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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Energtek Inc (CE) | USOTC:EGTK | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.0001 | 0.00 | 01:00:00 |
Nevada
|
42-1708652
|
|
(State
or other jurisdiction of incorporation)
|
|
(IRS
Employer Identification No.)
|
Large
accelerated filer
¨
|
Accelerated
filer
¨
|
Non-accelerated
filer
¨
(Do not check if
a smaller reporting company)
|
Smaller
Reporting Company
x
|
Page
|
|||
PART
I
|
|||
Item 1
|
Business
|
1
|
|
Item 1A
|
Risk
Factors
|
7 | |
Item 1B
|
Unresolved
Staff Comments
|
13 | |
Item 2
|
Properties
|
13
|
|
Item 3
|
Legal
Proceedings
|
14
|
|
Item 4
|
Submission
of Matters to a Vote of Security Holders
|
14
|
|
PART
II
|
|||
Item 5
|
Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
|
14
|
|
Item 6
|
Selected
Financial Data
|
16
|
|
Item 7
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operation
|
16
|
|
Item 7A
|
Quantitative
and
Qualitative Disclosures About Market Risk
|
20 | |
Item 8
|
Financial
Statements and Supplementary Data.
|
21
|
|
Item 9
|
Changes
in and Disagreements With Accountants on Accounting and Financial
Disclosure
|
43
|
|
Item 9A(T)
|
Controls
and Procedures
|
44
|
|
Item 9B
|
Other
Information
|
45
|
|
PART
III
|
|||
Item 10
|
Directors,
Executive Officers and Corporate Governance
|
46
|
|
Item 11
|
Executive
Compensation
|
48
|
|
Item 12
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
51
|
|
Item 13
|
Certain
Relationships and Related Transactions, and Director
Independence
|
53
|
|
Item 14
|
Principal
Accounting Fees and Services
|
54
|
|
PART
IV
|
|||
Item 15
|
Exhibits,
Financial Statement Schedules
|
56
|
|
SIGNATURES
|
59 |
Item 1. |
Business.
|
·
|
Identifying
and assessing alternative energy technologies and opportunities;
and
|
·
|
Acquiring,
establishing and supporting the activities of several subsidiaries
in the
U.S., Israel, India and Ukraine.
|
1.
|
Moregastech
LLC, a Nevada limited liability
company.
|
2.
|
Primecyl
LLC, a New York limited liability
company.
|
3.
|
Energtek
Products Ltd., a company organized under the laws of the State of
Israel.
|
4.
|
GATAL
(Natural Gas for Israel) Ltd., a company organized under the laws
of the
State of Israel.
|
5.
|
Angstore
Technologies Ltd., a company organized under the laws of the State
of
Israel.
|
6.
|
Ukcyl
Ltd., a company registered in Ukraine (99.5% ownership through Primecyl
LLC).
|
·
|
AngStore
Technologies Ltd, Israel:
Developer of Adsorbed Natural Gas (ANG)storage technology
|
·
|
Energtek
Products Ltd, Israel:
Developer
of Natural Gas (NG) bulk transportation
technologies
|
·
|
GATAL
Ltd, Israel:
Distributor of Natural Gas utilizing bulk NG transportation technology,
and facilitator of Natural Gas Vehicles (NGV)
projects
|
·
|
MoreGasTech
India Private Limited, India:
Manufacturing and distribution of NGV equipment and pipeless gas
supply
technology
|
·
|
Ukcyl
Ltd, Ukraine:
Manufacturing of high-pressure gas storage tanks
|
·
|
Moregastech
LLC, USA:
Supplier of NGV Infrastructure and high-pressure
equipment
|
Item 1A. |
Risk
Factors
|
1.
|
We
are a development stage company with no operating history and may
never be
able to effectuate our business plan or achieve any revenues or
profitability; at this stage of our business, even with our good
faith
efforts, potential investors have a high probability of losing their
entire investment.
|
2.
|
We
have no track record that would provide a basis for assessing our
ability
to implement our business plans. We may not be successful in carrying
out
our business objectives and potential investors may lose their entire
investment in us.
|
3.
|
Because
we have no revenue, our Company has a history of losses and we expect
to
incur losses for the foreseeable
future.
|
4.
|
Our
auditors have expressed substantial doubt about our ability to continue
as
a going concern.
|
5.
|
We
have had negative cash flows from operations since inception. We
will
require significant additional financing, the availability of which
cannot
be assured, and if our Company is unable to obtain such financing,
our
business may fail.
|
6.
|
The
scope of our patent protection is uncertain. If we fail to adequately
protect our intellectual property through patent or other means,
it could
harm our business plans, prospects, results of operations and financial
condition.
|
7.
|
We
may become involved in intellectual property litigation that causes
us to
incur significant expenses or prevents us from engaging in our business,
which could harm our business plans, prospects, results of operations
and
financial condition.
|
8.
|
If
the Company is deemed to be an “investment company,” the Company may be
required to institute burdensome compliance requirements and the
Company's
activities may be
restricted.
|
9.
|
All
of our activities and investments may prove unfruitful, harming our
business plans, prospects, results of operations and financial
condition.
|
10.
|
Part
of our assets and some of our directors and officers are outside
the
United States, with the result that it may be difficult for investors
to
enforce within the United States any judgments obtained against us
or any
of our directors or officers.
|
11.
|
A
significant part of our investments are located in Israel, and any
major
hostilities involving Israel, or the interruption or curtailment
of trade
between Israel and its present trading partners, could significantly
harm
our business, operating results and financial
condition.
|
12.
|
We
are entering into investments in Ukraine, which may be negatively
affected
by geopolitical clashes and political
instability.
|
13.
|
Economic
instability in the foreign nations in which we intend to operate
might
result from or lead to inflation, high interest rates and social
unrest,
which could adversely affect our operations and
performance
.
