas and industries served by us. Reserves for
uncollectable amounts are provided, based on past experience and a specific analysis of the accounts. Although we expect to collect amounts
due, actual collections may differ from the estimated amounts. As of December 31, 2023, and December 31, 2022, we had a reserve for potentially
un-collectable accounts receivable of $ 95,000 95,000 247,500 247,500 Seven
(7) customers accounted for approximately 98 98 Inventory Inventories
are valued at the lower of weighted average cost or market value. Our industry experiences changes in technology, changes in market value
and availability of raw materials, as well as changing customer demand. We make provisions for estimated excess and obsolete inventories
based on regular audits and cycle counts of our on-hand inventory levels and forecasted customer demands and at times additional provisions
are made. Any inventory write offs are charged to the reserve account. As of December 31, 2023 we had a reserve of $934,344 $897,808 Property
and Equipment Property
and equipment are recorded at cost. Assets held under capital leases are recorded at lease inception at the lower of the present value
of the minimum lease payments or the fair market value of the related assets. The cost of ordinary maintenance and repairs is charged
to operations. Depreciation and amortization are computed on the straight-line method over the following estimated useful lives of the
related assets: SCHEDULE
OF ESTIMATED USEFUL LIVES Furniture
and fixtures 3 5 Equipment
5 10 Long
– Lived Assets Long-lived
assets, which include property, plant and equipment and intangible assets with finite lives, and operating lease right-of-use assets,
are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability
of long-lived assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future
cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows,
an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair
value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. The
Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the asset’s carrying
amount may not be recoverable. The Company conducts its long-lived asset impairment analyses in accordance with ASC 360-10-15, “Impairment
or Disposal of Long-Lived Assets.” ASC 360-10-15 requires the Company to group assets and liabilities at the lowest level for which
identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against
the sum of the undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset is recoverable,
an impairment charge is measured as the amount by which the carrying amount of the asset group asset group exceeds its fair value based
on discounted cash flow analysis or appraisals. There was no Revenue
Recognition The
Company recognizes revenue under ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 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. Additionally,
the above five steps are applied to achieve 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 contract has commercial substance. The risk associated with this EPC Agreement is that payment of the EPC contract price.
● Per the EPC Agreement, CETY expects to collect substantially all of the consideration for its goods and services. 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 its agreement with 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, CETY 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 measurement 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. The company adopts the input method for implementation. 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 33,000 33,000 Also
from time to time we require upfront deposits from our customers based on the contract. As of December 31, 2023 and 2022, we had outstanding
customer deposits of $ 210,310 80,475 Fair
Value of Financial instruments The
Financial Accounting Standards Board issued ASC (Accounting Standards Codification) 820-10 (SFAS No. 157), “Fair Value Measurements
and Disclosures” for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value and requires expanded
disclosures regarding fair value measurements. FASB ASC 820-10 defines fair value as the price that would be received for an asset or
the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between
market participants on the measurement date. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize
the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the
Company uses to measure fair value:
● Level
1: Quoted prices in active markets for identical assets or liabilities.
● Level
2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets
that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full
term of the related assets or liabilities.
● Level
3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets
or liabilities. The Company’s derivative liabilities have been valued as Level 3 instruments. We value the derivative liability
using a lattice model, with a volatility of 56 0.15 The Company’s financial instruments consist of cash, prepaid expenses,
inventory, accounts payable, accrued expenses, and convertible notes payable. The estimated fair value of cash, prepaid expenses, investments,
accounts payable, accrued expenses and convertible notes payable approximate their carrying amounts due to the short-term nature of these
instruments. Foreign
Currency Translation and Comprehensive Income (Loss) We
have no material components of other comprehensive income (loss) and accordingly, net loss is equal to comprehensive loss in all periods.
The accounts of the Company’s Chinese entities are maintained in RMB. The accounts of the
Chinese entities were translated into USD in accordance with FASB ASC Topic 830 “Foreign Currency Matters.” All assets and
liabilities were translated at the exchange rate on the balance sheet date; stockholders’ equity is translated at historical rates
and the statements of operations and cash flows are translated at the weighted average exchange rate for the period. The resulting translation
adjustments are reported under other comprehensive income (loss) in accordance with FASB ASC Topic 220, “Comprehensive Income.”
