10-Q

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2023

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

For the transition period from ____________ to ____________

Commission file number 0-31981

ENERTECK CORPORATION

(Exact name of Registrant as Specified in its Charter)

Delaware	47-0929885
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
10701 Corporate Drive, Suite 150 Stafford, Texas	77477
(Address of principal executive offices)	(Zip Code)

(281) 240-1787

(Registrant’s Telephone Number, Including Area Code)

Not applicable

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act: None.

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ 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 definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☒	Smaller reporting company	☒
Emerging growth company	☐

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

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

State the number of shares outstanding of each of the Issuer’s classes of common stock, as of the latest practicable date: Common, $.001 par value per share; 36,380,690 outstanding as of May 15, 2023.

ENERTECK CORPORATION

TABLE OF CONTENTS

		Page
PART I ‑ FINANCIAL INFORMATION		3
Item 1.	Financial Statements.	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	18
Item 4.	Controls and Procedures.	18
PART II - OTHER INFORMATION		19
Item 1.	Legal Proceedings.	19
Item 1A.	Risk Factors.	19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	19
Item 3.	Default upon Senior Securities.	19
Item 4.	Mine Safety Disclosures.	19
Item 5.	Other Information.	19
Item 6.	Exhibits.	20
SIGNATURES		21

2

PART I ‑ FINANCIAL INFORMATION

Item 1. Financial Statements

ENERTECK CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
	2023			2022
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	7,585		$	1,035
Inventory		185,316			185,316
Accounts receivable		2,750			6,950
Prepaid expenses		66,913			15,237
Total current assets		262,564			208,538
Intangible assets, net of accumulated amortization
of $53,125 and $50,000, respectively		96,875			100,000
Property and equipment, net of accumulated
depreciation of $269,290 and $269,274, respectively		6,257			6,273
TOTAL ASSETS	$	365,696		$	314,811
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable	$	273,096		$	276,876
Customer advances		50,900			50,900
Related party notes and advances		4,317,500			4,112,500
Accrued compensation		5,013,987			4,963,987
Accrued interest		2,475,283			2,397,780
Accrued liabilities		345,717			301,103
Deferred revenue		-			-
Total liabilities		12,476,483			12,103,146
Commitments and contingencies (Note 8)
Stockholders' deficit
Preferred stock, $0.001 par value, authorized 10,000,000
shares, none issued and outstanding at March 31, 2023
and December 31, 2022		-			-
Common stock, $0.001 par value, authorized 100,000,000
shares, 36,380,690 issued and outstanding at March 31, 2023
and December 31, 2022		36,381			36,381
Additional paid-in capital		29,495,837			29,495,837
Accumulated deficit		(41,643,005	)		(41,320,553	)
Total stockholders' deficit		(12,110,787	)		(11,788,335	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	365,696		$	314,811

The accompanying notes are integral part of these condensed consolidated financial statements.

3

ENERTECK CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended
	March 31,
	2023			2022
	(unaudited)
Revenues	$	-		$	31,171
Cost of goods sold		-			10,117
Gross profit		-			21,054
General and administrative expenses
Wages		134,028			134,040
Depreciation and amortization		3,141			3,141
Other selling, general and administrative		107,189			112,120
Total expenses		244,358			249,301
Operating loss		(244,358	)		(228,247	)
Other income (expense)
Interest income		3			1
Other (expense) income		(595	)		2,372
Interest expense		(77,502	)		(71,366	)
Net loss	$	(322,452	)	$	(297,240	)
Loss per common share
Basic and diluted	$	(0.01	)	$	(0.01	)
Weighted average shares outstanding
Basic and diluted		36,380,690			36,380,690

The accompanying notes are integral part of these condensed consolidated financial statements.

4

ENERTECK CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(Unaudited)

					Additional					Total
	Common Stock				Paid-in		Accumulated			Stockholders'
Three Months Ended March 31, 2022	Shares		Amount		Capital		Deficit			Deficit
Balances at December 31, 2021		36,380,690	$	36,381	$	29,495,837	$	(40,118,205	)	$	(10,585,987	)
Net loss		-		-		-		(297,240	)		(297,240	)
Balances at March 31, 2022		36,380,690	$	36,381	$	29,495,837	$	(40,415,445	)	$	(10,883,227	)

					Additional					Total
	Common Stock				Paid-in		Accumulated			Stockholders'
Three Months Ended March 31, 2023	Shares		Amount		Capital		Deficit			Deficit
Balances at December 31, 2022		36,380,690	$	36,381	$	29,495,837	$	(41,320,553	)	$	(11,788,335	)
Net loss		-		-		-		(322,452	)		(322,452	)
Balances at March 31, 2023		36,380,690	$	36,381	$	29,495,837	$	(41,643,005	)	$	(12,110,787	)

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

5

ENERTECK CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended
	March 31,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(322,452	)	$	(297,240	)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization		3,141			3,141
Effects of changes in operating assets and liabilities:
Accounts receivable		4,200			(24,301	)
Inventory		-			(115,229	)
Prepaid expenses		(51,676	)		(53,926	)
Accounts payable		(3,780	)		89,370
Accrued interest		77,503			70,864
Accrued compensation		50,000			53,825
Accrued liabilities		44,614			11,659
Deferred revenue		-			(695	)
NET CASH USED IN OPERATING ACTIVITIES		(198,450	)		(262,532	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from related party notes and advances		205,000			250,000
NET CASH PROVIDED BY FINANCING ACTIVITIES		205,000			250,000
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS		6,550			(12,532	)
CASH AND CASH EQUIVALENTS, beginning of period		1,035			23,625
CASH AND CASH EQUIVALENTS, end of period	$	7,585		$	11,093
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for:
Interest	$	-		$	180
Non-cash financing activities:
Financed portion of prepaid insurance	$	51,571		$	46,293

The accompanying notes are integral part of these condensed consolidated financial statements.

6

ENERTECK CORPORATION and SUBSIDIARY,

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – BASIS OF PRESENTATION

Nature of Operations:

EnerTeck Corporation, a Delaware corporation, and its wholly owned subsidiary, EnerTeck Chemical Corp. (“EnerTeck Sub”) (collectively referred to as the “Company”) are headquartered in Houston, Texas. The Company specializes in the sales, marketing and manufacture of a fuel borne catalytic engine treatment for diesel engines known as EnerBurn®. The use of EnerBurn in diesel engines improves fuel economy, lowers smoke, and decreases engine wear and the dangerous emissions of both Nitrogen Oxide (NOx) and microscopic airborne solid matter (particulates). Principal target markets have included the trucking, heavy construction, maritime shipping, railroad and mining industries, as well as federal, state and international government applications. Key uncertainties and risks to the Company include, but are not limited to, if and how quickly the EnerBurn technology is accepted by the market and the effects future technological changes and environmental regulatory requirements may have on the need for diesel fuel additives.

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited consolidated financial statements for fiscal 2022 as reported in the Form 10-K have been omitted.

Use of Estimates

In preparing the accompanying condensed unaudited interim consolidated financial statements, management has made certain estimates and assumptions that affect reported amounts in the condensed unaudited interim consolidated financial statements and disclosures of contingencies. Actual results may differ from those estimates.

Inventory

Inventory primarily consists of market ready EnerBurn plus raw materials required to manufacture the products. Inventory is valued at the lower of cost or net realizable value, using the average cost method.

Finished product costs amounted to approximately $79,000 and $79,000 at March 31, 2023 and December 31, 2022, respectively, and includes required blending costs to bring the Company’s products to their finished state.

Accounts Receivable and Expected Credit Losses

Account receivables represent uncollateralized obligations due from customers of the Company and are recorded at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts to reflect any loss anticipated on the accounts receivable balances and charged to the provision for doubtful accounts. The Company calculates this allowance based on historical write-offs, level of past due accounts and relationships with and economic status of the customers. Accounts are written off as bad debts when all collection efforts have failed, and the account is deemed uncollectible. Accounts receivable balances as of March 31, 2023, December 31, 2022 and January 1, 2022 are $2,750, $6,950 and 0, respectively.

7

The Company incorporated the measurement of expected credit losses on accounts receivable under the new methodology using a forward-looking approach that incorporates lifetime expected credit losses based on historical information, current conditions, and reasonable and supportable forecasts. The Company reviews customer accounts using various factors, including but not limited to the customer’s current financial condition, ability to pay and the volume and level of historical write-offs. Based on the Company’s review of these factors, management has provided allowances for doubtful accounts of $0, $6,722 and $6,722 as of March 31, 2023, December 31, 2022 and January 1, 2022, respectively.

Intangible Assets

The Company follows the provisions of FASB ASC 350, Goodwill and Other Intangible Assets. FASB ASC 350 addresses financial accounting and reporting for acquired goodwill and other intangible assets. Specifically, FASB ASC 350 addresses how intangible assets that are acquired should be accounted for in consolidated financial statements upon their acquisition, as well as how goodwill and other intangible assets should be accounted for after they have been initially recognized in the consolidated financial statements. The statement requires the Company to evaluate its intellectual property each reporting period to determine whether events and circumstances continue to support an indefinite life. In addition, the Company tests its intellectual property for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The statement requires intangible assets with finite lives to be reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable and that a loss shall be recognized if the carrying amount of an intangible exceeds its fair value. No impairment expense was recorded for these assets at March 31, 2023 and 2022.

The Company has determined its intangible assets to have a finite life of 12 years. Amortization expense was $3,125 for the three months ended March 31, 2023 and 2022.

Revenue Recognition

The Company follows Accounting Standards Update (ASU) 2014-09, Revenues from Contracts with Customers and all subsequent amendments to the ASU (collectively Topic 606) which creates a single framework for recognizing revenue from contracts with customers that fall within its scope. The core principle of Topic 606 is that a reporting entity should recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the reporting entity expects to be entitled in exchange for the goods and services.

While the Company has had some direct customers over the years, the principal method of selling the Company’s product EnerBurn is through the use of independent distributors, for both domestic and international markets. The transaction price for each sale is explicitly stated within the contract with a customer. The Company does not accept returns nor does it provide warranty on its product’s performance, as control of performance is based on the proper utilization by the final user. Normal payment terms for domestic sales to both customers and distributors shipping within the United States are net 30 days. All foreign shipments are cash in advance of shipment from the Company’s location. The Company’s sole performance obligation to customers and distributors is the manufacturing and shipment of EnerBurn. Revenues from sales of the Company’s product are recognized at the point when a customer or distributor order has been completed and shipped. Sales of all product are f.o.b. shipping point. All sales contracts between the individual distributor and end customer are the responsibility of the individual distributor and the amount of mark up above the distributors’ wholesale price per unit is the purview of the distributor.