|
14.
|
Political
instability in the foreign nations in which we invest and intend
to
operate might result from or lead to military confrontation, frequent
changes in national governments, terrorism and corruption which could
adversely affect the Company’s operations and
performance
.
|
15.
|
We
have not entered into derivative transactions to hedge market risks
, and
market fluctuation may adversely affect our
operations.
|
16.
|
We
may, in the future, issue additional common shares, which would reduce
investors' percent of ownership and may dilute our share
value.
|
17.
|
Our
common shares are subject to the "Penny Stock" Rules of the SEC and
the
trading market in our securities is limited, which makes transactions
in
our stock cumbersome and may reduce the value of an investment in
our
stock.
|
18.
|
Because
we do not intend to pay any cash dividends on our common stock, our
stockholders will not be able to receive a return on their shares
unless
they sell them.
|
19.
|
We
may issue shares of preferred stock in the future that may adversely
impact the rights of the holders of our common
stock.
|
Item 1B. |
Unresolved
Staff Comments.
|
Year
|
Quarter
Ended
|
High
|
Low
|
|||
2007
|
December
31
|
1.70
|
1.15
|
|||
September
30
|
1.85
|
1.05
|
||||
June
30
|
N/A
|
N/A
|
||||
March
31
|
N/A
|
N/A
|
·
|
Members
of the Board of Directors would be entitled to receive 150,000 warrants,
vesting over a period of 24 months, each warrant exercisable for
a common
share at the price of $0.36. The exercise period is the year in which
the
vesting takes place plus additional five years.
|
·
|
Members
of the Advisory Board would be entitled to receive 102,000 warrants,
vesting over a period of 24 months, each warrant exercisable for
a common
share at the price of $0.36. The exercise period is current year
plus
additional five years.
|
·
|
50,000
warrants with exercise price of $0.36 vesting on June 30, 2008,
exercisable until June 30, 2011
|
·
|
50,000
warrants with exercise price of $0.36 vesting on April 30, 2009,
exercisable until March 31, 2012
|
·
|
50,000
warrants with exercise price of $0.36 vesting on April 30, 2010,
exercisable until March 31, 2013
|
·
|
120,000
warrants with exercise price of $0.50 vesting on March 31, 2009,
exercisable until March 31, 2012
|
·
|
115,000
warrants with exercise price of $0.50 vesting on March 31, 2010,
exercisable until March 31, 2013
|
·
|
115,000
warrants with exercise price of $0.50 vesting on March 31, 2011,
exercisable until March 31, 2014
|
·
|
2-
and 3-Wheel Vehicle Market, Particularly in
Asia
|
·
|
Pipeless
Gas Supply Markets
|
Ziv
Haft
|
Certified
Public Accountants (Isr.)
|
BDO
member firm
|
As
Of December
|
||||||||||
Note
|
2007
|
2006
|
||||||||
ASSETS
|
||||||||||
Current
Assets
|
||||||||||
Cash
and Cash Equivalents
|
2,527,681
|
287,301
|
||||||||
Accounts
Receivable
|
2
|
410,843
|
53,264
|
|||||||
Total
current assets
|
2,938,524
|
340,565
|
||||||||
DEPOSITS
|
33,337
|
-
|
||||||||
FIXED
ASSETS, NET
|
1;3
|
185,577
|
2,882
|
|||||||
INVESTMENTS:
|
||||||||||
Investments
in Shares
|
4
|
24,500
|
-
|
|||||||
Patent
rights
|
5
|
41,920
|
-
|
|||||||
66,420
|
-
|
|||||||||
TOTAL
ASSETS
|
3,223,858
|
343,447
|
||||||||
LIABILITIES
AND SHAREHOLDER EQUITY
|
||||||||||
CURRENT
LIABILITIES
|
||||||||||
Related
Party
|
-
|
8,000
|
||||||||
Account
payable and Accrued Liabilities
|
6
|
708,413
|
32,431
|
|||||||
TOTAL
CURRENT LIABILITIES
|
708,413
|
40,431
|
||||||||
SHAREHOLDER
EQUITY
|
7
|
|||||||||
Preferred
Stock: $0.001 par value; 5,000,000 authorized,
|
||||||||||
none
issued and outstanding
|
||||||||||
Common
Stock: $0.001 par value; 750,000,000 authorized, 70,754,259 issued
and
outstanding
|
70,754
|
48,993
|
||||||||
Additional
Paid-in Capital
|
7,251,051
|
1,197,007
|
||||||||
Accumulated
Deficit
|
(4,806,360
|
)
|
(942,984
|
)
|
||||||
TOTAL
SHAREHOLDER EQUITY
|
2,515,445
|
303,016
|
||||||||
Total
Liabilities and Stockholders' Equity
|
3,223,858
|
343,447
|
Note
|
Year Ended December 31
|
From inception of
the development
stage entity
until December 31,
|
|||||||||||
2007
|
2006
|
2007
|
|||||||||||
Revenues
|
-
|
-
|
-
|
||||||||||
Operating
Expenses:
|
|||||||||||||
