10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, 2020

or

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________ to __________________________

Commission file number: 000-30454

Enviro Technologies U.S., Inc.

(Exact name of registrant as specified in its charter)

Florida	65-0742890
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

821 NW 57 Place, Fort Lauderdale, FL	33309
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (954) 958-9968

Securities registered under Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	None	None

Securities registered under Section 12(g) of the 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 of the Securities Act.

o 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 12 months (or for 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   o No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.4.05 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     x Yes   o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	x
		Emerging growth company	o

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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act 915 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.    ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes     ☒ No

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked prices of such common equity, as of the last business day of the registrant’s most recently completed fiscal year. $557,959 on June 30, 2020.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. 4,950,125 shares of common stock are issued and outstanding as of March 31, 2021.

DOCUMENTS INCORPORATED BY REFERENCE5

List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980). None.

2

Table of Contents

			Page
PART I.			5
	Item 1.	Business	5
	Item 1 A.	Risk Factors	8
	Item 1 B.	Unresolved Staff Comments	11
	Item 2.	Properties	11
	Item 3.	Legal Proceedings	11
	Item 4.	Mine Safety Disclosures	11
PART II.			11
	Item 5.	Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	11
	Item 6.	Selected Financial Data	12
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	17
	Item 8.	Financial Statements and Supplementing Data	17
	Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	17
	Item 9A.	Controls and Procedures	17
	Item 9B.	Other Information	19
PART III.			19
	Item 10.	Directors, Executive Officers and Corporate Governance	19
	Item 11.	Executive compensation	21
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	22
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	24
PART IV.			24
	Item 14.	Principal Accountant Fees and Services	24
	Item 15.	Exhibits and Financial Data Schedules	25
	Item 16.	Form 10-K Summary	25

3

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This report includes forward-looking statements that relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “likely,” “aim,” “will,” “would,” “could,” and similar expressions or phrases identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and future events and financial trends that we believe may affect our financial condition, results of operation, business strategy and financial needs. Forward-looking statements include, but are not limited to, statements about risks associated with:

·     Financial risks, including
·	our ability to continue as a going concern;
·	the adverse impact of Covid-19 on our company;
·	our ability to generate revenues and report profitable operations;
·	our ability to pay our operating expenses; and
·	our ability to raise working capital.
·     Business risks, including:
·	reliance on a limited number of customers and the Grant Back License;
·	our ability to compete; and
·	our dependence on our sole executive officer.
·     Risks related to our common stock, including:
·	continuing material weaknesses in our disclosure controls and internal control over financial reporting;
·	the illiquid nature of the market for our common stock; and
·	the impact of penny stock rules on our shareholders.

You should read thoroughly this report and the documents that we refer to herein with the understanding that our actual future results may be materially different from and/or worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements including those made in Part I. Item 1A. Risk Factors appearing elsewhere in this report. Other sections of this report include additional factors, which could adversely impact our business and financial performance. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our 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. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. These forward-looking statements speak only as of the date of this report, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business.

OTHER PERTINENT INFORMATION

All share data contained herein gives pro forma effect to the 10:1 reverse stock split of our common stock which was effective on September 10, 2020.

Unless specifically set forth to the contrary, when used in this report the terms “EVTN,” the “Company,” “we,” “our,” “us,” and similar terms refers to Enviro Technologies U.S., Inc., a Florida corporation, and our subsidiary, Florida Precision Aerospace, Inc., a Florida corporation which we refer to as “FPA”. In addition, “2019” refers to the year ended December 31, 2019, “2020” refers to the year ended December 31, 2020 and “2021” refers to the year ending December 31, 2021. We maintain a corporate website at www.evtn.com. Unless specifically set forth to the contrary, the information which appears on our website at www.evtn.com is not part of this report.

4

 PART I

ITEM 1. BUSINESS.

The Company developed and manufactured the Voraxial Separator and currently manufactures and sells the V-Inline Separator, a unique separation technology that efficiently separates large volumes of liquid/liquid, liquid/solids or liquid/liquid/solids fluid mixtures with distinct specific gravities. Current and potential commercial applications and markets for the V-Inline Separator include mining, utilities, manufacturing, utilities, waste-to-energy among other industries.

On March 13, 2017, we entered into a Technology Purchase Agreement with Schlumberger Technology Corporation, a Texas corporation, Schlumberger Canada Limited, a Canadian entity, and Schlumberger B.V., an entity organized under the laws of the Netherlands (collectively, “Schlumberger”) pursuant to which we sold our intellectual property, substantially consisting of the Voraxial patents, marks, software and copyrights, to Schlumberger in consideration of $4,000,000. As part of the agreement, Schlumberger granted us a non-exclusive, non-transferable, worldwide, royalty-free licenses (the “Grant Back Licenses”), to make, use, sell, offer for sale, and import products and processes embodying the Voraxial intellectual property outside the oil and gas market. Under the terms of the agreement, we can no longer use the tradename Voraxial and we subsequently branded the technology licensed to us as the “V-Inline”. Our management believes that the Grant Back Licenses can potentially provide additional revenues through the sale of V-Inline Separators outside the oil and gas industry, including, but not limited to mining, utilities, sewage and industrial wastewater. In the fourth quarter of 2019 we shipped a wastewater system comprised of multiple V-Inline Separators to a utility company to separate solids and oil from their wastewater stream. Due to Covid-19, the installation of the system was delayed. The system, successfully commissioned in February 2021, is being used to process and separate oil and solids from a flow of about 100 gallons per minute. The System includes different technologies with the heart of the system being comprised of two V-Inline 2000 Separators working in parallel with a third V-Inline Separator being utilized to further dewater the reject lines from the System. Management believes there are many opportunities similar to this installation available for the V-Inline Separator not only in the utilities industry but other industries as well including those previously mentioned.

The V-Inline Separator is a continuous flow turbo machine that generates a strong centrifugal force, a vortex, capable of separating light and heavy liquids, such as oil and water, or any other combination of liquids and solids at extremely high flow rates. As the fluid passes through the machine, the V-Inline Separator accomplishes this separation through the creation of a vortex. In liquid/liquid and liquid/solid mixtures, this vortex causes the heavier compounds to gravitate to the outside of the flow and the lighter elements to move to the center where an inner core is formed. The liquid stream processed by the machine is divided into separate streams of heavier and lighter liquids and solids. As a result of this process, separation is achieved.

The benefits of the V-Inline Separator include: 

- High volume / small footprint  

- No Pressure drop requirement

- High G force

- Treats a wide range of flows, even slugging flows

- Handles fluctuation in flow rates without any adjustments

- Handles fluctuation in contaminates without any adjustments

- Separation of 2 or 3 components simultaneously

- Non-clogging - open rotor assembly

- Low maintenance with ease of operation and installation

- Can operate dry

- Since there is no pressure drop, there is very little wear caused by sand  

The V-Inline Separator is a self-contained, non-clogging device that can be powered by an electric motor, diesel engine or by hydraulic power generation. Further, its scalability allows it to be utilized in a variety of industries and to process

5

various amounts of liquid. The following are the various sizes and the corresponding capacity range:

Model Number	Diameter Size	Capacity Range Gallons Per Minute
V1000	1 inch	3-5
V2000	2 inches	20-70
V4000	4 inches	100-500
V8000	8 inches	1,000-3,500

While our net revenues in 2020 declined substantially from 2019, we remain firm in our belief that the need for effective and cost efficient wastewater treatment and separation technology is global in scale. Moreover, virtually every industry requires some type of separation process either during the manufacturing process, prior to treatment or discharge of wastewater into the environment, for general clean up, or emergency response capability. Separation processes, however, are largely unknown to the average consumer. These processes are deeply integrated in almost all industrial processes from oil to wastewater to manufacturing. Management believes that the separation technology has applications in most, if not all major separation industries. The unique characteristics of the technology allow it to be utilized either as a stand-alone unit or within an existing system to provide a more efficient and cost effective way to handle the separation needs of the customer. We believe the separation technology can result in a cost savings and other benefits to the customer. These benefits result in and include:

● A reduction in water and energy usage,

● Requires no pressure drop to perform separation,

● Less space needed to implement the V-Inline Separator, the V-Inline Separator weights less than some competing technologies,

● A reduction time to process and separate the fluids, allowing the customer to be more efficient,

● Creation of more efficient and faster process to treat water to increase the overall productivity of the end-user,

● Fewer employees needed to operate the system, and

● Reduction of ongoing maintenance and servicing costs.

We believe that this separation technology is a unique front-end solution for the separation industry that can offer increased productivity while reducing the physical space and energy required to operate the unit. These advantages translate into the potential for substantial operating cost efficiencies that would increase the profitability of the solution’s end user. The unique characteristic to conduct separation without a pressure loss allows the unit to be installed in locations other technologies cannot. For instance, another separation technology called a hydrocyclone requires a significant pressure loss to perform separation.

Manufacturing

We manufacture and assemble our products at our Fort Lauderdale, Florida facilities. The materials needed to manufacture the components of the products we sell, including the separation technology, have been provided by leading companies in the precision equipment industry. We do not have any long term contracts with any supplier. We do not anticipate any shortage of component parts. We maintain a limited inventory of finished parts until we receive a customer order. Most of our inventory is comprised of raw materials and finished Separator components that can be used for future sales.

Marketing

During 2020 we limited our marketing and advertising due to COVID-19 and the downturn in the oil and gas markets and lack of available working capital. We anticipate increasing spending on marketing efforts, such as tradeshows, when, and if, our cash flow and market conditions improve. From June 2017 through June 2020, we primarily focused our marketing resources to develop a strong rapport with Schlumberger, which included scaling up our manufacturing capabilities. In addition, we started to pursue projects in industries outside of the oil and gas market, and primarily marketed our products by

6

developing relationships within the separation markets. Our marketing efforts were compromised as we anticipated using the revenues from the Schlumberger Supply Agreement to invest in new applications and industries for the V-Inline Separator unit sales. However, sales from Schlumberger were lower than management anticipated and the Supply Agreement has expired.

As the economy improves we expect to market the V-Inline Separator to companies outside of the oil and gas industry by attending tradeshows and developing relationships with sales representatives. The Company has also begun marketing its manufacturing capabilities to companies located in South Florida through networking, reaching out to old customers and attending tradeshows. Due to the economic conditions presented by the Covid-19, the Company does not currently have plans to present at any tradeshows in 2021.

Regulation

Our operations are subject to extensive and frequently changing federal, state, and local laws and substantial regulation by government agencies, including the United States Environmental Protection Agency (EPA), the United States Occupational Safety and Health administration (OSHA) and the Federal Aviation Administration (FAA). Among other matters, these agencies regulate the operation, handling, transportation and disposal of hazardous materials used by us during the normal course of our operations, govern the health and safety of our employees and certain standards and licensing requirements for our aerospace components that we contract manufacture. We are subject to significant compliance burden from this extensive regulatory framework, which may substantially increase our operational costs.

We believe that we have been and are in compliance with environmental requirements and believe that we have no liabilities under environmental requirements. Further, we have not spent any funds specifically on compliance with environmental laws. However, some risk of environmental liability is inherent in the nature of our business, and we might incur substantial costs to meet current or more stringent compliance, cleanup, or other obligations pursuant to environmental requirements in the future. This could result in a material adverse effect to our results of operations and financial condition.

Product Liability

Our business exposes us to possible claims of personal injury, death or property damage, which may result from the failure, or malfunction of any component or subassembly manufactured or assembled by us. We have product liability insurance. However, any product liability claim made against us may have a material adverse effect on our business, financial condition or results of operations in light of our poor financial condition, losses and limited revenues. We also maintain general insurance coverage.

Competition

We are subject to competition from other manufacturing facilities who have greater manufacturing capacity, which allows them to utilize economy of scale to reduce cost. We are also subject to competition from a number of companies who have greater experience, research abilities, engineering capability and financial resources than we have to market and sell separation technology. Although we believe the separation technology offers applications which accomplish better or similar results on a more cost-effective basis than existing products, other products have, in some instances, attained greater market and regulatory acceptance.

Human Capital

As of the date of this report we have five employees, including Mr. John A. DiBella, our sole executive officer, one individual who provides administrative and support services to us and three individuals who are involved in the manufacturing, shipping and installation, if required, of our products. All of our employees work from our principal offices in Fort Lauderdale, Florida, other than Mr. DiBella who works from time to time remotely from his home. All of our employees are full-time and none are covered by collective bargaining agreements. Our non-executive employees have been employed “at will” by our company from 2 years to 13 years.

Our executive officer receives an annual salary and may receive bonuses at the discretion of the board of directors. Information regarding Mr. DiBella’s compensation appear later in this report. All of our employees receive health insurance

7

and one week paid leave. Our employees are compensated based on their responsibilities as such, some are hourly while others are salaried. Our hourly employees may also receive overtime pay. At the discretion of our management, the non-executive employees may receive bonus paid either at the end of the year or after completion of certain projects.

Our History

The Company was incorporated in Idaho on October 19, 1964 under the name Idaho Silver, Inc. In June 1996 we changed our corporate name to Enviro Voraxial Technology, Inc. and in June 2017 we changed our corporate name to Enviro Technologies, Inc. On August 20, 2020, the Company’s shareholders approved a change of domicile of the Company from Idaho to Florida. On December 28, 2020, the Company received the file stamped Certificate of Domestication and Articles of Incorporation from the Secretary of State of Florida, which was effective on December 18, 2020, thereby completing the change in domicile from Idaho to Florida. In connection with the change in domicile from Idaho to Florida, the Company’s name changed to “Enviro Technologies U.S., Inc.”

Additional Information

We file annual and quarterly reports on Forms 10-K and 10-Q, current reports on Form 8-K and other information with the Securities and Exchange Commission (“SEC” or the “Commission”). The Commission also maintains an Internet site at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission.

Other information about EVTN can be found on our website www.evtn.com. Reference in this document to that website address does not constitute incorporation by reference of the information contained on the website.

ITEM 1A. RISK FACTORS.

Before you invest in our securities, you should be aware that there are various risks. You should consider carefully these risk factors, together with all of the other information included in this annual report before you decide to purchase our securities. If any of the following risks and uncertainties develop into actual events, our business, financial condition or results of operations could be materially adversely affected.

FINANCIAL RISKS

Our independent auditors have raised substantial doubt about our ability to continue as a going concern.

Our consolidated financial statements have been prepared assuming we will continue as a going concern. At December 31, 2020 we have a working capital deficit of $750,481 and an accumulated deficit of $15,922,429. Our revenues declined approximately 97% in 2020 from 2019 and for 2020 we reported a net loss of ($1,030,808). In addition, we used $541,249 in net cash in our operations during 2020. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We expect the impact of the Covid-19 pandemic on our company to continue to materially impact our results of operations in 2021.

The decline in oil prices and overall economic activity as a result of the Covid-19 pandemic has materially adversely impact our operations during 2020 and we believe the ongoing effects of Covid-19 pandemic will negatively impact our operations in 2021. Specifically, the decrease in the price of oil (West Texas Intermediate – WTI) from approximately $60 per barrel in the beginning of January 2020 to a low of approximately negative $37 per barrel in April 2020 and then staying at approximately $40 per barrel until early November 2020 had a negative effect on the potential for sales of our products. During 2020 we experienced a significant slowdown from customer’s inquiries from other industries as well that lasted the majority of the year. Although we are starting to experience some inquiries from customers in 2021, we expect this trend to continue until such

8

time as the full impact of the virus passes, travel restrictions are lifted and corporate capital expenditures are normalized. We are unable to predict the overall impact on our company at this time. Our loss of revenues will materially impact our liquidity, and we do not expect to be able to access the capital markets for additional working capital in the near future. Our senior management will continue to monitor our situation on a daily basis, however, we expect that these factors and others we have yet to experience will materially adversely impact our company, its business and operations for the foreseeable future.

Our ability to generate revenues or profitable operations in the future is not assured.

Since entering into the Grant Back License in June 2017, we have generated limited revenues under the terms of this agreement, nor are there any guarantees that we will be able to generate any meaningful revenues in the future. Our ability to generate future revenues will depend on a number of factors, many of which are beyond our control, including the impact of Covid-19, competitive efforts and general economic trends. In addition, we reported a net loss of approximately $1.03 million for 2020. There are no assurances we will be able to continue to generate revenues or report profitable operations in the future.

If our revenues continue to decline, we do not have sufficient funds to pay our operating expenses.

While we reported net income of $594,037 in 2019, we reported a net loss of $(1,030,808) in 2020. At December 31, 2020 we had $336,564 of cash and a working capital deficit of $750,481. We used $541,249 in net cash in our operations in 2020. We do not have any external sources of liquidity. Although we believe our revenues will increase in 2021 from 2020, there are no assurances this is correct or that any increase in our revenues in 2021 will be sufficient to pay our operating expenses. In an effort to conserve our cash resources to sustain our operations until such time as the economy begins returning to pre-Covid-19 pandemic activity levels, we have reduced employee hours, accrued a portion of management’s salary and have begun marketing our machining capabilities to local manufactures. Our management has also begun exploring possible opportunities for the Company involving mergers, acquisitions or other business combination transactions in an effort to diversify our business. There are no assurances, however, that these efforts will be sufficient to permit us to pay our operating expenses. In that event, our ability to continue as a going concern is in jeopardy.

We have been limited by insufficient capital, and we may continue to be so limited.

In the past, we have lacked the required capital to market the V-Inline Separator. Our inability to raise the funding or to otherwise finance our capital needs could adversely affect our financial condition and our results of operations, and could prevent us from implementing our business plan. We may seek to raise capital through public and private equity offerings, debt financing or collaboration, and strategic alliances. Such financing may not be available when we need it or may not be available on terms that are favorable to us. If we raise additional capital through the sale of our equity securities, your ownership interest will be diluted and the terms of the financing may adversely affect your holdings or rights as a stockholder. If we fail to raise additional funds when needed, or do not have sufficient cash flows from sales, we may be required to scale back or cease operations, sell or liquidate our assets and possibly seek bankruptcy protection.

BUSINESS RISKS

We currently rely on a limited number of customers and the Grant Back License for our revenues.

Revenues from two customers accounted for approximately 20% and 10% of total revenues, respectively, during 2020 and revenues from one customer accounted for approximately 93% of total revenues during 2019. We do not have any contracts with minimum guaranteed orders with these customers. Furthermore, we currently rely on the Grant Back License. If these customers fail to order additional products or we are unable to attract new customers or we do not comply with the terms of the Grant Back License, it could have an adverse effect on our financial condition and results of operations.

9

Our market is subject to intense competition. If we are unable to compete effectively, our product may be rendered non-competitive or obsolete.

We are engaged in a segment of the water filtration industry that is highly competitive and rapidly changing. Many large companies, academic institutions, governmental agencies, and other public and private research organizations are pursuing the development of technology that can be used for the same purposes as the V-Inline Separator. We face, and expect to continue to face, intense and increasing competition, as new products enter the market and advanced technologies become available. We believe that a significant number of products are currently under development and will become available in the future that may address the water filtration segment of the market. If other products are successfully developed, it may be better received by the market or introduced before the V-Inline Separator. Our competitors' products may be more effective, or more effectively marketed and sold, than any of our products. Many of our competitors have significantly greater financial, technical and human resources than we have and may be better equipped to discover, develop, manufacture and commercialize products; and more extensive experience in marketing water treatment products. Competitive products may render the V-Line Separator obsolete or noncompetitive.

We are dependent on key personnel.

We are dependent upon the availability and the continued performance of the services of John A. DiBella, our Chief Executive Officer. We are not a party to any employment agreement with him. The loss of the services of Mr. DiBella could have a material adverse effect on us.

RISKS RELATED TO OUR COMMON STOCK

We have material weaknesses in our disclosure controls and our internal control over financial reporting. If we fail to remediate any material weaknesses or if we fail to establish and maintain effective control over financial reporting, our ability to accurately and timely report our financial results could be adversely affected.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. GAAP. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis. Historically we have reported material weaknesses in our disclosure controls and internal control over financial reporting. As required by the rules and regulations of the SEC, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2020. Based on this assessment, and as described later is this report, our management concluded that as of December 31, 2020, our internal control over financial reporting was not effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP as a result of material weaknesses. Our failure to remediate the material weaknesses or the identification of additional material weaknesses in the future could adversely affect our ability to report financial information, including our filing of quarterly or annual reports with the SEC on a timely and accurate basis. Moreover, our failure to remediate the material weaknesses identified above or the identification of additional material weaknesses could prohibit us from producing timely and accurate financial statements, which may adversely affect the market price of shares of our common stock.

We do not know whether an active, liquid and orderly trading market will develop for our common stock and as a result it may be difficult for you to sell your shares of our common stock.

Our common stock is quoted on the Pink tier of the OTC Markets and is thinly traded. An active trading market in our common stock may never develop or, if developed, sustained. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the fair market value of your shares. Further, an inactive market may also impair our ability to raise capital by selling shares of our common stock and may impair our ability to enter into business combinations with other companies by using our shares of common stock as consideration. The market price of our common stock may be volatile, and you could lose all or part of your investment.

10

Because our stock currently trades below $5.00 per share, and is quoted on the Pink tier of the OTC Markets, our stock is considered a "penny stock" which can adversely affect its liquidity.

As the trading price of our common stock is less than $5.00 per share, our common stock is considered a "penny stock," and trading in our common stock is subject to the requirements of Rule 15g-9 under the Securities Exchange Act of 1934. Under this rule, broker/dealers who recommend low-priced securities to persons other than established customers and accredited investors must satisfy special sales practice requirements. The broker/dealer must make an individualized written suitability determination for the purchaser and receive the purchaser's written consent prior to the transaction. SEC regulations also require additional disclosure in connection with any trades involving a "penny stock," including the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and its associated risks. These requirements severely limit the liquidity of our common stock in the secondary market because few brokers or dealers are likely to undertake these compliance activities. Purchasers of our common stock may find it difficult to resell the shares in the secondary market.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None.

ITEM 2. PROPERTIES.

In December 2018, the Company entered into a three year lease for an office and manufacturing facility located at 821 NW 57 Place, Fort Lauderdale, FL 33309. The lease is approximately $4,839 per month. The lease has a one-time renewal option for three years and an increased base rent of 3%. The Company has the option to terminate the lease with three months’ notice.

ITEM 3. LEGAL PROCEEDINGS.

Please see Note I to the notes to consolidated financial statements appears later in this report for a discussion of the pending or threatened litigation involving the Company.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Our common stock is quoted on the Pink tier of OTC Markets under the symbol “EVTN”.

The last sale price of our common stock as reported on the Pink tier of the OTC Markets on March 29, 2021, was $0.25 per share. As of March 29, 2021, there were approximately 800 record owners of our common stock.

Dividends

We have not paid a cash dividend on the common stock since current management joined our company in 1996. The payment of dividends may be made at the discretion of our board of directors and will depend upon, among other things, our operations, our capital requirements and our overall financial condition. As of the date of this report, we have no intention to declare dividends.

Recent Sales of Unregistered Securities

Except for those unregistered securities previously disclosed in reports filed with the Commission during the period covered by this report, we have not sold any securities without registration under the Securities Act of 1933, as amended, during the period covered by this report.

11

Issuer Purchase of Equity Securities

None.

ITEM 6. SELECTED FINANCIAL DATA.

This information not required for a smaller reporting company.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion of our financial condition and results of operations for 2020 and 2019 and should be read in conjunction with the financial statements and the notes to those statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under Cautionary Statement Regarding Forward Looking Information, Item 1A. Business and Item 1A. Risk Factors in this report. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

Overview

Although we experienced significant revenue growth in 2019 mainly through the sale of Voraxial Separator and V-Inline Separators, 2020 proved to be an extremely challenging and disappointing year due to the Covid-19 pandemic. Our revenues were mainly derived from machining, face guards and auxiliary parts for the V-Inline Separators. The demand from the oil industry dried up as we saw a significant decline in oil prices and a drop in capital expenditures from the overall market, both the oil industry and industries outside of oil and gas hindered sales opportunities for the V-Inline Separator. Customer inquiries decreased significantly as well. The Supply Agreement we signed with Schlumberger in June 2017 as part of the Technology Purchase Agreement expired in 2020. As we did not generate significant revenues from this agreement, we did not pursue an extension of such agreement under its initial terms. However, we may continue to work together on a project by project basis with Cameron until such time a new agreement is reached, if at all.

We believe there is a market for the V-Inline Separator in the mining, utilities, sewage and industrial wastewater industries, among others. We intend to continue to seek opportunities for the V-Inline Separator through our rights under our Grant Back License. We have branded our licensed products as the V-Inline Separator. We shipped a wastewater system to a utility company that consisted of multiple V-Inline Separators to separate solids and oil from their wastewater stream. The system is being used to process and separate oil and solids from a flow of about 100 gallons per minute. The system includes different technologies with the heart of the system being comprised of two V-Inline 2000 Separators working in parallel with a third V-Inline Separator being utilized to further dewater the reject lines from the System. We shipped the wastewater system in the fourth quarter of 2019. Due to Covid-19, the system installation was delayed. The system was commissioned in February 2021 and meeting all the required discharge requirements.

Going Concern 

For 2020 we reported a net loss of  $(1,030,808) and net cash used in operations of $541,249. At December 31, 2020 we had cash on hand of $336,564, a working capital deficit of $750,481 and an accumulated deficit of $15,922,429. The report of our independent registered public accounting firm on our consolidated financial statements for the year ended December 31, 2020 contains an explanatory paragraph regarding our ability to continue as a going concern based upon our working capital deficit, accumulated deficit and negative cash flows from operations. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. There are no assurances we will be successful in our efforts to raise capital,

12

develop a source of revenues, report profitable operations or to continue as a going concern, in which event investors would lose their entire investment in our company.

Results of Operations

Revenues

Revenues for 2020 decreased by approximately 97% from 2019. The decrease in revenues were a result of the harsh economic climate we faced in 2020 due to Covid-19 pandemic. Although we achieved significant revenue growth in 2019 from the sale of Voraxial Separator to the oil industry and the sale of a wastewater system that included multiple V-Inline Separators to a nuclear facility, the damage experienced from the 2020 pandemic may hinder our ability to generate sales and increase revenues quickly. As discussed earlier in this report, we expect that our revenues in 2021 from the sale of Voraxial and V-Inline Separators will be adversely impacted by the Covid-19 pandemic. Even once the effects of the pandemic on our business subsides, it may take longer than expected for business in our target markets to resume normal operations. Accordingly, at this time we are unable to predict the ultimate impact to our revenues in 2021.

Cost of goods

Cost of goods sold decreased approximately 96% in 2020 from 2019, and reflects the decrease in the number of units sold during the year. Our cost of goods sold as a percentage of revenues, however, increased to approximately 60% in 2020 from approximately 42% in 2019 as a result of the lower margin projects we completed via machining, including the manufacturing of face shields, and the auxiliary parts for the V-Inline Separators as compared to the higher margin products of the V-Inline Separators and Voraxial Separators. Further, we experience inventory impairment as a result of extra face shields we have in inventory. Our cost of goods continues to be reviewed by management in effort to obtain the best available pricing while maintaining high quality standards.

Costs and expenses

Total costs and expenses increased by approximately 2% for 2020 as compared to 2019. The increase was due to increase in payroll expense, partially offset by decreases in selling, general and administrative expenses and professional fees.

Selling, general and administrative expenses

Selling, general and administrative expenses in 2020 decreased by 1% for 2020 as compared to 2019. Our SG&A remained fairly consistent year over year. We experienced decreases in our insurance expense of $15,717 and interest expense of $7,206 as the interest on the principal owed on our equipment note payable decreased. Furthermore, travel expense decreased $16,837 as a result of reduced travel due to Covid-19. This was offset by an increase in healthcare benefits to our staff of $10,952.

Payroll Expenses

Payroll expense in 2020 increased by approximately 14% as compared to 2019. The increase in payroll expense was due to a lower utilization and absorption of labor cost into cost of goods sold as compared to 2019.

Professional Fees

Professional fees decreased by approximately 20% for 2020 from 2019. The decrease was primarily due to a decrease in advisory and consulting services as a result of our cost cutting measure to conserve cash. A reduction in such fees may have a negative effect on future sales opportunities.

13

                Interest Expense

Interest expense, which represents interest we pay on an equipment note payable, decreased approximately 41% in 2020 from 2019 as a result of a decrease in the principal owed.

Liquidity and Capital Resources

At December 31, 2020, cash was $336,564 as compared to $674,844 at December 31, 2019. Working capital deficit at December 31, 2020 was $750,481 as compared to a working capital deficit at December 31, 2019 of $38,544. At December 31, 2020, we had an accumulated deficit of $15,922,429. Our current assets decreased by 58% at December 31, 2020 as compared to December 31, 2019, which reflects decreases in our cash and cash equivalents and accounts receivable. Our current liabilities increased 6% at December 31, 2020 as compared to December 31, 2019, which is primarily attributable to an increase accrued expense-related party and Loans Payable – current portion as a result of the SBA loans and PPP loans we received. We expect that such loans will be forgiven but we cannot provide any assurances.

