What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-06-05 compared with 2025-04-14 · 233 added, 189 removed, 363 unchanged (54% of the section changed)

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should read this section together with our consolidated financial statements and related notes thereto included elsewhere in this report.

Restatement of Previously

Issued Financial Statements

following discussion and analysis of our financial condition and results of operations reflects the restatement of our previously issued

consolidated financial statements as of and for the year ended December 31, 2024.

As described in Note 19 to the consolidated financial

statements included in Item 8 of this Annual Report, and as previously disclosed in Amendment No.

3 to our Annual Report on Form 10-K

for the year ended December 31, 2024, filed with the Securities and Exchange Commission on June 4, 2026 (the “2024 Form 10-K/A”),

we identified historical accounting errors during the preparation of our consolidated financial statements for the year ended December

31, 2025 relating primarily to the classification, valuation, and collectability of long-term financing receivables and contract assets;

the timing of revenue recognition and recognition of related interest income;

and the accounting for warrant transactions.

concluded, in accordance with Staff Accounting Bulletin No.

108, that the errors were material to its previously issued consolidated

financial statements for the years ended December 31, 2024 and 2023, and accordingly restated those financial statements.

All references

in this Management’s Discussion and Analysis to financial information for the year ended December 31, 2024 are to the restated amounts.

The Company also amended its Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2025, June 30, 2025, and September

30, 2025 to restate the financial statements included in those Quarterly Reports.

This Item 7 should be read in conjunction with the

restated consolidated financial statements and related notes included in Item 8, and with Note 19.

Forward-Looking

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principal executive offices are located at 1340 Reynolds Avenue Unit 120, Irvine, California 92614.

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

Our common stock is listed on the

NASDAQ Markets under the symbol “CETY.”

internet website address is www.cetyinc.com.

The information contained on our websites are not incorporated by reference into

The information contained on our websites is 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

Company has four reportable segments:

Clean Energy HRS (HRS), CETY Renewables waste to energy solutions, engineering, procurement, construction

and program management services, and CETY HK natural gas trading business.

The Company has four reportable segments:

HRS (HRS) and CETY Europe, CETY Renewables, CETY HK and CETY engineering solution services division.

During the reporting period, the

Company made the strategic decision to dispose of its Shuya interests in China.

This decision reflects a broader effort to sharpen the

Company’s focus on its core competencies and highest-value opportunities in waste-to-energy, heat recovery, and eco-friendly energy

offer turnkey energy solutions leveraging our technologies and solutions to provide green energy solutions, clean energy fuels and alternative

We 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 provided engineering and manufacturing electronics services to original equipment

We provide engineering and manufacturing electronics services to original equipment

manufacturers (OEMs) of clean energy, industrial, automotive, semiconductor, medical, communication, military, and high technology products.

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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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Limited, a natural gas trading company in China.

Company has four reportable segments:

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

services division.

During the reporting period, the Company made the strategic decision to discontinue its involvement in the Shuya operations,

which was previously aligned under the CETY HK segment.

This decision reflects a broader effort to sharpen the Company’s focus

on its core competencies and highest-value opportunities in waste-to-energy, heat recovery, and eco-friendly energy solutions.

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

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Heat Recovery Solutions – we recycle wasted 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.

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

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 Technologies (H.K.) Limited (“CETY HK”) consists of a ventures in mainland China:

(i) our natural gas

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

The NG 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 market.

We sell the NG to our customers at prevailing daily spot

prices for the duration of the contracts.

(i) our natural gas (“NG”)

trading operations sourcing and suppling NG to industries and municipalities.

The NG 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 market.

We sell the NG to our customers at prevailing daily spot prices for the duration of the contracts.

and Segment Information

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segments but added the CETY HK segment to reflect its recent new businesses in China.

of Operating Results for the year ended December 31, 2024, Compared to the year ended December 31, 2023

of Operating Results for the year ended December 31, 2025, compared to the year ended December 31, 2024 (Restated)

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 $2,938,502 and

a working capital deficit of $3,240,008 and an accumulated deficit of $27,443,231 as of December 31, 2024 and used $3,560,950 in net

cash from operating activities for the year ended December 31, 2024.