Consulting
|
1,055,430
|
225,931
|
1,237,361
|
||||||||||
Consulting-Related
parties
|
-
|
152,450
|
122,900
|
||||||||||
Research
and Development expenses
|
1,330,835
|
-
|
1,330,835
|
||||||||||
Marke
t
Research
|
-
|
23,347
|
-
|
||||||||||
Market
Research- Related parties
|
-
|
137,050
|
120,020
|
||||||||||
General
and administrative expenses
|
8
|
1,445,451
|
161,528
|
1,530,825
|
|||||||||
Total
Operating Expenses
|
3,831,715
|
700,306
|
4,341,940
|
||||||||||
Net
loss from operations
|
(3,831,715
|
)
|
(700,306
|
)
|
(4,341,940
|
)
|
|||||||
Other
Income
|
|||||||||||||
Interest
Income (losses),net
|
(31,661
|
)
|
3,141
|
(29,097
|
)
|
||||||||
Investments
impairment
|
-
|
(50,000
|
)
|
(50,000
|
)
|
||||||||
Patent
impairment
|
-
|
(100,000
|
)
|
(100,000
|
)
|
||||||||
Total
other income(expenses)
|
(31,661
|
)
|
(146,859
|
)
|
(179,097
|
)
|
|||||||
Net
Loss
|
(3,863,376
|
)
|
(847,165
|
)
|
(4,521,037
|
)
|
|||||||
Weighted
Average Shares
Common
Stock Outstanding
|
59,531,120
|
29,174,637
|
|||||||||||
Net
Loss Per Common Share
|
|||||||||||||
(Basic
and Fully Diluted)
|
(0.06
|
)
|
(0.03
|
)
|
Shares
Issued
|
Par
Value
$0.001
Per
share
|
Additional
Paid-In
Capital
|
Retained
deficit
|
Total
|
||||||||||||
Balance
as at January 1, 2005
|
38,520,000
|
38,520
|
(12,520
|
)
|
(53,521
|
)
|
(27,521
|
)
|
||||||||
Issuance
of common stock
|
6,390,000
|
6,390
|
64,610
|
-
|
71,000
|
|||||||||||
5
for 1 forward stock split-July 21,2005
|
|
|
|
|
|
|||||||||||
Cancellation
of shares - split adjustment
|
(16,897,500
|
)
|
(16,897
|
)
|
16,897
|
|
-
|
|||||||||
Net
Loss for the year
|
|
|
|
(42,298
|
)
|
(42,298
|
)
|
|||||||||
Balance
as at December 31, 2005
|
28,012,500
|
28,013
|
68,987
|
(95,819
|
)
|
1,181
|
||||||||||
Cancellation
of shares March 14
|
(4,500,000
|
)
|
(4,500
|
)
|
4,500
|
-
|
-
|
|||||||||
3
for 2 forward Stock Split March 25
|
|
|
|
|
|
|||||||||||
Issuance
of common stock for cash, August -September
|
17,400,000
|
17,400
|
727,600
|
|
745,000
|
|||||||||||
3
for 1 forward stock split-October 30
|
|
|
|
|
|
|||||||||||
Issuance
of common stock for services December
|
2,880,000
|
2,880
|
141,120
|
|
144,000
|
|||||||||||
Issuance
of common stock for cash December
|
3,200,000
|
3,200
|
156,800
|
|
160,000
|
|||||||||||
Issuance
of common stock for acquisition of a patent, December 31
|
2,000,000
|
2,000
|
98,000
|
|
100,000
|
|||||||||||
Net
Loss for the year
|
-
|
-
|
-
|
(847,165
|
)
|
(847,165
|
)
|
|||||||||
Balance
as at December 31, 2006
|
48,992,500
|
48,993
|
1,197,007
|
(942,984
|
)
|
303,016
|
||||||||||
Issuance
of common stock for cash, January
|
1,040,000
|
1,040
|
50,960
|
-
|
52,000
|
|||||||||||
Issuance
of common stock for cash,February 16
|
1,111,111
|
1,111
|
398,889
|
-
|
400,000
|
|||||||||||
Issuance
of common stock for cash,February 23 -July 31
|
7,382,524
|
7,382
|
3,683,880
|
-
|
3,691,262
|
|||||||||||
Issuance
of common stock for completion of acquisition of Angstore Technologies
Ltd, August 23
|
550,000
|
550
|
274,450
|
|
275,000
|
|||||||||||
Issuance
of common stock for cash,November
|
80,000
|
80
|
59,920
|
-
|
60,000
|
|||||||||||
Warrants
exercise
|
11,149,998
|
11,150
|
1,283,850
|
|
1,295,000
|
|||||||||||
Redemption
of warrants
|
|
|
(250,000
|
)
|
|
(250,000
|
)
|
|||||||||
Issuance
of common stock for services
|
448,126
|
448
|
552,095
|
|
552,543
|
|||||||||||
Net
Loss for the year
|
-
|
-
|
-
|
(3,863,376
|
)
|
(3,863,376
|
)
|
|||||||||
70,754,259
|
70,754
|
7,251,051
|
(4,806,360
|
)
|
2,515,445
|
Year Ended December 31
|
From inception of
the development
stage entity
until December 31,
|
|||||||||
2007
|
2006
|
2007
|
||||||||
Cash
Flows from Operating Activities:
|
||||||||||
Net
Loss
|
(3,863,376
|
)
|
(847,165
|
)
|
(4,521,037
|
)
|
||||
Adjustments
to reconcile net loss to net cash
|
||||||||||
Provided
be operating activities:
|
||||||||||
Depreciation
and Amortization
|
1,119,635
|
73
|
1,119,708
|
|||||||
Accumulated
interest on loans and linkage differences
|
41,876
|
41,876
|
||||||||
Impairment
and Adjustments of Patent
|
2,147
|
100,000
|
102,147
|
|||||||
Impairment
of Option Investment
|
-
|
50,000
|
50,000
|
|||||||
Non-employees'