The Company may from time to time enter into contracts to sell exclusive distributorship rights to certain markets for a fee. The contracts typically contain a term of market exclusivity as well as other performance obligations. The Company has determined the performance obligations on these types of contracts are satisfied evenly over the term of the contract and recognizes revenue evenly over the term of the contract. For such contracts that were classified as deferred revenue at the beginning of 2022, the Company recognized revenue of $695 for the three months ended March 31, 2022. The remaining performance obligations on these contracts as of March 31, 2022 was $0.

In the following table, revenues have been disaggregated for the periods indicated:

8

	Three Months Ended
	March 31,
	2023		2022
	(unaudited)
Revenues - domestic	$	-	$	31,171
Revenues - foreign		-		-
Total revenues	$	-	$	31,171

As stated above, the Company does not accept returns nor does it provide warranty on its product’s performance, as control of performance is based on the proper utilization by the final user. The Company periodically tests the product manufactured prior to shipment for its proprietary quality standards and guarantees to the distributors that the product will always maintain the level of strict quality standard that is integral to the performance of its product for the end customer. The Company will provide a Certificate of Analysis, (“C of A”) on each shipment of its product, if requested for the customer. The C of A provides proof that the product is manufactured to meet chemical specifications that insure performance standards.

Cost of Goods Sold

Cost of goods sold includes costs related to the manufacture of the Company’s product EnerBurn. The primary costs included are raw materials that are mixed to produce the finished product that is then sold to customers and/or distributors. Other costs included are packaging and freight.

Going Concern

In accordance with ASC Subtopic 205-40, Going Concern, management evaluates whether relevant conditions and events that, when considered in the aggregate, indicate that it is probable the Company will be unable to meet its obligations as they become due within one year after the date that the consolidated financial statements are issued. When relevant conditions or events, considered in the aggregate, initially indicate that it is probable that the Company will be unable to meet its obligations as they become due within one year after the date that the consolidated financial statements are issued (and therefore they raise substantial doubt about the Company’s ability to continue as a going concern), management evaluates whether its plans that are intended to mitigate those conditions and events, when implemented, will alleviate substantial doubt about the Company’s ability to continue as a going concern. Management’s plans are considered only to the extent that 1) it is probable that the plans will be effectively implemented and 2) it is probable that the plans will mitigate the conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern.

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the three months ended March 31, 2023 and 2022, the Company incurred recurring net losses of $322,452 and $297,240, respectively. Further, most of the Company’s notes payable are overdue and payment may be demanded at any time. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The Company’s continuation as a going concern is contingent upon its ability to obtain additional financing and to generate revenues and cash flow to meet its obligations on a timely basis. The Company has been able to obtain cash in the past through private placements and issuing promissory notes and believes that these avenues will remain available to the Company. These financings are intended to mitigate the substantial doubt raised by the Company’s historical operating results and satisfying estimated liquidity needs 12 months from the issuance of the consolidated financial statements. However, there is no certainty that additional financing can be obtained in the future at terms acceptable to the Company.

9

Adoption of New Accounting Standard

On January 1, 2023, the Company adopted ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including trade receivables. Estimates of expected credit losses on trade receivables over their life will be required to be recorded at inception, using a forward-looking methodology that incorporates lifetime expected credit losses that are based on historical information, current conditions, and reasonable and supportable forecasts. The Company may review customer accounts using various factors, including but not limited to the customer’s current financial condition, ability to pay and the volume and level of historical write-offs.

The Company’s adoption of ASC 326 does not require prior-period adjustment, nor is there a material impact to current results.

NOTE 2 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	March 31,		December 31,
	2023		2022
	(unaudited)
Furniture and fixtures	$	30,909	$	30,909
Equipment		244,638		244,638
		275,547		275,547
Less: accumulated depreciation		269,290		269,274
Total property and equipment, net	$	6,257	$	6,273

Depreciation expense for the three months ended March 31, 2023 and 2022 was $16 and $16, respectively.

NOTE 3 – LOSS PER COMMON SHARE

The Company follows ASC 260, Earnings Per Share, for share-based payments that are considered to be participating securities within the definition provided by the standard. All share-based payment awards that contained non-forfeitable rights to dividends, whether paid or unpaid, were designated as participating securities and included in the computation of earnings per share (“EPS”).

The following table sets forth the computation of basic and diluted loss per share:

10

	Three Months Ended
	March 31,
	2023			2022
	(unaudited)
Net loss	$	(322,452	)	$	(297,240	)
Weighted average common shares outstanding:
Basic and diluted		36,380,690			36,380,690
Basic and diluted loss per share	$	(0.01	)	$	(0.01	)

For the three months ended March 31, 2023 and 2022, 4,940,000 stock warrants were excluded from diluted earnings per share because they are considered anti-dilutive.

For the three months ended March 31, 2023 and 2022, 1,235,070 stock options were excluded from diluted earnings per share because they are considered anti-dilutive.

Further, the calculation of diluted weighted-average shares outstanding for the three months ended March 31, 2023 and 2022 exclude potential shares related to the outstanding convertible notes payable, which if converted, would be anti-dilutive and would have a significant impact on the total number of shares outstanding, once exercised.

NOTE 4 – STOCKHOLDERS’ DEFICIT

During the three months ended March 31, 2023 and 2022, no equity activity occurred.

NOTE 5 – STOCK WARRANTS AND OPTIONS

Stock Warrants

No warrants were issued or exercised, nor were there any warrants that expired, during the three months ended March 31, 2023 and 2022.

An unaudited summary of warrants outstanding and exercisable as of March 31, 2023 were:

				Weighted
				Average		Exercisable
Exercise		Number of		Remaining		Number of
Price		Warrants		Life in Years		Warrants
$	0.60		3,340,000		3.8		3,340,000
$	0.75		100,000		3.8		100,000
$	0.30		1,500,000		3.8		1,500,000
			4,940,000				4,940,000

Stock Options

In September 2003, shareholders of the Company approved an employee stock option plan (the “2003 Option Plan”) authorizing the issuance of options to purchase up to 1,000,000 shares of common stock. The 2003 Option Plan is intended to give the Company greater ability to attract, retain, and motivate officers, key employees, directors and consultants; and is intended to provide the Company with the ability to provide incentives more directly linked to the success of the Company’s business and increases in shareholder value. During the third quarter of 2013, the board of directors increased the number of shares reserved for issuance under the 2003 Option Plan from 1,000,000 to 1,250,000 which was increased by the board to 1,750,000 during the third quarter of 2018. 

11

An unaudited summary of the activity of the Company’s stock options for the three months ended March 31, 2023 is presented below:

					Weighted		Weighted
	Weighted				Average		Average
	Average		Number of		Remaining		Optioned		Aggregate
	Exercise		Optioned		Contractual		Grant Date		Intrinsic
	Price		Shares		Term in Years		Fair Value		Value
Balance as of December 31, 2022	$	0.32		1,235,070			$	-	$	-
Expired		-		-				-
Granted		-		-				-
Exercised		-		-				-
Forfeited		-		-				-
Balance as of March 31, 2023	$	0.32		1,235,070		2.06	$	0.09	$	-
Vested and exercisable as of March 31, 2023	$	0.32		1,235,070		2.06	$	0.09	$	-

NOTE 6 – INCOME TAXES

The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company has historically incurred net losses and therefore has no tax liability or tax expense. At March 31, 2023, the Company’s net deferred tax asset had a full valuation allowance against it.

NOTE 7 – RELATED PARTY NOTES AND ADVANCES

On July 7, 2009, the Company entered into a $100,000 unsecured promissory note with an officer, due on demand. Interest is payable at 12% per annum. Also, on December 11, 2009, the Company entered into a $50,000 note with a shareholder/director. Interest is 5% per annum. The principal balance of the note was due on the earlier of December 11, 2013, or upon completion by the Company of equity financing in excess of $1.0 million in gross proceeds. Interest on the loan is payable on the maturity date at the rate of 5% per annum. These notes are now overdue for payment.

On June 1, 2010, the Company entered into a $50,000 convertible promissory note with a shareholder/director which was due on June 1, 2013 and accrues interest at 8.0% per annum payable at maturity and which may be converted at any time into shares of common stock. The assignment of the conversion feature of the note resulted in a loan discount being recorded. The discount amount of $36,207 was fully amortized over the original thirty-six-month term of the debt as additional interest expense. This note is now overdue for payment.

On June 1, 2010, the Company entered into $300,000 of convertible promissory notes with a shareholder/director which was due on June 1, 2013 and accrues interest at 8.0% per annum payable at maturity and which may be converted at any time into shares of common stock the number of which is to be determined at that time. This note is now overdue for payment.

12

On July 20, 2010, the Company entered into $400,000 convertible promissory notes with a shareholder/director which was due on July 20, 2013 and accrues interest at 8.0% per annum payable at maturity and which may be converted at any time into shares of common stock. This note is now overdue for payment. 

On July 20, 2010, the Company entered into a $100,000 convertible promissory note with a shareholder which was due on July 20, 2013 and accrues interest at 8.0% per annum payable at maturity and which may be converted at any time into shares of common stock. This note is now overdue for payment.

On December 10, 2010, the Company entered into $150,000 of convertible promissory notes with a shareholder/director which was due on December 10, 2013 and accrues interest at 8.0% per annum payable at maturity and which may be converted at any time into shares of common stock. This note is now overdue for payment.

On June 20, 2011, the Company entered into a $150,000 convertible promissory note with a shareholder/director which shall be due and payable on June 20, 2014 and accrues interest at 8.0% per annum payable at maturity and which may be converted at any time into shares of common stock. This note is now overdue for payment.

On October 20, 2011, the Company entered into a $70,000 convertible promissory note with a shareholder/director which was due on October 20, 2014 and accrues interest at 8.0% per annum payable at maturity and which may be converted at any time into shares of common stock. This note is now overdue for payment.