We do not have any external sources of liquidity, and have been dependent upon the funds we received under the SBA and PPP loans, and limited customer’s revenues to provide working capital for our company. We do not have any commitment for capital expenditures. We anticipate we will need approximately $1 million to operate the business over the next twelve months. Our ability to generate future revenues, generate sufficient cash flow to pay our operating expenses and report profitable operations in future periods will depend on a number of factors, many of which are beyond our control. If we fail to achieve profitability on a quarterly or annual basis, or to raise additional funds when needed, or do not have sufficient cash flows from sales, we may be required to scale back or cease operations, sell or liquidate our assets and possibly seek bankruptcy protection.

Summary of cash flows

The following table summarizes our cash flows:

	Year Ended December 31,
	2020			2019
Cash flow data:
Cash used in operating activities	$	(541,249	)	$	(485,187	)
Cash used in investing activities	$	(8,228	)	$	—
Cash (used in) provided by financing activities	$	211,197		$	(63,832	)

Net cash used in operating activities in 2020 was primarily attributable to a decrease in accounts payable and accrued expenses, offset in part by a decrease in accounts receivable and an increase in accrued expenses – related party. Decrease in accounts receivable are a result of some parts we manufactured and shipped in 2020 in fulfillment of orders we received in 2019. Decreases in deposit from customer is primarily attributable to deposit recognized as revenues as a result of the shipment of the wastewater system to the utility company.

Net cash used in operating activities in 2019 was primarily attributable to an increase in accounts receivable, and decreases in accrued expenses – related party and deposit from customer, offset in part by decreases in inventory and prepaid expenses. Decreases in inventory and prepaid expenses are a result of the units we manufactured and shipped in fulfillment of orders we received. Decreases in deposit from customer is primarily attributable to deposit recognized as revenues as a result of the shipment of the wastewater system to the utility company. Increase in accrued expenses related party is due to payments made to our chief executive office for his accrued salary.

Net cash used in investing activities in 2020 was primarily attributable to an increase in manufacturing equipment we purchased for machining projects we pursued.

Net cash used in financing activities during each of 2020 and 2019 was primarily attributable to the repayment of the equipment note payable.

14

Looking Forward

As a result of the uncertainties facing our company as discussed elsewhere in this report, including the impact of the Covid-19 pandemic, we are unable to predict the overall impact in 2021 and beyond on our company at this time. Our loss of revenues will materially impact our liquidity, and we do not expect to be able to access the capital markets for additional working capital in the near future. Our senior management will continue to monitor our situation on a daily basis, however, we expect that these factors and others we have yet to experience will materially adversely impact our company, its business and operations for the foreseeable future. Our management has also begun exploring possible opportunities for the Company involving mergers, acquisitions or other business combination transactions in an effort to diversify our business. We are not currently a party to any agreement or understandings with any third parties, and there are no assurances even if our management locates an opportunity which it believes will be in the best interests of our shareholders what we will ever consummate such a transaction. Accordingly, investors should not place undue reliance on these efforts.

Our ability to generate future revenues, generate sufficient cash flow to pay our operating expenses and report profitable operations in future periods will depend on a number of factors, many of which are beyond our control. Our independent auditors have included in their audit report an explanatory paragraph that states that our working capital deficits and accumulated deficit raises substantial doubt about our ability to continue as a going concern. If we fail to achieve profitability on a quarterly or annual basis, or to raise additional funds when needed, or do not have sufficient cash flows from sales, we may be required to scale back or cease operations, sell or liquidate our assets and possibly seek bankruptcy protection. As a result of the above, there is substantial doubt about the ability of the Company to continue as a going concern and the accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty.

Critical Accounting Estimates

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Note C of the Notes to Consolidated Financial Statements appearing later in this report describes the significant accounting policies used in the preparation of the consolidated financial statements. Certain of these significant accounting policies are considered to be critical accounting policies, as defined below.

A critical accounting policy is defined as one that is both material to the presentation of our financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on our financial condition and results of operations. Specifically, critical accounting estimates have the following attributes: 1) we are required to make assumptions about matters that are highly uncertain at the time of the estimate; and 2) different estimates we could reasonably have used, or changes in the estimate that are reasonably likely to occur, would have a material effect on our financial condition or results of operations.

Estimates and assumptions about future events and their effects cannot be determined with certainty. We base our estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as our operating environment changes. These changes have historically been minor and have been included in the consolidated financial statements as soon as they became known. Based on a critical assessment of our accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes that our consolidated financial statements are fairly stated in accordance with U.S. GAAP, and present a meaningful presentation of our financial condition and results of operations. We believe the following critical accounting policies reflect our more significant estimates and assumptions used in the preparation of our consolidated financial statements:

15

Accounts Receivable

Accounts receivable are presented net of an allowance for doubtful accounts. The company maintains allowances for doubtful accounts for estimated losses. The company reviews the accounts receivable on a periodic basis and makes general and specific allowance when there is a doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, customer’s historical payment history, and its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collections.

Inventory

Inventory primarily consists of components, including raw material and finished parts for the V-Inline Separator and face shields and is priced at lower of cost or net realizable value. Net realizable value is defined as sales price less cost of completion, disposable and transportation. Provisions have been made to reduce excess or obsolete inventories to their net realizable value.

Income Taxes

The Company accounts for income taxes under ASC 740-10-25. Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Contingencies

The Company is involved in a legal proceeding. The Company assessed the probability of occurrence and whether any loss or range of loss can be reasonably estimated for the legal proceeding. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. If a loss or an additional loss has at least a reasonable possibility of occurring and the impact on the consolidated financial statements would be material, the Company provides disclosure of the loss contingency in the footnotes to the consolidated financial statements. The Company reviews the status of the legal proceeding at least quarterly to determine whether the likelihood of loss has changed and to assess whether a reasonable estimate of the loss or the range of the loss can be made.

Recent Accounting Pronouncements

Recent accounting pronouncements issued by the FASB, the AICPA and the SEC, did not, or are not believed by management, to have a material impact on the Company's present or future financial statements, except as follows:

16

Off Balance Sheet Arrangements

As of the date of this report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with us is a party, under which we have any obligation arising under a guarantee contract, derivative instrument or variable interest or a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

This information is not required by smaller reporting company.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTING DATA.

The financial statements required by this report are included, commencing on F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to be effective in providing reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.

The Company’s management, under the supervision and with the participation of the Company's Chief Executive Officer who also serves as our Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act) as of December 31, 2020. Based upon that evaluation at the end of the period covered by this annual report our Chief Executive Officer concluded that our disclosure controls and procedures were not effective to ensure that the information relating to our company, required to be disclosed in our SEC Reports (i) is recorded, processed,

17

summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communications to our management, including our Chief Executive Officer, to allow timely decisions regarding required disclosure as a result of material weaknesses in our internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2020 based on the 2013 criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management's assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of these controls. Based on this assessment, our Chief Executive Officer who also serves as our Chief Financial Officer has concluded that as of December 31, 2020, our internal control over financial reporting was not effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP as a result of material weaknesses. A “material weakness” is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of our annual or interim financial statement will not be presented or detected by our employees. The specific material weaknesses that management identified in our internal controls as of December 31, 2020 that persist are as follows:

● we did not have adequate staffing resources to provide appropriate segregation of duties;

● we did not have a sufficient number of adequately trained technical accounting personnel to support multiple level of review in the financial close process;

● we did not have personnel with sufficient experience with U.S. GAAP; and

● we did not have adequate personnel to document, timely review and support all transactions.

These listed material weaknesses in our internal control over financial reporting are legacy issues dating back many years. In order to remediate these material weaknesses in our internal control over financial reporting, we will need to:

● create a position to segregate duties consistent with control objectives and will increase our personnel resources; and

●hire experienced independent third parties or consultants to provide additional expert advice as needed.

We made efforts to improve these weaknesses in our internal control over financial reporting results by focusing on upgrading our internal accounting processes and managing the daily accounting responsibilities, maintaining the new accounting software and modifying the inventory system we implemented in the past to manage inventory and having duplicity in reviewing our accounting records by retaining an outside CPA to review our financials on a quarterly and annual basis. We believe these steps have helped and will continue to further mitigate issues that may arise from a limited staff. In 2021 we plan to further improve our financial controls. Until such time, however, as we remediate the material weaknesses in our internal control over financial reporting, there is a likelihood that our financial statements in future periods may contain errors which will require a restatement.

Limitations on Effectiveness of Controls and Procedures

Our management, including our Chief Executive Officer who also serves as our Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of

18

future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Changes in Internal Control over Financial Reporting

There were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION.

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Directors and executive officers

The following sets forth the names and ages of our officers and directors.

Name	Age	Position
John A. DiBella	49	Chief Executive Officer, President, Chief Financial Officer and Director
Raynard Veldman	60	Director

John A. DiBella has served as a member of the board of directors since August 2006 and Chief Executive Officer and Chief Financial Officer since November 2011. From 2000 through January 2002 Mr. DiBella provided consulting services to our Company. In January 2002 we hired him to serve as a Vice President and Director of Business Development, and thereafter prior to be named Chief Executive Officer Mr. DiBella served as our Chief Operating Officer. Mr. DiBella co-founded and served as President of PBCM, a financial management company located in New Jersey from 1997 to 1999. Prior to co-founding PBCM, Mr. DiBella worked for Donaldson, Lufkin and Jenrette, a NYSE member firm. Mr. DiBella’s operational experience with our company were factors considered by our board of directors in concluding that he should be serving as a director of our company.

Raynard Veldman has served as a director of the Company since August 2014. Since 2014, Mr. Veldman has operated Veldman Consulting Corporation which provides consulting services, commission sales, and has made investments in the oil and gas and chemical industries where he is an active participant in the businesses. He served as vice president for Magnablend, Inc., a custom chemical blending and manufacturing company from February 2012 to July 2014. From April 2001 through February 2012 he served as business and product manager for Weatherford, Inc. in their Engineered Chemistry Division. He has over 30 years of experience in the domestic and international oil and gas industry. Mr. Veldman has a M.S. in Chemical Engineering from the University of Houston and a B.S. in Chemical Engineering from the University of Texas. He has also periodically served as a consultant to the Company since 2009. Mr. Veldman’s professional background as an engineer and his professional experience in the oil and gas industry were factors considered by our board of directors in concluding that he should be serving as a director of our company.

There are no family relationships between any of the executive officers and directors.

Board of Directors

Each director is elected at our annual meeting of stockholders and holds office until the next annual meeting of stockholders, or until his successor is elected and qualified. If any director resigns, dies or is otherwise unable to serve out

19

his or her term, or if the Board increases the number of directors, the Board may fill any vacancy by a vote of a majority of the directors then in office, although less than a quorum exists. A director elected to fill a vacancy shall serve for the unexpired term of his or her predecessor. Vacancies occurring by reason of the removal of directors without cause may only be filled by vote of the stockholders.

Board leadership structure and board’s role in risk oversight

The board of directors is comprised of one member of our management and one independent director. Given the size of our company, our Board believes the current leadership structure is appropriate for our company. As our company grows, we expect to expand our board of directors through the appointment of independent directors.

Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including credit risk, interest rate risk, liquidity risk, operational risk, strategic risk and reputation risk. Management is responsible for the day-to-day management of the risks we face and have responsibility for the oversight of risk management in their dual roles as directors.

Committees of the board of directors; stockholder nominations; audit committee financial expert

We have not established any committees comprised of members of our board of directors, including an Audit Committee, a Compensation Committee or a Nominating Committee, or any committee performing similar functions. The functions of those committees are being undertaken by our board of directors as a whole.

We do not have a policy regarding the consideration of any director candidates which may be recommended by our stockholders, including the minimum qualifications for director candidates, nor has our board of directors established a process for identifying and evaluating director nominees, nor do we have a policy regarding director diversity. We have not adopted a policy regarding the handling of any potential recommendation of director candidates by our stockholders, including the procedures to be followed. Our Board has not considered or adopted any of these policies as we have never received a recommendation from any stockholder for any candidate to serve on our board of directors. While there have been no nominations of additional directors proposed by our shareholders, in the event such a proposal is made, all members of our Board will participate in the consideration of director nominees. In considering a director nominee, it is likely that our Board will consider the professional and/or educational background of any nominee with a view towards how this person might bring a different viewpoint or experience to our Board.

None of our directors is an “audit committee financial expert” within the meaning of Item 401(e) of Regulation S-K. In general, an “audit committee financial expert” is an individual member of the audit committee or board of directors who: 

● understands generally accepted accounting principles and financial statements;

● is able to assess the general application of such principles in connection with accounting for estimates, accruals and reserves;

● has experience preparing, auditing, analyzing or evaluating financial statements comparable to the breadth and complexity to our financial statements;

● understands internal controls over financial reporting; and

● understands audit committee functions.

Our securities are not quoted on an exchange that has requirements that a majority of our Board members be independent and we are not currently otherwise subject to any law, rule or regulation requiring that all or any portion of our board of directors include “independent” directors, nor are we required to establish or maintain an Audit Committee or other committee of our board of directors.

20

Code of Ethics

During the year ended December 31, 2003 we adopted a code of ethics. The code of ethics was filed with the Company’s Form 10-KSB annual report for the year ended December 31, 2003. The code of ethics may be obtained by contacting the Company’s executive offices. The code applies to our officers and directors. The code provides written standards that are designed to deter wrongdoing and promote: (i) honest and ethical conduct; (ii) full, fair, accurate, timely and understandable disclosure; (iii) compliance with applicable laws and regulations; (iv) promote reporting of internal violations of the code; and (v) accountability for the adherence to the code.

Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act, requires our executive officers and directors, and persons who beneficially own more than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common shares and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% stockholders are required by the Securities and Exchange Commission regulations to furnish us with copies of all Section 16(a) reports they file. Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to us under Rule 16a-3(d) of the Securities Exchange Act during the year ended December 31, 2020 and Forms 5 and amendments thereto furnished to us with respect to the year ended December 31, 2020, as well as any written representation from a reporting person that no Form 5 is required, we are not aware that any officer, director or 10% or greater stockholder failed to file on a timely basis, as disclosed in the aforementioned Forms, reports required by Section 16(a) of the Exchange Act of during the year ended December 31, 2020.

ITEM 11. EXECUTIVE COMPENSATION.

The following table summarizes all compensation recorded by us in the past two years for:

● our principal executive officer or other individual serving in a similar capacity;

● our two most highly compensated named executive officers at December 31, 2020 whose annual compensation exceeded $100,000; and

● up to two additional individuals for whom disclosure would have been required but for the fact that the individual was not serving as an executive officer at December 31, 2020.

For definitional purposes, these individuals are sometimes referred to as the “named executive officers.”

Summary Compensation Table
Name and principal position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)	No equity incentive plan compensation ($)	Non-qualified deferred compensation earnings ($)	All other compensation ($)(1)	Total ($)
John A. DiBella,	2019	210,000	—	—	—	—	—	27,800	237,800
President, Chief Executive Officer and Chief Financial Officer	2020	210,000	—	—	—	—	—	23,034	233,034

(1) Represents healthcare benefits.

21

Outstanding Equity Awards at December 31, 2020

There are no outstanding equity awards held by our named executive officers at December 31, 2020.

How Mr. DiBella’s Compensation is Determined

We are not a party to an employment agreement with Mr. DiBella. His compensation is determined by the board of directors of which he is one of the two members. Effective For 2020 and 2019, the Company incurred salary expenses for Mr. DiBella of $210,000 and $210,000, respectively. For 2020 and 2019, the Company paid Mr. DiBella $156,650 and $412,796, respectively, including accrued salary which was owed to him from prior years. Of the salary received in 2020, only $75,000 was paid in cash. The balance was a reduction of his accrued salary to pay for the exercise of his options and those of certain of the Company’s employees. The unpaid accrued salary balances as of December 31, 2020 and 2019, are $664,315 and $610,965, respectively. The timing of the payment of any of the accrued but unpaid compensation due Mr. DiBella may be determined by the board of directors at any time. In addition, Mr. DiBella’s compensation may be changed at any time by the board of directors.

Consulting Fees Paid to Mr. Veldman

In addition to his compensation for serving as a member of the Company’s board of directors set forth below, since July 1, 2017, the Company has paid Mr. Veldman a fee of $2,500 per month for consulting services. For 2020 and 2019, he received consulting fees of $30,000 and $30,000, respectively. Mr. Veldman accrued his consulting fees in 2020.

Director Compensation

Our board compensation plan effective for non-management directors consists of a $1,000 monthly cash payment. In addition, board members may be reimbursed for out-of-pocket expenses related to participation in board and committee meetings. No reimbursable payments were made during 2020. The table below provides information concerning the compensation paid in 2020 to our non-management director for his services as a member of our board of directors 2020. The information in the following table excludes the consulting fees paid to Mr. Veldman as described earlier in this section.

		Fees earned or paid in	Stock awards	Option awards	Non-equity incentive Plan compensation	Nonqualified deferred compensation earnings	All other compensation	Total
Name	Year	cash ($)	($)	($)	($)	($)	($)	($)
Raynard Veldman	2020	$12,000	--	--	--	--	--	$12,000

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

At March 29, 2021, we had 4,950,125 shares of our common stock issued and outstanding. The following table sets forth information regarding the beneficial ownership of our common stock as of that date by:

●each person known by us to be the beneficial owner of more than 5% of our common stock;

●each of our directors;

●each of our named executive officers; and

●our named executive officers and directors as a group.

22

Unless specified below, the business address of each shareholder is c/o 821 NW 57 Place, Fort Lauderdale, FL 33309. The percentages in the table have been calculated on the basis of treating as outstanding for a particular person, all shares of our common stock outstanding on that date and all shares of our common stock issuable to that holder in the event of exercise of outstanding options, warrants, rights or conversion privileges owned by that person at that date which are exercisable within 60 days of that date. Except as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our common stock owned by them, except to the extent that power may be shared with a spouse.

Name of Beneficial Owner	No. of Shares Beneficially Owned		% of Class
John A. DiBella (1)		1,126,462		22.8	%
Raynard Veldman		419,144		8.5	%
All officers and directors as a group (two persons)		1,545,606		31.2	%
Adele DiBella		609,550		12.3	%

(1)       The number of shares of common stock beneficially owned by Mr. DiBella includes 15,000 shares held by his minor children.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table sets forth securities authorized for issuance under any equity compensation plans approved by our shareholders as well as any equity compensation plans not approved by our shareholders as of December 31, 2020.

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted average exercise price of outstanding options, warrants and rights ($)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column
Plans approved by our shareholders	0		n/a		n/a
Plans not approved by shareholders		10,000		0.10		n/a

23

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

During 2020 and 2019, Raynard Veldman, a member of the Company’s board of directors, received total consulting fees of $30,000 and $30,000, respectively. The Company currently pays Mr. Veldman $2,500 per month for consulting services. Mr. Veldman accrued his consulting fees in 2020. During 2020, Mr. Veldman reduced his accrued expense by $10,000 to exercise his options.

Director Independence

The Company has one independent director, Raynard Veldman. Mr. Veldman is considered “independent” as defined under Rule 5605 of the Nasdaq Marketplace Rules.

PART IV

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The following table shows the fees that were billed for the audit and other services provided by Liggett & Webb, P.A. for 2020 and 2019.

	2020	2019
Audit Fees	$ 32,000	$ 32,000
Audit-Related Fees	-	-
Tax Fees	-	-
All Other Fees	-	-
Total	$ 32,000	$ 32,000

Audit Fees — This category includes the audit of our annual financial statements, review of financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with engagements for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements.

Audit-Related Fees — This category consists of assurance and related services by the independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees.” The services for the fees disclosed under this category include consultation regarding our correspondence with the Securities and Exchange Commission and other accounting consulting.

Tax Fees — This category consists of professional services rendered by our independent registered public accounting firm for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice.

All Other Fees — This category consists of fees for other miscellaneous items.

Our board of directors has adopted a procedure for pre-approval of all fees charged by our independent registered public accounting firm. Under the procedure, the Board approves the engagement letter with respect to audit, tax and review services. Other fees are subject to pre-approval by the Board, or, in the period between meetings, by a designated member of the Board. Any such approval by the designated member is disclosed to the entire Board at the next meeting. The audit and tax fees paid to the auditors with respect to 2020 were pre-approved by the board of directors.

24

ITEM 15. EXHIBITS AND FINANCIAL DATA SCHEDULES.

		Incorporated by Reference			Filed or
No.	Exhibit Description	Form	Date Filed	Exhibit Number	Furnished Herewith
2	Agreement and Plan of Reorganization	10	11/03/99	2
3(i)	Articles of Incorporation	10	11/03/99	3(i)
3(ii)	Bylaws				Filed
3(iii)	Articles of Amendment to the Articles of Incorporation	8-K	11/13/17	3.2
3(iv)	Articles of Amendment to the Articles of Incorporation	8-K	9/9/20	3(iv)
3(v)	Statement of Domestication filed in the State of Idaho	8-K	12/28/20	3(iv)
3(vi)	Certificate of Domestication and Articles of Incorporation filed in the State of Florida	8-K	12/28/20	3(v)
10.1	Technology Purchase Agreement between Schlumberger Technology Corporation, Schlumberger Canada Limited, and Schlumberger B.V. And Enviro Voraxial Technology, Inc. and Florida Precision Aerospace, Inc. dated as of March 13, 2017	8-K	03/15/17	10.1
10.2	Business Lease Agreement dated December 14, 2018		04/01/19	10.2
10.3	Promissory Note dated May 4, 2020 between Florida Precision Aerospace, Inc. and Bank of America	8-K	5/14/20	10.1
10.4	Loan Authorization and Agreement dated June 23, 2020	10-Q	8/14/20	10.2
10.5	Bill of Sale and Intellectual Property Agreement and Grant Back License Agreement June 8, 2017				Filed
14	Code of Ethics	10-K	04/15/04	14
21	Subsidiaries of the Registrant	10	11/03/99	21
31.1	Rule 13a-14(a)/15d-4(a) Certification of Chief Executive Officer				Filed
31.2	Rule 13a-14(a)/15d-4(a) Certification of Chief Financial Officer				Filed
32.1	Section 1350 Certification of Chief Executive Officer, Chief Financial Officer, principal executive officer and principal financial and accounting officer				Filed
101.INS	XBRL Instance Document				Filed
101.SCH	XBRL Taxonomy Extension Schema Document				Filed
101.CAL	XBRL Taxonomy Calculation Linkbase Document				Filed
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document				Filed
101.LAB	XBRL Taxonomy Extension Label Linkbase Document				Filed
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document				Filed

ITEM 16. FORM 10-K SUMMARY.

The Company has elected not to provide a summary of the information required by this form.

25

 SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Enviro Technologies U.S., Inc.
March 31, 2020	By:	/s/ John A. DiBella
		John A. DiBella, President, Chief Executive Officer and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.

Name	Positions	Date
/s/ John A. DiBella	Director, President, Chief Executive Officer, Chief	March 31, 2021
John A. DiBella	Financial Officer, principal executive officer and
	principal financial and accounting officer
/s/ Raynard Veldman	Director	March 31, 2021
Raynard Veldman

26

INDEX TO FINANCIAL STATEMENTS
ENVIRO TECHNOLOGIES U.S., INC.
CONSOLIDATED FINANCIAL STATEMENTS

CONTENTS

	PAGE
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	F-2
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2020 AND 2019	F-3
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019	F-4
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIENCY) FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019	F-5
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019	F-6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	F-7

F-1

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of:

Enviro Technologies U.S., Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Enviro Technologies U.S., Inc. and Subsidiary (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of operations, changes in shareholders’ equity (deficiency) and cash flows for each of the two years in the period ended December 31, 2020, and the related notes (collectively referred to as “the consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019 and the results of its operations and its cash flows for each of the two years ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

    Explanatory Paragraph – Going concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note B to the consolidated financial statements, the Company has a working capital deficit, an accumulated deficit and negative cash flows from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plan in regards to these matters are described in Note B of the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

    Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal controls over financial reporting. Accordingly, we express no such opinion. 

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures including examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits include evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. 

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. 

Contingencies

As described in Note I to the consolidated financial statements, the Company is involved in a legal proceeding. Management assessed the probability of occurrence and whether any loss or range of loss can be reasonably estimated for the legal proceeding.

Auditing management’s accounting for, and disclosure of, loss contingency was highly judgmental as it involved our assessment of the significant judgments made by management when assessing the probability of occurrence or when determining whether an estimate of the loss or range of loss could be made.

To test the Company’s assessment of the probability of occurrence or determination of an estimate of loss, or range of loss, among other procedures, we read the legal documentations, reviewed opinions provided to the Company by outside legal counsel, read letters received directly by us from external counsel, and evaluated the current status of contingencies based on discussions with external legal counsel. We also evaluated the appropriateness of the related disclosures. 

/s/ Liggett & Webb, P.A.

LIGGETT & WEBB, P.A.

Certified Public Accountants

We have served as the Company’s auditor since 2012

Boynton Beach, Florida

March 31, 2021

F-2

ENVIRO TECHNOLOGIES U.S., INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS

	December 31, 2020			December 31, 2019
CURRENT ASSETS:
Cash and cash equivalents	$	336,564		$	674,844
Accounts receivable, net		1,176			297,755
Inventory, net		113,335			117,984
Prepaid expenses		12,174			20,579
Total current assets		463,249			1,111,162
FIXED ASSETS, NET		312,468			349,377
OTHER ASSETS
Operating lease asset		200,066			243,039
Security deposits		10,143			10,143
Total other assets		210,209			253,182
Total Assets	$	985,926		$	1,713,721
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIENCY)
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	323,481		$	427,492
Accrued expenses – related party		706,315			610,965
Loans payable, current portion		65,867			—
Equipment note payable, current portion		71,812			68,276
Operating lease liability, current portion		46,255			42,973
Total current liabilities		1,213,730			1,149,706
LONG-TERM LIABILITIES
Operating lease liability, less current portion		153,811			200,066
Equipment note payable, less current portion		103,586			157,896
Loans payable, less current portion		196,104			—
Total long term liabilities		453,501			357,962
Total Liabilities		1,667,231			1,507,668
COMMITMENTS AND CONTINGENCIES (See Note I)
SHAREHOLDERS’ EQUITY (DEFICIENCY)
Common stock, $.001 par value, 250,000,000 shares authorized; 4,950,125 and 3,578,625 shares issued and outstanding as of December 31, 2020
and December 31, 2019		4,951			3,579
Additional paid-in capital		15,236,173			15,094,095
Accumulated deficit		(15,922,429	)		(14,891,621	)
Total shareholders’ equity (deficiency)		(681,305	)		206,053
Total liabilities and shareholders’ equity (deficiency)	$	985,926		$	1,713,721

The accompanying notes are an integral part of the consolidated financial statements.

F-3

 ENVIRO TECHNOLOGIES U.S., INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

		Years ended December 31,
		2020			2019
Revenues, net	$	79,965		$	2,824,083
Cost of goods sold		47,897			1,172,874
Gross profit		32,068			1,651,209
Expenses:
Selling, general and administrative		333,575			336,686
Payroll expenses		536,733			469,815
Professional fees		187,549			233,047
Research and development		2,601			—
Total costs and expenses		1,060,458			1,039,548
(Loss)/Income from operations		(1,028,390	)		611,661
Other Income and (Expenses):
Other income		8,000			—
Interest expense		(10,418	)		(17,624	)
Total other expense		(2,418	)		(17,624	)
Net (loss)/ income before provision for income taxes		(1,030,808	)		594,037
Provision for income taxes		—			—
Net (loss)/ income	$	(1,030,808	)	$	594,037
Net (loss)/ income per share
Basic	$	(0.24	)	$	0.17
Diluted	$	(0.24	)	$	0.13
Weighted average number of common shares
Basic		4,346,815			3,578,625
Diluted		4,346,815			4,592,111

The accompanying notes are an integral part of the consolidated financial statements.

F-4

ENVIRO TECHNOLOGIES U.S., INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIENCY)

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

	Common Stock				Additional Paid-In		Accumulated
	Shares		Par Value		Capital		Deficit			Total
Balance - December 31, 2018		3,578,625	$	3,579	$	15,094,095	$	(15,485,658	)	$	(387,984	)
Net Income		—		—		—		594,037			594,037
Balance - December 31, 2019		3,578,625	$	3,579	$	15,094,095	$	(14,891,621	)	$	206,053
Stock issued for exercise of options in exchange for accrued expenses – related parties and accounts payable		1,336,500		1,337		132,313		—			133,650
Stock issued for services to employees		35,000		35		9,765		—			9,000
Net (loss)		—		—		—		(1,030,808	)		(1,030,808	)
Balance - December 31, 2020		4,950,125	$	4,951	$	15,236,173	$	(15,922,429	)	$	(681,305	)

The accompanying notes are an integral part of the consolidated financial statements.