share compensation
|
552,543
|
144,000
|
696,543
|
|||||||
Severance
pay liability
|
(11,295
|
)
|
-
|
(11,295
|
)
|
|||||
Decrease
(Increase) in accounts receivable
|
(84,759
|
)
|
(53,264
|
)
|
(126,805
|
)
|
||||
Accounts
payable and accrued liabilities
|
45,834
|
40,431
|
7,962
|
|||||||
Net
cash used in Operating Activities
|
(2,197,395
|
)
|
(565,925
|
)
|
(2,640,901
|
)
|
||||
Cash
Flows to Investing Activities:
|
||||||||||
Investment
in newly-consolidated subsidiaries and purchase of newly-activity
(Appendix A)
|
(160,688
|
)
|
-
|
(160,688
|
)
|
|||||
Investment
in shares
|
(24,500
|
)
|
-
|
(24,500
|
)
|
|||||
Investment
in Option
|
-
|
(50,000
|
)
|
(50,000
|
)
|
|||||
Deposit
|
(29,646
|
)
|
-
|
(29,646
|
)
|
|||||
Advances
paid to suppliers of fixed assets
|
(259,340
|
)
|
-
|
(259,340
|
)
|
|||||
Purchase
of fixed assets
|
(116,313
|
)
|
(2,955
|
)
|
(119,268
|
)
|
||||
Net
cash used in Investing Activities
|
(590,487
|
)
|
(52,955
|
)
|
(643,442
|
)
|
||||
Cash
Flows from Financing Activities:
|
||||||||||
Issuance
of common stock
|
4,203,262
|
905,000
|
4,363,262
|
|||||||
Warrants
exercise
|
1,295,000
|
-
|
1,295,000
|
|||||||
Redemption
of warrants
|
(250,000
|
)
|
-
|
(250,000
|
)
|
|||||
Loan
proceeds
|
-
|
-
|
-
|
|||||||
Repayment
of loan
|
(220,000
|
)
|
-
|
(220,000
|
)
|
|||||
Net
cash from Financing Activities
|
5,028,262
|
905,000
|
5,188,262
|
|||||||
Net
Increase (Decrease) in Cash
|
2,240,380
|
286,120
|
1,903,919
|
|||||||
Cash
at Beginning of Period
|
287,301
|
1,181
|
623,762
|
|||||||
|
|
|
||||||||
Cash
at End of Period
|
2,527,681
|
287,301
|
2,527,681
|
Year Ended December 31
|
Since the
beginning of
the development
stage entity
until December 31,
|
|||||||||
2007
|
2006
|
2007
|
||||||||
Working
capital, other than cash
|
751,490
|
-
|
751,490
|
|||||||
Property
and equipment
|
(79,989
|
)
|
-
|
(79,989
|
)
|
|||||
Patent
rights
|
(44,067
|
)
|
-
|
(44,067
|
)
|
|||||
IPRD
|
(1,074,417
|
)
|
-
|
(1,074,417
|
)
|
|||||
Non-current
liabilities
|
11,295
|
-
|
11,295
|
|||||||
Company
shares issued upon acquisition
|
275,000
|
-
|
275,000
|
|||||||
Net
cash used in acquisition
|
(160,688
|
)
|
-
|
(160,688
|
)
|
|
Useful Life - Years
|
Building
and Land Improvements*
|
25
|
Computers
and peripheral equipment
|
3
|
Instruments
and laboratory equipment
|
5-7
|
Furniture
and office equipment
|
15
|
Motor
vehicles
|
7
|
Patent**
|
10
|
Note
2 – Accounts receivable:
|
December
31
|
||||||
2007
|
2006
|
||||||
Comprise:
|
(U.S.$)
|
||||||
Vat
Refund Receivable
|
127,296
|
37,879
|
|||||
Advances
paid to suppliers
|
274,150
|
15,385
|
|||||
Prepaid
Expenses
|
7,500
|
-
|
|||||
Others
|
1,897
|
-
|
|||||
410,843
|
53,264
|
||||||
Note
3 – Fixed Assets:
|
December
31
|
||||||
2007
|
2006
|
||||||
Comprise:
|
(U.S.$)
|
||||||
Building
and Land Improvements
|
112,766
|
-
|
|||||
Machinery,
equipment and other
|
51,046
|
-
|
|||||
Motor
vehicles
|
36,310
|
-
|
|||||
Office
equipment
|
27,992
|
2,955
|
|||||
Fixed
assets
|
228,114
|
2,955
|
|||||
Accumulated
depreciation
|
(42,537
|
)
|
(73
|
)
|
|||
Fixed
assets less accumulated depreciation
|
185,577
|
2,882
|
Comprise:
|
December 31, 2007
|
|||
(U.S.$)
|
||||
Cost
|
47,342
|
|||
Less
- accumulated amortization
|
(5,422
|
)
|
||
41,920
|
Note
6 - Account payable and Accrued Liabilities:
|
December 31
|
||||||
2007
|
2006
|
||||||
Comprise:
|
(U.S.$)
|
||||||
Employees
and Employee institutions
|
82,797
|
9,942
|
|||||
Service
providers
|
38,681
|
13,140
|
|||||
Short
Term Loans
|
468,965
|
-
|
|||||
Accrued
expenses and others
|
117,970
|
9,349
|
|||||
708,413
|
32,431
|
Note
8 - General and administrative expenses:
|
December 31
|
||||||
2007
|
2006
|
||||||
Comprise:
|
(U.S.$)
|
||||||
Salary
|
743,294
|
56,153
|
|||||
Start-up
costs
|
138,730
|
-
|
|||||
Travel
expenses
|
239,262
|
1,866
|
|||||
Accounting
& Legal services
|
111,610
|
55,641
|
|||||
Vehicle
expenses
|
71,464
|
6,404
|
|||||
Advertising
& Promotion
|
62,600
|
-
|
|||||
Office
& Others
|
78,491
|
41,464
|
|||||
1,445,451
|
161,528
|
|
Options
|
Weighted-
Average
Exercise
Price
(U.S.
Dollars)
|
Weighted-
Average
Remaining
Contractual
Term
(in
years)
|
Aggregate
Intrinsic
Value
(U.S.