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 fiscal year closing on December 31, 2024, our company reported a net loss amounting to $4,416,319, to the net loss of $5,782,666 before non-controlling interest and tax

we achieved during the equivalent period in 2023.

CETY’s net loss was impacted by a shift in our revenue mix, with lower business from China, which historically

had lower margins, and an increasing focus on higher-margin opportunities from our waste-to-energy business.

Additionally, while interest

and financing fees were lower compared to previous periods, they remained high due to delays in our registration becoming effective.

factors contributed to the overall financial performance for the period.

Following the close of the 2024 fiscal year, CETY’s equity saw a significant decrease, dropping from $4,444,038

to $2,938,502, as reflected in our quarterly financials.

This decline was primarily driven by ongoing investments in our waste-to-energy

business, the impact of lower-margin revenue from China, and continued financing costs.

Despite this, our strategic focus on higher-margin

opportunities positions us for stronger long-term growth and improved financial performance.

The Company had a total stockholder’s equity of $6,246,597

and a working capital of $260,863 and an accumulated deficit of $35,299,999 as of December 31, 2025 and used $7,922,347 in net cash

from operating activities for the year ended December 31, 2025.

Management’s plans to alleviate the conditions raising

substantial doubt about the Company’s ability to continue as a going concern include obtaining additional debt and equity

financing, including efforts to restructure certain existing debt obligations through capital raising activities in the equity

The Company is also pursuing strategic partnerships, joint ventures, and other business opportunities, including

collaborations with parties such as Exergy and Metis Power, to support project development, execution, and access to capital.

addition, management continues to pursue project-level financing for development projects, including the Vermont Renewable Gas

project and other clean energy initiatives.

The Company is also implementing cost-reduction initiatives within its Heat Recovery

Solutions business, including utilizing Sagacity as a supply chain partner to improve operating efficiencies and reduce procurement

and manufacturing costs.

Management continues to focus on generating revenue and cash flow from existing operations, project

development activities, and strategic growth opportunities while preserving liquidity and managing operating expenses.

management believes these plans are achievable, there can be no assurance that such plans will be successfully implemented or that

the Company will attain profitable operations and positive cash flows.

company reported a net loss of $6,808,895, for the year ended December 31, 2025, compared to a net loss of $4,550,296 for the same

period in 2024 (Restated) before non-controlling interest and tax we achieved during the equivalent period in 2024 (Restated).

The increase in

net loss was primarily attributable to the write-off of the LWL-related asset in China, as well as substantial interest and

financing expenses associated with convertible notes during the period.

PARTY TRANSACTIONS

note 12 to the notes to the financial statements for a discussion on related party transaction

for the year ended December 31, 2024, compared to the year ended December 31, 2023.

for the year ended December 31, 2025, compared to the year ended December 31, 2024 (Restated).

the year ending December 31, 2025, our total revenue was $2,161,626 compared to $2,424,659 for the same period in 2024.

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four reportable segments:

CETY Renewables division, Clean Energy HRS (HRS) and CETY Europe, the engineering and program management services

division, and CETY HK.

the fiscal year ending December 31, 2024, our revenue from Engineering and Manufacturing amounted to $9,341, a decrease from $47,091

for the corresponding period in 2023.

This decline is due to the gradual shutdown of our legacy manufacturing operations and the strategic

reallocation of resources towards becoming a turnkey provider of technology energy solutions, thus enhancing support for our other advanced

technology segments.

Going forward, our power generation site design and integration for data centers and industrial operations will

be assigned to this segment.

CETY Renewables division, Clean Energy HRS (HRS), the engineering and integrated solutions division, and CETY

For the fiscal year ended December 31, 2025, the Company reported engineering

services revenue of $0.

