What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-05-22 compared with 2022-11-14 · 169 added, 181 removed, 135 unchanged (72% of the section changed)

5 unchanged sentences

or implied, by those forward-looking statements.

You can identify forward-looking statements by the use of the words may, will, should,

could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those

You can identify forward-looking statements using the words may, will, should, could,

expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms.

These statements are only predictions.

In evaluating these statements, you should consider various factors which may cause our

actual results to differ materially from any forward-looking statements.

In evaluating these statements, you should consider various factors which may cause our actual

results to differ materially from any forward-looking statements.

Although we believe that the exceptions reflected in the forward-looking

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of the Company

were incorporated in California in July 1995 under the name Probe Manufacturing Industries, Inc.

We redomiciled to Nevada in April 2005

under the name Probe Manufacturing, Inc.

We manufactured electronics and provided services to original equipment manufacturers (OEMs)

of industrial, automotive, semiconductor, medical, communication, military, and high technology products.

On September 11, 2015, Clean

Energy HRS, or “CE HRS”, our wholly owned subsidiary acquired the assets of Heat Recovery Solutions from General Electric

International.

In November 2015, we changed our name to Clean Energy Technologies, Inc.

principal executive offices are located at 2990 Redhill Avenue, Costa Mesa, CA 92626.

Our telephone number is (949) 273-4990.

stock is listed on the NASDAQ Markets under the symbol “CETY.”

internet website address is www.cetyinc.com and our subsidiary’s web site is www.heatrecoverysolutions.com The information

contained on our websites are not incorporated by reference into this document, and you should not consider any information contained

on, or that can be accessed through, our website as part of this document.

Company has four reportable segments:

Clean Energy HRS (HRS), CETY Europe, the legacy electronic manufacturing services (Electronic Assembly)

division and CETY HK.

specialize in renewable energy & energy efficiency systems design, manufacturing and project implementation.

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We have 14 full-time employees.

All employees and overhead are shared

All employees and overheads are shared

between Clean Energy Technologies, Inc.

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Their offices

are located at Alzaia Sul Sile, 26D, 31057 Silea (TV) and the have 1 full time employee.

are located at Alzaia Sul Sile, 26D, 31057 Silea (TV) and they have 1 full time employee.

Energy Technologies, Inc.

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Market factors of supply and demand can impact operating costs.

December 2019, a novel strain of coronavirus (COVID-19) was reported in Wuhan, China and has spread throughout the United States and

the rest of the world.

The World Health Organization has declared the outbreak to constitute a “Public Health Emergency of International

Concern.” This contagious disease outbreak, which has not been contained, and is disrupting supply chains and affecting production

and sales across a range of industries in United States and other companies as a result of quarantines, facility closures, and travel

and logistics restrictions in connection with the outbreak, as well as the worldwide adverse effect to workforces, economies and financial

markets, leading to a global economic downturn.

Therefore, the Company expects this matter to negatively impact its operating results.

However, the related financial impact and duration cannot be reasonably estimated at this time.

develop renewable energy products and solutions and establish partnerships in renewable energy that make environmental and economic sense.

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to Energy Solutions - we convert waste products created in manufacturing, agriculture, wastewater treatment plants and other industries

to electricity, renewable natural gas (“RNG”), hydrogen and bio char which are sold or used by our customers.

to electricity, renewable natural gas (“RNG”), hydrogen and biochar which are sold or used by our customers.

Consulting and Project Management Solutions – we bring a wealth of experience in developing clean energy projects for municipal

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energy solutions in their projects.

Energy Technologies (H.K.) Limited (“CETY HK”) consists of two business ventures in mainland China:(i) our liquefied natural

gas (“LNG”) trading operations sourcing and suppling LNG to industries and municipalities.

The LNG is principally used for

heavy truck refueling stations and urban or industrial users in areas that do not have a connection to local LNG pipeline systems.

purchase large quantities of LNG from large wholesale LNG depots at fixed prices which are prepaid for in advance at a discount to market.

We sell the LNG to our customers at prevailing daily spot prices for the duration of the contracts;

and (ii) our planned joint venture

with a large state-owned gas enterprise in China called Shenzhen Gas (Hong Kong) International Co.

(“Shenzhen Gas”),

acquiring natural gas pipeline operator facilities, each primarily located in the southern part of Sichuan Province and portions of Yunnan

Our planned joint venture with Shenzhen Gas plans to acquire, with financing from Shenzhen Gas, natural gas pipeline operator

facilities with the goal of aggregating and selling the facilities to Shenzhen Gas in the future.

