UNITED STATES

                    SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C. 20549

                               FORM 10-KSB

[X]  Annual Report Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934

                   FOR THE YEAR ENDED DECEMBER 31, 2003

                      Commission File Number 0-32129

                 Energy and Engine Technology Corporation
               ---------------------------------------------
           (Exact name of registrant as specified in its charter)

                        Nevada                88-0471842
               --------------------------------------------
           (State or other jurisdiction of  (I.R.S. Employer
            incorporation or organization)   Identification No.)

                        5308 West Plano Parkway
                          Plano, Texas, 75093
             --------------------------------------------------
            (Address of principal executive offices) (Zip Code)

             Registrant's telephone number, including area code:
                            (972) 732-6360

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

Securities registered pursuant to Section 12(g) of the Act: Common
Stock, par value $.001 per share

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, and (2) has been subject to
such filing requirements for the past 90 days.  YES: [X] NO: [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-B is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-KSB or any amendment to this Form 10-KSB. [X]

The number of shares outstanding of the Registrant's common stock as
of April 8, 2004 was 101,627,269.

Registrant had revenues for its year ended December 31, 2003 of
$383,262.

Registrant's common stock is listed and trading on the OTCBB under the
symbol "EENT". The aggregate market value of the voting stock held by
non-affiliates of Registrant as of April 8, 2004 was $19,986,457. This
calculation does not reflect a determination that persons are
affiliates for any other purposes.

                                    1

DOCUMENTS INCORPORATED BY REFERENCE

None.

Transitional Small Business Disclosure Format (Check one):  Yes ; No X

Forward-Looking Statements
--------------------------

In addition to historical information, this Annual Report contains
forward-looking statements. These forward-looking statements are
subject to certain risks and uncertainties that could cause actual
results to differ materially from those reflected in these forward-
looking statements. Factors that might cause such a difference include,
but are not limited to, those discussed in the section entitled
Management's Discussion and Analysis of Financial Position and Results
of Operations.  Readers are cautioned not to place undue reliance on
these forward-looking statements, which reflect management's opinions
only as of the date hereof. Registrant undertakes no obligation to
revise or publicly release the results of any revision to these
forward-looking statements. Readers should carefully review the risk
factors described in other documents the Registrant files from time to
time with the Securities and Exchange Commission, including the
Quarterly Reports on Form 10-QSB to be filed by the Registrant in the
year 2004.

                                    PART I

ITEM 1.  DESCRIPTION OF BUSINESS

Energy & Engine Technology Corporation ("Registrant" or the "Company")
was formed in the State of Nevada on November 16, 1999 under the name
Bidder Communications, Inc. On December 5, 2001, Registrant filed an
Amendment to its Articles of Incorporation, changing the name of the
company to Energy & Engine Technology Corporation.

On August 29, 2001, the Board of Directors and stockholders of
Registrant voted to acquire Southern States Gas Gathering, LLC,
("SSGG"), a Louisiana limited liability company, whose business was
stated as the proposed operation of a 65-mile gas gathering system in
Louisiana. After careful consideration, Registrant's Board of Directors
and stockholders, representing 68% of the authorized, issued and
outstanding common stock determined that the transaction described in
the Purchase and Sale Agreement (Exhibit 99(a) to the Form 8-K, filed
August 29, 2001, under SEC File No. 0-32129 and incorporated herein by
reference ("P&S Agreement"))was in the best interests of the
stockholders of registrant and approved the resolution. Under the
terms of the Purchase and Sale Agreement, a total of 3,827,621 shares
of the authorized, but unissued common stock of Registrant, as well as
$150,000 in cash, were exchanged for 100% of the membership interests
in SSGG. In addition, the Board of Directors appointed Willard G.
McAndrew, III and Roger Wurtele as directors, and Willard G. McAndrew,
III as Chairman of the Board of Directors, until the next annual
stockholders meeting. The closing of the acquisition occurred on
September 7, 2001.  As a result of this acquisition, during the fourth
quarter of 2001, there was a transition period during which former
management and directors of Bidder resigned, and Wurtele and McAndrew
assumed management of Registrant.

                                  2

On September 7, 2001, the Company acquired 100% of the membership
interests in Southern States Gas Gathering, LLC ("SSGG") for $153,828
in cash and common stock, which was recorded as an acquisition of
assets.  The assets acquired consisted primarily of an inactive 65 mile
gas gathering system located in the Caddo Pine Island Field, Louisiana.
Trailblazer Production Company, LLC ("Trailblazer"), acting as agent
for Mees Pierson Unlimited ("Seller"), was an unrelated party at the
time of the acquisition, and received $50,000 plus common stock from
the total purchase price for services rendered.  As noted in Item 12 to
Registrant's 2002 Form 10-KSB, at the time of the acquisition,
Trailblazer (now inactive) was owned by Registrant's Chief Executive
Officer and Chief Financial Officer.

As part of the acquisition, pursuant to the Purchase and Sale Agreement,
(Exhibit 99(a) to the Registrant's Form 8-K, filed August 29, 2001 (the
"P&S Agreement")), the Company had also acquired from Seller (through
its agent, Trailblazer), GlobalSat Technology data.  In exchange for
this data, the Company issued Trailblazer and Seller an option to
acquire up to 25% of its interest in SSGG (the "Option") which the
Company deemed to have a nominal value.   The Seller and Trailblazer
had also retained a 6% royalty on gross income of SSGG (the "Royalty").
The Company also agreed that Trailblazer's and the Seller's ownership
in the Company would not dilute for 2 years ("Non Dilution Agreement").
On August 5, 2002, the Agreement was amended as follows: 1)  The
GlobalSat Technology was returned to the Seller in exchange for the
termination of the Option by Seller; 2)  The Royalty was terminated and
instead it was agreed that Seller would retain a 2% royalty on gross
income of SSGG; and 3)  the Non Dilution Agreement was terminated in
exchange for 1,000,000 shares of the Company's common stock valued at
$40,000 issued to the Seller (See Note 9).  As of December 31, 2001,
Trailblazer had relinquished all rights to the Royalty, the NonDilution
Agreement and the Option.

On December 5, 2002, Wind Dancer Aviation Services, Inc. ("Wind
Dancer"), a wholly owned subsidiary of Registrant, purchased certain
hard assets and inventory and fuel associated with the former Fixed
Base Operator ("FBO"), at Stevens Field, Archuleta County, Colorado
from the Board of County Commissioners of Archuleta County, Colorado
("Seller").  The total consideration paid was $103,375.76. The
purchase price funds were provided by Registrant in the form of an
equity infusion into Wind Dancer.  The nature of the business in
which the assets were used was an FBO, and Wind Dancer continues to
use the assets in an FBO.

CURRENT BUSINESS

The Parent

Registrant is pursuing a strategy to establish a technological presence
in providing products to the long haul trucking and general aviation
industries in America. With the national quest for a balanced energy
policy that addresses consumption issues, it is seeking to do its part
to contribute to reductions in our dependence on foreign energy sources
which management believes is a national security issue. Registrant
currently has three divisions, all of which focus on innovative ways to
conserve energy and/or make engine technology more efficient, less
harmful to the environment and effective:  its AXP 1000 auxiliary power


                                     3

generator for long haul trucks, its Fixed Base Operator for general
aviation aircraft in Pagosa Springs, Colorado and related general
aviation STC development and marketing and its Gas Gathering System,
located in The Caddo Pine Island Field, in Caddo Parrish, Louisiana,.
As discussed below, Registrant has determined to redirect its focus on
the transportation industries, rather than on the energy gathering facet
of its businesses.

AXP 1000

Overview
--------
The AXP 1000 is a device designed for new installation and retrofit to
semi truck tractors which provides air conditioning and heating for
long haul trucks and power generation without running the truck engine
to provide "creature comforts" for the truck cab (i.e.: heating,
cooling and operation of devices requiring electrical power), while
keeping the truck battery charged.  Registrant has filed a patent on
its device.  On December 2, 2002, Registrant successfully installed
its new Auxiliary Power Generator - "AXP 1000" on a truck, and the unit
functioned properly, including providing power to the truck's cab HVAC
unit.  On January 2 and 3, 2003, an AXP 1000 unit was installed on a
loaned truck, and road testing completed.

Registrant spent most of 2003 testing and making improvements to is
AXP 1000.  In December 2003, Registrant commenced commercial sales of
the AXP 1000 and is currently transitioning from a research and
development stage to a marketing and sales and production stage.

Long Haul Trucking Industry
---------------------------
The trucking industry is a $255.5 billion industry in the U.S. with
1,900,000 Class 7 and 8 trucks (Source:  TruckInfo.net as of March
25, review of their website).  The average truck driver in the United
States makes 30.3 cents per mile and an average of $32,000 per year,
leading to the assumption that the drivers travel an average of over
90,000 miles per year.  The trucking industry accounts for 12.8% of
all the fuel purchased in the U.S., with the average 2004 per gallon
price of diesel estimated at $1.58 per gallon (up from $1.26 in 2002).

The Argonne National Laboratory Report entitled "Analysis of Technology
Options to Reduce the Fuel Consumption of Idling Trucks" by F.
Stodolsky, L. Guines and A. Vyus, dated June 1, 2000 ("Argonne Report")
contains various calculations of savings by utilization of technology
options to idling, including auxiliary power generators, which show the
potential for massive reductions in fuel consumption.  In conclusion,
the Argonne Report states:  "[any] of the listed alternatives has
significant potential to reduce all impacts compared to idling
overnight....  Auxiliary power units [may] reduce energy and petroleum
use and CO2 emissions by more than 80% for the entire year" (using
assumption of 458,000 trucks with 85 days of heating at 10 h/d and
218 days with average cooling at 4.5 h/d).  Argonne Report at p. 21.

Furthermore, according to an article on the Transportation Technology
and R&D Center website (www.transportation.anl.gov), called "Truckers:
Don't Let Your Profits Go Up In Smoke," "assuming 1,830 hours of
idling a year, a single truck emits about 22 tons of carbon dioxide;...


                                   4

390 pounds of carbon monoxide; and 1,024 pounds of nitrous oxides."
The article, in a parenthetical, states there are approximately 480,000
Class 7 and 8 trucks.

Effective as of midnight, January 4, 2004 new federal regulations were
implemented which significantly curtail long haul truck driver time,
thus increasing the length of rest intervals, and the need for idling
alternatives such as EENT's AXP 1000 device.  In summary, the
regulations permit truck drivers to drive for 11 hours, only after
having spent 10 consecutive hours off duty and limit the number of
hours a driver may be on duty in any consecutive 7 day period to 60.
The Federal Motor Carrier Safety Administration ("FMCSA") stated in a
December 30, 2003 press release that federal and state regulators plan
to spend the first 60 days after implementation in "an aggressive
education campaign and enforcing egregious violations" in the first
regulations in this area enacted in over 60 years.  In fact, the
FMCSA website (www.fmcsa.dot.gov) states that 47 of 50 states plan to
immediately cite violations of regulations.

These new regulations are touted to greatly improve safety for the
2.6 million long haul trucks in the U.S., according to the above cited
press release, and are projected to save 75 lives and prevent over
1300 driver fatigue related injuries and 6900 property casualty crashes
each year, with over $628 million in cost savings to the American
economy.  But, according to the law of averages, the American economy's
gain is the trucking industry's loss.  According to a January 2, 2004
article on the Sun-Sentinel's website, the cost to trucking companies
could rise so significantly that manufacturer shipping costs could rise
2 percent to 19 percent in the near future.

Detailed Information on the AXP 1000 Product
--------------------------------------------
The AXP 1000 is a device designed for new installation and retrofit to
semi truck tractors which provides air conditioning and heating for
long haul trucks and power generation without running the truck engine
to provide "creature comforts" for the truck cab (i.e.: heating,
cooling and operation of devices requiring electrical power), while
keeping the truck battery charged.  The Company recently had filed
four provisional patent applications on the device, which was
converted to a traditional patent pending in 2003, and has recently
filed a continuation in part to include further unique features.

Recent federal and state laws and regulations collectively limit both
the number of hours per day that long haul truckers may drive and the
number of non-driving hours they may allow their trucks to idle.
Trucks burn a considerable amount of diesel fuel when idling and
release harmful emissions into the atmosphere.  According to the U.S.
Department of Energy's Transportation Technology R&D Center's website,
with a 1000 RPM engine and truck accessories with a 10 brake
horsepower, the total yearly savings for fuel costs, preventative
maintenance and overhauls would be approximately $5,280, even with
diesel at a modest $1.35 per gallon.  The AXP 1000 reduces fuel
consumption and release of noxious emissions, as well as lowering the
truck maintenance burden. Reduced engine running time lengthens the
intervals between scheduled maintenance on the truck's engine.




                                    5

These claims are borne out by industry research.  According to the
Argonne Report, "long-haul trucks idling overnight consume more than
838 million gallons of fuel annually" The report continues on to
indicate that various technology solutions, which reduce idling time,
can also be effective methods of saving fuel, reducing maintenance
costs and lowering emissions.  One such solution is the AXP 1000.

The AXP 1000 also has the potential to be a significant money saver.
The device retails for $5,495, so it may pay for itself in less than
one year, based upon the cost savings estimates above.  Given that the
average truck is rotated every three years or 1,000,000 miles by
large companies, and the device pays for itself in less than one year
on average, the device is destined to be a priority for all long haul
truck fleets interested in cost savings.

While there are several other direct competitors in this market,
Registrant believes that its device occupies a unique niche as it is
one of the lightest devices on the market, has a low maintenance
burden and is one of the least expensive APUs available.  According
to the Argonne Report, other technology options to reduce idling
(such as direct-fired heaters, which raise safety concerns, in
addition to high retrofitting costs and unknown reliability, thermal
storage systems, which is a relatively new technology without any
active manufacturer, and truck stop electrification (there are almost
no truck stops currently offering plug-ins in the U.S.)) are not
currently viable.

Early Installations
-------------------
On December 2, 2002, the Company successfully installed its new
Auxiliary Power Generator - "AXP 1000" on a truck, and the unit
functioned properly, including providing power to the truck's cab HVAC
unit. The Company has successfully completed its second test of its
Auxiliary Power Generator - "AXP 1000", on January 3, 2003.  The unit
was mounted on a truck and connected to the batteries and HVAC unit,
and a dedicated start mechanism was installed.  The unit generated
electricity in excess of that needed to charge the truck batteries and
run the HVAC system and other electronics inside the truck cab.  The
unit was installed in the unique mounting location sought, tied into
the stack and installation brackets were designed and utilized which
allow for truck vibration dampening.

Trade Show Participation and Media Exposure
-------------------------------------------
Registrant has had much feedback from its launch of the product at the
March 2003 Mid America Truck Show in Louisville, Kentucky.  At that
truck show, several major American retail and/or trucking fleet giants
expressed interest about including the product in testing programs.
In addition, the Registrant approached several small fleets about
initial orders, to be supplemented with larger orders over a one to
two year period.

Further trade show exposure continued with participation in the Great
American Truck Show, in Dallas, which occurred in late September 2003.
The Show had an estimated attendance of 30,000 people from the trucking
industry.  With its location at the America Trucking On the Road
Magazine booth, EENT experienced high volume potential customer
exposure for the AXP 1000 and made contact with several new potential

                                     6

distributors and installation facilities. The grand prize for the On
the Road drawing was a free AXP 1000 unit, and several hundred people
were present for the drawing. EENT has also advertised the AXP 1000 in
On the Road, which according to its staff, has a circulation in excess
of 80,000.  EENT again teamed up with On the Road at the Mid America
Truck Show in March 2004 in Louisville, KY, which is touted to be the
largest truck show in North America, with projected attendance of over
80,000 people.

EENT was also featured in Fleet Owner Magazine's September 2003 special
industry report on anti-idling called "Turn Idle Time into Cash". This
bi-annual report should reach much of Fleet Owner's estimated 103,000
circulation.

Further trade show participation ensued at the American Trucking
Association show in October 2003, which focuses on management level
exposure to the trucking industry.  The ATA show provided exposure for
future contact with decision makers at the larger players in the long
haul trucking industry.

In March 2004, EENT again had a booth at the Louisville Mid America
Trucking Show with emphasis on taking orders for units, setting up
new installation facilities and expanding its dealer network.

Product Supply and Installations
--------------------------------
In Summer 2003, EENT also received its 150 prepaid-for Lombardini
engines at its sole contract manufacturing facility, BMZ Generators,
in Pompano Beach, FL, in preparation for commencement of regular
production. The engines are EPA approved and CARB (California Air
Resource Board) certified.  Registrant also prepaid for 180
generators.

The first commercial installation of an AXP 1000 unit occurred in
Oklahoma City, OK on Friday, December 12, 2003. Two more installations,
originally also scheduled for Friday, December 12, 2003 occurred in
early January, 2004. These Oklahoma City installations constitute
commencement of fulfillment of the purchase order from an Oklahoma
company mentioned in a press release and EENT's entry into the Central
U.S. market.

In early January 2004, Registrant installed two AXP 1000 units on long
haul trucks in Oklahoma City. An additional 5 units were installed in
the ensuing weeks in the first quarter both in Oklahoma City and EENT's
Dallas installation facility.

The installation schedule has been slower than anticipated due to
holiday hiatus of various AXP 1000 parts suppliers and difficulty in
scheduling driver availability over the holidays to have trucks in
Oklahoma City and Dallas for installations. However, as the holiday
season abated, EENT looked forward to increased production and
installation in the first quarter of 2004. In fact, the current AXP 1000
production run is comprised of 30 units.

EENT is encouraged by its proven uniqueness as compared to other
products in the market. One major way in which it shows its uniqueness
is the versatility in its ability to be installed in nonstandard
locations. In one of the installations in Oklahoma City, the unit was

                                  7

installed between the frame rails directly below a previously installed
"headache rack" (safety barrier between the back of the truck cab and
trailer). To accommodate the rack which sits above the rails in the
usual AXP 1000 mounting position, EENT's unit was mounted further down
between the rails, as made possible due to its compact size.
Additionally, the between the rail mounting position maintains balanced
weight distribution and preserves side rail space needed for
installation of additional items such as larger fuel tanks and
toolboxes.