F-5

ENVIRO TECHNOLOGIES U.S., INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS 

	Years Ended December 31,
	2020			2019
Cash Flows From Operating Activities:
Net (loss)/ income	$	(1,030,808	)	$	594,037
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation		45,137			45,059
Stock issued for services of consultant		9,800			—
Provision for bad debt		6,790			—
Provision for slow moving inventory		8,848			24,185
Amortization for operating lease		42,973			41,769
Changes in assets and liabilities:
Accounts receivable		289,789			(293,716	)
Inventory		(4,199	)		234,149
Prepaid expenses		8,405			186,671
Accounts payable, accrued expenses and deposits		(62,011	)		(37,070	)
Accrued expenses – related party		187,000			(202,796	)
Operating lease liability		(42,973	)		(41,769	)
Deposits from customers		—			(1,035,706	)
Net cash used in operating activities		(541,249	)		(485,187	)
Cash Flows From Investing Activities:
Purchase of equipment		(8,228	)		—
Net cash used in Investing Activities		(8,228	)		—
Cash Flows From Financing Activities:
Loan payable issuance – PPP & EIDL		261,971			—
Repayments of Equipment Note Payable		(50,774	)		(63,832	)
Net Cash provided by (used in) financing activities		211,197			(63,832	)
Net decrease in cash and cash equivalents		(338,280	)		(549,019	)
Cash and cash equivalents, beginning of year		674,844			1,223,863
Cash and cash equivalents, end of year	$	336,564		$	674,844
Supplemental Disclosure:
Cash paid during the year for interest	$	10,418		$	17,624
Cash paid during the year for taxes	$	—		$	—

Supplemental Disclosure of non-cash investing and financing activities:

Operating lease asset obtained in exchange for operating lease liability	$	—	$	284,808
Stocks issued with exercise of options in exchange for accounts payable	$	42,000	$	—
Stocks issued with exercise of options for accrued expenses – related party	$	91,650	$	—

The accompanying notes are an integral part of the consolidated financial statements.

F-6

ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary
Notes to Consolidated Financial Statements
December 31, 2020 and 2019

NOTE A - ORGANIZATION AND OPERATIONS

Enviro Technologies U.S., Inc., a Florida corporation (the “Company”), is a manufacturer and provider of environmental and industrial separation technology. The Company developed, and now manufactures and sells the V-Inline Separator, a technology that efficiently separates liquid/liquid, liquid/solid or liquid/liquid/solid fluid streams with distinct specific gravities. Current and potential commercial applications and markets include mining, utilities, manufacturing, waste-to-energy among other industries. We also, through a Grant Back License with Cameron Solutions signed in June 2017, can utilize specific patents that were sold to Schlumberger under Technology Purchase Agreement for industries outside of oil and gas.

Florida Precision Aerospace, Inc., a Florida corporation (“FPA”), is the wholly-owned subsidiary of the Company and is used to manufacture, assemble and test the V-Inline Separator. On August 20, 2020, the Company’s shareholders approved a change of domicile of the Company from Idaho to Florida. On December 28, 2020, the Company received the file stamped Certificate of Domestication and Articles of Incorporation from the Secretary of State of Florida, which was effective on December 18, 2020, thereby completing the change in domicile from Idaho to Florida. In connection with the change in domicile from Idaho to Florida, the Company’s name changed to “Enviro Technologies U.S., Inc.”.

NOTE B – GOING CONCERN

Since entering into the Technology Purchase Agreement, Supply Agreement and Grant Back License in June 2017 (see Note I), we have generated limited revenues, significantly less than we anticipated, under the terms of any of these agreements. The Supply Agreement expired in June 2020. As we did not generate significant revenues from this agreement, we did not pursue Cameron for an extension in its current state. The Company’s non-compete agreement in the oil and gas industry also expired in June 2020 which allows us to pursue projects in the oil and gas industry. However, we may continue to work together on a project by project basis with Cameron until such time a new agreement is reached, if at all. The Grant Back License did not expire. There are no assurances that the Grant Back License will ever generate any material ongoing revenues. We intend to continue to seek opportunities for the V-Inline Separator. Our revenues declined approximately 97% for the year ended December 31, 2020 as compared to the year ended December 31, 2019. We reported a net loss for 2020 of $1,030,808 as compared to net income of $597,037 in 2019. Our ability to increase our revenues in future periods will depend on a number of factors, many of which are beyond our control, including our ability to generate sales of the V-Inline Separator, our ability to leverage the Grant Back License to generate additional revenues, the continuing impact of the Covid-19 pandemic on the economy in general and the Company in particular, competitive efforts and other general economic trends. There are no assurances we will be able to increase our revenues from 2020 levels or report profitable operations in the future. Further, the lingering economic impact of the Covid-19 pandemic and the weak oil prices during the year 2020 may have a continued negative effect on the potential for sales of V-inline Separators.

At December 31, 2020, we had a working capital deficit of $750,481, an accumulated deficit of $15,922,429 and used $541,249 in net cash in our operations during the year ended December 31, 2020. We do not have any external sources of liquidity. In an effort to conserve our cash resources to sustain our operations until such time as we are able to significantly increase our revenues, we have reduced employee hours and accrued a portion of management’s salary. There are no assurances, however, that these efforts will be sufficient to permit us to pay our operating expenses. In that event, we may be required to scale back or cease operations, sell or liquidate our assets and possibly seek bankruptcy protection.

As a result of the above, there is substantial doubt about the ability of the Company to continue as a going concern and the accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty.

NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the parent company, Enviro Technologies U.S., Inc., and its wholly-owned subsidiary, Florida Precision Aerospace, Inc. All significant intercompany accounts and transactions have been eliminated.

F-7

ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary
Notes to Consolidated Financial Statements
December 31, 2020 and 2019

Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates include the valuation of deferred tax assets, allowance for doubtful accounts, allowance for inventory obsolescence and valuation of stock-based compensation. Actual results may differ.

Revenue Recognition

We account for our revenues in accordance with the Accounting Standard Codification Topic 606, “Revenue from Contracts with Customers” and all the related amendments. This standards core principal is that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to receive.

The Company derives its revenue from the sale of the V-Inline Separators and some high precision manufacturing projects. We have also generated revenues from the sale of the Voraxial Separator to one customer, Schlumberger, through the Supply Agreement which expired in June 2020. We pursued designing, manufacturing and selling face shields during this quarantine period and are constantly seeking other sources of revenues.

Revenues that are generated from high precision manufacturing projects are recognized when we satisfy a performance obligation by transferring control of the promised goods or services to our customers at a point in time, in an amount specified in the contract with our customer and that reflects the consideration we expect to be entitled to in exchange for those goods or services. The Company also assesses our customer’s ability and intention to pay, which is based on a variety of factors including our customer’s historical payment experience and financial condition.

Revenues that are generated from sales of V-Inline separators, auxiliary equipment and parts and face shields are typically recognized upon shipment. Our standard agreements generally do not include customer acceptance or post shipment installation provisions. However, if such provisions have been included or there is an uncertainty about customer order, revenue is deferred until we have evidence of customer order and all terms of the agreement have been complied with. As of December 31, 2020, and December 31, 2019, respectively, there was $0 of deposits from customers.

Accounts Receivable

Accounts receivable are presented net of an allowance for doubtful accounts. The company maintains allowances for doubtful accounts for estimated losses. The company reviews the accounts receivable on a periodic basis and makes general and specific allowance when there is a doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, customer’s historical payment history, and its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collections. At December 31, 2020 and 2019, the Company has $7,044 and $254 in the allowance for doubtful accounts, respectively.

Fair Value of Instruments

The carrying amounts of the Company's financial instruments, including cash and cash equivalents, inventory, prepaid expense, accounts payable, accrued expenses and deposits from customers at December 31, 2020 and 2019, approximate their fair value because of their relatively short-term nature.

ASC 820 “Disclosures about Fair Value of Financial Instruments,” requires disclosures of information regarding the fair value of certain financial instruments for which it is practicable to estimate the value. For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale of liquidation.

The Company accounts for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value is observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

F-8

ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary
Notes to Consolidated Financial Statements
December 31, 2020 and 2019

Level 1—inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. We have no Level 1 instruments as of December 31, 2020 and 2019.

Level 2—inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and forward and spot prices for currencies and commodities. We have no Level 2 instruments as of December 31, 2020 and 2019.

Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. We have no Level 3 instruments as of December 31, 2020 and 2019.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. The Company maintains its cash balances with various financial institutions. Balances at these institutions may at times exceed the Federal Deposit Insurance Corporate limits. As of December 31, 2020 and 2019, we have a cash concentration in excess of the FDIC limit of $80,014 and $398,673, respectively.

Inventory

Inventory primarily consists of components, including raw material and finished parts for the V-Inline Separator and face shields and is priced at lower of cost or net realizable value. Net realizable value is defined as sales price less cost of completion and disposable and transportation. Inventory may include units being rented on a short term basis or components held by third parties in connection with pilot programs as part of the continuing evaluation by such third parties as to the effectiveness and usefulness of the service to be incorporated into their respective operations. The third parties do not have a contractual obligation to purchase the equipment. The Company maintains the title and risk of loss. Provisions have been made to reduce excess or obsolete inventories to their net realizable value. Therefore, these units are included in the inventory of the Company. As of December 31, 2020, and December 31, 2019:

	December 31, 2020		December 31, 2019
Raw materials	$	30,145	$	38,935
Work in process		10,240		—
Finished goods		72,950		79,049
Total	$	113,335	$	117,984

Inventory amounts are presented net of allowance for inventory reserves of $75,785 and $66,937 as of December 31, 2020 and December 31, 2019, respectively.

Fixed Assets

Fixed assets are stated at cost less accumulated depreciation. The cost of maintenance and repairs is expensed to operations as incurred. Depreciation is computed by the straight-line method over the estimated economic useful life of the assets (5-10 years). Gains and losses recognized from the sales or disposal of assets is the difference between the sales price and the recorded cost less accumulated depreciation less costs of disposal. 

F-9

ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary
Notes to Consolidated Financial Statements
December 31, 2020 and 2019

Net Income (Loss) Per Share

In accordance with the Accounting Standard Codification Topic 260, “Earnings per Share” basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period.

As of December 31, 2020 and 2019, there were 10,000 and 1,346,500 shares issuable upon the exercise of options, respectively. The Company had a net loss for the year ended December 31, 2020; therefore, common stock equivalent shares are excluded from the computation of net income per share if their effect is anti-dilutive. The Company had net income for the year ended December 31, 2019. A separate computation of diluted earnings per share is presented using the treasury stock method.

Income Taxes

The Company accounts for income taxes under ASC 740-10-25. Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Business Segments

The Company operates in one segment and therefore segment information is not presented.

Research and Development Expenses

Research and development costs, which includes travel expenses, consulting fees, subcontractors and salaries are expensed as incurred. There was $2,601 and $0, respectively, in research and development costs during the years ended December 31, 2020 and 2019, respectively.

Leases

Financial Accounting Standards Board Accounting Standards Certification (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases”, which amended current lease accounting to require lessees to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted this standard primarily related to our corporate office lease in Fort Lauderdale, FL on January 1, 2019. The Company elected the optional transition method to apply this standard as of the effective date and therefore, the Company did not apply the standard to the comparative period presented on our consolidated financial statements. Refer to Note J.

Advertising Costs

Advertising costs are expensed as incurred and are included in general and administrative expenses. There was $5,789 and $2,570 in advertising costs during December 31, 2020 and 2019, respectively.

F-10

ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary
Notes to Consolidated Financial Statements
December 31, 2020 and 2019

Stock-Based Compensation

The Company accounts for stock-based instruments issued to employees for services in accordance with ASC 718 “Compensation – Stock Compensation.” ASC 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees. The value of the portion of an employee award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method.

Recent Accounting Pronouncements

All other newly issued accounting pronouncements, but not yet effective, have been deemed either immaterial or not applicable.

NOTE D - RELATED PARTY TRANSACTIONS

For each of the years ended December 31, 2020 and 2019, the Company incurred salary expenses from the Chief Executive Officer of the Company of $210,000 and $210,000, respectively. During the years ended December 31, 2020 and 2019, $156,650 and $412,796, respectively, of salary and accrued salary have been paid. Of the $156,650 paid to Mr. DiBella in 2020, $81,650 was a reduction of his accrued salary in payment for the exercise of options, including some options of the Company’s employees and a related party. The unpaid balance has been included in accrued expenses- related party. As of December 31, 2020 and 2019, the accrued salary is $664,315 and $610,965, respectively.

Effective July 1, 2017, Raynard Veldman, a member of the Company’s board of directors receives a fee of $2,500 per month for consulting services. For the years ended December 31, 2020 and 2019, Raynard Veldman earned consulting fees of $30,000 and $30,000, respectively. The unpaid balance has been included in accrued expenses- related party. As of December 31, 2020 and 2019, the accrued salary is $30,000 and $0, respectively.

During the years ended December 31, 2020 and 2019, Raynard Veldman, a member of the Company’s board of directors, earned compensation for being a member of the Company’s board of directors of $12,000 and $12,000, respectively. The unpaid balance has been included in accrued expenses- related party. As of December 31, 2020 and 2019, the accrued compensation is $12,000 and $0, respectively. Mr. John DiBella does not receive compensation for being a member of the Company’s board of directors.

On June 9, 2020, the Company issued 770,000 shares of its common stock to our Chief Executive Officer in connection with the exercise of a stock option at an exercise price of $0.10. Mr. DiBella reduced his accrued salary in the amount of $77,000 for the exercise of options.

On June 9, 2020, the Company issued 100,000 shares of its common stock to Mr. Veldman in connection with the exercise of a stock option at an exercise price of $0.10. Mr. Veldman reduced his accrued consulting and Board of Director fees in the amount of $10,000 for the exercise of options.

On June 9, 2020, the Company issued 16,500 shares of its common stock to two employees in connection with the exercise of a stock option at an exercise price of $0.10. Mr. DiBella reduced his accrued salary in the amount of $1,650 for the exercise of options.

On June 9, 2020, the Company issued 380,000 shares of its common stock to a related party in connection with the exercise of a stock option at an exercise price of $0.10. Mr. DiBella reduced his accrued salary in the amount of $3,000 for the exercise of options and an outside consultant agreed to reduce her payable in the amount of $35,000 for the exercise of options.

F-11

ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary
Notes to Consolidated Financial Statements
December 31, 2020 and 2019

    NOTE E - FIXED ASSETS

Fixed assets as of December 31 consists of:	2020			2019
Machinery and equipment	$	941,473		$	933,245
Furniture and fixtures		14,498			14,498
Autos and Trucks		5,294			5,294
Total		961,265			953,037
Less: accumulated depreciation		(648,797	)		(603,660	)
Fixed Assets, net	$	312,468		$	349,377

Depreciation expense was $45,137 and $45,059 for the years ended December 31, 2020 and 2019, respectively.

NOTE F – EQUIPMENT NOTE PAYABLE

In July 2017, the Company entered into a financing agreement for the purchase of CNC machining equipment valued at approximately $426,000. The machining equipment was received in July 2017 and was used for the manufacture of Voraxial Separators under the Supply Agreement and sales of the V-Inline Separators. Under the terms of the agreement the Company made an initial down payment of $85,661 and is required to make monthly payments of $6,788 through January 2023. In addition, the Company incurred $24,281 of installation costs. As of December 31, 2020 and 2019 the amount owed is $175,398 and $226,172, respectively.

    Future minimum payments at December 31, 2020 are as follows:

2021		81,457
2022		81,456
2023		27,152
Future Minimum Equipment Note Payable Payments		190,065
Less Amount Representing Interest		(14,667	)
Present Value of Minimum Equipment Note Payable Payments		175,398
Less Current Portion		(71,812	)
Long-Term Obligations under Equipment Note Payable	$	103,586

NOTE H – SHAREHOLDERS’ EQUITY

Common Stock

On June 9, 2020, the Company issued to 35,000 shares of its common stock to employees at $0.28 per share, or $9,800, for services rendered. The Company valued these common shares based on the fair value at the date of grant.

On June 9, 2020, the Company issued 770,000 shares of its common stock to our Chief Executive Officer in connection with the exercise of a stock option at an exercise price of $0.10. Mr. DiBella reduced his accrued salary in the amount of $77,000 for the exercise of options.

On June 9, 2020, the Company issued 100,000 shares of its common stock to Mr. Veldman in connection with the exercise of a stock option at an exercise price of $0.10. Mr. Veldman reduced his accrued consulting and Board of Director fees in the amount of $10,000 for the exercise of options.

On June 9, 2020, the Company issued 70,000 shares of its common stock to a consultant in connection with the exercise of a stock option at an exercise price of $0.10. The consultant agreed to reduce her payable in the amount of $7,000 for the exercise of options.

On June 9, 2020, the Company issued 16,500 shares of its common stock to two employees in connection with the exercise of a stock option at an exercise price of $0.10. Mr. DiBella agreed reduce his accrued salary in the amount of $1,650 for the exercise of options.

F-12

ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary
Notes to Consolidated Financial Statements
December 31, 2020 and 2019

On June 9, 2020, the Company issued 380,000 shares of its common stock to a related party in connection with the exercise of a stock option at an exercise price of $0.10. Mr. DiBella agreed reduce his accrued salary in the amount of $3,000 for the exercise of options and an outside consultant agreed to reduce her payable in the amount of $35,000 for the exercise of options.

Options

The Company accounts for stock-based instruments issued to employees for services in accordance with ASC 718 “Compensation – Stock Compensation.” ASC 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees. The value of the portion of an employee award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The Company accounts for non-employee share-based awards in accordance with the measurement and recognition criteria of ASC 505-50, “Equity-Based Payments to Non-Employees.” The Company estimates the fair value of stock options by using the Black-Scholes option-pricing model.

The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s stock options and warrants have characteristics different from those of its traded stock, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of such stock options. The risk-free interest rate is based upon quoted market yields for United States Treasury debt securities with a term similar to the expected term. The expected dividend yield is based upon the Company’s history of having never issued a dividend and management’s current expectation of future action surrounding dividends. Expected volatility was based on historical data for the trading of our stock on the open market. The expected lives for such grants were based on the simplified method for employees and officers.

On June 9, 2020, our Chief Executive Officer exercised 770,000 stock options at an exercise price of $0.10 per share. Mr. DiBella agreed to reduce his accrued salary in the amount of $77,000 for the exercise of options.

On June 9, 2020, Mr. Veldman exercised 100,000 stock options at an exercise price of $0.10 per share. Mr. Veldman agreed to reduce his accrued consulting fees in the amount of $10,000 for the exercise of options.

On June 9, 2020, a consultant exercised 70,000 stock options at an exercise price of $0.10 per share. The consultant agreed to reduce the payables due in the amount of $7,000 for the exercise of options. In addition, a related party exercised 380,000 stock options at an exercise price of $0.10 per share. The consultant agreed to reduce the payables due in the amount of $35,000 for the exercise of options for the related party. In addition, Mr. DiBella reduced his accrued salary in the amount of $3,000 for the exercise of options for the related party.

On June 9, 2020, two employees exercised 16,500 stock options at an exercise price of $0.10 per share. Mr. DiBella reduced his accrued salary in the amount of $1,650 for the exercise of options for these three employees.

F-13

ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary
Notes to Consolidated Financial Statements
December 31, 2020 and 2019

Information with respect to options outstanding and exercisable at December 31, 2020 and 2019 is as follows:

	Number Outstanding	Range of Exercise Price		Number Exercisable
Balance, December 31, 2018	1,346,500	$	0.10	1,346,500
Issued	—		—	__
Expired	—		—	—
Balance, December 31, 2019	1,346,500	$	0.10	1,346,500
Issued	—		—	—
Expired	—		—	—
Exercised	(1,336,500)		0.10	(1,336,500)
Forfeited	—		—	—
Balance, December 31, 2020	10,000	$	__	10,000

The following table summarizes information about the stock options outstanding at December 31, 2020 and 2019:

Number Outstanding at December 31, 2020		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable at December 31, 2020		Weighted Average Exercise Price
	10,000		2.88	$	0.10		10,000	$	0.10

Number Outstanding at December 31, 2019		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable at December 31, 2019		Weighted Average Exercise Price
	1,346,500		3.88	$	0.10		1,346,500	$	0.10

The aggregate intrinsic value represents the excess amount over the exercise price optionees would have received if all the options have been exercised on the last business day of the period indicated based on the Company’s closing stock price for such day. The aggregate intrinsic value as of December 31, 2020 is $30.

Reverse Split

On August 27, 2020 the Company filed Articles of Amendment to its Articles of Incorporation which, on the effective date of September 10, 2020 (the “Effective Date”):

· effected a ten for one (10:1) reverse stock split of our outstanding common stock (“Reverse Stock Split”); and

· eliminated the existing class of preferred stock and create a new class of blank check preferred stock consisting of 5,000,000 shares.

These actions were approved by our shareholders at our 2020 Annual Meeting held on August 20, 2020.

As a result of the Reverse Stock Split, on the Effective Date each 10 shares of our common stock issued and outstanding immediately prior to the Effective Date became one share of our common stock on the Effective Date. No fractional shares of common stock were issued to any shareholder in connection with the Reverse Stock Split and all fractional shares which might otherwise be issuable as a result of the Reverse Stock Split were rounded up to the nearest whole share. On the Effective Date, each certificate representing shares of pre-Reverse Stock Split common stock was deemed to represent one-tenth of a share of our post-Reverse Stock Split common stock, subject to rounding for fractional shares.

The Reverse Stock Split also affected the Company’s outstanding stock options which resulted in the underlying shares of such instruments being reduced and exercise price being increased proportionally to the Reverse Stock Split ratio. All shares and per share data have been retroactively adjusted for all periods presented to reflect the effects of the Reverse Stock Split.

F-14

ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary
Notes to Consolidated Financial Statements
December 31, 2020 and 2019

NOTE I - COMMITMENTS AND CONTINGENCIES

SBA and PPP Loans

On May 4, 2020, FPA received a loan (the “PPP Loan”) from Bank of America, N.A. in the aggregate amount of $111,971, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020.

The PPP Loan, which was in the form of a Note dated May 4, 2020 issued by FPA, matures on May 4, 2022 and bears interest at a rate of 1% per annum, payable monthly commencing on November 6, 2020. The Note may be prepaid by FPA at any time prior to maturity with no prepayment penalties. Funds from the PPP Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations incurred before February 15, 2020. FPA believes it used the entire PPP Loan amount for qualifying expenses. Under the terms of the PPP Loan, certain amounts of the PPP Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. We intend to apply for forgiveness of the PPP Loan in accordance with the terms of the CARES Act.

On May 5, 2020, FPA also received an $8,000 grant from the U.S. Small Business Administration. The Company recognized the grant as other income during the year ended December 31, 2020.

On June 23, 2020, FPA executed the standard loan documents required for securing a loan (the “EIDL Loan”) from the SBA under its Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the Covid-19 pandemic on the Company’s business. Pursuant to that certain Loan Authorization and Agreement, the principal amount of the EIDL Loan is up to $150,000, with proceeds to be used for working capital purposes. On July 16, 2020, the Company has requested $150,000 in disbursements under the EIDL Loan. The funds were received on July 20, 2020. Interest accrues at the rate of 3.75% per annum . Installment payments, including principal and interest, are due monthly beginning June 23, 2021 (12 months from the date of the SBA note) in the amount of $731. The balance of principal and interest is payable 30 years from the date of the SBA Note. In connection therewith, FPA executed (i) a note for the benefit of the SBA, which contains customary events of default and (ii) a Security Agreement, granting the SBA a security interest in all tangible and intangible personal property of FPA, which also contains customary events of default.

	December 31, 2020			December 31, 2019
Loans payable	$	261,971		$	—
Less: current portion		(65,867	)		—
Long-term loans payable	$	196,104		$	—

Future minimum loans payable at December 31, 2020 are as follows:

2021		76,723
2022		50,544
2023		8,772
2024		8,772
2025		8,772
2026 and thereafter		215,062
Future Minimum Note Payable Payments		368,645
Less Amount Representing Interest		(106,674	)
Present Value of Minimum Note Payable Payments		261,971
Less Current Portion		(65,867	)
Long-Term Obligations under Note Payable	$	196,104

F-15

 ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary
Notes to Consolidated Financial Statements
December 31, 2020 and 2019

Litigation

On or about October 23, 2017, a claim was filed in the 17th Judicial Circuit Court in and for Broward County in Fort Lauderdale, Florida, by the plaintiff, Industrial and Oilfield Procurement Services, LLC, against our company. The case involves an alleged breach of contract between the parties relating to the purchase and sale of a Voraxial unit in 2015. The plaintiff has demanded a refund and damages. We are contesting the case vigorously.

Sale of Intellectual Property

On June 8, 2017, the Company and FPA, our wholly owned subsidiary, closed the transactions contemplated by the Technology Purchase Agreement dated March 13, 2017 with Schlumberger Technology Corporation, a Texas corporation, Schlumberger Canada Limited, a Canadian entity, and Schlumberger B.V., an entity organized under the laws of the Netherlands (collectively, “Schlumberger”).

As part of the agreement, Schlumberger granted us a non-exclusive, worldwide, royalty-free licenses (the “Grant Back Licenses”), to make, use, sell, offer for sale, and import products and processes embodying the Purchase Intellectual Property outside the oil and gas market.

For a period of three years following the closing of the Technology Purchase Agreement, which expired in June 2020, the Company and Mr. Veldman and Mr. Di Bella have agreed to not participate or cause participation in the oil-and-gas market in relation to phase or constituent sensing or separation which is defined as, liquid-liquid, liquid-solid or liquid-gas separation and gas or liquid sensing, including all product lines and services related thereto and including the Voraxial product line and services. As the term has expired, the Company may review opportunities in the oil and gas industry.

NOTE J - LEASE

The Company adopted the provision of ASU 2016-02, “Leases” as of the effective date. The Company recorded an operating right of use assets and operating lease liability on January 1, 2019 related to our lease agreement for our facility in Fort Lauderdale, Florida.

In December 2018, the Company entered into a three year lease for an office and manufacturing facility located at 821 NW 57^th Place, Fort Lauderdale, FL 33309. The lease is $4,839 per month, which includes common area maintenance, taxes and insurance and expires in October 2021. The lease has a one-time renewal option for three years and an increased base rent of 3%. The Company has the option to terminate the lease with three months’ notice. The Company accounts for lease in accordance with ASC Topic 842.

Operating right of use asset and operating lease liability are recognized at the lease commencement date. Operating lease liability represents the present value of lease payments not yet paid. Operating right of use asset represent our right to use an underlying asset and are based upon the operating lease liability adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. The Company used our incremental borrowing rate to determine the present value of lease payments not yet paid.

Supplemental balance sheet information related to leases was as follows:

Operating Leases	Classification	December 31, 2020		December 31, 2019
Right-of-use assets	Operating lease assets	$	200,066	$	243,039
Current lease liability	Current operating lease liability		46,255		42,973
Non-current lease liability	Long-term operating lease liability		153,811		200,066
Total lease liabilities		$	200,066	$	243,039

F-16

ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary
Notes to Consolidated Financial Statements
December 31, 2020 and 2019

Lease term and discount rate were as follows:

	December 31, 2020		December 31, 2019
Weighted average remaining lease term (years)		3.75		4.76
Weighted average discount rate		6.75%		6.75%

The components of lease cost were as follows:

	For the Year Ended December 31
	2020		2019
Operating lease cost	$	58,065	$	58,065
Variable lease cost (1)	$	18,128	$	18,128
Total lease cost	$	76,193	$	76,193

(1) Variable lease cost primarily relates to common area maintenance, property taxes and insurance on leased real estate.

Maturities of lease liabilities were as follows as of December 31, 2020:		Operating Leases
	2021		58,353
	2022		59,795
	2023		59,795
	2024		49,829
	Total lease payments		227,772
	Less: imputed interest		(27,706	)
	Present value of lease liabilities	$	200,066

NOTE K – MAJOR CUSTOMERS

For the year ended December 31, 2020, two customers accounted for approximately 20% and 10% of total revenues, respectively. For the year ended December 31, 2019, one customer accounted for approximately 93% of total revenues. As of December 31, 2020, three customers represented 68%, 17% and 15%, respectively, of total accounts receivables. As of December 31, 2019, one customer represented 99% of total accounts receivables.

NOTE L – INCOME TAX

The Jobs Act (the “TCJA”) significantly revised the US corporate income tax by lowering the corporate federal income tax from 35% to 21%, effective January 1, 2019.

F-17

 ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary
Notes to Consolidated Financial Statements
December 31, 2020 and 2019

The significant components of the deferred tax asset at December 31, 2020 and 2019 were as follows:

	For the Years Ended December 31
	2020			2019
Statutory rate applied to income (loss) before income taxes	$	(261,258	)	$	147,517
Increase (decrease) in income taxes results from:
Change in tax estimate		77,676			—
Non-deductible expense		2,484			—
Change in valuation allowance		181,098			(147,517	)
Income tax expense (benefit)	$	—		$	—

The difference between income tax expense computed by applying the federal statutory corporate tax rate and provision for actual income tax is as follows:

	For the Years Ended December 31
	2020			2019
Income tax expense (benefit) at U.S. statutory rate of 34%		21.00	%		21.00	%
Income tax expense (benefit) - State		4.35	%		4.35	%
Change in tax estimate		(7.54)	%
Non-deductible expense		(0.24)	%		—	%
Change in valuation allowance		(17.57)	%		(25.34)	%
Income tax expense (benefit)		—			—

Deferred income taxes result from temporary differences in the recognition of income and expenses for the financial reporting purposes and for tax purposes. The effects of temporary differences that gave rise to deferred tax assets are as follows:

	For the Years Ended December 31
Deferred tax assets:	2020			2019
Provision for inventory reserve	$	19,208		$	16,965
Operating loss carryforwards		2,902,353			2,723,498
Gross deferred tax assets		2,921,561			2,740,463
Valuation allowance		(2,921,561	)		(2,740,463	)
Net deferred income tax asset	$	—		$	—

Increase in the deferred income tax asset is attributable to the estimated deferred income tax benefit arising from operating loss carry forward. The change in valuation allowance for the years ended December 31, 2020 and 2019 was an increase (decrease) of $181,098 and $(147,517), respectively.