During the year, the Company integrated its engineering services into its Heat Recovery Solutions (HRS) and Waste-to-Energy

business segments, compared to 2024 when such services were reported separately as $9,341.

Going forward, engineering services will be

recognized within each respective operating segment and reported accordingly.

the year ended December 31, 2025, our revenue from HRS was $503,878 compared to $158,141 for the same period in 2024.

The decrease in

revenue for Heat Recovery Solutions (HRS) and ORC systems in 2024 compared to 2023 was primarily due to project delays and longer sales

cycles associated with supply chain disruptions and extended customer decision-making processes.

Additionally, some key contracts that

were expected to close in 2024 were pushed into 2025 due to permitting and financing challenges faced by customers.

The lower revenue

also reflects a strategic shift toward larger-scale projects, which have longer development timelines but are expected to generate higher

future revenues.

The increase in

revenue for Heat Recovery Solutions (HRS) and ORC systems in 2025 compared to 2024 was primarily due to higher project activity, including

the advancement and execution of customer projects, as well as improved timing of revenue recognition on engineering and system delivery

the fiscal year ending December 31, 2025, our revenue from CETY Renewables, our newly launched waste-to-energy business, amounted to

$484,955 compared to $1,064,757 for the same period in 2024.

The increase in revenue from CETY Renewables in 2024 compared to 2023 was

primarily driven by the continued development and progress of the VRG project, which advanced through critical permitting and early-stage

construction design phases.

The rise in revenue also aligns with our strategic efforts to scale operations and establish a stronger market

presence in the renewable energy sector.

the fiscal year ending December 31, 2024, our revenue from the NG business reached $1,192,420, a significant drop from $5,719,170 in

the corresponding period of 2023.

The decline in revenue from our NG business in 2024 compared to 2023 was primarily due to lower demand

in China, driven by economic factors and shifts in energy consumption patterns.

Additionally, increased competition and more competitive

pricing in the market pressured margins, leading to a significant drop in revenue.

These factors contributed to a slower sales cycle

and reduced order volume compared to the previous year.

The decrease in revenue from CETY Renewables in 2025 compared to 2024 was

primarily attributable to the timing of project execution and revenue recognition, including a longer-than-anticipated review process

by the Public Utility Commission (PUC) for the VRG project, which delayed the advancement of certain project milestones.

continues to make progress on its development pipeline and expects activity to increase as projects move forward.

the fiscal year ending December 31, 2025, our revenue from the NG business reached $1,172,793, compared to $1,192,420 in the corresponding

period of 2024.

The variance reflects relatively consistent performance year over year.

the year ending December 31, 2025, our gross profit increased to $595,568 compared to $846,555 for the same period in 2024.

growth was achieved despite a significant decline in revenue, primarily due to the slowdown in CETY HK’s natural gas business.

The increase in gross profit reflects improved operational efficiencies and a stronger revenue mix from higher-margin segments,

including CETY Renewables.

However, the overall gross margin percentage declined, largely due to the lower-margin nature of the

China natural gas business and increased competition in that market.

Moving forward, we remain focused on expanding our

higher-margin renewable energy and waste-to-energy solutions to drive sustainable profitability.

was primarily driven by the sale of systems with higher margins, as well as improved cost efficiencies.

For the year ended December 31, 2025, our gross profit from Engineering

and Manufacturing amounted to $0, compared to $7,806 for the same period in 2024.

This segment is a recent addition to CETY’s portfolio,

currently serving as a support for our ongoing internal projects.

Nevertheless, it is anticipated to expand notably as CETY shifts its

focus towards providing comprehensive end-to-end power generation and integrated solutions.

the year ended December 31, 2025, our gross profit from HRS was $386,069 compared to $15,160 for the same period in 2024;

This decrease was primarily

due to delays in booking and shipping products, as customers were evaluating their sites and waiting for clarity on economic factors

driven by the U.S.

government’s pending tax incentive programs and the release of new guidelines at the end of 2024, compounded

by the election year uncertainties.

the year ended December 31, 2024, our gross profit from CETY Renewables increased to $829,784, compared to $355,303 for the same period

This growth reflects the expansion of our higher-margin waste-to-energy business, which in 2024 consisted of engineering, project

development, and services with minimal material costs.