According to our Framework Agreement

with Shenzhen Gas, we will be required to contribute $8 million to the joint venture.

The terms of the joint venture are subject to the

execution of definitive agreements.

Energy Technologies (H.K.) Limited (“CETY HK”) consists of two business ventures in mainland China:(i) our natural gas

(“NG”) trading operations sourcing and suppling NG to industries and municipalities.

Natural Gas is principally used for

heavy truck refueling stations and urban or industrial users.

We purchase large quantities of NG from large wholesale NG depots at

fixed prices which are prepaid for in advance at a discount to the market.

We sell the NG to our customers at fixed prices or

prevailing daily spot prices for the duration of the contracts;

and (ii) our planned joint venture with a large state-owned gas

enterprise in China called Shenzhen Gas (Hong Kong) International Co.

(“Shenzhen Gas”), acquiring natural gas

pipeline operator facilities, primarily located in the southwestern part of China.

Our planned joint venture with Shenzhen Gas plans

to acquire, with financing from Shenzhen Gas, natural gas pipeline operator facilities with the goal of aggregating and selling the

facilities to Shenzhen Gas in the future.

According to our Framework Agreement with Shenzhen Gas, we will be required to contribute

$8 million to the joint venture which plans to raise in future rounds of financing.

The terms of the joint venture are subject to

the execution of definitive agreements.

and Segment Information

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plan that we are required to report as a separate accounting entity.

HK – which is the parent company of our LNG trading operations in China that source and

supply LNG and our planned joint venture to acquire LNG distribution systems depots and transmission systems.

Prior to the first quarter

of 2022, the Company had three reportable segments but added the CETY HK segment to reflect its recent new businesses in China.

of Operating Results the three months ended September 30, 2022 Compared to the same period in 2021

is the parent company of our NG trading operations in China, as well as our planned joint venture to acquire NG distribution

systems depots and transmission systems.

Prior to the first quarter of 2022, the Company had three reportable segments but added the

CETY HK segment to reflect its recent new businesses in China.

of Operating Results the three months Ended March 31, 2023 Compared to the same period in 2022

financial statements have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets

and liquidation of liabilities in the normal course of business.

The Company had a total stockholder’s equity of $166,173 and a

working capital deficit of $4,000,686 as of September 30, 2022 The company also had an accumulated deficit of $18,763,939 as of September

30, 2022 and used $1,016,545 in net cash from operating activities for the three months ended September 30, 2022.

Therefore, there is

substantial doubt about the ability of the Company to continue as a going concern.

There can be no assurance that the Company will achieve

its goals and reach profitable operations and is still dependent upon its ability (1) to obtain sufficient debt and/or equity capital

and/or (2) to generate positive cash flow from operations.

three months ended September 30, 2022;

we had a net loss of $540,986 compared to a net loss of $277,664 for the same period in 2021.

The increase in the net loss in 2022 was mainly due to the increase in professional fees including legal & accounting due to the

expenses associated with the IPO up listing to NASDAQ and lower sales in the quarter.

The three months ended September 30, 2022;

revenue was $44,629 compared to $575,545 for the same period in 2021.

For the three months ended September 30, 2022, our gross margin

was 58% compared to 52% for the same period in 2021.

For the three months ended September 30, 2022, our operating expense was $566,899

compared to $578,808 for the same period in 2021.

The Company had a total stockholder’s equity of $6,001,109 and

a working capital of $2,377,048 as of March 31, 2023, The company also had an accumulated deficit of $18,350,395 as of March

31, 2023 and used $641,092 in net cash from operating activities for the three months ended March 31, 2023.

Therefore, there is substantial

doubt about the ability of the Company to continue as a going concern.

There can be no assurance that the Company will achieve its goals

and reach profitable operations and is still dependent upon its ability (1) to obtain sufficient debt and/or equity capital and/or (2)

to generate positive cash flow from operations.

the quarter ended March 31, 2023, our total revenue was $2,897,007 compared to $775,266 for the same period in 2022, which represents

revenue growth of 373%.

Our first quarter 2023 total revenue has already exceeded the total revenue of the entire year of 2022.

the quarter ended March 31, 2023, our gross profit was $160,569 compared to $514,192 for the same period in 2022.

Despite highly volatile

natural gas (NG) prices, CETY was able to protect downside risks while scaling up the NG trading operations.

the three months ended March 31, 2023, our operating expense was $763,412 compared to $499,023 for the same period in 2022.

the quarter ended March 31, 2023, we had a net loss of $1,073,858 compared to $112,588 for the same period in 2022 due to increased interest

and financing fees and marketing campaign expenses attributed to CETY’s Nasdaq up-listing efforts.

the quarter ended March 31, 2023, stockholder’s equity was $6,001,109 compared to $1,878,196 in December 31, 2022.