Sources of Supply and Assembly Information
------------------------------------------
The source of supplies used to assemble the AXP 1000 are off the shelf
products which are readily available.  Major items include Lombardini
USA for the motor, BMZ Generators for the genset, and Frigette for
the HVAC unit.  There is no need for government approval of principal
products and services, and the BMZ generator meets standards
for US military applications.  Research and development expense incurred
during the year ended December 31, 2003 was approximately $126,785
(product development).

In June 2003, EENT entered into an exclusive contract manufacturing
relationship with BMZ Generators & Welders, Inc. of Pompano Beach, FL.

BMZ (www.bmzgenerators.com) is a Pompano Beach, FL manufacturing
concern which has over 30 years of experience providing customers with
equipment and service in the areas of power generators and custom
designed/built power equipment for various industrial, military, and
trucking applications.

BMZ is the exclusive contract manufacturer for EENT's AXP 1000.  BMZ
assembles, packages and ships units.  BMZ acts as a vendor with EENT
to provide the generator for the AXP 1000 device with delivery of a
minimum of 30 units per month for the next six months (which schedule
was delayed due to transition from the research and development phase).
EENT and BMZ also agreed to enter into good faith negotiations
regarding an acquisition by EENT of an equity interest in BMZ.

As early as June 2003, EENT also engaged in further discussions
with BMZ regarding a possible equity purchase by EENT in BMZ. EENT
had prepaid deposits for 180 generators with BMZ and 150 engines
with Lombardini.  While all of the engines have been delivered,
generator delivery has been delayed in part due to lack of storage
space and other production issues.

In November 2003, EENT engaged Decimal Engineering of Pompano Beach,
Florida to manufacture the enclosures for its AXP 1000 device. Decimal
Engineering, Inc. is a full service precision sheet metal fabricator
and machine shop specializing in the electronics, telecommunications,
medical, computer, automotive and marine related industries, which has
been operating since 1968 in South Florida. Currently, Decimal is fully
automated and employs 80+ people, working 2 shifts, and its sales have
grown on an average of 15% per year for the last several years.  Because
of its extensive facility, Decimal has the current ability to keep up
with enclosure manufacturing demand as EENT's AXP 1000 order flow
increases.

On March 4, 2004, EENT announced that it has agreed to definitive terms
to acquire BMZ Generators & Welders, Inc. (www.bmzgenerators.com ), its

                                     8

supplier of generators and contract assembler for the AXP 1000 product,
which replaced the transaction outlined in the August 2003 term sheet
which expired February 20, 2004.

The acquisition will include a lease fopr the assembly facility for the
AXP 1000 product, other assets of BMZ, and related intellectual property.
The transaction is expected to close on a date to be determined but as soon
as practical.


BMZ, located in Pompano Beach, Florida, has been manufacturing
generators for the automotive, marine, and other industries for over
30 years.

Market and Marketing Plan

The potential market for the AXP 1000 is 480,000 existing Class 7 and
8 trucks and 140,000 new trucks manufactured annually.

EENT envisions a five step marketing plan for the AXP 1000 Program.

1.  Independent Owner/Operators (1 - 5 trucks per customer)

    a.  Focused Trade Shows
        i.  Mid America Truck Show in Louisville, KY
        ii. Great American Truck Show in Dallas, TX

    b.  Trucker Referral Program
        i.  Cash referral fee for trucks who recommend customers which
            buy an AXP 1000

    c.  Target Publications
        i.  Fleet Owner Magazine
        ii. On the Road Magazine

2.  Small Fleets (6 - 250 trucks)

    a.  Focused Trade Shows
        i.   Mid America Truck Show in Louisville, KY
        ii.  Great American Truck Show in Dallas, TX

    b.  Target Publications
        i.   Fleet Owner Magazine
        ii.  On the Road Magazine

    c.  Buying Clubs
        i.   Mercer Transportation
        ii.  Jones Motor Transport

    d.  Implementation of Multi - tier Volume Discounts

3.  Large Fleets (Over 250 trucks)

    a.  Focused Trade Shows
        i.   Mid America Truck Show in Louisville, KY
        ii.  Great American Truck Show in Dallas, TX
        iii. ATA Truck Show in San Antonio, TX



                                   9

    b.  Target Publications
        i.   Fleet Owner Magazine
        ii.  On the Road Magazine

    c.  Buying Club
        i.   Landstar

    d.  Implementation of Multi - tier Volume Discounts

    e.  Implementation of Test Programs

4.  Truck Stops (i.e.: Travel Centers of America, Flying J)

    a.  AXP 1000 is the only unit which could practically be marketed
        through truck stops due to short installation time

    b.  Minimal Inventory Investment (Offer of Net Period Terms)

    c.  Fixed return (installation revenue) but ability to market other
        services for trucks stopping for AXP 1000 installation

    d.  Implementation of Multi - tier Volume Discounts

5.  Independent Installation Facilities

    a.  Focused Trade Shows
        i.   Mid America Truck Show in Louisville, KY
        ii.  Great American Truck Show in Dallas, TX
        iii. ATA Truck Show in San Antonio, TX

    b.  Target Publications
        i.   Fleet Owner Magazine
        ii.  On the Road Magazine

    c.  Incentives for facilities to generate leads or EENT to provide
        geographic appropriate leads

    d.  Implementation of Multi - tier Volume Discounts

    e.  Fixed return (installation revenue) but ability to market other
        services for truck at dealer for AXP 1000 installation

Competition
-----------
There is significant competition to EENT's product: other auxiliary
power units and stationary idle eliminating technologies.

1.  Other major auxiliary power units include Rig Master, Pony Pack,
    Pro Heat, Truck Gen and Idle Eliminator.  Generally, these units
    are more expensive and heavier in weight than the AXP 1000.  Also,
    some are belt driven versus direct drive and/or water cooled
    instead of air cooled, which generates the likelihood of increased
    maintenance instances over the AXP 1000.  Also, the AXP 1000
    exhibits versatility of installation location as it can be mounted
    between the rails instead of on the side rails, permitting use of
    the side railing for installation of other accessories (i.e.: tool
    boxes).


                                     10

2.  Fixed location alternatives include truck electrification and Idle
    Aire.  Truck electrification consists of shorepower Truck Stop
    Electrification systems that provide grid electricity to stationary,
    long-haul trucks for the operation of onboard HVAC units, block
    heaters, and in-cab convenience appliances.  Idle Aire consists of
    an umbilical duct, connected through the truck cab's passenger side
    window, which delivers heat, air conditioning and power to the cab.
    These alternatives carry obvious disadvantages in that a large
    capital outlay is required by the truck stop, thereby limiting the
    locations where the technologies are available.  The AXP 1000 can
    be utilized anywhere a truck is stopped.

Wind Dancer Aviation Services, Inc.

Overview
--------
Registrant owns the fixed base operator ("FBO"; equivalent of a service
station for aircraft), at Stevens Field, Pagosa Springs, Colorado, and
it plans to provide aircraft engine enhancements and installation
activities there. The FBO provides fuel, oxygen, aircraft parking,
flight training and catering, ground transportation, supplies, pilots'
lounge, and rental cars, in addition to becoming a major center for
aircraft repair, maintenance and upgrades.  The intent is to build the
business by offering unique products and services while developing a
service organization to provide major overhaul and enhancements.  The
initial stage of the business plan consists of basic FBO services
offered to an expanded customer base.  Registrant can attract
significant business through expansion of services offered and an
effective public relations effort.  The acquisition of Supplemental
Type Certificates (STCs) to offer additional and unique services and
enhancements for planes is planned in stages.  A very unique
opportunity exists due to an FAA-sponsored $16 million capital
improvement program at the Airport, which is scheduled to be completed
in late 2004.

Detailed Information
--------------------
On December 5, 2002, Wind Dancer Aviation Services, Inc. ("Wind
Dancer"), a wholly owned subsidiary of Registrant, purchased certain
hard assets and inventory and fuel associated with the former Fixed
Base Operator ("FBO"), at Stevens Field, Archuleta County, Colorado
from the Board of County Commissioners of Archuleta County, Colorado
("Seller").  The total consideration paid was $103,375.76.

In December 2003, the Company repaid the loan used to finance the
acquisition in full.

Wind Dancer operates the FBO through a Fixed Base Operator Agreement
and Hangar Lease, dated October 16, 2002 (the "Lease") with the Board
of County Commissioners of Archuleta County, Colorado (the "Board"),
which is the owner of Stevens Field Airport, where the FBO is located.
The effective date of the Lease was December 5, 2002, which was the
closing date of the asset acquisition.

The salient terms of the Lease are:

Term:	10 years plus one 10 year renewal.  Right of first refusal on
      further renewals.

                                  11

Rent:	$9,600 per year with CPI adjustments commencing in year two and
      increases of 18% per year commencing in year six.  Rent during
      initial term capped at $22,000 per year.  Fair market rent
      starting in year 11.

Fuel Flowage Fee: $0.05 per gallon to Archuleta County.

Aircraft Parking Fee: 70% to Archuleta County.

Required Services: Ground Guidance, Aircraft Fueling, Apron Servicing,
                   Pilot Facilities, Telephone and Flight Planning,
                   Unicom and  Pilot Supplies.

Authorized Services: Aircraft Maintenance, Flight Services, Aircraft
                     Rentals and Sales, Flight Instruction, Ramp
                     Services, Catering, Heating and De-Icing, Oxygen
                     and Other Gasses, Engine Starting and Rental
                     Vehicles.

Operating Standards: Includes required open hours during summer and
                     winter season and handling and storage of
                     aviation fuel per the fuel farm covered by the
                     Lease.

Lease Covenants: Industry standard covenants covering maintenance, etc.

Events of Default: Failure to make any payment within 10 days after it
                   is due; failure to perform any covenant, etc. and
                   failure to cure within 30 days after notice of
                   default from the  Board; bankruptcy, insolvency,
                   etc. not dismissed within 90 days after filing;
                   Wind Dancer is prohibited from operating the FBO for
                   a 60 day period; and voluntary abandonment by Wind
                   Dancer of operation of FBO for a period of more than
                   10 days.  An Event of Default gives  the Board the
                   right to terminate the Lease.

Insurance: Liability insurance of $1,000,000 per occurrence and
           $1,000,000 in the aggregate.

Change in Control: A change in control (defined as a transfer of 51%
                   or  more of the equity interest in Wind Dancer) must
                   be approved in writing by the Board, unless the
                   change in control is due to an investor financing for
                   the FBO operation, in which Wind Dancer remains in
                   operational control of the FBO.

The intent is to build the business by offering unique products and
services while developing a service organization to provide major
overhaul and enhancements.  The initial stage of the business plan
consists of basic FBO services offered to an expanded customer base.
The Company believes it can attract significant additional business
through expansion of services offered and an effective public relations
effort (in conjunction with the Airport and local government).  The
acquisition of Supplemental Type Certificates (STCs) for turbo chargers
offers an additional and unique services and enhancements for planes is


                                 12

planned in stages.  Wind Dancer stands to benefit from the ongoing
major improvements at Stevens Field, which are being spearheaded by the
FAA, which should substantially increase air traffic upon completion
due to increased capacity as to planes which will be able to land at
and take off from the airport. Phase I of the improvements, which
consisted of purchasing land and completing improvements to 500 feet of
runway at the far end of the Field, is finished. The Project has
commenced Phase II, which consists of the balance of the rebuild of the
runway to allow aircraft up to 70,000 pounds to land and take off,
brings the total Project cost to approximately $16,000,000.

In 2003, EENT purchased over 50 STCs (supplemental type certificates
which are unique designs for aircraft parts, which are FAA-approved for
exclusive installation of specific parts on specific aircraft types -
the owner of an STC has the exclusive right to manufacture a specific
part for a particular aircraft type, which right provides expanded
protection beyond that offered by a patent.), for a purchase price of
over $100,000.  These STCs are for various types of turbocharger kits,
which enable already existing engines to travel more efficiently at
higher altitudes, therefore prolonging the usefulness of existing
engine technologies.  The development of the STC projects is a long
term goal, and will require additional capital to be effective,  As of
early April 2004, Wind Dancer has streamlined its operations in the
short term to focus on fuel sales and maintenance, including
installation of third party turbocharger systems.  In addition, Wind
Dancer terminated the employment of Tylor Hall thus significantly
reducing personnel costs.

The FBO business should break even in late 2004 and in the opinion of
Company management constitutes a solid base upon which to build.
EENT's plan is to systematically add business services while airport
improvements are in process with the goal of becoming a successful
provider of new products at a "new" airport, in a very favorable
destination.

Aircraft Enhancements
---------------------
FAA Type Certificates (TC) and Supplemental Type Certificates (STC) are
the aviation equivalents of a patent.  If the manufacturer decides to
make major changes to an airframe design, it must go through a new FAA
certification program. An examination of the fuselage of Aero
Commanders and most other general aviation aircraft will show relatively
little change over a 30 year period.  The basic airframe is designed to
last 10,000 to 25,000 hours and the average yearly use is 200 flying
hours (50 to 125 years). Aircraft manufacturers are producing airplanes
today that were designed and certified by the FAA 20, 30 even 50 years
ago.

FAA regulations do not require prior FAA certification of individuals
or entities seeking to be STC proponents to design and manufacture
improvements for aircraft as long as the improvements meet the
Regulations, and the proponents perform the required engineering
documentation and testing to qualify for a STC. The TC/STC process
has a monopolistic effect because regulations restrict aircraft owners
from installing any part or device on a plane which does not carry a
STC approval for that particular plane.  Cost to obtain STC approval,
narrow market and limited expertise discourage competition.


                                     13

EENT is preparing to capitalize on this opportunity in the aircraft
industry with its new STC acquisitions for several enhancements to
existing types of general aviation aircraft.

There is a large potential market of such aircraft in need of
modernization to provide better performance and increased speed,
comfort and utilization.

Turbocharger Power Systems
--------------------------
Many general aviation aircraft lack modern, high power engines due to
static designs.  Since the airframes are still very much in demand,
there is huge potential to upgrade through provision of modernization
enhancement such as engine turbo charger kits.  In early days of
aircraft turbo-charging, little was known, understood or given
attention to the effects of induction heat caused by the air being
compressed. The early systems were designed so the aircraft owner
could choose either normally aspirated or turbo-charged. A problem
developed later when a turbocharger "coked up" because the turbine
did not run continuously. Much has recently been learned about
inter-cooling, maximizing gas velocities, waste gate controls and
sealed exhaust systems.

Turbocharging an engine increases power produced by an engine and
facilitates equal power output at various altitudes.  Normally
aspirated engines vary in power output relative to altitude; therefore,
the addition of a turbocharger to a normally aspirated engine increases
and stabilizes power output which in turn increases payload limit of
the airplane.  Turbo-charging also decreases noise two ways. First, the
turbocharger converts 60% of the exhaust energy (noise) into useful
work turning the compressor. Power now available at altitude allows a
decrease in propeller RPM decreasing tip speed, a 8% to 16% noise
reduction. Second, inter-cooling is extremely important because when
air is compressed it gets hot. It is not unusual for temperatures to
exceed 300 degrees F. For every 10 degree increase in the temperature
of the air, 1% of the available power is lost.

The distribution of products and services will be through Wind Dancer.
There is no direct competition to the FBO as the FBO is the only one
operating at Stevens Field, although the Lease does provide that the
Board may authorize further FBOs in the future, as required by federal
law and regulation (but, as Wind Dancer occupies the only hangar, a
new FBO would need to secure a new hangar).  The major raw material is
aviation gas and jet fuel, which Wind Dancer purchases from Western
Petroleum, Inc., which is a Chevron supplier.  Wind Dancer is in the
process of negotiating a full fuel supply contract with Western
Petroleum, which shall also include a nominal amount of capital
expenditure financing.  Wind Dancer does not depend on any one or
several major customers, and its customer base is both local pilots and
transient general aviation aircraft business.  Wind Dancer has no
intellectual property at the current time, until the purchase of the
STCs if, as and when consummated.  There is governmental approval
required to obtain STCs; however, Wind Dancer anticipated that when it
purchased the STCs, governmental approval would already have been
obtained.  The aircraft industry is heavily regulated by the FAA,
and many of the STCs require updating.  There are compliance
requirements for environmental purposes for fuel spills at the federal,
state and local government levels, which the FBO complies with.

                                 14

Additionally, the FBO's liability insurance includes hangarkeeper's
liability which covers fuel spills from the FBO fuel trucks up to
policy limits.  The fuel farm is not owned by the FBO; however, the
FBO has usage and may have exposure if it were not covered by its
insurance.

The management team has substantial experience in the engine
manufacturing and aviation fields.  This will greatly assist in the
redirected core businesses.

Gas Gathering Enterprises, LLC

Overview
--------
Registrant's Gas Gathering System is located in Caddo Parish, Louisiana
in the Caddo Pine Island Field (the "Field"), which was discovered in
1905.  Several geological formations have been developed for both oil
and gas production, with over 25,000 successful wells having been
drilled to date.  In recent years, new drilling (400 to 500 wells)
continues to produce shallow gas as well as some deeper oil and gas
zones.  Registrant's Gas Gathering System is a branch-like construction
approximately 72 miles long, which winds throughout portions of the
Field that have heavy concentrations of wells. Ready access to various
leases throughout the Field provides a convenient, inexpensive method
of gathering the vast amounts of casing head gas that are otherwise
vented into the atmosphere from the more than 10,000 Annona Chalk wells
which are located in the Field.  Despite the fact that the Field has
been in operation since 1905, it is estimated that only 15% to 20% of
the total oil and gas reserves in the Field have been captured.
Registrant estimates that it will be able to connect 5,000 wells in a
two year period, with an average daily output of 2-3 mcf (thousand cu.
ft.) of gas.

Natural Gas Industry
--------------------
According to the U.S. Department of Energy Information Administration's
Historical Natural Gas Annual 1930 - 2000, dated December 2001, total
U.S. consumption of natural gas in 2000 was 22,546,944 million cubic
feet.  From 1983 - 1999, consumption increased on an annual basis,
although the numbers in 2000 showed a slight decrease from 1999.  This
recent historical increase in demand demonstrates a burgeoning market.
Smaller companies can capitalize on the fact that major players in the
oil and gas industry often ignore or abandon smaller, less productive
fields and formations, preferring the large profits available in easily
accessible fields, although these smaller fields still yield significant
amounts of gas.  The natural gas market is a $90 billion per year
industry (U.S. DOE 1999 report).  An article on Hoovers.com, entitled
"Energy", by Stuart Hampton, states: "Increased demand for natural gas
to fuel power plants has encouraged more exploration for that resource
as well, and it has created more business for natural gas transporters
and marketers."  EENT's Gas Gathering System addresses the growing
national need for alternatives to the traditional sources of energy, in
particular to foreign crude oil.

