Company Quick10K Filing
Energy & Technology
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$0.00 166 $177
10-Q 2018-11-14 Quarter: 2018-09-30
10-Q 2018-08-14 Quarter: 2018-06-30
10-Q 2018-05-16 Quarter: 2018-03-31
10-K 2018-04-02 Annual: 2017-12-31
10-Q 2017-11-14 Quarter: 2017-09-30
10-Q 2017-08-14 Quarter: 2017-06-30
10-Q 2017-05-15 Quarter: 2017-03-31
10-Q 2016-11-14 Quarter: 2016-09-30
10-Q 2016-08-15 Quarter: 2016-06-30
10-Q 2016-05-16 Quarter: 2016-03-31
10-K 2016-03-31 Annual: 2015-12-31
10-Q 2015-11-13 Quarter: 2015-09-30
10-Q 2015-08-14 Quarter: 2015-06-30
10-Q 2015-05-15 Quarter: 2015-03-31
10-K 2015-04-15 Annual: 2014-12-31
10-Q 2014-11-14 Quarter: 2014-09-30
10-Q 2014-08-14 Quarter: 2014-06-30
10-Q 2014-05-16 Quarter: 2014-03-31
10-K 2014-03-31 Annual: 2013-12-31
10-Q 2013-11-13 Quarter: 2013-09-30
10-Q 2013-08-14 Quarter: 2013-06-30
10-Q 2013-05-13 Quarter: 2013-03-31
10-K 2013-03-28 Annual: 2012-12-31
10-Q 2012-11-15 Quarter: 2012-09-30
10-Q 2012-08-10 Quarter: 2012-06-30
10-Q 2012-05-04 Quarter: 2012-03-31
10-K 2012-03-30 Annual: 2011-12-31
10-Q 2011-11-14 Quarter: 2011-09-30
10-Q 2011-08-15 Quarter: 2011-06-30
10-Q 2011-05-16 Quarter: 2011-03-31
10-K 2011-04-15 Annual: 2010-12-31
10-Q 2010-11-12 Quarter: 2010-09-30
10-Q 2010-08-16 Quarter: 2010-06-30
10-Q 2010-05-21 Quarter: 2010-03-31
10-K 2010-04-16 Annual: 2009-12-31
ENGT 2018-09-30
Part I - Financial Information
Item 1. Financial Statements
Note 1. Organization
Note 2. Summary of Significant Accounting Policies
Note 3. Patent
Note 4. Property and Equipment
Note 5. Related Party Transactions
Note 6. Notes Payable
Note 7. Equity
Note 8. Earnings per Share
Note 9. Commitments
Note 10. Litigation and Contingent Liabilities
Note 11. Major Customers
Note 12. Estimated Fair Value of Financial Instruments
Note 13. Subsequent Events
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities.
Item 4. Submission of Matters To A Vote of Security Holders.
Item 5. Other Information.
Item 6. Exhibits and Reports of Form 8-K.
Item 7. Up-Dates and Clarifications To Prior Non-Financial Information
EX-31.1 f10q0918ex31-1_energytech.htm
EX-32.1 f10q0918ex32-1_energytech.htm

Energy & Technology Earnings 2018-09-30

ENGT 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Comparables ($MM TTM)
Ticker M Cap Assets Liab Rev G Profit Net Inc EBITDA EV G Margin EV/EBITDA ROA
BCYC 185 126 22 2 0 -10 -10 76 0% -7.5 -8%
TEHG 182 5 3 1 0 -2 -2 182 57% -105.6 -33%
ACBM 177 1 0 3 0 -0 -0 177 10% -1,443.4 -13%
ENGT 177 4 9 3 1 -0 -0 177 32% -1,446.0 -4%
EMG 177 85 121 35 0 -59 -33 176 0% -5.2 -69%
FNGR 175 5 4 2 0 -4 -4 174 18% -49.3 -72%
PGTK 173 44 44 7 2 -22 -21 170 31% -8.1 -49%
CYDY 171 21 30 0 0 -56 -49 172 -3.5 -269%
FRAF 170 1,252 1,128 0 0 15 25 88 3.6 1%
STXS 169 21 17 29 23 -4 -4 161 80% -40.1 -20%

10-Q 1 f10q0918_energytechnology.htm QUARTERLY REPORT

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2018

 

TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

ENERGY & TECHNOLOGY, CORP.

(Exact name of registrant as specified in Charter)

 

DELAWARE   333-143215   26-0198662

(State or other jurisdiction of

incorporation or organization)

  (Commission File No.)   (IRS Employee
Identification No.)

 

Petroleum Towers, Suite 530

3639 Ambassador Caffery Blvd

Mail to: P.O. Box 52523

Lafayette, LA 70505

(Address of Principal Executive Offices)

 

 

 

+ 1-337- 984-2000

(Issuer Telephone number)

 

+ 1-337- 988-1777

Issuer Fax Number

 

 

 

www.engt.com 

www.energyntechnology.com

 

Securities registered under Section 12(b) of the Exchange Act: None.
   
Securities registered under Section 12(g) of the Exchange Act: Common stock, par value $0.001 per share.
  (Title of class)

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 the Securities Act. Yes ☐   No ☒ 

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐   No ☒ 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

  Large accelerated filer Accelerated filer
  Non-accelerated filer Smaller reporting company
  (Do not check if a smaller reporting company)   Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ☒

 

According to the Company’s transfer agent of record, Olde Monmoth Stock Transfer Agent’s latest records, the number of shares outstanding of each of the Company’s classes of common equity, as of the end of the fiscal quarter covered by this report, is 165,560,766 shares of common stock. The company has issued no stock since that date.

 

 

 

 

 

ENERGY & TECHNOLOGY, CORP.

