What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-08-14 compared with 2023-05-22 · 150 added, 145 removed, 159 unchanged (65% of the section changed)

29 unchanged sentences

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.

internet website address is www.cetyinc.com the information contained on our website 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.

Clean Energy HRS, the engineering & manufacturing services, CETY Renewables waste to energy

solutions, and CETY HK natural gas trading business.

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

15 unchanged sentences

between Clean Energy Technologies, Inc.

(which still provides the contract electronic manufacturing services) and Clean Energy HRS, LLC.

Energy Technologies, Inc.

15 unchanged sentences

Limited a liquid natural gas trading company in China.

Company has four reportable segments:

Clean Energy HRS (HRS) and CETY Europe, CETY Renewables, CETY HK and the legacy engineering and

manufacturing services division.

Company’s business and operating results are directly affected by changes in overall customer demand, operational costs and performance

14 unchanged sentences

principal businesses

Heat Recovery Solutions – we recycle wasted heat produced in manufacturing, waste to energy and power generation facilities

Heat Recovery Solutions – we recycle waste heat produced in manufacturing, waste to energy and power generation facilities

using our patented Clean Cycle TM generator to create electricity which can be recycled or sold to the grid.

4 unchanged sentences

energy solutions in their projects.

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.

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

4 unchanged sentences

four segments for accounting purposes are:

Energy Solutions - our Waste Heat Recovery Solutions, Waste to Energy Solutions, China LNG initiatives and Engineering and Consulting

Services which are the core offerings of our business.

Europe – our subsidiary established in Italy for the purposes of servicing our customers in the EU that we are required to

report as a separate accounting entity.

Manufacturing Business - our legacy electronics manufacturing business that do not contribute significantly to our revenues or business

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

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 $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.

Energy HRS & CETY Europe - Our Waste Heat Recovery Solutions, converting thermal energy to zero emission electricity.

Renewables Waste to Energy Solutions – Providing Waste to Energy technologies and solutions.

& Manufacturing Services – providing customers with comprehensive design, manufacturing, and project management solutions.

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 six months Ended June 30, 2023 Compared to the same period in 2022.

The 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

The Company had a total stockholder’s equity of $5,735,399 and a working capital of $2,124,013 as of June 30, 2023

the company also had an accumulated deficit of $19,108,027 as of June 30, 2023 and used $2,620,809 in net cash from operating activities

for the six months ended June 30, 2023.

CETY has a clear strategy in place and has the capability to successfully restructure its existing

debt and secure additional financing.

With its current strategic approach and diversification of its products and solutions, the management

has created a favorable environment for the company to transition towards profitability.

the six months ended June 30, 2023 our total revenue was $7,696,401 compared to 2,522,968 for the same period in 2022 which represents

revenue growth of 205% and 189% growth over the total revenue in 2022.

the six months ended June 30, 2023 our gross profit was $674,246 compared to $1,125,990 for the same period in 2022.

The highly volatile

natural gas (NG) prices during winter and summer impacted the profit margins, however CETY’s waste to energy and engineering solutions

significantly boosted the margins.

For the six months ended June 30, 2023 our operating

expense was $1,653,741 compared to $1,154,358 for the same period in 2022.

This increase is as a result of CETY’s expansion in 2023

and additional cost associated with marketing and business development, professional fees for legal and accounting, increase in salary

expense for the new CFO, Director of operations and additional cost for consulting engineering.

For the six months ended June 30, 2023 we had a net

loss of $1,793,384 compared to $459,531 for the same period in 2022 due to increased interest and financing fees of $1,349,594 for interest,

financing fees and debt discount calculations associated with the warrant issuances and additional operating expenses mentioned above.

For the six months ended June 30, 2023 stockholder’s

equity was $5,735,399 compared to $1,878,196 on 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.

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).

The first half of 2023 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

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.

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

the entire year of 2022.

CETY believes that it will continue to deliver growth in 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.

The Inflation Reduction Act passed by

Congress in August 2022 had specific provisions that can take advantage of CETY’s products and solutions.

Another catalyst that

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

and 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.

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.