Gains and losses resulting from foreign currency transactions are reflected in the statements of operations. The
Company follows FASB ASC Topic 220-10, “Comprehensive Income (loss).” Comprehensive income (loss) comprises net income (loss)
and all changes to the statements of changes in stockholders’ equity, except those due to investments by stockholders, changes
in additional paid-in capital and distributions to stockholders. Change
from fair value or equity method to consolidation In
July 2022, JHJ, a wholly owned subsidiary of CETY HK and other three shareholders agreed to form and make total capital contribution
of RMB 20 2.81 20 100 0 29 49 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 is 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 0.55 10,750 5000 Chengdu
Xiangyueheng Enterprise Management Co., Ltd (the “Xiangyueheng”), which owns a 10% equity interest in Shuya, entered a three-party
Concerted Action Agreement (the “CAA”), wherein the parties agreed to vote in unison at the shareholders’ meeting of
Shuya to consolidate the controlling position of the three parties in Shuya. The three parties agreed that during the term of the CAA,
before any of the three parties intends to propose motions to the shareholders’ meetings or the board of directors, or exercise
their voting rights on any matter that shall be presented to and resolved through the shareholders’ meeting in accordance with
the laws, regulations, Articles of Association of Shuya or any relevant shareholders’ agreements, the three parties 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 the CAA, the Company re-analyzed and determined that Shuya is the variable interest entity (the “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 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 into its consolidated financial statements 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. Based on the preliminary independent valuation, management determined that the difference in the fair value of
the consideration paid, and book records was immaterial due to the fact that Shuya has been only in operations for less than a year after
effective date of control in became effective. The management determined that the final purchase price allocation shall be re-valuated
subject to change pending additional operational results and forecast assumptions. As
the Consistent Action Agreement did not quantify any considerations to gain the control, the deemed consideration paid is the fair value
of 51 SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES ACQUIRED
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 (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 per Unaudited Proforma of Consolidated
Statement of Operations
2023 2022
Sales 14,702,977 4,029,087
Sales - Related Party 410,486 -
Total Income 15,113,463 4,029,087
Cost of
Goods Sold 14,023,209 2,758,977
Gross Profit 1,090,254 1,270,110
Expense
General and Administrative
Expense 684,893 507,321
Salaries 1,671,071 782,657
Travel 405,334 166,025
Professional Fees Legal &
Accounting 356,785 315,361
Facility Lease and Maintenance 401,293 349,610
Consulting Engineering 199,594 119,896
Stock Compensation - -
Depreciation and Amortization 26,692 30,076
Total Expense 3,745,662 2,270,946
Net Profit
/ (Loss) From Operations (2,655,408 ) (1,000,836 )
Other Income
& Expense
Other Income 81,583 55,577
Change in Derivative Liability 326,539 (331,495 )
Gain / (Loss) on Debt Settlement
and Write Down (1,124,654 ) 2,556,916
Interest and Financing fees (2,137,649 ) (1,125,371 )
Net Profit
/ (Loss) Before Income Taxes (5,509,589 ) 154,791
Income Tax Expense (22,173 ) (18,283 )
Net Profit
/ (Loss) (5,531,762 ) 136,508
Non-controlling interest 127,961 -
Net Profit / (Loss) attributable
to Clean Energy Technologies, Inc. (5,659,723 ) 136,508
Other Comprehensive Item
Foreign Currency Translation
Gain (36,155 ) (160,673 )
Total Comprehensible Income
/ (Loss) (5,695,878 ) (24,165 )
Non- Controlling interest
Accumulative Other Comprehensive
Income 838 -
Total Comprehensive
Income (5,695,040 ) (24,165 ) Net
Profit (Loss) per Preferred and Common Share Basic
profit / (loss) per share is computed based on the weighted average number of common shares outstanding. At December 31, 2023, we
had outstanding common shares of 39,152,455 38,447,916 27,681,722 277,604 70,102 1,857,590 38,227,965 Research
and Development We
had no Segment
Disclosure FASB
Codification Topic 280, Segment Reporting An
operating segment’s performance is evaluated based on its pre-tax operating contribution, or segment income. Segment income is
defined as net sales less cost of sales, and segment selling, general and administrative expenses, and does not include amortization
of intangibles, stock-based compensation, other charges (income), net and interest and other, net. Selected
Financial Data SCHEDULE
OF FINANCIAL DATA
2023 2022
For
the years ended December 31,
2023 2022
Net Sales
Manufacturing
and Engineering $ 47,091 $ 203,078
Heat Recovery
Solutions 497,584 488,453
LNG Trading 14,138,789 1,890,439
Waste to
Energy 429,999 81,242
Total Sales $ 15,113,463 $ 2,663,212
Segment income
and reconciliation before tax
Manufacturing
and Engineering (16,199 ) 124,437
Heat Recovery
Solutions 157,179 361,914
LNG Trading 594,041 619,446
Waste to
Energy 355,233 68,399
Total Segment
income 1,090,254 1,174,196
Less: operating expense (3,745,662 ) (2,163,947 )
Less: other income and expenses (2,854,181 ) 1,155,429