 

FORM 10-Q

 

September 30, 2018

 

INDEX

 

PART I—FINANCIAL INFORMATION

  1
       
Item 1.  Financial Statements  1
Item 2.  Management’s Discussion and Analysis of Financial Condition  10
Item 3.  Quantitative and Qualitative Disclosures About Market Risk  14
Item 4.  Control and Procedures  14
       
PART II—OTHER INFORMATION   
       
Item 1.  Legal Proceedings  15
Item 2.  Risk Factors  15
Item 3.  Unregistered Sales of Equity Securities and Use of Proceeds  15
Item 4.  Defaults Upon Senior Securities  15
Item 5.  Submission of Matters to a Vote of Security Holders  15
Item 6.  Other Information  15
Item 7.  Exhibits and Reports on Form 8-K  15
       
SIGNATURE  16

 

i

 

 

INTRODUCTORY NOTE

 

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 about Energy & Technology, Corp. (the “Company”) and our subsidiaries, Technical Industries, Inc. (TII), Energy Pipe, LLC (EP), (a variable interest entity), and Energy Technology Manufacturing & Threading, LLC (ETMT), (a variable interest entity), that are subject to risks and uncertainties. Forward-looking statements include information concerning future financial performance, business strategy, projected plans and objectives. Statements preceded by, followed by or that otherwise include the words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “may increase,” “may fluctuate” and similar expressions of future or conditional verbs such as “will,” “should,” “would,” and “could” are generally forward-looking in nature and not historical facts. Actual results may differ materially from those projected, implied, anticipated or expected in the forward-looking statements. Readers of this quarterly report should not rely solely on the forward-looking statements and should consider all uncertainties and risks throughout this report. The statements are representative only as of the date they are made. The Company, Technical Industries, Inc. (TII), Energy Pipe, LLC (EP), and Energy Technology Manufacturing & Threading, LLC (ETMT), (sometimes referred to herein on a consolidated basis as the Company, we, us, or similar phrasing) undertakes no obligation to update any forward-looking statement.

 

These forward-looking statements, implicitly and explicitly, include the assumptions underlying the statements and other information with respect to the Company’s beliefs, plans, objectives, goals, expectations, anticipations, estimates, financial condition, results of operations, future performance and business, including management’s expectations and estimates with respect to revenues, expenses, return on equity, return on assets, efficiency ratio, asset quality and other financial data and capital and performance ratios.

 

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, these statements involve risks and uncertainties that are subject to change based on various important factors, some of which are beyond the control of the Company. The following factors, among others, could cause the Company’s results or financial performance to differ materially from its goals, plans, objectives, intentions, expectations and other forward-looking statements:

 

general economic and industry conditions;
our capital requirements and dependence on the sale of our equity securities;
the liquidity of the Company’s common stock will be affected by the lack of a trading market;
industry competition;
shortages in availability of qualified personnel;
legal and financial implications of unexpected catastrophic events;
regulatory or legislative changes effecting the industries we serve; and
reliance on, and the ability to attract, key personnel.

 

For a discussion of these and other risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” in the Company’s S-1 Report filed with the SEC, which is available on the SEC’s website at www.sec.gov. All forward-looking statements are qualified in their entirety by this cautionary statement, and the Company undertakes no obligation to revise or update this Quarterly Report on Form 10-Q to reflect events or circumstances after the date hereof. New factors emerge from time to time, and it is not possible for us to predict which factors, if any, will arise. In addition, the Company cannot assess the impact of each factor on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

 

ii

 

 

PART I - Financial Information

 

Item 1. Financial Statements

 

ENERGY & TECHNOLOGY, CORP.

Consolidated Balance Sheets

As of September 30, 2018 and December 31, 2017

 

   June 30,   December 31, 
   2018   2017 
   (Unaudited)   (Unaudited) 
Assets        
Current Assets    
Cash and Cash Equivalents  $117,106   $36,168 
Investments   2,332    2,289 
Accounts Receivable          
Trade, Net   393,571    273,183 
Inventory, Net   903,373    903,373 
Prepaid Expenses   74,422    50,835 
Other Current Assets   178,366    126,168 
           
Total Current Assets   1,669,170    1,392,016 
           
Property and Equipment, Net          
Held for Operations, Net   1,933,949    2,099,840 
Construction in Progress   350,418    350,418 
    2,284,366    2,450,258 
           
Total Assets  $3,953,537   $3,842,274 
           
Liabilities and Stockholders’ Equity          
Current Liabilities          
Accounts Payable  $1,077,806   $978,740 
Accrued Liabilities   79,601    82,035 
Accrued Rent   2,520,000    2,407,500 
Current Maturities of Notes Payable   4,580,873    4,425,147 
Due to Affiliates   739,271    856,687 
Income Taxes Payable   25,287    25,287 
           
Total Current Liabilities   9,022,838    8,775,396 
           
Long-Term Liabilities          
Notes Payable  $6,427   $13,142 
           
 Total Liabilities  $9,029,265   $8,788,538 
           
Stockholders’ Equity          
Preferred Stock - $.001 Par Value; 10,000,000 Shares Authorized,  None Issued   -    - 
Common Stock - $.001 Par Value; 250,000,000 Shares Authorized, 169,198,117 Shares Issued at September 30, 2018 and December 31, 2017, respectively   169,198    169,198 
Paid-In Capital   4,209,592    4,209,592 
Treasury Stock, at cost (3,637,351 Shares)   (4,076,441)   (4,076,441)
Retained Earnings   (5,378,078)   (5,248,612)
           
Total Stockholders’ Equity   (5,075,728)   (4,946,263)
           
Total Liabilities and Stockholders’ Equity  $3,953,537   $3,842,274 

 

See notes to consolidated financial statements.

 

1

 

 

ENERGY & TECHNOLOGY, CORP.

