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RELATED PARTY TRANSACTIONS
 12 Months Ended
Dec. 31, 2023
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 13 – RELATED PARTY TRANSACTIONS

 

From August 2022 through October 2022 Hongzhuo Shuya (Shuya) a 49% owned subsidiary (also is our consolidated VIE) of CETY HK limited engaged in the trading of pipeline gas and CNG processing and sales provided Sichuan Leishen Hongzhuo Energy Development Co., Ltd (Leishen) with approximately total of $700,000 loan with a 4-year term to facilitate building of a natural gas recycling station to provide Shuya with CNG sales. Leishen owns 41% of Shuya and as an entity can obtain the permits and licenses to build and operate the NG Recycling Station to produce CNG. At the end of the 4-year term of the loan, Leishen has the option to either transfer the NG Recycling Station and all permits to Shuya or repay the loan.

 

Additionally, Leishen has relationships with the supply side of the NG business and is able to obtain large amounts of NG. As a result, Shuya also has a supplier relationship with Leishen. Our Board of Directors has approved the transactions between Leishen and the Company. During the year ended December 31, 2023 Shuya made a $5,641,069 purchase from Leishen. As of December 31, 2023, we had no accounts receivable from Leishen. However, we had an advance to the supplier of Leishen amounting to $466,914. Additionally, there were accounts payable to Leishen totaling $315,361, which were recorded for inventory purposes but the advance to supplier account was not decreased. Furthermore, there was a due from related party balance of $752,066 and a due to related party balance of $103,939.

 

Leishen has constructed a CNG refueling station on behalf of Shuya, the loan term is four years. When the CNG refueling station is ready for operation, Shuya will lease the CNG refueling station from Leishen at a price equivalent to the depreciation amount of the station; when the assets are eligible for transfer, Leishen will transfer the assets of CNG refueling station to Shuya at the net asset value.

 

Effective August 5, 2022, Shuya entered a 48-month lease for a natural gas recycle station from Leishen (the 41% shareholder of Shuya), including the operating rights and use rights of all the assets and equipment in the station. The annual rent is approximately $64,290, to be paid each year in advance, however, it has not been paid since the lease commenced. Effective August 5, 2022, Shuya entered another 48-month lease for leasing sewage treatment land from Leishen to operate the natural gas recycling station. The annual rent is approximately $17,137, to be paid each year in advance, which has not been fully paid since the lease commenced.

 

On May 13, 2021 the Company formed CETY Capital LLC a wholly owned subsidiary of CETY. In addition, the company established Vermont Renewable Gas LLC (“VRG”) with our partner, Synergy Bioproducts Corporation (“SBC”) The purpose of the joint venture is the development of a pyrolysis plant established to convert wood feedstock into electricity and BioChar by using high temperature ablative fast pyrolysis reactor for which Clean Energy Technology, Inc. holds the license for. The VRG is in Lyndon, Vermont. Based upon the terms of the members’ agreement, CETY Capital LLC owns a 49% interest and SBC owns a 51% interest in Vermont Renewable Gas LLC.

 

On June 2, 2023 CETY Renewables executed a turnkey agreement for the design, construction, and delivery of organics to energy plant with Vermont Renewable Gas, LLC. As a result, CETY has invoiced VRG $ in 2023 ($429,999 in total) and $410,486 recorded as related party revenue.

 

Kambiz Mahdi, our Chief Executive Officer, owns Billet Electronics, which is distributor of electronic components. From time to time, we purchase parts from Billet Electronics. In addition, Billet was a supplier of parts and had dealings with current and former customers of the Company prior to joining the company. The amount of parts purchases in 2023 was $6,187. Our Board of Directors has approved the transactions between Billet Electronics and the Company. The outstanding balance as of December 31, 2023 was $0.