During the year ended December 31, 2018, a shareholder/director advanced $445,000 to the Company for working capital requirements. In addition, the Company reclassified a previous customer deposit of $37,500 originally received from a shareholder/director, made on behalf of a now deceased distributor, from customer deposits to shareholder deposits, as the original projected sale in question is no longer viable. The Company expects amounts advanced will be either (i) applied against a stock subscription to be issued at a future date or (ii) repaid at a future date as the parties shall determine. Until otherwise agreed, such amounts advanced have been recorded as an additional payable bearing no interest.

During the year ended December 31, 2019, a shareholder/director advanced $570,000 to the Company for working capital requirements. The Company expects amounts advanced will be either (i) applied against a stock subscription to be issued at a future date or (ii) repaid at a future date as the parties shall determine. Until otherwise agreed, such amounts advanced have been recorded as an additional payable bearing no interest.

During the year ended December 31, 2020, a shareholder/director advanced $625,000 to the Company for working capital requirements. The Company expects amounts advanced will be either (i) applied against a stock subscription to be issued at a future date or (ii) repaid at a future date as the parties shall determine. Until otherwise agreed, such amounts advanced have been recorded as an additional payable bearing no interest.

During the year ended December 31, 2021, a shareholder/director advanced $435,000 to the Company for working capital requirements. The Company expects amounts advanced will be either (i) applied against a stock subscription to be issued at a future date or (ii) repaid at a future date as the parties shall determine. Until otherwise agreed, such amounts advanced have been recorded as an additional payable bearing no interest.

During the year ended December 31, 2022, a shareholder/director advanced $620,000 to the Company for working capital requirements. The Company expects amounts advanced will be either (i) applied against a stock subscription to be issued at a future date or (ii) repaid at a future date as the parties shall determine. Until otherwise agreed, such amounts advanced have been recorded as an additional payable bearing no interest.

During the three months ended March 31, 2023, a shareholder/director advanced $205,000 to the Company for working capital requirements. The Company expects amounts advanced will be either (i) applied against a stock subscription to be issued at a future date or (ii) repaid at a future date as the parties shall determine. Until otherwise agreed, such amounts advanced have been recorded as an additional payable bearing no interest.

13

The Company determined it is not practicable to estimate the fair value of outstanding debt as of March 31, 2023 and December 31, 2022, as the outstanding debt is private, there is no clarity as to when interest payments or principal payments will ultimately be made (or be called by the debt holders), and the Company lacks the internal expertise to calculate fair value of these debt instruments and would incur excessive costs to obtain a third-party valuation.

Other related party transactions

As of March 31, 2023, and December 31, 2022, the Company owed approximately $5.0 and $5.0 million, respectively, to its chief executive officer and other employees of the Company. The CEO and employees agreed to salary deferrals pending available resources to make such payments.

One of the Company’s shareholders owns 100% of BATL Trading, Inc., which is a distributor of EnerBurn. There was no activity between the Company and BATL or between the Company and the Shareholder during the three months ended March 31, 2023 and 2022.

During the three months ended March 31, 2023 and 2022, the Company had sales to related parties of $0.

NOTE 8 -- COMMITMENTS AND CONTINGENCIES

In January 2021, the Company executed an additional one-year amendment to the lease for office space for the period March 1, 2021 through February 28, 2022. As permitted by ASC 842-20-25-2 the Company has elected to not record the short-term lease on the consolidated balance sheets.

In November 2021, the Company executed an additional one-year amendment to the lease for office space for the period March 1, 2022 through February 28, 2023. As permitted by ASC 842-20-25-2 the Company has elected to not record the short-term lease on the consolidated balance sheets.

In January 2023, the Company executed an additional one-year amendment to the lease for office space for the period March 1, 2023 through February 29, 2024. As permitted by ASC 842-20-25-2 the Company has elected to not record the short-term lease on the consolidated balance sheets.

Rent expense for the three months ended March 31, 2023 and 2022 totaled $14,284 and $14,284, respectively.

NOTE 9 -- RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.

NOTE 10 – SUBSEQUENT EVENTS

During April 2023 the Company received total advances from a shareholder/director in the amount of $60,000. 

14

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

The following should be read in conjunction with the consolidated financial statements of the Company included elsewhere herein.

Forward Looking Statements

When used in this report, the words “may,” “will,” “expect,” “anticipate,” “continue,” “estimate,” “intend,” “plans”, and similar expressions are intended to identify forward-looking statements regarding events, conditions and financial trends which may affect our future plans of operations, business strategy, operating results and financial position. Forward looking statements in this report include without limitation statements relating to trends affecting our financial condition or results of operations, our business and growth strategies and our financing plans.

Such statements are not a guarantee of future performance and are subject to risks and uncertainties and actual results may differ materially from those included within the forward-looking statements as a result of various factors. Such factors include, among other things, general economic conditions; cyclical factors affecting our industry; lack of growth in our industry; our ability to comply with government regulations; a failure to manage our business effectively; our ability to sell products at profitable yet competitive prices; and other risks and factors set forth from time to time in our filings with the Securities and Exchange Commission.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. We undertake no obligation to publicly release the result of any revision of these forward-looking statements to reflect events or circumstances after the date they are made or to reflect the occurrence of unanticipated events.

Executive Overview

EnerTeck Corporation (the “Company” or “EnerTeck Parent”), formerly named Gold Bond Mining Company and then Gold Bond Resources, Inc., was incorporated in the State of Washington on July 30, 1935. We acquired EnerTeck Chemical Corp. (“EnerTeck Sub”) as a wholly owned subsidiary on January 9, 2003. As a result of this acquisition, we are now acting as a holding company, with EnerTeck Sub as our primary operating business. Subsequent to this transaction, on November 24, 2003 we changed our domicile from the State of Washington to the State of Delaware and changed our name from Gold Bond Resources, Inc. to EnerTeck Corporation. Unless the context otherwise requires, the terms “we,” “us” or “our” refer to EnerTeck Corporation and its consolidated subsidiary.

EnerTeck Sub, our wholly owned operating subsidiary, was incorporated in the State of Texas on November 29, 2000. It was formed for the purpose of commercializing a diesel fuel specific combustion catalyst known as EnerBurn (TM), as well as other combustion enhancement and emission reduction technologies. Nalco/Exxon Energy Chemicals, L.P. (“Nalco/Exxon L.P.”), a joint venture between Nalco Chemical Corporation and Exxon Corporation commercially introduced EnerBurn in 1998. When Nalco/Exxon L.P. went through an ownership change in 2000, our founder, Dwaine Reese, formed EnerTeck Sub. It acquired the EnerBurn trademark and related assets and took over the Nalco/Exxon L.P. relationship with the EnerBurn formulator and blender, and its supplier, Ruby Cat Technology, LLC (“Ruby Cat”).

We utilize a sales process that includes detailed proprietary customer fleet monitoring protocols in on-road applications that quantify data and assists in managing certain internal combustion diesel engine operating results while utilizing EnerBurn. Test data prepared by Southwest Research Institute and actual customer usage has indicated that the use of EnerBurn in diesel engines improves fuel economy, lowers smoke, and decreases engine wear and the dangerous emissions of both Nitrogen Oxide (NOx) and microscopic airborne solid matter (particulates). Our principal target markets have included the trucking, heavy construction, maritime shipping, railroad and mining industries, as well as federal, state and international government applications. Each of these industries shares certain common financial characteristics, i.e. (i) diesel fuel represents a disproportionate share of operating costs; and (ii) relatively small operating margins are prevalent. Considering these factors, management believes that the use of EnerBurn and the corresponding derived savings in diesel fuel costs can positively affect the operating margins of its customers while contributing to a cleaner environment.

15

During 2011, we acquired a 40% membership interest in an entity called EnerTeck Environmental, LLC, which was formed for the purpose of marketing and selling a diesel fuel emission reduction technology with the creators of such specific technology. Indian Nations Technology, the co-owner of EnerTeck Environmental, LLC is currently working on a testing protocol which could revive this entity.

Results of Operations

Three Months Ended March 31, 2023, Compared to Three Months Ended March 31, 2022

Revenues

We recognized revenues of $0 for the three months ended March 31, 2023, compared to revenues of $31,171 for the three months ended March 31, 2022, a decrease of $31,171. Several trials and evaluations are currently underway in the U.S. and various other countries, and it is expected revenue should show increases for the remainder of 2023.

Sales delays have occurred due to delays in the completion of important product testing projects, a lack of new customers and the COVID-19 shutdown and restrictions. As businesses fully reopen following the COVID-19 shutdown, we expect to see progress in ongoing trials and evaluations that are currently underway in the U.S. and various other countries.

Gross Profit (Loss)

Gross profit (loss), defined as revenues less cost of goods sold, was $0, for the three months ended March 31, 2023, compared to $21,054, or 67.5% of revenue, for the three months ended March 31, 2022. Although raw material costs have increased substantially, we feel confident there will be an increase in gross profits as the year proceeds and into next year as several trials and evaluations are currently underway in the U.S. and various other countries.

Cost of goods sold was $0 for the three months ended March 31, 2023 compared to $10,117 for the three months ended March 31, 2022, which represented 32.5% of revenue.

General and Administrative Expenses

Operating expenses were $244,358 for the three months ended March 31, 2023 as compared to $249,301 for the three months ended March 31, 2022, a decrease of $4,943. Costs and expenses in all periods primarily consisted of payroll, professional fees, rent expense, amortization expense and other general and administrative expenses.

Net Loss

We reported a net loss of $322,452 for the three months ended March 31, 2023 as compared to a net loss of $297,240 for the three months ended March 31, 2022, an increase of $25,212. The expectation is that sales will increase for the remainder of 2023 as several trials and evaluations are currently underway in the U.S. and various other countries.

Operations Outlook

The fuel additive industry has historically been mired by a myriad of technically dubious products. Prospective customers in all targeted market sectors and geographic locations are primarily concerned about the potential business risks associated with the adoption of any new fuel or engine treatment. Our sales process begins with a proof of performance demonstration that is a thorough analysis of the potential customer, including fleet type, size, and opportunity. This is followed with sales presentations at both the executive level and maintenance level.