This is a result

of the offering related to the Nasdaq up-list as well as debt conversions and write-offs.

has successfully repositioned itself and created 4 different business segments to create a larger, more stable, and more diversified

revenue stream that could scale up.

The 4 segments are Clean Energy HRS (Heat Recovery), Waste-to-Energy (Pyrolysis Plant), Engineering

Procurement and Consulting (EPC), and CETY HK (NG trading and acquisitions).

First quarter revenue was mainly contributed by NG trading.

The revenue in this segment is expected to continue to scale up which will help establish CETY as a player in the China market and allows

cross-selling of CETY products and solutions.

CETY expects larger revenue contribution from Waste-to-Energy, Heat Recovery, and EPC in

the latter of this year which are higher gross margin segments.

Our pilot Waste-to-Energy plant in Vermont which integrates all of CETY’s

technologies and expertise into a single solution, is progressing steadily with updates coming soon.

There is a growing market for Heat

Recovery in the U.S.

and Europe, and CETY HK has begun cross-selling Heat Recovery products in China.

CETY is also gearing up for the

EPC segment to implement holistic self-generation solutions globally.

believes this 4 segment strategy has created many operational synergies and cross-selling opportunities across different markets.

The breakneck revenue growth that was demonstrated this quarter is a direct result of this strategy as we have exceeded the revenues

of the entire year of 2022.

CETY believes that it will continue to deliver growth on all segments this year due to our belief that

there is an optimistic industry macro backdrop.

The main macro factor benefiting us is the global commitment to push renewable

energy to the forefront from governments across the world.

This is evidenced by the Paris Agreement and COP26.

The Inflation

Reduction Act passed by Congress in August 2022 had specific provisions that can take advantage of CETY’s products and

Another catalyst that will potentially help our Company, is a continuously improving global supply chain as U.S.

European markets have begun to return normal levels post COVID and China has reopened its borders.

The European energy crisis has

given rise to the opportunity for CETY to sell more of its products and solutions as customers are in search of self-generation

capabilities in renewable energy.

And lastly, as China ends its draconian COVID lockdown policies, CETY was able to resume its

growing business in that region.

reached a momentous milestone in its corporate history on March 23, 2023, when the company was able to meet all the Nasdaq listing

standards and began trading on Nasdaq.

Nasdaq trading status increases CETY’s reputation greatly and benefits CETY’s

sales plans globally.

This also improves the company’s ability to access capital with better terms.

expects to and will continue to execute its corporate strategy to build sustained and profitable growth by providing end to end

fully integrated solutions and technologies, expand our global sales and marketing, production, research & development, as well

as search for synergistic acquisition opportunities.

note 1 to the notes to the financial statements for a discussion on critical accounting policies

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note 13 to the notes to the financial statements for a discussion on related party transaction

Results of the three

month ended September 30, 2022, Compared to the nine month ended September 30, 2021

Segment breakdown

The three months

ended September 30, 2022, our revenue from Engineering and Manufacturing was $71,298 compared to $50,040 for the same period in

The three months

ended September 30, 2022, our revenue from HRS was $307 compared to $513,400 for the same period in 2021.

This decrease was mainly

because of delay with the passing of inflation reduction act and the incentives associated with heat recovery solution and delays with

supply chain.

The three months ended September 30, 2022, our revenue

from CETY Europe was $10,125 compared to $12,105 for the same period in 2021.

The three months ended September 30, 2022, our revenue

from our wholly owned subsidiary CETY HK was $0.0 due to lack of availability of natural gas during the quarter compared to $0 for the

same period in 2021.This is a s a result of the acquisition of JHJ gas company made in November of 2021.

We started to generate revenue

from this entity in the 1 st quarter of 2022.

The three months ended

September 30 , 2022;

our gross profits were $25,913 compared

to $301,144 for the same period in 2021.

The decrease in gross profit was due to lower revenues.

Segment breakdown

The three months

ended September 30, 2022, our gross profit from Engineering and Manufacturing was $46,876 compared to $43,216 for the same period

The three months

ended September 30, 2022, we had negative gross profit from HRS of $18,146 compared to $250,500 for the same period in 2021.

decrease from the HRS segment was mainly due to 0 revenue in the third quarter of 2022.

The three months

ended September 30, 2022, our gross profit from CETY Europe was $9,685 compared to $4,101 for the same period in 2021.

in gross profit was due higher service revenue.