The strong profitability of this segment underscores our strategic focus on delivering

turnkey renewable energy solutions that generate long-term value while maintaining a lean cost structure.

was primarily driven by higher revenue volumes and improved margins on system sales, reflecting a more favorable project mix and execution

during the year.

the year ended December 31, 2025, our gross profit from CETY Renewables decreased to $157,405, compared to $829,784 for the same period

Gross profit in both periods reflects work performed during the engineering and development phase of projects, which typically

carries higher margins relative to later-stage execution activities.

the year ended December 31, 2025, our gross profit from CETY HK improved to $52,094, compared to $(6,195) for the same period in 2024.

While overall market conditions for the natural gas business in China remained challenging, we were able to mitigate some losses through

operational efficiencies and pricing adjustments.

The improvement was primarily attributable to more stable operations and improved margins within the natural gas trading business in

General and Administrative (SG&A) Expenses

the year ending December 31, 2024, our Selling, General, and Administrative (SG&A) expenses increased to $797,518, compared to $679,004

This increase was primarily driven by expanded investments in Media and Investor Relations, marketing efforts, and sales initiatives

aimed at supporting business growth.

Increased spending on subscription services and IT infrastructure.

Furthermore, the rise in SG&A

includes expenses related to inducement shares issued in connection with inducement shares for various notes, contributing to the overall

increase in administrative costs.

the fiscal year ending December 31, 2024, our total salaries increased to $1,906,701, compared to $1,570,909 in 2023.

This increase was

primarily driven by the expansion of our CETY Renewables team to support the growth of our waste-to-energy business, as well as salary

increases in our China operations.

These strategic investments in personnel were necessary to strengthen our capabilities, drive project

execution, and support long-term business expansion.

the year ending December 31, 2025, our Selling, General, and Administrative (SG&A) expenses decreased to $3,096,780, compared to

$4,176,986 in 2024 (Restated).

The decrease was primarily driven by reductions in salaries and general and administrative

& Administrative expense

For the fiscal

year ended December 31, 2025, our total General and administrative expense decreased to $553,522, compared to $1,015,102 in 2024

the fiscal year ended December 31, 2025, our total salaries decreased to $1,399,073, compared to $1,906,701 in 2024, primarily reflecting

reductions in headcount and personnel-related costs.

the year ending December 31, 2025, our travel expenses totaled $198,122, compared to $185,876 for the same period in 2024.

This reduction

in expenditure is primarily due to a decrease in travel costs from both the US and Europe.

was not significant and reflects normal variations in business activity.

Lease Expense

the fiscal year ending December 31, 2024, our Facility Lease expense amounted to $285,823, a slight decrease from $310,004 in 2023.

reduction reflects our ongoing efforts to lower lease costs through renegotiations and our focus on more efficient operations.

continuously worked to optimize our space utilization and streamline processes, contributing to this modest reduction in lease expenses.

the fiscal year ending December 31, 2025, our Facility Lease expense amounted to $216,812 a decrease from $285,823 in 2024.

This reduction

reflects our ongoing efforts to lower lease costs through renegotiations and our focus on more efficient operations.

We have continuously

worked to optimize our space utilization and streamline processes, contributing to this modest reduction in lease expenses.

the fiscal year ending December 31, 2025, our total expenses for Investor Relations (IR), marketing, and contractors related to the VRG

project were $10,597, compared to $195,640 for the same period in 2024.

This represents a very slight decrease in expenses, reflecting

our continued focus on cost management while maintaining efforts to support the VRG project.

the year ended December 31, 2024, our bad debt expense was $0 compared to $0 for the same period in 2023.