Detailed Information
--------------------
As Americans seek more and better ways to trim their energy costs and
consumption and to reduce dependence on foreign energy resources,

                               15

greater emphasis is being placed on finding viable fuel alternatives.
Registrant is contributing to the effort to reduce Western dependence
on foreign energy sources by capturing and making available natural gas
that would otherwise be vented into the atmosphere during the oil
pumping process.

Since producers in the Field typically vent casing head gas into the
atmosphere, wasting what is otherwise a valuable commodity, EENT's Gas
Gathering System offers these producers a way to increase revenue
through the capture and sale of the natural gas.  Since EENT's Gas
Gathering System does not cross any state lines and is not a "pipeline",
it is exempt from most of the state and federal regulations that apply
to pipelines.  The lack of compliance requirements reduces production
costs and allows the Company to maximize revenues.  EENT's Gas
Gathering System enables oil producers to capture an otherwise
dissipated revenue stream, providing valuable natural gas to market.

In 2002, Registrant had significant challenges in operation of its Gas
Gathering System.  Its original gas purchaser, Prism, was shut down
approximately six weeks during the first three quarters of 2002.
Registrant then attempted to sell its gas to Koch/Gulf South through an
intermediary, Metro Energy, which is located in the Caddo Pine Island
Field, but Metro lacked sufficient equipment to process the gas.
Unfortunately, Registrant was not able to sell directly to Koch due to
the amount of capital required to be able to install and run the
necessary equipment.

Therefore, Registrant determined on February 18, 2003 that its best
course of action is to attempt to sell the Gas Gathering System.
During the first quarter of 2003, Registrant approached in excess of
six different parties to locate a purchaser.  It only identified one
interested party (American West Resources, Inc. of Fort Worth, TX
("American West")) with which it has a letter of intent to sell the
System (100% of the membership interest in Gas Gathering Enterprises,
LLC, Registrant's wholly owned subsidiary, which owns the system) for
a purchase price of $500,000.  Pursuant to a letter of intent, dated
March 7, 2003, American West was entitled to a 30 day exclusive period
in which to post a $50,000 non refundable deposit to purchase the
System, with closing no later than 90 days from March 7, 2003. On
April 3, 2003, Registrant signed an amendment to the letter of intent
to extend the exclusive period to expire no later than 60 days from
March 7, 2003.  On May 8, 2003, the Company entered into a revised
letter of intent with American West whereby the purchase price would
be $500,000, if the closing occurs on or before November 1, 2003,
$650,000 if the closing occurs between November 2, 2003 and May 1, 2004
and $800,000 if the closing occurs between May 2, 2004 and November 1,
2004.  Upon closing the Company would also retain an 8% net profit
interest in Gas Gathering as defined in the letter of intent.

Prior to closing, American West would operate the system and receive all
gross proceeds until November 1, 2003, with the Company receiving 50% of
net proceeds thereafter until closing.  The President, Chief Executive
Officer and majority shareholder of America West is the father in law of
the Company's President and Chief Executive Officer. There can be no
assurance that this sale will take place, and as of December 31, 2003,
EENT had derived no significant revenue from the System in 2003.



                                16

Other
-----

There have been no bankruptcy, receiverships, or similar proceedings by
or against Registrant.

As of December 31, 2003, Registrant and its subsidiaries had four full
time employees other than their officers and directors.  Each of
Registrant's CEO, CFO and General Counsel are to receive a salary of
$180,000 per year, but the CEO received less than $100,000 in 2003 and
the CFO and General Counsel each received under $80,000.  No one is
represented by a collective bargaining agreement.

ITEM 2.  DESCRIPTION OF PROPERTY

Registrant's executive offices are located at 5308 West Plano Parkway,
Plano, Texas, which it leases on a monthly basis, at competitive market
rates. Wind Dancer Aviation maintains its offices at the FBO.
Registrant believes that its facilities are adequate for its current
needs and that suitable additional or substitute space will be
obtained as and when needed.  There are leased offices for Gas
Gathering in Shreveport, Louisiana.

ITEM 3.  LEGAL PROCEEDINGS

Securities and Exchange Commission Matter
-----------------------------------------
On October 23, 2003, the Commission entered a cease-and-desist order
against the Company resulting from the Company's issuance of certain
shares of its common stock in January 2002 pursuant to an S-8
registration statement.  The order requires the Company to cease and
desist from committing or causing any violations and any future
violations of Sections 5(a) and 5(c) of the Securities Act of 1933.

600 Racing, Inc. v. EENT et. al.
--------------------------------
On October 28, 2003, the Company was served with a complaint by 600
Racing, Inc.  The complaint alleges that EENT is liable on a $150,000
judgment issued against Millennium Fuels USA, LLC ("MFUSA"), an
unrelated entity, of which Will McAndrew and Roger Wurtele, the
Company's CEO and CFO, respectively, were the Managers.  The complaint
alleges that the Company engaged in a joint enterprise with MFUSA and
integrated resources with MFUSA and is thus liable on an "alter ego"
theory.  Alternatively, the complaint alleges Company liability based
upon the allegation that the Company deprived MFUSA of corporate
opportunity and thus tortiously interfered with MFUSA's contract with
Plaintiff.

Company's counsel states that the claims are without merit in that
MFUSA and the Company were two distinct businesses, with separate
business plans and no commingling of funds.  Each had separate
operations with the only coincidence being the fact that McAndrew and
Wurtele were officers of both entities and the entities share a
business address.  Lastly, McAndrew and Wurtele did not become
substantially involved with the Company until December 2001, which
was well after the end of dealings between Plaintiff and MFUSA.
Defense counsel is filing an answer and expects to be able to effect
the Company's dismissal from the suit without any liability due to the
lack of meritorious claims.

                               17

Other than as stated above, Registrant is not a party to any legal
proceedings.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were matters submitted to a vote of security holders during
the fourth quarter of the fiscal year ended December 31, 2003.

On or about November 26, 2003, Registrant submitted the following
to a vote of security holders, through a Written Consent of
Shareholders in Lieu of an Annual Meeting:

1.  Election of Willard G. McAndrew, III, Roger N. Wurtele and
    Robert G. Farris to hold office until the next annual meeting of
    shareholders and until a successor is elected and has qualified,
    or until such director's earlier death or removal.

2.  Selection of Marcum & Kliegman, LLC to audit the consolidated
    financial statements of Registrant for the fiscal year ending
    December 31, 2003.

3.  Ratification of purchase of assets from Kelly Aerospace Power
    Systems, Inc. on June 27, 2003, and purchase of assets from Mr.
    RPM, LLC, on or about September 17, 2003.

4.  Amendment to increase the authorized shares of Registrant's stock
    to 200,000,000: 180,000,000 shares of common stock and 20,000,000
    shares of preferred stock (not enacted).

The number of shares voted in favor of items 1 (including each director
in item 1) - 3, and the first part of item 4 (increasing the authorized
common stock) were 42,341,149, against were 0 and abstaining were
15,894,836.  The number of shares voted in favor of the second part of
item 4 (the authorized preferred stock) were 27,432,958, against were
14,908,191 and abstaining were 15,894,836.

For further information on the foregoing items 1 - 4, please refer to
the Registrant's Definitive Proxy Statement on Schedule 14A filed with
the Commission, on November 26, 2003.

                                 PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Registrant's Common Stock is traded on the OTCBB under the symbol EENT
and has been traded on the OTCBB since the Registrant's initial public
offering (under Rule 504) in 2000. According to records of the
Registrant's stock transfer agent, Registrant had 572 stockholders of
record as of December 31, 2003. The following table sets forth the low
and high bid price of the Company's Common Stock, based on the last bid
price, in each of the Company's last eight quarters:








                                   18

<TABLE>
<CAPTION>

<S>                  <C>               <C>
Quarter Ended	   Low Bid Price	   High Bid Price
-------------        -------------     --------------
December 31, 2003         .06               .21
September 31, 2003        .09               .20
June 30, 2003             .05               .15
March 31, 2003            .05               .15
December 31, 2002         .04               .14
September 30, 2002        .03               .08
June 30, 2002             .03               .16
March 31, 2002            .14               .49

</TABLE>

The reported high and low bid prices of our common stock are above for
each quarter during the last two complete fiscal years.  The high and
low bid price for the periods in 2002 and 2003 shown above are
quotations from the OTCBB.  The quotations reflect inter-dealer prices
and do not include retail mark-ups, mark-downs or commissions.  The
prices do not necessarily reflect actual transactions.

No assurance can be given that any established market for the Company's
common stock will develop or be maintained.  For any market that
develops for the common stock, the sale of "restricted securities"
pursuant to Rule 144 promulgated under the Securities Act of 1933 by
members of management and others or any other person to whom any such
securities may be issued in the future may have a substantial adverse
impact on any such public market.

Information about the date when current holders' holding period of
"restricted securities" commenced can be found below under the heading
"Recent Sales of Unregistered Securities" of this Item.  A minimum
holding period of one year is required for resales under Rule 144,
along with other pertinent provisions, including publicly available
information concerning our Company (this requirement will be satisfied
by the filing of this Annual Report and the continued timely filing by
us of all future reports required to be filed by us with the Securities
and Exchange Commission; limitations on the volume of "restricted
securities" which can be sold in any 90 day period; the requirement of
unsolicited broker's transactions; and the filing of a notice of Sale on
Form 144).

As of the date of filing this Annual Report, there has been trading in
the common stock; the current bid/ask prices are roughly in the range
of $0.38/$0.41. There has been increased volume in early 2004 and the
sales were 56,938 shares at $0.41 per share close on April 12, 2004.

Registrant has adopted the policy to reinvest earnings to fund future
growth. Accordingly, Registrant has not paid dividends and does not
anticipate declaring dividends on its Common Stock in the foreseeable
future.

Recent Common Stock Transactions

On January 17, 2003, in connection with a private offering, the Company
sold 500,000 shares of common stock to an investor at $0.10 per share
                                  19

or $50,000. The Company also issued warrants to purchase 50,000 shares
of the Company's common stock with an exercise price of $0.25 expiring
on January 16, 2005

On January 21, 2003, the Company issued 260,000 shares of common stock
valued at $28,600 to consultants for services to be provided.

On January 21, 2003, the Company issued 500,000 shares of common stock
valued at $55,000 to employees for services provided.

On January 22, 2003, in connection with a private offering, the Company
sold 100,000 shares of common stock to an investor at $0.20 per share
or $20,000. The Company also issued an additional 100,000 shares of
common stock valued at $11,000 to this investor for consulting services
to be provided.

On March 5, 2003, the Company issued 50,000 shares of common stock
valued at $3,000 to consultants for services to be provided.

On March 21, 2003, the Company issued 382,942 shares of common stock
(201,817 shares of which were accrued for at December 31, 2002) to an
investor in connection with an ant-dilution agreement.

On March 13, 2003, the Company issued 25,000 shares of common stock
valued at $1,750 to an employee for services to be provided.

On April 2, 2003, the Company issued 25,000 shares of common stock
valued at $1,250 to a consultant for services provided.

On May 1, 2003, the Company issued 25,000 shares of common stock
valued at $1,500 to a consultant for services provided.

On June 1, 2003, the Company issued 200,000 shares of common stock
valued at $12,000 in connection with a one-year agreement with an
investor relations firm for services provided. The Company will also
issue an additional 300,000 shares through March 1, 2004 for services
to be provided. The Company will also pay a $500 monthly retainer to
be increased up to $4,000 based on performance criteria.

On June 18, 2003, an investor purchased 1,000,000 shares of the
Company's common stock at $0.05 per share or $50,000. The Company also
issued rights to this investor to purchase and additional 1,000,000
shares for $0.05 per share or $50,000 on or before September 6, 2003.
The Company and the investor agreed to exercise this right on August
7, 2003 for 1,100,000 shares at $0.045 per share or $50,000.

On June 18, 2003, the Company issued 25,000 shares of common stock
valued at $3,000 to a consultant for services provided.

On June 18, 2003, the Company issued 25,000 shares of common stock
valued at $3,000 to a consultant for services provided.

On June 18, 2003, the Company issued 50,000 shares of common stock
valued at $6,000 to the manufacturer of its AXP 1000 product for
consulting services provided. The Company has also agreed to issue
50 shares of common stock for each unit to be shipped by the
manufacturer.

                              20

On June 27, 2003, an investor purchased 1,604,909 shares of the
Company's common stock at $0.0303 per share or $48,629.

On June 30, 2003, the Company issued 729,182 shares to an investor
in regards to an anti-dilution agreement.

On July 2, 2003, in connection with a private offering, the Company
sold 100,000 shares of common stock to an investor at $0.06 per share
or $6,000.

On July 4, 2003, in connection with a private offering, the Company
sold 150,000 shares of common stock to an investor at $0.06 per share
or $9,000.

On July 10, 2003, in connection with a private offering, the Company
sold 200,000 shares of common stock to an investor at $0.05 per share
or $10,000 and issued 2,000 shares as an equity kicker.

On July 15, 2003, in connection with a private offering, the Company
sold 600,000 shares of common stock to two investors at $0.05 per
share or $30,000.

On July 17, 2003, in connection with a private offering, the Company
sold 30,000 shares of common stock to an investor at $0.06 per share
or $1,800.

On July 18, 2003, in connection with a private offering, the Company
sold 200,000 shares of common stock to an investor at $0.05 per share
or $10,000 and issued 4,000 shares as an equity kicker.

On July 24, 2003, in connection with a private offering, the Company
sold 100,000 shares of common stock to two investors at $0.06 per
share or $6,000.

On July 24, 2003, the Company issued as an equity kicker 14,000 shares
to seven investors.

On July 24, 2003, the Company issued 15,250,000 shares to officers and
employees of the Company valued at $1,830,000 for services provided.

On July 24, 2003, the Company issued 3,300,000 shares to an investor
in regards to an anti-dilution agreement.

On July 28, 2003, in connection with a private offering, the Company
sold 125,000 shares of common stock to two investors at $0.06 per
share or $7,500.

On July 29, 2003, in connection with a private offering, the Company
sold 50,000 shares of common stock to an investor at $0.06 per share
or $3,000.

On July 30, 2003, in connection with a private offering, the Company
sold 50,000 shares of common stock to an investor at $0.06 per share
or $3,000.

On August 5, 2003, in connection with a private offering, the Company
sold 50,000 shares of common stock to an investor at $0.06 per share
or $3,000.

                                   21

On August 5, 2003, the Company issued 774,182 shares to an investor
in regards to an anti-dilution agreement.

On August 6, 2003, in connection with a private offering, the Company
sold 33,333 shares of common stock to an investor at $0.06 per share
or $2,000.

On August 8, 2003, the Company entered into an agreement with a
consulting firm to issue 600,000 shares of the Company's common stock
valued at $72,000 for consulting services to be provided. The term of
the agreement is for six months with a renewal option for an
additional six months.

On August 19, 2003, in connection with a private offering, two investors
purchased 200,000 of the Company's common stock at $0.05 per share or
$10,000.

On August 19, 2003, the Company issued 175,000 shares of common stock
valued at $26,250 to consultants for services provided.

On August 19, 2003, in connection with a private offering, an investor
purchased 20,000 of the Company's common stock at $0.06 per share or
$1,200.

On August 19, 2003, the Company issued 1,685,259 shares to an investor
in regards to an anti-dilution agreement.

On August 22, 2003, the Company issued 60,000 shares of common stock
valued at $9,000 to consultants for services provided.

On August 22, 2003, in connection with a private offering, two investors
purchased 450,000 of the Company's common stock at $0.05 per share or
$22,500.

On August 25, 2003, the Company issued 300,000 shares of the Company's
common stock to officers of the Company as non-cash compensation valued
at $45,000 for services provided.

On August 29, 2003, in connection with a private offering, two investors
purchased 340,000 of the Company's common stock at $0.05 per share or
$17,000.

On August 29, 2003, in connection with a private offering, an investor
purchased 80,000 of the Company's common stock at $0.10 per share or
$8,000.

On August 29, 2003, the Company issued 320,000 shares to an investor
in regards to an anti-dilution agreement.

On September 17, 2003, the Company issued 900,000 shares valued at
$135,000 in connection with an asset purchase agreement.

On September 17, 2003, the Company issued 500,000 shares of common
stock valued at $75,000 to a consultant for services to be provided.

On September 17, 2003, the Company issued 50,000 shares valued at
$7,500 to employees of the Company as non cash compensation for services
provided.

                                    22

On September 17, 2003, in connection with a private offering, an
investor purchased 1,000,000 of the Company's common stock at $0.05
per share or $50,000.

On September 23, 2003, the Company issued 99,000 shares of common stock
valued at $12,870 to a consultant for services provided.

On September 29, 2003, in connection with a private offering, an
investor purchased 50,000 of the Company's common stock at $0.10 per
share or $5,000.

On September 29, 2003, in connection with a private offering, two
investors purchased 223,500 of the Company's common stock at $0.06 per
share or $13,400.

On September 29, 2003, the Company issued 50,000 shares of common stock
valued at $7,500 to a consultant for services provided.

On September 29, 2003, the Company issued 328,750 shares to an investor
in regards to an anti-dilution agreement.

On October 15, 2003, the Company issued 500,000 shares of common stock
valued at $75,000 to a consultant for services to be provided based on
a consulting agreement.  On December 2, 2003 the Company extended the
consulting agreement and issued an additional 600,000 shares of common
stock valued at $102,000 for services to be provided.  Subsequently on
February 5, 2004, the Company terminated this consulting agreement.

On October 16, 2003, in connection with a private offering, an investor
purchased 1,000,000 shares of the Company's common stock at $0.05 per
share or $50,000.  This investor was also issued warrants to purchase
200,000 shares of the Company's common stock with an exercise price of
$0.01 per share expiring October 30, 2005.