The majority of our marketing effort since 2005 has been directed at targeting and gaining a foothold in one of several major target areas, including the inland marine diesel market, trucking, heavy construction and mining. Management concedes that sales revenues for 2022 and prior years, and the first three months of 2023, have been considerably less than earlier anticipated. One of the issues we have faced in recent years has been the very long timeline from initial contact to contract signing subsequent to completion of an evaluation. Although we believe that many times in the past, we have proven the benefits of EnerBurn, various evaluating companies have opted not to move forward for a variety of reasons which we believe were beyond our control.

16

Nevertheless, at both the Company and distributor level, we have recently completed or are proceeding with evaluations of EnerBurn in many field trials. As we continue to string together a series of positive evaluations in more industries, we should begin to see more business generated from such results. New trials are either in progress or should be commencing shortly. 

A substantial portion of the last few years was spent re-directing our marketing emphasis for our primary product, EnerBurn. Our current sales process now requires a signed commitment letter from the prospective customer for a minimum of a 3-year supply agreement, prior to the commencement of an evaluation of any of our products. Should the evaluation meet or exceed the established benchmarks as outlined in the evaluation protocol document, the supply agreement would become binding. We have adopted this strategy as we had numerous successful evaluations in the past that did not result in the customer moving forward and adopting the technology, with most of those evaluations being at the Company’s expense.

Additionally, we have contracted with outside sales representatives, both in the United States and in other parts of the world to act as distributors of our products. We currently have distribution agreements with Diesel-E Pty Ltd in Australia and with Green Group in South America. Diesel-E Pty Ltd completed its first EnerBurn evaluation with Robson Civil Projects Pty Limited of Australia and is currently working on multiple other opportunities leveraging on that successful trial. Green Group is currently running two evaluations in Peru, one for a mining railroad and another for a large mining conglomerate. We also have a representative working on mining evaluations in Mexico and expect that once the COVID-19 pandemic subsides, we will commence an evaluation at a large mine in Mexico. In the U.S. we have a representative working on a number of currently ongoing EnerBurn evaluations in the Midwest, two of which have been completed successfully and we have recently started to supply one of them with chemical. Two other evaluations recently started but were terminated due to the pandemic. We believe such will resume when it is safe to do so.

Since the latter part of 2022, we have been working on a research and development project to automate injection of Enerburn. In the past, we have found that the need to hand treat Enerburn at a customer site has been a hindrance to our ability to sell our products to potential customers. We believe this has prevented our success to spread our technology not only to existing customers to also to potential new customers. In this regard, we recently completed the design and the building of our first drum automatic system for use at one of our existing customer’s sites, which was installed at such customer’s site in Florida at the end of February 2023. If successful, we are encouraged that this will lead to additional customers in 2023 and the installation of such additional automatic injection systems. We have also recently been working with waste haulers on testing Enerburn to improve their DPF filter problems which, if successful, should lead to additional business opportunities.

It should be noted that the ongoing coronavirus outbreak which began at the beginning of 2020 has impacted various businesses throughout the world, including travel restrictions and the extended shutdown of certain businesses in impacted geographic regions. A pandemic typically results in social distancing, travel bans and quarantine, and the effects of, and response to, the COVID-19 pandemic has so far limited access to our corporate office, personnel and professional advisors, and has also hampered, and may continue to hamper, our efforts to comply with our filing obligations with the Securities and Exchange Commission. If the coronavirus outbreak situation should worsen, we may experience additional disruptions to our business. The extent to which the coronavirus impacts our operations or those of our third-party partners will depend on future developments, which are highly uncertain and cannot be predicted, including the duration of the outbreak, new information that may emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its impact, among others.

Liquidity and Capital Resources

On March 31, 2023 we had a working capital deficit of $12,213,919 and a stockholders’ deficit of $12,110,787 compared to a working capital deficit of $11,894,608 and a stockholders’ deficit of $11,788,335 on December 31, 2022. Our continuing deficit levels are primarily due to poor sales. On March 31, 2023, we had $7,585 in cash, total assets of $365,696 and total liabilities of $12,476,483, compared to $1,035 in cash, total assets of $314,811 and total liabilities of $12,103,146 on December 31, 2022.

Net cash used in operating activities was $198,450 for the three months ended March 31, 2023 compared to net cash used in operating activities of $262,532 for the three months ended March 31, 2022, a decrease of $64,082. The decrease was primarily due to timing of accounts payable during the three months ended March 31, 2023.

Cash used in investing activities was $0 and $0 for the three months ended March 31, 2023 and 2022, respectively.

In the past, we have been able to finance our operations primarily from capital which has been raised. To date, sales have not been adequate to finance our operations without investment capital. Cash provided by financing activities was $205,000 for the three months ended March 31, 2023, a result of funds received from related party notes and advances. This is compared to cash provided by financing activities of $250,000 during the three months ended March 31, 2022, a result of funds received from related party notes and advances.

17

We anticipate, based on currently proposed plans and assumptions relating to our operations, that in addition to our current cash and cash equivalents together with projected cash flows from operations and projected revenues, we will require additional investment to satisfy our contemplated cash requirements for the next 12 months. No assurance can be made that we will be able to obtain such investment on terms acceptable to us or at all. We anticipate that our costs and expenses over the next 12 months will be approximately $1.0 million. Our continuation as a going concern is contingent upon our ability to obtain additional financing and to generate revenues and cash flow to meet our obligations on a timely basis. As mentioned above, management acknowledges that sales revenues have been considerably less than earlier anticipated. This was primarily due to a combination of circumstances which have been corrected or are in the process of being corrected and therefore should not reoccur in the future and the general state of the economy. Management expects that sales should show increases during 2023. No assurances can be made that we will be able to obtain required financing on terms acceptable to us or at all. Our contemplated cash requirements in 2023 and beyond will depend primarily upon level of sales of our products, inventory levels, product development, sales and marketing expenditures and capital expenditures.

Due to our lack of meaningful revenues, we have been forced to finance our operations primarily from capital which has been raised from promissory notes and advances from related parties. Such loans and advances from related parties total $4,317,500 and $4,112,500 on March 31, 2023 and December 31, 2022, respectively. Many of these remaining loans are past due and certain others are due on demand. The Company does not expect any of such related parties to demand payment until the Company has adequate resources to pay back such loans and advances, there can be no assurance that such will be the case. This debt presents a significant risk to the Company in that in the event any of such related parties demand payment, the Company may not have the necessary cash to meet such payment obligations, or if it does, such payments may draw significantly on the Company’s cash position. Any of such events will likely have a materially detrimental effect on the Company.

Inflation has not significantly impacted the Company’s operations.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 4. Controls and Procedures.

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2023, these disclosure controls and procedures were ineffective to ensure that all information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rule and forms; and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure, as a result of material weaknesses in our disclosure controls and internal control over financial reporting. The ineffectiveness was due to the following material weaknesses which are indicative of many small companies: (i) all accounting functions are performed by limited accounting personnel; (ii) lack of formalized controls in the financial close and revenue recognition processes; and (iii) review of monthly, quarterly and yearly consolidated financial statements was not performed at a sufficient level of precision and specificity in order to detect material errors in the financial statements; and (iv) lack of formalized agreements maintained between parties during the normal course of business.

Despite the existence of the material weaknesses, we believe that our consolidated financial statements contained in this Form 10-Q fairly present our financial position, results of operations and cash flows as of and for the periods presented in all material respects.

Changes in Internal Control over Financial Reporting

There have been no material changes in internal control over financial reporting that occurred during the fiscal quarter covered by this report that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting. However, we intend to actively plan for and implement control procedures to improve our overall control environment including but not limited to documenting necessary internal control policies and developing and delivering appropriate internal control training to our personnel. Due to the nature of the remediation process and the need to allow adequate time after implementation to evaluate and test the effectiveness of the controls, as well as our limited cash resources, no assurance can be given as to the timing of achievement of remediation.

18

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

The Company is not currently a party to any pending material legal proceeding nor is it aware of any proceeding contemplated by any individual, company, entity or governmental authority involving the Company.

Item 1A. Risk Factors.

Not required.

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

None.

Item 3. Defaults upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

19

Item 6. Exhibits.

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 002 (Rules 13a-14 and 15d-14 of the Exchange Act)
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rules 13a-14 and 15d-14 of the Exchange Act)
32.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

20

SIGNATURES

Pursuant to the requirements 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.

	ENERTECK CORPORATION
	(Registrant)
Dated: May 15, 2023	By:	/s/ Gary B. Aman
		Gary B. Aman,
		President and Acting Chief Executive Officer
		(Principal Executive Officer)
Dated: May 15, 2023	By:	/s/ Richard B. Dicks
		Richard B. Dicks,
		Chief Financial Officer
		(Principal Financial Officer)

21

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Gary B. Aman, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of EnerTeck Corporation;
2.	Based on my knowledge, this report does not contain any untrue statements 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 officers 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;
(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 reasonable 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.

Dated: May 15, 2023	By:	/s/ Gary B. Aman
		Gary B. Aman,
		President and Acting Chief Executive Officer (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Richard Dicks, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of EnerTeck Corporation;
2.	Based on my knowledge, this report does not contain any untrue statements 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 officers 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;
(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 reasonable 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.

