UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 16, 2025
Clean Energy Technologies, Inc.
(Exact name of registrant as specified in its charter)
| 001-41654 | 20-2675800 | |
| (Commission File Number) | (IRS Employer Identification Number) |
1340 Reynolds Avenue, Unit 120 Irvine, CA | 92614 | |
| (Address of Principal Executive Offices) | (Zip Code) |
(949) 273-4990
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||
| Common Stock, par value $0.001 | CETY | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
Effective January 16, 2025, Clean Energy Technologies, Inc. (the “Company”), entered into a securities purchase agreement (the “SPA”) with Mast Hill Fund, L.P., a Delaware limited partnership (“Mast Hill”), pursuant to which the Company sold, and Mast Hill purchased, (i) a junior secured convertible promissory note in the principal amount of $1,637,833.33 (the “Note”), and (ii) warrants to purchase 818,917 shares of Company common stock (the “Warrants”), for an aggregate purchase price of $1,474,050 (the “Transaction”).
The Transaction closed on January 16, 2025, and on such date pursuant to the SPA, Mast Hill’s legal expenses of $22,000 were paid from the gross purchase price, Mast Hill was paid $852,406.35 as payment in full of that certain promissory note issued by the Company to Mast Hill on or about September 10, 2024, and subsequently amended on or about December 11, 2024 (the “September 10th Mast Hill Note”), and the Company receiving net funding of $308,051.20, and the Note and Warrants were issued to Mast Hill.
The SPA includes customary representations, warranties and covenants by the Company and customary closing conditions. The SPA requires that the proceeds from the Transaction be used for the payment of $852,406.35 to Mast Hill for the payment in full of the September 10th Mast Hill Note, working capital, and business development, but not for repayment of indebtedness owed to officers, directors or employees of the Company or their affiliates, the repayment of any debt issued in corporate finance transactions, any loan to or investment in any other corporation, partnership, enterprise or other person (except in connection with the Company’s currently existing operations), or any loan, credit, or advance to any officers, directors, employees, or affiliates of the Company. The SPA also (i) requires the Company to hold a special meeting of its shareholders, on or before the date that is 60 calendar days after the first date (after the date of the SPA) that the Company’s common stock has traded at a price per share of less than $0.50, for the purpose of obtaining shareholder approval to issue shares of Company common stock to Mast Hill in excess of the Exchange Cap (as defined below), pursuant to Nasdaq’s listing rules, and (ii) prohibits the issuance of more than 9,156,726 shares of Company common stock (the “Exchange Cap”) to Mast Hill in the aggregate until shareholder approval has been obtained.
The Note matures 12 months following the issue date, accrues guaranteed interest of 10% per annum (with the first 12 months of interest guaranteed and earned in full as of issuance of the Note), and is secured by a junior security interest (subordinate to the Company’s senior secured lender, Nations Interbanc) in all of the assets of the Company. The Note is convertible into shares of the Company’s common stock at the election of the holder at a conversion price equal to the lesser of (i) $2.50/share, or (ii) 90% of the lowest dollar volume-weighted average price (during the period from 9:30 a.m. to 4 pm ET) on any trading day during the 5 trading days prior to the conversion date; provided, however, that the holder may not convert the Note to the extent that such conversion would result in the holder’s beneficial ownership of the Company’s common stock being in excess of 4.99% of the Company’s issued and outstanding common stock. Additionally, the holder of the Note is entitled to deduct $1,750 from the conversion amount in each note conversion to cover the holder’s fees associated with the conversion.
The Warrants have a 5-year term, are exercisable on a cashless basis, and have an exercise price of $2.50, subject to adjustment as provided in the Warrants.
The foregoing descriptions of the SPA, Note, and Warrants do not purport to be complete and are qualified in their entirety by reference to the full text of those agreements, copies of which are filed as Exhibits 10.1-10.3, respectively, to this Current Report on Form 8-K and incorporated by reference herein.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The disclosure provided above in Item 1.01 above is incorporated by reference into this Item 2.03.
Item 3.02. Unregistered Sales of Equity Securities.
The disclosure provided above in Item 1.01 above is incorporated by reference into this Item 3.02. The Note and Warrants were sold in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, as there was no general solicitation, and the issuances did not involve a public offering.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |
| 10.1 | Securities Purchase Agreement, dated January 16, 2025, entered into between the Company and Mast Hill * | |
| 10.2 | Promissory Note, dated January 16, 2025, by the Company to Mast Hill * | |
| 10.3 | Common Stock Purchase Warrant, dated January 16, 2025, by the Company to Mast Hill * | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL Document) |
* Filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunder duly authorized.
| CLEAN ENERGY TECHNOLOGIES, INC. | ||
| Dated: January 22, 2025 | By: | /s/ Kambiz Mahdi |
| Kambiz Mahdi | ||
| Chief Executive Officer | ||