Consolidated Statements of Operations (Unaudited)

For the Three Months Ended September 30, 2018 and September 30, 2017

For the Nine Months Ended September 30, 2018 and September 30, 2017

 

   Three Months Ended   Nine Months Ended 
   September 30,   September 30,   September 30,   September 30, 
   2018   2017   2018   2017 
                 
                 
Revenues  $758,745   $733,091   $2,592,772    2,112,773 
Cost of Revenues                    
Materials and Supplies   24,320    72,960    158,100    262,008 
Subcontractor Costs   132,393    191,767    429,599    475,575 
Depreciation   36,247    64,463    92,191    193,389 
Employees and Related Costs   203,026    102,501    489,410    325,448 
Repairs and Maintenance   39,549    74,097    109,516    150,504 
Insurance   6,328    13,666    71,250    45,928 
Other Costs   101,634    113,340    370,655    374,299 
                     
Total Cost of Revenues   543,496    632,795    1,720,720    1,827,151 
                     
Gross Profit   215,248    100,296    872,052    285,622 
                     
Operating Expenses                    
Selling, General, and Administration   279,705    376,812    840,700    1,056,683 
Depreciation   27,054    27,525    81,161    82,576 
                     
Total Operating Expenses   306,759    404,337    921,861    1,139,259 
                     
Loss from Operations   (91,510)   (304,042)   (49,809)   (853,637)
                     
Income from Claim Settlement        61,397    78,281    61,397 
Income from Lawsuit Settlement                  105,816 
Investment Income (Expense)   0    (53)   43    (1,514)
Interest Expense   (50,434)   (127,809)   (157,980)   (139,509)
                     
Total Other Income (Expense)   (50,434)   (66,465)   (79,656)   26,190 
                     
Loss Before Provision for Income Taxes   (141,944)   (370,506)   (129,466)   (827,447)
                     
Benefit for Income Taxes   0    0    0    0 
                     
Income/(Loss)  $(141,944)  $(370,506)  $(129,466)  $(827,447)
                     
Loss per Share - Basic  $NM    $NM    $NM    $NM  
                     
Loss per Share - Diluted  $NM    $NM    $NM    $NM  

 

See notes to consolidated financial statements.

 

2

 

 

ENERGY & TECHNOLOGY CORP.

Consolidated Statements of Changes in Stockholders’ Equity

For the Years Ended December 31, 2017 and the Nine Months Ended September 30, 2018

 

   Common Stock   Treasury Stock   Additional Paid-In   Retained   Total Stockholders' 
   Shares   Amount   Shares   Amount   Capital   Earnings   Equity 
                             
Balance at January 1, 2017   169,198,117   $169,198    (3,637,351)  $(4,076,441)  $4,209,591    (3,940,586)  $(3,638,238)
                                    
Net (Loss)   -    -         -    -    (1,308,025)  $(1,308,025)
                                    
Balance at December 31, 2017   169,198,117   $169,198    (3,637,351)  $(4,076,441)  $4,209,591   $(5,248,611)  $(4,946,263)
                                    
Balance at January 1, 2018   169,198,117    169,198    (3,637,351)   (4,076,441)   4,209,591    (5,248,611)   (4,946,263)
                                    
Net Income (Loss)   -    -              -    (129,466)  $(129,466)
                                    
Balance at September 30, 2018   169,198,117   $169,198   $(3,637,351)  $(4,076,441)  $4,209,591   $(5,378,077)  $(5,075,728)

 

See notes to consolidated financial statements.

 

3

 

 

ENERGY & TECHNOLOGY, CORP.

Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2018 and 2017

 

   Nine Months Ended 
   September 30,   September 30, 
   2018   2017 
Cash Flows from Operating Activities        
Net Income (Loss)   (127,608)   (827,447)
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities          
Depreciation   173,353    275,965 
Accrued Interest        118,057 
Fair Value of Investments   (43)   1,632 
Changes in Assets and Liabilities          
Trade Receivables   (120,388)   (153,651)
Inventory   -    104,748 
Prepaid Expenses   (23,587)   (15,623)
Accounts Payable   99,066    250,643 
Accrued Payroll and Payroll Liabilities   (2,434)   (99,791)
Accrued Rent   112,500    112,500 
           
Net Cash Provided by Operating Activities   110,859    (232,967)
           
Cash Flows from Investing Activities          
Other Assets   (52,198)   (38,732)
Purchase of Property and Equipment   (7,461)   (35,501)
           
Net Cash Provided by (Used in) Investing Activities   (59,659)   (74,233)
           
Cash Flows from Financing Activities          
Borrowings (Principal Repayments) to Affiliates   (119,273)   319,186 
Borrowings (Principal Repayments) on Notes Payable   149,011   (4,647)
           
Net Cash Provided by (Used in) Financing Activities   29,738   314,539 
           
Net Increase (Decrease) in Cash and Cash Equivalents   80,938   7,339 
           
Cash and Cash Equivalents, Beginning of Year   36,168   158,068 
           
Cash and Cash Equivalents, End of Year   117,106   165,407 
           
Supplemental Disclosure of Cash Flow Information          
Cash Paid During the Period for Interest   11,098   21,452 
           
Cash Paid During the Period for Income Taxes   -   - 

 

See notes to consolidated financial statements.

 

4

 

 

ENERGY & TECHNOLOGY, CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

 

Note 1. Organization

 

This Financial statement is unaudited.

 

Energy and Technology, Corp. (the Company) was formed November 29, 2006 under the laws of the State of Delaware in order to acquire and to take over the assets and business of Technical Industries, Inc. (TII).  On that date, the Company issued 125,000,000 shares of common stock to American Interest, LLC, in exchange for founder services rendered.  The fair value of these services was considered immaterial, and no amounts were recognized in the financial statements.  At the time the shares were issued to American Interest, LLC, the Company had no assets, operations, or cash flows.  As such, the stock had no value at the time the Company was established.  The par value was arbitrarily established in order to comply with the State of Delaware laws.  In order to reflect the par value of the shares issued, the Company recognized a discount on capital stock as a contra-equity account within the equity section of the consolidated balance sheets. 

 

On January 3, 2007, the Company entered into a Stock Exchange Agreement and Share Exchange (the Agreement) whereby the sole shareholder of TII exchanged all of the outstanding shares of TII to the Company in exchange for 50,000,000 shares of Company stock.  Accordingly, TII became a wholly-owned subsidiary of the Company.  The assets acquired and liabilities assumed were recorded at the carrying value to TII since TII and the Company were under common control prior to the acquisition.  