Dated: May 15, 2023	By:	/s/ Richard Dicks
		Richard Dicks, Chief Financial Officer (Principal Financial 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 Quarterly Report of EnerTeck Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2023, as filed with the Securities and Exchange Commission (the “Report”), the undersigned certifies, 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 the undersigned’s knowledge, that:

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

Dated: May 15, 2023	By:	/s/ Gary B. Aman
		Gary B. Aman,
		President and Acting Chief Executive Officer (Principal Executive Officer)

Dated: May 15, 2023	By:	/s/ Richard Dicks
		Richard Dicks, Chief Financial Officer (Principal Financial Officer)

XML

Cover - shares	3 Months Ended
	Mar. 31, 2023	May 15, 2023
Cover [Abstract]
Entity Registrant Name	ENERTECK CORPORATION
Entity Central Index Key	0001128353
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Mar. 31, 2023
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2023
Entity Common Stock Shares Outstanding		36,380,690
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	0-31981
Entity Incorporation State Country Code	DE
Entity Tax Identification Number	47-0929885
Entity Interactive Data Current	Yes
Entity Address Address Line 1	10701 Corporate Drive
Entity Address Address Line 2	Suite 150
Entity Address City Or Town	Stafford
Entity Address State Or Province	TX
Entity Address Postal Zip Code	77477
City Area Code	281
Local Phone Number	240-1787

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 7,585	$ 1,035
Inventory	185,316	185,316
Accounts receivable	2,750	6,950
Prepaid expenses	66,913	15,237
Total current assets	262,564	208,538
Intangible assets, net of accumulated amortization of $53,125 and $50,000, respectively	96,875	100,000
Property and equipment, net of accumulated depreciation of $269,290 and $269,274, respectively	6,257	6,273
TOTAL ASSETS	365,696	314,811
Current liabilities
Accounts payable	273,096	276,876
Customer advances	50,900	50,900
Related party notes and advances	4,317,500	4,112,500
Accrued compensation	5,013,987	4,963,987
Accrued interest	2,475,283	2,397,780
Accrued liabilities	345,717	301,103
Deferred revenue	0	0
Total liabilities	12,476,483	12,103,146
Stockholders' deficit
Preferred stock, $.001 par value, authorized 10,000,000 shares, none issued and outstanding at March 31, 2023 and December 31, 2022	0	0
Common stock, $.001 par value, authorized 100,000,000 shares, 36,380,690 issued and outstanding at March 31, 2023 and December 31, 2022	36,381	36,381
Additional paid-in capital	29,495,837	29,495,837
Accumulated deficit	(41,643,005)	(41,320,553)
Total stockholders' deficit	(12,110,787)	(11,788,335)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 365,696	$ 314,811

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
CONDENSED CONSOLIDATED BALANCE SHEETS
Intangible assets, net of accumulated amortization	$ 53,125	$ 50,000
Accumulated depreciation of Property and equipment, net	$ 269,290	$ 269,274
Preferred stock, shares par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares outstanding	0	0
Preferred stock, shares issued	0	0
Common stock, shares par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	36,380,690	36,380,690
Common stock, shares outstanding	36,380,690	36,380,690

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Revenues	$ 0	$ 31,171
Cost of goods sold	0	10,117
Gross profit	0	21,054
General and administrative expenses
Wages	134,028	134,040
Depreciation and amortization	3,141	3,141
Other selling, general and administrative	107,189	112,120
Total expenses	244,358	249,301
Operating loss	(244,358)	(228,247)
Other income (expense)
Interest income	3	1
Other (expense) income	(595)	2,372
Interest expense	(77,502)	(71,366)
Net loss	$ (322,452)	$ (297,240)
Loss per common share
Basic and diluted	$ (0.01)	$ (0.01)
Weighted average shares outstanding
Basic and diluted	36,380,690	36,380,690

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS DEFICIT (Unaudited) - USD ($)	Total	Common Stock	Additional Paid-in Capital	Retained Earnings (Accumulated Deficit)
Balance, shares at Dec. 31, 2021		36,380,690
Balance, amount at Dec. 31, 2021	$ (10,585,987)	$ 36,381	$ 29,495,837	$ (40,118,205)
Net loss	(297,240)	$ 0	0	(297,240)
Balance, shares at Mar. 31, 2022		36,380,690
Balance, amount at Mar. 31, 2022	(10,883,227)	$ 36,381	29,495,837	(40,415,445)
Balance, shares at Dec. 31, 2022		36,380,690
Balance, amount at Dec. 31, 2022	(11,788,335)	$ 36,381	29,495,837	(41,320,553)
Net loss	(322,452)			(322,452)
Balance, shares at Mar. 31, 2023		36,380,690
Balance, amount at Mar. 31, 2023	$ (12,110,787)	$ 36,381	$ 29,495,837	$ (41,643,005)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (322,452)	$ (297,240)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	3,141	3,141
Effects of changes in operating assets and liabilities:
Accounts receivable	4,200	(24,301)
Inventory	0	(115,229)
Prepaid expenses	(51,676)	(53,926)
Accounts payable	(3,780)	89,370
Accrued interest	77,503	70,864
Accrued compensation	50,000	53,825
Accrued liabilities	44,614	11,659
Deferred revenue	0	(695)
NET CASH USED IN OPERATING ACTIVITIES	(198,450)	(262,532)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from related party notes and advances	205,000	250,000
NET CASH PROVIDED BY FINANCING ACTIVITIES	205,000	250,000
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS	6,550	(12,532)
CASH AND CASH EQUIVALENTS, beginning of period	1,035	23,625
CASH AND CASH EQUIVALENTS, end of period	7,585	11,093
Cash paid for:
Interest	0	180
Non-cash financing activities:
Financed portion of prepaid insurance	$ 51,571	$ 46,293

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BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2023

BASIS OF PRESENTATION

BASIS OF PRESENTATION

NOTE 1 – BASIS OF PRESENTATION

Nature of Operations:

EnerTeck Corporation, a Delaware corporation, and its wholly owned subsidiary, EnerTeck Chemical Corp. (“EnerTeck Sub”) (collectively referred to as the “Company”) are headquartered in Houston, Texas. The Company specializes in the sales, marketing and manufacture of a fuel borne catalytic engine treatment for diesel engines known as EnerBurn®. The use of EnerBurn in diesel engines improves fuel economy, lowers smoke, and decreases engine wear and the dangerous emissions of both Nitrogen Oxide (NOx) and microscopic airborne solid matter (particulates). Principal target markets have included the trucking, heavy construction, maritime shipping, railroad and mining industries, as well as federal, state and international government applications. Key uncertainties and risks to the Company include, but are not limited to, if and how quickly the EnerBurn technology is accepted by the market and the effects future technological changes and environmental regulatory requirements may have on the need for diesel fuel additives.

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited consolidated financial statements for fiscal 2022 as reported in the Form 10-K have been omitted.

Use of Estimates

In preparing the accompanying condensed unaudited interim consolidated financial statements, management has made certain estimates and assumptions that affect reported amounts in the condensed unaudited interim consolidated financial statements and disclosures of contingencies. Actual results may differ from those estimates.

Inventory

Inventory primarily consists of market ready EnerBurn plus raw materials required to manufacture the products. Inventory is valued at the lower of cost or net realizable value, using the average cost method.

Finished product costs amounted to approximately $79,000 and $79,000 at March 31, 2023 and December 31, 2022, respectively, and includes required blending costs to bring the Company’s products to their finished state.

Accounts Receivable and Expected Credit Losses

Account receivables represent uncollateralized obligations due from customers of the Company and are recorded at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts to reflect any loss anticipated on the accounts receivable balances and charged to the provision for doubtful accounts. The Company calculates this allowance based on historical write-offs, level of past due accounts and relationships with and economic status of the customers. Accounts are written off as bad debts when all collection efforts have failed, and the account is deemed uncollectible. Accounts receivable balances as of March 31, 2023, December 31, 2022 and January 1, 2022 are $2,750, $6,950 and 0, respectively.

The Company incorporated the measurement of expected credit losses on accounts receivable under the new methodology using a forward-looking approach that incorporates lifetime expected credit losses based on historical information, current conditions, and reasonable and supportable forecasts. The Company reviews customer accounts using various factors, including but not limited to the customer’s current financial condition, ability to pay and the volume and level of historical write-offs. Based on the Company’s review of these factors, management has provided allowances for doubtful accounts of $0, $6,722 and $6,722 as of March 31, 2023, December 31, 2022 and January 1, 2022, respectively.

Intangible Assets

The Company follows the provisions of FASB ASC 350, Goodwill and Other Intangible Assets. FASB ASC 350 addresses financial accounting and reporting for acquired goodwill and other intangible assets. Specifically, FASB ASC 350 addresses how intangible assets that are acquired should be accounted for in consolidated financial statements upon their acquisition, as well as how goodwill and other intangible assets should be accounted for after they have been initially recognized in the consolidated financial statements. The statement requires the Company to evaluate its intellectual property each reporting period to determine whether events and circumstances continue to support an indefinite life. In addition, the Company tests its intellectual property for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The statement requires intangible assets with finite lives to be reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable and that a loss shall be recognized if the carrying amount of an intangible exceeds its fair value. No impairment expense was recorded for these assets at March 31, 2023 and 2022.

The Company has determined its intangible assets to have a finite life of 12 years. Amortization expense was $3,125 for the three months ended March 31, 2023 and 2022.

Revenue Recognition

The Company follows Accounting Standards Update (ASU) 2014-09, Revenues from Contracts with Customers and all subsequent amendments to the ASU (collectively Topic 606) which creates a single framework for recognizing revenue from contracts with customers that fall within its scope. The core principle of Topic 606 is that a reporting entity should recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the reporting entity expects to be entitled in exchange for the goods and services.

While the Company has had some direct customers over the years, the principal method of selling the Company’s product EnerBurn is through the use of independent distributors, for both domestic and international markets. The transaction price for each sale is explicitly stated within the contract with a customer. The Company does not accept returns nor does it provide warranty on its product’s performance, as control of performance is based on the proper utilization by the final user. Normal payment terms for domestic sales to both customers and distributors shipping within the United States are net 30 days. All foreign shipments are cash in advance of shipment from the Company’s location. The Company’s sole performance obligation to customers and distributors is the manufacturing and shipment of EnerBurn. Revenues from sales of the Company’s product are recognized at the point when a customer or distributor order has been completed and shipped. Sales of all product are f.o.b. shipping point. All sales contracts between the individual distributor and end customer are the responsibility of the individual distributor and the amount of mark up above the distributors’ wholesale price per unit is the purview of the distributor.

The Company may from time to time enter into contracts to sell exclusive distributorship rights to certain markets for a fee. The contracts typically contain a term of market exclusivity as well as other performance obligations. The Company has determined the performance obligations on these types of contracts are satisfied evenly over the term of the contract and recognizes revenue evenly over the term of the contract. For such contracts that were classified as deferred revenue at the beginning of 2022, the Company recognized revenue of $695 for the three months ended March 31, 2022. The remaining performance obligations on these contracts as of March 31, 2022 was $0.

In the following table, revenues have been disaggregated for the periods indicated:

	Three Months Ended
	March 31,
	2023		2022
	(unaudited)
Revenues - domestic	$	-	$	31,171
Revenues - foreign		-		-
Total revenues	$	-	$	31,171

As stated above, the Company does not accept returns nor does it provide warranty on its product’s performance, as control of performance is based on the proper utilization by the final user. The Company periodically tests the product manufactured prior to shipment for its proprietary quality standards and guarantees to the distributors that the product will always maintain the level of strict quality standard that is integral to the performance of its product for the end customer. The Company will provide a Certificate of Analysis, (“C of A”) on each shipment of its product, if requested for the customer. The C of A provides proof that the product is manufactured to meet chemical specifications that insure performance standards.

Cost of Goods Sold

Cost of goods sold includes costs related to the manufacture of the Company’s product EnerBurn. The primary costs included are raw materials that are mixed to produce the finished product that is then sold to customers and/or distributors. Other costs included are packaging and freight.

Going Concern

In accordance with ASC Subtopic 205-40, Going Concern, management evaluates whether relevant conditions and events that, when considered in the aggregate, indicate that it is probable the Company will be unable to meet its obligations as they become due within one year after the date that the consolidated financial statements are issued. When relevant conditions or events, considered in the aggregate, initially indicate that it is probable that the Company will be unable to meet its obligations as they become due within one year after the date that the consolidated financial statements are issued (and therefore they raise substantial doubt about the Company’s ability to continue as a going concern), management evaluates whether its plans that are intended to mitigate those conditions and events, when implemented, will alleviate substantial doubt about the Company’s ability to continue as a going concern. Management’s plans are considered only to the extent that 1) it is probable that the plans will be effectively implemented and 2) it is probable that the plans will mitigate the conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern.

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the three months ended March 31, 2023 and 2022, the Company incurred recurring net losses of $322,452 and $297,240, respectively. Further, most of the Company’s notes payable are overdue and payment may be demanded at any time. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The Company’s continuation as a going concern is contingent upon its ability to obtain additional financing and to generate revenues and cash flow to meet its obligations on a timely basis. The Company has been able to obtain cash in the past through private placements and issuing promissory notes and believes that these avenues will remain available to the Company. These financings are intended to mitigate the substantial doubt raised by the Company’s historical operating results and satisfying estimated liquidity needs 12 months from the issuance of the consolidated financial statements. However, there is no certainty that additional financing can be obtained in the future at terms acceptable to the Company.

Adoption of New Accounting Standard

On January 1, 2023, the Company adopted ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including trade receivables. Estimates of expected credit losses on trade receivables over their life will be required to be recorded at inception, using a forward-looking methodology that incorporates lifetime expected credit losses that are based on historical information, current conditions, and reasonable and supportable forecasts. The Company may review customer accounts using various factors, including but not limited to the customer’s current financial condition, ability to pay and the volume and level of historical write-offs.

The Company’s adoption of ASC 326 does not require prior-period adjustment, nor is there a material impact to current results.

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PROPERTY AND EQUIPMENT

3 Months Ended

Mar. 31, 2023

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

NOTE 2 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	March 31,		December 31,
	2023		2022
	(unaudited)
Furniture and fixtures	$	30,909	$	30,909
Equipment		244,638		244,638
		275,547		275,547
Less: accumulated depreciation		269,290		269,274
Total property and equipment, net	$	6,257	$	6,273

Depreciation expense for the three months ended March 31, 2023 and 2022 was $16 and $16, respectively.

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LOSS PER COMMON SHARE

3 Months Ended

Mar. 31, 2023

LOSS PER COMMON SHARE

LOSS PER COMMON SHARE

NOTE 3 – LOSS PER COMMON SHARE

The Company follows ASC 260, Earnings Per Share, for share-based payments that are considered to be participating securities within the definition provided by the standard. All share-based payment awards that contained non-forfeitable rights to dividends, whether paid or unpaid, were designated as participating securities and included in the computation of earnings per share (“EPS”).

The following table sets forth the computation of basic and diluted loss per share:

	Three Months Ended
	March 31,
	2023			2022
	(unaudited)
Net loss	$	(322,452	)	$	(297,240	)
Weighted average common shares outstanding:
Basic and diluted		36,380,690			36,380,690
Basic and diluted loss per share	$	(0.01	)	$	(0.01	)

For the three months ended March 31, 2023 and 2022, 4,940,000 stock warrants were excluded from diluted earnings per share because they are considered anti-dilutive.

For the three months ended March 31, 2023 and 2022, 1,235,070 stock options were excluded from diluted earnings per share because they are considered anti-dilutive.

Further, the calculation of diluted weighted-average shares outstanding for the three months ended March 31, 2023 and 2022 exclude potential shares related to the outstanding convertible notes payable, which if converted, would be anti-dilutive and would have a significant impact on the total number of shares outstanding, once exercised.

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STOCKHOLDERS DEFICIT

3 Months Ended

Mar. 31, 2023

STOCKHOLDERS DEFICIT

STOCKHOLDERS' DEFICIT

NOTE 4 – STOCKHOLDERS’ DEFICIT

During the three months ended March 31, 2023 and 2022, no equity activity occurred.

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STOCK WARRANTS AND OPTIONS

3 Months Ended

Mar. 31, 2023

STOCK WARRANTS AND OPTIONS

STOCK WARRANTS AND OPTIONS

NOTE 5 – STOCK WARRANTS AND OPTIONS

Stock Warrants

No warrants were issued or exercised, nor were there any warrants that expired, during the three months ended March 31, 2023 and 2022.

An unaudited summary of warrants outstanding and exercisable as of March 31, 2023 were:

				Weighted
				Average		Exercisable
Exercise		Number of		Remaining		Number of
Price		Warrants		Life in Years		Warrants
$	0.60		3,340,000		3.8		3,340,000
$	0.75		100,000		3.8		100,000
$	0.30		1,500,000		3.8		1,500,000
			4,940,000				4,940,000

Stock Options

In September 2003, shareholders of the Company approved an employee stock option plan (the “2003 Option Plan”) authorizing the issuance of options to purchase up to 1,000,000 shares of common stock. The 2003 Option Plan is intended to give the Company greater ability to attract, retain, and motivate officers, key employees, directors and consultants; and is intended to provide the Company with the ability to provide incentives more directly linked to the success of the Company’s business and increases in shareholder value. During the third quarter of 2013, the board of directors increased the number of shares reserved for issuance under the 2003 Option Plan from 1,000,000 to 1,250,000 which was increased by the board to 1,750,000 during the third quarter of 2018. 

An unaudited summary of the activity of the Company’s stock options for the three months ended March 31, 2023 is presented below:

					Weighted		Weighted
	Weighted				Average		Average
	Average		Number of		Remaining		Optioned		Aggregate
	Exercise		Optioned		Contractual		Grant Date		Intrinsic
	Price		Shares		Term in Years		Fair Value		Value
Balance as of December 31, 2022	$	0.32		1,235,070			$	-	$	-
Expired		-		-				-
Granted		-		-				-
Exercised		-		-				-
Forfeited		-		-				-
Balance as of March 31, 2023	$	0.32		1,235,070		2.06	$	0.09	$	-
Vested and exercisable as of March 31, 2023	$	0.32		1,235,070		2.06	$	0.09	$	-

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INCOME TAXES

3 Months Ended

Mar. 31, 2023

INCOME TAXES

INCOME TAXES

NOTE 6 – INCOME TAXES

The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company has historically incurred net losses and therefore has no tax liability or tax expense. At March 31, 2023, the Company’s net deferred tax asset had a full valuation allowance against it.

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RELATED PARTY NOTES AND ADVANCES

3 Months Ended

Mar. 31, 2023

RELATED PARTY NOTES AND ADVANCES

RELATED PARTY NOTES AND ADVANCES

NOTE 7 – RELATED PARTY NOTES AND ADVANCES

On July 7, 2009, the Company entered into a $100,000 unsecured promissory note with an officer, due on demand. Interest is payable at 12% per annum. Also, on December 11, 2009, the Company entered into a $50,000 note with a shareholder/director. Interest is 5% per annum. The principal balance of the note was due on the earlier of December 11, 2013, or upon completion by the Company of equity financing in excess of $1.0 million in gross proceeds. Interest on the loan is payable on the maturity date at the rate of 5% per annum. These notes are now overdue for payment.

On June 1, 2010, the Company entered into a $50,000 convertible promissory note with a shareholder/director which was due on June 1, 2013 and accrues interest at 8.0% per annum payable at maturity and which may be converted at any time into shares of common stock. The assignment of the conversion feature of the note resulted in a loan discount being recorded. The discount amount of $36,207 was fully amortized over the original thirty-six-month term of the debt as additional interest expense. This note is now overdue for payment.

On June 1, 2010, the Company entered into $300,000 of convertible promissory notes with a shareholder/director which was due on June 1, 2013 and accrues interest at 8.0% per annum payable at maturity and which may be converted at any time into shares of common stock the number of which is to be determined at that time. This note is now overdue for payment.

On July 20, 2010, the Company entered into $400,000 convertible promissory notes with a shareholder/director which was due on July 20, 2013 and accrues interest at 8.0% per annum payable at maturity and which may be converted at any time into shares of common stock. This note is now overdue for payment. 

On July 20, 2010, the Company entered into a $100,000 convertible promissory note with a shareholder which was due on July 20, 2013 and accrues interest at 8.0% per annum payable at maturity and which may be converted at any time into shares of common stock. This note is now overdue for payment.

On December 10, 2010, the Company entered into $150,000 of convertible promissory notes with a shareholder/director which was due on December 10, 2013 and accrues interest at 8.0% per annum payable at maturity and which may be converted at any time into shares of common stock. This note is now overdue for payment.

On June 20, 2011, the Company entered into a $150,000 convertible promissory note with a shareholder/director which shall be due and payable on June 20, 2014 and accrues interest at 8.0% per annum payable at maturity and which may be converted at any time into shares of common stock. This note is now overdue for payment.

On October 20, 2011, the Company entered into a $70,000 convertible promissory note with a shareholder/director which was due on October 20, 2014 and accrues interest at 8.0% per annum payable at maturity and which may be converted at any time into shares of common stock. This note is now overdue for payment.

During the year ended December 31, 2018, a shareholder/director advanced $445,000 to the Company for working capital requirements. In addition, the Company reclassified a previous customer deposit of $37,500 originally received from a shareholder/director, made on behalf of a now deceased distributor, from customer deposits to shareholder deposits, as the original projected sale in question is no longer viable. The Company expects amounts advanced will be either (i) applied against a stock subscription to be issued at a future date or (ii) repaid at a future date as the parties shall determine. Until otherwise agreed, such amounts advanced have been recorded as an additional payable bearing no interest.

