Clean Energy Technologies, Inc. (NASDAQ:CETY), a natural gas distribution company with a current ratio of 0.86, has entered into a significant financial arrangement, securing an equity line of credit agreement with Mast Hill Fund, L.P. on December 5, 2024.
According to InvestingPro analysis, the company's overall financial health score stands at 1.6, indicating potential challenges that this new funding could help address. This agreement provides Clean Energy Technologies with a $5 million equity line, enhancing the company's financial flexibility over the next two years.
Under the terms of the agreement, Clean Energy Technologies, which rebranded from Probe Manufacturing Inc., can issue notices to Mast Hill Fund to sell shares of its common stock at a price of 95% of the lowest trading price during a set pricing period. The company has the discretion to sell a minimum of $5,000 and up to $250,000 worth of shares per notice, without surpassing 20% of the average trading volume of the stock in the five days preceding the notice.
A commitment fee of 50,000 shares was issued to Mast Hill Fund, along with a warrant enabling the purchase of an additional 500,000 shares at an initial price of $2.00 per share, subject to standard adjustments. The warrant comes with a beneficial ownership limitation of 4.99% for the investor.
Additionally, Clean Energy Technologies agreed to a registration rights agreement, committing to file an initial registration statement with the SEC within 45 days to cover the resale of shares by Mast Hill Fund. The company aims to have the registration statement declared effective within 90 days and will maintain its effectiveness until all registrable securities have been sold and the equity line fully utilized.
The company's issuance of the commitment shares and the warrant to Mast Hill Fund is exempt from registration under the Securities Act of 1933, as amended, in reliance on Section 4(a)(2) and Rule 506(b) of Regulation D.
This financial maneuver provides Clean Energy Technologies with a robust mechanism to support its growth initiatives by tapping into additional capital in a flexible manner. The company has demonstrated strong revenue growth of 119.2% over the last twelve months, reaching $11.78 million, though operating with a debt-to-equity ratio of 1.05. For deeper insights into CETY's financial metrics and growth potential, InvestingPro subscribers have access to over 10 additional key financial indicators and expert analysis.
The company's strategic partnership with Mast Hill Fund through this equity line of credit agreement is an important step in bolstering its financial position to navigate and expand within the competitive natural gas distribution market. With the stock down 57.42% over the past year and trading significantly below its 52-week high of $2.39, this financing could prove crucial for the company's turnaround efforts. This news is based on the company's recent SEC filing.
In other recent news, Clean Energy Technologies, Inc. (CETY) has announced a strategic partnership with METIS Power Inc. to develop advanced microgrid solutions for AI data centers and cryptocurrency mining operations. The collaboration aims to integrate CETY's waste heat recovery systems with METIS Power's energy storage and power generation technologies. This comes alongside CETY's broader commitment to the zero-emission revolution.
In recent developments, CETY has received a non-compliance notice from Nasdaq due to its common stock trading below the $1.00 minimum bid price. The company has expressed its intent to evaluate all possible measures to regain compliance within the given 180 days.
Furthermore, CETY has signed a Memorandum of Understanding with True North Computation, Inc., indicating its intention to venture into Cryptocurrency Mining and Artificial Intelligence Datacenter sectors. The company's affiliate, Vermont Renewable Gas, LLC (VRG), has also been awarded a $1 million grant from the United States Department of Agriculture (USDA) under the Rural Energy for America Program (REAP). This grant will support the completion of the VRG – Lyndon 2.2-megawatt renewable energy facility in Vermont, which will utilize Clean Energy Technologies' HTAP Biomass Reactor technology.
These recent developments are part of CETY's strategy to integrate biomass solutions into its business, enhancing its heat recovery offerings, and driving growth. As the company navigates these changes, investors are expected to closely monitor its progress.
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