Dollars
)
|
|||||||||
Outstanding
at January 1, 2007
|
-
|
-
|
-
|
-
|
|||||||||
|
|||||||||||||
Granted
- below market price
|
1,488,000
|
$
|
0.32
|
4.68
|
88,560
|
||||||||
|
|||||||||||||
Outstanding
at December 31, 2007
|
1,488,000
|
$
|
0.32
|
4.68
|
88,560
|
||||||||
|
|||||||||||||
Exercisable
at December 31, 2007
|
829,541
|
$
|
0.29
|
4.68
|
55,439
|
||||||||
Weighted-average
fair value of options granted during the year
|
$
|
0.24
|
December 31
|
|||||||
2007
|
2006
|
||||||
(U.S.$)
|
|||||||
Net
operating losses carry forwards
|
965,844
|
211,791
|
|||||
Valuation
allowance
|
(965,844
|
)
|
(211,791
|
)
|
|||
|
- |
-
|
a. |
50,000
(Fifty Thousand) warrants with exercise price of $0.36 vesting on
June 30,
2008, exercisable until June 30,
2011
|
b. |
50,000
(Fifty Thousand) warrants with exercise price of $0.36 vesting on
April
30, 2009, exercisable until March 31,
2012
|
c. |
50,000
(Fifty Thousand) warrants with exercise price of $0.36 vesting on
April
30, 2010, exercisable until March 31,
2013
|
d. |
120,000
(One Hundred Twenty Thousand) warrants with exercise price of $0.50
vesting on March 31, 2009, exercisable until March 31,
2012
|
e. |
115,000
(One Hundred Fifteen Thousand) warrants with exercise price of $0.50
vesting on March 31, 2010, exercisable until March 31,
2013
|
f. |
115,000
(One Hundred Fifteen Thousand) warrants with exercise price of $0.50
vesting on March 31, 2011, exercisable until March 31,
2014
|
1.
|
Insufficient
documentation of financial statement preparation and review procedures.
The
Company and its Subsidiaries employs policies and procedures in
reconciliation of the financial statements and the financial information
based on which the financial statements are prepared, however, such
controls and policies employed by the Company are not sufficiently
documented.
|
2.
|
We
do not have an Audit Committee
-
While not being legally obligated to have an audit committee, it
is the
Company's Management view that such committee, including a financial
expert member, is utmost important entity level control over the
Company's
financial statement. To date the Company has not yet nominated an
Audit
Committee.
|
3.
|
We
did not maintain proper segregation of duties for preparation of
our
financial statement
-
As of December 31, 2007 the entire process of financial statement
preparation was carried out by a single person. This has brought
several
deficiencies:
|
a.
|
Significant,
non-standard journal entries were prepared and approved by the same
person, without being checked or approved by any other personnel
within
the Company.
|
b.
|
Lack
of control over consolidation of financial statement, and proper
application of accounting policies.
|
4.
|
We
do not have an effective control over our budget
-
The budget of the Company in 2007 was not reviewed throughout the
year.
Budget control activities were carried out, if at all, sporadically,
inconsistently, and were not documented at
all.
|
5.
|
We
lack information technology controls and procedures
-
In
2007 the Company lacked proper computer operations, change management
and
access to programs and data controls and procedure. Amongst other
the
Company lacked a proper data backup procedure, and while backup did
take
place in actual, we believe that it was not regulated by methodical
and
consistent activities and monitoring by the
Company.
|
6.
|
We
do not have adequate internal controls over financial statement
consolidation
-
Consolidation of our financial statements was performed on spreadsheet
and
was therefore subject to potential errors.
|
1.
|
In
2008 our Board of Directors intends to nominate an audit
committee.
|
2.
|
We
have appointed additional personnel within the Financial Department
including an in-house Bookkeeper and a Treasurer who performs as
separate
entity. These appointments will allow proper segregation of duties,
as
well as sufficient manpower for proper
documentation.
|
3.
|
We
are in the process of implementing a system with an advanced financial
module that should enable us proper automated controls and procedures
over
financial records, including automated financials
consolidation.
|
4.
|
We
are currently engaged in thorough review and restatement of our IT
Procedures, in addition to procurement of all hardware and software
that
will enable us to maintain proper backups, privileges management,
access
control etc.
|
5.
|
In
2008 we intend to implement an annual budget, to be approved by the
Board
of Directors of the Company, as well as monthly budget control activity,
comparing Budget vs. Actual.
|
Name
|
Age
|
Position
|
||
Lev
Zaidenberg
|
53
|
Chief
Executive Officer and Director
|
||
Doron
Uziel
|
37
|
Treasurer
|
||
Yuri
Ginzburg
|
67
|
Chief
Technical Officer
|
||
Yishai
Aizik
|
44
|
Secretary
and Director
|
||
Eliezer
Sandberg
|
46
|
Director
|
||
Dr.
Zhenia Fleisher
|
59
|
Director
|
(i)
|
all
individuals who served as the principal executive officer or acting
in a
similar capacity during the fiscal year ended December 31, 2007,
regardless of compensation level;
|
(ii)
|
all
individuals who served as officers at December 31, 2007 and whose
total
compensation during the fiscal year ended December 31, 2007 exceeded
$100,000; and
|
(iii)
|
up
to two additional individuals who served as officers during the fiscal
year ended December 31, 2006 and whose total compensation during
the
fiscal year ended December 31, 2007 exceeded $100,000, regardless
of
whether they were serving as officers at the end of such fiscal
year.
|
Name and
Principal
Position
|
Year
|
Salary
($)
|
Option
Awards
($)
|
Total
($)
|
|||||||||
(a)
|
(b)
|
(c)
|
(f)
|
(j)
|
|||||||||
Lev
Zaidenberg
|
2007
|
38,100
|
38,100
|
||||||||||
Doron
Uziel
|
2007
|
13,200
|
(1)
|
64,155
|
(2)
|
77,355
|
|||||||
2006
|
7,000
|
7,000
|
1.