 

TII specializes in the non-destructive testing of structures, vessels, oilfield equipment and pipe, including magnetic and ultrasonic testing, utilizing the latest technologies.  These technologies enable TII to (i) provide detailed information to customers regarding each pipe tested, and (ii) reach energy reserves present technology cannot reach without extra cost to the oil and gas companies.  Because of the intense scrutiny applied to each section of pipe, TII is able to generate data which allows the pipe to be used in the most extreme conditions, and has been proven especially useful in critical and deep water drilling operations in the Gulf of Mexico.

 

On August 29, 2009, the Company effected a name change from Technical Industries & Energy Corp. to Energy & Technology, Corp. to better reflect the nature of the Company’s business.

 

Note 2. Summary of Significant Accounting Policies

 

Basis of Presentation and Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Technical Industries, Inc., the accounts of Energy Pipe, LLC (a variable interest entity), and the accounts of Energy Technology Manufacturing & Threading, LLC (a variable interest entity).  All significant intercompany balances and transactions have been eliminated.

 

The consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of financial information for the interim periods presented.  These adjustments are of a normal recurring nature and include appropriate estimated provisions.

 

Basis of Accounting

Assets, liabilities, revenues and expenses are recognized on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America.

 

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect amounts reported in the financial statements.  Accordingly, actual results could differ from those estimates due to information that becomes available subsequent to the issuance of the financial statements or for other reasons.

 

Revenue Recognition

Revenue for inspection services and manufacturing and threading services is recognized upon completion of the services rendered.  Revenue for the sales of pipe is recognized when pipe is delivered and the customer takes ownership and assumes the risks of loss, collection of the relevant receivable is probable, persuasive evidence of an arrangement exists, and the sales price is fixed or determinable.

 

Trade Receivables

Trade accounts receivable are carried at their estimated collectible amounts.  Trade credit is generally extended on a short-term basis; thus receivables do not bear interest, although a finance charge may be applied to amounts past due. Trade accounts receivable are periodically evaluated for collectability based on past credit.

 

Allowance for Doubtful Accounts

The company calculates the allowance based on the history with customers and their current financial condition. Provisions of uncollectible amounts are determined based on management’s estimate of collectability. Allowance for doubtful accounts was $3,078 and $3,078 at September 30, 2018 and at December 31, 2017, respectively.

 

5

 

 

ENERGY & TECHNOLOGY, CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

 

Note 2. Summary of Significant Accounting Policies (Continued)

 

Inventory

Inventory is stated at the lower of cost determined by the specific identification method or market.  At September 30, 2018 and at December 31, 2017, inventory consisted of pipe available for sale.

 

Property and Equipment

Property and equipment are stated at cost.  Expenditures for property and equipment and items that substantially increase the useful lives of existing assets are capitalized at cost and depreciated. Routine expenditures for repairs and maintenance are expensed as incurred.  The cost and related accumulated depreciation of property and equipment disposed of are eliminated from the accounts, and any resulting gain or loss is recognized. Depreciation is provided utilizing the straight-line method over the estimated useful lives of the assets capitalized.

 

Valuation of Long-Lived Assets

In the event facts and circumstances indicate that carrying amounts of long-lived assets may be impaired, the Company evaluates the recoverability of its long-lived assets using the estimated future undiscounted cash flows associated with the asset compared to the asset’s carrying amount to determine if a write-down is required, pursuant to the provisions of Financial Accounting Standards Board (FASB) ASC 360-10-35.  Any impairment loss is measured as the difference between the carrying amount and the fair value of the impaired asset.

 

Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments and trade receivables. Concentration of credit risk with respect to trade receivables is limited due to the Company’s large number of customers. At the end of the fiscal quarter covered by this report, the balance due from three customers represented 56.1 % of receivables, and sales to four customers represented 74.6% of revenues.

 

The Company maintains cash balances at several financial institutions, and periodically maintains cash in bank accounts in excess of insured limits.  The Company has not experienced any losses and does not believe that significant credit risk exists as a result of this practice.

 

Advertising

The Company charges the costs of advertising to expense as incurred. Advertising expense was $2,598 and $8,052, for the nine months ended September 30, 2018 and 2017, respectively.

 

Cash Flows

For purposes of the consolidated statement of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

 

Income Taxes

The Company recognizes income taxes in accordance with FASB ASC 740, “Income Taxes” (formerly Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes). ASC 740 uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of “temporary differences” by applying enacted statutory tax rates applicable to future years to the difference between financial statement carrying amounts and the tax basis of existing assets and liabilities. Deferred taxes are also recognized for operating losses and tax credits that are available to offset future income taxes.

 

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained.  The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any.

 

Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above would be reflected as a liability for unrecognized tax benefits in the consolidated balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits would be classified as additional income taxes in the statement of operations.

 

Emerging Growth Company Critical Accounting Policy Disclosure

The Company qualifies as an “emerging growth company” under the 2012 JOBS Act. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. As an emerging growth company, the Company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company may elect to take advantage of the benefits of this extended transition period in the future.

 

6

 

 

ENERGY & TECHNOLOGY, CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

 

Note 2. Summary of Significant Accounting Policies (Continued)

 

Recent Accounting Pronouncements

Management does not expect any impact from the adoption of new accounting pronouncements.

 

Comprehensive Income

The Company had no components of comprehensive income. Therefore, net income (loss) equals comprehensive income (loss) for the periods presented.

 

Note 3. Patent

 

On August 6, 2018, the company patent protection was voided which was previously awarded by the United States Patent and Trademark Office when its Patent Nos.  7,263,887, 7,401,518, 7,552,640, and 7,997,138 were challenged by National Oilwell Varco, LP, (NOV) as un-patentable under the obviousness doctrine in response to a patent infringement suit filed by the Company against NOV. Due to high expense of litigation costs to defend its patents and the uncertainty of success, the company has decided not to appeal these decisions.