The three months

ended September 30, 2022, our gross profit from our wholly owned subsidiary CETY HK was negative $12,158 compared to $0 for the

same period in 2021.

We had zero revenue from CETY HK in 2021.

Selling, General and Administrative (SG&A)

The three months ended September 30 ,

of the three Ended March 31, 2023, Compared to the three ended March 31, 2022

the quarter ended March 31, 2023, our total revenue was $2,897,007 compared to $775,266 for the same period in 2022.

The Company has

four reportable segments:

Clean Energy HRS (HRS), CETY Europe and the legacy engineering & manufacturing services division, and

three months ended March 31, 2023, our revenue from Engineering and Manufacturing was $0 compared to $32,280 for the same period in

Our engineering team is in transition to establish the innovation center in Europe and has executed a master services

agreement with RPG to support its fortune 500 customers with its sustainability goals.

Additionally, our engineering team will be

commencing work on the Vermont project starting in the second quarter of 2023.

three months ended March 31, 2023, our revenue from HRS was $5,194 compared to $441,193 for the same period in 2022.

We are in the process

of securing long lead materials to complete several units over the next 6 months and be able to recognize revenue by the end of the year.

three months ended March 31, 2023, our revenue from CETY Europe was $5,748 compared to $33,827 for the same period in 2022.

three months ended March 31, 2023, our revenue from our wholly owned subsidiary JHJ was $2,886,065 compared to $267,966 for the same

period in 2021.

The increase was as a result of the ability to secure larger amounts of gas.

three months ended March 31, 2023;

our gross profits were $160,628 compared to $514,192 for the same period in 2022.

The decrease in

gross profit was due to lower margins from the NG business and lower revenue from the HRS and Engineering services.

three months ended March 31, 2023, our gross profit from Engineering and Manufacturing was $0 compared to $23,986 for the same period

The three months ended March 31, 2023, our gross profit from HRS was $90

compared to $400,487, for the same period in 2022.

We only had service revenue from HRS segment in the first quarter of 2023.

three months ended March 31, 2023, our gross profit from CETY Europe was $5,097 compared to $28,986 for the same period in 2022.

three months ended March 31, 2023, our gross profit from our wholly owned subsidiary JHJ was $155,441 compared to $60,733 for the same

period in 2022.

General and Administrative (SG&A) Expenses

three months ended March 31, 2023;

our SG&A expense was $88,891 compared to $92,935 for the same period in 2022.

The decrease was a result of separating

the subcontractor category from SG&A.

Salaries Expense

The three months ended September 30 ,

three months ended March 31, 2023;

our Salaries expense was $218,237 compared to $191,217 for the same period in 2022.

Travel Expense

The three months ended September 30 ,

The increase in

the quarter ending in March 31, 2023 was due to new hires.

three months ended March 31, 2023;

our travel expense was $71,662 compared to $27,734 for the same period in 2022.

The increase in the quarter ending in September

30, 2022 was due to additional site assessment surveys of multiple facilities in Europe and global commissioning.

Professional fees Expense

The three months ended September 30 ,

The increase was due

to travel expenses related to Europe for the MSA development and increased site visits due to an increase in the sales opportunities

and commissioning.

fees legal and accounting

three months ended March 31, 2023;

our Professional fees expense was $88,210 compared to $64,853 for the same period in 2022.

The increase in legal fees was

due to higher expenses related to a proposed IPO and up listing to NASDAQ.

of the nine month ended September 30, 2022, Compared to the nine month ended September 30, 2021

Company has four reportable segments:

Clean Energy HRS (HRS), CETY Europe srl, Engineering and Manufacturing Business and CETY HK.

nine months ended September 30, 2022, our revenue from

Engineering and Manufacturing was $132,316 compared to $91,262 for the same period in 2021.

nine months ended September 30, 2022, our revenue from

HRS was $461,292 compared to $602,207 for the same period in 2021.

This decrease was mainly because of delay with the passing of inflation

reduction act and the incentives associated with heat recovery solution.

nine months ended September 30, 2022, our revenue from CETY Europe was $48,138 compared to $173,234 for the same period in 2021.

decrease was a result of a sell of an equipment in 2021 vs.

just the service revenue.

nine months ended September 30, 2022, our revenue from our wholly owned subsidiary CETY HK was $1,925,950 compared to $0 for the same

period in 2021.

This is a s a result of the acquisition of JHJ gas company made in November of 2021.

We started to generate revenue from

this entity in the 1 st quarter of 2022.

nine months ended September 30 , 2022;

our gross profits were $1,151,903 compared to $519,683

for the same period in 2021.