The Company has made a 100% valuation allowance of the deferred income tax asset at December 31, 2020, as it is not expected that the deferred tax assets will be realized. The Company has a net operating loss carryforward of approximately $10,145,000 available to offset future taxable income through 2037. The Company has a net operating loss carryforward of approximately $1,305,000, which can be carried forward indefinitely subject to limitation.

The Company’s federal income tax returns for 2017, 2018, 2019 and 2020 remain subject to examination by the Internal Revenue Services and state tax authorities.

F-18

EX-3.II

Exhibit 3(ii)

BY-LAWS

OF

ENVIRO TECHNOLOGIES U.S., INC.

a Florida corporation

INDEX

		PAGE
	ARTICLE I
	Offices
Section 1.01	Principal Office	1
Section 1.02	Registered Office	1
Section 1.03	Other Offices	1
	ARTICLE II
	Meetings of Shareholders
Section 2.01	Annual Meeting	1
Section 2.02	Special Meetings	1
Section 2.03	Shareholders' List for Meeting	2
Section 2.04	Record Date	2
Section 2.05	Notice of Meetings and Adjournment	3
Section 2.06	Waiver of Notice	4
	ARTICLE III
	Shareholder Voting
Section 3.01	Voting Group Defined	5
Section 3.02	Quorum and Voting Requirements for Voting Groups	5
Section 3.03	Action by Single and Multiple Voting Groups	5
Section 3.04	Shareholder Quorum and Voting; Greater or Lesser Voting Requirements	5
Section 3.05	Voting for Directors; Cumulative Voting	6

i

Section 3.06	Voting Entitlement of Shares	6
Section 3.07	Proxies	8
Section 3.08	Shares Held by Nominees	9
Section 3.09	Corporation's Acceptance of Votes	9
Section 3.10	Action by Shareholders Without Meeting	10
	ARTICLE IV
	Board of Directors and Officers
Section 4.01	Qualifications of Directors	10
Section 4.02	Number of Directors	11
Section 4.03	Terms of Directors Generally	11
Section 4.04	Staggered Terms for Directors	11
Section 4.05	Vacancy on Board	11
Section 4.06	Compensation of Directors	12
Section 4.07	Meetings	12
Section 4.08	Action by Directors Without a Meeting	12
Section 4.09	Notice of Meetings	12
Section 4.10	Waiver of Notice	13
Section 4.11	Quorum and Voting	13
Section 4.12	Committees	13
Section 4.13	Loans to Officers, Directors and Employees; Guaranty of Obligations	14
Section 4.14	Required Officers	14
Section 4.15	Duties of Officers	15
Section 4.16	Resignation and Removal of Officers	15

ii

Section 4.17	Contract Rights of Officers	15
Section 4.18	General Standards for Directors	15
Section 4.19	Director Conflicts of Interest	16
Section 4.20	Resignation of Directors	17
	ARTICLE V
	Indemnification of Directors, Officers, Employees and Agents
Section 5.01	Directors, Officers, Employees and Agents	17
	ARTICLE VI
	Office and Agent
Section 6.01	Registered Office and Registered Agent	21
Section 6.02	Change of Registered Office or Registered Agent; Resignation of Registered Agent	21
	ARTICLE VII
	Shares, Option, Dividends and Distributions
Section 7.01	Authorized Shares	22
Section 7.02	Terms of Class or Series Determined by Board of Directors	23
Section 7.03	Issued and Outstanding Shares	23
Section 7.04	Issuance of Shares	23
Section 7.05	Form and Content of Certificates	24
Section 7.06	Shares Without Certificates	25
Section 7.07	Restriction on Transfer of Shares and Other Securities	25
Section 7.08	Shareholder's Pre-emptive Rights	25
Section 7.09	Corporation's Acquisition of its Own Shares	25

iii

Section 7.10	Share Options	26
Section 7.11	Terms and Conditions of Stock Rights and Options	26
Section 7.12	Share Dividends	27
Section 7.13	Distributions to Shareholders	27
Section 7.14	Lost, Destroyed and Mutilated Certificates	28
	ARTICLE VIII
	Amendment of Articles and Bylaws
Section 8.01	Authority to Amend the Articles of Incorporation	29
Section 8.02	Amendment by Board of Directors	29
Section 8.03	Amendment of Bylaws by Board of Directors	30
Section 8.04	Bylaw Increasing Quorum or Voting Requirements for Directors	30
	ARTICLE IX
	Records and Report
Section 9.01	Corporate Records	30
Section 9.02	Financial Statements for Shareholders	31
Section 9.03	Other Reports to Shareholders	32
Section 9.04	Annual Report for Department of State	32
	ARTICLE X
	Miscellaneous
Section 10.01	Definition of the Act	33
Section 10.02	Application of Florida Law	33
Section 10.03	Fiscal Year	33

iv

Section 10.04	Conflicts with Articles of Incorporation	33
Section 10.05	Emergency By-Laws	33
Section 10.06	Forum for Adjudication of Disputes	34

v

ARTICLE I

Offices

Section 1.01. Principal Office.

The principal office of the corporation in the State of Florida shall be established at such places as the board of directors from time to time determine.

Section 1.02. Registered Office.

The registered office of the corporation in the State of Florida shall be at the office of its registered agent as stated in the articles of incorporation or as the board of directors shall from time to time determine.

Section 1.03. Other Offices.

The corporation may have additional offices at such other places, either within or without the State of Florida, as the board of directors may from time to time determine or the business of the corporation may require.

ARTICLE II

Meetings of Shareholders

Section 2.01. Annual Meeting.

(1)       The corporation shall hold a meeting of shareholders annually, for the election of directors and for the transaction of any proper business, at a time stated in or fixed in accordance with a resolution of the board of directors.

(2)       Annual shareholders' meeting may be held in or out of the State of Florida at a place stated in or fixed in accordance with a resolution by the board of directors or, when not inconsistent with the board of directors' resolution stated in the notice of the annual meeting. If no place is stated in or fixed in accordance with these bylaws, or stated in the notice of the annual meeting, annual meetings shall be held at the corporation's principal office.

(3)       The failure to hold the annual meeting at the time stated in or fixed in accordance with these bylaws or pursuant to the Act does not affect the validity of any corporate action and shall not work a forfeiture of or dissolution of the corporation.

Section 2.02. Special Meeting.

(1)       The corporation shall hold a special meeting of shareholders:

1

(a)       On call of its board of directors or the person or persons authorized to do so by the board of directors; or

(b)       If the holders of not less than 10% of all votes entitled to be cast on any issue proposed to be considered at the proposed special meeting sign, date and deliver to the corporation's secretary one or more written demands for the meeting describing the purpose or purposes for which it is to be held.

(2)       Special shareholders' meetings may be held in or out of the State of Florida at a place stated in or fixed in accordance with a resolution of the board of directors, or, when not inconsistent with the board of directors' resolution, in the notice of the special meeting. If no place is stated in or fixed in accordance with these bylaws or in the notice of the special meeting, special meetings shall be held at the corporation's principal office.

(3)       Only business within the purpose or purposes described in the special meeting notice may be conducted at a special shareholders' meeting.

Section 2.03. Shareholders' List for Meeting.

(1)       After fixing a record date for a meeting, a corporation shall prepare a list of the names of all its shareholders who are entitled to notice of a shareholders' meeting, in accordance with the Act, or arranged by voting group, with the address of, and the number and class and series, if any, of shares held by, each.

(2)       The shareholders' list must be available for inspection by any shareholder for a period of ten days prior to the meeting or such shorter time as exists between the record date and the meeting and continuing through the meeting at the corporation's principal office, at a place identified in the meeting notice in the city where the meeting will be held, or at the office of the corporation's transfer agent or registrar. A shareholder or his agent or attorney is entitled on written demand to inspect the list (subject to the requirements of Section 607.1602(3)) of the Act), during regular business hours and at his expense, during the period it is available for inspection.

(3)       The corporation shall make the shareholders' list available at the meeting, and any shareholder or his agent or attorney is entitled to inspect the list at any time during the meeting or any adjournment.

Section 2.04. Record Date.

(1)       The board of directors may set a record date for purposes of determining the shareholders entitled to notice of and to vote at a shareholders' meeting; however, in no event may a record date fixed by the board of directors be a date preceding the date upon which the resolution fixing the record date is adopted.

(2)       Unless otherwise fixed by the board of directors, the record date for determining shareholders entitled to demand a special meeting is the date the first shareholder delivers his demand to the corporation. In  

2

the event that the board of directors sets the record date for a special meeting of shareholders, it shall not be a date preceding the date upon which the corporation receives the first demand from a shareholder requesting a special meeting.

(3)       If no prior action is required by the board of directors pursuant to the Act, and, unless otherwise fixed by the board of directors, the record date for determining shareholders entitled to take action without a meeting is the date the first signed written consent is delivered to the corporation under Section 607.0704 of the Act. If prior action is required by the board of directors pursuant to the Act, the record date for determining shareholders entitled to take action without a meeting is at the close of business on the day on which the board of directors adopts the resolution taking such prior action.

(4)       Unless otherwise fixed by the board of directors, the record date for determining shareholders entitled to notice of and to vote at an annual or special shareholders' meeting is the close of business on the day before the first notice is delivered to shareholders.

(5)       A record date may not be more than 70 days before the meeting or action requiring a determination of shareholders.

(6)       A determination of shareholders entitled to notice of or to vote at a shareholders' meeting is effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it must do if the meeting is adjourned to a date more than one 120 days after the date fixed for the original meeting.

Section 2.05. Notice of Meetings and Adjournment.

(1)       The corporation shall notify shareholders of the date, time and place of each annual and special shareholders' meeting no fewer than 10 or more than 60 days before the meeting date. Unless the Act requires otherwise, the corporation is required to give notice only to shareholders entitled to vote at the meeting. Notice shall be given in the manner provided in Section 607.0141 of the Act, by or at the direction of the president, the secretary, of the officer or persons calling the meeting. If the notice is mailed at least 30 days before the date of the meeting, it may be done by a class of United States mail other than first class. Notwithstanding Section 607.0141, if mailed, such notice shall be deemed to be delivered when deposited in the United Statement mail addressed to the shareholder at his address as it appears on the stock transfer books of the corporation, with postage thereon prepaid.

(2)       Unless the Act or the articles of incorporation requires otherwise, notice of an annual meeting need not include a description of the purpose or purposes for which the meeting is called.

(3)       Notice of a special meeting must include a description of the purpose or purposes for which the meeting is called.

(4)       If an annual or special shareholders meeting is adjourned to a different date, time, or place, notice need not be given of the new date, time, or place if the new date, time or place is announced at the meeting before adjournment is taken, and any business may be transacted at the adjourned meeting that might have been transacted on the original date of the meeting. If a new record date is or must be fixed under Section

3

607.0707 of the Act, however, notice of the adjourned meeting must be given under this section to persons who are shareholders as of the new record date who are entitled to notice of the meeting.

(5)       Notwithstanding the foregoing, no notice of a shareholders' meeting need be given if: (a) an annual report and proxy statements for two consecutive annual meetings of shareholders, or (b) all, and at least two checks in payment of dividends or interest on securities during a 12-month period, have been sent by first-class United States mail, addressed to the shareholder at his address as it appears on the share transfer books of the corporation, and returned undeliverable. The obligation of the corporation to give notice of a shareholders' meeting to any such shareholder shall be reinstated once the corporation has received a new address for such shareholder for entry on its share transfer books.

(6)       Shareholders of any voting group, other persons entitled to vote on behalf of shareholders pursuant to Section 607.0721 of the Act, attorneys in fact for shareholders, and holders of proxies appointed pursuant to Section 607.0722 of the Act may participate in any annual or special meeting of shareholders by means of remote communication to the extent the board of directors authorizes such participation for such voting group. Participation by means of remote communication is subject to such guidelines and procedures as the board of directors adopts, and must be in conformity with the Act.

Section 2.06. Waiver of Notice.

(1)       A shareholder may waive any notice required by the Act, the articles of incorporation, or bylaws before or after the date and time stated in the notice. The waiver must be in writing, be signed by the shareholder entitled to the notice, and be delivered to the corporation for inclusion in the minutes or filing with the corporate records. Neither the business to be transacted at nor the purpose of any regular or special meeting of the shareholders need be specified in any written waiver of notice.

(2)       A shareholder's attendance at a meeting: (a) Waives objection to lack of notice or defective notice of the meeting, unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting; or (b) waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the shareholder objects to considering the matter when it is presented.

4

ARTICLE III

Shareholder Voting

Section 3.01. Voting Group Defined.

A "voting group" means all shares of one or more classes or series that under the articles of incorporation or the Act are entitled to vote and be counted together collectively on a matter at a meeting of shareholders. All shares entitled by the articles of incorporation or the Act to vote generally on the matter are for that purpose a single voting group.

Section 3.02. Quorum and Voting Requirements for Voting Groups.

(1)       Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares exists with respect to that matter. Unless the articles of incorporation or the Act provides otherwise, thirty-three and one-third percent (33⅓ %) entitled to be cast on the matter by the voting group constitutes a quorum of that voting group for action on that matter.

(2)       Once a share is represented for any purpose at a meeting, it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be set for that adjourned meeting.

(3)       If a quorum exists, action on a matter (other than the election of directors) by a voting group is approved if the votes cast within the voting group favoring the action exceed the votes cast opposing the action, unless the articles of incorporation or the Act requires a greater number of affirmative votes.

Section 3.03. Action by Single and Multiple Voting Groups.

(1)       If the articles of incorporation or the Act provides for voting by a single voting group on a matter, action on that matter is taken when voted upon by that voting group as provided in Section 3.02 of these bylaws.

(2)       If the articles of incorporation or the Act provides for voting by two or more voting groups on a matter, action on that matter is taken only when voted upon by each of those voting groups counted separately as provided in Section 3.02 of these bylaws. Action may be taken by one voting group on a matter even though no action is taken by another voting group entitled to vote on the matter.

Section 3.04. Shareholder Quorum and Voting; Greater or Lesser Voting Requirements.

(1)       A majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders, but in no event shall a quorum consist of less than one-third of the shares entitled to vote. When a specified item of business is required to be voted on by a class or series of stock, a

5

majority of the shares of such class or series shall constitute a quorum for the transaction of such item of business by that class or series.

(2)       An amendment to the articles of incorporation that adds, changes or deletes a greater or lesser quorum or voting requirement must meet the same quorum requirement and be adopted by the same vote and voting groups required to take action under the quorum and voting requirements then in effect or proposed to be adopted, whichever is greater.

(3)       If a quorum exists, action on a matter, other than the election of directors, is approved if the votes cast by the holders of the shares represented at the meeting and entitled to vote on the subject matter favoring the action exceed the votes cast opposing the action, unless a greater number of affirmative votes or voting by classes is required by the Act or the articles of incorporation.

(4)       After a quorum has been established at a shareholders' meeting, the subsequent withdrawal of shareholders, so as to reduce the number of shares entitled to vote at the meeting below the number required for a quorum, shall not affect the validity of any action taken at the meeting or any adjournment thereof.

(5)       The articles of incorporation may provide for a greater voting requirement or a greater or lesser quorum requirement for shareholders (or voting groups of shareholders) than is provided by the Act, but in no event shall a quorum consist of less than one-third of the shares entitled to vote.

Section 3.05. Voting for Directors; Cumulative Voting.

(1)       Directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present.

(2)       Each shareholder who is entitled to vote at an election of directors has the right to vote the number of shares owned by him for as many persons as there are directors to be elected and for whose election he has a right to vote. Shareholders do not have a right to cumulate their votes for directors unless the articles of incorporation so provide.

Section 3.06. Voting Entitlement of Shares.

(1)       Unless the articles of incorporation or the Act provides otherwise, each outstanding share, regardless of class, is entitled to one vote on each matter submitted to a vote at a meeting of shareholders. Only shares are entitled to vote.

(2)       The shares of the corporation are not entitled to vote if they are owned, directly or indirectly, by a second corporation, domestic or foreign, and the first corporation owns, directly or indirectly, a majority of shares entitled to vote for directors of the second corporation.

(3)       This section does not limit the power of the corporation to vote any shares, including its own shares, held by it in a fiduciary capacity.

6

(4)       Redeemable shares are not entitled to vote on any matter, and shall not be deemed to be outstanding, after notice of redemption is mailed to the holders thereof and a sum sufficient to redeem such shares has been deposited with a bank, trust company, or other financial institution upon an irrevocable obligation to pay the holders the redemption price upon surrender of the shares.

(5)       Shares standing in the name of another corporation, domestic or foreign, may be voted by such officer, agent, or proxy as the bylaws of the corporate shareholder may prescribe or, in the absence of any applicable provision, by such person as the board of directors of the corporate shareholder may designate. In the absence of any such designation or in case of conflicting designation by the corporate shareholder, the chairman of the board, the president, any vice president, the secretary, and the treasurer of the corporate shareholder, in that order, shall be presumed to be fully authorized to vote such shares.

(6)       Shares held by an administrator, executor, guardian, personal representative, or conservator may be voted by him, either in person or by proxy, without a transfer of such shares into his name. Shares standing in the name of a trustee may be voted by him, either in person or by proxy, but no trustee shall be entitled to vote shares held by him without a transfer of such shares into his name or the name of his nominee.

(7)       Shares held by or under the control of a receiver, a trustee in bankruptcy proceedings, or an assignee for the benefit of creditors may be voted by him without the transfer thereof into his name.

(8)       If a share or shares stand of record in the names of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety, or otherwise, or if two or more persons have the same fiduciary relationship respecting the same shares, unless the secretary of the corporation is given notice to the contrary and is furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, then acts with respect to voting have the following effect:

(a)       If only one votes, in person or in proxy, his act binds all;

(b)       If more than one vote, in person or by proxy, the act of the majority so voting binds all;

(c)       If more than one vote, in person or by proxy, but the vote is evenly split on any particular matter, each faction is entitled to vote the share or shares in question proportionally;

(d)       If the instrument or order so filed shows that any such tenancy is held in unequal interest, a majority or a vote evenly split for purposes of this subsection shall be a majority or a vote evenly split in interest;

7

(e)       The principles of this subsection shall apply, insofar as possible, to execution of proxies, waivers, consents, or objections and for the purpose of ascertaining the presence of a quorum;

(f)       Subject to Section 3.08 of these bylaws, nothing herein contained shall prevent trustees or other fiduciaries holding shares registered in the name of a nominee from causing such shares to be voted by such nominee as the trustee or other fiduciary may direct. Such nominee may vote shares as directed by a trustee or their fiduciary without the necessity of transferring the shares to the name of the trustee or other fiduciary.

Section 3.07. Proxies.

(1)       A shareholder, other person entitled to vote on behalf of a shareholder pursuant to Section 3.06 of these bylaws, or attorney in fact may vote the shareholder's shares in person or by proxy.

(2)       A shareholder may appoint a proxy to vote or otherwise act for him by signing an appointment form, either personally or by his attorney in fact. An executed telegram or cablegram appearing to have been transmitted by such person, or a photographic, photostatic, or equivalent reproduction of an appointment form, is a sufficient appointment form.

(3)       An appointment of a proxy is effective when received by the secretary or other officer or agent authorized to tabulate votes. An appointment is valid for up to 11 months unless a longer period is expressly provided in the appointment form.

(4)       The death or incapacity of the shareholder appointing a proxy does not affect the right of the corporation to accept the proxy's authority unless notice of the death or incapacity is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises his authority under the appointment.

(5)       An appointment of a proxy is revocable by the shareholder unless the appointment form conspicuously states that it is irrevocable and the appointment is coupled with an interest. Appointments coupled with an interest include the appointment of: (a) a pledgee; (b) a person who purchased or agreed to purchase the shares; (c) a creditor of the corporation who extended credit to the corporation under terms requiring the appointment; (d) an employee of the corporation whose employment contract requires the appointment; or (e) a party to a voting agreement created in accordance with the Act.

(6)       An appointment made irrevocable under this section becomes revocable when the interest with which it is coupled is extinguished and, in a case provided for in Subsection 5(c) or 5(d), the proxy becomes revocable three years after the date of the proxy or at the end of the period, if any, specified herein, whichever is less, unless the period of irrevocability is renewed from time to time by the execution of a new irrevocable proxy as provided in this section. This does not affect the duration of a proxy under subsection (3).

8

(7)       A transferee for value of shares subject to an irrevocable appointment may revoke the appointment if he did not know of its existence when he acquired the shares and the existence of the irrevocable appointment was not noted conspicuously on the certificate representing the shares or on the information statement for shares without certificates.

(8)       Subject to Section 3.09 of these bylaws and to any express limitation on the proxy's authority appearing on the face of the appointment form, a corporation is entitled to accept the proxy's vote or other action as that of the shareholder making the appointment.

(9)       If an appointment form expressly provides, any proxy holder may appoint, in writing, a substitute to act in his place.

Section 3.08. Shares Held by Nominees.

(1)       The corporation may establish a procedure by which the beneficial owner of shares that are registered in the name of a nominee is recognized by the corporation as the shareholder. The extent of this recognition may be determined in the procedure.

(2)       The procedure may set forth (a) the types of nominees to which it applies; (b) the rights or privileges that the corporation recognizes in a beneficial owner; (c) the manner in which the procedure is selected by the nominee; (d) the information that must be provided when the procedure is selected; (e) the period for which selection of the procedure is effective; and (f) other aspects of the rights and duties created.

Section 3.09. Corporation's Acceptance of Votes.

(1)       If the name signed on a vote, consent, waiver, or proxy appointment corresponds to the name of a shareholder, the corporation if acting in good faith is entitled to accept the vote, consent waiver, or proxy appointment and give it effect as the act of the shareholder.

(2)       If the name signed on a vote, consent, waiver, or proxy appointment does not correspond to the name of its shareholder, the corporation if acting in good faith is nevertheless entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the shareholder if: (a) the shareholder is an entity and the name signed purports to be that of an officer or agent of the entity; (b) the name signed purports to be that of an administrator, executor, guardian, personal representative, or conservator representing the shareholder and, if the corporation requests, evidence of fiduciary status acceptable to the corporation has been presented with respect to the vote, consent, waiver, or proxy appointment; (c) the name signed purports to be that of a receiver, trustee in bankruptcy, or assignee for the benefit of creditors of the shareholder and, if the corporation requests, evidence of this status acceptable to the corporation has been presented with respect to the vote, consent, waiver, or proxy appointment; (d) the name signed purports to be that of a pledgee, beneficial owner, or attorney in fact of the shareholder and, if the corporation requests, evidence acceptable to the corporation of the signatory's authority to sign for the shareholder has been presented with respect to the vote, consent, waiver, or proxy appointment; or (e) two or more persons are the shareholder as covenants or

9

fiduciaries and the name signed purports to be the name of at least one of the co-owners and the person signing appears to be acting on behalf of all the co-owners.

(3)       The corporation is entitled to reject a vote, consent, waiver, or proxy appointment if the secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory's authority to sign for the shareholder.

(4)       The corporation and its officer or agent who accepts or rejects a vote, consent, waiver, or proxy appointment in good faith and in accordance with the standards of this section are not liable in damages to the shareholder for the consequences of the acceptance or rejection.

(5)       Corporate action based on the acceptance or rejection of a vote, consent, waiver, or proxy appointment under this section is valid unless a court of competent jurisdiction determines otherwise.

Section 3.10. Action by Shareholders Without Meeting.

(1)       Any action required or permitted by the Act to be taken at any annual or special meeting of shareholders of the corporation may be taken without a meeting, without prior notice and without a vote, if the action is taken by the holders of outstanding stock of each voting group entitled to vote thereon having not less than the minimum number of votes with respect to each voting group that would be necessary to authorize or take such action at a meeting at which all voting groups and shares entitled to vote thereon were present and voted. In order to be effective, the action must be evidenced by one or more written consents describing the action taken, dated and signed by approving shareholders having the requisite number of votes of each voting group entitled to vote thereon, and delivered to the corporation by delivery to its principal office in this state, its principal place of business, the corporate secretary, or another office or agent of the corporation having custody of the book in which proceedings of meetings of shareholders are recorded. No written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the date of the earliest dated consent is delivered in the manner required by this section, written consent signed by the number of holders required to take action is delivered to the corporation by delivery as set forth in this section.

(2)       Within 10 days after obtaining such authorization by written consent, notice in accordance with Section 607.0704(3) of the Act must be given to those shareholders who have not consented in writing.

ARTICLE IV

Board of Directors and Officers

Section 4.01. Qualifications of Directors.

Directors must be natural persons who are 18 years of age or older but need not be residents of the State of Florida or shareholders of the corporation.

10

Section 4.02. Number of Directors.

(1)       The board of directors shall consist of not less than one nor more than nine individuals.

(2)       The number of directors may be increased or decreased from time to time by amendment to these bylaws.

(3)       Directors are elected at the first annual shareholders' meeting and at each annual meeting thereafter unless their terms are staggered under Section 4.04 of these bylaws.

Section 4.03. Terms of Directors Generally.

(1)       The terms of the initial directors of the corporation expire at the first shareholders' meeting at which directors are elected.

(2)       The terms of all other directors expire at the next annual shareholders' meeting following their election unless their terms are staggered under Section 4.04 of these bylaws.

(3)       A decrease in the number of directors does not shorten an incumbent director's term.

(4)       The term of a director elected to fill a vacancy expires at the next shareholders' meeting at which directors are elected.

(5)       Despite the expiration of a director's term, he continues to serve until his successor is elected and qualifies or until there is a decrease in the number of directors.

Section 4.04. Staggered Terms for Directors.

The directors of any corporation organized under the Act may, by the articles of incorporation, or by amendment to these bylaws adopted by a vote of the shareholders, be divided into one, two or three classes with the number of directors in each class being as nearly equal as possible; the term of office of those of the first class to expire at the annual meeting next ensuing; of the second class one year thereafter; at the third class two years thereafter; and at each annual election held after such classification and election, directors shall be chosen for a full term, as the case may be, to succeed those whose terms expire. If the directors have staggered terms, then any increase or decrease in the number of directors shall be so apportioned among the classes as to make all classes as nearly equal in number as possible.

Section 4.05. Vacancy on Board.

(1)       Whenever a vacancy occurs on a board of directors, including a vacancy resulting from an increase in the number of directors, it may be filled by the affirmative vote of a majority of the remaining directors.

11

(2)       A vacancy that will occur at a specific later date (by reason of a resignation effective at a later date may be filled before the vacancy occurs but the new director may not take office until the vacancy occurs.

Section 4.06. Compensation of Directors.

The board of directors may fix the compensation of directors.

Section 4.07. Meetings.

(1)       The board of directors may hold regular or special meetings in or out of the State of Florida.

(2)       A majority of the directors present, whether or not a quorum exists, may adjourn any meeting of the board of directors to another time and place. Notice of any such adjourned meeting shall be given to the directors who were not present at the time of the adjournment and, unless the time and place of the adjourned meeting are announced at the time of the adjournment, to the other directors.

(3)       Meetings of the board of directors may be called by the chairman of the board or by the president.

(4)      The board of directors may permit any or all directors to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting.

Section 4.08. Action by Directors Without a Meeting.

(1)       Action required or permitted by the Act to be taken at a board of directors' meeting or committee meeting may be taken without a meeting if the action is taken by all members of the board or of the committee. The action must be evidenced by one or more written consents describing the action taken and signed by each director or committee member.

(2)       Action taken under this section is effective when the last director signs the consent, unless the consent specifies a different effective date.

(3)      A consent signed under this section has the effect of a meeting vote and may be described as such in any document.

Section 4.09. Notice of Meetings.

Regular and special meetings of the board of directors may be held without notice of the date, time, place, or purpose of the meeting.

12

Section 4.10. Waiver of Notice.

Notice of a meeting of the board of directors need not be given to any director who signs a waiver of notice either before or after the meeting. Attendance of a director at a meeting shall constitute a waiver of notice of such meeting and a waiver of any and all objections to the place of the meeting, the time of the meeting, or the manner in which it has been called or convened, except when a director states, at the beginning of the meeting or promptly upon arrival at the meeting, any objection to the transaction of business because the meeting is not lawfully called or convened.

Section 4.11. Quorum and Voting.

(1)       A quorum of a board of directors consists of a majority of the number of directors prescribed by the articles of incorporation or these bylaws.

(2)       If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the board of directors.

(3)       A director of a corporation who is present at a meeting of the board of directors or a committee of the board of directors when corporate action is taken is deemed to have assented to the action taken unless:

(a)       He objects at the beginning of the meeting (or promptly upon his arrival) to holding it or transacting specified business at the meeting; or

(b)       He votes against or abstains from the action taken.

Section 4.12. Committees.

(1)       The board of directors, by resolution adopted by a majority of the full board of directors, may designate from among its members an executive committee and one or more other committees each of which, to the extent provided in such resolution, shall have and may exercise all the authority of the board of directors, except that no such committee shall have the authority to:

(a)       Approve or recommend to shareholders actions or proposals required by the Act to be approved by shareholders.

(b)       Fill vacancies on the board of directors or any committee thereof.

(c)       Adopt, amend, or repeal these bylaws.

(d)       Authorize or approve the reacquisition of shares unless pursuant to a general formula or method specified by the board of directors.

(e)       Authorize or approve the issuance or sale or contract for the sale of shares, or determine the designation and relative rights, preferences, and limitations of a voting group except that the board

13

of directors may authorize a committee (or a senior executive officer of the corporation) to do so within limits specifically prescribed by the board of directors.

(2)       The sections of these bylaws which govern meetings, notice and waiver of notice, and quorum and voting requirements of the board of directors apply to committees and their members as well.

(3)       Each committee must have two or more members who serve at the pleasure of the board of directors. The board, by resolution adopted in accordance herewith, may designate one or more directors as alternate members of any such committee who may act in the place and stead of any absent member or members at any meeting of such committee.

(4)       Neither the designation of any such committee, the delegation thereto of authority, nor action by such committee pursuant to such authority shall alone constitute compliance by any member of the board of directors not a member of the committee in question with his responsibility to act in good faith, in a manner he reasonably believes to be in the best interests of the corporation, and with such care as an ordinarily prudent person in a like position would use under similar circumstances.

Section 4.13. Loans to Officers, Directors, and Employees; Guaranty of Obligations.

Subject to the compliance with provisions of the Sarbanes-Oxley Act of 2002, the corporation may lend money to, guaranty any obligation of, or otherwise assist any officer, director, or employee of the corporation or of a subsidiary, whenever, in the judgment of the board of directors, such loan, guaranty, or assistance may reasonably be expected to benefit the corporation. The loan, guaranty, or other assistance may be with or without interest and may be unsecured or secured in such manner as the board of directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing in this section shall be deemed to deny, limit, or restrict the powers of guaranty or warranty of any corporation at common law or under any statute. Loans, guaranties, or other types of assistance are subject to Section 4.19.

Section 4.14. Required Officers.

(1)       The corporation shall have such officers as the board of directors may appoint from time to time.

(2)       A duly appointed officer may appoint one or more assistant officers.

(3)       The board of directors shall delegate to one of the officers responsibility for preparing minutes of the directors' and shareholders' meetings and for authenticating records of the corporation.

(4)       The same individual may simultaneously hold more than one office in the corporation.

14

Section 4.15. Duties of Officers.

Each officer has the authority and shall perform the duties set forth in a resolution or resolutions of the board of directors or by direction of any officer authorized by the board of directors to prescribe the duties of other officers.

Section 4.16. Resignation and Removal of Officers.

(1)       An officer may resign at any time by delivering notice to the corporation. A resignation is effective when the notice is delivered unless the notice specifies a later effective date. If a resignation is made effective at a later date and the corporation accepts the future effective date, the board of directors may fill the pending vacancy before the effective date if the board of directors provides that the successor does not take office until the effective date.

(2)       The board of directors may remove any officer at any time with or without cause. Any assistant officer, if appointed by another officer, may likewise be removed by the board of directors or by the officer which appointed him in accordance with these bylaws.

Section 4.17. Contract Rights of Officers.

The appointment of an officer does not itself create contract rights.

Section 4.18. General Standards for Directors.

(1) A director shall discharge his duties as a director, including his duties as a member of a committee:

(a)       In good faith;

(b)       With the care an ordinarily prudent person in a like position would exercise under similar circumstances; and

(c)       In a manner he reasonably believes to be in the best interests of the corporation.

(2)       In discharging his duties, a director is entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, if prepared or presented by:

(a)       One or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the matters presented;

(b)       Legal counsel, public accountants, or other persons as to matters the director reasonably believes are within the persons' professional or expert competence; or

(c)       A committee of the board of directors of which he is not a member if the director reasonably believes the committee merits confidence.

15

(3)       In discharging his duties, a director may consider such factors as the director deems relevant, including the long-term prospects and interests of the corporation and its shareholders, and the social, economic, legal, or other effects of any action on the employees, suppliers, customers of the corporation or its subsidiaries, the communities and society in which the corporation or its subsidiaries operate, and the economy of the state and the nation.

(4)       A director is not acting in good faith if he has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (2) unwarranted.

(5)       A director is not liable for any action taken as a director, or any failure to take any action, if he performed the duties of his office in compliance with this section.

Section 4.19. Director Conflicts of Interest.

No contract or other transaction between a corporation and one or more interested directors shall be either void or voidable because of such relationship or interest, because such director or directors are present at the meeting of the board of directors or a committee thereof which authorizes, approves or ratifies such contract or transaction, or because his or their votes are counted for such purpose, if:

(1)       The fact of such relationship or interest is disclosed or known to the board of directors or committee which authorizes, approves or ratifies the contract or transactions by a vote or consent sufficient for the purpose without counting the votes or consents of such interested directors;

(2)       The fact of such relationship or interest is disclosed or known to the shareholders entitled to vote and they authorize, approve or ratify such contract or transaction by vote or written consent; or

(3)       The contract or transaction is fair and reasonable as to the corporation at the time it is authorized by the board, a committee or the shareholders.

Common or interested directors may be counted in determining the presence of a quorum at the meeting of the board of directors or a committee thereof which authorizes, approves or ratifies such contract or transaction.

For the purpose of paragraph (2) above, a conflict of interest transaction is authorized, approved or ratified if it receives the vote of a majority of the shares entitled to be counted under this subsection. Shares owned by or voted under the control of a director who has a relationship or interest in the conflict of interest transaction may not be counted in a vote of shareholders to determine whether to authorize, approve or ratify a conflict of interest transaction under paragraph (2). The vote of those shares, however, is counted in determining whether the transaction is approved under other sections of the Act. A majority of the shares, whether or not present, that are entitled to be counted in a vote on the transaction under this subsection constitutes a quorum for the purpose of taking action under this section.

16

Section 4.20. Resignation of Directors.

A director may resign at any time by delivering written notice to the board of directors or its chairman or to the corporation.

A resignation is effective when the notice is delivered unless the notice specifies a later effective date. If a resignation is made effective at a later date, the board of directors may fill the pending vacancy before the effective date if the board of directors provides that the successor does not take office until the effective date.

ARTICLE V

Indemnification of Directors, Officers,

Employees and Agents

Section 5.01. Directors, Officers, Employees and Agents.

(1)       The corporation shall have power to indemnify any person who was or is a party to any proceeding (other than an action by, or in the right of, the corporation), by reason of the fact that he is or was a director, officer, employee, or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise against liability incurred in connection with such proceeding, including any appeal thereof, if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any proceeding by judgment, order, settlement, or conviction or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in, or not opposed to, the best interests of the corporation or, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

(2)       The corporation shall have power to indemnify any person, who was or is a party to any proceeding by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee, or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses and amounts paid in settlement not exceeding, in the judgment of the board of directors, the estimated expense of litigating the proceeding to conclusion, actually and reasonably incurred in connection with the defense or settlement of such proceeding, including any appeal thereof. Such indemnification shall be authorized if such person acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation, except that no indemnification shall be made under this subsection in respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable unless, and only to the extent that, the court in which such proceeding was brought, or any other court of competent jurisdiction, shall determine upon application that, despite the adjudication of liability but in

17

view of all circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.

(3)       To the extent that a director, officer, employee, or agent of the corporation has been successful on the merits or otherwise in defense of any proceeding referred to in subsections (1) or (2), or in defense of any claim, issue, or matter therein, he shall be indemnified against expenses actually and reasonably incurred by him in connection therewith.

(4)       Any indemnification under subsections (1) or (2), unless pursuant to a determination by a court, shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee, or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in subsections (1) or (2). Such determination shall be made:

(a)       By the board of directors by a majority vote of a quorum consisting of directors who were not parties to such proceeding;

(b)       If such a quorum is not obtainable or, even if obtainable, by majority vote of a committee duly designated by the board of directors (in which directors who are parties may participate) consisting solely of two or more directors not at the time parties to the proceeding;

(c)       By independent legal counsel:

(i)       Selected by the board of directors prescribed in paragraph (a) or the committee prescribed in paragraph (b); or

(ii)       If a quorum of the directors cannot be obtained for paragraph (a) and the committee cannot be designed under paragraph (b), selected by majority vote of the full board of directors (in which directors who are parties may participate); or

(d)       By the shareholders by a majority vote of a quorum consisting of shareholders who were not parties to such proceeding or, if no such quorum is obtainable, by a majority vote of shareholders who were not parties to such proceeding.

(5)       Evaluation of the reasonableness of expenses and authorization of indemnification shall be made in the same manner as the determination that indemnification is permissible. However, if the determination of permissibility is made by independent legal counsel, persons specified by paragraph (4)(c) shall evaluate the reasonableness of expenses and may authorize indemnification.

(6)       Expenses incurred by an officer or director in defending a civil or criminal proceeding may be paid by the corporation in advance of the final disposition of such proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if he is ultimately found not to be entitled to indemnification by the corporation pursuant to this section. Expenses incurred by other employees and agents may be paid in advance upon such terms or conditions that the board of directors deems appropriate.

18

(7)       The indemnification and advancement of expenses provided pursuant to this section are not exclusive, and the corporation may make any other or further indemnification or advancement of expenses of any of its directors, officers, employees, or agents, under any bylaw, agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. However, indemnification or advancement of expenses shall not be made to or on behalf of any director, officer, employee, or agent if a judgment or other final adjudication establishes that his actions, or omissions to act, were material to the cause of action so adjudicated and constitute:

(a)       A violation of the criminal law, unless the director, officer, employee, or agent had reasonable cause to believe his conduct was lawful or had no reasonable cause to believe his conduct was unlawful;

(b)       A transaction from which the director, officer, employee, or agent derived an improper personal benefit;

(c)       In the case of a director, a circumstance under which the liability provisions of Section 607.0834 under the Act are applicable; or

(d)       Willful misconduct or a conscious disregard for the best interests of the corporation in a proceeding by or in the right of the corporation to procure a judgment in its favor or in a proceeding by or in the right of a shareholder.

(8)      Indemnification and advancement of expenses as provided in this section shall continue as, unless otherwise provided when authorized or ratified, to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person, unless otherwise provided when authorized or ratified.

(9)       Notwithstanding the failure of the corporation to provide indemnification, and despite any contrary determination of the board or of the shareholders in the specific case, a director, officer, employee, or agent of the corporation who is or was a party to a proceeding may apply for indemnification or advancement of expenses, or both, to the court conducting the proceeding, to the circuit court, or to another court of competent jurisdiction. On receipt of an application, the court, after giving any notice that it considers necessary, may order indemnification and advancement of expenses, including expenses incurred in seeking court-ordered indemnification or advancement of expenses, if it determines that:

(a)       The director, officer, employee, or agent if entitled to mandatory indemnification under subsection (3), in which case the court shall also order the corporation to pay the director reasonable expenses incurred in obtaining court-ordered indemnification or advancement of expenses;

(b)       The director, officer, employee, or agent is entitled to indemnification or advancement of expenses, or both, by virtue of the exercise by the corporation of its power pursuant to subsection (7); or

19

(c)       The director, officer, employee, or agent is fairly and reasonably entitled to indemnification or advancement of expenses, or both, in view of all the relevant circumstances, regardless of whether such person met the standard of conduct set forth in subsection (1), subsection (2) or subsection (7).

(10)       For purposes of this section, the term "corporation" includes, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger, so that any person who is or was a director, officer, employee, or agent of a constituent corporation, or is or was serving at the request of a constituent corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise, is in the same position under this section with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued.

(11)       For purposes of this section:

(a)       The term "other enterprises" includes employee benefit plans;

(b)       The term "expenses" includes counsel fees, including those for appeal;

(c)       The term "liability" includes obligations to pay a judgment, settlement, penalty, fine (including an excise tax assessed with respect to any employee benefit plan), and expenses actually and reasonably incurred with respect to a proceeding;

(d)       The term "proceeding" includes any threatened, pending, or completed action, suit or other type of proceeding, whether civil, criminal, administrative, or investigative and whether formal or informal;

(e)       The term "agent" includes a volunteer;

(f)       The term "serving at the request of the corporation" includes any service as a director, officer, employee, or agent of the corporation that imposes duties on such persons, including duties relating to an employee benefit plan and its participants or beneficiaries; and

(g)       The term "not opposed to the best interest of the corporation" describes the actions of a person who acts in good faith and in a manner he reasonably believes to be in the best interests of the participants and beneficiaries of an employee benefit plan.

(12)       The corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of this section.

20

ARTICLE VI

Office and Agent

Section 6.01. Registered Office and Registered Agent.

(1)       The corporation shall have and continuously maintain in the State of Florida:

(a)       A registered office which may be the same as its place of business; and

(b)       A registered agent, who, may be either:

(i)       An individual who resides in the State of Florida whose business office is identical with such registered office; or

(ii)       Another corporation or not-for-profit corporation as defined in Chapter 617 of the Act, authorized to transact business or conduct its affairs in the State of Florida, having a business office identical with the registered office; or

(iii)       A foreign corporation or not-for-profit foreign corporation authorized pursuant to chapter 607 or chapter 617 of the Act to transact business or conduct its affairs in the State of Florida, having a business office identical with the registered office.

Section 6.02. Change of Registered Office or Registered Agent; Resignation of Registered Agent.

(1)       The corporation may change its registered office or its registered agent upon filing with the Department of State of the State of Florida a statement of change setting forth:

(a)       The name of the corporation;

(b)       The street address of its current registered office;

(c)       If the current registered office is to be changed, the street address of the new registered office;

(d)       The name of its current registered agent;

(e)       If its current registered agent is to be changed, the name of the new registered agent and the new agent's written consent (either on the statement or attached to it) to the appointment;

(f)       That the street address of its registered office and the street address of the business office of its registered agent, as changed, will be identical;

21

(g) That such change was authorized by resolution duly adopted by its board of directors or by an officer of the corporation so authorized by the board of directors.

ARTICLE VII

Shares, Options, Dividends and Distributions

Section 7.01. Authorized Shares.

(1)       The articles of incorporation prescribe the classes of shares and the number of shares of each class that the corporation is authorized to issue, as well as a distinguishing designation for each class, and prior to the issuance of shares of a class the preferences, limitations, and relative rights of that class must be described in the articles of incorporation.

(2)       The articles of incorporation must authorize:

(a)       One or more classes of shares that together have unlimited voting rights, and

(b)       One or more classes of shares (which may be the same class or classes as those with voting rights) that together are entitled to receive the net assets of the corporation upon dissolution.

(3)       The articles of incorporation may authorize one or more classes of shares that have special, conditional, or limited voting rights, or no rights, or no right to vote, except to the extent prohibited by the Act;

(a)       Are redeemable or convertible as specified in the articles of incorporation;

(b)       Entitle the holders to distributions calculated in any manner, including dividends that may be cumulative, non-cumulative, or partially cumulative;

(c)       Have preference over any other class of shares with respect to distributions, including dividends and distributions upon the dissolution of the corporation.

(4)       Shares which are entitled to preference in the distribution of dividends or assets shall not be designated as common shares. Shares which are not entitled to preference in the distribution of dividends or assets shall be common shares and shall not be designated as preferred shares.

22

Section 7.02. Terms of Class or Series Determined by Board of Directors.

(1)       If the articles of incorporation so provide, the board of directors may determine, in whole or part, the preferences, limitations, and relative rights (within the limits set forth in Section 7.01) of:

(a)       Any class of shares before the issuance of any shares of that class, or

(b)       One or more series within a class before the issuance of any shares of that series.

(2)       Each series of a class must be given a distinguishing designation.

(3)       All shares of a series must have preferences, limitations, and relative rights identical with those of other shares of the same series and, except to the extent otherwise provided in the description of the series, of those of other series of the same class.

(4)       Before issuing any shares of a class or series created under this section, the corporation must deliver to the Department of State of the State of Florida for filing articles of amendment, which are effective without shareholder action, in accordance with Section 607.0602 of the Act.

Section 7.03. Issued and Outstanding Shares.

(1)       A corporation may issue the number of shares of each class or series authorized by the articles of incorporation. Shares that are issued are outstanding shares until they are reacquired, redeemed, converted, or canceled.

(2)       The reacquisition, redemption, or conversion of outstanding shares is subject to the limitations of subsection (3) and to Section 607.06401 of the Act.

(3)       At all times that shares of the corporation are outstanding, one or more shares that together have unlimited voting rights and one or more shares that together are entitled to receive the net assets of the corporation upon dissolution must be outstanding.

Section 7.04. Issuance of Shares.

(1)       The board of directors may authorize shares to be issued for consideration consisting of any tangible or intangible property or benefit to the corporation, including cash, promissory notes, services performed, promises to perform services evidenced by a written contract, or other securities of the corporation.

(2)       Before the corporation issues shares, the board of directors must determine that the consideration received or to be received for shares to be issued is adequate. That determination by the board of directors is conclusive insofar as the adequacy of consideration for the issuance of shares relates to whether the shares are validly issued, fully paid, and non-assessable. When it cannot be determined that outstanding shares

23

are fully paid and non-assessable, there shall be a conclusive presumption that such shares are fully paid and non-assessable if the board of directors makes a good faith determination that there is no substantial evidence that the full consideration for such shares has not been paid.

(3)       When the corporation receives the consideration for which the board of directors authorized the issuance of shares, the shares issued therefor are fully paid and non-assessable. Consideration in the form of a promise to pay money or a promise to perform services is received by the corporation at the time of the making of the promise, unless the agreement specifically provides otherwise.

(4)       The corporation may place in escrow shares issued for a contract for future services or benefits or a promissory note, or make other arrangements to restrict the transfer of the shares, and may credit distributions in respect of the shares against their purchase price, until the services are performed, the note is paid, or the benefits received. If the services are not performed, the shares escrowed or restricted and the distributions credited may be canceled in whole or part.

Section 7.05. Form and Content of Certificates.

(1)       Shares may but need not be represented by certificates. Unless the Act or another statute expressly provides otherwise, the rights and obligations of shareholders are identical whether or not their shares are represented by certificates.

(2)       At a minimum, each share certificate must state on its face:

(a)       The name of the issuing corporation and that the corporation is organized under the laws of the State of Florida;

(b)       The name of the person to whom issued; and

(c)       The number and class of shares and the designation of the series, if any, the certificate represents.

(3)       If the shares being issued are of different classes of shares or different series within a class, the designations, relative rights, preferences, and limitations applicable to each class and the variations in rights, preferences, and limitations determined for each series (and the authority of the board of directors to determine variations for future series) must be summarized on the front or back of each certificate. Alternatively, each certificate may state conspicuously on its front or back that the corporation will furnish the shareholder a full statement of this information on request and without charge.

(4)       Each share certificate:

(a)       Must be signed (either manually or in facsimile) by an officer or officers designated by the board of directors, and

24

(b)       May bear the corporate seal or its facsimile.

(5)       If the person who signed (either manually or in facsimile) a share certificate no longer holds office when the certificate is issued, the certificate is nevertheless valid.

(6)       Nothing in this section may be construed to invalidate any share certificate validly issued and outstanding under the Act on July 1, 1990.

Section 7.06. Shares Without Certificates.

(1)       The board of directors of the corporation may authorize the issue of some or all of the shares of any or all of its classes or series without certificates. The authorization does not affect shares already represented by certificates until they are surrendered to the corporation.

(2)       Within a reasonable time after the issue or transfer of shares without certificates, the corporation shall send the shareholder a written statement of the information required on certificates by the Act.

Section 7.07. Restriction on Transfer of Shares and Other Securities.

(1)       The articles of incorporation, these bylaws, an agreement among shareholders, or an agreement between shareholders and the corporation may impose restrictions on the transfer or registration of transfer of shares of the corporation. A restriction does not affect shares issued before the restriction was adopted unless the holders of such shares are parties to the restriction agreement or voted in favor of the restriction.

(2)       A restriction on the transfer or registration of transfer of shares is valid and enforceable against the holder or a transferee of the holder if the restriction is authorized by this section, and effected in compliance with the provisions of the Act, including having a proper purpose as referred to in the Act.

Section 7.08. Shareholder's Pre-emptive Rights.

The shareholders of the corporation do not have a pre-emptive right to acquire the corporation's unissued shares.

Section 7.09. Corporation's Acquisition of its Own Shares.

(1)        The corporation may acquire its own shares, and, unless otherwise provided in the articles of incorporation or except as provided in subsection (4), shares so acquired constitute authorized but unissued shares of the same class but undesignated as to series.

(2)       If the articles of incorporation prohibit the reissue of acquired shares, the number of authorized shares is reduced by the number of shares acquired, effective upon amendment of the articles of incorporation.

25

(3)       Articles of amendment may be adopted by the board of directors without shareholder action, shall be delivered to the Department of State of the State of Florida for filing, and shall set forth the information required by Section 607.0631 of the Act.

(4)       Shares of the corporation in existence on June 30, 1990, which are treasury shares under Section 607.004(18), Florida Statutes (1987), shall be issued, but not outstanding, until canceled or disposed of by the corporation.

Section 7.10. Share Options.

(1)       Unless the articles of incorporation provide otherwise, the corporation may issue rights, options, or warrants for the purchase of shares of the corporation. The board of directors shall determine the terms upon which the rights, options, or warrants are issued, their form and content, and the consideration for which the shares are to be issued.

(2)       The terms and conditions of stock rights and options which are created and issued by the corporation, or its successor, and which entitle the holders thereof to purchase from the corporation shares of any class or classes, whether authorized by unissued shares, treasury shares, or shares to be purchased or acquired by the corporation, may include, without limitation, restrictions, or conditions that preclude or limit the exercise, transfer, receipt, or holding of such rights or options by any person or persons, including any person or persons owning or offering to acquire a specified number or percentage of the outstanding common shares or other securities of the corporation, or any transferee or transferees of any such person or persons, or that invalidate or void such rights or options held by any such person or persons or any such transferee or transferees.

Section 7.11. Terms and Conditions of Stock Rights and Options.

The terms and conditions of the stock rights and options which are created and issued by the corporation or its successor, and which entitle the holders thereof to purchase from the corporation shares of any class or classes, whether authorized but unissued shares, treasury shares, or shares to be purchased or acquired by the corporation, may include, without limitation, restrictions or conditions that preclude or limit the exercise, transfer, receipt or holding of such rights or options by any person or persons, including any person or persons owning or offering to acquire a specified number or percentage of the outstanding common shares or other securities of the corporation, or any transferee or transferees of any such person or persons, or that invalidate or void such rights or options held by any such person or persons or any such transferee or transferees.

26

Section 7.12. Share Dividends.

(1)       Shares may be issued pro rata and without consideration to the corporation's shareholders or to the shareholders of one or more classes or series. An issuance of shares under this subsection is a share dividend.

(2)       Shares of one class or series may not be issued as a share dividend in respect of shares of another class or series unless:

(a)       The articles of incorporation so authorize,

(b)       A majority of the votes entitled to be cast by the class or series to be issued approves the issue, or

(c)       There are no outstanding shares of the class or series to be issued.

(3)       If the board of directors does not fix the record date for determining shareholders entitled to a share dividend, it is the date of the board of directors authorizes the share dividend.

Section 7.13. Distributions to Shareholders.

(1)       The board of directors may authorize and the corporation may make distributions to its shareholders subject to restriction by the articles of incorporation and the limitations in subsection (3).

(2)       If the board of directors does not fix the record date for determining shareholders entitled to a distribution (other than one involving a purchase, redemption, or other acquisition of the corporation's shares), it is the date the board of directors authorizes the distribution.

(3)       No distribution may be made if, after giving it effect:

(a)       The corporation would not be able to pay its debts as they become due in the usual course of business; or

(b)       The corporation's total assets would be less than the sum of its total liabilities plus (unless the articles of incorporation permit otherwise) the amount that would be needed, if the corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution.

(4)       The board of directors may base a determination that a distribution is not prohibited under subsection (3) either on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances. In the case of any distribution based upon such a valuation, each such distribution shall be

27

identified as a distribution based upon a current valuation of assets, and the amount per share paid on the basis of such valuation shall be disclosed to the shareholders concurrent with their receipt of the distribution.

(5)       Except as provided in subsection (7), the effect of a distribution under subsection (3) is measured;

(a)       In the case of distribution by purchase, redemption, or other acquisition of the corporation's shares, as of the earlier of:

(i)       The date money or other property is transferred or debt incurred by the corporation, or

(ii)       The date the shareholder ceases to be a shareholder with respect to the acquired shares;

(b)       In the case of any other distribution of indebtedness, as of the date the indebtedness is distributed;

(c)       In all other cases, as of:

(i)       The date the distribution is authorized if the payment occurs within 120 days after the date of authorization, or

(ii)       The date the payment is made if it occurs more than 120 days after the date of authorization.

(6)       A corporation's indebtedness to a shareholder incurred by reason of a distribution made in accordance with this section is at parity with the corporation's indebtedness to its general, unsecured creditors except to the extent subordinated by agreement.

(7)       Indebtedness of the corporation, including indebtedness issued as a distribution, is not considered a liability for purposes of determinations under subsection (3) if its terms provide that payment of principal and interest are made only if and to the extent that payment of a distribution to shareholders could then be made under this section. If the indebtedness is issued as a distribution, each payment of principal or interest is treated as a distribution, the effect of which is measured on the date the payment is actually made.

Section 7.14 Lost, Destroyed and Mutilated Certificates.

The registered owner of any certificated shares of stock of the corporation as reflected in the books and records of the corporation shall promptly notify the corporation and/or its transfer agent (with a copy to the corporation) in writing of any loss, destruction or mutilation of the certificate therefor, and the corporation may, or may cause its transfer agent to, issue a new certificate in the place of any certificate theretofore issued by it, alleged to have been lost or destroyed. The board of directors may, in its sole discretion, require the registered owner of the shares represented by the lost or destroyed certificate, or his or her legal representatives, to give the corporation a bond in such sum, limited or unlimited, and in such form and with such surety or sureties, as

28

the board of directors shall in its uncontrolled discretion determine, to indemnify the corporation against any and all claims that may be made against it and/or its agents on account of the alleged loss or destruction of any such certificate, or the issuance of such new certificate in replacement therefore. Upon receipt of such indemnification, in its sole discretion the board of directors may, on the corporation's behalf, indemnity the corporation's transfer agent against any and all claims that may be made against it on account of the alleged loss or destruction of any such certificate, or the issuance of such new certificate in replacement therefore.

ARTICLE VIII

Amendment of Articles and Bylaws

Section 8.01. Authority to Amend the Articles of Incorporation.

(1)       The corporation may amend its articles of incorporation at any time to add or change a provision that is required or permitted in the articles of incorporation or to delete a provision not required in the articles of incorporation. Whether a provision is required or permitted in the articles of incorporation is determined as of the effective date of the amendment.

(2)       A shareholder of the corporation does not have a vested property right resulting from any provision in the articles of incorporation, including provisions relating to management, control, capital structure, dividend entitlement, or purpose or duration of the corporation.

Section 8.02. Amendment by Board of Directors.

The corporation's board of directors may adopt one or more amendments to the corporation's articles of incorporation without shareholder action:

(1)       To extend the duration of the corporation if it was incorporated at a time when limited duration was required by law;

(2)       To delete the names and addresses of the initial directors;

(3)       To delete the name and address of the initial registered agent or registered office, if a statement of change is on file with the Department of State of the State of Florida;

(4)       To delete any other information contained in the articles of incorporation that is solely of historical interest;

(5)       To change each issued and unissued authorized share of an outstanding class into a greater number of whole shares if the corporation has only shares of that class outstanding;

(6)       To delete the authorization for a class or series of shares authorized pursuant to Section 607.0602 of the Act, if no shares of such class or series have been issued;

(7)       To change the corporate name by substituting the word "Corporation," "Incorporated," or

29

"Company," or the abbreviation "Corp.," Inc.," or Co.," for a similar word or abbreviation in the name, or by adding, deleting, or changing a geographical attribution for the name; or

(8)       To make any other change expressly permitted by the Act to be made without shareholder action.

Section 8.03. Amendment of Bylaws by Board of Directors.

The corporation's board of directors may amend or repeal the corporation's bylaws unless the Act reserves the power to amend a particular bylaw provision exclusively to the shareholders.

Section 8.04. Bylaw Increasing Quorum or Voting Requirements for Directors.

(1)       A bylaw that fixes a greater quorum or voting requirement for the board of directors may be amended or repealed:

(a)       If originally adopted by the shareholders, only by the shareholders;

(b)       If originally adopted by the board of directors, either by the shareholders or by the board of directors.

(2)       A bylaw adopted or amended by the shareholders that fixes a greater quorum or voting requirement for the board of directors may provide that it may be amended or repealed only by a specified vote of either the shareholders or the board of directors.

(3)       Action by the board of directors under paragraph (1)(b) to adopt or amend a bylaw that changes the quorum or voting requirement for the board of directors must meet the same quorum requirement and be adopted by the same vote required to take action under the quorum and voting requirement then in effect or proposed to be adopted, whichever is greater.

ARTICLE IX

Records and Reports

Section 9.01. Corporate Records.

(1)       The corporation shall keep as permanent records minutes of al meetings of its shareholders and board of directors, a record of all actions taken by the shareholders or board of directors without a meeting, and a record of all actions taken by a committee of the board of directors in place of the board of directors on behalf of the corporation.

(2)       The corporation shall maintain accurate accounting records.

(3)       The corporation or its agent shall maintain a record of its shareholders in a form that permits preparation of a list of the names and addresses of all shareholders in alphabetical order by class of shares showing the number and series of shares held by each.

30

(4)       The corporation shall maintain its records in written form or in another form capable of conversion into written form within a reasonable time.

(5)       The corporation shall keep a copy of the following records:

(a)       Its articles or restated articles of incorporation and all amendments to them currently in effect;

(b)       Its bylaws or restated bylaws and all amendments to them currently in effect;

(c)       Resolutions adopted by the board of directors creating one or more classes or series of shares and finding their relative rights, preferences, and limitations, if shares issued pursuant to those resolutions are outstanding;

(d)       The minutes of all shareholders' meetings and records of all action taken by shareholders without a meeting for the past three years;

(e)       Written communications to all shareholders generally or all shareholders of a class or series within the past three years, including the financial statements furnished for the past three years;

(f)       A list of the names and business street addresses of its current directors and officers; and

(g)       Its most recent annual report delivered to the Department of State of the State of Florida.

Section 9.02. Financial Statements for Shareholders.

(1)       Unless modified by resolution of the shareholders within 120 days of the close of each fiscal year, the corporation shall furnish its shareholders annual financial statements which may be consolidated or combined statements of the corporation and one or more of its subsidiaries, as appropriate, that include a balance sheet as of the end of the fiscal year, an income statement for that year, and a statement of cash flows for that year. If financial statements are prepared for the corporation on the basis of generally-accepted accounting principles, the annual financial statements must also be prepared on that basis.

(2)       If the annual financial statements are reported upon by a public accountant, his report must accompany them. If not, the statements must be accompanied by a statement of the president or the person responsible for the corporation's accounting records:

(a)       Stating his reasonable belief whether the statements were prepared on the basis of generally-accepted accounting principles and, if not, describing the basis of preparation; and

31

(b)       Describing any respects in which the statements were not prepared on a basis of accounting consistent with the statements prepared for the preceding year.

(3)       The corporation shall mail the annual financial statements to each shareholder within 120 days after the close of each fiscal year or within such additional time thereafter as is reasonably necessary to enable the corporation to prepare its financial statements, if for reasons beyond the corporation's control, it is unable to prepare its financial statements within the prescribed period. Thereafter, on written request from a shareholder who was not mailed the statements, the corporation shall mail him the latest annual financial statements.

Section 9.03. Other Reports to Shareholders.

(1)       If the corporation indemnifies or advances expenses to any director, officer, employee or agent otherwise than by court order or action by the shareholders or by an insurance carrier pursuant to insurance maintained by the corporation, the corporation shall report the indemnification or advance in writing to the shareholders with or before the notice of the next shareholders' meeting, or prior to such meeting if the indemnification or advance occurs after the giving of such notice but prior to the time such meeting is held, which report shall include a statement specifying the persons paid, the amounts paid, and the nature and status at the time of such payment of the litigation or threatened litigation.

(2)       If the corporation issues or authorizes the issuance of shares for promises to render services in the future, the corporation shall report in writing to the shareholders the number of shares authorized or issued, and the consideration received by the corporation, with or before the notice of the next shareholders' meeting.

Section 9.04. Annual Report for Department of State.

(1)       The corporation shall deliver to the Department of State of the State of Florida for filing a sworn annual report on such forms as the Department of State of the State of Florida prescribes that sets forth the information prescribed by Section 607.1622 of the Act.

(2)       Proof to the satisfaction of the Department of State of the State of Florida on or before July 1 of each calendar year that such report was deposited in the United States mail in a sealed envelope, properly addressed with postage prepaid, shall be deemed in compliance with this requirement.

(3)       Each report shall be executed by the corporation by an officer or director or, if the corporation is in the hands of a receiver or trustee, shall be executed on behalf of the corporation by such receiver or trustee, and the signing thereof shall have the same legal effect as if made under oath, without the necessity of appending such oath thereto.

(4)       Information in the annual report must be current as of the date the annual report is executed on behalf of the corporation.

32

(5)       Any corporation failing to file an annual report which complies with the requirements of this section shall not be permitted to maintain or defend any action in any court of this state until such report is filed and all fees and taxes due under the Act are paid and shall be subject to dissolution or cancellation of its certificate of authority to do business as provided in the Act.

ARTICLE X

Miscellaneous

Section 10.01. Definition of the Act.

All references contained herein to the "Act" or to sections of the Act shall be deemed to be in reference to the Florida Business Corporation Act.

Section 10.02. Application of Florida Law.

Whenever any provision of these bylaws is inconsistent with any provision of the Act, as it may be amended from time to time, then in such instance Florida law shall prevail.

Section 10.03. Fiscal Year.

The fiscal year of the corporation shall be determined by resolution of the board of directors.

Section 10.04. Conflicts with Articles of Incorporation.

In the event that any provision contained in these bylaws conflicts with any provision of the corporation's articles of incorporation, as amended from time to time, the provisions of the articles of incorporation shall prevail and be given full force and effect, to the full extent permissible under the Act.

Section 10.05. Emergency By-Laws.

In the event of an emergency, as currently or hereafter defined or described under Section 607.02.07 of the Act, and if there are no officers or directors in office or serving based on death, incapacity or resignation, the corporation, acting through shareholders representing a majority in interest of shares and who purport to be shareholders of the corporation, shall have a right to designate one or more persons to serve as director or directors of the corporation until formal procedures can be established in order to elect a director or directors to serve on the board of directors of the corporation. In the event the number of shareholders shall ultimately be determined not to be a majority in interest of the shareholder interest of the corporation, the actions taken by such shareholders, on the good faith belief that they are acting as a majority in interest of the shareholders of the corporation, shall be deemed valid and proper.

33

Section 10.06. Forum for Adjudication of Disputes.

Unless the corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the corporation to the corporation or the corporation’s shareholders, (iii) any action asserting a claim arising pursuant to any provision of the Act, or (iv) any action asserting a claim governed by the internal affairs doctrine shall be a state or federal court located in the county in which the principal office of the corporation in the State of Florida is established, in all cases subject to the court’s having personal jurisdiction over the indispensable parties named as defendants. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the corporation shall be deemed to have notice of and consented to the provisions of this Section 10.06 of Article X.

34

EX-10.5

Exhibit 10.5

BILL OF SALE AND INTELLECTUAL PROPERTY ASSIGNMENT

AND

GRANT-BACK LICENSE

AGREEMENT

This Bill of Sale and Intellectual Property Assignment and Grant-Back License Agreement (“this Assignment”) is entered into on the Closing Date by and between:

Schlumberger Technology Corporation, a Texas corporation, (“US Purchaser”), Schlumberger Canada Limited, a Canadian entity, (“Canadian Purchaser”) and Schlumberger B.V., an entity organized under the laws of the Netherlands (“Overseas Purchaser”) and

Enviro Voraxial Technology, Inc., an Idaho corporation and Florida Precision Aerospace, Inc., a Florida corporation (collectively “Sellers”).

Whereas, US Purchaser, Canadian Purchaser, and Overseas Purchaser and Sellers entered into that certain Technology Purchase Agreement (“the TPA”) on March __, 2017; and

Whereas, Article 2 of the TPA outlines US Purchaser’s, Canadian Purchaser’s, and Overseas Purchaser’s and Sellers’ rights and obligations with respect to the Purchased Assets, including the Purchased Intellectual Property.

Now therefore, pursuant to the TPA and in consideration of the promises and the mutual covenants of the parties set forth in the TPA and herein, US Purchaser, Canadian Purchaser, and Overseas Purchaser and Sellers, intending to the legally bound, hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1         All terms used but not defined herein have the meanings set forth in the TPA. The following definitions from the TPA are reproduced below for ease of reference, and do not, and are not meant to, vary the definitions in the TPA. In case of conflict the definitions in the TPA control.

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such Person, and the term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise.

1

“Business” means the businesses of Sellers related to phase or constituent sensing or separation (e.g., liquid-liquid, liquid-solid or liquid-gas separation and gas or liquid sensing), including all product lines and services related thereto and including the Voraxial product line and services.

“Documents” means any and all files, documents, instruments, computer programs on a tangible medium, papers, books, reports, records, tapes, microfilms, templates, vendor lists, supply-chain documents, photographs, letters, budgets, forecasts, ledgers, journals, customer lists, regulatory filings, operating data and plans, technical documentation (e.g., design specifications, engineering files, functional requirements, operating instructions, source code, logic manuals, flow charts), user documentation (e.g., installation guides, user manuals, training materials, release notes, working papers), marketing documentation (e.g., sales brochures, flyers, pamphlets, web pages, etc.), and other similar materials, in each case whether or not in electronic form.

“Lien” means any lien, pledge, mortgage, deed of trust, security interest, claim, lease, charge, option, right of first refusal, easement, servitude, proxy, voting trust or agreement, bond-holder rights, transfer restriction under any shareholder or similar agreement, encumbrance or any other restriction or limitation whatsoever.

“Oil-and-Gas Market” means a market related to the exploration, drilling, production, processing, separation, transportation, distribution or refining of hydrocarbons, including the entirety of the upstream, midstream and downstream petroleum and natural-gas markets.

“Purchased Intellectual Property” means all intellectual property rights (including the right to sue and collect past damages for infringement or misappropriation thereof) owned by, used by, or assigned to Sellers in connection with the Business and arising from or in respect of the following, whether protected, created or arising under the laws of the United States or any other jurisdiction:

(i)      all patents and patent applications (whether active, expired or abandoned) worldwide, including continuations, divisionals, counterparts, continuations-in-part, or reissues of patent applications and patents issuing thereon or related thereto (collectively, “Patents”),

(ii)     all trademarks, service marks, trade names, service names, brand names, trade dress rights, logos, internet domain names and corporate names and general intangibles of a like nature, together with the goodwill associated with any of the foregoing, and all applications, registrations and renewals thereof, (collectively, “Marks”).

(iii)    all copyrights (and, if any, registrations and applications therefor), works of authorship and mask work rights (collectively, “Copyrights”).

2

(iv)   all confidential Technology and other proprietary and confidential information in possession of Sellers used in connection with the Business (collectively, “Trade Secrets”), and

(v)    all Software and non-confidential Technology in possession of Sellers used in connection with the Business.

“Sellers” means Enviro Voraxial Technology, Inc. and Florida Precision Aerospace, Inc., both collectively and each individually.

“Software” means any and all (i) computer programs, including any and all software implementations of algorithms, firmware, networking protocols, models and methodologies, whether in source code or object code, (ii) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise, (iii) descriptions, flow-charts and other work product used to design, plan, organize and develop any of the foregoing, (iv) screens, user interfaces, report formats, development tools, templates, menus, buttons, icons and other elements related to human-machine interfaces, and (v) all documentation including user manuals and other training documentation related to any of the foregoing.

“Technology” means all discoveries, concepts, designs, drawings, formulae, algorithms, procedures, compositions, methods, databases, techniques (including manufacturing and production processes and techniques), ideas, know-how, show-how, research and development, technical data, programs, subroutines, specifications, technical information, commercial information (e.g., customer lists, supplier lists, supply-chain information, pricing and cost information, and business and marketing plans and proposals) processes, inventions (whether patentable or unpatentable and whether or not reduced to practice), creations, improvements, works of authorship and other similar materials, and all recordings, graphs, drawings, reports, analyses, and other writings, and other tangible embodiments of the foregoing, in any form whether or not specifically listed herein, and all related technology.

ARTICLE II

ASSIGNMENT

2.1           Subject to the terms and conditions of the TPA, Sellers, as of the Closing Date, for good and valuable consideration, the receipt of sufficiency of which is hereby acknowledged, hereby sell, assign, grant, and conveys, free and clear of all Liens, all of Sellers’ right tide and interest in the Purchased Assets (which includes Purchased Intellectual Property but which excludes the Excluded Assets) to the US Purchaser, Canadian Purchaser, and Overseas Purchaser to their own use and benefit, forever: as follows:

● To US Purchaser, all U.S. rights in and to the Purchased Assets.

● To Canadian Purchaser, all Canadian rights in and to the Purchased Assets.

● To Overseas Purchaser, all other rights in and to the Purchased Assets.

3

2.2           For Purchased Assets that are Purchased Intellectual Property, Sellers’ foregoing assignment pursuant to Section 2.1 includes, but is not limited to:

a.	the Patents set forth on Schedule 2.2(a) of this Assignment;
b.	with respect to the Patents assigned under Section 2.1 or Section 2.2(a), the right to:
	i.	the invention claimed therein;
	ii.	all letters patents that may be granted thereon;
	iii.	all reissues, reexaminations, continuations, counterparts continuations-in-part, divisional and extensions thereof; and
	iv.	apply for any patents, file any patent applications or claim priority based thereon, under the provisions of any law, convention or treaty; and
c.	the rights to the registered Marks set forth on Schedule 2.2(c), including the goodwill of the business associated therewith and symbolized thereby.

For the avoidance of doubt, Section 2.2 merely sets forth certain Purchased Intellectual Property and rights thereto assigned pursuant to Section 2.1 and are not limiting.

2.3               The assignments in Section 2.1 and Section 2.2 are complete and undivided, and include the right (a) in and to all income, royalties, damages, claims and payments now or hereafter due or payable with respect thereto, and (b) to sue or otherwise bring or maintain, worldwide, any action, whether pending or uninitiated, for any past, present or future infringement of, breach of obligation regarding, or misappropriation of the Purchased Intellectual Property and the right to collect and receive all benefits and damages therefrom.

2.4               Sellers agree that they shall, upon the request of and at the expense of US Purchaser, Canadian Purchaser, and Overseas Purchaser, or any Affiliate thereof:

a.	execute any documents necessary to secure, maintain or enforce US Purchaser’s, Canadian Purchaser’s, or Overseas Purchaser’s rights in the Purchased Intellectual Property; and
b.	cooperate, in good faith with the US Purchaser, Canadian Purchaser, or Overseas Purchaser, including joining a suit if necessary, to effectuate and enforce US Purchaser’s, Canadian Purchaser’s, and Overseas Purchaser’s rights in the Purchased Intellectual Property.

4

ARTICLE III

Grant-Back License

3.1           US Purchaser hereby grants to Enviro Voraxial Technology, Inc., starting on the Closing Date, the following rights:

a.	a non-exclusive, royalty-free license (nontransferable, but sublicensable to Sellers’ Affiliates) to, in the U.S., make, use, sell, offer for sale, and import products and processes embodying the Purchased Intellectual Property outside the Oil-and-Gas Market; and
b.	a non-exclusive, royalty-free license (nontransferable, but sublicensable to Sellers’ Affiliates) to, in the U.S., make, use, sell, offer for sale, and import products and processes embodying the Purchased Intellectual Property in the Oil-and-Gas Market, but only to the extent necessary to:
	i.	repair or service, but not remanufacture, any goods incorporating the Purchased Intellectual Property that Sellers sold to third Persons prior to Closing or on or after Closing in accordance section 3.1(b)(ii) below; or
	ii.	fulfill, on or after Closing, any obligation identified in Schedule 5.6(j) to deliver goods incorporating the Purchased Intellectual Property;
c.	a right to, in the U.S., use any tangible copies of the Documents or Technology assigned to Purchasers that remain in Sellers’ possession, but solely for the purpose of effecting Sellers’ rights described in Sections 3.1(a) and 3.1(b) above;
d.	to the extent the Purchased Intellectual Property is a Copyright, a nonexclusive, royalty-free license (nontransferable, but sublicensable to Sellers’ Affiliates) to, in the U.S., copy and make derivative works, but solely for the purpose of effecting Sellers’ rights described in Section 3.1(a) and 3.1(b) above; and
e.	a non-exclusive, royalty tree license to, in the U.S., use the Marks in commerce for a period of six-months immediately after the Closing Date, but only to the extent necessary to 1) facilitate Sellers’ transition to new trademarks and 2) to further Sellers’ rights under Sections 3.1(a) and 3.1(b).

3.2          Canadian Purchaser hereby grants to Enviro Voraxial Technology, Inc., starting on the Closing Date, the following rights:

a. a non-exclusive, royalty-free license (nontransferable, but sublicensable to Sellers’ Affiliates) to, in Canada, make, use, sell, offer for sale, and import products and processes embodying the Purchased Intellectual Property outside the Oil-and-Gas Market; and

5

b.	a non-exclusive, royalty-free license (nontransferable, but sublicensable to Sellers’ Affiliates) to, in Canada, make, use, sell, offer for sale, and import products and processes embodying the Purchased Intellectual Property in the Oil-and-Gas Market, but only to the extent necessary to:
	i.	repair or service, but not remanufacture, any goods incorporating the Purchased Intellectual Property that Sellers sold to third Persons prior to Closing or on or after Closing in accordance section 3.2(b)(ii) below; or
	ii.	fulfill, on or after Closing, any obligation identified in Schedule 5.60 to deliver goods incorporating the Purchased Intellectual Property;
c.	a right to, in Canada, use any tangible copies of the Documents or Technology assigned to Purchasers that remain in Sellers’ possession, but solely for the purpose of effecting Sellers’ rights described in Sections 3.2(a) and 3.2(b) above;
d.	to the extent the Purchased Intellectual Property is a Copyright, a nonexclusive, royalty-free license (nontransferable, but sublicensable to Sellers’ Affiliates) to, in Canada, copy and make derivative works, but solely for the purpose of effecting Sellers’ rights described in Section 3.2(a) and 3.2(b) above; and
e.	a non-exclusive, royalty free license to, in Canada, use the Marks in commerce for a period of six-months immediately after the. Closing Date, but only to the extent necessary to 1) facilitate Sellers’ transition to new trademarks and 2) to further Sellers’ rights under Sections 3.2(a) and 3.2(b).

3.3.          Overseas Purchaser hereby grants to Enviro Voraxial Technology, Inc., starting on the Closing Date, the following rights:

a.	a non-exclusive, royalty-free license (nontransferable, but sublicensable to Sellers’ Affiliates) to, outside tire U.S. and Canada, make, use, sell, offer for sale, and import products and processes embodying the Purchased Intellectual Property outside the Oil-and-Gas Market; and
b.	a non-exclusive, royalty-free license (nontransferable, but sublicensable to Sellers’ Affiliates) to, outside the U.S. and Canada, make, use, sell, offer for sale, and import products and processes embodying the Purchased Intellectual Property in the Oil-and-Gas Market, but only to the extent necessary to:
	i.	repair or service, but not remanufacture, any goods incorporating the Purchased Intellectual Property that Sellers sold to third Persons prior to Closing or on or after Closing in accordance section 3.3(b)(ii) below; or

6

	ii.	fulfill, on or after Closing, any obligation identified in Schedule 5.6(j) to deliver goods incorporating the Purchased Intellectual Property;
c.	a right to, outside the U.S. and Canada, use any tangible copies of the Documents or Technology assigned to Purchasers that remain in Sellers’ possession, but solely for the purpose of effecting Sellers’ rights described in Sections 3.3(a) and 3.3(b) above;
d.	to the extent the Purchased Intellectual Property is a Copyright, a nonexclusive, royalty-free license (nontransferable, but sublicensable to Sellers’ Affiliates) to, outside the U.S. and Canada, copy and make derivative works, but solely for the purpose of effecting Sellers’ rights described in Section 3.3(a) and 3.3(b) above; and
e.	a non-exclusive, royalty free license to, outside the U.S. and Canada, use the Marks in commerce for a period of six-months immediately after the Closing Date, but only to the extent necessary to 1) facilitate Sellers’ transition to new trademarks and 2) to further Sellers’ rights under Sections 3.2(a) and 3.2(b).

3.4                Except as expressly provided in Section 3.1, Section 3.2, and Section 3.3 above, Sellers retain no right to or to use the Purchased Assets (including the Marks), implied or otherwise.

3.5               Notwithstanding the foregoing or anything else in this Agreement, Sellers shall not exercise their rights under Section 3.1, Section 3.2, or Section 3.2 above if that exercise of their rights will or is likely to cause products or processes embodying the Purchased Intellectual Property to enter the Oil-and-Gas market, excluding any such entry pursuant to Section 3.1(b), 3.2(b), or 3.3(b).

ARTICLE IV

CONFIDENTIALITY

4.1.             Sellers shall take all reasonable measures to ensure the confidentiality and prevent the improper use of all Trade Secrets. To that end, Sellers, its future subsidiaries, and employees shall not disclose or use the Trade Secrets unless such disclosure or use is necessary to employ a right under a license granted to Seller pursuant to this Assignment. And, in the event of such disclosure or use, Seller shall ensure the receiving Person shall and can maintain, using at least a reasonable degree of care, the secrecy and police any improper use of the disclosed Trade Secrets.

4.2.              The covenants and undertakings contained in this Section 4.1 relate to matters which are of a special, unique and extraordinary character, and a violation or threatened violation of any of the terms of this Section 4.1 will cause irreparable injury to the US Purchaser, Canadian Purchaser, and Overseas Purchaser, the amount of which cannot be adequately compensated. Therefore, US Purchaser, Canadian Purchaser, or Overseas Purchaser will be entitled to an injunction, restraining order or other equitable relief from any court of competent jurisdiction in the event of any actual or threatened breach of this Section 4.1.

7

The rights and remedies provided by this Section 4.1 are cumulative and in addition to any other rights and remedies which US Purchaser, Canadian Purchaser, or Overseas Purchaser may have hereunder or at law or in equity. In the event that US Purchaser, Canadian Purchaser, or Overseas Purchaser were to seek damages for any breach of this Section 4.1, the portion of the Purchase Price which is allocated by the parties to the foregoing covenant shall not be considered a measure of or limit on such damages.

ARTICLE V

GENERAL PROVISIONS

5.1                This Assignment shall be governed, construed and enforced in accordance with the laws of the State of Delaware, without regard to Delaware’s rules of conflicts of law.

5.2                The parties hereto hereby irrevocably submit to the exclusive jurisdiction of any federal or state court located within Harris County, Texas over any dispute arising out of or relating to this Assignment or any of the transactions contemplated hereby, and waive any claims a party may have regarding such court’s lack of personal jurisdiction over that party.

5.3                If any provision of this Assignment is held to be illegal or unenforceable, such provision shall be limited or eliminated to the minimum extent necessary so that the remainder of this Assignment will continue in full force and effect and be enforceable. The parties agree to negotiate in good faith an enforceable substitute provision for any invalid or unenforceable provision that most nearly achieves the intent of such provision.

5.4                No modification or amendment to this Assignment, nor any waiver of any rights, will be effective unless assented to in writing by the party to be charged, and the waiver of any breach or default will not constitute a waiver of any other right hereunder or any subsequent breach or default.

5.5                This Assignment is entered into pursuant to the TPA, and the provisions herein should be interpreted in a manner consistent with the TPA. To the extent a provision of this Assignment conflicts with the TPA, the TPA controls. Any rule of construction to the effect that ambiguities are to be resolved against the drafting party will not be applied in the construction or interpretation of this Assignment. As used in this Assignment, the words “include” and “including” and variations thereof, will not be deemed to be terms of limitation, but rather will be deemed to be followed by the words “without limitation.”

5.6               This Assignment shall inure to the benefit of, and be binding on, the parties and their legal representatives, successors, and assigns.

5.7                This Assignment may be executed in counterparts or duplicate originals, both of which shall be regarded as one and the same instrument, and which shall be the official and governing version in the interpretation of this Assignment This Assignment may be executed by facsimile signatures and such signatures shall be deemed to bind each party as if they were original signatures.

8

5.8           Except for the TPA and other contemporaneous agreements executed pursuant thereto, this Assignment contains the entire agreement between the Parties regarding the subject matter contained herein.

9

IN WITNESS WHEREOF, the Parties have caused this Assignment to be signed by their duly authorized representatives:

Schlumberger Technology Corporation	Enviro Voraxial Technologies, Inc.
Signature	Signature
	John Di Bella
Printed Name	Printed Name
	President & CEO
Title	Title
	5/31/17
Date	Date
Schlumberger Canada Limited	Florida Precision Aerospace, Inc.
Signature	Signature
	John Di Bella
Printed Name	Printed Name
	President & CEO
Title	Title
	5/31/17
Schlumberger B.V.	Date
Signature
Printed Name
Title

10

IN WITNESS WHEREOF, the Parties have caused this Assignment to be signed by their duly authorized representatives:

Schlumberger Technology Corporation	Enviro Voraxial Technologies, Inc.
Signature	Signature
Printed Name	Printed Name
Vice President
Title	Title
June 2, 2017
Date	Date
Schlumberger Canada Limited	Florida Precision Aerospace, Inc.
Signature	Signature
Printed Name	Printed Name
Title	Title
	Date
Schlumberger B.V.
Signature
Printed Name
Title

11

IN WITNESS WHEREOF, the Parties have caused this Assignment to be signed by their duly authorized representatives:

Schlumberger Technology Corporation	Enviro Voraxial Technologies, Inc.
Signature	Signature
Printed Name	Printed Name
Title	Title
Date	Date
Schlumberger Canada Limited	Florida Precision Aerospace, Inc.
Signature	Signature
Mark O’Byrne
Printed Name	Printed Name
President
Title	Title
Schlumberger B.V.	Date
Signature
Printed Name
Title

12

Schlumberger Technology Corporation	Enviro Voraxial Technologies, Inc.
Signature	Signature
Printed Name	Printed Name
Title	Title
Date	Date
Schlumberger Canada Limited	Florida Precision Aerospace, Inc.
Signature	Signature
Printed Name	Printed Name
Tide	Title
Schlumberger B.V.	Date
Signature
Wim Janssens
Printed Name
Director
Title
31 May 2017

13

Schedules 2.2(a) and (c)

Listing of Certain Intellectual Property

1.	Patents and Patent Applications
	a.	U.S. Patent No. 5,084,189 (expired; no patent assignment document required);
	b.	U.S. Patent No. 5,904,840;
	c.	U.S. Patent No. 6,248,231;
	d.	U.S. Patent No. 7,727,386;
	e.	U.S. Patent Appl. No. 13/153,951 (abandoned);
	f.	U.S. Patent Appl. No. 12/288,850 (abandoned);
	g.	U.S. Patent Appl. No. 14/216,748 (abandoned before publication);
	h.	U.S. Patent Appl. No. 14/216,864 (abandoned before publication);
	i.	U.S. Patent Appl. No. 15/588,132 (refiling of USSN 14/216,748); and
	j.	U.S. Patent Appl. No. 15/588,168 (refiling of USSN 14/216,864).
2.	Trademarks
	a.	Voraxial®, U.S. Trademark Registration No. 4036636, and U.S. Trademark Serial No. 76704144.
	b.	All unregistered U.S. trademark rights to the Voraxial trademark.

i

Schedule 5.6(j) 

Existing Contract Orders

1.      None.

ii 

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John A. DiBella, certify that:

1.	I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2020 of Enviro Technologies U.S., Inc.
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

March 31, 2021	/s/ John A. DiBella
	John A. DiBella, Chief Executive Officer, principal executive officer

EX-31.2

Exhibit 31.2 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT

TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John A. DiBella, certify that:

1.	I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2020 of Enviro Technologies U.S., Inc.
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

March 31, 2021	/s/ John A. DiBella
	John A. DiBella, Chief Financial Officer, principal financial and accounting officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the accompanying Annual Report of Enviro Technologies U.S., Inc. (the “Company”) on Form 10-K for the year ending December 31, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John DiBella, Chief Executive Officer, Chief Financial Officer, principal executive officer and principal financial and accounting officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and
2.	The information contained in the Report fairly presents, in all material respects, the financial conditions and results of operations of the Company.

March 31, 2021	/s/ John A. DiBella
	John A. DiBella, Chief Executive Officer, principal executive officer, Chief Financial Officer, principal financial and accounting officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Cover - USD ($)	12 Months Ended
	Dec. 31, 2020	Mar. 31, 2021	Jun. 30, 2020
Cover [Abstract]
Entity Registrant Name	Enviro Technologies U.S., Inc.
Entity Central Index Key	0001043894
Document Type	10-K
Entity Incorporation, State or Country Code	ID
Entity File Number	000-30454
Document Period End Date	Dec. 31, 2020
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity a Well-known Seasoned Issuer	No
Entity a Voluntary Filer	No
Entity Reporting Status Current	Yes
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Small Business	true
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Public Float			$ 557,959
Entity Common Stock, Shares Outstanding		4,950,125
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2020

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2020	Dec. 31, 2019
CURRENT ASSETS:
Cash and cash equivalents	$ 336,564	$ 674,844
Accounts receivable, net	1,176	297,755
Inventory, net	113,335	117,984
Prepaid expenses	12,174	20,579
Total current assets	463,249	1,111,162
FIXED ASSETS, NET	312,468	349,377
OTHER ASSETS
Operating lease asset	200,066	243,039
Security deposits	10,143	10,143
Total other assets	210,209	253,182
Total Assets	985,926	1,713,721
CURRENT LIABILITIES
Accounts payable and accrued expenses	323,481	427,492
Accrued expenses - related party	706,315	610,965
Loans payable, current portion	65,867
Equipment note payable, current portion	71,812	68,276
Operating lease liability, current portion	46,255	42,973
Total current liabilities	1,213,730	1,149,706
LONG-TERM LIABILITIES
Operating lease liability, less current portion	153,811	200,066
Equipment note payable, less current portion	103,586	157,896
Loans payable, less current portion	196,104
Total long term liabilities	453,501	357,962
Total Liabilities	1,667,231	1,507,668
COMMITMENTS AND CONTINGENCIES (See Note I)
SHAREHOLDERS' EQUITY (DEFICIENCY)
Common stock, $.001 par value, 250,000,000 shares authorized; 4,950,125 and 3,578,625 shares issued and outstanding as of December 31, 2020 and December 31, 2019	4,951	3,579
Additional paid-in capital	15,236,173	15,094,095
Accumulated deficit	(15,922,429)	(14,891,621)
Total shareholders' equity (deficiency)	(681,305)	206,053
Total liabilities and shareholders' equity (deficiency)	$ 985,926	$ 1,713,721

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized	250,000,000	250,000,000
Common stock, issued	4,950,125	3,578,625
Common stock, outstanding	4,950,125	3,578,625

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Statement [Abstract]
Revenues, net	$ 79,965	$ 2,824,083
Cost of goods sold	47,897	1,172,874
Gross profit	32,068	1,651,209
Expenses:
Selling, general and administrative	333,575	336,686
Payroll expenses	536,733	469,815
Professional fees	187,549	233,047
Research and development	2,601
Total costs and expenses	1,060,458	1,039,548
(Loss)/Income from operations	(1,028,390)	611,661
Other Income and (Expenses):
Other income	8,000
Interest expense	(10,418)	(17,624)
Total other expense	(2,418)	(17,624)
Net (loss)/ income before provision for income taxes	(1,030,808)	594,037
Provision for income taxes
Net (loss)/ income	$ (1,030,808)	$ 594,037
Net (loss)/ income per share
Basic (in dollars per share)	$ (0.24)	$ 0.17
Diluted (in dollars per share)	$ (0.24)	$ 0.13
Weighted average number of common shares
Basic (in shares)	4,346,815	3,578,625
Diluted (in shares)	4,346,815	4,592,111

XML

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY) - USD ($)	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Total
Balance at beginning at Dec. 31, 2018	$ 3,579	$ 15,094,095	$ (15,485,658)	$ (387,984)
Balance at beginning (in shares) at Dec. 31, 2018	3,578,625
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)			594,037	594,037
Balance at ending at Dec. 31, 2019	$ 3,579	15,094,095	(14,891,621)	206,053
Balance at ending (in shares) at Dec. 31, 2019	3,578,625
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock issued for exercise of options in exchange for accrued expenses - related parties and accounts payable	$ 1,337	132,313		$ 133,650
Stock issued for exercise of options in exchange for accrued expenses - related parties and accounts payable (in shares)	1,336,500			1,336,500
Stock issued for services to employees	$ 35	9,765		$ 9,000
Stock issued for services to employees (in shares)	35,000
Net income (loss)			(1,030,808)	(1,030,808)
Balance at ending at Dec. 31, 2020	$ 4,951	$ 15,236,173	$ (15,922,429)	$ (681,305)
Balance at ending (in shares) at Dec. 31, 2020	4,950,125

XML

SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Cash Flows From Operating Activities:
Net (loss)/ income	$ (1,030,808)	$ 594,037
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation	45,137	45,059
Stock issued for services of consultant	9,800
Provision for bad debt	6,790
Provision for slow moving inventory	8,848	24,185
Amortization for operating lease	42,973	41,769
Changes in assets and liabilities:
Accounts receivable	289,789	(293,716)
Inventory	(4,199)	234,149
Prepaid expenses	8,405	186,671
Accounts payable, accrued expenses and deposits	(62,011)	(37,070)
Accrued expenses - related party	187,000	(202,796)
Operating lease liability	(42,973)	(41,769)
Deposits from customers		(1,035,706)
Net cash used in operating activities	(541,249)	(485,187)
Cash Flows From Investing Activities:
Purchase of equipment	(8,228)
Net cash used in Investing Activities	(8,228)
Cash Flows From Financing Activities:
Loan payable issuance - PPP & EIDL	261,971
Repayments of Equipment Note Payable	(50,774)	(63,832)
Net Cash provided by (used in) financing activities	211,197	(63,832)
Net decrease in cash and cash equivalents	(338,280)	(549,019)
Cash and cash equivalents, beginning of year	674,844	1,223,863
Cash and cash equivalents, end of year	336,564	674,844
Supplemental Disclosure:
Cash paid during the year for interest	10,418	17,624
Cash paid during the year for taxes
Supplemental Disclosure of non-cash investing and financing activities:
Operating lease asset obtained in exchange for operating lease liability		284,808
Stocks issued with exercise of options in exchange for accounts payable	42,000
Stocks issued with exercise of options for accrued expenses - related party	$ 91,650

XML

ORGANIZATION AND OPERATIONS

12 Months Ended

Dec. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND OPERATIONS

NOTE A - ORGANIZATION AND OPERATIONS

Enviro Technologies U.S., Inc., a Florida corporation (the “Company”), is a manufacturer and provider of environmental and industrial separation technology. The Company developed, and now manufactures and sells the V-Inline Separator, a technology that efficiently separates liquid/liquid, liquid/solid or liquid/liquid/solid fluid streams with distinct specific gravities. Current and potential commercial applications and markets include mining, utilities, manufacturing, waste-to-energy among other industries. We also, through a Grant Back License with Cameron Solutions signed in June 2017, can utilize specific patents that were sold to Schlumberger under Technology Purchase Agreement for industries outside of oil and gas.

Florida Precision Aerospace, Inc., a Florida corporation (“FPA”), is the wholly-owned subsidiary of the Company and is used to manufacture, assemble and test the V-Inline Separator. On August 20, 2020, the Company’s shareholders approved a change of domicile of the Company from Idaho to Florida. On December 28, 2020, the Company received the file stamped Certificate of Domestication and Articles of Incorporation from the Secretary of State of Florida, which was effective on December 18, 2020, thereby completing the change in domicile from Idaho to Florida. In connection with the change in domicile from Idaho to Florida, the Company’s name changed to “Enviro Technologies U.S., Inc.”.

XML

GOING CONCERN

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

GOING CONCERN

NOTE B – GOING CONCERN

Since entering into the Technology Purchase Agreement, Supply Agreement and Grant Back License in June 2017 (see Note I), we have generated limited revenues, significantly less than we anticipated, under the terms of any of these agreements. The Supply Agreement expired in June 2020. As we did not generate significant revenues from this agreement, we did not pursue Cameron for an extension in its current state. The Company’s non-compete agreement in the oil and gas industry also expired in June 2020 which allows us to pursue projects in the oil and gas industry. However, we may continue to work together on a project by project basis with Cameron until such time a new agreement is reached, if at all. The Grant Back License did not expire. There are no assurances that the Grant Back License will ever generate any material ongoing revenues. We intend to continue to seek opportunities for the V-Inline Separator. Our revenues declined approximately 97% for the year ended December 31, 2020 as compared to the year ended December 31, 2019. We reported a net loss for 2020 of $1,030,808 as compared to net income of $597,037 in 2019. Our ability to increase our revenues in future periods will depend on a number of factors, many of which are beyond our control, including our ability to generate sales of the V-Inline Separator, our ability to leverage the Grant Back License to generate additional revenues, the continuing impact of the Covid-19 pandemic on the economy in general and the Company in particular, competitive efforts and other general economic trends. There are no assurances we will be able to increase our revenues from 2020 levels or report profitable operations in the future. Further, the lingering economic impact of the Covid-19 pandemic and the weak oil prices during the year 2020 may have a continued negative effect on the potential for sales of V-inline Separators.

At December 31, 2020, we had a working capital deficit of $750,481, an accumulated deficit of $15,922,429 and used $541,249 in net cash in our operations during the year ended December 31, 2020. We do not have any external sources of liquidity. In an effort to conserve our cash resources to sustain our operations until such time as we are able to significantly increase our revenues, we have reduced employee hours and accrued a portion of management’s salary. There are no assurances, however, that these efforts will be sufficient to permit us to pay our operating expenses. In that event, we may be required to scale back or cease operations, sell or liquidate our assets and possibly seek bankruptcy protection.

As a result of the above, there is substantial doubt about the ability of the Company to continue as a going concern and the accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the parent company, Enviro Technologies U.S., Inc., and its wholly-owned subsidiary, Florida Precision Aerospace, Inc. All significant intercompany accounts and transactions have been eliminated.

Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates include the valuation of deferred tax assets, allowance for doubtful accounts, allowance for inventory obsolescence and valuation of stock-based compensation. Actual results may differ.

Revenue Recognition

We account for our revenues in accordance with the Accounting Standard Codification Topic 606, “Revenue from Contracts with Customers” and all the related amendments. This standards core principal is that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to receive.

The Company derives its revenue from the sale of the V-Inline Separators and some high precision manufacturing projects. We have also generated revenues from the sale of the Voraxial Separator to one customer, Schlumberger, through the Supply Agreement which expired in June 2020. We pursued designing, manufacturing and selling face shields during this quarantine period and are constantly seeking other sources of revenues.

Revenues that are generated from high precision manufacturing projects are recognized when we satisfy a performance obligation by transferring control of the promised goods or services to our customers at a point in time, in an amount specified in the contract with our customer and that reflects the consideration we expect to be entitled to in exchange for those goods or services. The Company also assesses our customer’s ability and intention to pay, which is based on a variety of factors including our customer’s historical payment experience and financial condition.

Revenues that are generated from sales of V-Inline separators, auxiliary equipment and parts and face shields are typically recognized upon shipment. Our standard agreements generally do not include customer acceptance or post shipment installation provisions. However, if such provisions have been included or there is an uncertainty about customer order, revenue is deferred until we have evidence of customer order and all terms of the agreement have been complied with. As of December 31, 2020, and December 31, 2019, respectively, there was $0 of deposits from customers.

Accounts Receivable

Accounts receivable are presented net of an allowance for doubtful accounts. The company maintains allowances for doubtful accounts for estimated losses. The company reviews the accounts receivable on a periodic basis and makes general and specific allowance when there is a doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, customer’s historical payment history, and its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collections. At December 31, 2020 and 2019, the Company has $7,044 and $254 in the allowance for doubtful accounts, respectively.

Fair Value of Instruments

The carrying amounts of the Company's financial instruments, including cash and cash equivalents, inventory, prepaid expense, accounts payable, accrued expenses and deposits from customers at December 31, 2020 and 2019, approximate their fair value because of their relatively short-term nature.

ASC 820 “Disclosures about Fair Value of Financial Instruments,” requires disclosures of information regarding the fair value of certain financial instruments for which it is practicable to estimate the value. For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale of liquidation.

The Company accounts for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value is observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1—inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. We have no Level 1 instruments as of December 31, 2020 and 2019.

Level 2—inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and forward and spot prices for currencies and commodities. We have no Level 2 instruments as of December 31, 2020 and 2019.

Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. We have no Level 3 instruments as of December 31, 2020 and 2019.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. The Company maintains its cash balances with various financial institutions. Balances at these institutions may at times exceed the Federal Deposit Insurance Corporate limits. As of December 31, 2020 and 2019, we have a cash concentration in excess of the FDIC limit of $80,014 and $398,673, respectively.

Inventory

Inventory primarily consists of components, including raw material and finished parts for the V-Inline Separator and face shields and is priced at lower of cost or net realizable value. Net realizable value is defined as sales price less cost of completion and disposable and transportation. Inventory may include units being rented on a short term basis or components held by third parties in connection with pilot programs as part of the continuing evaluation by such third parties as to the effectiveness and usefulness of the service to be incorporated into their respective operations. The third parties do not have a contractual obligation to purchase the equipment. The Company maintains the title and risk of loss. Provisions have been made to reduce excess or obsolete inventories to their net realizable value. Therefore, these units are included in the inventory of the Company. As of December 31, 2020, and December 31, 2019:

	December 31, 2020		December 31, 2019
Raw materials	$	30,145	$	38,935
Work in process		10,240		—
Finished goods		72,950		79,049
Total	$	113,335	$	117,984

Inventory amounts are presented net of allowance for inventory reserves of $75,785 and $66,937 as of December 31, 2020 and December 31, 2019, respectively.

Fixed Assets

Fixed assets are stated at cost less accumulated depreciation. The cost of maintenance and repairs is expensed to operations as incurred. Depreciation is computed by the straight-line method over the estimated economic useful life of the assets (5-10 years). Gains and losses recognized from the sales or disposal of assets is the difference between the sales price and the recorded cost less accumulated depreciation less costs of disposal. 

Net Income (Loss) Per Share

In accordance with the Accounting Standard Codification Topic 260, “Earnings per Share” basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period.

As of December 31, 2020 and 2019, there were 10,000 and 1,346,500 shares issuable upon the exercise of options, respectively. The Company had a net loss for the year ended December 31, 2020; therefore, common stock equivalent shares are excluded from the computation of net income per share if their effect is anti-dilutive. The Company had net income for the year ended December 31, 2019. A separate computation of diluted earnings per share is presented using the treasury stock method.

Income Taxes

The Company accounts for income taxes under ASC 740-10-25. Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Business Segments

The Company operates in one segment and therefore segment information is not presented.

Research and Development Expenses

Research and development costs, which includes travel expenses, consulting fees, subcontractors and salaries are expensed as incurred. There was $2,601 and $0, respectively, in research and development costs during the years ended December 31, 2020 and 2019, respectively.

Leases

Financial Accounting Standards Board Accounting Standards Certification (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases”, which amended current lease accounting to require lessees to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted this standard primarily related to our corporate office lease in Fort Lauderdale, FL on January 1, 2019. The Company elected the optional transition method to apply this standard as of the effective date and therefore, the Company did not apply the standard to the comparative period presented on our consolidated financial statements. Refer to Note J.

Advertising Costs

Advertising costs are expensed as incurred and are included in general and administrative expenses. There was $5,789 and $2,570 in advertising costs during December 31, 2020 and 2019, respectively.

Stock-Based Compensation

The Company accounts for stock-based instruments issued to employees for services in accordance with ASC 718 “Compensation – Stock Compensation.” ASC 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees. The value of the portion of an employee award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method.

Recent Accounting Pronouncements

All other newly issued accounting pronouncements, but not yet effective, have been deemed either immaterial or not applicable.

XML

RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2020

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE D - RELATED PARTY TRANSACTIONS

For each of the years ended December 31, 2020 and 2019, the Company incurred salary expenses from the Chief Executive Officer of the Company of $210,000 and $210,000, respectively. During the years ended December 31, 2020 and 2019, $156,650 and $412,796, respectively, of salary and accrued salary have been paid. Of the $156,650 paid to Mr. DiBella in 2020, $81,650 was a reduction of his accrued salary in payment for the exercise of options, including some options of the Company’s employees and a related party. The unpaid balance has been included in accrued expenses- related party. As of December 31, 2020 and 2019, the accrued salary is $664,315 and $610,965, respectively.

Effective July 1, 2017, Raynard Veldman, a member of the Company’s board of directors receives a fee of $2,500 per month for consulting services. For the years ended December 31, 2020 and 2019, Raynard Veldman earned consulting fees of $30,000 and $30,000, respectively. The unpaid balance has been included in accrued expenses- related party. As of December 31, 2020 and 2019, the accrued salary is $30,000 and $0, respectively.

During the years ended December 31, 2020 and 2019, Raynard Veldman, a member of the Company’s board of directors, earned compensation for being a member of the Company’s board of directors of $12,000 and $12,000, respectively. The unpaid balance has been included in accrued expenses- related party. As of December 31, 2020 and 2019, the accrued compensation is $12,000 and $0, respectively. Mr. John DiBella does not receive compensation for being a member of the Company’s board of directors.

On June 9, 2020, the Company issued 770,000 shares of its common stock to our Chief Executive Officer in connection with the exercise of a stock option at an exercise price of $0.10. Mr. DiBella reduced his accrued salary in the amount of $77,000 for the exercise of options.

On June 9, 2020, the Company issued 100,000 shares of its common stock to Mr. Veldman in connection with the exercise of a stock option at an exercise price of $0.10. Mr. Veldman reduced his accrued consulting and Board of Director fees in the amount of $10,000 for the exercise of options.

On June 9, 2020, the Company issued 16,500 shares of its common stock to two employees in connection with the exercise of a stock option at an exercise price of $0.10. Mr. DiBella reduced his accrued salary in the amount of $1,650 for the exercise of options.

On June 9, 2020, the Company issued 380,000 shares of its common stock to a related party in connection with the exercise of a stock option at an exercise price of $0.10. Mr. DiBella reduced his accrued salary in the amount of $3,000 for the exercise of options and an outside consultant agreed to reduce her payable in the amount of $35,000 for the exercise of options.

XML

FIXED ASSETS

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

FIXED ASSETS

NOTE E - FIXED ASSETS

Fixed assets as of December 31 consists of:	2020			2019
Machinery and equipment	$	941,473		$	933,245
Furniture and fixtures		14,498			14,498
Autos and Trucks		5,294			5,294
Total		961,265			953,037
Less: accumulated depreciation		(648,797	)		(603,660	)
Fixed Assets, net	$	312,468		$	349,377

Depreciation expense was $45,137 and $45,059 for the years ended December 31, 2020 and 2019, respectively.

XML

EQUIPMENT NOTE PAYABLE

12 Months Ended

Dec. 31, 2020

Notes Payable [Abstract]

EQUIPMENT NOTE PAYABLE

NOTE F – EQUIPMENT NOTE PAYABLE

In July 2017, the Company entered into a financing agreement for the purchase of CNC machining equipment valued at approximately $426,000. The machining equipment was received in July 2017 and was used for the manufacture of Voraxial Separators under the Supply Agreement and sales of the V-Inline Separators. Under the terms of the agreement the Company made an initial down payment of $85,661 and is required to make monthly payments of $6,788 through January 2023. In addition, the Company incurred $24,281 of installation costs. As of December 31, 2020 and 2019 the amount owed is $175,398 and $226,172, respectively.

    Future minimum payments at December 31, 2020 are as follows:

2021		81,457
2022		81,456
2023		27,152
Future Minimum Equipment Note Payable Payments		190,065
Less Amount Representing Interest		(14,667	)
Present Value of Minimum Equipment Note Payable Payments		175,398
Less Current Portion		(71,812	)
Long-Term Obligations under Equipment Note Payable	$	103,586

XML

SHAREHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2020

Stockholders' Equity Note [Abstract]

SHAREHOLDERS' EQUITY

NOTE H – SHAREHOLDERS’ EQUITY

Common Stock

On June 9, 2020, the Company issued to 35,000 shares of its common stock to employees at $0.28 per share, or $9,800, for services rendered. The Company valued these common shares based on the fair value at the date of grant.

On June 9, 2020, the Company issued 770,000 shares of its common stock to our Chief Executive Officer in connection with the exercise of a stock option at an exercise price of $0.10. Mr. DiBella reduced his accrued salary in the amount of $77,000 for the exercise of options.

On June 9, 2020, the Company issued 100,000 shares of its common stock to Mr. Veldman in connection with the exercise of a stock option at an exercise price of $0.10. Mr. Veldman reduced his accrued consulting and Board of Director fees in the amount of $10,000 for the exercise of options.

On June 9, 2020, the Company issued 70,000 shares of its common stock to a consultant in connection with the exercise of a stock option at an exercise price of $0.10. The consultant agreed to reduce her payable in the amount of $7,000 for the exercise of options.

On June 9, 2020, the Company issued 16,500 shares of its common stock to two employees in connection with the exercise of a stock option at an exercise price of $0.10. Mr. DiBella agreed reduce his accrued salary in the amount of $1,650 for the exercise of options.

On June 9, 2020, the Company issued 380,000 shares of its common stock to a related party in connection with the exercise of a stock option at an exercise price of $0.10. Mr. DiBella agreed reduce his accrued salary in the amount of $3,000 for the exercise of options and an outside consultant agreed to reduce her payable in the amount of $35,000 for the exercise of options.

Options

The Company accounts for stock-based instruments issued to employees for services in accordance with ASC 718 “Compensation – Stock Compensation.” ASC 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees. The value of the portion of an employee award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The Company accounts for non-employee share-based awards in accordance with the measurement and recognition criteria of ASC 505-50,“Equity-Based Payments to Non-Employees.” The Company estimates the fair value of stock options by using the Black-Scholes option-pricing model.

The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s stock options and warrants have characteristics different from those of its traded stock, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of such stock options. The risk-free interest rate is based upon quoted market yields for United States Treasury debt securities with a term similar to the expected term. The expected dividend yield is based upon the Company’s history of having never issued a dividend and management’s current expectation of future action surrounding dividends. Expected volatility was based on historical data for the trading of our stock on the open market. The expected lives for such grants were based on the simplified method for employees and officers.

On June 9, 2020, our Chief Executive Officer exercised 770,000 stock options at an exercise price of $0.10 per share. Mr. DiBella agreed to reduce his accrued salary in the amount of $77,000 for the exercise of options.

On June 9, 2020, Mr. Veldman exercised 100,000 stock options at an exercise price of $0.10 per share. Mr. Veldman agreed to reduce his accrued consulting fees in the amount of $10,000 for the exercise of options.

On June 9, 2020, a consultant exercised 70,000 stock options at an exercise price of $0.10 per share. The consultant agreed to reduce the payables due in the amount of $7,000 for the exercise of options. In addition, a related party exercised 380,000stock options at an exercise price of $0.10per share. The consultant agreed to reduce the payables due in the amount of $35,000 for the exercise of options for the related party. In addition, Mr. DiBella reduced his accrued salary in the amount of $3,000 for the exercise of options for the related party.

On June 9, 2020, two employees exercised 16,500 stock options at an exercise price of $0.10 per share. Mr. DiBella reduced his accrued salary in the amount of $1,650 for the exercise of options for these three employees.

Information with respect to options outstanding and exercisable at December 31, 2020 and 2019 is as follows:

	Number Outstanding	Range of Exercise Price		Number Exercisable
Balance, December 31, 2018	1,346,500	$	0.10	1,346,500
Issued	—		—	__
Expired	—		—	—
Balance, December 31, 2019	1,346,500	$	0.10	1,346,500
Issued	—		—	—
Expired	—		—	—
Exercised	(1,336,500)		0.10	(1,336,500)
Forfeited	—		—	—
Balance, December 31, 2020	10,000	$	__	10,000

The following table summarizes information about the stock options outstanding at December 31, 2020 and 2019:

Number Outstanding at December 31, 2020		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable at December 31, 2020		Weighted Average Exercise Price
	10,000		2.88	$	0.10		10,000	$	0.10

Number Outstanding at December 31, 2019		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable at December 31, 2019		Weighted Average Exercise Price
	1,346,500		3.88	$	0.10		1,346,500	$	0.10

The aggregate intrinsic value represents the excess amount over the exercise price optionees would have received if all the options have been exercised on the last business day of the period indicated based on the Company’s closing stock price for such day. The aggregate intrinsic value as of December 31, 2020 is $30.

Reverse Split

On August 27, 2020 the Company filed Articles of Amendment to its Articles of Incorporation which, on the effective date of September 10, 2020 (the “Effective Date”):

· effected a ten for one (10:1) reverse stock split of our outstanding common stock (“Reverse Stock Split”); and

· eliminated the existing class of preferred stock and create a new class of blank check preferred stock consisting of 5,000,000 shares.

These actions were approved by our shareholders at our 2020 Annual Meeting held on August 20, 2020.

As a result of the Reverse Stock Split, on the Effective Date each 10 shares of our common stock issued and outstanding immediately prior to the Effective Date became one share of our common stock on the Effective Date. No fractional shares of common stock were issued to any shareholder in connection with the Reverse Stock Split and all fractional shares which might otherwise be issuable as a result of the Reverse Stock Split were rounded up to the nearest whole share. On the Effective Date, each certificate representing shares of pre-Reverse Stock Split common stock was deemed to represent one-tenth of a share of our post-Reverse Stock Split common stock, subject to rounding for fractional shares.

The Reverse Stock Split also affected the Company’s outstanding stock options which resulted in the underlying shares of such instruments being reduced and exercise price being increased proportionally to the Reverse Stock Split ratio. All shares and per share data have been retroactively adjusted for all periods presented to reflect the effects of the Reverse Stock Split.

XML

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE I - COMMITMENTS AND CONTINGENCIES

SBA and PPP Loans

On May 4, 2020, FPA received a loan (the “PPP Loan”) from Bank of America, N.A. in the aggregate amount of $111,971, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020.

The PPP Loan, which was in the form of a Note dated May 4, 2020 issued by FPA, matures on May 4, 2022 and bears interest at a rate of 1% per annum, payable monthly commencing on November 6, 2020. The Note may be prepaid by FPA at any time prior to maturity with no prepayment penalties. Funds from the PPP Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations incurred before February 15, 2020. FPA believes it used the entire PPP Loan amount for qualifying expenses. Under the terms of the PPP Loan, certain amounts of the PPP Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. We intend to apply for forgiveness of the PPP Loan in accordance with the terms of the CARES Act.

On May 5, 2020, FPA also received an $8,000 grant from the U.S. Small Business Administration. The Company recognized the grant as other income during the year ended December 31, 2020.

On June 23, 2020, FPA executed the standard loan documents required for securing a loan (the “EIDL Loan”) from the SBA under its Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the Covid-19 pandemic on the Company’s business. Pursuant to that certain Loan Authorization and Agreement, the principal amount of the EIDL Loan is up to $150,000, with proceeds to be used for working capital purposes. On July 16, 2020, the Company has requested $150,000 in disbursements under the EIDL Loan. The funds were received on July 20, 2020. Interest accrues at the rate of 3.75% per annum .. Installment payments, including principal and interest, are due monthly beginning June 23, 2021 (12 months from the date of the SBA note) in the amount of $731. The balance of principal and interest is payable 30 years from the date of the SBA Note. In connection therewith, FPA executed (i) a note for the benefit of the SBA, which contains customary events of default and (ii) a Security Agreement, granting the SBA a security interest in all tangible and intangible personal property of FPA, which also contains customary events of default.

	December 31, 2020			December 31, 2019
Loans payable	$	261,971		$	—
Less: current portion		(65,867	)		—
Long-term loans payable	$	196,104		$	—

Future minimum loans payable at December 31, 2020 are as follows:

2021		76,723
2022		50,544
2023		8,772
2024		8,772
2025		8,772
2026 and thereafter		215,062
Future Minimum Note Payable Payments		368,645
Less Amount Representing Interest		(106,674	)
Present Value of Minimum Note Payable Payments		261,971
Less Current Portion		(65,867	)
Long-Term Obligations under Note Payable	$	196,104

Litigation 

On or about October 23, 2017, a claim was filed in the 17th Judicial Circuit Court in and for Broward County in Fort Lauderdale, Florida, by the plaintiff, Industrial and Oilfield Procurement Services, LLC, against our company. The case involves an alleged breach of contract between the parties relating to the purchase and sale of a Voraxial unit in 2015. The plaintiff has demanded a refund and damages. We are contesting the case vigorously.

Sale of Intellectual Property

On June 8, 2017, the Company and FPA, our wholly owned subsidiary, closed the transactions contemplated by the Technology Purchase Agreement dated March 13, 2017 with Schlumberger Technology Corporation, a Texas corporation, Schlumberger Canada Limited, a Canadian entity, and Schlumberger B.V., an entity organized under the laws of the Netherlands (collectively, “Schlumberger”).

As part of the agreement, Schlumberger granted us a non-exclusive, worldwide, royalty-free licenses (the “Grant Back Licenses”), to make, use, sell, offer for sale, and import products and processes embodying the Purchase Intellectual Property outside the oil and gas market.

For a period of three years following the closing of the Technology Purchase Agreement, which expired in June 2020, the Company and Mr. Veldman and Mr. Di Bella have agreed to not participate or cause participation in the oil-and-gas market in relation to phase or constituent sensing or separation which is defined as, liquid-liquid, liquid-solid or liquid-gas separation and gas or liquid sensing, including all product lines and services related thereto and including the Voraxial product line and services. As the term has expired, the Company may review opportunities in the oil and gas industry.

XML

LEASE

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

LEASE

NOTE J - LEASE

The Company adopted the provision of ASU 2016-02, “Leases” as of the effective date. The Company recorded an operating right of use assets and operating lease liability on January 1, 2019 related to our lease agreement for our facility in Fort Lauderdale, Florida.

In December 2018, the Company entered into a three year lease for an office and manufacturing facility located at 821 NW 57^th Place, Fort Lauderdale, FL 33309. The lease is $4,839 per month, which includes common area maintenance, taxes and insurance and expires in October 2021. The lease has a one-time renewal option for three years and an increased base rent of 3%. The Company has the option to terminate the lease with three months’ notice. The Company accounts for lease in accordance with ASC Topic 842.

Operating right of use asset and operating lease liability are recognized at the lease commencement date. Operating lease liability represents the present value of lease payments not yet paid. Operating right of use asset represent our right to use an underlying asset and are based upon the operating lease liability adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. The Company used our incremental borrowing rate to determine the present value of lease payments not yet paid.

Supplemental balance sheet information related to leases was as follows:

Operating Leases	Classification	December 31, 2020		December 31, 2019
Right-of-use assets	Operating lease assets	$	200,066	$	243,039
Current lease liability	Current operating lease liability		46,255		42,973
Non-current lease liability	Long-term operating lease liability		153,811		200,066
Total lease liabilities		$	200,066	$	243,039

Lease term and discount rate were as follows:

	December 31, 2020		December 31, 2019
Weighted average remaining lease term (years)		3.75		4.76
Weighted average discount rate		6.75%		6.75%

The components of lease cost were as follows:

	For the Year Ended December 31
	2020		2019
Operating lease cost	$	58,065	$	58,065
Variable lease cost (1)	$	18,128	$	18,128
Total lease cost	$	76,193	$	76,193

(1) Variable lease cost primarily relates to common area maintenance, property taxes and insurance on leased real estate.

Maturities of lease liabilities were as follows as of December 31, 2020:		Operating Leases
	2021		58,353
	2022		59,795
	2023		59,795
	2024		49,829
	Total lease payments		227,772
	Less: imputed interest		(27,706	)
	Present value of lease liabilities	$	200,066

XML

MAJOR CUSTOMERS

12 Months Ended

Dec. 31, 2020

Risks and Uncertainties [Abstract]

MAJOR CUSTOMERS

NOTE K – MAJOR CUSTOMERS

For the year ended December 31, 2020, two customers accounted for approximately 20% and 10% of total revenues, respectively. For the year ended December 31, 2019, one customer accounted for approximately 93% of total revenues. As of December 31, 2020, three customers represented 68%, 17% and 15%, respectively, of total accounts receivables. As of December 31, 2019, one customer represented 99% of total accounts receivables.

XML

INCOME TAX

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

INCOME TAX

NOTE L – INCOME TAX

The Jobs Act (the “TCJA”) significantly revised the US corporate income tax by lowering the corporate federal income tax from 35% to 21%, effective January 1, 2019.

The significant components of the deferred tax asset at December 31, 2020 and 2019 were as follows:

	For the Years Ended December 31
	2020			2019
Statutory rate applied to income (loss) before income taxes	$	(261,258	)	$	147,517
Increase (decrease) in income taxes results from:
Change in tax estimate		77,676			—
Non-deductible expense		2,484			—
Change in valuation allowance		181,098			(147,517	)
Income tax expense (benefit)	$	—		$	—

The difference between income tax expense computed by applying the federal statutory corporate tax rate and provision for actual income tax is as follows:

	For the Years Ended December 31
	2020			2019
Income tax expense (benefit) at U.S. statutory rate of 34%		21.00	%		21.00	%
Income tax expense (benefit) - State		4.35	%		4.35	%
Change in tax estimate		(7.54)	%
Non-deductible expense		(0.24)	%		—	%
Change in valuation allowance		(17.57)	%		(25.34)	%
Income tax expense (benefit)		—			—

Deferred income taxes result from temporary differences in the recognition of income and expenses for the financial reporting purposes and for tax purposes. The effects of temporary differences that gave rise to deferred tax assets are as follows:

	For the Years Ended December 31
Deferred tax assets:	2020			2019
Provision for inventory reserve	$	19,208		$	16,965
Operating loss carryforwards		2,902,353			2,723,498
Gross deferred tax assets		2,921,561			2,740,463
Valuation allowance		(2,921,561	)		(2,740,463	)
Net deferred income tax asset	$	—		$	—

Increase in the deferred income tax asset is attributable to the estimated deferred income tax benefit arising from operating loss carry forward. The change in valuation allowance for the years ended December 31, 2020 and 2019 was an increase (decrease) of $181,098 and $(147,517), respectively.

The Company has made a 100% valuation allowance of the deferred income tax asset at December 31, 2020, as it is not expected that the deferred tax assets will be realized. The Company has a net operating loss carryforward of approximately $10,145,000 available to offset future taxable income through 2037. The Company has a net operating loss carryforward of approximately $1,305,000, which can be carried forward indefinitely subject to limitation.

The Company’s federal income tax returns for 2017, 2018, 2019 and 2020 remain subject to examination by the Internal Revenue Services and state tax authorities.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of the parent company, Enviro Technologies U.S., Inc., and its wholly-owned subsidiary, Florida Precision Aerospace, Inc. All significant intercompany accounts and transactions have been eliminated. 

Estimates

Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates include the valuation of deferred tax assets, allowance for doubtful accounts, allowance for inventory obsolescence and valuation of stock-based compensation. Actual results may differ.

Revenue Recognition

Revenue Recognition

We account for our revenues in accordance with the Accounting Standard Codification Topic 606, “Revenue from Contracts with Customers” and all the related amendments. This standards core principal is that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to receive.

The Company derives its revenue from the sale of the V-Inline Separators and some high precision manufacturing projects. We have also generated revenues from the sale of the Voraxial Separator to one customer, Schlumberger, through the Supply Agreement which expired in June 2020. We pursued designing, manufacturing and selling face shields during this quarantine period and are constantly seeking other sources of revenues.

Revenues that are generated from high precision manufacturing projects are recognized when we satisfy a performance obligation by transferring control of the promised goods or services to our customers at a point in time, in an amount specified in the contract with our customer and that reflects the consideration we expect to be entitled to in exchange for those goods or services. The Company also assesses our customer’s ability and intention to pay, which is based on a variety of factors including our customer’s historical payment experience and financial condition.

Revenues that are generated from sales of V-Inline separators, auxiliary equipment and parts and face shields are typically recognized upon shipment. Our standard agreements generally do not include customer acceptance or post shipment installation provisions. However, if such provisions have been included or there is an uncertainty about customer order, revenue is deferred until we have evidence of customer order and all terms of the agreement have been complied with. As of December 31, 2020, and December 31, 2019, respectively, there was $0 of deposits from customers.

Accounts Receivable

Accounts Receivable

Accounts receivable are presented net of an allowance for doubtful accounts. The company maintains allowances for doubtful accounts for estimated losses. The company reviews the accounts receivable on a periodic basis and makes general and specific allowance when there is a doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, customer’s historical payment history, and its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collections. At December 31, 2020 and 2019, the Company has $7,044 and $254 in the allowance for doubtful accounts, respectively.

Fair Value of Instruments

Fair Value of Instruments

The carrying amounts of the Company's financial instruments, including cash and cash equivalents, inventory, prepaid expense, accounts payable, accrued expenses and deposits from customers at December 31, 2020 and 2019, approximate their fair value because of their relatively short-term nature.

ASC 820 “Disclosures about Fair Value of Financial Instruments,” requires disclosures of information regarding the fair value of certain financial instruments for which it is practicable to estimate the value. For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale of liquidation.

The Company accounts for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value is observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1—inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. We have no Level 1 instruments as of December 31, 2020 and 2019.

Level 2—inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and forward and spot prices for currencies and commodities. We have no Level 2 instruments as of December 31, 2020 and 2019.

Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. We have no Level 3 instruments as of December 31, 2020 and 2019.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. The Company maintains its cash balances with various financial institutions. Balances at these institutions may at times exceed the Federal Deposit Insurance Corporate limits. As of December 31, 2020 and 2019, we have a cash concentration in excess of the FDIC limit of $80,014 and $398,673, respectively.

Inventory

Inventory

Inventory primarily consists of components, including raw material and finished parts for the V-Inline Separator and face shields and is priced at lower of cost or net realizable value. Net realizable value is defined as sales price less cost of completion and disposable and transportation. Inventory may include units being rented on a short term basis or components held by third parties in connection with pilot programs as part of the continuing evaluation by such third parties as to the effectiveness and usefulness of the service to be incorporated into their respective operations. The third parties do not have a contractual obligation to purchase the equipment. The Company maintains the title and risk of loss. Provisions have been made to reduce excess or obsolete inventories to their net realizable value. Therefore, these units are included in the inventory of the Company. As of December 31, 2020, and December 31, 2019:

	December 31, 2020		December 31, 2019
Raw materials	$	30,145	$	38,935
Work in process		10,240		—
Finished goods		72,950		79,049
Total	$	113,335	$	117,984

Inventory amounts are presented net of allowance for inventory reserves of $75,785 and $66,937 as of December 31, 2020 and December 31, 2019, respectively.

Fixed Assets

Fixed Assets

Fixed assets are stated at cost less accumulated depreciation. The cost of maintenance and repairs is expensed to operations as incurred. Depreciation is computed by the straight-line method over the estimated economic useful life of the assets (5-10 years). Gains and losses recognized from the sales or disposal of assets is the difference between the sales price and the recorded cost less accumulated depreciation less costs of disposal. 

Net Income (Loss) Per Share

Net Income (Loss) Per Share

In accordance with the Accounting Standard Codification Topic 260, “Earnings per Share” basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period.

As of December 31, 2020 and 2019, there were 10,000 and 1,346,500 shares issuable upon the exercise of options, respectively. The Company had a net loss for the year ended December 31, 2020; therefore, common stock equivalent shares are excluded from the computation of net income per share if their effect is anti-dilutive. The Company had net income for the year ended December 31, 2019. A separate computation of diluted earnings per share is presented using the treasury stock method.

Income Taxes

Income Taxes

The Company accounts for income taxes under ASC 740-10-25. Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Business Segments

Business Segments

The Company operates in one segment and therefore segment information is not presented.

Research and Development Expenses

Research and Development Expenses

Research and development costs, which includes travel expenses, consulting fees, subcontractors and salaries are expensed as incurred. There was $2,601 and $0, respectively, in research and development costs during the years ended December 31, 2020 and 2019, respectively.

Leases

Leases

Financial Accounting Standards Board Accounting Standards Certification (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases”, which amended current lease accounting to require lessees to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted this standard primarily related to our corporate office lease in Fort Lauderdale, FL on January 1, 2019. The Company elected the optional transition method to apply this standard as of the effective date and therefore, the Company did not apply the standard to the comparative period presented on our consolidated financial statements. Refer to Note J.

Advertising Costs

Advertising Costs

Advertising costs are expensed as incurred and are included in general and administrative expenses. There was $5,789 and $2,570 in advertising costs during December 31, 2020 and 2019, respectively.

Stock-Based Compensation

Stock-Based Compensation

The Company accounts for stock-based instruments issued to employees for services in accordance with ASC 718 “Compensation – Stock Compensation.” ASC 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees. The value of the portion of an employee award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

All other newly issued accounting pronouncements, but not yet effective, have been deemed either immaterial or not applicable.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Schedule of inventory

Therefore, these units are included in the inventory of the Company. As of December 31, 2020, and December 31, 2019:

	December 31, 2020		December 31, 2019
Raw materials	$	30,145	$	38,935
Work in process		10,240		—
Finished goods		72,950		79,049
Total	$	113,335	$	117,984

XML

FIXED ASSETS (Tables)

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Schedule of fixed assets

Fixed assets as of December 31 consists of:	2020			2019
Machinery and equipment	$	941,473		$	933,245
Furniture and fixtures		14,498			14,498
Autos and Trucks		5,294			5,294
Total		961,265			953,037
Less: accumulated depreciation		(648,797	)		(603,660	)
Fixed Assets, net	$	312,468		$	349,377

XML

EQUIPMENT NOTE PAYABLE (Tables)

12 Months Ended

Dec. 31, 2020

Notes Payable [Abstract]

Schedule of future minimum payments

Future minimum payments at December 31, 2020 are as follows:

2021		81,457
2022		81,456
2023		27,152
Future Minimum Equipment Note Payable Payments		190,065
Less Amount Representing Interest		(14,667	)
Present Value of Minimum Equipment Note Payable Payments		175,398
Less Current Portion		(71,812	)
Long-Term Obligations under Equipment Note Payable	$	103,586

XML

SHAREHOLDERS' EQUITY (Tables)

12 Months Ended

Dec. 31, 2020

Stockholders' Equity Note [Abstract]

Schedule of options

Information with respect to options outstanding and exercisable at December 31, 2020 and 2019 is as follows:

	Number Outstanding	Range of Exercise Price		Number Exercisable
Balance, December 31, 2018	1,346,500	$	0.10	1,346,500
Issued	—		—	__
Expired	—		—	—
Balance, December 31, 2019	1,346,500	$	0.10	1,346,500
Issued	—		—	—
Expired	—		—	—
Exercised	(1,336,500)		0.10	(1,336,500)
Forfeited	—		—	—
Balance, December 31, 2020	10,000	$	__	10,000

The following table summarizes information about the stock options outstanding at December 31, 2020 and 2019:

Number Outstanding at December 31, 2020		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable at December 31, 2020		Weighted Average Exercise Price
	10,000		2.88	$	0.10		10,000	$	0.10

Number Outstanding at December 31, 2019		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable at December 31, 2019		Weighted Average Exercise Price
	1,346,500		3.88	$	0.10		1,346,500	$	0.10

XML

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of loans payables

In connection therewith, FPA executed (i) a note for the benefit of the SBA, which contains customary events of default and (ii) a Security Agreement, granting the SBA a security interest in all tangible and intangible personal property of FPA, which also contains customary events of default.

	December 31, 2020			December 31, 2019
Loans payable	$	261,971		$	—
Less: current portion		(65,867	)		—
Long-term loans payable	$	196,104		$	—

Schedule of future minimum loans payable

Future minimum loans payable at December 31, 2020 are as follows:

2021		76,723
2022		50,544
2023		8,772
2024		8,772
2025		8,772
2026 and thereafter		215,062
Future Minimum Note Payable Payments		368,645
Less Amount Representing Interest		(106,674	)
Present Value of Minimum Note Payable Payments		261,971
Less Current Portion		(65,867	)
Long-Term Obligations under Note Payable	$	196,104

XML

LEASE (Tables)

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

Schedule of supplemental balance sheet information related to leases

Supplemental balance sheet information related to leases was as follows:

Operating Leases	Classification	December 31, 2020		December 31, 2019
Right-of-use assets	Operating lease assets	$	200,066	$	243,039
Current lease liability	Current operating lease liability		46,255		42,973
Non-current lease liability	Long-term operating lease liability		153,811		200,066
Total lease liabilities		$	200,066	$	243,039

Schedule of lease term and discount rate

Lease term and discount rate were as follows:

	December 31, 2020		December 31, 2019
Weighted average remaining lease term (years)		3.75		4.76
Weighted average discount rate		6.75%		6.75%

Schedule of components of lease cost

The components of lease cost were as follows:

	For the Year Ended December 31
	2020		2019
Operating lease cost	$	58,065	$	58,065
Variable lease cost (1)	$	18,128	$	18,128
Total lease cost	$	76,193	$	76,193

(1) Variable lease cost primarily relates to common area maintenance, property taxes and insurance on leased real estate.

Schedule of maturities of lease liabilities

Maturities of lease liabilities were as follows as of December 31, 2020:		Operating Leases
	2021		58,353
	2022		59,795
	2023		59,795
	2024		49,829
	Total lease payments		227,772
	Less: imputed interest		(27,706	)
	Present value of lease liabilities	$	200,066

XML

INCOME TAX (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Schedule of components of deferred tax asset

The significant components of the deferred tax asset at December 31, 2020 and 2019 were as follows:

	For the Years Ended December 31
	2020			2019
Statutory rate applied to income (loss) before income taxes	$	(261,258	)	$	147,517
Increase (decrease) in income taxes results from:
Change in tax estimate		77,676			—
Non-deductible expense		2,484			—
Change in valuation allowance		181,098			(147,517	)
Income tax expense (benefit)	$	—		$	—

Schedule of effective income tax rate reconciliation

The difference between income tax expense computed by applying the federal statutory corporate tax rate and provision for actual income tax is as follows:

	For the Years Ended December 31
	2020			2019
Income tax expense (benefit) at U.S. statutory rate of 34%		21.00	%		21.00	%
Income tax expense (benefit) - State		4.35	%		4.35	%
Change in tax estimate		(7.54)	%
Non-deductible expense		(0.24)	%		—	%
Change in valuation allowance		(17.57)	%		(25.34)	%
Income tax expense (benefit)		—			—

Summary of deferred tax liability

The effects of temporary differences that gave rise to deferred tax assets are as follows:

	For the Years Ended December 31
Deferred tax assets:	2020			2019
Provision for inventory reserve	$	19,208		$	16,965
Operating loss carryforwards		2,902,353			2,723,498
Gross deferred tax assets		2,921,561			2,740,463
Valuation allowance		(2,921,561	)		(2,740,463	)
Net deferred income tax asset	$	—		$	—

XML

GOING CONCERN (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Accounting Policies [Abstract]
Percentage of revenues	97.00%
Net (loss)/ income	$ (1,030,808)	$ 594,037
Working capital deficit	750,481
Accumulated deficit	(15,922,429)	(14,891,621)
Net cash	$ (541,249)	$ (485,187)

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Accounting Policies [Abstract]
Raw materials	$ 30,145	$ 38,935
Work in process	10,240
Finished goods	72,950	79,049
Total	$ 113,335	$ 117,984

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative)	12 Months Ended
	Dec. 31, 2020 USD ($) Number shares	Dec. 31, 2019 USD ($) shares
Customer deposits	$ 0	$ 0
Allowance for doubtful accounts	7,044	254
Excess of FDIC limits	$ 80,014	$ 398,673
Anti-dilutive option | shares	10,000	1,346,500
Research and development costs	$ 2,601
Advertising costs	5,789	2,570
Allowance for inventory reserves	$ 75,785	$ 66,937
Number of reportable segments | Number	1
Maximum [Member]
Estimated useful life of assets	10 years
Minimum [Member]
Estimated useful life of assets	5 years

XML

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)			12 Months Ended
	Jun. 09, 2020	Jul. 01, 2017	Dec. 31, 2020	Dec. 31, 2019
Accrued salaries			$ 706,315	$ 610,965
Accrued expenses - related party			664,315	610,965
Consulting services			187,549	233,047
Related Party [Member] | Option [Member]
Number of shares issued	380,000
Stock option exercise price (in dollars per shares)	$ 0.10
Mr DiBella Adele DiBella And Two Employee [Member]
Accrued salaries			81,650
Mr. DiBella [Member] | Related Party [Member] | Option [Member]
Reduction of accrued salary	$ 3,000
Mr. Veldma [Member] | Option [Member]
Number of shares issued	100,000
Stock option exercise price (in dollars per shares)	$ 0.10
Chief Executive Officer [Member]
Salary and accured salary paid			210,000	210,000
Salary paid			156,650	412,796
Accrued salaries			156,650
Chief Executive Officer [Member] | Option [Member]
Number of shares issued	770,000
Stock option exercise price (in dollars per shares)	$ 0.10
Chief Executive Officer [Member] | Mr. DiBella [Member] | Option [Member]
Stock option exercise price (in dollars per shares)	$ 0.10
Reduction of accrued salary	$ 77,000
Raynard Veldman [Member]
Compensation and salary			12,000	0
Accrued salaries			30,000	0
Consulting services		$ 2,500	30,000	30,000
Received compensation			$ 12,000	$ 12,000
Raynard Veldman [Member] | Mr. Veldma [Member] | Option [Member]
Reduction of accrued salary	$ 10,000
Consultant [Member] | Option [Member]
Number of shares issued	70,000
Stock option exercise price (in dollars per shares)	$ 0.10
Reduction of payable	$ 7,000
Consultant [Member] | Related Party [Member] | Option [Member]
Reduction of payable	$ 35,000
Two Employees [Member] | Option [Member]
Number of shares issued	16,500
Two Employees [Member] | Option [Member]
Number of shares issued	1,650
Stock option exercise price (in dollars per shares)	$ 0.10
Two Employees [Member] | Mr. DiBella [Member] | Option [Member]
Reduction of accrued salary	$ 1,650

XML

FIXED ASSETS (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Total	$ 961,265	$ 953,037
Less: accumulated depreciation	(648,797)	(603,660)
Fixed Assets, net	312,468	349,377
Machinery and Equipment [Member]
Total	941,473	933,245
Furniture and Fixtures [Member]
Total	14,498	14,498
Autos and Trucks [Member]
Total	$ 5,294	$ 5,294

XML

FIXED ASSETS (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 45,137	$ 45,059

XML

EQUIPMENT NOTE PAYABLE (Details)	Dec. 31, 2020 USD ($)
Notes Payable [Abstract]
2021	$ 81,457
2022	81,456
2023	27,152
Future Minimum Equipment Note Payable Payments	190,065
Less Amount Representing Interest	(14,667)
Present Value of Minimum Equipment Note Payable Payments	175,398
Less Current Portion	(71,812)
Long-Term Obligations under Equipment Note Payable	$ 103,586

XML

EQUIPMENT NOTE PAYABLE (Details Narrative) - Financing Agreement [Member] - USD ($)	1 Months Ended
	Jul. 31, 2017	Dec. 31, 2020	Dec. 31, 2019
CNC machining equipment value	$ 426,000
Initial payment to purchase machining equipment	85,661
Monthly payments for machining equipment	6,788
Installation cost	$ 24,281
Financing amount for purchase of machining equipment		$ 175,398	$ 226,172

XML

SHAREHOLDERS' EQUITY (Details) - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Number Outstanding
Balance at beginning	13,465,000	13,465,000
Issued
Expired
Exercised	(1,336,500)
Forfeited
Balance at ending	10,000	13,465,000
Range of Exercise Price
Balance at beginning	$ 0.10	$ 0.10
Issued
Expired
Exercised	0.10
Forfeited
Balance at ending		$ 0.10
Number Exercisable
Balance at beginning	13,465,000	1,346,500
Issued
Expired
Exercised	(1,336,500)
Forfeited
Balance at ending	10,000	13,465,000

XML

SHAREHOLDERS' EQUITY (Details 1) - Exercise Price 0.10 [Member] - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Exercise Price	$ 0.10
Number Outstanding	10,000	1,346,500
Weighted Average Remaining Contractual Life	2 years 10 months 16 days	3 years 10 months 16 days
Outstanding Weighted Average Exercise Price	$ 0.10	$ 0.10
Number Exercisable	10,000	1,346,500
Exercisable Weighted Average Exercise Price	$ 0.10	$ 0.10

XML

SHAREHOLDERS' EQUITY (Details Narrative) - USD ($)			12 Months Ended
	Aug. 27, 2020	Jun. 09, 2020	Dec. 31, 2020
Aggregate intrinsic value of stock options			$ 30
Number of shares issued for services, value			$ 9,000
Description of reverse stock split	• effected a ten for one (10:1) reverse stock split of our outstanding common stock (“Reverse Stock Split”); and • eliminated the existing class of preferred stock and create a new class of blank check preferred stock consisting of 5,000,000 shares.
Option [Member] | Related Party [Member]
Number of shares issued		380,000
Stock option exercise price (in dollars per shares)		$ 0.10
Number of shares exercised		380,000
Option [Member] | Related Party [Member] | Mr. DiBella [Member]
Reduction of accrued salary		$ 3,000
Chief Executive Officer [Member] | Option [Member]
Number of shares issued		770,000
Stock option exercise price (in dollars per shares)		$ 0.10
Number of shares exercised		77,000
Chief Executive Officer [Member] | Option [Member] | Mr. DiBella [Member]
Stock option exercise price (in dollars per shares)		$ 0.10
Reduction of accrued salary		$ 77,000
Number of shares exercised		770,000
Raynard Veldman [Member] | Option [Member]
Number of shares issued		100,000
Stock option exercise price (in dollars per shares)		$ 0.10
Reduction of accrued consulting and board of director fees		$ 10,000
Number of shares exercised		100,000
Consultant [Member] | Option [Member]
Number of shares issued		70,000
Stock option exercise price (in dollars per shares)		$ 0.10
Reduction of payable		$ 7,000
Number of shares exercised		700,000
Consultant [Member] | Option [Member] | Related Party [Member]
Reduction of payable		$ 35,000
Two Employees [Member] | Option [Member]
Number of shares issued		16,500
Stock option exercise price (in dollars per shares)		$ 0.10
Reduction of payable		$ 1,650
Number of shares exercised		165,000
Two Employees [Member] | Option [Member] | Mr. DiBella [Member]
Reduction of accrued salary		$ 1,650
Two Employees [Member] | Option [Member]
Number of shares issued		1,650
Stock option exercise price (in dollars per shares)		$ 0.10
Number of shares exercised		16,500
Two Employees [Member] | Option [Member] | Mr. DiBella [Member]
Reduction of accrued salary		$ 1,650
Common Stock [Member]
Number of shares issued for services			35,000
Number of shares issued for services, value			$ 35
Common Stock [Member] | Employees [Member]
Number of shares issued for services		35,000
Number of shares issued for services, value		$ 9,800
Shares issued price (in dollars per shares)		$ 0.28

XML

COMMITMENTS AND CONTINGENCIES (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Loans payable	$ 261,971
Less: current portion	(65,867)
Long-term loans payable	$ 196,104

XML

COMMITMENTS AND CONTINGENCIES (Details 1) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
2021	$ 76,723
2022	50,544
2023	8,772
2024	8,772
2025	8,772
2026 and thereafter	215,062
Future Minimum Note Payable Payments	368,645
Less Amount Representing Interest	(106,674)
Present Value of Minimum Note Payable Payments	261,971
Less Current Portion	(65,867)
Long-Term Obligations under Note Payable	$ 196,104

XML

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)		1 Months Ended
	May 04, 2020	Jul. 16, 2020	Jun. 23, 2020	May 05, 2020
Economic Injury Disaster Loan [Member] | Agreement [Member]
Principal amount			$ 150,000
Disbursements amount		$ 150,000
Interest rate		3.75%
Description of payment		Installment payments, including principal and interest, are due monthly beginning June 23, 2021 (12 months from the date of the SBA note) in the amount of $731. The balance of principal and interest is payable 30 years from the date of the SBA Note.
Dated		Jul. 20, 2020
Florida Precision Aerospace, Inc. [Member] | U.S. Small Business Administration [Member]
Grants receivable				$ 8,000
Florida Precision Aerospace, Inc. [Member] | PPP Loan [Member] | Bank of America, N.A. [Member]
Loan receivable	$ 111,971
Maturity terms	May 04, 2022
Payment start date	Nov. 06, 2020
Dated	May 04, 2020
Description of debt obligations	Funds from the PPP Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations incurred before February 15, 2020.

XML

LEASE (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Leases [Abstract]
Operating lease ROU assets	$ 200,066	$ 243,039
Current operating lease liabilities	46,255	42,973
Noncurrent operating lease liabilities	153,811	200,066
Total operating lease liabilities	$ 200,066	$ 243,039

XML

LEASE (Details 1)	Dec. 31, 2020	Dec. 31, 2019
Leases [Abstract]
Weighted average remaining lease term (years)	3 years 9 months	4 years 9 months 4 days
Weighted average discount rate	6.75%	6.75%

XML

LEASE (Details 2) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Leases [Abstract]
Operating lease cost	$ 58,065	$ 58,065
Variable lease cost	18,128	18,128	[1]
Total lease cost	$ 76,193	$ 76,193

[1] Variable lease cost primarily relates to common area maintenance, property taxes and insurance on leased real estate.

XML

LEASE (Details 3) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Leases [Abstract]
2021	$ 58,353
2022	59,795
2023	59,795
2024	49,829
Total lease payments	227,772
Less: imputed interest	(27,706)
Total operating lease liabilities	$ 200,066	$ 243,039

XML

LEASE (Details Narrative) - USD ($)	1 Months Ended	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2020
Leases [Abstract]
Description of termination of use agreement		In December 2018, the Company entered into a three (3) year lease for an office and manufacturing facility located at 821 NW 57th Place, Fort Lauderdale, FL 33309. The lease is $4,839 per month, which includes common area maintenance, taxes and insurance and expires in October 2021. The lease has a one-time renewal option for three years and an increased base rent of 3%. The Company has the option to terminate the lease with three months’ notice.
Lease term	3 years
Rent	$ 4,839
Lease expiration	Oct. 31, 2021
One-time renewal term	3 years
Percentage of increased base rent	3.00%

XML

MAJOR CUSTOMERS (Details Narrative)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Sales Revenue [Member] | Customer One [Member]
Percentage of revenue from Major customer (in percent)	20.00%	93.00%
Sales Revenue [Member] | Customer Two [Member]
Percentage of revenue from Major customer (in percent)	10.00%
Accounts Receivable [Member] | Customer One [Member]
Percentage of revenue from Major customer (in percent)	68.00%	99.00%
Accounts Receivable [Member] | Customer Two [Member]
Percentage of revenue from Major customer (in percent)	17.00%
Accounts Receivable [Member] | Customer Three [Member]
Percentage of revenue from Major customer (in percent)	15.00%

XML

INCOME TAX (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Statutory rate applied to income (loss) before income taxes	$ (261,258)	$ 147,517
Increase (decrease) in income taxes results from:
Change in tax estimate	77,676
Non-deductible expense	2,484
Change in valuation allowance	181,098	(147,517)
Income tax expense (benefit)

XML

INCOME TAX (Details 1)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Income tax expense (benefit) at U.S. statutory rate of 34%	21.00%	21.00%
Income tax expense (benefit) - State	4.35%	4.35%
Change in tax estimate	(7.54%)
Non-deductible expense	(0.24%)
Change in valuation allowance	(17.57%)	(25.34%)
Income tax expense (benefit)

XML

INCOME TAX (Details 2) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Deferred tax assets:
Provision for inventory reserve	$ 19,208	$ 16,965
Operating loss carryforwards	2,902,353	2,723,498
Gross deferred tax assets	2,921,561	2,740,463
Valuation allowance	(2,921,561)	(2,740,463)
Net deferred income tax asset

XML

INCOME TAX (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Revised federal income tax rate	35.00%	21.00%
Valuation allowance	$ 181,098	$ (147,517)
Net operating loss carryforwards	10,145,000
Net operating loss carryforwards subject to limitation	$ 1,305,000