 

Note 4. Property and Equipment

 

Property and equipment consists of the following at September 30, 2018 and December 31, 2017, respectively:

 

     2018   2017 
           
  Buildings and Improvements  $3,157,937   $3,157,937 
  Equipment   5,982,669    5,975,208 
  Autos and Trucks   276,682    276,682 
  Office Furniture   34,025    34,025 
  Construction in Progress   350,418    350,418 
      9,801,731    9,794,270 
  Less: Accumulated Depreciation   (7,517,365)   (7,344,013)
  Total  $2,284,367   $2,450,258 

 

Depreciation expense amounted to $173,352 and $275,965 for the nine months ended September 30, 2018 and 2017, respectively.

 

Note 5. Related Party Transactions

 

Energy & Technology, Corp is a holding company. Its subsidiaries include: Technical Industries, Inc. (NDT Inspection Services, maintenance, and storage are done in this company), Energy Technology Manufacturing & Threading, LLC (threading and manufacturing services are done in this company), and Energy Pipe, LLC (pipe sales are done in this company). All significant intercompany transactions are eliminated in consolidation.

 

Additionally, St. Charles Real Estate Corp LLC owns the land in Houston, Texas where the Company maintains its pipe inventory, as well as the Houston facility. The Company has a month to month lease for $12,500 with St. Charles Real Estate but is accruing rent instead of paying. As of September 30, 2018 and December 31, 2017 the total owed is $2,520,000 and $2,407,500, respectively. St. Charles Real Estate Corp LLC is owned by various members of the Sfeir family.

 

7

 

 

ENERGY & TECHNOLOGY, CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

 

Note 6. Notes Payable

 

Notes payable at September 30, 2018 and December 31, 2017 consist of the following:

 

     2018   2017 
  Secured fixed term note of $48,601.50 due November 2020; fixed interest rate of 3.39%   15,342    22,057 
  Unsecured variable term note of $3,935,217 ; fixed interest rate of 4.0%   4,534,288    4,416,232 
  Secured fixed term note of $47,181 due December 2019; fixed interest rate of 6.95%   37,669    - 
     $4,587,300   $4,438,289 
  Less: Current Portion   4,580,873    4,425,147 
  Long-Term Portion  $6,427   $13,142 

 

Following are maturities of long-term debt at December 31, 2017:

 

  Fiscal Year Ending December 31,  Amount 
       
  2018  $8,280 
  2019   4,862 
        
  Total  $13,142 

 

Note 7. Equity

 

The Company is authorized to issue 250,000,000 shares of common stock at a par value of $.001 per share. The number of shares issued and outstanding are 165,560,766 as of June 30, 2018 and December 31, 2017. The Company is authorized to issue 10,000,000 shares of preferred stock. As of September 30, 2018 and December 31, 2017, there were no shares issued and outstanding. In 2014, the company attempted to exchange debt for 3,617,075 shares of common stock now in Treasury, However, due to the company’s failure to obtain the approval of the shareholders of the 3,617,075 shares to exchange for debt the transaction did not happen.

 

Note 8. Earnings per Share

 

Earnings (loss) per share are calculated in accordance with ASC 260 “Earnings per Share”. The weighted average number of common shares outstanding during each period is used to compute basic earnings (loss) per share. Diluted earnings per share are computed using the weighted average number of shares and potentially dilutive common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised. Potentially dilutive common shares consist of stock options and are excluded from the diluted earnings per share computation in periods where the Company has incurred a net loss, as their effect would be considered anti-dilutive.

 

There were no potentially dilutive common stock equivalents as of the end of the fiscal quarter covered by this report, therefore basic earnings per share equals diluted earnings per share for the fiscal quarter covered by this report. As the Company incurred a net loss during the fiscal quarter covered by this report, the basic and diluted loss per common share is the same amount, as any common stock equivalents would be considered anti-dilutive.

 

The weighted average common shares outstanding were 165,560,766 for the fiscal quarter covered by this report and the year ended December 31, 2017.

 

Note 9. Commitments

 

The Company leases office premises, operating facilities, and equipment under operating leases expiring in various years through 2030. The Company also leases land for operating purposes on a month to month basis.

 

Note 10. Litigation and Contingent Liabilities

 

In the ordinary course of our business, we are, from time to time, subject to various legal proceedings, including matters involving employees, customers, and suppliers. We may enter into discussions regarding settlement of claims or lawsuits, and may enter into settlement agreements, if we believe settlement is in the best interest of our stockholders. We do not believe that any existing legal proceedings or settlements, individually or in the aggregate, will have a material effect on our financial condition, results of operations, or liquidity.

 

Note 11. Major Customers

 

For the end of the fiscal quarter covered by this report, the Company had four customers which generated revenues in excess of 10% of the Company’s total revenues. Revenues for these customers were approximately 74.6% of total revenues, and total balance due from these customers at the end of the fiscal quarter covered by this report was $265,924.

8

 

 

ENERGY & TECHNOLOGY, CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

 

Note 12. Estimated Fair Value of Financial Instruments

 

The following disclosure is made in accordance with the requirements of FASB ASC 825, Financial Instruments. Financial instruments are defined as cash and contractual rights and obligations that require settlement, directly or indirectly, in cash. In cases where quoted market prices are not available, fair values have been estimated using the present value of future cash flows or other valuation techniques.

 

The result of these techniques are highly sensitive to the assumptions used, such as those concerning appropriate discount rates and estimates of future cash flows, which require considerable judgment. Accordingly, estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current settlement of the underlying financial instruments. ASC 825 excludes certain financial instruments and all non-financial instruments from its disclosure requirements. These disclosures should not be interpreted as representing an aggregate measure of the underlying value of the Company.

 

While these estimates of fair value are based on management’s judgment of appropriate factors, there is no assurance that if the Company had disposed of such items at September 30, 2018 or December 31, 2017, the estimated fair values would have been achieved. Market values may differ depending on various circumstances not taken into consideration in this methodology. The estimated fair values at September 30, 2018 and December 31, 2017, should not necessarily be considered to apply at subsequent dates.

 

     September 30,   December 31, 
     2018   2017 
     Carrying   Fair   Carrying   Fair 
     Amount   Value   Amount   Value 
  Financial Assets                
  Investments  $2,332   $2,332   $2,289   $2,289 
                       
     $2,332   $2,332   $2,289   $2,289 

  

The following methods and assumptions were used by the Company in estimating fair values for financial instruments:

 

Cash and cash equivalents: The carrying amount reported in the balance sheet approximates fair value.