The increase in gross profit was due to higher revenues.

nine months ended September 30, 2022, our gross profit

from Engineering and Manufacturing was $85,352 compared to $72,853 for the same period in 2021.

nine months ended September 30, 2022, our gross profit

from HRS was $427,219 compared to $312,118, for the same period in 2021.

The increase from the HRS segment was mainly due to higher revenue

in the first quarter of 2022.

nine months ended September 30, 2022, our gross profit

from CETY Europe was $40,315 compared to $134,712 for the same period in 2021.

The decrease in gross profit was due to revenue generated

from the sale of a clean cycle waste heat recovery system.

nine months ended September 30, 2022, our gross profit

from our wholly owned subsidiary CETY HK was $631,082 compared to $0 for the same period in 2021.

We had zero revenue from CETY HK in

General and Administrative (SG&A) Expenses

nine months ended September 30 , 2022;

our SG&A expense was $284,025 compared to $529,335,

for the same period in 2021.

The decrease was a result of separating the subcontractor category from SG&A and lower cost of repair.

nine months ended September 30 , 2022;

our Salaries expense was $587,928 compared to $661,634

for the same period in 2021.

The decrease in the quarter ending in September 30, 2022 was due to less number of employees.

nine months ended September 30 , 2022;

our travel expense was $126,388 compared to $66,735

for the same period in 2021.

The increase in the quarter ending in September 30, 2022 was due to additional site assessment surveys of

multiple facilities in Europe and global commissioning.

nine months ended September 30 , 2022;

our Professional fees expense was $359,636 compared

to $123,383 for the same period in 2021.

The increase in legal fees was due to higher expenses related to a proposed IPO and up listing

in legal fees was due to more contract and agreement-related work and additional accounting work related to new foreign entities.

Lease and Maintenance Expense

nine months ended September 30 , 2022;

our Facility Lease and maintenance expense was $260,262

compared to $254,708 for the same period in 2021.

three months ended March 31, 2023;

our Facility Lease and maintenance expense was $122,779 compared to $88,962 for the same period in

and Amortization Expense

nine months ended September 30 , 2022, our depreciation and amortization expense was $22,557

compared to $24,219 for the same period in 2021, which remained relatively unchanged.

three months ended March 31, 2023, our depreciation and amortization expense was $5,949 compared to $7,519 for the same period in 2022,

which remained relatively unchanged.

in Derivative Liability

nine months ended September 30, 2022;

three months ended March 31, 2023;

we had a gain on derivative liability of $326,539 compared to a gain of $16,014 for the same

period in 2022.

The gain in derivative liability was due to paying off several convertible notes in the six months ended June 30, 2021.

on debt settlement

nine months ended September 30, 2022, we recognized a gain on debt settlement in the amount of $2920 compared to $828,666 for the nine

months ended September 30, 2021.

The gain in derivative liability was from a favorable derivative calculations from several convertible notes in the

three months ended March 31, 2023.

and Finance Fees

nine months ended September 30, 2022 interest and finance fees were $747,451 compared to $603,240 for the same period in 2021.

three months ended March 31, 2023, interest and finance fees were $837,391 compared to $132,470 for the same period in 2022.

was due to several new notes to assist with the uplist to Nasdaq.

Income / Loss

nine months ended September 30, 2022;

our loss was $1,338,010

compared to net profit of $819,719 for the same period in 2021.

The higher profits was primarily due to the gain on derivative liability

three months ended March 31, 2023;

our loss was $1,073,858 compared to loss of $112,588 for the same period in 2022.

This increase was

primarily due to financing fees.

and Capital Resources

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Consolidated Statements of Cash Flows

the nine months ended September 30, 2022

the three months ended March 31, 2023

Net Cash provided / (Used) In Operating Activities

$ (1,929,678 )

$ (1,964,231 )

Cash Flows Used In Investing Activities

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Net (Decrease) Increase in Cash and Cash Equivalents

$ (1,016,545 )

February 21, 2022 the Company completed public and private financing of an aggregate of $1,202,800.

Requirements for long-term Obligations

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Actual results could differ from those estimates made by management.

will continue to rely on equity sales of our common shares in order to continue to fund our business operations.

Issuances of additional

shares will result in dilution to existing stockholders.

There is no assurance that we will achieve any additional sales of the equity

securities or arrange for debt or other financing to fund planned acquisitions and exploration activities.

will continue to rely on equity sales of our common shares to continue to fund our business operations.

Issuance of additional shares

will result in dilution to existing stockholders.

There is no assurance that we will achieve any additional sales of the equity securities

or arrange for debt or other financing to fund planned acquisitions and exploration activities.

Sheet Arrangements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis