Energy & Technology : 2021 Financial Statements and Notes to Financial Statements

PART I. Financial Information

ITEM 1. Financial Statements

ENERGY & TECHNOLOGY, CORP.
Consolidated Balance Sheets
As of December 31, 2021 and December 31, 2020
December 31,	December 31,
2021	2020
(Unaudited)	(Unaudited)
Assets
Current Assets
Cash and Cash Equivalents	$ 509,841	$ 16,201
Investments	718	822
Accounts Receivable
Trade, Net	350,434	542,777
Inventory, Net	0	63,856
Prepaid Expenses	16,276	47,044
Other Current Assets	334,088	3,979
Total Current Assets	1,211,357	674,679
Property and Equipment, Net
Held for Operations, Net	2,257,403	3,531,937
Total Assets	$ 3,468,760	$ 4,206,616
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable	$ 237,486	$ 460,458
Accrued Liabilities	61,470	13,310
Accrued Rent	3,797,500	3,625,500
Current Maturities of Notes Payable	5,160,535	4,650,232
Due to Affiliates	1,026,493	1,057,406
Total Current Liabilities	10,283,483	9,806,906
Long-Term Liabilities
Notes Payable	904,018	2,207,427
Total Liabilities	$ 11,187,502	$ 12,014,333
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 and 169,186,117 shares Issued at December 31, 2021 and December 31, 2020, 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	(8,021,091)	(8,110,065)
Total Stockholders' Equity	(7,718,741)	(7,807,716)
Total Liabilities and Stockholders' Equity	$ 3,468,760	$ 4,206,616

See notes to consolidated financial statements.

ENERGY & TECHNOLOGY, CORP.
Consolidated Statements of Operations (Unaudited)
For the Year Ended December 31, 2021 and December 31, 2020
December 31,	December 31,
2021	2020
(Unaudited)	(Unaudited)
Revenues	$ 3,219,669	$ 2,456,978
Cost of Revenues
Materials and Supplies	292,951	330,323
Subcontract Labor	448,094	403,845
Depreciation	391,671	431,656
Employees and Related Costs	590,202	631,965
Repairs and Maintenance	82,851	72,566
Insurance	85,889	92,064
Other Costs	473,214	469,938
Total Cost of Revenues	2,364,872	2,432,358
Gross Profit	854,797	24,620
Operating Expenses
Selling, General, and Administration	838,945	1,174,716
Depreciation
Bad Debts	59,780	85,139
Total Operating Expenses	898,725	1,259,855
Loss from Operations	(43,928)	(1,235,235)
Other Income (Expense)
Loan Forgiveness	259,022	291,297
Employee Retention Credit Income	329,100	-
Income (Expense) from Lawsuit Settlement	(25,000)	73,410
Gain (Loss) on Sale of Assets	(365,491)	5,850
Investment Income (Expense)	(105)	(729)
Interest Expense	(64,623)	(75,813)
Total Other Income (Expense)	132,903	294,015
Loss Before Provision for Income Taxes	88,975	(941,221)
Benefit for Income Taxes
Income/(Loss)	$ 88,975	$ (941,221)

See notes to consolidated financial statements.

ENERGY & TECHNOLOGY CORP.

Consolidated Statements of Changes in Stockholders' Equity For the Years Ended December 31, 2020 and December 31, 2021

Common Stock

Treasury StockAdditional

Paid-In CapitalRetained EarningsTotal Stockholders'Shares

AmountShares

Amount

EquityBalance at January 1, 2020

Net Income

Balance at December 31, 2020

Balance at January 1, 2021

Net Income

Balance at December 31, 2021

See notes to consolidated financial statements.

169,186,117

$

169,198

(3,637,351) $ (4,076,441) $ 4,209,592

$ (7,168,844)

• $ (6,866,495)

  -

  -

  -

  -

  (941,221)

• $ (941,221)

  169,186,117 169,186,117

  $ $

  169,198 169,198

  (3,637,351) $ (4,076,441) $ 4,209,592

  • $ (8,110,065)

• $ (7,807,716)

(3,637,351) $ (4,076,441) $ 4,209,592

• $ (8,110,065)

  • $ (7,807,716)

  -

  -

  -

• $ 88,975

$

88,975

169,186,117

$

169,198

(3,637,351) $ (4,076,441) $ 4,209,592

$ (8,021,090)

$

(7,718,741)

ENERGY & TECHNOLOGY, CORP. Consolidated Statements of Cash Flows

For the Twelve Months Ended December 31, 2021 and 2020

Twelve Months EndedDecember 31, 2021 UnauditedDecember 31, 2020 Unaudited

Cash Flows from Operating Activities

Net Income (Loss)

Adjustments to Reconcile Net Income to Net Cash Provided by

Operating Activities

Depreciation

Fair Value of Investments Prior Period Audit Adjustments Accrued Interest

88,974

(941,221)

391,671 104

284,206 729

Gain on disposal of asset 882,863 227,025

Deferred Income Taxes

Changes in Assets and Liabilities

Trade Receivables 192,343 15,055 Inventory 63,856

Prepaid Expenses 30,768

Accounts Payable

Accrued Payroll and Payroll Liabilities Accrued Rent

Net Cash Provided by Operating Activities

Cash Flows from Investing Activities

Other Assets

Patent Cost

Purchase of Property and Equipment

Net Cash Provided by (Used in) Investing Activities

Cash Flows from Financing Activities

Issuance of Stock

Borrowings (Principal Repayments) to Affiliates Borrowings (Principal Repayments) on Notes Payable

(222,972)

48,160 172,000 1,647,767

(330,109)

(330,109)

(2,493) 69,407 (44,361) 202,500

(189,153)

7,359

7,359

(30,913) 97,493

(793,105) 6,407

Net Cash Provided by (Used in) Financing Activities

(824,018)

103,900

Net Increase (Decrease) in Cash and Cash Equivalents

Cash and Cash Equivalents, Beginning of Year

493,640 16,201

(77,894)

94,099

Cash and Cash Equivalents, End of Year

Supplemental Disclosure of Cash Flow Information

Cash Paid During the Period for Interest

Cash Paid During the Period for Income Taxes

See notes to consolidated financial statements.

$	509,841	$	16,205
$	64,636	$	75,838
$	-	$	-

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 vessels, oilfield equipment and mainly pipe, including 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 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 at December 31, 2021 and at December 31, 2020.

Inventory

Inventory is stated at the lower of cost determined by the specific identification method or market. At December 31, 2021 and at December 31, 2020, 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.