The decrease was primarily due to reduced activity and spending

associated with the VRG project during the period.

and Amortization Expense

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fees legal and accounting

the fiscal year ending December 31, 2024, our Professional Fees expense amounted to $578,937, up from $356,785 in the same period of

This increase was primarily due to higher costs associated with engaging a new auditor, as well as the increased expenses tied

to our status as a Nasdaq-listed company and expenses associated with our SEC filings.

the fiscal year ending December 31, 2025, our Professional Fees expense

amounted to $706,778, up from $578,937 in the same period of 2024.

For the fiscal year ended December 31, 2025, The increase was primarily

attributable to higher legal and advisory costs related to the Company’s S-3 registration and increased expenses associated with

being a Nasdaq-listed company.

(Loss) from operations

the fiscal year ending December 31, 2024, our net loss from operations totaled $3,112,847, an increase compared to the net loss of $2,925,984

for the same period in 2023.

This rise in loss is primarily due to the expansion of our team, our uplisting to Nasdaq, and the growth

of our global business operations, as well as a decline in revenue from our NG business.

Although revenue dropped substantially, our

net loss remained relatively close to the losses incurred in 2023, reflecting our efforts to manage costs despite the challenges.

the fiscal year ending December 31, 2025, our net loss from operations totaled $2,501,212, a decrease compared to the net loss of $3,330,431

for the same period in 2024 (Restated).

The decrease in net loss reflects improved operating performance during the period.

income/expense

the year ended December 31, 2025, the Company recorded a loss of $179,983, compared to a gain of $12,583 for the same period in 2024.

The decrease was primarily driven by the discount recognized on the modified Heze loan receivable and the recognition of a CECL allowance

based on amortized cost.

in Derivative Liability

For the year ended December 31, 2024, we had $0 compared

to loss on derivative liability of $326,539 for the same period in 2023.

The decrease in loss on derivative liability was due to maturity

date and expiration of the notes.

the year ended December 31, 2025, the Company recorded a gain of $370,707 from changes in derivative liabilities,

compared to no such gain or loss in 2024.

Change in FV of warrant liability

For the years ended December 31, 2025 and 2024 (Restated),

we had $57,674 and $26,596 gain on warrant liability related to Equity Line of Credit Agreement entered December 5, 2024.

the year ended December 31, 2025, we recorded a gain of $318,426 from investment from Shuya compared to $125,148 in losses in year ended

in December 31, 2024.

This gain is because of the disposition of the Shuya assets.

on debt settlement and write off

For the year ended December 31, 2024, we recorded

gain of $8,135, compared to a loss of $1,124,654 for the same period in 2023.

The loss in 2024 was

primarily attributable to the deconsolidation of Shuya, while the 2023 loss was due to the fair market valuation of preferred shares.

the year ended December 31, 2025, we recorded a loss of 1,573,939 compared to a gain of $8,135 for the same period in 2024.

2025 was primarily attributable to the write-off related to the LWL investment in China.

and Finance Fees

the year ended December 31, 2024, interest and finance fees totaled $1,199,042, compared to $2,137,649 for the same period in 2023.

decrease was primarily due to a reduction in convertible notes, bridge financing fees, and interest.

However, we still incurred significant

financing fees and higher interest costs due to delays in our registration statement becoming effective, delays in funding, and the need

to rely on more expensive debt during the year.

the year ended December 31, 2025, interest and finance fees totaled $3,300,520, compared to $1,142,031 for the year ended December 31,

2024 (Restated), representing an increase of $2,158,489, or 189%.

increase was primarily attributable to higher financing costs associated with the Company’s convertible notes and bridge financing activities,

including increased interest expense, amortization of original issue discounts (“OID”), amortization of debt discounts associated

with derivative liabilities, and other financing-related charges recognized during 2025.

