Clean Energy Technologies, Inc. (CETY) Announces Entry Into \$260,000 Loan Agreement with Agile Capital Funding
Key Highlights
- Material Definitive Agreement: On May 27, 2026, Clean Energy Technologies, Inc. (“CETY” or the “Company”) entered into a Subordinated Business Loan and Security Agreement with Agile Capital Funding, LLC.
- Loan Amount: The Company borrowed approximately \$260,000 under this agreement.
- Purpose & Collateral: The loan is secured by substantially all assets of CETY, including accounts receivable, inventory, equipment, and intellectual property.
- Interest Charge: The total interest charge on the loan, assuming timely payments, is \$129,740.
- Fees: An administrative agent fee of \$10,000 is payable to Agile Capital Funding, LLC.
- Net Proceeds to Company: After fees and other deductions, the net proceeds to CETY are \$24,546.64.
- Signatories: The agreement is signed by Kambiz Mahdi, CEO of CETY, and Aaron Greenblott for Agile Capital Funding, LLC.
- Exchange Listing: CETY’s common stock is listed on The Nasdaq Stock Market LLC under the trading symbol “CETY”.
Details of the Loan Agreement
The Subordinated Business Loan and Security Agreement between CETY and Agile Capital Funding, LLC is a significant financial transaction for the company. The agreement provides immediate liquidity to CETY, which could be used for working capital, operations, or other corporate purposes. The loan is subordinated, meaning it ranks below certain existing debts in the event of liquidation.
Collateral and Security
The agreement grants Agile Capital Funding a security interest in essentially all of CETY’s assets. This includes, but is not limited to:
- Accounts receivable
- Inventory
- Equipment
- Intellectual property
This means if the company defaults, Agile Capital Funding has a right to seize and liquidate these assets to recover its loan.
Financial and Operating Covenants
The agreement includes both affirmative and negative covenants. Key requirements and restrictions include:
- Maintenance of good standing and qualification in relevant jurisdictions.
- Timely delivery of financial statements, reports, and notices of litigation or other material events.
- Restrictions on dividends and distributions in the event of default.
- Limitations on transactions with affiliates unless on arm’s-length terms.
- Requirement to maintain proper books and allow lender access for audits (up to twice a year or more frequently if in default).
- Timely filing and payment of taxes except where contested in good faith.
- Negative pledge on creating further liens or incurring new indebtedness beyond permitted levels.
Events of Default
The agreement specifies various events that would constitute a default, including:
- Failure to perform covenants (e.g., deliver financial statements, maintain insurance, pay taxes) within 30 days of awareness.
- Material adverse changes in the company’s business or financial condition.
- Attachment, levy, or restraint on business funds or assets.
Default could trigger immediate repayment obligations and enforcement of the lender’s security interest.
Potential Market Impact and Price-Sensitive Information
- Liquidity Injection: The \$260,000 loan provides near-term liquidity, which may stabilize operations or support growth initiatives.
- High Cost of Capital: The total interest charge of \$129,740 on a \$260,000 loan is significant, highlighting a high cost of borrowing, which may reflect the company’s risk profile or limited access to cheaper capital.
- Asset Encumbrance: By pledging substantially all assets, CETY reduces its borrowing capacity for additional secured debt, and increases its risk profile in the event of further liquidity stress.
- Restrictive Covenants: The covenants may limit management’s flexibility in capital allocation, dividend payments, and related-party transactions, affecting strategic decisions and shareholder returns.
- Default Risk: Any breach of the agreement could have severe consequences, including forced asset sales or further operational restrictions.
- Shareholder Dilution Risk: The agreement does not immediately result in shareholder dilution, but the high cost of debt and the company’s financial position could increase the likelihood of future equity raises at potentially dilutive terms.
Conclusion
This loan agreement represents a material event for CETY and its shareholders. While it provides necessary liquidity, it also significantly encumbers the company’s assets and comes at a high cost. Investors should closely monitor future filings for compliance with loan covenants, use of proceeds, and any indications of financial distress or potential defaults, all of which could materially affect CETY’s share price.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should perform their own due diligence or consult a qualified financial advisor before making investment decisions related to Clean Energy Technologies, Inc. or any other security.