 

Notes Payable: The fair value of notes payable approximates the carrying amount reported in the balance sheet.

 

Due to Affiliates: The carrying amount of due to affiliates approximates fair values.

 

Note 13. Subsequent Events

 

In accordance with the subsequent events topic of the FASB ASC, Topic No. 855, Subsequent Events, the Company evaluates events and transactions that occur after the balance sheet date for potential recognition in the financial statements. The effects of all subsequent events that provide additional evidence of conditions that existed at the balance sheet date are recognized in the financial statements at the end of the fiscal quarter covered by this report. In preparing these financial statements, the Company evaluated the events and transactions through the date these financial statements were issued.

 

9

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

General

Headquartered in Lafayette, Louisiana, with production facilities in Houston, Texas and Abbeville, Louisiana, Energy & Technology, Corp. provides non-destructive testing (NDT) services, OCTG and oilfield pipe sales, service and storage, and rig and equipment sales. Originally founded on May 11, 1971 as an inspection company, Energy & Technology, Corp. currently serves customers throughout the oil patch of Louisiana and Texas as well as in Canada, Mexico, and in the Gulf of Mexico. The Company’s customer base of over 130 accounts consists of major oil companies, steel mills, material suppliers, drilling companies, tool rental companies, and natural gas storage operators. As noted in Note 11, the company is dependent on a few customers, mainly from the U.S. Government and D.O.T. sub-contracts, due to the oil industry decline. The company’s customers base has slowed down and many closed or bankrupt. Due to the nature of its technology, the Company maintains competitive advantages in offshore deep water and other onshore critical projects. In order to increase revenue and add services and product in the current depressed energy industry, the company is now involved in project management, contracting, engineering, manufacturing, procurement, rentals, equipment and supplies providers, coating, storage, maintenance, drilling completion, and logistics.

 

Technical Industries, Inc., a wholly owned subsidiary of Energy & Technology, Corp., manufactures its own proprietary NDT equipment. The Company’s patented ultrasonic systems have some of the largest OD and pipe length capabilities in the industry and the deepest penetration capability offered for wall thickness measurement. The Company holds patents on certain exclusive inspection technology that allows oil and gas companies to use their current drill strings and other equipment to reach depths that were previously unreachable. This technology can make wells safer, increase the success rate for critical wells, and greatly reduce the chances of a failure. As the industry moves to ever deeper reserves and makes advances in horizontal drilling, oil and gas wells are becoming more and more expensive and difficult to drill, making this technology more of a necessity.

 

In the oilfield pipe sales and storage segment, Energy & Technology, Corp utilizes a state-of-the-art web based inventory management system that allows each client to view and track projects during processing, to locate inventory throughout the plant, and access reports, bill of ladings, tally sheets, logs and other required information.

 

Key Ongoing Operational Processes:

 

Update ISO Certification

Energy & Technology, Corp. recognizes that quality is every bit as important as price and prompt service. This is even truer of the Company’s typical client, who often contracts for services that other companies are not able to provide. In response to our clients’ requirements, the Company has obtained the latest ISO: 9001 certification by Moody’s, recognized in the industry as representing the highest quality control available. As the Company’s business lines are very synergistic, management feels that it can leverage this dominant position to increase share in the markets in which it competes, and likely more in the critical service arena.

 

Increased Sales and Marketing Effort

Energy & Technology, Corp. hired three qualified personnel in order to help the marketing and sales effort. New business was generated from referrals, technical sessions given to oil and gas and industry related companies, the Company website, and through the use of a marketing company on a limited basis. Recently, several new deep water well permits were issued in the Gulf of Mexico. As a result, ENGT has experienced significant new interest from major oil and gas companies - including site visits and evaluations - for its VisonArray™ deep water and critical well technologies, and ENGT Manufacturing facilities.   Currently, there are several employees whose duties are focused on sales, and one marketing and promotional activity director.  Management believes revenue can be greatly increased by expanding the Company’s sales force.  

 

Diversification

Energy & Technology, Corp. has diligently worked to diversify its business model by adding sales, service, and storage of OCTG and all types of oilfield pipe, as well as equipment leasing and sales. Additional growth will come domestically, but management feels that overseas expansion is critical to the ultimate success of the business plan.

 

Critical Accounting Policies

The Company has identified the following accounting policies to be the critical accounting policies of the Company:

 

Revenue Recognition. Revenue for inspection services and manufacturing and threading services are recognized upon completion of the services rendered. Revenue for the sales of pipe is recognized when pipe is delivered and the customer takes ownership and assumes the risks of loss, collection of the relevant receivable is probable, persuasive evidence of an arrangement exists, and the sales price is fixed or determinable.

 

Inventory. Inventory is stated at the lower of cost determined by the specific identification method or market. At the end of the fiscal quarter covered by this report, inventory consisted of pipe available for sale.

 

10

 

 

Property and Equipment. Property and equipment are stated at cost. Expenditures for property and equipment and items that substantially increase the useful lives of existing assets are capitalized at cost and depreciated. Routine expenditures for repairs and maintenance are expensed as incurred. The cost and related accumulated depreciation of property and equipment disposed of are eliminated from the accounts, and any resulting gain or loss is recognized. Depreciation is provided utilizing the straight-line method over the estimated useful lives of the assets capitalized.

 

Valuation of Long-Lived Assets. In the event facts and circumstances indicate that carrying amounts of long-lived assets may be impaired, the Company evaluates the recoverability of its long-lived assets using the estimated future undiscounted cash flows associated with the asset compared to the asset’s carrying amount to determine if a write-down is required, pursuant to the provisions of SFAS Financial Accounting Standards Board (FASB) ASC 360-10-35. Any impairment loss is measured as the difference between the carrying amount and the fair value of the impaired asset.