|
Cash
Compensation - $1,000 for each month Mr. Uziel has served as CEO
of the
Company, and $350 per each month Mr. Uziel has served as director
of the
Company.
|
2.
|
Stock
Based Compensation - See note 9 (1-3) for full description of Warrants
Granted to Mr. Uziel in 2007.
|
Name
|
Number of
Securities
Underlying
Unexercised
Options
(#)
exercisable
|
Number of
Securities
Underlying
Unexercised
Options
(#)
unexercisable
|
Option exercise
price($)
|
Option
Expiration
date
|
|||||||||
(a)
|
(b)
|
(c)
|
(e)
|
(f)
|
|||||||||
Doron Uziel
|
112,000
|
0.05
|
12/31/2011
|
||||||||||
75,000
|
0.36
|
6/30/2012
|
|||||||||||
75,000
|
0.36
|
6/30/2013
|
|||||||||||
100,000
|
0.36
|
12/31/2012
|
Name
|
Fees
earned or
paid in
cash
($)
|
Stock
awards
($)
|
Option
awards
($)
|
Non-equity
Incentive
Plan
Compensation
($)
|
Nonqualified
Deferred
Compensation
Earnings
($)
|
All other
Compensation
($)
|
Total
($)
|
|||||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
|||||||||||||||
Yishai Aizik
(1)
|
4,200
|
3,375
|
(1)
|
7,575
|
||||||||||||||||||
Dr.
Zhenia Fleisher
(2)
|
2,800
|
0
|
2,800
|
|||||||||||||||||||
Joseph
Shefet
(3)
|
2,200
|
2,200
|
(a)
|
Security
ownership of certain beneficial
owners
|
Title Of
Class
|
Name and address of Beneficial
Owner
|
Amount and Nature
of Beneficial
Ownership
|
Percent of Class
|
|||||||
Common
Stock
|
International
Executive Consulting SPRL
|
3,712,500
|
5.23
|
%
|
Title of Class
|
Name of Beneficial Owner
|
Amount
and
nature
of
beneficial
ownership
|
Percent of
Common
Stock
Beneficially
Owned
|
|||||||
Common
Stock
|
Lev
Zaidenberg
|
1,950,000
|
2.7
|
%
|
||||||
Common
Stock
|
Doron
Uziel
|
749,500
|
(1)
|
1.1
|
%
|
|||||
Common
Stock
|
Yuri
Ginzburg
|
1,170,000
|
1.6
|
%
|
||||||
Common
Stock
|
Yishai
Aizik
|
117,500
|
(2)
|
0.2
|
%
|
|||||
Common
Stock
|
Eliezer
Sandberg
|
55,250
|
(3)
|
0.1
|
%
|
|||||
Common
Stock
|
Zhenia
Fleisher
|
58,065
|
(4)
|
0.1
|
%
|
|||||
Common
Stock
|
All
directors and executive officers as a group (six
persons)
|
|
2,930,315
|
5.7
|
%
|
(1)
|
As
of March 13, 2007 Mr. Uziel owns 450,000 shares of common tock and
299,500
exercisable warrants, each warrants entitles Mr. Uziel to purchase
a
single share of common stock.
|
(2)
|
As
of March 13, 2007 Mr. Aizik owns 117,500 exercisable warrants, each
warrants entitles him to purchase a single share of Common
stock.
|
(3)
|
As
of March 13, 2007 Mr. Sandberg owns 55,250 exercisable warrants,
each
warrant entitles him to purchase a single share of Common
stock.
|
(4)
|
As
of March 13, 2007 Dr. Fleisher owns 58,065 exercisable warrants,
each
warrant entitles her to purchase a single share of Common
stock.
|
Date
|
Consultant
|
Brief Description of Consulting
Services
|
Consulting Fee
Paid ($)
|
|||||||
January 3, 2007
|
Eurospark
Israel Ltd.
|
Alternative
fuels for vehicles
|
26,000*
|
|||||||
January 7, 2007
|
Angstore
Technologies Ltd
|
CNG
Kits
|
16,200*
|
|||||||
February 2, 2007
|
Eurospark
S.A.
|
Plant
Ukraine
|
25,000
|
|||||||
March 5, 2007
|
Eurospark
S.A.