On October 16, 2003, the Company issued 399,750 shares to an investor
in regards to an anti-dilution agreement.

On November 17, 2003, in connection with a private offering, an investor
purchased 1,000,000 of the Company's common stock at $0.05 per share or
$50,000.

On November 25, 2003, the Company issued 473,685 shares of the
Company's common stock to officers of the Company valued at $71,052
for services provided.

On November 25, 2003, the Company issued 50,0000 shares of the Company's
common stock to an employee of the Company valued at $7,500 for services
provided.

On November 25, 2003, the Company issued 100,000 shares of common stock
valued at $15,000 to a consultant for services provided.

On December 2, 2003, the Company issued 25,000 shares of common stock
valued at $4,250 to a consultant for services provided.

On December 2, 2003, in connection with a private offering, two
investors purchased 400,000 of the Company's common stock at $0.05 per
share or $20,000.

                              23

On December 12, 2003, the Company issued 200,000 shares of common
stock valued at $40,000 to a consultant for services provided.

On December 12, 2003, in connection with a private offering, two
investors purchased 300,000 of the Company's common stock at $0.05 per
share or $15,000.

On December 12, 2003, in connection with a private offering, an investor
purchased 50,000 of the Company's common stock at $0.10 per share or
$5,000.

On December 12, 2003, the Company issued 150,000 shares of common stock
valued at $28,500 to a consultant for services provided.

On December 30, 2003, in connection with a private offering, two
investors purchased 200,000 of the Company's common stock at $0.05 per
share or $10,000.

On December 30, 2003, the Company issued 2,527,223 shares to an investor
in regards to an anti-dilution agreement.

On December 30, 2003, the Company issued 6,000,000 shares of the
Company's common stock valued at $900,000 to officers of the Company
for services provided.

On December 31, 2003, in connection with a private placement offering,
the Company sold 300,000 shares of the Company's common stock to an
investor at $0.05 per share or $15,000.  At December 31, 2003 a stock
subscription receivable of $15,000 is recorded relating to this
private placement.

Management believes that each of the foregoing persons or entities was
either an "accredited investor," or "sophisticated investor" as defined
in Rule 506 of Regulation D promulgated under the Securities Act of
1933.  Each had access to all material information about the Company
prior to the offer, sale or issuance of these "restricted securities."
We believe these shares were exempt from the registration requirements
of the Securities Act, pursuant to Section 4(2) thereof.

The valuation of these shares was based on trading volume and prices.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

OVERVIEW
--------
Registrant operates businesses which provide products to various aspects
of the transportation industry (long haul trucking and general aviation)
which supply innovative products to promote efficiency of operation of
motor vehicles, reduce fuel consumption and assist in reducing pollutive
emissions from operation of motor vehicles.

Registrant also owns a natural gas gathering system in Louisiana, which
was being operated by a third party, American West Resources, Inc., as
of December 31, 2003, which also had an option to purchase such System;
however, minimal amounts of revenue were generated from the System
activity during 2003, and the manager did not exercise its option.
Although the manager has had gas flow through the System and the

                                24

potential to increase such flow, the System has been subject in recent
months to several hiatuses in operation.  Additionally, the manager
has not provided Registrant with any definitive indication as to
availability of cash flow to continue operation or ability to raise
investment funds to purchase the System, despite requests from
Registrant.  Therefore, Registrant has concluded that it is unlikely
that the manager will be able to close and has shifted focus away from
the System.  However, Registrant is currently seeking alternative
buyers for the System.

Long Haul Trucking Industry and the AXP 1000 (according to statistics
gleaned from Truckinfo.net in late March 2004):

*   The overall U.S. trucking industry employs over 9 million
    individuals, with an estimated 15.5 million trucks overall, of
    these 1.9 million are tractor trailers.

*   There are an estimated 3.3 million truck drivers, with 10% being
    independent truckers (mostly owner operators).

*   There are also over 360,000 trucking companies with 96% operating
    28 or fewer trucks.

*   Total revenue estimates are $255 billion per year.

*   However, profit margins are very small ($.048 per dollar of
    revenue), and the average trucker earns under $40,000 per year,
    with 12.8% of all fuel purchased belonging to truckers.

*   The U.S. Department of Labor estimates that the demand for
    employment of truck drivers may triple by 2020 from current
    levels.

Given these small profit margins and the January 2004 federal mandates
requiring 10 hours of rest for every 11 hours driven (combined with
the state and local anti idling laws), there is a need for solutions
which can achieve the combined goals of: utilizing all means possible
to take measures to increase profit margin and compliance with the
increased and more enforced federal and state legislation affecting
long haul trucks.  Solutions to be used must combine these two goals.
Hence, the increasing popularity of auxiliary power units ("APUs")
other alternatives, such as truck stop electrification, exist, but
require large capital expenditures and are thus less likely to
become prevalent.

EENT's experience is that although APUs have been around for several
years, the recent increase in diesel prices, combined with stricter
enforcement, has placed a spotlight on this cottage industry (with
industry estimates that it could become a $2.5 billion dollar per
year industry), which heretofore had been filled with small niche
players with minimal followings.  Such newfound industry is evident
from the formation of a trade association for APU manufacturers
(Idle Eliminators Manufacturing Association) and various conferences
(such as the May 2004 Anti Idling Conference in Albany, New York).
Additionally, EENT has participated in several trucking industry
trade shows over the past 13 months, with increased interest in the
AXP 1000 at each show.


                                 25

Given the size of the market, EENT believes that there is ample room
for itself and its competitors.  With estimates of 500,000 or more
long haul trucks on the road today, even if EENT were to only capture
a 1% market share, with an average sales price of $5000 per unit,
this represents gross revenues of $25,000,000.  If EENT can overcome
its two biggest challenges, sound and production, EENT believes it
can sell 1000 - 2000 units in 2004, which would yield $5,000,000 -
$10,000,000 in sales.

The AXP 1000 has also been successful in distinguishing itself from its
competitors in several areas, including:

*   Lower cost

*   Lighter weight

*   Only unit to sit between the rails

*   Low maintenance burden

The biggest overall challenge is coordinating production/supply chain
and sales.  EENT is in the process of purchasing BMZ Generators, its
contract assembly facility, which in its current space can assemble 30
- 50 generators per month.  BMZ's owner, Freddy Pereira, has purchased
a large facility in Pompano Beach Florida, which is in the process of
being built out, with expectations of completion during the Summer
2004.  Upon completion, EENT will be leasing space from Pereira and
expects initial assembly volume to be close to 100 units per month.
By purchasing BMZ, EENT will also have direct access to its generator
manufacturer, thus controlling supply.

The BMZ purchase will give EENT the opportunity to expand into other
stand alone and portable generator markets in the future, such as the
marine, aviation and military industries, thus giving it flexibility
in expansion of revenue base should the APU market become saturated.
Also, the facility will become, under the aegis of Freddy Pereira,
ISO 9001 certified, allowing it to be an industry accepted testing
facility for its products.

On the supply chain issue, in March 2004, Registrant's CEO and CFO
traveled with BMZ owner, Freddy Pereira, to meet with the manufacturer
of the custom made generator used in the AXP 1000.  The meetings proved
successful in allowing Registrant to conduct sufficient due diligence
to be comfortable that the manufacturer will be able to meet
Registrant's increasing product need.

With regard to the challenge of reducing the sound emission level with
the AXP 1000, Registrant is applying to a program sponsored by NASA,
called SATOP (Space Alliance Technology Outreach Program) which provides
up to 40 hours of free technology assistance to small businesses looking
to apply space technology (such as noise reduction) to the private
sector.  EENT is in the process of applying for the program and feels
that it meets the outlined qualifications.  Additionally, Registrant
is exploring opportunities in the private sector to take advantage of
quieter technologies.  It is significant to note that, although noise
reduction is an ongoing process, the sound level from the AXP 1000 is
still significantly lower than from a truck's main engine or the
generator used for cooling by reefers (refrigerated truck trailers).

                               26

General Aviation/Wind Dancer:

The discussion in the business section provides ample detail on the
industry.  While EENT had placed great confidence in the ability to
produce marketable product from its STC purchases experience has shown
that this process will take significantly more time and funding than
anticipated.  Therefore, EENT has determined to instead concentrate on
Wind Dancer's "bread and butter" businesses - fuel sales and general
aviation aircraft maintenance and installation of third party
turbocharger systems.  While Wind Dancer will not generate large
amounts of revenue, it is generating at present, an average of $40,000
per month, and although there will be a dip over the summer as the
Stevens Field runway length is reduced to 4000 feet, upon completion
of runway renovations, Wind Dancer will benefit from the ability of jet
aircraft to take off with full loads of fuel (increase in weight to
70,000 lbs. from 16,000 lbs.), which should greatly increase Wind
Dancer's sale of jet fuel, from increased number of jets using the
airport, and jets purchasing more fuel (instead of taking off with
partially filled tanks due to weight limitation with the need to stop
at another general aviation airport with higher weight capacity to top
off tanks).  While EENT is exploring the efficacy of pursuing the STC
program, at present, it has determined that the priority is to use
available cash to fund AXP 1000 needs, and it is considering sale of
some of its STCs to a third party.

Additional 2004 Goals:

Management has, in addition to product specific goals, undertaken to use
its reasonable best efforts to accomplish the following in 2004:

*   Listing on the Australian Stock Exchange to ease buying and selling
    of EENT stock by Pacific Rim Shareholders

*   Preparation for listing on a U.S. regulated exchange (most probably
    the American Stock Exchange) and effectuating that listing,
    depending on ability to meet listing criteria, in late 2004 or
    early 2005

*   Implementation of further internal controls and policies and
    procedures to continue to self manage the growth of Registrant's
    business and personnel as the business expands

*   Possible sale of non revenue generating assets, such as the Gas
    Gathering System, and certain STCs owned by Wind Dancer Aviation, to
    create additional cash available to utilize in the growth of the AXP
    1000 and Wind Dancer business segments and to explore additional
    genset applications, as discussed under the AXP 1000 heading above

*   Shift from reliance of use of outside consultants for support
    services (such as investor relations) to self reliance for such
    services through the use of internal resources and personnel

*   Identification of new markets for products and long range business
    planning for all business units

RESULTS OF OPERATIONS

As of December 31, 2002, Registrant had realized minimal revenues of
$99,257.  As of December 31, 2003, Registrant had realized revenues of
                                  27

$383,262.  The major source of revenue was Registrant's wholly owned
subsidiary, Wind Dancer Aviation, which completed its first full year
of operation in 2003.  Sales and installations of AXP 1000 units did
commence in December 2003, but revenues yielded were minimal.  As AXP
1000 sales increase, the revenue generated from that business segment
are expected to increase dramatically.  Also, although Wind Dancer
has not been able to capitalize on the STC development aspect of its
business plan, due to challenges of capital and time needed to fully
develop product, it has cut costs and dramatically increased the
amount of its maintenance work and installations of third party
turbocharger systems and related items in early 2004, a trend expected
to continue.  With the completion of the expanded runway in 2004,
which should greatly increase fuel sales (which will taper off over
the Summer 2004 when the runway is partially shut down (only 4000 feet
open),  fuel sales (especially jet fuel) should increase markedly.

Expenses for the year ended December 31, 2003 were $4,818,463, as
opposed to $1,674,700 for the year ended December 31, 2002.  The
reason for the increase in expenses was that Registrant increased
operations and hired several outside consultants on a stock compensation
basis, as cash was a limited commodity. In 2003, Registrant retired debt
in the aggregate amount of $251,884.  Of the $4,818,463, $1,462,745 was
due to selling, general and administrative expenses, with $126,785 in
product development, $24,719 in Gas Gathering System operating expenses,
and $540,000 in officer salaries (approximately $609,523 (aggregate 2002
and 2003) of which is accrued and not paid).

Both the AXP 1000 business and Wind Dancer Aviation lost significant
amounts of money in 2003 as both were still in a development stage and
thus required cash outlays without corresponding returns.  Additionally,
Registrant paid for approximately $236,861 worth of inventory and parts.
As Registrant continues through its transition from product and business
development to business operation and production, cash flow should
increase significantly.  Indeed, if current trends continue, assuming
runway completion by the end of the third quarter, Wind Dancer Aviation
may "break even" during the fourth quarter of 2004, on a then current
basis.

The activities management took to record expenses consisted mostly of
development of its AXP 1000 product and acquisition and commencement of
the Fixed Base of Operations business, including acquisition of STCs.
Management also spent significant time on fund raising activities.

A review of cash flows from operating activities shows net cash used in
2003 of $1,112,145 opposed to $564,284 in 2002.  The net cash used in 2003
in operating activities resulted from operating expenses, less amounts
mainly for stock based compensation, accounts payable and accrued
expenses, and accrued expenses, officers.  A review of cash flows from
investing activities shows $25,128 in 2003 as opposed to $189,551 in
2002.  The main categories in 2003 consisted mainly of investment by
Registrant of funds into its subsidiary, Wind Dancer Aviation Services,
Inc., for the purchase of STCs and additional capital expenditures for
Wind Dancer.  A review of cash flows from financing activities shows
$1,126,480 in 2003, as opposed to $680,000 in 2002.  In 2003 financing
activities consisted of $514,749 in proceeds from notes payable,
stockholders, $24,131 from notes payable, net and $587,600 from proceeds
from the issuance of common stock.  Items 5 and 12 detail this financing
activity.

                                 28

Registrant had a net loss of $5,041,657 at December 31, 2003, resulting
in a net loss per share of $.12.

Selling, general and administrative expenses at December 31, 2003 were
$1,462,745.

LIQUIDITY AND CAPITAL RESOURCES AND FISCAL CONDITION

During 2003, Registrant's primary sources of liquidity included cash and
cash equivalents in the amount of $1,126,480, which was the balance of
proceeds raised in several private Section 4(2) stock sales and note
payable agreements.

Registrant believes that its existing cash balance and future operating
cash flows should be sufficient for near term operating needs (given the
completed capital raise in February 2004). However, the raise did not
contemplate purchase of BMZ which will cost an additional $500,000,
$200,000 in cash (to be raised as acquisition capital) and $300,000 in
restricted Common Stock of Registrant.  Given the increased production
capacity upon acquisition and move of operations to BMZ's new facility,
Registrant's cash flow should cover the increased cost of BMZ's
operations, which EENT projects will be $100,000 until BMZ breaks even
for a period of 90 days (assuming full production and AXP sales, but
without sales and production, this amount is not a commitment, and
operations would be scaled back so the amount would likely be $30,000).
Even with an estimate of sales of 1000 AXP 1000 units in the next 12
months, and with a projection of $1000 gross profit per unit, the
additional $1,000,000 in cash flow (with Registrant's current bank
deposits of approximately $1,000,000 from the first quarter capital
raise) should carry Registrant's cash requirements through the end
of 2004.

As mentioned in the overview, the length of time to completion of the
Stevens Field runway expansion is significant as during the construction
period, there will be limited access to the Field, which will cause
decreased amounts of fuel to be sold during the Summer of 2004,
typically the FBO's busy season for fuel sales.  However, Wind Dancer
should be able to continue to consistently attract maintenance and third
party turbocharger installation work to offset the potential loss of
$20,000 - $30,000 in fuel sale revenue over the second and third
quarters.  Once the construction is complete and jets can land and take
on more fuel, there should be offsetting sales of fuel in the fourth
quarter to substantially counteract the intermediate losses.

With regard to known trends and events reasonably expected to have a
material impact on net sales and revenues, Registrant strongly believes
that the heightened interest in idling alternatives should provide a
stronger demand for the AXP 1000 device.  Uncertainties include whether
there can be sufficient noise reduction in the AXP 1000 to overcome
objections from some long haul truckers (the AXP 1000 is air cooled
rather than water cooled, so it has a somewhat elevated noise level when
compared with liquid cooled devices).   If not, EENT will focus on the
segment of the market where noise is not as much of a factor (i.e.:
liquid haulers where weight reduction is paramount (the AXP 1000 is one
of the lightest weight alternatives in the 5 kW category) and
refrigerated container haulers or "reefers" which are loud due to the
refrigeration apparatus in any case, so noise is not as much of a
concern).  There is also concern over the reliability of the Frigette

                                  29

HVAC unit currently used, but management believes alternatives are
available.  Also, Registrant does not believe it will be faced with
the same delays it experienced in 2003, which were largely caused by
cash flow issues.

The other major uncertainty is the extent to whether new technology will
appear that will make the small generator/engine genset used by EENT
obsolete.  Given the potential development of other power generator
technologies, there may be a limited window of 5 - 10 years for EENT's
technology as currently configured.  Therefore, EENT, in addition to
gearing up for current production, is looking into commencing a research
and development project for its next generation products, which is
envisioned to be a part of the AXP 1000 business unit, with project
specific funding, to be determined in the future as the details of such
research and development products come to fruition.  Discussions for a
joint venture with a company with a potential alternative fuel
generation source are under way.  Registrant is also in the process of
securing its next generation engine driven genset, to replace the
currently used Lombardini engine.  This is an intermediate step to be
taken before putting an alternative fuel generation source into
commercial production.

Another guard against obsolescence is looking for new markets for BMZ
generators.  Therefore, Registrant will commence exploration of
marketing and sales for the generator products in other likely
industries, most notably marine, aviation and military.

Of course, EENT's business is subject to customary and usual business
risks, not necessarily subject to its control, including, but not
limited, to:

*   Ordinary operating risks (product, labor and capital cost increases)

*   General economic conditions

*   Changes in laws and regulations

*   Competition

*   Stock and product market volatility

*   "Acts of God"

ITEM 7.  FINANCIAL STATEMENTS AND SELECTED FINANCIAL DATA

Registrant's financial statements for the years ended December 31,
2002 and December 31, 2003 audited by Marcum & Kliegman, LLP, are
included herein in full.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
         AND FINANCIAL DISCLOSURE.

None

ITEM 8-A.  CONTROLS AND PROCEDURES.

Disclosures Controls and Procedures


                                  30

The Company maintains controls and procedures designed to ensure that
it is able to collect the information that is required to be disclosed
in the reports it files with the SEC, and to process, summarize and
disclose this information within the time period specified in the
rules of the SEC. The Company's Chief Executive and Chief Financial
Officers are responsible for establishing, maintaining and enhancing
these procedures. They are also responsible, as required by the rules
established by the SEC, for the evaluation of the effectiveness of
these procedures.