 

Discussion of Changes in Financial Condition from December 31, 2017 to September 30, 2018

 

At September 30, 2018, total assets amounted to $3,953,537 compared to $3,842,274 at December 31, 2017, an increase of $111,263, or 2.9%. The increase is primarily due to an increase in cash and cash equivalents of $80,938 and by an increase in net accounts receivable of $120,388, partially offset by a decrease in net property plant and equipment of $165,892

 

Our liabilities at September 30, 2018, totaled $9,029,265 compared to $8,788,538 at December 31, 2017, an increase of $240,727, or 2.74%. The increase is primarily due to an increase in accrued rent of $112,500 and an increase in notes payable of $155,726.

 

Total stockholder’s equity decreased from ($4,948,121) at December 31, 2017, to ($5,075,728) at September 30, 2018. This decrease was due to our net loss for the end of the period covered by this report.

  

Cash and Cash Equivalents

Cash and Cash Equivalents totaled $117,106 at September 30, 2018, an increase of $80,938 from the balance of $36,168 at December 31, 2017. The increase in cash and cash equivalents was primarily due to the cash generated from operating activities partially offset by the amounts used to reduce debt for the end of the fiscal quarter covered by this report.

 

Inventory

Inventory consists primarily of pipe held for sale to our customers. We began purchasing pipe for sale to customers in December, 2007. This was an opportunity for us to expand our services to our customers. It is anticipated that the Company will continue its efforts to expand its sales of pipe.

 

Property and Equipment

The decrease in property and equipment is primarily due to depreciation for the end of the fiscal quarter covered by this report of $173,352.

 

Accounts Payable

Accounts payable at September 30, 2018 totaled $1,077,806 compared to $978,740 at December 31, 2017, an increase of $99,066. The increase is primarily due to the accounts owed in the course of operations.

 

Discussion of Results of Operations for the Three Months Ended September 30, 2018 compared to the Three Months Ended September 30, 2017

 

Revenues

Our revenue for the three months ended September 30, 2018, was $758,745, compared to $733,091, for the three months ended September 30, 2017 an increase of $25,654, or 3.5%. The increase is attributable primarily to an increase in exploration technologies.

 

The following table presents the composition of revenue for the three months ended September 30, 2018 and 2017:

 

   2018   2017   Variance 
Revenue:  Dollars   Percentage   Dollars   Percentage   Dollars 
                     
Exploration Technologies  $482,221    63.6%  $422,372    55.7%  $59,849 
Drilling, OCTG, & Equipment Sales        0.0%  $-    0.0%  $- 
Warehouse & Storage Fees  $75,399    9.9%  $71,651    9.4%  $3,748 
Rebillable Income  $99,835    13.2%  $112,784    14.9%  $(12,949)
Manufacturing  $101,290    13.3%  $126,284    16.6%  $(24,994)
Total Revenue  $758,745    100.0%  $733,091    100.0%  $25,654 

 

Cost of Revenue and Gross Profit

Our cost of revenue for the three months ended September 30, 2018, was $543,496, or 71.7% of revenues, compared to $632,794, or 86.4% of revenues, for the three months ended September 30, 2017. The overall decrease in our cost of revenue is primarily due to a decrease in Subcontractor Costs, as Employee and Related Costs increased.

 

11

 

 

The following table presents the composition of cost of revenue for the three months ended September 30, 2018 and 2017:

 

   2018   2017   Variance 
Cost of Revenue:  Dollars   Percentage   Dollars   Percentage   Dollars 
                     
Employee and Related Costs  $203,026    37.4%  $102,501    18.9%  $100,525 
Materials and Supplies   24,320    4.5%   72,960    13.4%  $(48,640)

Subcontractor Costs

   132,393    24.4%   191,767    35.3%  $(59,374)
Depreciation and Amortization   36,247    6.7%   64,463    11.9%  $(28,216)
Repairs and Maintenance   39,549    7.3%   74,097    13.6%  $(34,548)
Insurance   6,328    1.2%   13,666    2.5%  $(7,338)
Other Costs   101,634    18.7%   113,340    20.9%  $(11,706)
Total Cost of Revenues  $543,496    100.0%  $632,794    116.4%  $(89,298)

 

Operating Expenses

For the three months ended September 30, 2018, our operating expenses totaled $306,759 as compared to $404,337 in 2017, representing a decrease of $97,578, or 24.13%. The largest components of our operating expense for 2018 consist of salaries and wages and professional services. Salaries and wages for general and administrative personnel was $155,589.40 for the three months ended September 30, 2018, compared to $163,823 for the three months ended September 30, 2017, a decrease of $8,234, or 5.1%. The decrease is primarily attributable to the company managing labor more efficiently. Professional services expense decreased from $29,723 for the three months ended September 30, 2017, to $15,652 for the three months ended September 30, 2018, a decrease of $14,071, or 47.4%. The decrease is primarily a result of a decrease in consulting fees.

 

Other Income and Expense

Other income and expense consists of investment income, interest expense, and gains and losses from the sale and disposal of assets. Other Income, net, totaled $66,465 for the three months ended September 30, 2017, compared to other Income, net, of $50,434, for the three months ended September 30, 2018, a decrease of $16,031 or 24.12%. This decrease is primarily due to the decrease of interest expense.

 

Interest expense totaled $50,434 for the three months ended September 30, 2017, as compared to $127,809 for the three months ended September 30, 2018, a decrease of $77,375, or 60.54%.  Interest expense pertains primarily to amounts due to affiliates as well as to our notes payable with third parties

 

Discussion of Results of Operations for the Nine Months Ended September 30, 2018 compared to the Nine Months Ended September 30, 2017

 

Revenues

Our revenue for the nine months ended September 30, 2018, was $2,592,772, compared to $2,112,773, for the nine months ended September 30, 2017, an increase of $479,999, or 22.8%. The increase is attributable primarily to an increase in exploration technologies.

