The accompanying financial statements have been prepared by Energtek Inc. ("Energtek" or "the Company") and are unaudited.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at JuneSeptember 30, 2008 and 2007 and for the periods then ended have been made.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2007 audited financial statements, which were filed with the Securities and Exchange Commission on March 27, 2008 with the Company’s annual report on Form 10-K.  The results of operations for the periods ended JuneSeptember 30, 2008 and 2007 are not necessarily indicative of the operating results for the full year.

Energtek provides proprietary solutions to meet the technical, economical and logistical challenges of Natural Gas (NG) delivery for vehicles worldwide, with a major focus on the 2- and 3-wheel vehicles market.market, and on Bulk Transportation markets.

The Company is considered to be a development stage company and as such the financial statements presented herein are presented in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 7 “Accounting and Reporting by Development Stage Enterprises”.

The accompanying financial statements have been prepared by the Company and are unaudited.  In the opinion of management, all adjustments necessary to present fairly the financial position, at JuneSeptember 30, 2008 and the results of operations and cash flows at JuneSeptember 30, 2008 and 2007 and for the periods then ended have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2007 audited financial statements.  The results of operations for the periods ended JuneSeptember 30, 2008 and 2007 are not necessarily indicative of the operating results for the full year.

In March 2008, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 161, “Disclosures about Derivative Instruments and Hedging Activities - An Amendment of SFAS No. 133” (“SFAS 161”). SFAS 161 seeks to improve financial reporting for derivative instruments and hedging activities by requiring enhanced disclosures regarding the impact on financial position, financial performance, and cash flows. To achieve this increased transparency, SFAS 161 requires (1) the disclosure of the fair value of derivative instruments and gains and losses in a tabular format; (2) the disclosure of derivative features that are credit risk-related; and (3) cross-referencing within the footnotes. SFAS 161 is effective for us on January 1, 2009. We are in the process of evaluating the new disclosure requirements under SFAS 161.

In December 2007, the FASB issued SFAS No. 141 (Revised 2007), “Business Combinations” (“SFAS 141R”). SFAS 141R continues to require the purchase method of accounting to be applied to all business combinations, but it significantly changes the accounting for certain aspects of business combinations. Under SFAS 141R, an acquiring entity will be required to recognize all the assets acquired and liabilities assumed in a transaction at the acquisition-date fair value with limited exceptions. SFAS 141R will change the accounting treatment for certain

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements” (“SFAS 160”). SFAS 160 establishes new accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary (minority interest) is an ownership interest in the consolidated entity that should be reported as equity in the Consolidated Financial Statements and separate from the parent company’s equity. Among other requirements, this statement requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest. It also requires disclosure, on the face of the Consolidated Statement of Operations, of the amounts of consolidated net income attributable to the parent and to the noncontrolling interest. This statement is effective for us on January 1, 2009. This amount was included in retirement and insurance programs and other long-term obligations on our Consolidated Balance Sheets. We are still in the process of evaluating the impact SFAS 160 will have on our Consolidated Financial Statements.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (“fair value option”). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, SFAS 159 specifies that unrealized gains and losses for that instrument be reported in earnings at each subsequent reporting date. SFAS 159 was effective for us on January 1, 2008. We did not apply the fair value option to any of our outstanding instruments and, therefore, SFAS 159 did not have an impact on our Condensed Consolidated Financial Statements.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”), which defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 was effective for us on January 1, 2008 for all financial assets and liabilities and for nonfinancial assets and liabilities recognized or disclosed at fair value in our Condensed Consolidated Financial Statements on a recurring basis (at least annually). For all other nonfinancial assets and liabilities, SFAS 157 is effective for us on January 1, 2009. We are still in the process of evaluating the impact that SFAS 157 will have on our pension related financial assets and our nonfinancial assets and liabilities not valued on a recurring basis (at least annually)..SFAS 157 did not have an impact on our Condensed Consolidated Financial Statements.

The Company's consolidated financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company is working on the basis of a budget that will enable it to operate during the coming year. However the Company will need additional working capital for its future planned expansion of activities and to service its debt, which raises doubt about its ability to continue as a going concern. Continuation of the Company as a going concern is dependent upon obtaining sufficient capital to be successful in that effort. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty.

As used in this Form 10-Q, references to the “Company”, "Corporation"“Corporation”, “Energtek,” “we,” “our” or “us” refer to Energtek Inc. or to Energtek Inc. together with its subsidiaries, unless the context otherwise indicates.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the financial statements and the notes thereto included elsewhere in this Form 10-Q.

