Companies

Clean Energy Technologies' Gross Profit Collapses as China Gas Mix Shifts

The Tip Desk · August 19, 2026 · 3 min read

Gross profit for the six months ended June 30, 2026 was $3,689, versus $635,535 a year earlier, as China natural gas filled the books and clean-energy system sales vanished.

Clean Energy Technologies (CETY), a designer of waste-heat recovery and waste-to-energy systems, reported that gross profit for the six months ended June 30, 2026, collapsed to $3,689 from $635,535 a year earlier as the business mix shifted toward lower-margin China natural gas trading and higher-margin clean-energy system sales were absent.

Total revenue for the same six months was $1,155,641, compared with $678,215 in the year-earlier period. The increase was primarily attributable to higher revenue from the China natural gas business.

The mix shift is the quarter’s defining turn. Natural gas revenue was $1,138,664, up from $7,130 a year earlier. Heat Recovery Solutions revenue was $16,977, versus $339,488 a year earlier, with no product sales from the HRS unit. Waste to Energy revenue was $0, compared with $331,597 a year earlier, as Vermont projects remained pending final Vermont Public Utility Commission review and Certificate of Public Good issuance. Engineering and Manufacturing reported nil revenue, matching the year-earlier period.

Gross profit by segment tracked the same pattern. Natural gas segment gross profit was $23,308, up from $239 a year earlier. HRS gross profit swung to a negative $19,620 from $303,699 a year earlier due to absent product sales and higher freight costs. Waste to Energy gross profit was nil. Engineering and Manufacturing gross profit was nil.

Operating expenses for the six months were $1,479,117, down from $1,766,687 a year earlier. The decrease was primarily attributable to lower salary and related personnel costs as fewer resources were required for Vermont Renewable Gas projects entering the final phase of permitting. Salary expenses were $571,175, versus $873,268 a year earlier, due to reduced CETY Renewables activity. Professional fees rose to $449,420 from $333,319 a year earlier, primarily due to audit costs.

The net loss was $1,735,079, compared with $1,699,803 a year earlier (restated). The increase was primarily attributable to the absence of higher-margin HRS sales, the shift toward lower-margin China natural gas, changes in fair value of convertibles, lower gross margins, and variations in interest and financing fees. Operating-expense savings from reduced Vermont personnel costs were not sufficient to offset the decline in gross profit.

Interest and finance fees were $1,177,937, up from $865,734 a year earlier. The increase was primarily due to two larger interim financings obtained to bridge the company through finalization of funding for the Vermont Renewable Gas project and monetization of HRS projects.

Cash used in operating activities was $1,664,648, versus $1,540,526 a year earlier. Cash used in investing activities was $702,769, versus nil a year earlier, driven by a $700,000 note-receivable investment. Cash provided by financing activities was $1,783,373, down from $5,903,311 a year earlier, on lower net proceeds from notes payable and lines of credit.

Cash on the balance sheet fell to $19,735 as of June 30, 2026, from $602,461 as of December 31, 2025. Working capital flipped to a deficit of $37,355, versus positive working capital of $1,036,272 as of March 31, 2026. Stockholders’ equity decreased to $5,990,022 from $6,246,597 as of December 31, 2025, primarily due to higher interest and financing fees. There is substantial doubt about the company’s ability to continue as a going concern.

Revenue for the first and second quarters was primarily driven by the CETY HK natural gas trading business, and the company anticipates stronger revenue contributions from Waste-to-Energy, Heat Recovery, and EPC segments with higher margins. The Vermont pilot Waste-to-Energy facility is pending final approval from the Vermont Public Utility Commission. Demand for Heat Recovery solutions is accelerating across the U.S. and Europe, and the company is scaling Engineering and project management operations.