Clean Energy Technologies, Inc. 8-K

What Happened

• Clean Energy Technologies, Inc. announced on July 1, 2026 that it entered into a securities purchase agreement and closed a transaction with Coventry Enterprises LLC under which Coventry purchased a convertible promissory note with a $166,500 principal amount for $150,000. The deal closed July 1, 2026 and proceeds are to be used for general working capital.

Key Details

• Purchase and proceeds: Principal $166,500; purchase price $150,000; Coventry’s legal fees of $3,000 were paid from the gross proceeds and $6,000 was paid to the company’s registered broker-dealer, leaving the company net funding of $141,000.
• Interest, payments and maturity: The Note accrues a one-time 12% interest charge on issuance (12% of $166,500 = $19,980), is payable in 10 monthly payments of $18,648 beginning August 7, 2026, and matures May 1, 2027.
• Conversion terms and limits: After default, the holder may elect to convert the Note into common stock at a price equal to 85% of the lowest closing bid during the ten trading days prior to conversion (a 15% discount). Conversions are limited so the holder cannot exceed 4.99% beneficial ownership, and conversions that would trigger Nasdaq Rule 5635(d) aggregation are limited to 19.99% if required shareholder approval has not been obtained. The holder may deduct $1,500 from each conversion amount to cover conversion fees.

Why It Matters

• The company received immediate cash (net $141,000) to support operations, but also took on a near-term financial obligation requiring monthly cash payments through May 2027.
• The note creates potential dilution if converted, with a conversion price set at a 15% discount to recent market prices; however, conversion is capped by ownership limits and Nasdaq-related thresholds, which constrain near-term dilution.
• Investors should note the short maturity and monthly payment burden, the one-time 12% interest cost, and the conversion mechanics when assessing company liquidity and potential dilution.