Based on their evaluation of the Company's disclosure controls and
procedures which took place as of December 31, 2003, the Chief Executive
Officer and the Chief Financial Officer believe that these procedures
are effective to ensure that the Company is able to collect, process
and disclose the information it is required to disclose in the reports
it files with the SEC within the required time period.

Internal Financials Controls

The Company maintains a system of internal controls designed to provide
reasonable assurance that transactions are executed in accordance with
management's general or specific authorization; transactions are
recorded as necessary to (1) permit preparation of financial statements
in conformity with accepted accounting principles generally accepted in
the United States of America, and (2) maintain accountability for
assets. Access to assets is permitted only in accordance with
management's general or specific authorization.

Since the date of the most recent evaluation of the Company's internal
controls by the Chief Executive and Chief Financial Officers, there
have been no significant changes in such controls or in other factors
that could have significantly affected those controls, including any
corrective actions with regard to significant deficiencies and material
weaknesses.

                                PART III

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT.

Each of Registrant's directors is elected by the stockholders to a
term of one year and serves until his or her successor is elected and
qualified. Each of the officers is elected by the Board of Directors
to a term of one year and serves until his or her successor is duly
elected and qualified, or until he or she is removed from office. The
Board of Directors has no nominating, auditing or compensation
committees.

The names, addresses, ages and positions of the current officers and
directors is set forth below:









                                  31

<TABLE>
<CAPTION>

<S>                       <C>        <C>
Name and Address          Age        Position(s)
-----------------------   ---        ------------------------------------
Willard G. McAndrew III   49         Chairman, President, Chief Executive
                                       Officer and Director
Roger Wurtele             57         Vice President, Chief Financial
                                       Officer and Director
Jolie Kahn                39         General Counsel and Secretary
Robert Farris             77         Director

</TABLE>

Background of Officers and Directors
------------------------------------
Willard G. McAndrew, III - Since 1998, Mr. McAndrew had been the
President and Manager of Millennium Fuels USA, LLC., an affiliate of
Millennium Fuels Corporation. Mr. McAndrew had been the President and
the Chairman of the Board of Directors of Millennium Fuels Corporation
since 2001. Millennium was a developer and producer of both fuels and
alternative fuels, domiciled in Plano, Texas. From 1996 until 1998, he
served as president and a director of McAndrew Management II, Inc., a
developer and operator of oil and gas production projects located in
Richardson, Texas. Mr. McAndrew devotes his time as required to the
business of Registrant.

Roger Wurtele - Since 2001, Mr. Wurtele had served Vice President and
a director of Registrant.  Since 1998, he had also been the Manager
and Principal Financial Officer of Millennium Fuels, USA, LLC.
Millennium Fuels, USA, LLC was a developer of products in both the
fuels and alternative fuels industries. From 1995 until 1998, Mr.
Wurtele was the President and a director of Controllership Services,
Inc., a provider of financial consulting services located in
Shreveport, Louisiana.  Mr. Wurtele holds a Bachelors Degree in
Business Administration from the University of Nebraska and is
admitted as a Certified Public Accountant in the states of Colorado
and Louisiana. He devotes his time as required to the business of
Registrant.

Jolie Kahn - Ms. Kahn received her Bachelor of Arts degree in
Government from Cornell University in Ithaca, New York and graduated
magna cum laude from the Benjamin Cardozo School of Law in New York,
New York in 1989, where she was a member of its Law Review and an
Alexander Fellow.  Since that time, she has represented both private
and public companies in varied aspects of general corporate,
securities, corporate finance and mergers and acquisitions law and
transactions.  In addition, Ms. Kahn has counseled clients in areas
related to their general day-to-day business affairs, such as
employment and taxation issues.  Ms. Kahn's career began at Weil,
Gotshal & Manges, LLP in New York City, and most recently, she had
acted as an in-house counsel to a "high tech" company in Boca Raton,
Florida.

Robert Farris - Mr. Farris serves as a Director of EENT.  After
three years in the U.S. Army in Korea, Mr. Farris became the Safety

                                    32

Director for Valley Transit Company in 1955.  In 1963, he became
President, a position he holds to the present day.  Mr. Farris has
also served as Director for Texas State Bank, Harlingen, Texas,
Texas Regional Bancshares, McAllen, Texas, National Bus Traffic
Association, Texas Motor Transportation Association, Texas Tourist
Council and Arxa International Energy Corporation.  Mr. Farris'
civic activities include Board of Trustees Marine Military Academy,
President of Harlingen Chamber of Commerce, Harlingen Industrial
foundation, Inc., Lower Rio Grande Valley Chamber of Commerce,
Algodon Club, Crusade Chairman for the American Cancer Society, Vice
President Rio Grande Council of Boy Scouts of America, Board Member
for the First United Methodist Church of Harlingen and Member of Phi
Gamma Delta.  Mr. Farris has been recognized for his accomplishments
by Who's Who in America and Who's Who in Finance and Industry.

To the best of Registrant's knowledge, all Section 16 reporting
requirements were timely met by all of Registrant's officers,
directors and control persons.

ITEM 10.  EXECUTIVE COMPENSATION

As of December 31, 2003, the CEO had been compensated $98,925 and
8,257,895 (8,000,000 shares of restricted stock and 257,895 shares of
"S-8" stock) shares of stock for his services, the CFO had  been
compensated $63,816 and 8,257,895 (8,000,000 shares of restricted stock
and 257,895 shares of "S-8" stock) shares of stock for his services and
the General Counsel was compensated $77,834 and 5,257,895 (5,000,000
restricted shares and 257,895 shares of "S-8" stock) shares of stock.






























                                  33

<TABLE>
<CAPTION>
                                                    SUMMARY COMPENSATION TABLE

                         ANNUAL COMPENSATION                                LONG TERM COMPENSATION
                    ----------------------------------------------------------------------------------------------------------------

                                                                                Awards                        Payouts
                                                          --------------------------------------------------------------------------
<S>          <C>    <C>       <C>    <C>       <C>    <C>            <C>             <C>         <C>           <C>      <C>
Name and                                                 Other       Restricted       S8         Securities
Principal                                                annual        Stock         Stock       underlying    LTIP     All other
Position     Year   Salary    Year   Salary    Bonus  compensation     Awards        Awards      Options/SARs  Payouts  compensation
------------------------------------------------------------------------------------------------------------------------------------
CEO
Willard G    2002   $180,000  2003   $180,000                         8,000,000 sh.  257,895 sh.
McAndrew

CFO
Roger        2002   $180,000  2003   $180,000                         8,000,000 sh.  257,895 sh.
Wurtele

General
Counsel
Jolie        2002   $180,000  2003   $180,000                         8,000,000 sh.  257,895 sh.
Kahn

</TABLE>

On November 21, 2003 registrant's Board of Directors adopted
registrant's 2003-2004 Consulting Services Plan (the "Consulting Plan")
in order to advance the interests of the registrant by rewarding,
encouraging and enabling the acquisition of larger personal
proprietary interests in the registrant by employees, directors and
former directors of, and contractors and consultants to, the
registrant, and its Subsidiaries who have:  1) served without salaries
or other compensation during time periods for which stock is awarded;
and 2) assisted the registrant with support services for its business
development.  The Consulting Plan provides for an aggregate of
1,000,000 shares of the registrant's $.001 par value common stock,

                                   34

currently valued at $.095 per share (but subject to change on market
fluctuation) that may be awarded from time to time at the sole
discretion of the Board of Directors.  The Plan was filed as an Exhibit
to Registrant's Form 8-K, filed with the U.S. Securities and Exchange
Commission on November 24, 2003.  Approximately 600,000 shares have
been issued under this Plan as of the date of filing this Annual
Report.

On December 22, 2003, Registrant's Board of Directors voted unanimously
to implement salary increases as follows:

CEO: Salary to increase to $210,000 per year on the first day of the
first month in which the Corporation ships 30 AXP 1000 units; salary
to increase to $240,000 per year on the first day of the first month
in which the Corporation ships 1000 AXP 1000 units; and salary to
increase to $260,000 per year on the earlier of (i) January 1, 2005
and (iii) the first day of the first month in which the Corporation
ships 250,000 AXP 1000 units.

CFO: Salary to increase to $195,000 per year on the first day of the
first month in which the Corporation ships 30 AXP 1000 units; salary
to increase to $210,000 per year on the first day of the first month
in which the Corporation ships 1000 AXP 1000 units; and salary to
increase to $230,000 per year on the earlier of (i) January 1, 2005
and (iii) the first day of the first month in which the Corporation
ships 250,000 AXP 1000 units.

General Counsel:  Salary to increase to $200,000 per year on the
earlier of (i) January 1, 2005 and (ii) the first day of the first
month in which the Corporation ships 250 AXP 1000 units.

In addition, the CEO is authorized, in his discretion to issue
up to an additional 25% of cash compensation per officer in each
calendar year for incentive bonuses and discretionary raises.

The terms of these increases and other significant employment
terms shall be memorialized in employment agreements which should
be executed and attached as an Exhibit to Registrant's Form
10-QSB for the quarter ended March 31, 2004.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT.

The following table sets forth the total number of shares owned
beneficially by each of Registrant's directors, officers and key
employees, individually as of December 31, 2003 and as a group, and
the present owners of 5% or more of total outstanding shares. The
stockholders listed below have direct ownership of their shares and
possess sole voting and dispositive power with respect to the shares.









                                    35

<TABLE>
<CAPTION>

<S>                       <C>                         <C>               <C>
-----------------------------------------------------------------------------------
                                                      Amount and
                          Name and Address            Nature of
                            of Beneficial             Beneficial         Percent
Title of Class                  Owner                 Ownership          of Class
-----------------------------------------------------------------------------------

Common Stock              Willard G. McAndrew III     11,131,499(D)       14.90%
                          5308 W. Plano Parkway
                          Plano, Texas 75093

Common Stock              Roger N. Wurtele            10,543,499(D)       14.11%
                          5308 W. Plano Parkway
                          Plano, Texas 75093

Common Stock              Jolie G. Kahn                6,396,257(D)        8.56%
                          5308 W. Plano Parkway
                          Plano, Texas 75093

All Officers and                                      28,071,255(D)       37.56%
Directors as a Group

Common Stock              Kevin W. Smyth              14,335,164(D)       19.18%

*(D) = Direct Beneficial Ownership

</TABLE>

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

As part of the original August 2001 acquisition of the Gathering System
and the GlobalSat data, Trailblazer Productions, LLC was to receive a
future 6% royalty and option to purchase 25% of the Gathering System.
Messrs. McAndrew and Wurtele were to have been recipients of 50% of any
proceeds from the royalty and 50% of the potential option interest,
collectively, in the Gathering System. Due to the assumption of
management of the Registrant in December 2001, Messrs. McAndrew and
Wurtele have agreed to forego their interests in the royalty and the
option, and in exchange for the royalty and option being cancelled,
the Registrant negotiated a fair market buyout with the recipients of
the other 50% of the interests in the royalty and option, which was
concluded in August 2002.

The President, CEO and majority shareholder of American West Resources,
the party with which Registrant has the letter of intent to sell the

                                   36

Gas Gathering System is the father in law of Registrant's President and
CEO, Willard G. McAndrew, III.  Registrant believes that it negotiated
the transaction at arms length notwithstanding the relationship between
Willard G. McAndrew, III and American West's CEO.

Notes Payable to Stockholders

On January 21, 2003 as part of a private placement an investor purchased
one unit for $25,000. This unit consists of a $25,000 note payable which
accrues interest at 10% and is due on January 7, 2004 as well as 25,000
shares of the Company's common stock plus 25,000 warrants to purchase
the Company's common stock at an exercise price of $0.10 per warrant
exercisable through January 7, 2004 plus 25,000 warrants to purchase the
Company's common stock at an exercise price of $0.25 per warrant
exercisable through January 7, 2005.

On November 29, 2002, March 11, 2003 and March 13, 2003 as part of
investment agreements, the Company entered into three note payable
agreements with a stockholder aggregating $70,000, which accrued
interest at 10% and was due in monthly installments through October
2003.  On December 2, 2003 the Company entered into a note termination
agreement with this stockholder whereby the Company issued 1,750,000
shares of the Company's common stock valued at $0.04 per share or
$70,000.  This issuance of stock is in full satisfaction of the then
outstanding principal balance of the loan of $60,750 and accrued
interest of $9,250.  In connection with these investment agreements
along with the note termination agreement the Company issued an
aggregate of 520,000 and 50,000 warrants to purchase the Company's
common stock during the years ended December 31, 2003 and 2002,
respectively.  In accordance with the termination agreement the
exercise price of all warrants was amended to $0.001 per warrant and
are exercisable through September 1, 2008. The investor exercised all
of the 520,000 warrants on December 30, 2003 (see Note 11).  Also in
connection with these investment agreements the Company issued an
aggregate of 140,000 shares of the Company's common stock valued at
$7,000 to the shareholder for consulting services provided.

During the second quarter, 2003 as part of a private placement offering
investors purchased 10 units for an aggregate of $100,000.  Each unit
consists of a $10,000 note payable, which accrues interest at 20% and
is due in twelve months as well as 2,000 shares or an aggregate of
20,000 shares of the Company's common stock.   During the fourth quarter
of 2003 the Company entered into termination agreements with two of
these stockholders whereby the Company issued an aggregate of 216,667
shares of the Company's common stock with an average value of $.08 per
share or $17,167.  The issuance of stock was in satisfaction of $15,000
of the principal balance and accrued interest of $2,167.  The balance
outstanding under these notes payable at December 31, 2003 was $84,000.
As an incentive to certain investors an additional 6,000 shares were
issued in connection with this offering.

On June 26, 2003, in connection with an asset purchase agreement, the
Company issued a note payable in the amount of $30,000 due in three
equal installments of $10,000 beginning every thirtieth day after the
date of agreement plus 300,000 shares of the Company's common stock
valued at $39,000.  The balance outstanding on this Note as of December
31, 2003 was $20,000. The Company has informally agreed with the note
holder to extend the due date of the note and is currently in the
process of formalizing this agreement.
                                   37

On July 15, 2003, the Company entered into a promissory note agreement,
which was subsequently amended on August 1, 2003 to increase the
principal amount from $20,000 to $40,000. The note was also amended to
accrue interest at 5% per annum and to be due February 1, 2004.  In
connection with this note agreement and amended note agreement the
Company issued 200,000 shares of the Company's common stock.

On August 18, 2003, the Company entered into a note payable agreement
with a stockholder for $250,000. This note will be repaid in the
aggregate amount of $281,250. This note, when aggregated with three
notes payable previously entered into with the same stockholder in the
amount of $125,000 (for an aggregate of $375,000), will be repaid to
the stockholder upon a potential funding from an investment company in
amounts of $40,000 per month upon receipt of such funding.  In
connection with this note, the Company issued the stockholder 500,000
warrants, which when added to 50,000 and 300,000 warrants issued
during the years ended December 31, 2003 and 2002, respectively in
connection with a common stock offering and 150,000 warrants issued
during the year ended December 31, 2003 in connection with the notes
payable, which were thereby amended and restated, are now set to expire
on August 15, 2007.  The new exercise prices for the aggregate of
1,000,000 warrants are as follows: 200,000 at $0.01, 200,000 at $0.05,
200,000 at $0.10, 200,000 at $0.15 and 200,000 at $0.25.  In connection
with one of these notes payable with the stockholder the Company also
issued 617,058 shares of the Company's common stock.

The fair market value of the 60,000 warrants issued during the year
ended December 31, 2002 approximated $2,200, estimated at the date of
grant using the Black-Scholes option-pricing model.  The fair value of
the 55,000 shares of the Company's common stock issued during the year
ended December 31, 2002 approximated $3,750 estimated based on the
average trading value of the stock.

The fair market value of the 1,220,000 warrants issued plus the value
of the restated and amended  warrants for the year ended December 31,
2003 was approximated $162,744 estimated at the date of grant using the
Black- Scholes option-pricing model. The fair market value of the
868,058 shares of the Company's common stock issued during the year
ended December 31, 2003 approximated $62,363 estimated based on the
average trading value of the stock.

On April 17, 2003, the Company entered a note payable agreement with
a distributor for $34,000. The note accrues interest at 7% and is
payable in monthly installments of $673, principal and interest,
beginning May 1, 2003 through April 1, 2008. The balance outstanding
under this note payable at December 31, 2003 was $24,131

These amounts were recorded as increases to both additional paid in
capital and deferred debt discount.  The deferred debt discount will
be amortized to interest expense over the life of the notes.  Interest
expense relating to this deferred debt discount for the years ended
December 31, 2003 and 2002 was $1,097 and $143,572, respectively.

ITEM 13.  REPORTS ON FORM 8-K.

(a)	Registrant's financial statements for the years ended December
      31, 2003 and December 31, 2002 are included herein.


                                38

(b)	Registrant's Form 8-K, filed on March 24, 2003 is incorporated
      by reference herein in its entirety.

(c)	Registrant's Form 8-K/A, filed on March 24, 2003 is incorporated
      by reference herein in its entirety.

(d)	Registrant's Form 8-K/A, filed on March 26, 2003 is incorporated
      by reference herein in its entirety.

(e)	Registrant's Form 8-K, filed on April 9, 2003 is incorporated
      by reference herein in its entirety.

(f)	Registrant's Form 8-K, filed on July 14, 2003 is incorporated
      by reference herein in its entirety.

(g)	Registrant's Form 8-K/A, filed on July 21, 2003 is incorporated
      by reference herein in its entirety.

(h)	Registrant's Form 8-K, filed on October 24, 2003 is incorporated
      by reference herein in its entirety.

(i)	Registrant's Form S-8, filed on November 24, 2003, is
      incorporated by reference herein in its entirety.

(h)	Registrant's Form 8-K, filed on November 24, 2003 is incorporated
      by reference herein in its entirety.

Item 14.  Principal Accountant Fees and Services.

