Clean Energy Technologies, Inc. Announces Entry into Securities Purchase Agreements and Convertible Note Issuances

Clean Energy Technologies, Inc. (NASDAQ: CETY) has entered into several significant financing agreements that may have a material impact on its capital structure and future share price. On or about March 4, 2026, the company executed a Securities Purchase Agreement (the “1800 SPA”) with 1800 Diagonal Lending LLC, a Virginia-based investment firm. Under the terms of this agreement, CETY sold a convertible promissory note in the principal amount of \$147,840, for a purchase price of \$132,000. This note, referred to as the “1800 Note,” is convertible into shares of the company’s common stock under certain conditions.

In addition to the 1800 SPA, CETY also entered into two further Securities Purchase Agreements with Mega Sincere Holdings Limited and Noblebear Investment Holdings LLC on March 6, 2026. Each of these agreements involves the issuance of convertible promissory notes. These transactions have similar terms, including conversion features and restrictions designed to limit the conversion to less than 20% of the company’s outstanding shares unless shareholder approval is obtained as required by Nasdaq rules.

Key Transaction Details

• 1800 Diagonal Lending LLC Note:
  – Principal Amount: \$147,840
  – Purchase Price: \$132,000
  – Interest Rate: 12% one-time charge applied on issuance
  – Convertible into common stock at a fixed price, with anti-dilution protections if the company issues shares at a lower price
  – Not convertible to the extent that it would result in the holder exceeding 9.99% beneficial ownership or more than 19.99% of outstanding shares without shareholder approval
• Mega Sincere Holdings Limited & Noblebear Investment Holdings LLC Notes:
  – Similar principal amounts, pricing, and conversion terms
  – Interest Rate: 10% per annum
  – Convertible into common stock at \$0.646 per share (subject to adjustment for future lower-priced issuances)
  – Each conversion allows a \$1,750 deduction to cover holder’s fees
  – Subject to the same conversion limitations as the 1800 Note

Material Terms and Shareholder Considerations

• Conversion Restrictions: Each note restricts conversion that would result in the holder owning more than 9.99% of CETY’s outstanding shares or that would cause the issuance of more than 19.99% of the pre-transaction common stock without shareholder approval, in accordance with Nasdaq Rule 5635(d). This is a key control to prevent a change of control or excessive dilution without shareholder consent.
• Anti-Dilution Protections: The conversion price can be adjusted downward if the company issues shares at a lower price, which could result in greater dilution for existing shareholders if future financings occur at lower prices.
• Potential for Shareholder Dilution: If fully converted and subject to price adjustments, these notes could significantly increase the company’s outstanding shares, potentially impacting share value.
• Purpose of Proceeds: The company states the proceeds from these financings are for general working capital purposes, which is standard, but investors should watch for future announcements regarding the specific use of these funds.
• Reporting and Governance: The company is required to maintain its SEC reporting obligations and Nasdaq listing. Default on these covenants could trigger adverse terms, including accelerated conversion rights for noteholders.
• Exemption from Registration: The notes and related share issuances are unregistered and rely on Section 4(a)(2) of the Securities Act, meaning they are not immediately tradable on the open market and have resale restrictions.

Other Notable Provisions

• Most Favored Nation Clause: If CETY issues similar securities with more favorable terms to other investors during the life of these notes, the current noteholders are entitled to receive the benefit of those terms.
• Potential Default Triggers: Standard default triggers include failure to pay, bankruptcy, delisting from Nasdaq, or failure to comply with SEC reporting. On default, noteholders may have the right to accelerate conversion or demand payment.
• Financial Representations: CETY affirms that it has filed all required SEC documents, its financial statements are accurate, and there are no undisclosed material adverse changes since September 30, 2025, aside from the disposal of its Chinese subsidiary, “Shuya.”
• No Off-Balance Sheet Arrangements: CETY states there are no undisclosed off-balance sheet transactions or arrangements, which may reassure investors regarding transparency.

Exhibits and Documentation

The company has filed the full SPA and note agreements as exhibits to the Form 8-K. Investors can review these for more granular details on covenants, conversion mechanics, and rights granted to noteholders.

Potential Market Impact and Price Sensitivity

• The issuance of convertible notes with anti-dilution and conversion features has the potential to substantially increase the number of shares outstanding if fully converted, which may exert downward pressure on share price due to dilution.
• Limitations on immediate conversion and requirements for shareholder approval of large issuances may mitigate, but not eliminate, dilution risk.
• Investors should monitor for future announcements regarding additional share issuances, conversions, or further financing activity, as well as compliance with Nasdaq and SEC requirements.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should review the full filings and consult their financial advisor before making any investment decisions. The information is based on public filings as of March 2026 and may be subject to change.

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