This Form 10-Q contains forward-looking statements. For this purpose, anyAny statements contained in this Form 10-Q that are not statements of historical fact may be deemed to be forward-looking statements. You can identify forward-looking statements as those that are not historical in nature, particularly those that use terminology such as “may,” “will,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,“projects,” “predicts,” “potential,” or “continue” or the negative of these similar terms. In evaluating these forward-looking statements, you should consider various factors, including the following: (a) those risks and uncertainties related to general economic conditions, (b) whether we are able to manage our planned growth efficiently and operate profitable operations,profitably, (c) whether we are able to generate sufficient revenues or obtain financing to sustain and grow our operations, (d) whether we are able to successfully fulfill our primary requirements for cash. The Company’s actual results may differ significantly from the results projected in the forward-looking statements. The Company assumes no obligation to update forward-looking statements, except as otherwise required under the applicable federal securities laws.

We were incorporated under the laws of the state of Florida on November 18, 1998 under the name “Elderwatch, Inc.” On September 20, 2006, we changed our Company’s state of incorporation from Florida to Nevada byin the merger of Elderwatch, Inc. with and into its wholly-owned subsidiary, Energtek Inc., a Nevada corporation, which was formed for such purpose. Simultaneously with such merger, we changed our Company name from "Elderwatch, Inc." to "Energtek Inc." in order to better reflect our proposed business operations. We also increased the number of our authorized shares of common stock from 50,000,000 to 250,000,000 shares, and decreased the authorized number of our preferred shares from 10,000,000 to 5,000,000 shares. On October 30, 2006, we implemented a one for three forward stock split of our common stock and further increased the authorized shares of our common stock to 750,000,000 shares, par value $0.001.

The Company enables the conversion of vehicles, especially two and three wheelers, into natural gas powered vehicles, allowing this much cleaner and cheaper fuel to replace other more expensive and environmentally damaging fuel sources. 

We also own, through Moregastech LLC, 50% of the issued and outstanding shares of Moregastech India Private Limited, a company registered in India.

We intend to further acquire or establish additional subsidiaries in selected countries, in order to sustain our business activities in such countries. Specific business development efforts are ongoing in the Philippines, India, Israel, Thailand, and Indonesia.

Over the next twelve months, we intend to continue investing and engaging mainly in the field of natural gas.NG. We intend to develop the activities in which we have invested and increase our research and development efforts. We also intend to continue analyzing markets, projects and investments proposed to us in relevant areas.

The expansion of activities that already took place and the expansion that is planned will require the expansion of the personnel of the Company and its subsidiaries. Our engineering and public relations personnel have been increased andincreased. Following the Streamlining Plan we expecthave delayed further increases in our engineering staff, which will be required as the operations develop.

As of November 12, we are working in India for receiving the authorities' approvals for our researchtransportation solutions, and development staff, our staffwe are investing in parallel in marketing efforts towards the time that the permits will be in place. In Indonesia we are involved in marketing efforts; we have signed two non-binding Memorandums of Understanding for joint natural gas distribution activities, and we are working both on operational and legal aspects to transform these Understandings into agreements. We are working in the Philippines andon the instrumentation of conversion of tricycles to the "CNG-lite", concentrating as of now in India, our business development staff and others.receiving all the required permits for these activities. In all the markets we are checking the possibility of local financing for the activities.

On JuneSeptember 30, 2008 we had cash and cash equivalents (including total deposits of $3,408,718, an increase$514,831) of 34.9%$2,169,682, a decrease of approximately 14.2% as compared to cash and cash equivalents of $2,527,681 on December 31, 2007. This increaseAlthough accounts receivable and prepaid expenses increased by approximately 17.5%, from $410,843 on December 31, 2007 to $483,859 on September 30, 2008, and we had inventory valued at $17,399 on September 30, 2008 as compared to no inventory on December 31, 2007, total current assets dropped by approximately 9.1%, from $2,938,524 on December 31, 2007 to 2,670,940 on September 30, 2008. The drop in current assets resulted primarily from a decrease in net cash received from financing activities, including issuances of common stock and warrant exercises, which amounted to $2,535,500 and $5,188,262, respectively, in the receipt of proceedsthree and nine month periods ended September 30, 2007, as compared to $0 and $2,845,483, respectively, in the three and nine month periods ended September 30, 2008.

Material changes were also recorded in advances and deposits, which increased by approximately 73.7% from $33,337 on December 31, 2007 to $57,915 on September 30, 2008. Advances and deposits consist primarily from deposits in bank and prepaid expenses to car rental companies. The increase in advances and deposits reflects primary increase in investing in bank deposits for period more than 3 months, and as a result additional deposits that the issuance and sale of securities of the Company.Company has made to car rental companies.

The Company has not generated any revenues to date. Our net loss in the sixnine months ended JuneSeptember 30, 2008 was $2,101,056,$11,136,137, an increase of 15.2%approximately 304% as compared to our net loss of $1,823,216$2,756,501 in the sixnine months ended JuneSeptember 30, 2007. In the three months ended JuneSeptember 30, 2008 our net loss was $1,326,190,$9,035,081, an increase of 7.1%868.1% as compared to our net loss of $1,237,994$933,285 in the three months ended JuneSeptember 30, 2007. The increase in losses resulted primarily from increased operational activitystock based compensation expenses of $8,166,292, including the effects of stock based compensation pursuant to our 2008 Israeli Employees Stock Plan, and related expenses.issuance of warrants to the Company's CEO, as described in more detail in footnote 3 in the accompanying financial statements.