Audit Fees
----------

For the audit of the Registrant's annual financial statements for 2002
and 2003, and for reviews of the financial statements included in
Registrant's Forms 10-QSB for the fiscal quarters ended March 31, 2003
and June 30, 2003 and September 30, 2003, Registrant has been billed
and expects to be billed the following amounts by Marcum & Kliegman,
LLP:

<TABLE>
<CAPTION>

<S>                            <C>
FYE 2002 audit:                $35,000.00
1st 3 Quarters 10-QSB 2003:    $22,500.00
FYE 2003 audit:                $43,000.00

</TABLE>

Tax Fees
--------

None.

All Other Fees
--------------

For the most recent fiscal year, the aggregate fees billed for services
rendered by Marcum & Kliegman, LLP, other than services covered in
                                    39

Exchange Act Rule 14a-101 Item 9(e)(1) and (2), is $962.00 and was for
structuring advice with respect to a potential investment opportunity.

The Board of Directors has not considered whether the services covered
in "All Other Fees" is compatible with maintaining the principal
accountant's independence.

Registrant does not have an audit committee, so sub - item (5) is
inapplicable.

The following exhibits are included herein, except for the exhibits
marked with an asterisk, which are incorporated herein by reference and
can be found in Registrant's previously filed Reports and Forms with
the SEC.

<TABLE>
<CAPTION

<S>                <C>                                           <C>
Exhibit Number                Description                        Page
--------------     ---------------------------------------       ----
3(i)*              Articles of Incorporation
3(i)*              Amendment to Articles of Inc.
3(i)               Amendment to Articles of Inc.                  77
3(ii)*             Bylaws
3(ii)*             Amendment to Bylaws
4*                 Reaffirmation Agreement
10*                Promissory Note and Security Agreement
10*                Fixed Base Operator Agreement and Lease
31.1               302 Consent                                    78
31.2               302 Consent                                    79
32.1               906 Consent                                    80
32.2               906 Consent                                    81
99(i)*             Consulting Plan
99(ii)*            Purchase and Sale Agreement
99(iii)*           Consulting Plan
99(iv)*            Consulting Plan 2003- 2004

</TABLE>

SIGNATURES

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

                  Energy & Engine Technology Corporation

Dated:	April 14, 2004	By:	/s/  Willard G. McAndrew III
                                    -------------------------------
						President, CEO and Chairman of
                                    the Board

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


                                       40

By:	/s/ Willard G. McAndrew III
	President, Chief Executive
	Officer and Chairman of the Board

Dated:	April 14, 2004

By:	/s/ Roger Wurtele
	Vice President, Secretary, Chief
	Financial Officer and Director

Dated:	April 14, 2004















































                                   41

                                 ENERGY & ENGINE TECHNOLOGY CORPORATION
                                                       AND SUBSIDIARIES

                                                               CONTENTS
-----------------------------------------------------------------------

<TABLE>
<CAPTION>

<S>                                                           <C>
                                                              Page

INDEPENDENT AUDITORS' REPORT                                    1


CONSOLIDATED FINANCIAL STATEMENTS

  Balance Sheet                                                 2
  Statements of Operations                                      4
  Statements of Stockholders' Deficiency                       5-6
  Statements of Cash Flows                                     7-8


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                     9-31



</TABLE>
































                                  42

                       INDEPENDENT AUDITORS' REPORT
                       ----------------------------


To the Board of Directors and Stockholders of
Energy & Engine Technology Corporation and Subsidiaries

We have audited the accompanying consolidated balance sheet of Energy
& Engine Technology Corporation and Subsidiaries as of December 31,
2003 and the related consolidated statements of operations,
stockholders' (deficiency)equity and cash flows for the years
ended December 31, 2003 and 2002. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Energy & Engine Technology Corporation and Subsidiaries as of December
31, 2003, the results of their operations and their cash flows for the
years ended December 31, 2003 and 2002, in conformity with accounting
principles generally accepted in the United States of America.


/S/ Marcum & Kliegman, LLP


New York, NY
March 5, 2004



















                                  43

                                ENERGY & ENGINE TECHNOLOGY CORPORATION
                                                      AND SUBSIDIARIES

                                            CONSOLIDATED BALANCE SHEET

                                                     December 31, 2003
----------------------------------------------------------------------

<TABLE>
<CAPTION>
                                 ASSETS
                                 ------

<S>                                                      <C>
CURRENT ASSETS
--------------
 Cash and cash equivalents                               $    7,024
 Accounts receivable                                          8,062
 Inventory                                                  236,861
 Prepaid expenses and other current assets                  143,427
                                                         ----------

    Total Current Assets                                    395,374

PROPERTY AND EQUIPMENT, Net                                 301,280
----------------------

OTHER ASSETS
------------
Intangible assets, net                                       74,957
                                                         ----------

    TOTAL ASSETS                                         $  771,611
                                                         ==========
</TABLE>


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
















                                  44

                                ENERGY & ENGINE TECHNOLOGY CORPORATION
                                                      AND SUBSIDIARIES

                                            CONSOLIDATED BALANCE SHEET

                                                     December 31, 2003
----------------------------------------------------------------------

<TABLE>
<CAPTION>

                 LIABILITIES AND STOCKHOLDERS' DEFICIENCY
                 ----------------------------------------

<S>                                                      <C>
CURRENT LIABILITIES
-------------------
 Accounts payable and accrued expenses                   $  504,932
 Accrued expenses officers                                  609,522
 Current maturities of note payable                           8,078
 Note payable, stockholders, net of deferred
  debt discount of$86,388                                   462,612
                                                         ----------

    Total Current Liabilities                             1,585,144

OTHER LIABILITIES
-----------------
Note payable, less current maturities                        16,053
                                                        -----------

    TOTAL LIABILITIES                                     1,601,197
                                                       ------------
STOCKHOLDERS' DEFICIENCY
------------------------
 Common stock, $.001 par value, 100,000,000 shares
  authorized, 78,557,194 shares issued and
  outstanding                                               78,558
 Additional paid-in capital                              6,194,912
 Stock subscription receivable                             (15,000)
 Accumulated Deficit                                    (6,981,306)
  Less: Deferred Compensation                             (106,750)
                                                        ----------

    TOTAL STOCKHOLDERS' DEFICIENCY                        (829,586)
                                                        ----------

    TOTAL LIABILITIES AND STOCKHOLDERS'
     DEFICIENCY                                        $   771,611
                                                       ===========

</TABLE>

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

                                   45

                                ENERGY & ENGINE TECHNOLOGY CORPORATION
                                                      AND SUBSIDIARIES

                                 CONSOLIDATED STATEMENTS OF OPERATIONS

                        For the Years Ended December 31, 2003 and 2002
----------------------------------------------------------------------
<TABLE>
<CAPTION>

<S>                                   <C>               <C>
                                          2003              2002
                                      ------------      ------------

NET SALES                             $    383,262      $     99,257
---------

COST OF SALES                              217,572            85,023
-------------                         ------------      ------------

    GROSS PROFIT                           165,690            14,234

OPERATING EXPENSES
------------------
 Selling general and
  administrative expenses                1,462,745         1,218,306
 Stock based compensation                3,355,718           470,628
                                      ------------      ------------

    TOTAL OPERATING EXPENSES             4,818,463         1,688,934
                                      ------------      ------------

    OPERATING LOSS                      (4,652,773)       (1,674,700)
                                      ------------      ------------
OTHER EXPENSE
-------------
 Interest expense                          209,384             4,289
 Loss on receivable, related party          27,500                --
 Loss on sale of asset, related party       22,000             2,000
 Terminated offering costs                 130,000                --
                                      ------------      ------------
    TOTAL OTHER EXPENSE                    388,884             6,289
                                      ------------      ------------

NET LOSS                              $ (5,041,657)     $ (1,680,989)
                                      ============      ============
NET LOSS PER COMMON SHARE:
--------------------------

BASIC and DILUTED                     $      (0.12)     $      (0.11)
                                      ============      ============
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING                             40,340,934        15,095,725
                                      ============      ============
</TABLE>

The accompanying notes are an integral part of these consolidated
financial statements.
                                46

                                ENERGY & ENGINE TECHNOLOGY CORPORATION
           CONSOLIDATED STATEMENT OF STOCKHOLDERS' (DEFICIENCY) EQUITY
                        For the Years Ended December 31, 2003 and 2002
----------------------------------------------------------------------
<TABLE>
<CAPTION>
<S>                          <C>          <C>       <C>           <C>              <C>             <C>              <C>
                                   Common           Additional
                             --------------------      Paid-in    Subscriptions    Accumulated      Deferred
                             Shares       Amount      Capital       Receivable        Deficit      Compensation     Total
--------------------------------------------------------------------------------------------------------------------------------
BALANCE - January 1, 2002    10,181,907   $10,182   $  490,646    $          --    $  (258,660)    $         --     $   242,168

Issuance of common stock
 to consultants               1,386,625     1,387      201,491               --             --               --         202,878

Issuance of common stock
 to officers and employees    5,675,000     5,675      222,075               --             --               --         227,750

Issuance of common stock
 in connection with
 termination agreement        1,000,000     1,000       39,000               --             --               --          40,000

Issuance of common stock
 in connection with
 notes payable                   55,000        55        3,695               --             --               --           3,750

Issuance of warrants                 --        --        2,200               --             --               --           2,200

Issuance of common stock
 in connection with
 private placements           4,701,817     4,702      445,298               --             --               --         450,000

Net loss                             --        --           --               --     (1,680,989)              --      (1,680,989)
                             ----------   -------   ----------    -------------    -----------     ------------     -----------
BALANCE - December 31, 2002
 (Forward)                   23,000,349   $23,001   $1,404,405    $          --    $(1,939,649)    $         --     $  (512,243)
                             ==========   =======   ==========    =============    ===========     ============     ===========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
                                  47

                                ENERGY & ENGINE TECHNOLOGY CORPORATION

CONSOLIDATED STATEMENT OF STOCKHOLDERS' (DEFICIENCY) EQUITY, Continued

                        For the Years Ended December 31, 2003 and 2002
----------------------------------------------------------------------
<TABLE>
<CAPTION>
<S>                            <C>          <C>       <C>           <C>               <C>            <C>              <C>
                                     Common            Additional
                               --------------------      Paid-in     Subscriptions     Accumulated      Deferred
                               Shares        Amount      Capital       Receivable         Deficit     Compensation       Total
---------------------------------------------------------------------------------------------------------------------------------
BALANCE - December 31, 2002
(Forward)                      23,000,349   $23,001   $1,404,405    $          --     $(1,939,649)   $         --     $  (512,243)

Issuance of common stock
 to consultants                 3,959,000     3,959      539,762               --              --              --         543,721

Issuance of common stock
 to officers and employees     22,648,685    22,649    2,896,099               --              --              --       2,918,748

Issuance of common stock
 in connection with
 note payable                     868,058       868       61,495               --              --              --          62,363

Issuance of warrants                   --        --      162,744               --              --              --         162,744

Issuance of common stock
 in connection with
 private placements            21,872,213    21,872      580,157          (15,000)             --              --         587,029

Issuance of common stock
 in connection with
 conversion of notes payable    3,716,667     3,717      240,950               --              --              --         244,667

Issuance of common stock
 in connection with
 convertible debenture
 relating to terminated
 offering                         722,222       722      136,500               --              --              --         137,222

</TABLE>
                                  48

                                ENERGY & ENGINE TECHNOLOGY CORPORATION

CONSOLIDATED STATEMENT OF STOCKHOLDERS' (DEFICIENCY) EQUITY, Continued

                        For the Years Ended December 31, 2003 and 2002
----------------------------------------------------------------------
<TABLE>
<CAPTION>

<S>                            <C>          <C>       <C>           <C>               <C>            <C>              <C>
                                     Common            Additional
                               --------------------      Paid-in     Subscriptions     Accumulated      Deferred
                               Shares        Amount      Capital       Receivable         Deficit     Compensation       Total
---------------------------------------------------------------------------------------------------------------------------------
Issuance of common stock
 in connection with
 exercise of warran            570,000       570              --               --              --              --             570

Issuance of common stock
 in connection with
 assets purchase agreements  1,200,000     1,200         172,800               --              --              --         174,000

Deferred compensation               --        --              --               --              --        (106,750)       (106,750)

Net loss                            --        --              --               --      (5,041,657)             --      (5,041,657)
                               ----------   -------   ----------    -------------     -----------    ------------     -----------
BALANCE - December 31, 2003    78,557,194   $78,558   $6,194,912    $     (15,000)    $(6,981,306)   $   (106,750)    $  (829,586)
                               ==========   =======   ==========    =============     ===========    ============     ===========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.












                                       49

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                        For the Years Ended December 31, 2003 and 2002
----------------------------------------------------------------------
<TABLE>
<CAPTION>
<S>                                      <C>              <C>
                                             2003             2002
                                         -----------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
------------------------------------
Net Loss                                 $(5,041,657)     $(1,680,989)
 Adjustments to reconcile net
   loss to net cash used in
   operating activities:
  Depreciation and amortization               38,558           17,488
  Stock-based compensation                 3,355,718          470,628
  Amortization of debt discount              143,572            1,097
  Loss on sale of fixed asset,
   related party                              22,000            2,000
  Loss on receivable, related party           27,500               --
  Terminated offering costs                  130,000               --
 Changes in operating assets
   and liabilities:
  Accounts receivable                         32,676          (40,738)
  Inventory                                 (113,066)         (16,813)
  Prepaid expenses and other
   current assets                           (135,020)          (8,407)
  Accounts payables and
   accrued expenses                          236,025          263,477
  Accrued expenses officer                   181,549          427,973
                                         -----------      -----------
    TOTAL ADJUSTMENTS                      3,919,512        1,116,705
                                         -----------      -----------
    NET CASH USED IN
     OPERATING ACTIVITIES                 (1,122,145)        (564,284)
                                         -----------      -----------
CASH FLOWS FROM INVESTING ACTIVITIES
------------------------------------
 Purchases of property and equipment         (25,128)        (191,551)
 Proceeds from disposal of fixed asset            --            2,000
                                         -----------      -----------
    NET CASH USED IN
     INVESTING ACTIVITIES                    (25,128)        (189,551)
                                         -----------      -----------
CASH FLOWS FROM FINANCING ACTIVITIES
------------------------------------
 Proceeds from notes payable,
  shareholders, net                          514,749          230,000
 Proceeds from notes payable, net             24,131               --
 Proceeds from the issuance of stock         587,600          450,000
                                         -----------      -----------
    NET CASH PROVIDED BY FINANCING
     ACTIVITIES                            1,126,480          680,000
                                         -----------      -----------
    NET DECREASE IN CASH AND
    CASH EQUIVALENTS                         (20,793)         (73,835)
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.             50

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS, Continued
                        For the Years Ended December 31, 2003 and 2002
----------------------------------------------------------------------
<TABLE>
<CAPTION>
<S>                                      <C>              <C>
                                             2003             2002
                                         -----------------------------
CASH AND CASH EQUIVALENTS - Beginning    $    27,817      $   101,652
-------------------------                -----------      -----------
CASH AND CASH EQUIVALENTS - Ending       $     7,024      $    27,817
-------------------------                ===========      ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
-------------------------------------------------
 Cash paid for:                              2003             2002
                                         -----------------------------
  Interest                               $    10,022      $       306
  Income taxes                           $        --      $        --
</TABLE>

Non-cash investing and financing activities:

During the year ended December 31, 2002, the Company issued warrants
to purchase 60,000 shares of common stock in connection with certain
notes payable to shareholders. The fair market value of the warrants
granted using the Black-Scholes pricing model was $2,200 and was
recorded as deferred debt discount.

During the year ended December 31, 2002, the Company issued 55,000
shares of the Company's common stock in connection with notes payable
to shareholders.  The fair market value of the common stock	at
issuance date was $3,750 and was recorded as deferred debt discount.

During the year ended December 31, 2003, the Company issued warrants
to purchase 1,220,000 shares of common stock in connection with
certain notes payable, stockholders.  The fair market value of the
warrants granted using the Black-Scholes pricing model was $162,744 and
was recorded as deferred debt discount.

During the year ended December 31, 2003, the Company issued 868,058
shares of the Company's common stock in connection with notes payable,
stockholders.  The fair market value of the common stock at issuance
date was $62,362 and was recorded as deferred debt discount.

During the year ended December 31, 2003, certain shareholders
converted their notes payable and accrued interest into 3,716,667
shares of the Company's common stock valued at $244,667.

In connection with two asset purchase agreements, the Company issued
an aggregate of 1,200,000 shares of the Company's common stock and a
$30,000 promissory note.  The fair market value of the common stock
issued at the date of the agreements was $174,000 and the assets
acquired were inventory, property and equipment and intangible assets.

The accompanying notes are an integral part of these consolidated
financial statements.
                                  51

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------
NOTE 1 - Description of Business and Management's Plans
         ----------------------------------------------
  Organization and Principal Business Activity
  --------------------------------------------
  Energy & Engine Technology Corporation ("EENT" or the "Company") was
  incorporated under the name Bidder Communications, Inc. in Nevada on
  November 16, 1999. It changed its name from Bidder Communications,
  Inc. ("Bidder") to Energy & Engine Technology Corporation on December
  5, 2001.

  The consolidated financial statements include the accounts of EENT
  and its wholly owned subsidiaries, Gas Gathering Enterprises, LLC
  ("Gas Gathering") (previously, Southern States Gas Gathering, LLC)
  and Wind Dancer Aviation Services, Inc. ("Wind Dancer") collectively
  referred to as the "Company."

  The Company, through its wholly owned subsidiaries, is the owner of a
  natural gas gathering system located in Caddo Parish, Louisiana, and
  is a fixed base operator which services general aviation aircraft in
  Pagosa Springs, Colorado. EENT also is the developer and marketer of
  AXP 1000 auxiliary power generator for long haul trucks. During the
  fourth quarter 2003 the Company began manufacturing operations and
  had sales of the AXP 1000 power generators.

  Acquisition of Assets
  ---------------------
  On September 7, 2001, the Company acquired 100% of the membership
  interests in Southern States Gas Gathering, LLC ("SSGG") for $153,828
  in cash and common stock, which was recorded as an acquisition of
  assets. The assets acquired consisted primarily of an inactive 65
  mile gas gathering system located in the Caddo Pine Island Field,
  Louisiana. Trailblazer Production Company, LLC ("Trailblazer"),
  acting as agent for Mees Pierson Unlimited ("Seller"), was an
  unrelated party at the time of the acquisition, and received a fee
  of $50,000 in cash plus common stock from the total purchase price
  for services rendered. Trailblazer (now inactive) was owned by the
  Company's Chief Executive Officer and Chief Financial Officer at the
  time of the acquisition.