During the year ended December 31, 2019, a shareholder/director advanced $570,000 to the Company for working capital requirements. The Company expects amounts advanced will be either (i) applied against a stock subscription to be issued at a future date or (ii) repaid at a future date as the parties shall determine. Until otherwise agreed, such amounts advanced have been recorded as an additional payable bearing no interest.

During the year ended December 31, 2020, a shareholder/director advanced $625,000 to the Company for working capital requirements. The Company expects amounts advanced will be either (i) applied against a stock subscription to be issued at a future date or (ii) repaid at a future date as the parties shall determine. Until otherwise agreed, such amounts advanced have been recorded as an additional payable bearing no interest.

During the year ended December 31, 2021, a shareholder/director advanced $435,000 to the Company for working capital requirements. The Company expects amounts advanced will be either (i) applied against a stock subscription to be issued at a future date or (ii) repaid at a future date as the parties shall determine. Until otherwise agreed, such amounts advanced have been recorded as an additional payable bearing no interest.

During the year ended December 31, 2022, a shareholder/director advanced $620,000 to the Company for working capital requirements. The Company expects amounts advanced will be either (i) applied against a stock subscription to be issued at a future date or (ii) repaid at a future date as the parties shall determine. Until otherwise agreed, such amounts advanced have been recorded as an additional payable bearing no interest.

During the three months ended March 31, 2023, a shareholder/director advanced $205,000 to the Company for working capital requirements. The Company expects amounts advanced will be either (i) applied against a stock subscription to be issued at a future date or (ii) repaid at a future date as the parties shall determine. Until otherwise agreed, such amounts advanced have been recorded as an additional payable bearing no interest.

The Company determined it is not practicable to estimate the fair value of outstanding debt as of March 31, 2023 and December 31, 2022, as the outstanding debt is private, there is no clarity as to when interest payments or principal payments will ultimately be made (or be called by the debt holders), and the Company lacks the internal expertise to calculate fair value of these debt instruments and would incur excessive costs to obtain a third-party valuation.

Other related party transactions

As of March 31, 2023, and December 31, 2022, the Company owed approximately $5.0 and $5.0 million, respectively, to its chief executive officer and other employees of the Company. The CEO and employees agreed to salary deferrals pending available resources to make such payments.

One of the Company’s shareholders owns 100% of BATL Trading, Inc., which is a distributor of EnerBurn. There was no activity between the Company and BATL or between the Company and the Shareholder during the three months ended March 31, 2023 and 2022.

During the three months ended March 31, 2023 and 2022, the Company had sales to related parties of $0.

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2023

Commitments and contingencies (Note 8)

COMMITMENTS AND CONTINGENCIES

NOTE 8 -- COMMITMENTS AND CONTINGENCIES

In January 2021, the Company executed an additional one-year amendment to the lease for office space for the period March 1, 2021 through February 28, 2022. As permitted by ASC 842-20-25-2 the Company has elected to not record the short-term lease on the consolidated balance sheets.

In November 2021, the Company executed an additional one-year amendment to the lease for office space for the period March 1, 2022 through February 28, 2023. As permitted by ASC 842-20-25-2 the Company has elected to not record the short-term lease on the consolidated balance sheets.

In January 2023, the Company executed an additional one-year amendment to the lease for office space for the period March 1, 2023 through February 29, 2024. As permitted by ASC 842-20-25-2 the Company has elected to not record the short-term lease on the consolidated balance sheets.

Rent expense for the three months ended March 31, 2023 and 2022 totaled $14,284 and $14,284, respectively.

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RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

3 Months Ended

Mar. 31, 2023

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

NOTE 9 -- RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2023

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 10 – SUBSEQUENT EVENTS

During April 2023 the Company received total advances from a shareholder/director in the amount of $60,000. 

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BASIS OF PRESENTATION (Policies)

3 Months Ended

Mar. 31, 2023

BASIS OF PRESENTATION

Nature of Operations

EnerTeck Corporation, a Delaware corporation, and its wholly owned subsidiary, EnerTeck Chemical Corp. (“EnerTeck Sub”) (collectively referred to as the “Company”) are headquartered in Houston, Texas. The Company specializes in the sales, marketing and manufacture of a fuel borne catalytic engine treatment for diesel engines known as EnerBurn®. The use of EnerBurn in diesel engines improves fuel economy, lowers smoke, and decreases engine wear and the dangerous emissions of both Nitrogen Oxide (NOx) and microscopic airborne solid matter (particulates). Principal target markets have included the trucking, heavy construction, maritime shipping, railroad and mining industries, as well as federal, state and international government applications. Key uncertainties and risks to the Company include, but are not limited to, if and how quickly the EnerBurn technology is accepted by the market and the effects future technological changes and environmental regulatory requirements may have on the need for diesel fuel additives.

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited consolidated financial statements for fiscal 2022 as reported in the Form 10-K have been omitted.

Use of Estimates

In preparing the accompanying condensed unaudited interim consolidated financial statements, management has made certain estimates and assumptions that affect reported amounts in the condensed unaudited interim consolidated financial statements and disclosures of contingencies. Actual results may differ from those estimates.

Inventory

Inventory primarily consists of market ready EnerBurn plus raw materials required to manufacture the products. Inventory is valued at the lower of cost or net realizable value, using the average cost method.

Finished product costs amounted to approximately $79,000 and $79,000 at March 31, 2023 and December 31, 2022, respectively, and includes required blending costs to bring the Company’s products to their finished state.

Accounts Receivable

Account receivables represent uncollateralized obligations due from customers of the Company and are recorded at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts to reflect any loss anticipated on the accounts receivable balances and charged to the provision for doubtful accounts. The Company calculates this allowance based on historical write-offs, level of past due accounts and relationships with and economic status of the customers. Accounts are written off as bad debts when all collection efforts have failed, and the account is deemed uncollectible. Accounts receivable balances as of March 31, 2023, December 31, 2022 and January 1, 2022 are $2,750, $6,950 and 0, respectively.

The Company incorporated the measurement of expected credit losses on accounts receivable under the new methodology using a forward-looking approach that incorporates lifetime expected credit losses based on historical information, current conditions, and reasonable and supportable forecasts. The Company reviews customer accounts using various factors, including but not limited to the customer’s current financial condition, ability to pay and the volume and level of historical write-offs. Based on the Company’s review of these factors, management has provided allowances for doubtful accounts of $0, $6,722 and $6,722 as of March 31, 2023, December 31, 2022 and January 1, 2022, respectively.

Intangible Assets

The Company follows the provisions of FASB ASC 350, Goodwill and Other Intangible Assets. FASB ASC 350 addresses financial accounting and reporting for acquired goodwill and other intangible assets. Specifically, FASB ASC 350 addresses how intangible assets that are acquired should be accounted for in consolidated financial statements upon their acquisition, as well as how goodwill and other intangible assets should be accounted for after they have been initially recognized in the consolidated financial statements. The statement requires the Company to evaluate its intellectual property each reporting period to determine whether events and circumstances continue to support an indefinite life. In addition, the Company tests its intellectual property for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The statement requires intangible assets with finite lives to be reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable and that a loss shall be recognized if the carrying amount of an intangible exceeds its fair value. No impairment expense was recorded for these assets at March 31, 2023 and 2022.

The Company has determined its intangible assets to have a finite life of 12 years. Amortization expense was $3,125 for the three months ended March 31, 2023 and 2022.

Revenue Recognition

The Company follows Accounting Standards Update (ASU) 2014-09, Revenues from Contracts with Customers and all subsequent amendments to the ASU (collectively Topic 606) which creates a single framework for recognizing revenue from contracts with customers that fall within its scope. The core principle of Topic 606 is that a reporting entity should recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the reporting entity expects to be entitled in exchange for the goods and services.

While the Company has had some direct customers over the years, the principal method of selling the Company’s product EnerBurn is through the use of independent distributors, for both domestic and international markets. The transaction price for each sale is explicitly stated within the contract with a customer. The Company does not accept returns nor does it provide warranty on its product’s performance, as control of performance is based on the proper utilization by the final user. Normal payment terms for domestic sales to both customers and distributors shipping within the United States are net 30 days. All foreign shipments are cash in advance of shipment from the Company’s location. The Company’s sole performance obligation to customers and distributors is the manufacturing and shipment of EnerBurn. Revenues from sales of the Company’s product are recognized at the point when a customer or distributor order has been completed and shipped. Sales of all product are f.o.b. shipping point. All sales contracts between the individual distributor and end customer are the responsibility of the individual distributor and the amount of mark up above the distributors’ wholesale price per unit is the purview of the distributor.

The Company may from time to time enter into contracts to sell exclusive distributorship rights to certain markets for a fee. The contracts typically contain a term of market exclusivity as well as other performance obligations. The Company has determined the performance obligations on these types of contracts are satisfied evenly over the term of the contract and recognizes revenue evenly over the term of the contract. For such contracts that were classified as deferred revenue at the beginning of 2022, the Company recognized revenue of $695 for the three months ended March 31, 2022. The remaining performance obligations on these contracts as of March 31, 2022 was $0.

In the following table, revenues have been disaggregated for the periods indicated:

	Three Months Ended
	March 31,
	2023		2022
	(unaudited)
Revenues - domestic	$	-	$	31,171
Revenues - foreign		-		-
Total revenues	$	-	$	31,171

As stated above, the Company does not accept returns nor does it provide warranty on its product’s performance, as control of performance is based on the proper utilization by the final user. The Company periodically tests the product manufactured prior to shipment for its proprietary quality standards and guarantees to the distributors that the product will always maintain the level of strict quality standard that is integral to the performance of its product for the end customer. The Company will provide a Certificate of Analysis, (“C of A”) on each shipment of its product, if requested for the customer. The C of A provides proof that the product is manufactured to meet chemical specifications that insure performance standards.

Cost of Goods Sold

Cost of goods sold includes costs related to the manufacture of the Company’s product EnerBurn. The primary costs included are raw materials that are mixed to produce the finished product that is then sold to customers and/or distributors. Other costs included are packaging and freight.