In addition, the Company incurred higher costs

related to the issuance, modification, and settlement of financing instruments compared to the prior year.

believes the increase reflects the Company’s greater reliance on short-term and convertible financing arrangements to fund operations,

project development activities, and working capital requirements during 2025.

and Capital Resources

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Requirements for long-term obligations

The following table presents the Company’s material contractual obligations

as of December 31, 2024:

Contractual Obligations

following table presents the Company’s material contractual obligations as of December 31, 2025:

Less than 1 year

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has an enforceable right to payment for performance completed to date (as described in FASB ASC 606-10-25-29).

following five steps are applied to achieve that core principle for our business:

the contract with the customer

the performance obligations in the contract

the transaction price

the transaction price to the performance obligations in the contract

revenue when the company satisfies a performance obligation

Obligations Satisfied at a Point in Time

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following step is applied to our CETY HK business unit:

HK is primarily responsible for fulfilling the contract / promise to provide the specified good or service.

HK is primarily responsible for fulfilling the contract / promise to provide the specified

good or service.

principal obtains control over any one of the following (ASC 606-10-55-37A):

good or another asset from the other party which the entity then transfers to the customer.

Note that momentary control before transfer

to the customer may not qualify.

right to a service to be performed by the other party, which gives the entity the ability to direct that party to provide the service

to the customer on the entity’s behalf.

good or service from the other party that it then combines with other goods or services in providing the specified good or service

to the customer.

Note that momentary control before transfer to the customer may not qualify.

right to a service to be performed by the other party, which gives the entity the ability to direct

that party to provide the service to the customer on the entity’s behalf.

good or service from the other party that it then combines with other goods or services in providing

the specified good or service to the customer.

the entity obtains control over one of the above before the good or service is transferred to a customer, the entity could be considered

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affecting the revenue recognized accordingly.

projected costs of the VRG project is based on estimates and profitability will be impacted depending on actual costs.

the VRG project, management considered the contractual arrangements, commercial substance of the transaction, probability of collection,

expected project financing sources, and anticipated economic benefits associated with the project when determining the appropriateness

of revenue recognition under ASC 606.

Although VRG is an equity-method investee of the Company and project financing has experienced

delays, management concluded that the project remained commercially viable and that the applicable criteria for revenue recognition over

time were satisfied.

Management continues to evaluate these assumptions and will adjust its estimates as facts and circumstances evolve.

Management evaluated the criteria under ASC 606, including

commercial substance and collectability, throughout the term of the EPC Agreement.

Although VRG is a related-party entity in which the

Company holds a 49% ownership interest, VRG is a separate legal entity with independent contractual obligations under the EPC Agreement.

The contract was entered into for the development, design, permitting, construction, and delivery of the VRG-Lyndon facility and management

concluded that the arrangement has commercial substance.

Although VRG is a related-party customer, management evaluated the material terms

of the EPC Agreement, including the scope of work, contract price, payment provisions, project deliverables, and enforceable rights and

Based on this evaluation, management concluded that the agreement has commercial substance and was entered into for a substantive

business purpose related to the development, design, permitting, construction, and delivery of the VRG-Lyndon facility.

Revenue is recognized

over time using a cost-to-cost input method based on costs incurred relative to total estimated project costs.

As of December 31, 2025,

the project continued to advance through the Vermont Section 248 permitting process and management continued to pursue multiple financing

sources for the project.

Although one potential financing source subsequently failed to fund as expected, management determined that the

project was not dependent on a single financing source and concluded that collection of substantially all consideration under the contract

remained probable.

No amounts due under the EPC Agreement were considered past due as of December 31, 2025.

CETY Renewables currently has $2,431,485 of accounts receivable from Vermont Renewable Gas.

projected costs of the VRG project are based on estimates and profitability will be impacted depending on actual costs.