The Company’s expenses include consulting expenses, stock based compensation, research and development expenses and general and administrative expenses. Total operating expenses increased by 14.8%approximately 305.3% to $2,074,772$11,133,651 in the sixnine months ended JuneSeptember 30, 2008, from $1,806,606$2,747,342 in the sixnine months ended JuneSeptember 30, 2007. In the three months ended JuneSeptember 30, 2008 total operating expenses were $1,306,206,$9,058,879, an increase of 7.4%863.02% from operating expenses on $1,216,703$940,736 in the three months ended JuneSeptember 30, 2007. The increases in operating expenses resulted primarily from stock based compensation expenses recorded in the expansionthird quarter of this year. With the implementation of the Company’s operations inStreamlining plan the Company expects quarterly expenses. In he context of the implementation of the Streamlining Plan, Eurospark S.A. has agreed to reduce the charges for the services provided by the CEO of the Company. The new areasmonthly charges, effective as of November 2008, that shall cover the salary, the additional costs related to the Salary and countries.the coverage of car expenses shall amount to $14,670.

The Company incurs consulting expenses in connection with the analysis of business opportunities. In the sixnine months ended JuneSeptember 30, 2008 we incurred $155,219$213,878 in consulting expenses, a decrease of almost 50% as compared to consulting expenses of $310,397$421,615 in the sixnine month period ended JuneSeptember 30, 2007. In the three month period ended JuneSeptember 30, 2008 we incurred $56,963$58,659 in consulting expenses, a decrease of 48%approximately 47.3% as compared to consulting expenses of $108,598$111,218 in the three month period ended JuneSeptember 30, 2007. These decreases resulted primarily from an increase in the number of employees of the Company and less reliance on independent consultants.

General and administrative expenses include marketing and business development efforts, management compensation, public and investor relations expenses, rent, professional fees, telephone, travel and other general corporate expenses.

In the sixnine months ended JuneSeptember 30, 2008 we incurred $1,522,997$2,099,821 in general and administrative expenses (not including $7,738,120 of stock based compensation), an increase of 119%approximately 84.1% as compared to general and administrative expenses of $696,056$1,140,285 in the sixnine month period ended JuneSeptember 30, 2007. In the three month period ended JuneSeptember 30, 2008 we incurred $1,019,077$730,324 in general and administrative expenses (not including $7,584,620 of stock based compensation), an increase of 231%almost 64.4.0% as compared to general and administrative expenses of $307,952$444,229 in the three month period ended JuneSeptember 30, 2007. These increases resulted primarily from the increased marketing and business development activities, and increased salary, commissions and travel expenses.

In the nine months ended September 30, 2008 we incurred $2,486 in net interest expenses, a decrease of approximately 72.9% as compared to interest expenses of $9,159 in the nine months ended September 30, 2007. In the three month ended JuneSeptember 30, 2008 and Junewe earned net interest in the amount of $23,798, an increase of almost 220% as compared to net interest in the amount of $7,451 earned in the three month period ended September 30, 2007 the Company incurred $19,9842007. The increase in earned net interest expense, consisting primarilyreflects an increase in an exchange rate of financing expenses resulting for a devaluation in the US dollar against the New Israeli Shekel. In the six months ended June 30, 2008 and 2007, the Company incurred $26,284 and $16,610, respectively, in interest expenses.

As of JuneSeptember 30, 2008, the Company has recorded an accumulated deficit of $6,907,417.$15,657,174. The Company's consolidated financial statements were prepared using generally accepted accounting principles applicable to a going concern, which contemplatescontemplate the realization of assets and the liquidation of liabilities in the normal course of business. The Company is working on the basis of a budget that will enable itAdditional funds are required in order to operate during the coming year. However the Company will need additional working capital for its futurefinance planned expansion activities and to service its debt, which raises doubt about itsour ability to continue as a going concern. Continuation of the Company as a going concern is dependent upon obtainingour ability to obtain sufficient capital. There can be no assurance that we will be able to raise additional capital to be successful in that effort.on acceptable terms, if at all. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty.

Management has assessed of the effectiveness of the Company's internal control over financial reporting as of September 30, 2008 and has concluded that our internal control over financial reporting is effective. We have not identified any current material weaknesses, considering the nature and extent of our current operations, or any risks or errors in our financial reporting under current operations. There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended JuneSeptember 30, 2008, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

During the quarter ended JuneSeptember 30, 2008, there were no pending legal proceedings to which the Company was a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder was a party adverse to the Company or had a material interest adverse to the Company.

There have been no material changesSmaller reporting companies are not required to provide the risks to our business described in our Annual Report on Form 10-K for the year ended December 31, 2007 filed with the SEC on March 27, 2008.information required by this Item.

None.