Going Concern

In accordance with ASC Subtopic 205-40, Going Concern, management evaluates whether relevant conditions and events that, when considered in the aggregate, indicate that it is probable the Company will be unable to meet its obligations as they become due within one year after the date that the consolidated financial statements are issued. When relevant conditions or events, considered in the aggregate, initially indicate that it is probable that the Company will be unable to meet its obligations as they become due within one year after the date that the consolidated financial statements are issued (and therefore they raise substantial doubt about the Company’s ability to continue as a going concern), management evaluates whether its plans that are intended to mitigate those conditions and events, when implemented, will alleviate substantial doubt about the Company’s ability to continue as a going concern. Management’s plans are considered only to the extent that 1) it is probable that the plans will be effectively implemented and 2) it is probable that the plans will mitigate the conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern.

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the three months ended March 31, 2023 and 2022, the Company incurred recurring net losses of $322,452 and $297,240, respectively. Further, most of the Company’s notes payable are overdue and payment may be demanded at any time. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The Company’s continuation as a going concern is contingent upon its ability to obtain additional financing and to generate revenues and cash flow to meet its obligations on a timely basis. The Company has been able to obtain cash in the past through private placements and issuing promissory notes and believes that these avenues will remain available to the Company. These financings are intended to mitigate the substantial doubt raised by the Company’s historical operating results and satisfying estimated liquidity needs 12 months from the issuance of the consolidated financial statements. However, there is no certainty that additional financing can be obtained in the future at terms acceptable to the Company.

Adoption of New Accounting Standard

On January 1, 2023, the Company adopted ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including trade receivables. Estimates of expected credit losses on trade receivables over their life will be required to be recorded at inception, using a forward-looking methodology that incorporates lifetime expected credit losses that are based on historical information, current conditions, and reasonable and supportable forecasts. The Company may review customer accounts using various factors, including but not limited to the customer’s current financial condition, ability to pay and the volume and level of historical write-offs.

The Company’s adoption of ASC 326 does not require prior-period adjustment, nor is there a material impact to current results.

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BASIS OF PRESENTATION (Tables)

3 Months Ended

Mar. 31, 2023

BASIS OF PRESENTATION

Schedule of revenue

	Three Months Ended
	March 31,
	2023		2022
	(unaudited)
Revenues - domestic	$	-	$	31,171
Revenues - foreign		-		-
Total revenues	$	-	$	31,171

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PROPERTY AND EQUIPMENT (Tables)

3 Months Ended

Mar. 31, 2023

PROPERTY AND EQUIPMENT

Schedule of property and equipment

	March 31,		December 31,
	2023		2022
	(unaudited)
Furniture and fixtures	$	30,909	$	30,909
Equipment		244,638		244,638
		275,547		275,547
Less: accumulated depreciation		269,290		269,274
Total property and equipment, net	$	6,257	$	6,273

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LOSS PER COMMON SHARE (Tables)

3 Months Ended

Mar. 31, 2023

LOSS PER COMMON SHARE

Schedule of basic and diluted loss per share

	Three Months Ended
	March 31,
	2023			2022
	(unaudited)
Net loss	$	(322,452	)	$	(297,240	)
Weighted average common shares outstanding:
Basic and diluted		36,380,690			36,380,690
Basic and diluted loss per share	$	(0.01	)	$	(0.01	)

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STOCK WARRANTS AND OPTIONS (Tables)

3 Months Ended

Mar. 31, 2023

STOCK WARRANTS AND OPTIONS

Schedule of warrants outstanding and exercisable

				Weighted
				Average		Exercisable
Exercise		Number of		Remaining		Number of
Price		Warrants		Life in Years		Warrants
$	0.60		3,340,000		3.8		3,340,000
$	0.75		100,000		3.8		100,000
$	0.30		1,500,000		3.8		1,500,000
			4,940,000				4,940,000

Schedule of activity for stock options

					Weighted		Weighted
	Weighted				Average		Average
	Average		Number of		Remaining		Optioned		Aggregate
	Exercise		Optioned		Contractual		Grant Date		Intrinsic
	Price		Shares		Term in Years		Fair Value		Value
Balance as of December 31, 2022	$	0.32		1,235,070			$	-	$	-
Expired		-		-				-
Granted		-		-				-
Exercised		-		-				-
Forfeited		-		-				-
Balance as of March 31, 2023	$	0.32		1,235,070		2.06	$	0.09	$	-
Vested and exercisable as of March 31, 2023	$	0.32		1,235,070		2.06	$	0.09	$	-

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BASIS OF PRESENTATION (Details) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Sep. 30, 2021
Total Revenue	$ 0	$ 31,171	$ 33,905
Domestic [Member]
Total Revenue	0	31,171
Foreign [Member]
Total Revenue	$ 0	$ 0

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BASIS OF PRESENTATION (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Jan. 01, 2022
Inventory, finished product costs	$ 79,000		$ 79,000
Allowances for doubtful accounts	0		6,722	$ 6,722
Deferred Revenue, Revenue Recognized	695
Account receivable	2,750		$ 6,950	$ 0
Performance obligations	0
Net loss	$ 322,452	$ 97,240
Estimated useful life	12 years
Amortization period	12 years
Amortization expenses	$ 3,125	$ 3,125
Intellectual Property [Member]
Intangible assets, finite life	12 years

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PROPERTY AND EQUIPMENT (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
PROPERTY AND EQUIPMENT
Furniture and fixtures	$ 30,909	$ 30,909
Equipment	239,414	244,638
Property plant and equipment gross	275,547	275,547
Less: accumulated depriciation	269,290	269,274
Total property and equipment, net	$ 6,257	$ 6,273

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PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
PROPERTY AND EQUIPMENT
Depreciation expense	$ 16	$ 16

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LOSS PER COMMON SHARE (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
LOSS PER COMMON SHARE
Net loss	$ (322,452)	$ (297,240)
Weighted average common shares outstanding: Basic and diluted	36,380,690	36,380,690
Basic and diluted loss per share	$ (0.01)	$ (0.01)

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LOSS PER COMMON SHARE (Details Narrative) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Potentially dilutive securities excluded from the computation of EPS	36,380,690	36,380,690
Stock Options [Member]
Potentially dilutive securities excluded from the computation of EPS	1,235,070	1,235,070
Warrants [Member]
Potentially dilutive securities excluded from the computation of EPS	4,940,000	4,940,000

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STOCK WARRANTS AND OPTIONS (Details)	3 Months Ended
	Mar. 31, 2023 shares
Number of Warrants	4,940,000
Exercisable Number of Warrants	4,940,000
Exercise Price $0.60 [Member]
Number of Warrants	3,340,000
Weighted Average Remaining Life in Years	3 years 9 months 18 days
Exercisable Number of Warrants	3,340,000
Exercise Price $0.75 [Member]
Number of Warrants	100,000
Weighted Average Remaining Life in Years	3 years 9 months 18 days
Exercisable Number of Warrants	100,000
Exercise Price $0.30 [Member]
Number of Warrants	1,500,000
Weighted Average Remaining Life in Years	3 years 9 months 18 days
Exercisable Number of Warrants	1,500,000

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STOCK WARRANTS AND OPTIONS (Details 1)	3 Months Ended
	Mar. 31, 2023 $ / shares shares
Weighted average exercise price
Outstanding at beginning	$ 0.32
Expired	0
Granted	$ 0
Exercised | shares	0
Forfeited | shares	0
Outstanding at the end	$ 0.32
Vested and exercisable	$ 0.32
Number of optioned shares
Outstanding at beginning | shares	1,235,070
Expired | shares	0
Granted | shares	0
Exercised | shares	0
Forfeited | shares	0
Outstanding at the end | shares	1,235,070
Vested and exercisable | shares	1,235,070
Weighted Average Remaining Contractual Term in Years	2 years 21 days
Weighted Average Remaining Contractual Term in Years vested and exercisable	2 years 21 days
Weighted average fair value grant date, Expired	$ 0
Weighted average fair value grant date, Exercised	0
Weighted average fair value grant date, Forfeited	0
Weighted average fair value grant date, Granted	0
Outstanding at ending	0.09
Weighted average Fair value of options vested and exercisable during the period	$ 0.09

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STOCK WARRANTS AND OPTIONS (Details Narrative) - 2003 Option Plan [Member] - shares	3 Months Ended
	Sep. 30, 2013	Sep. 30, 2003
Description of option plan	During the third quarter of 2013, the board of directors increased the number of shares reserved for issuance under the 2003 Option Plan from 1,000,000 to 1,250,000 which was increased by the board to 1,750,000 during the third quarter of 2018.
Common stock, shares reserved for future issuance		1,000,000

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RELATED PARTY NOTES AND ADVANCES (Details Narrative) - USD ($)				1 Months Ended			3 Months Ended	12 Months Ended
	Dec. 11, 2013	Dec. 10, 2010	Jun. 01, 2010	Oct. 20, 2011	Jun. 20, 2011	Jul. 20, 2010	Mar. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 11, 2009	Jul. 07, 2009
Gross proceeds	$ 1,000,000
Interest rate														12.00%
Convertible promissory note														$ 100,000
Sales to related party							$ 0	$ 0
Accrued compensation							5,013,987	4,963,987
Director One [Member]
Interest rate		8.00%	8.00%			8.00%
Convertible promissory note		$ 150,000	$ 300,000			$ 100,000
Maturity date		Dec. 10, 2013	Jun. 01, 2013
Director [Member]
Interest rate	5.00%		8.00%	8.00%	8.00%	8.00%							5.00%
Convertible promissory note			$ 50,000	$ 70,000	$ 150,000	$ 400,000							$ 50,000
Maturity date			Jun. 01, 2013	Oct. 20, 2014	Jun. 20, 2014	Jul. 20, 2013
Amortization of debt discount			$ 36,207
Proceeds from related party notes and advances							205,000	620,000	$ 435,000	$ 625,000	$ 570,000	$ 445,000
Customer deposit												$ 37,500
Chief Executive Officer And Other Employees [Member]
Accrued compensation							$ 5,000,000	$ 5,000,000
BATL Trading, Inc [Member]
Shareholders ownership percentage							100.00%

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COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Commitments and contingencies (Note 8)
Rent expense	$ 14,284	$ 14,284

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SUBSEQUENT EVENTS (Details Narrative)	3 Months Ended
	Mar. 31, 2023 USD ($)
SUBSEQUENT EVENTS
Proceeds from related party notes and advances	$ 60,000