Using the input

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Additionally,

the above five steps are applied to achieve core principle for our CETY Renewables Division:

the following five steps are applied to achieve the core principle for our CETY Renewables Division:

the CETY Renewables Division is presently engaged in the Engineering, Procurement, and Construction (EPC) of biomass power facilities,

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recognizing this revenue, CETY Renewables first identifies the relevant contract with its customer according to 606-10-25-1.

entities, together known as the Parties, approved the contract in writing, through signatures and commitment to the performance of

permitting, design, procurement, construction, and commissioning.

work product includes permits, engineering designs, equipment, and full balance of plant specific to permitting, design, procurement,

construction, and commissioning.

entities, together known as the Parties, approved the contract in writing, through signatures

and commitment to the performance of permitting, design, procurement, construction, and commissioning.

work product includes permits, engineering designs, equipment, and full balance of plant

specific to permitting, design, procurement, construction, and commissioning.

and customer agree to a total EPC Contract price.

contract has commercial substance.

The risk associated with this EPC Agreement is that payment of the EPC contract price.

the EPC Agreement, CETY expects to collect substantially all of the consideration for its goods and services.

The EPC Agreement has commercial substance because it establishes enforceable rights and obligations between the

parties for the permitting, design, procurement, construction, commissioning, and delivery of a biomass power generation facility.

agreement provides for a defined contract price, milestone-based billing provisions, and the transfer of goods and services that are expected

to result in future economic benefits to the customer.

In assessing collectability under ASC 606-10-25-1(e), management considers the customer’s ability and intent to satisfy

its payment obligations.

For the VRG EPC Agreement, management considered the continued advancement of the project through the Vermont

Section 248 permitting process, the existence of a long-term power purchase framework, selection of the project for Quantified Ventures’

GGRF pipeline, ongoing discussions with multiple potential financing sources, including infrastructure and climate-focused investors,

and the availability of grant funding opportunities, including investment tax credits, Wood Innovation Grant Award, and USDA grant agreement.

Although one potential financing source subsequently failed to fund as expected, management determined that the project was not dependent

upon a single financing source and concluded that collection of substantially all consideration under the contract remained probable as

of the reporting date.

CETY identifies the performance obligations of the Parties in performance of the EPC Agreement in accordance with 606-10-25-14.

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or functional system.

in accordance with 606-10-32-1, CETY reviews measurement of the performance obligations.

There are no exclusion of any amount of the

in accordance with 606-10-32-1, reviews measurement of the performance obligations.

There is no exclusion of any amount of the

Contract Price due to constraints associated with 606-10-31-11 through 606-10-32-13.

review of 606-10-32-2A, CETY did not exclude measurement from the measurement of the transaction price any taxes assessed by a government

review of 606-10-32-2A, CETY did not exclude from the measurement of the transaction price any taxes assessed by a government

authority as no such taxes will be due.

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ASC 606-10-25-33.

The company adopts the input method for implementation.

CETY recognizes revenue for performance obligations on the

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a final payment of 10%.

As of December 31, 2024 and 2023 we had $33,000 and $33,000 of deferred revenue, which is expected to be recognized

in the second quarter of year 2025.

As of December 31, 2025 and 2024 we had $33,000 and $33,000 of deferred revenue.

from time-to-time, we require upfront deposits from our customers based on the contract.

As of December 31, 2024 and 2023, we had outstanding

customer deposits of $30,061 and $165,236, respectively.

As of December 31, 2025 and 2024 (Restated), we had

outstanding customer deposits of $759,611 and $172,061, respectively.

from fair value or equity method to consolidation

July 2022, JHJ and other three shareholders agreed to form and make total capital contribution of RMB 20 million ($2.81 million) with

latest contribution due date in February 2066 into Sichuan Hongzuo Shuya Energy Limited (“Shuya”), JHK owns 20% of Shuya.

In August 2022, JHJ purchased 100% ownership of Sichuan Shunengwei Energy Technology Limited (“SSET”) for $0, who owns 29%

Shunengwei is a holding company and did not have any operations nor made any capital contribution into Shuya as of the ownership

purchase date by JHJ;

right after the ownership purchase of SSET, JHJ ultimately owns 49% of Shuya.

July 2022, JHJ and other three shareholders agreed to form and make total capital contribution of RMB 20 million ($2.81 million)

with latest contribution due date in February 2066 into Sichuan Hongzuo Shuya Energy

Limited (“Shuya”), JHJ owns 20% of Shuya.