1 unchanged sentence

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

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

of the six-month ended June 30, 2023 compared to the six-month ended June 30, 2022

the six months ended June 30, 2023 our total revenue was $7,696,401 compared to $2,522,968 for the same period in 2022.

has four reportable segments:

Clean Energy HRS (HRS), CETY Renewables waste to energy solutions, the engineering and manufacturing services,

and CETY HK Natural gas trading business.

six months ended June 30, 2023 our revenue from Engineering and Manufacturing was $36,332 compared to $61,018 for the same period in

Our engineering team was 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 has started work on the

Vermont projects in the second quarter of 2023.

We expect continued growth from this segment.

six months ended June 30, 2023 our revenue from HRS was $28,338 compared to $460,885 for the same period in 2022.

The revenue from

this segment in 2023 was from service fees vs.

Equipment sale in 2022.

We are in the process of securing long lead materials to

complete several units over the next few months and be able to recognize unit sales by the end of the year.

six months ended June 30, 2023 our revenue from our wholly owned subsidiary CETY HK was $7,219,049 compared to $1,963,053 for the same

period in 2022.

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

three months ended March 31, 2023;

The increase was as a result of the ability to secure larger amounts of gas and we should be seeing faster growth from

this segment due to the nature of the business.

The six months ended June 30, 2023 our revenue from

our wholly owned subsidiary CETY Renewables Waste to Energy was $412,682 compared to $38,012 for the same period in 2022.

six months ended June 30, 2023;

our gross profits were $674,246 compared to $1,125,990 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.

The decrease in gross

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

six months ended June 30, 2023 our gross profit from Engineering and Manufacturing was $18,355 compared to $22,543 for the same period

six months ended June 30, 2023 our gross profit from HRS was $29 compared to $445,885 for the same period in 2022.

We only had service

revenue from HRS segment in the first quarter of 2023 the higher revenue from the same period in 2022 was a result of equipment sale.

six months ended June 30, 2023 our gross profit from CETY HK was $270,457 compared to $650,180 for the same period in 2022.

margin was due to lower gas prices in winter and spring and higher volume.

six months ended June 30, 2023 our gross profit from our waste to energy solutions was $385,404 compared to $7,382 for the same period

The higher margins were as a result of higher sales and launch of the Vermont Renewable Gas project.

General and Administrative (SG&A) Expenses

three months ended March 31, 2023;

six months ended June 30, 2023;

our SG&A expense was $299,430 compared to $201,304 for the same period in 2022.

three months ended March 31, 2023;

The increase was

due to increased marketing and expansion.

six months ended June 30, 2023;

our salaries expense was $584,526 compared to $390,892 for the same period in 2022.

The increase in

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

three months ended March 31, 2023;

The increase in the

quarter ended June 30, 2023 was due to new hires.

six months ended June 30, 2023;

our travel expense was $201,165 compared to $87,398 for the same period in 2022.

1 unchanged sentence

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

and commissioning.

and commissioning, and customer visits in China related ot the LNG trading business.

fees legal and accounting

three months ended March 31, 2023;

six months ended June 30, 2023;

our professional fees expense was $177,437 compared to $224,195 for the same period in 2022.

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

in legal and accounting fees was due to less work related to the registration.

Lease and Maintenance Expense

three months ended March 31, 2023;

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

six months ended June 30, 2023 our Facility Lease and maintenance expense was $196,373 compared to $173,840 for the same period in 2022.

and Amortization Expense

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

six months ended June 30, 2023 our depreciation and amortization expense was $9,203 compared to $15,038 for the same period in 2022

which remained relatively unchanged.

in Derivative Liability

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 from a favorable derivative calculations from several convertible notes in the

three months ended March 31, 2023.

six months ended June 30, 2023;

we had a gain on derivative liability of $326,539 compared to a gain of $13,399 for the same period in

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

six months ended June 30, 2023.

and Finance Fees

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

six months ended June 30, 2023 interest and finance fees were $1,349,594 compared to $416,864 for the same period in 2022.

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

Income / Loss

three months ended March 31, 2023;

six months ended June 30, 2023;

our loss was $1,793,384 compared to loss of $459,531 for the same period in 2022.

This increase was

primarily due to financing fees.

This increase was primarily

due to 1,349,594 of financing fees, due to our willingness to pay more for financing to safeguard investors, preventing dilution at lower

and Capital Resources

1 unchanged sentence

Consolidated Statements of Cash Flows

the three months ended March 31, 2023

the six months ended June 30, 2023

Net Cash provided / (Used) In Operating Activities

$ (2,620,809 )

$ (1,233,919 )

Cash Flows Used In Investing Activities

35 unchanged sentences

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