  As part of the acquisition, the Company had also acquired from Seller
  (through its agent, Trailblazer), GlobalSat Technology data. In
  exchange for this data, the Company issued Trailblazer and Seller an
  option to acquire up to 25% of its interest in SSGG (the "Option")
  which the Company deemed to have a nominal value. The Seller and
  Trailblazer had also retained a 6% royalty on gross income of SSGG
  (the "Royalty"). The Company also agreed that Tralblazer's and the
  Seller's ownership in the Company would not dilute for 2 years ("Non
  Dilution Agreement"). On August 5, 2002, the Agreement was amended as
  follows: 1) The GlobalSat Technology was returned to the Seller in
  exchange for the termination of the Option by Seller; 2) The Royalty
  was terminated and instead it was agreed that seller would retain a 2%
  royalty on gross income of SSGG; and 3) the Non Dilution Agreement was
  terminated in exchange for 1,000,000 shares of the Company's common
  stock valued at $40,000 issued to the Seller (See Note 10). As of
  December 31, 2001, Trailblazer had relinquished all rights to the
  Royalty, the Non Dilution Agreement and the Option.
                                    52

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------
NOTE 1 - Description of Business and Management's Plans, continue
         ----------------------------------------------
  Management Liquidity Plans
  --------------------------
  As shown in the accompanying consolidated financial statements, the
  Company incurred a net loss of $5,041,657 during the year ended
  December 31, 2003, resulting in an accumulated deficit of $6,981,306.
  The Company also has a working capital deficit of $1,189,770 and cash
  on hand of $7,024.  On January 23, 2004 through March 12, 2004, in
  connection with a private placement offering the Company sold an
  aggregate of 15,455,000 shares of common stock to investors for
  $1,545,500 (see Note 16).  Also on March 1, 2004, in connection with
  another private placement offering, the Company sold 1,350,000 shares
  of common stock to an investor for $270,000 (see Note 16).  As of
  April 1, 2004 the Company had approximately $999,000 of cash.

  In addition to the private placements from investors the Company plans
  to raise additional cash through the issuance of debt or equity
  securities and increased revenues.

NOTE 2 - Summary of Significant Accounting Policies
         ------------------------------------------
  Consolidation
  -------------
  The consolidated financial statements include the accounts of EENT and
  its wholly owned subsidiaries.  All significant inter-company
  transactions have been eliminated in consolidation.

  Revenue Recognition
  -------------------
  Gas Gathering
  Revenue is recognized at the time the product is delivered to its
  customers based on the agreement with America West (see Note 15).

  Fixed Base Operator
  Revenue is recognized at the time the services are performed and
  provided, or made available to its customers.

  AXP 1000 Power Generators
  Revenue is recognized at the time that the generator is delivered to
  the customer.

  Cash and Cash Equivalents
  -------------------------
  For the purposes of the statement of cash flows, the Company
  considers all short-term investments with maturity of three months
  or less when purchased to be cash equivalents.

  Inventory
  ---------
  Inventory consists of aviation fuel, parts, materials and engines and
  is valued at the lower of cost or market, cost being determined
  using the first in/first-out basis.


                                  53

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------

NOTE 2 - Summary of Significant Accounting Policies, continued
         ------------------------------------------

  Research and Development
  ------------------------
  Research and development costs are expensed as incurred. Research and
  development costs for the years ended December 31, 2003 and 2002 were
  $126,785 and $110,143, respectively and are included in selling,
  general and administrative expenses.

  Income Taxes
  ------------
  The Company accounts for income taxes using the liability method,
  which requires the determination of deferred tax assets and
  liabilities based on the differences between the financial and tax
  bases of assets and liabilities using enacted tax rates in effect for
  the year in which differences are expected to reverse. Deferred tax
  assets are adjusted by a valuation allowance, if, based on the weight
  of available evidence, it is more likely than not that some portion
  or all of the deferred tax assets will not be realized.

  Depreciation and Amortization
  -----------------------------
  Depreciation of machinery and equipment, furniture, fixtures and gas
  gathering equipment is computed on the straight-line method at rates
  adequate to allocate the cost of applicable assets over their
  expected useful lives.

  Advertising Costs
  -----------------
  Advertising costs are expensed as incurred.  For the years ended
  December 31, 2003 and 2002, advertising costs were $61,128 and $957,
  respectively.

  Net Loss per Share
  ------------------
  Basic EPS is computed by dividing income (loss) available to common
  stockholders by the weighted-average number of common shares
  outstanding for the period.  Diluted EPS is based on the weighted-
  average number of shares of common stock and common stock equivalents
  outstanding at year-end. Common stock equivalents have been excluded
  from the weighted-average shares for 2003 and 2002, as inclusion is
  anti-dilutive. Potentially dilutive securities (warrants) of
  1,355,000 and 460,000 are outstanding at December 31, 2003 and 2002,
  respectively.











                                   54

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------

NOTE 2 - Summary of Significant Accounting Policies, continued
         ------------------------------------------
  Use of Estimates
  ----------------
  The preparation of financial statements in conformity with accounting
  principles generally accepted in the United States of America
  requires management to make estimates and assumptions that affect the
  reported amounts of assets and liabilities and disclosure of
  contingent assets and liabilities at the date of the consolidated
  financial statements and the reported amounts of revenues and
  expenses during the reporting period.  Actual results could differ
  from those estimates.

  Stock-Based Compensation
  ------------------------
  In October 1995, SFAS No. 123, "Accounting for Stock-Based
  Compensation" was issued. SFAS 123 prescribes accounting and reporting
  standards for all stock-based compensation plans, including employee
  stock options, restricted stock, employee stock purchase plans and
  stock appreciation rights.  SFAS 123 requires compensation expense to
  be recorded (i) using the new fair value method or (ii) using the
  existing accounting rules prescribed by Accounting Principles Board
  Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25")
  and related interpretations with pro forma disclosure of what net
  income and earnings per share would have been had the Company adopted
  the new fair value method.  The Company intends to continue to account
  for its stock based compensation plans in accordance with the
  provisions of APB 25.

  On December 31, 2002, the FASB issued SFAS No. 148 ("SFAS 148"),
  Accounting for Stock Based Compensation-Transition and disclosure.
  SFAS 148 amends SFAS No. 123, to provide an alternative method of
  transition to SFAS 123's fair value method of accounting for stock
  based employee compensation. SFAS 148 also amends the disclosure
  provisions of SFAS 123 and Accounting Principles Board ("APB") Opinion
  No. 28, "Interim Financial Reporting", to require disclosure in the
  summary of significant accounting policies of the effects of an
  entity's accounting policy with respect to stock based employee
  compensation on reported net income and earnings per share in annual
  and interim financial statements. While the statement does not amend
  SFAS 123 to require companies to account for employee stock options
  using the fair value method, the disclosure provisions of SFAS 123
  are applicable to all companies with stock based employee
  compensation, regardless of whether they account for that compensation
  using the fair value method of SFAS 123, or the intrinsic value method
  of APB Opinion No. 25. The adoption of SFAS 148 did not have an impact
  on net income or pro forma net income applying fair value method as
  the Company did not have compensatory stock options or warrants for
  the year ended December 31, 2003.





                                    55

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------

NOTE 2 - Summary of Significant Accounting Policies, continued
         ------------------------------------------

  New Accounting Pronouncements
  -----------------------------
  In January 2003, Financial Accounting Standards Board ("FASB") issued
  FASB Interpretation No. 46, "Consolidation of Variable Interest
  Entities" ("FIN 46"), an interpretation of Accounting Research
  Bulletin No. 51. FIN 46 expands upon and strengthens existing
  accounting guidance that addresses when a company should include in
  its financial statements the assets, liabilities and activities of
  another entity. A variable interest entity is any legal structure
  used for business purposes that either does not have equity investors
  with voting rights or has equity investors that do not provide
  sufficient financial resources for the entity to support its
  activities. FIN 46 requires a variable interest entity to be
  consolidated by a company if that company is subject to a majority
  of the risk of loss from the variable interest entity's activities
  or entitled to receive a majority of the entity's residual returns or
  both. The consolidation requirements of FIN 46 apply immediately to
  variable interest entities created after January 31, 2003. The
  consolidation requirements apply to older entities in the first
  fiscal year or interim period beginning after June 15, 2003. However,
  in December 2003, FASB deferred the latest date by which all public
  entities, which meet the definition of small business issuer under
  SEC Regulation S-B, must apply FIN 46 to the first interim or annual
  reporting period ended after December 15, 2004. The effect of the
  adoption of this new accounting pronouncement is not expected to have
  a significant impact on the Company financial statements.

  In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement
  133 on Derivative Instruments and Hedging Activities." This statement
  amends and clarifies SFAS No. 133 "Accounting for Derivative
  Instruments and Hedging Activities." The statement clarifies the
  accounting guidance on (1) derivative instruments (including certain
  derivative instruments embedded in other contracts) and (2) hedging
  activities that fall within the scope of SFAS No. 133. SFAS No. 149
  also amends certain other existing pronouncements, which will result
  in more consistent reporting of contracts that are derivatives in
  their entirety or that contain embedded derivatives that warrant
  separate accounting. SFAS No. 149 is effective (1) for contracts
  entered into or modified after June 30, 2003, with certain exceptions,
  and (2) for hedging relationships designated after June 30, 2003. The
  guidance is to be applied prospectively. The adoption of SFAS No. 149
  did not have a material impact on its consolidated financial position
  or results of operations.










                                  56

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------

NOTE 2 - Summary of Significant Accounting Policies, continued
         ------------------------------------------

  New Accounting Pronouncements
  -----------------------------
  In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
  Financial Instruments with Characteristics of both Liabilities and
  Equity." SFAS No. 150 addresses certain financial instruments that,
  under previous guidance could be accounted for as equity, but now
  must be classified as liabilities in statements of financial
  position. These financial instruments include: 1) mandatorily
  redeemable financial instruments, 2) obligation to repurchase the
  issuer's equity shares by transferring assets, and 3) obligation to
  issue a variable number of shares. SFAS No. 150 is effective for all
  financial instruments entered into or modified after May 31, 2003,
  and otherwise effective at the beginning of the first interim period
  beginning after June 15, 2003. The adoption of SFAS No. 150 did not
  have an impact on the consolidated financial position or results of
  operations.

NOTE 3 - Property and Equipment
         ----------------------
  Property and equipment at December 31, 2003 consist of the following:

<TABLE>
<CAPTION>

    <S>                               <C>                  <C>
                                             Estimated
                                           Useful Lives
                                      ----------------------------
    Machinery and Equipment           $ 131,476            5 years
    Gas Gathering Equipment             218,265           20 years
    Furniture and Fixtures                6,670            5 years
                                      ---------
                                        356,411
    Less:  Accumulated depreciation     (55,131)
                                      ---------

    Property and Equipment, Net       $ 301,280
                                      =========

</TABLE>

  Depreciation expense for the years ended December 31, 2003 and 2002
  was $36,015 and $17,488, respectively.









                                   57

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------
NOTE 4 - Intangible Assets
         -----------------
  Intangible assets at December 31, 2003 consists of the following:

<TABLE>
<CAPTION?

<S>                                    <C>             <C>
                                                        Estimated
                                        Amount         Useful Lives
                                       ----------------------------
Supplemental type certificates         $77,500           10 years

  Less:  accumulated amortization        2,543
                                       -------
Intangible Assets, Net                 $74,957
                                       =======
</TABLE>

  Amortization expense for the years ended December 31, 2003 and 2002
  was $2,543 and $-0-, respectively.

  Future amortization expense for the above intangible assets as of
  December 31, 2003 is as follows:

<TABLE>
<CAPTION>

<S>                                          <C>
For the year ending December 31,             Amounts
--------------------------------             -------
            2004                             $ 7,500
            2005                               7,500
            2006                               7,500
            2007                               7,500
            2008                               7,500
         Thereafter                           37,457
                                             -------
            Total                            $74,957
</TABLE>

NOTE 5 - Notes Payable Stockholders
         --------------------------
  On November 14, 2002, as part of a private placement offering a
  stockholder purchased a one quarter (1/4) unit for $5,000. This one
  quarter (1/4) unit consists of a $5,000 note payable which accrues
  interest at 10% and was due on November 14, 2003 as well as 5,000
  shares of the Company's common stock plus 5,000 warrants to purchase
  the Company's common stock at an exercise price of $0.10 per warrant
  exercisable through November 14, 2003 plus 5,000 warrants to purchase
  the Company's common stock at an exercise price of $0.25 per warrant
  exercisable through November 14, 2004.  The balance outstanding on
  this loan at December 31, 2003 was $5,000 and the Company was in
  default at this date.  However, during March, 2004, principal and
  interest were paid in full.

                                58

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------

NOTE 5 - Notes Payable Stockholders - continued
         --------------------------
  On December 3, 2002 the Company entered into a $150,000 note payable
  agreement with a stockholder which accrued interest at 10% and was
  due December 31, 2004.  In connection with this note the Company
  issued 50,000 shares of the Company's common stock and it is secured
  by a lien on Wind Dancer's assets.  On February 3, 2004,  effective as
  of December 30, 2003, the Company entered into a settlement agreement
  with this stockholder whereby the Company issued 1,750,000 shares of
  the Company's restricted common stock valued at $0.09 per share or
  $157,500.  This stock issuance was in full satisfaction of the
  outstanding principal balance of the loan of $150,000 and accrued
  interest of $7,500.

  On January 21, 2003, as part of a private placement an investor
  purchased one unit for $25,000. This unit consists of a $25,000 note
  payable which accrues interest at 10% and is due on January 7, 2004
  as well as 25,000 shares of the Company's restricted common stock plus
  25,000 warrants to purchase the Company's common stock at an exercise
  price of $0.10 per warrant exercisable through January 7, 2004 plus
  25,000 warrants to purchase the Company's common stock at an exercise
  price of $0.25 per warrant exercisable through January 7, 2005.

  On November 29, 2002, March 11, 2003 and March 13, 2003 as part of
  investment agreements, the Company entered into three note payable
  agreements with a stockholder aggregating $70,000, which accrued
  interest at 10% and was due in monthly installments through October
  2003.  On December 2, 2003 the Company entered into a note
  termination agreement with this stockholder whereby the Company
  issued 1,750,000 shares of the Company's restricted common stock
  valued at $0.04 per share or $70,000.  This issuance of stock is in
  full satisfaction of the then outstanding principal balance of the
  loan of $60,750 and accrued interest of $9,250.  In connection with
  these investment agreements along with the note termination agreement
  the Company issued an aggregate of 570,000 and 50,000 warrants to
  purchase the Company's common stock during the years ended December
  31, 2003 and 2002, respectively.  In accordance with the termination
  agreement the exercise price of all warrants was amended to $0.001 per
  warrant and are exercisable through September 1, 2008. The investor
  exercised all of the 570,000 warrants on December 30, 2003 (see Note
  13).  Also in connection with these investment agreements the Company
  issued an aggregate of 140,000 shares of the Company's common stock
  valued at $7,000 to the shareholder for consulting services provided.












                                   59

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------

NOTE 5 - Notes Payable Stockholders - continued
         --------------------------
  During the second quarter, 2003 as part of a private placement
  offering investors purchased 10 units for an aggregate of $100,000.
  Each unit consists of a $10,000 note payable, which accrues interest
  at 20% and is due in twelve months as well as 2,000 shares or an
  aggregate of 20,000 shares of the Company's restricted common stock.
  During the fourth quarter of 2003 the Company entered into termination
  agreements with two of theses stockholders whereby the Company issued
  an aggregate of 216,667 shares of the Company's restricted common
  stock with an average value of $.08 per share or $17,167.  The
  issuance of stock was in satisfaction of $15,000 of the principal
  balance and accrued interest of $2,167.  The balance outstanding under
  these notes payable at December 31, 2003 was $84,000.  As an incentive
  to certain investors an additional 6,000 shares were issued in
  connection with this offering.

  On June 26, 2003, in connection with an asset purchase agreement, the
  Company issued a note payable in the amount of $30,000 due in three
  equal installments of $10,000 beginning every thirtieth day after the
  date of agreement plus 300,000 shares of the Company's restricted
  common stock valued at $39,000.  The balance outstanding on this note
  as of December 31, 2003 was $20,000. The Company has informally
  agreed with the note holder to extend the due date of the note and is
  currently in the process of formalizing this agreement.

  On July 15, 2003, the Company entered into a promissory note
  agreement, which was subsequently amended on August 1, 2003 to
  increase the principal amount from $20,000 to $40,000. The note was
  also amended to accrue interest at 5% per annum and to be due February
  1, 2004.  In connection with this note agreement and amended note
  agreement the Company issued 200,000 shares of the Company's restricted
  common stock.

  On August 18, 2003, the Company entered into a note payable agreement
  with a stockholder for $250,000. This note will be repaid in the
  aggregate amount of $281,250. This note, when aggregated with three
  notes payable previously entered into with the same stockholder in
  the amount of $125,000 (for an aggregate of $375,000), will be repaid
  to the stockholder upon a potential funding from an investment
  company in amounts of $40,000 per month upon receipt of such funding.
  In connection with this note, the Company issued the stockholder
  500,000 warrants, which when added to 50,000 and 300,000 warrants
  issued during the years ended December 31, 2003 and 2002,
  respectively, in connection with a common stock offering and 150,000
  warrants issued during the year ended December 31, 2003 in connection
  with the notes payable, which were thereby amended and restated, are
  now set to expire on August 15, 2007.  The new exercise prices for
  the aggregate of 1,000,000 warrants are as follows: 200,000 at $0.01,
  200,000 at $0.05, 200,000 at $0.10, 200,000 at $0.15 and 200,000 at
  $0.25.  In connection with one of these notes payable with the
  stockholder the Company also issued 617,058 shares of the Company's
  restricted common stock.