In August 2022, JHJ purchased 100% ownership of Sichuan Shunengwei Energy

Technology Limited (“SSET”) for $0, which owns 29% of Shuya;

Shunengwei is a holding company and did not have any

operations nor make any capital contribution into Shuya as of the ownership purchase date by JHJ;

right after the ownership purchase

of SSET by JHJ, JHJ ultimately owns 49% of Shuya.

was set up as the operating entity for pipeline natural gas (PNG) and compressed natural gas (CNG) trading business, while the other

two shareholders of Shuaya have large supply relationships.

two shareholders of Shuya have large supply relationships.

the year ended December 31, 2022, the Company has determined that Shuya was not a VIE and has evaluated its consolidation analysis under

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Also, any recognized profit increases the investment recorded by the investing entity, while a recognized loss decreases the investment.

made a investment of RMB 3.91 million ($0.55 million) into Shuya during the 12 months ended December 31, 2022 recorded in accordance

made an investment of RMB 3.91 million ($0.55 million) into Shuya during the 12 months ended December 31, 2022, recorded in accordance

with ASC 323.

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effective January 1, 2023, JHJ, SSET and Chengdu Xiangyueheng Enterprise Management Co., Ltd (“Xiangyueheng), who is the 10% shareholder

of Shuya, entered a Three-Parties Consistent Action Agreement, wherein these three shareholders (or three parties) will guarantee that

of Shuya, entered a Three-Parties Consistent Action Agreement, wherein these three shareholders (or three parties) guaranteed that

the voting rights will be expressed in the same way at the shareholders’ meeting of Shuya to consolidate the controlling position

of the three parties in Shuya.

The three parties agree that within the validity period of this agreement, before the party intends to

The three parties agreed that within the validity period of this agreement, before the party intends to

propose the motions to the shareholders or the board of directors on the major matters related to the voting rights of the shareholders

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Therefore, the Company should provide pro forma information

as if the consolidation had occurred as of the beginning of each of the current and prior comparative reporting period per

ASC-805-10-50-2, initial consolidation of an investee previously reported using fair value or the equity method should be accounted for

prospectively as of the date the entity obtained a controlling financial interest.

Therefore, the Company should provide pro forma information

as if the consolidation had occurred as of the beginning of each of the current and prior comparative reporting period per

as if the consolidation had occurred as of the beginning of each of the current and prior comparative reporting period.

January 1, 2024, and effective on the same date, JHJ, SSET and Xiangyueheng entered into the Agreement on the Termination of the Concerted

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on or after January 1, 2024.

the year ended December 31, 2025, the Company completed the disposal of its investment in Shuya through a series of equity transfer transactions,

as evidenced by executed equity transfer agreements and shareholder resolutions.

Pursuant to these transactions, the Company transferred

its ownership interest in Shuya and no longer retains any equity interest, control, or significant influence over the entity.

the Company determined that Shuya no longer meets the criteria for recognition under the equity method or fair value method.

a result, the Company derecognized its investment in Shuya and recognized the resulting gain or loss on disposal in the consolidated

statements of operations in accordance with U.S.

Additionally,

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upon adoption.

2025, the Company entered into a consulting and business development arrangement with Linkage, pursuant to which approximately HKD 30

million (approximately US$3.2 million) was advanced under the agreement.

Linkage also participated as an investor in the Company’s May

2025 private placement financing.

evaluated the substance of the arrangement and determined that the amounts advanced should be recorded as a refundable deposit and other

receivable rather than as a current period expense, based on the contractual terms of the agreement and the Company’s expectation of

Management periodically assesses the recoverability of the receivable by considering the financial condition of the counterparty,

contractual rights, subsequent events, and other available evidence.

Based on management’s evaluation as of December 31, 2025, the Company

believes the recorded balance is recoverable.

Quantitative and Qualitative Disclosures about Market Risk.

2 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-K

Item 7. Management’s Discussion and Analysis