|
Site
& Machinery - Ukraine
|
22,000
|
|||||||
April 5,2007
|
Eurospark
S.A
|
Project
in Uzbekistan
|
11,500
|
|||||||
April 12,2007
|
Eurospark
S.A
|
Plant
building and Macinery
|
23,000
|
|||||||
May 21, 2007
|
Eurospark
S.A
|
Plant
Ukraine
|
13,000
|
|||||||
June 15 ,207
|
Eurospark
S.A
|
Furnaces
suppliers
|
18,000
|
|||||||
August 13,2007
|
Eurospark
S.A
|
Tubes
for plant Ukraine
|
15,000
|
|
Fiscal year ending
December 31, 2007
|
Fiscal year ending
December 31, 2006
*
|
|||||
Audit
Fees
|
$
|
0
|
$
|
14,410
|
|||
Audit
Related Fees
|
$
|
0
|
$
|
0
|
|||
Tax
Fees
|
$
|
12,000
|
$
|
0
|
|||
All
Other Fees
|
$
|
0
|
$
|
0
|
|
Fiscal year ending
December 31, 2007
|
Fiscal year ending
December 31, 2006
*
|
|||||
Audit
Fees
|
$
|
60,000
|
$
|
10,000
|
|||
Audit
Related Fees
|
$
|
0
|
$
|
0
|
|||
Tax
Fees
|
$
|
0
|
$
|
0
|
|||
All
Other Fees
|
$
|
0
|
$
|
0
|
Number
|
Description
|
|
3.1
|
Articles
of Incorporation (annexed as Exhibit 3.1 to the Registration Statement
of
Form SB-1 (File Number 333-108190) filed with the Securities and
Exchange
Commission on January 3, 2005 and incorporated herein by
reference)
|
|
3.2
|
Certificate
of Amendment to the Articles of Incorporation filed with the Nevada
Secretary of State on August 23, 2006 (annexed as Exhibit C to the
Definitive Proxy Statement on Schedule 14A filed with the Securities
and
Exchange Commission on July 28, 2006 and incorporated herein by
reference)
|
|
3.3
|
Certificate
of Change filed with the Nevada Secretary of State on October 19,
2006
(annexed as Exhibit 10.9 to the Form 8-K filed with the Securities
and
Exchange Commission on October 31, 2006 and incorporated herein by
reference)
|
|
3.4
|
Bylaws
(annexed as Exhibit D to the Definitive Proxy Statement on Schedule
14A
filed with the Securities and Exchange Commission on July 28, 2006
and
incorporated herein by reference)
|
|
3.5
|
First
Amendment to Bylaws, adopted December 22, 2006 (annexed as Exhibit
3.2 to
the Form 8-K filed with the Securities and Exchange Commission on
December
29, 2006 and incorporated herein by reference)
|
|
10.1
|
Form
of Regulation S Subscription Agreement, dated August 14, 2006 (annexed
as
Exhibit 10.1 to the Form 8-K filed with the Securities and Exchange
Commission on August 16, 2006 and incorporated herein by
reference)
|
|
10.2
|
Form
of Class A Warrant Agreement (annexed as Exhibit 10.1 to the Form
8-K
filed with the Securities and Exchange Commission on August 16, 2006
and
incorporated herein by reference)
|
|
10.3
|
Form
of Class B Warrant Agreement (annexed as Exhibit 10.1 to the Form
8-K
filed with the Securities and Exchange Commission on August 16, 2006
and
incorporated herein by reference)
|
|
10.4
|
Consulting
Agreement, dated August 8, 2006, between the Company and Eurospark
SA
(annexed as exhibit 10.1 to the Quarterly Report on Form 10-QSB for
the
quarter ended June 30, 2006 filed with the Securities and Exchange
Commission on August 21, 2006 and incorporated herein by
reference)
|
|
10.5
|
Consulting
Agreement, dated August 8, 2006, between the Company and Conertech
Ltd.
(annexed as exhibit 10.2 to the Quarterly Report on Form 10-QSB for
the
quarter ended June 30, 2006 filed with the Securities and Exchange
Commission on August 21, 2006 and incorporated herein by
reference)
|
|
10.6
|
Consulting
Agreement, dated August 25, 2006, between the Company and PG Engineering
SA (annexed as exhibit 10.4 to the Current Report on Form 8-K filed
with
the Securities and Exchange Commission on September 6, 2006 and
incorporated herein by reference)
|
|
10.7
|
Consulting
Agreement, dated August 30, 2006, between the Company and Eurospark
SA
(annexed as exhibit 10.5 to the Current Report on Form 8-K filed
with the
Securities and Exchange Commission on September 6, 2006 and incorporated
herein by reference)
|
|
10.8
|
Consulting
Agreement, dated August 4, 2006, between the Company and Conertech
Ltd.
(annexed as exhibit 10.6 to the Current Report on Form 8-K filed
with the
Securities and Exchange Commission on September 6, 2006 and incorporated
herein by reference)
|
|
10.9
|
Consulting
Agreement, dated August 25, 2006, between the Company and PG Engineering
SA (annexed as exhibit 10.4 to the Current Report on Form 8-K filed
with
the Securities and Exchange Commission on September 6, 2006 and
incorporated herein by reference)
|
|
10.10
|
Consulting
Agreement, dated August 5, 2006, between the Company and Angstore
Technologies Ltd. (annexed as exhibit 10.5 to the Current Report
on Form
8-K filed with the Securities and Exchange Commission on September
6, 2006
and incorporated herein by reference)
|
|
10.11
|
Form
of Regulation S Subscription Agreement, dated September 29, 2006
(annexed
as Exhibit 10.8 to the Form 8-K filed with the Securities and Exchange
Commission on October 5, 2006 and incorporated herein by
reference)
|
|
10.12
|
Letter
of Agreement, dated November 8, 2006, between the Company and Angstore
Technologies Ltd. (annexed as Exhibit 10.1 to the Quarterly Report
on Form
10-QSB for the quarter ended September 30, 2006 filed with the Securities
and Exchange Commission on November 14, 2006 and incorporated herein
by
reference)
|
10.13
|
Form
of Regulation S Subscription Agreement, dated December 28, 2006 (annexed
as Exhibit 10.1 to the Form 8-K filed with the Securities and Exchange
Commission on December 29, 2006 and incorporated herein by
reference)
|
|
10.14
|
Letter
of Agreement, dated November 28, 2006, between the Company and Radel
LLC
(annexed as Exhibit 10.2 to the Form 8-K filed with the Securities
and
Exchange Commission on January 8, 2007 and incorporated herein by