 

The following table presents the composition of revenue for the nine months ended September 30, 2018 and 2017:

 

   2018   2017   Variance 
Revenue:  Dollars   Percentage   Dollars   Percentage   Dollars 
                     
Exploration Technologies  $1,583,328    208.7%  $1,149,853    151.5%  $433,475 
Drilling, OCTG, & Equipment Sales  $91,538    12.1%  $95,712    12.6%  $(4,174)
Warehouse & Storage Fees  $218,967    28.9%  $224,269    29.6%  $(5,302)
Rebillable Income  $315,536    41.6%  $231,742    30.5%  $83,794 
Manufacturing  $383,403    50.5%  $411,197    54.2%  $(27,794)
Total Revenue  $2,592,772    100.0%  $2,112,773    100.0%  $479,999 

 

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Cost of Revenue and Gross Profit

Our cost of revenue for the nine months ended September 30, 2018, was $1,718,753, or 66.3% of revenues, compared to $1,827,151, or 86.5% of revenues, for the nine months ended September 30, 2017. The overall decrease in our cost of revenue is primarily due to a decrease in Depreciation.

 

The following table presents the composition of cost of revenue for the nine months ended September 30, 2018 and 2017:

 

   2018   2017   Variance 
Cost of Revenue:  Dollars   Percentage   Dollars   Percentage   Dollars 
                     
Employee and Related Costs  $489,410    28.5%  $325,448    18.9%  $163,962 
Materials and Supplies   158,100    9.2%   262,008    15.2%  $(103,908)

Subcontractor Costs

   429,599    25.0%   475,575    27.7%  $(45,976)
Depreciation and Amortization   92,191    5.4%   193,389    11.3%  $(101,198)
Repairs and Maintenance   109,516    6.4%   150,504    8.8%  $(40,988)
Insurance   71,250    4.1%   45,928    2.7%  $25,322 
Other Costs   368,688    21.5%   374,299    21.8%  $(5,611)
Total Cost of Revenues  $1,718,753    100.0%  $1,827,151    106.3%  $(108,398)

 

Operating Expenses

For the nine months ended September 30, 2018, our operating expenses totaled $921,861 as compared to $1,139,259 in 2017, representing a decrease of $97,578, or 24.13%. The largest components of our operating expense for 2018 consist of salaries and wages and Professional Services. Salaries and wages for general and administrative personnel was $421,124 for the nine months ended September 30, 2018, compared to $460,610 for the nine months ended September 30, 2017, a decrease of $39,486, or 8.6%. Professional Services decreased from $162,099 for the nine months ended September 30, 2017, to $43,318 for the nine months ended September 30, 2018, a decrease of $118,781, or 73.3%.

 

13

 

 

Other Income and Expense

Other income and expense consists of investment income, interest expense, and gains and losses from the sale and disposal of assets. Other Income, net, totaled $26,190 for the nine months ended September 30, 2017, compared to other expense, net, of $79,656, for the nine months ended September 30, 2018, a decrease of $176,078 or 221.05%. This is primarily the result from Income from Lawsuits settled. Interest expense totaled $139,509 for the nine months ended September 30, 2017, as compared to $157,980 for the nine months ended September 30, 2018, an increase of $146,280, or 92.59%.  Interest expense pertains primarily to amounts due to affiliates as well as to our notes payable with third parties.

 

Capital Resources and Liquidity

As of the end of the fiscal quarter covered by this report, we had $117,106 in cash and cash equivalents. Our cash outflows have consisted primarily of expenses associated with our operations. These outflows have been offset by the timely inflows of cash from our customers for sales that have been made. We have been able to utilize our relationships with affiliated entities to stabilize our liquidity needs.

 

We believe we can satisfy our cash requirements for the next twelve months only with our current cash and additional loans. However, completion of our plan of operation is subject to attaining adequate revenue. We cannot assure investors that adequate revenues will be generated. In the absence of our projected revenues, we may be unable to proceed with our plan of operations. Even without adequate revenues within the next twelve months, we still anticipate being able to continue with our present activities, but we will require financing to potentially achieve our growth goals.

 

In the event we are not successful in reaching our initial revenue targets, additional funds may be required, and we may not be able to proceed with our business plan for the development and marketing of our core services.  Should this occur, we would likely seek additional financing to support the continued operation of our business.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

We do not hold any derivative instruments and do not engage in any hedging activities.

 

Item 4. Controls and Procedures

 

(a) Evaluation of Disclosure Controls. The Company maintains a set of disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports filed or submitted under the Securities Exchange Act of 1934, as amended (“Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely discussion regarding required disclosure. Management, with the participation of the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on this evaluation, the CEO and CFO concluded that the disclosure controls and procedures were effective as of the period covered by this report.

 

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

 

(b) Changes in internal control over financial reporting. There have been no changes in the Company’s internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

14

 

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

In the ordinary course of our business, we are, from time to time, subject to various legal proceedings, including matters involving employees, customers, and suppliers. We may enter into discussions regarding settlement of claims or lawsuits, and may enter into settlement agreements, if we believe settlement is in the best interest of our stockholders. We do not believe that any existing legal proceedings or settlements, individually or in the aggregate, will have a material effect on our financial condition, results of operations, or liquidity. Nevertheless, a disgruntled employee sued for the purchase back of his bonus stock which is in violation of applicable laws.  An adverse decision, which is not anticipated, would not have material adverse effect on our financial condition or results of operations.

 

Item 1A. Risk Factors.

 

None.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

 

Item 3. Defaults Upon Senior Securities.

 

None

 

Item 4. Submission of Matters to a Vote of Security Holders.

 

None.

 

Item 5. Other Information.

 

Due to the downturn in the economy, the reduction of oil prices, and the inability to afford continued auditing and reporting expenses, ENGT has decided to “go dark” and stop reporting to the SEC until it will be able to hire qualified auditors. ENGT will file with the SEC the necessary forms in the next quarter in order to stop reporting.

 

Item 6. Exhibits and Reports of Form 8-K.

 

(a) Exhibits

 

 

(b) Reports of Form 8-K

 

None. 

 

Item 7. Up-dates and Clarifications to prior non-financial information

 

None.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  ENERGY & TECHNOLOGY, CORP.
   
Date: November 14, 2018 By: /s/ George M. Sfeir
    George M. Sfeir
   

C.E.O./C.F.O.

 

 

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