Net profit/ (loss) before income tax $ (5,509,589 ) $ 165,678
December
31, December
31,
Total Assets
CETY & Manufacturing
and Engineering $ 2,548,630 $ 5,518,460
Clean Energy HRS 3,099,223 2,556,166
Waste to Energy 523,566 39,703
LNG Trading 5,339,618 -
Total Assets $ 11,511,037 $ 8,114,329
2023 2022
For
the years ended December 31,
2023 2022
United
States 905,057 509,330
China 14,138,789 1,925,950
Other
international 69,617 132,316
Total
Sales 15,113,463 2,567,596 Share-Based
Compensation The
Company has adopted the use of Statement of Financial Accounting Standards No. 123R, “Share-Based Payment” (SFAS No. 123R)
(now contained in FASB Codification Topic 718, Compensation-Stock Compensation We
re-evaluate the assumptions used to value our share-based awards on a quarterly basis and, if changes warrant different assumptions,
the share-based compensation expense could vary significantly from the amount expensed in the past. We may be required to adjust any
remaining share-based compensation expense, based on any additions, cancellations or adjustments to the share-based awards. The expense
is recognized over the period during which an employee is required to provide service in exchange for the award—the requisite service
period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the
requisite service. As of December 31, 2023, we had no further non-vested expense to be recognized. Leases On
January 2, 2020, the Company adopted ASC Topic 842, Leases, or ASC 842, using the modified retrospective transition method with a cumulative
effect adjustment to be accumulated deficit as of January 1, 2019, and accordingly, modified its policy on accounting for leases as stated
below. As described under “Recently Adopted Accounting Pronouncements,” below, the primary impact of adopting ASC 842 for
the Company was the recognition in the consolidated balance sheet of certain lease-related assets and liabilities for operating leases
with terms longer than 12 months. The
Company’s leases primarily consist of facility leases which are classified as operating leases. The Company assesses whether an
arrangement contains a lease at inception. The Company recognizes a lease liability to make contractual payments under all leases with
terms greater than twelve months and a corresponding right-of-use asset, representing its right to use the underlying asset for the lease
term. The lease liability is initially measured at the present value of the lease payments over the lease term using the collateralized
incremental borrowing rate since the implicit rate is unknown. Options to extend or terminate a lease are included in the lease term
when it is reasonably certain that the Company will exercise such an option. The right-of-use asset is initially measured as the contractual
lease liability plus any initial direct costs and prepaid lease payments made, less any lease incentives. Lease expense is recognized
on a straight-line basis over the lease term. Leased
right-of-use assets are subject to impairment testing as a long-lived asset at the asset-group level. The Company monitors its long-lived
assets for indicators of impairment. As the Company’s leased right-of-use assets primarily relate to facility leases, early abandonment
of all or part of facility as part of a restructuring plan is typically an indicator of impairment. If impairment indicators are present,
the Company tests whether the carrying amount of the leased right-of-use asset is recoverable including consideration of sublease income,
and if not recoverable, measures impairment loss for the right-of-use asset or asset group. Income
Taxes Federal
Income taxes are not currently due since we have had losses since inception of Clean Energy Technologies. On
December 22, 2018 H.R. 1, originally known as the Tax Cuts and Jobs Act, (the “Tax Act”) was enacted. Among the significant
changes to the U.S. Internal Revenue Code, the Tax Act lowers the U.S. federal corporate income tax rate (“Federal Tax Rate”)
from 35% to 21% effective January 1, 2018. The Company will compute its income tax expense for the year ended December 31, 2022 using
a Federal Tax Rate of 21% and an estimated state of California rate of 9%. Income
taxes are provided based upon the liability method of accounting pursuant to ASC 740-10-25 Income Taxes – Recognition. Deferred
income tax amounts reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax reporting purposes. As
of December 31, 2023, we had a net operating loss carry-forward of approximately $( 15,737,415 4,727,224 30 4,727,224 On
February 13, 2018, Clean Energy Technologies, Inc., a Nevada corporation (the “Registrant” or “Corporation”)
entered into a Common Stock Purchase Agreement (“Stock Purchase Agreement”) by and between MGW Investment I Limited (“MGWI”)
and the Corporation. The Corporation received $ 907,388 7,561,567 .001 On
February 13,2018 the Corporation and Confections Ventures Limited. (“CVL”) entered into a Convertible Note Purchase Agreement
(the “Convertible Note Purchase Agreement,” together with the Stock Purchase Agreement and the transactions contemplated
thereunder, the “Financing”) pursuant to which the Corporation issued to CVL a convertible promissory Note (the “CVL
Note”) in the principal amount of $ 939,500 10 0.12 This
resulted in a change in control, which limited the net operating to that date forward. We are subject to taxation in the U.S. and the
states of California. Further, the Company currently has no open tax years’ subject to audit prior to D |