reference)
|
|
10.15
|
Share
Purchase Agreement, dated January 12, 2007, between the Company,
Energtek
Products Ltd., and MoreGasTech SRL (annexed as Exhibit 10.4 to the
Form
8-K filed with the Securities and Exchange Commission on January
19, 2007
and incorporated herein by reference)
|
|
10.16
|
Form
of Class 2007-A Warrant Agreement (annexed as Exhibit 10.5 to the
Form 8-K
filed with the Securities and Exchange Commission on January 19,
2007 and
incorporated herein by reference)
|
|
10.17
|
Form
of Class 2007-B Warrant Agreement (annexed as Exhibit 10.6 to the
Form 8-K
filed with the Securities and Exchange Commission on January 19,
2007 and
incorporated herein by reference)
|
|
10.18
|
Form
of Class 2007-C Warrant Agreement (annexed as Exhibit 10.8 to the
Form 8-K
filed with the Securities and Exchange Commission on January 19,
2007 and
incorporated herein by reference)
|
|
10.19
|
Form
of Regulation S Subscription Agreement (annexed as Exhibit 10.11
to the
Form 8-K filed with the Securities and Exchange Commission on March
2,
2007 and incorporated herein by reference)
|
|
10.20
|
Form
of Regulation D Subscription Agreement (annexed as Exhibit 10.12
to the
Form 8-K filed with the Securities and Exchange Commission on March
2,
2007 and incorporated herein by reference)
|
|
10.21
|
Form
of Regulation S Subscription Agreement (annexed as Exhibit 10.13
to the
Form 8-K filed with the Securities and Exchange Commission on March
2,
2007 and incorporated herein by reference)
|
|
10.22
|
Form
of Regulation S Subscription Agreement (annexed as Exhibit 10.14
to the
Form 8-K filed with the Securities and Exchange Commission on March
2,
2007 and incorporated herein by reference)
|
|
10.23
|
Form
of Class 2007-D Warrant Agreement (annexed as Exhibit 10.15 to the
Form
8-K filed with the Securities and Exchange Commission on March 2,
2007 and
incorporated herein by reference)
|
|
10.24
|
Form
of Class 2007-E Warrant Agreement (annexed as Exhibit 10.16 to the
Form
8-K filed with the Securities and Exchange Commission on March 2,
2007 and
incorporated herein by reference)
|
|
10.25
|
Membership
Purchase Agreement, dated March 26, 2007, between the Company, Energtek
Products Ltd., and HEEF Holdings Ltd (annexed as Exhibit 10.24 to
the Form
10-KSB filed with the Securities and Exchange Commission on April
2, 2007
and incorporated herein by reference)
|
|
10.26
|
Collaboration
Agreement, dated March 31, 2007, between Moregastech, LLC, Moregastech
(India) Private Limited, and Mahinder Singh Khatkar (annexed as Exhibit
10.25 to the Form 10-KSB filed with the Securities and Exchange Commission
on April 2, 2007 and incorporated herein by reference)
|
|
10.27
|
Purchase
Agreement, dated April 17, 2007, between Ukcyl Ltd. and Pavlograd
Plant
for Technological Equipment (English Translation) (annexed as Exhibit
10.1
to the Form 10-QSB filed with the Securities and Exchange Commission
on
May 16, 2007 and incorporated herein by reference)
|
|
10.28
|
English
Translation of Sale-Purchase Agreement, dated May 15, 2007, between
the
Registrant and Open Joint-Stock Company Steatit (annexed as Exhibit
10.1
to the Form 8-K filed with the Securities and Exchange Commission
on May
21, 2007 and incorporated herein by reference)
|
|
10.29
|
Investment
Agreement, dated June 29, 2007, by and between Energtek Inc. and
Angstore
Technologies Ltd. (annexed as Exhibit 10.6 to the Form 8-K filed
with the
Securities and Exchange Commission on July 6, 2007 and incorporated
herein
by reference)
|
|
10.30
|
Stock
Purchase Agreement dated August 27, 2007, by and between Energtek
Inc. and
Radel LLC. (annexed as Exhibit 10.7 to the Form 8-K filed with the
Securities and Exchange Commission on August 28, 2007 and incorporated
herein by reference)
|
10.31
|
Management
Services Agreement between Energtek Inc. and EuroSpark S.A., dated
September 30, 2007 (annexed as Exhibit 10.8 to the Form 8-K filed
with the
Securities and Exchange Commission on August 28, 2007 and incorporated
herein by reference)
|
|
10.32
|
Agreement
dated September 26, 2007, by and between Ukcyl, Ltd. and Dynatech
Furnaces
(Bombay) Pvt. Ltd. Portions of this exhibit have been omitted pursuant
to
a request for confidential treatment and have been filed separately
with
the Securities and Exchange Commission (annexed as Exhibit 10.9 to
the
Form 8-K filed with the Securities and Exchange Commission on August
28,
2007 and incorporated herein by reference)
|
|
14.1
|
Code
of Conduct (filed herewith)
|
|
31.1
|
Certification
pursuant to Section 302 of the Sarbanes-Oxley Act (filed herewith)
|
|
31.2
|
Certification
pursuant to Section 302 of the Sarbanes-Oxley Act (filed
herewith)
|
|
32.1
|
Certification
of Principal Executive Officer and Principal Financial Officer pursuant
to
Section 906 of the Sarbanes-Oxley (filed
herewith)
|
ENERGTEK,
INC.
|
|
By:
|
/s/
Lev Zaidenberg
|
Name:
|
Lev
Zaidenberg
|
Title:
|
Chief
Executive Officer and Director
|
(Principal
Executive Officer)
|
|
By:
|
/s/
Doron Uziel
|
Name:
|
Doron
Uziel
|
Title:
|
Treasurer
|
(Principal
Financial Officer)
|
Signatures
|
Title
|
|||
By:
|
/s/
Lev Zaidenberg
|
Chief
Executive Officer and Director
|
||
Lev
Zaidenberg
|
||||
Date:
|
March
26, 2008
|
|||
By:
|
/s/
Yishai Aizik
|
Secretary
and Director
|
||
Yishai
Aizik
|
||||
Date:
|
March
26, 2008
|
|||
By:
|
/s/
Zhenia Fleisher
|
Director
|
||
Zhenia
Fleisher
|
||||
Date:
|
March
26, 2008
|
|||
By:
|
/s/
Eliezer Sandberg
|
Director
|
||
Eliezer
Sandberg
|
||||
Date:
|
March
26, 2008
|
1 Year Energtek (CE) Chart |
1 Month Energtek (CE) Chart |
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