What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-14 compared with 2023-08-14 · 112 added, 103 removed, 206 unchanged (51% of the section changed)

117 unchanged sentences

& 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.

HK – 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 nine months ended September 30, 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 $5,389,051 and

a working capital of $1,755,468 as of September 30, 2023 the company also had an accumulated deficit of $19,829,422 as of September 30,

2023 and used $3,842,232 in net cash from operating activities for the nine months ended September 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 nine months ended September 30, 2023, our total revenue amounted to $11,701,118, a substantial increase from the $2,567,596 recorded

during the same period in 2022, reflecting a remarkable revenue growth of 356%.

This also represents a remarkable 339% growth over our

total revenue in 2022.

This impressive increase can be attributed to the success of the Vermont Renewable Gas Biomass project in Lyndon

and the substantial anticipated growth in Natural Gas (NG) trading from CETY HK.

the nine months ending on September 30, 2023, our gross profit amounted to $1,427,629, as compared to $1,151,903 for the corresponding

period in 2022.

The substantial fluctuations in natural gas (NG) prices during both the winter and summer seasons had a notable impact

on our profit margins.

Nevertheless, the sale of CETY’s waste-to-energy and waste-heat to power systems significantly bolstered

our profit margins.

the nine months ending on September 30, 2023, our operating expenses totaled $2,709,963, compared to $1,724,727 for the corresponding

period in 2022.

This increase can be attributed to CETY’s expansion in 2023, along with additional costs related to marketing and

business development, professional fees for legal and accounting services, increased expenses for investor relations, higher salaries

for the new executives and directors, and additional consulting engineering expenses.

the nine months ended September 30, 2023, we incurred a net loss of $2,460,489, as compared to $1,322,861 for the corresponding period

This increase in net loss can be attributed to the rise in operating expenses stemming from our recent expansion, as well as

interest and financing fees amounting to $1,707,690, which includes financing fees and debt discount calculations associated with the

the period ending September 30, 2023, the stockholder’s equity amounted to $5,389,051, representing a significant increase from

the $1,878,196 reported on December 31, 2022.

This substantial growth is attributable to the offering associated with the Nasdaq up-listing,

along with 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).

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.

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 revenue in the CETY HK fuel segment is expected to continue

to scale up which will help establish CETY as a player in the Asian market and allows cross-selling of CETY products and solutions.

expects larger revenue contribution from Waste-to-Energy, 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.

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

27 unchanged sentences

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

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.

of the nine-month ended September 30, 2023 compared to the nine-month ended September 30, 2022

the nine months ended September 30, 2023 our total revenue was $11,701,118 compared to $2,567,596 for the same period in 2022.

has four reportable segments:

1 unchanged sentence

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

nine months ended September 30, 2023 our revenue from Engineering and Manufacturing was $59,877 compared to $132,316 for the same period

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

2 unchanged sentences

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.

We expect continued growth from this segment with the revenue being recognized within

the waste to energy business segment.

nine months ended September 30, 2023 our revenue from HRS was $399,136 compared to $509,330 for the same period in 2022.

from this segment in 2023 was from service fees vs.

Equipment sale in 2022.

1 unchanged sentence

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 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;

nine months ended September 30, 2023 our revenue from our wholly owned subsidiary CETY HK was $10,462,385 compared to $1,925,950 for

the same period in 2022.

The increase was as a result of the ability to secure larger amounts of gas and growth from the newly formed

joint venture.

nine months ended September 30, 2023 our revenue from our wholly owned subsidiary CETY Renewables Waste to Energy was $779,720, this

was as a result of commencement of the design, sourcing and permitting of the Vermont Renewable Gas project.

nine months ended September 30, 2023;

our gross profits were $1,427,629 compared to $1,151,903 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.

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

nine months ended September 30, 2023 our gross profit from Engineering and Manufacturing was $16,528 compared to $85,352 for the same

period in 2022.

This was as a result of higher revenue in this segment.

nine months ended September 30, 2023 our gross profit from HRS was $148,706 compared to $467,534 for the same period in 2022.

revenue from the same period in 2022 was a result of more unit sales and higher margin product sale.

nine months ended September 30, 2023 our gross profit from CETY HK was $524,152 compared to $631,082 for the same period in 2022.

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

the nine months ending September 30, 2023, our gross profit from our waste-to-energy solutions amounted to $738,243, in contrast to no

revenue for the same period in 2022.

The improved margins were primarily driven by increased sales and the launch of the Vermont Renewable

General and Administrative (SG&A) Expenses

six months ended June 30, 2023;

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

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 ended June 30, 2023 was due to new hires.

six months ended June 30, 2023;

September 30, 2023, after nine months, our SG&A expense amounted to $476,078, marking a significant increase from the $284,025 recorded

for the corresponding period in 2022.

This uptick can be attributed to heightened expenditures in several areas, including Media and

Investor Relations activities, marketing, sales efforts, subscription services, and IT-related expenses.

the nine months concluding on September 30, 2023, our salaries expense totaled $1,040,431, reflecting a substantial rise from the $587,928

incurred during the equivalent period in 2022.

This increase in 2023 was primarily attributable to the addition of new executive hires.

nine months ended September 30, 2023;

our travel expense was $328,104 compared to $126,388 for the same period in 2022.

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

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

fees legal and accounting

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

the nine-month period ending on September 30, 2023, our professional fees expense amounted to $259,476, as opposed to $359,636 for the

corresponding period in 2022.

This reduction in legal and accounting fees can be attributed to a decreased workload associated with the

registration and uplisting process to NASDAQ.

Lease and Maintenance Expense

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.

the nine-month period ending on September 30, 2023, our Facility Lease and maintenance expense amounted to $347,529, showing an increase

compared to the $260,262 spent during the same period in 2022.

This rise can be attributed to the inclusion of Shuya’s new facility

in Chengdu, China.

and Amortization Expense

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.

the nine months ending on September 30, 2023, our depreciation and amortization expense amounted to $13,805, compared to $22,557 for

the corresponding period in 2022, showing a relatively unchanged figure.

in Derivative Liability

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.

nine months ended September 30, 2023;

we had a gain on derivative liability of $326,539 compared to a gain of $(12,980) for the same

period in 2022.

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

in the nine months ended September 30, 2023.

and Finance Fees

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

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

nine months ended September 30, 2023 interest and finance fees were $1,707,690 compared to $747,451 for the same period in 2022.

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

the nine months ending on September 30, 2023, our loss amounted to $2,460,489, which is an increase compared to a loss of $1,322,861

for the same period in 2022.

This increase can be primarily attributed to $1,707,690 in financing fees.

We incurred these additional

financing fees due to our commitment to paying more for financing in order to safeguard our investors, thereby preventing dilution at

a lower valuation.

and Capital Resources

1 unchanged sentence

Consolidated Statements of Cash Flows

the six months ended June 30, 2023

Net Cash provided / (Used) In Operating Activities

the nine months ended September 30, 2023

Net Cash used in operating activities

$ (3,842,232 )

$ (1,929,678 )

Cash Flows Used In Investing Activities

Cash Flows Provided / (used) By Financing Activities

Net (Decrease) Increase in Cash and Cash Equivalents

Cash Flows provided by/ (used in) investing activities

Cash Flows Provided by financing activities

Net Increase (decrease) in Cash and Cash Equivalents

$ (1,016,545 )

Requirements for long-term Obligations.

32 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