                                  60

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------
NOTE 5 - Notes Payable Stockholders - continued
         --------------------------
  The fair market value of the 60,000 warrants issued during the year
  ended December 31, 2002 approximated $2,200, estimated at the date of
  grant using the Black-Scholes option-pricing model.  The fair value
  of the 55,000 shares of the Company's restricted common stock issued
  during the year ended December 31, 2002 approximated $3,750 estimated
  based on the average trading value of the stock.

  The fair market value of the 1,220,000 warrants issued, plus the value
  of the restated and amended warrants for the year ended December 31,
  2003 was $162,744, estimated at the date of grant or amendment using
  the Black-Scholes option-pricing model. The fair market value of the
  868,058 shares of the Company's common stock issued during the year
  ended December 31, 2003 approximated $62,363 estimated based on the
  average trading value of the stock.

  These amounts were recorded as increases to both additional paid in
  capital and deferred debt discount.  The deferred debt discount will
  be amortized to interest expense over the life of the notes.  When the
  notes are paid or settled the related deferred debt discount is charged
  to interest expenses.  Interest expense relating to this deferred debt
  discount for the years ended December 31, 2003 and 2002 was $143,572
  and $1,097, respectively.

NOTE 6 - Notes Payable
         -------------
  On April 17, 2003, the Company entered a note payable agreement with
  a distributor for $34,000. The note accrues interest at 7% and is
  payable in monthly installments of $673, principal and interest,
  beginning May 1, 2003 through April 1, 2008. The balance outstanding
  under this note payable at December 31, 2003 was $24,131.

NOTE 7 - Accrued Expenses, Officers
         --------------------------
  Accrued expenses officers represents unpaid payroll and bonuses for
  2002 and 2003 to  three (3) officers of the Company.  Theses amounts
  are non-interest bearing and have no definite repayment terms.  As of
  December 31, 2003 the outstanding balance in accrued expenses officers
  was $609,522.


NOTE 8 - Commitments and Contingencies
         -----------------------------
  Operating Lease
  ---------------
  On September 11, 2002 the Company entered into a noncancelable
  operating lease for office space in Shreveport Louisiana with monthly
  rent of $519.  This lease commenced on October 1, 2002 and expires on
  September 30, 2005.




                                 61

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------

NOTE 8 - Commitments and Contingencies, continued
         -----------------------------
  On October 15, 2002 the Company entered into a noncancelable operating
  lease for a aircraft hanger located at the Archuleta County Airport -
  Stevens Field in Colorado.  This lease commenced on December 5, 2002
  and expires on December 5, 2012.  Annual rent is $9,600 for the first
  five (5) years of the lease term and increases 18% for the remaining
  five (5) years not exceeding annual rent of $22,000.  The Company has
  an option to renew the lease at the end of the lease term for an
  additional 10 year period with annual rent to be determined based on
  the appraised value at that time.  Under the terms of this lease the
  Company must also pay to the landlord a fuel flow fee of $.05 per
  gallon, subject to increases, of aviation fuel sold by the Company as
  well as an aircraft parking fee of 70% of all aircraft parking fees
  collected by the Company.

  The Company also rents office space for its corporate headquarters in
  Plano, Texas.  This rent is on a month-to-month basis without a formal
  lease agreement with a monthly rent expense of $2,500.

  Future minimum rental payments under the above noncancelable operating
  leases as of December 31, 2002 are as follow:

<TABLE>
<CAPTION>

            <S>                          <C>
            For the Year Ending
            December 31,                 Amount
            -------------------------------------------
                 2004                    $ 15,828
                 2005                      14,271
                 2006                       9,744
                 2007                      11,498
                 2008                      13,568
                 Thereafter                77,033
                                         --------
                 Total                   $141,942
                                         ========
</TABLE>

  Rent expense for the years ended December 31, 2003 and 2002 amounted
  to $39,941 and $19,664, respectively.

  Legal Proceedings
  -----------------
  On October 27, 2003, the Company was served with a complaint that
  alleges that EENT is liable on a $150,000 judgment issued against
  Millennium Fuels USA, LLC ("MFUSA"), an unrelated entity, of which
  Will McAndrew and Roger Wurtele, the Company's CEO and CFO,
  respectively, were formerly the Managers.

  The Company believes that the claim is without merit and intends to
  aggressively defend this claim brought against the Company.  At this
  time it is too early to evaluate with any reasonable certainty the
  likelihood of a favorable or unfavorable outcome.
                                 62

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------

NOTE 9 - Economic Dependency
        -------------------
  Major Customers
  ---------------
  During the year ended December 31, 2002, Gas Gathering sold a
  substantial portion of its product to one customer.  Sales to this
  customer during the year ended December 31, 2002 totaled $71,148
  (84%) of net sales.

  Major Suppliers
  ---------------
  During the year ended December 31, 2003, Energy & Engine purchased
  a substantial portion of its product from one supplier.  Purchases
  from this supplier were $114,870 (75%) of purchases. At December 31,
  2003, the   amount due to this supplier included in accounts payable
  was $3,610.

  During the year ended December 31, 2003, Wind Dancer purchased a
  substantial portion of is product from one supplier.  Purchases from
  this supplier were $118,448 (43%) of purchases.  At December 31, 2003,
  total amount due to this supplier included in accounts payable
  was $16,639.

  During the year ended December 31, 2002, Gas Gathering purchased a
  substantial portion of its product from three suppliers.  Purchase
  from these suppliers during the year ended December 31, 2003 were
  $26,065 (31%), $11,381 (13%), and $11,176 (13%) of cost of sales,
  respectively.  At December 31, 2003, total amount due these
  suppliers included in accounts payable were $21,611.

  Geographic Dependency
  ---------------------
  Gas Gathering revenue is generated in Caddo Parish, Louisiana.  The
  Company's revenues are limited to the amount of product, which can be
  extracted from this area

NOTE 10 - Common Stock
         ------------

  On January 10, 2002, Company issued 445,000 shares of common stock
  valued at $138,400 to consultants for services provided.

  On April 25, 2002, the Company issued 142,650 shares of common stock
  valued at $17,868 to consultants for services provided.

  On April 26, 2002, the Company issued 35,000 shares of common stock
  valued at $4,550 to a consultant for services provided.

  On May 24, 2002, the Company issued 500,000 shares of common stock
  valued at $30,000 to a consultant for services provided.





                                63
               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------
NOTE 10 - Common Stock, continued
         ------------
  On June 28, 2002, August 13, 2002, September 29, 2002 and December
  23, 2002 in connection with private placement offerings, the Company
  sold 3,500,000 shares of common stock to an investor at $0.10 per
  share or an aggregate of $350,000. In connection with these private
  offerings the Company issued warrants to purchase an aggregate of
  300,000 shares of the Company's common stock with an exercise price
  of $0.25 expiring through January 16, 2005. Also in connection with
  these offerings the Company and the investor entered into an agreement
  whereby the investor's 3,500,000 share common stock ownership in the
  Company at December 31, 2002 is non-dilutable by common stock issued
  by the Company beyond 20,000,000 shares, or 17.5%.  The non-dilution
  agreement was originally effective until December 12, 2004 and has
  been subsequently extended to August 15, 2005 and the non-dilution
  percentage has increased to 20% based on additional investments.  The
  non dilution agreement  does not include stock issuances over
  20,000,000 shares which are attributable to shares issued in a merger
  or acquisition that increases value and is approved by a majority of
  the stockholders of the Company.

  On August 13, 2002, the Company issued 13,975 shares of common stock
  valued at $559 to a consultant for services provided.

  On August 13, 2002, in connection with a private placement offering,
  the Company sold 1,000,000 shares of common stock to an investor at
  $0.10 per share or $100,000.  In connection with this private
  placement offering the Company issued warrants to purchase 100,000
  shares of the Company's common stock, which vested immediately with
  an exercise price of $0.25 expiring on August 13, 2004.

  On August 29, 2002, the Company issued 5,650,000 shares of common
  stock valued at $226,000 to officers and employees for services
  provided.

  On August 29, 2002, the Company issued 1,000,000 shares of common
  stock valued at $40,000 in connection with a termination agreement
  (See Note 1).

  On August 29, 2002, the Company issued 100,000 shares of common stock
  valued at $4,000 to consultants for services provided.

  On October 10, 2002, the Company issued 100,000 shares of common stock
  valued at $4,000 to consultants for services provided.

  On November 29, 2002 the Company issued 50,000 shares of the Company's
  common stock valued at $3,500 to a stockholder for consulting services
  as part of an investment agreement.

  On December 3, 2002, the Company issued 25,000 shares of common stock
  valued at $1,750 to an employee for services provided.

  On January 17, 2003, in connection with a private offering, the
  Company sold 500,000 shares of common stock to an investor at $0.10
  per share or $50,000. The Company also issued warrants to purchase
  50,000 shares of the Company's common stock with an exercise price of
  $0.25 expiring on January 16, 2005.
                                     64

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------
NOTE 10 - Common Stock, continued
          ------------
  On January 21, 2003, the Company issued 260,000 shares of common
  stock valued at $28,600 to consultants for services to be provided.

  On January 21, 2003, the Company issued 500,000 shares of common
  stock valued at $55,000 to employees for services provided.

  On January 22, 2003, in connection with a private offering, the
  Company sold 100,000 shares of common stock to an investor at $0.20
  per share or $20,000. The Company also issued an additional 100,000
  shares of common stock valued at $11,000 to this investor for
  consulting services to be provided.

  On March 5, 2003, the Company issued 50,000 shares of common stock
  valued at $3,000 to consultants for services to be provided.

  On March 21, 2003, the Company issued 382,942 shares of common stock
  (201,817 shares of which were accrued for at December 31, 2002) to an
  investor in connection with an ant-dilution agreement.

  On March 13, 2003, the Company issued 25,000 shares of common stock
  valued at $1,750 to an employee for services to be provided.

  On April 2, 2003, the Company issued 25,000 shares of common stock
  valued at $1,250 to a consultant for services provided.

  On May 1, 2003, the Company issued 25,000 shares of common stock
  valued at $1,500 to a consultant for services provided.

  On June 1, 2003, the Company issued 200,000 shares of common stock
  valued at $12,000 in connection with a one-year agreement with an
  investor relations firm for services provided.

  On June 18, 2003, an investor purchased 1,000,000 shares of the
  Company's common stock at $0.05 per share or $50,000. The Company also
  issued rights to this investor to purchase and additional 1,000,000
  shares for $0.05 per share or $50,000 on or before September 6, 2003.
  The Company and the investor agreed to exercise this right on August
  7, 2003 for 1,100,000 shares at $0.045 per share or $50,000.

  On June 18, 2003, the Company issued 25,000 shares of common stock
  valued at $3,000 to a consultant for services provided.

  On June 18, 2003, the Company issued 25,000 shares of common stock
  valued at $3,000 to a consultant for services provided.

  On June 18, 2003, the Company issued 50,000 shares of common stock
  valued at $6,000 to the manufacturer of its AXP 1000 product for
  consulting services provided. The Company has also agreed to issue
  50 shares of common stock for each unit to be shipped by the
  manufacturer.

  On June 27, 2003, an investor purchased 1,604,909 shares of the
  Company's common stock at $0.0303 per share or $48,629.

                                   65

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------
NOTE 10 - Common Stock, continued
          ------------

  On June 30, 2003, the Company issued 729,182 shares to an investor
  in regards to an anti-dilution agreement.

  On July 2, 2003, in connection with a private offering, the Company
  sold 100,000 shares of common stock to an investor at $0.06 per share
  or $6,000.

  On July 4, 2003, in connection with a private offering, the Company
  sold 150,000 shares of common stock to an investor at $0.06 per share
  or $9,000.

  On July 10, 2003, in connection with a private offering, the Company
  sold 200,000 shares of common stock to an investor at $0.05 per share
  or $10,000 and issued 2,000 shares as an equity kicker.

  On July 15, 2003, in connection with a private offering, the Company
  sold 600,000 shares of common stock to two investors at $0.05 per
  share or $30,000.

  On July 17, 2003, in connection with a private offering, the Company
  sold 30,000 shares of common stock to an investor at $0.06 per share
  or $1,800.

  On July 18, 2003, in connection with a private offering, the Company
  sold 200,000 shares of common stock to an investor at $0.05 per share
  or $10,000 and issued 4,000 shares as an equity kicker.

  On July 24, 2003, in connection with a private offering, the Company
  sold 100,000 shares of common stock to two investors at $0.06 per
  share or $6,000.

  On July 24, 2003, the Company issued as an equity kicker 14,000
  shares to seven investors.

  On July 24, 2003, the Company issued 15,250,000 shares to officers
  and employees of the Company valued at $1,830,000 for services
  provided.

  On July 24, 2003, the Company issued 3,300,000 shares to an investor
  in regards to an anti-dilution agreement.

  On July 28, 2003, in connection with a private offering, the Company
  sold 125,000 shares of common stock to two investors at $0.06 per
  share or $7,500.

  On July 29, 2003, in connection with a private offering, the Company
  sold 50,000 shares of common stock to an investor at $0.06 per share
  or $3,000.

  On July 30, 2003, in connection with a private offering, the Company
  sold 50,000 shares of common stock to an investor at $0.06 per share
  or $3,000.

                                 66

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------
NOTE 10 - Common Stock, continued
          ------------

  On August 5, 2003, in connection with a private offering, the Company
  sold 50,000 shares of common stock to an investor at $0.06 per share
  or $3,000.

  On August 5, 2003, the Company issued 774,182 shares to an investor
  in regards to an anti-dilution agreement.

  On August 6, 2003, in connection with a private offering, the Company
  sold 33,333 shares of common stock to an investor at $0.06 per share
  or $2,000.

  On August 8, 2003, the Company entered into an agreement with a
  consulting firm to issue 600,000 shares of the Company's common stock
  valued at $72,000 for consulting services to be provided. The term of
  the agreement is for six months with a renewal option for an
  additional six months.

  On August 19, 2003, in connection with a private offering, two
  investors purchased 200,000 of the Company's common stock at $0.05
  per share or $10,000.

  On August 19, 2003, the Company issued 175,000 shares of common
  stock valued at $26,250 to consultants for services provided.

  On August 19, 2003, in connection with a private offering, an
  investor purchased 20,000 of the Company's common stock at $0.06
  per share or $1,200.

  On August 19, 2003, the Company issued 1,685,259 shares to an
  investor in regards to an anti-dilution agreement.

  On August 22, 2003, the Company issued 60,000 shares of common stock
  valued at $9,000 to consultants for services provided.

  On August 22, 2003, in connection with a private offering, two
  investors purchased 450,000 of the Company's common stock at $0.05
  per share or $22,500.

  On August 25, 2003, the Company issued 300,000 shares of the
  Company's common stock to officers of the Company as non-cash
  compensation valued at $45,000 for services provided.

  On August 29, 2003, in connection with a private offering, two
  investors purchased 340,000 of the Company's common stock at $0.05
  per share or $17,000.

  On August 29, 2003, in connection with a private offering, an
  investor purchased 80,000 of the Company's common stock at $0.10 per
  share or $8,000.

  On August 29, 2003, the Company issued 320,000 shares to an investor
  in regards to an anti-dilution agreement.

                                   67

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------
NOTE 10 - Common Stock, continued
          ------------

  On September 17, 2003, the Company issued 900,000 shares valued at
  $135,000 in connection with an asset purchase agreement.

  On September 17, 2003, the Company issued 500,000 shares of common
  stock valued at $75,000 to a consultant for services to be provided.

  On September 17, 2003, the Company issued 50,000 shares valued at
  $7,500 to employees of the Company as non cash compensation for
  services provided.

  On September 17, 2003, in connection with a private offering, an
  investor purchased 1,000,000 of the Company's common stock at $0.05
  per share or $50,000.

  On September 23, 2003, the Company issued 99,000 shares of common
  stock valued at $12,870 to a consultant for services provided.

  On September 29, 2003, in connection with a private offering, an
  investor purchased 50,000 of the Company's common stock at $0.10 per
  share or $5,000.

  On September 29, 2003, in connection with a private offering, two
  investors purchased 223,500 of the Company's common stock at $0.06
  per share or $13,400.

  On September 29, 2003, the Company issued 50,000 shares of common
  stock valued at $7,500 to a consultant for services provided.

  On September 29, 2003, the Company issued 328,750 shares to an
  investor in regards to an anti-dilution agreement.

  On October 15, 2003, the Company issued 500,000 shares of common
  stock valued at $75,000 to a consultant for services to be
  provided based on a consulting agreement.  On December 2, 2003 the
  Company extended the consulting agreement and issued an additional
  600,000 shares of common stock valued at $102,000 for services to
  be provided.  Subsequently on February 5, 2004, the Company
  terminated this consulting agreement.

  On October 16, 2003, in connection with a private offering, an
  investor purchased 1,000,000 shares of the Company's common stock
  at $0.05 per share or $50,000.  This investor was also issued
  warrants to purchase 200,000 shares of the Company's common stock
  with an exercise price of $0.01 per share expiring October 30, 2005.

  On October 16, 2003, the Company issued 399,750 shares to an investor
  in regards to an anti-dilution agreement.

  On November 17, 2003, in connection with a private offering, an
  investor purchased 1,000,000 of the Company's common stock at $0.05
  per share or $50,000.


                                  68

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------
NOTE 10 - Common Stock, continued
          ------------

  On November 25, 2003, the Company issued 473,685 shares of the
  Company's common stock to officers of the Company valued at $71,052
  for services provided.

  On November 25, 2003, the Company issued 50,0000 shares of the
  Company's common stock to an employee of the Company valued at
  $7,500 for services provided.

  On November 25, 2003, the Company issued 100,000 shares of common
  stock valued at $15,000 to a consultant for services provided.

  On December 2, 2003, the Company issued 25,000 shares of common
  stock valued at $4,250 to a consultant for services provided.

  On December 2, 2003, in connection with a private offering, two
  investors purchased 400,000 of the Company's common stock at $0.05
  per share or $20,000.

  On December 12, 2003, the Company issued 200,000 shares of common
  stock valued at $40,000 to a consultant for services provided.

  On December 12, 2003, in connection with a private offering, two
  investors purchased 300,000 of the Company's common stock at $0.05
  per share or $15,000.

  On December 12, 2003, in connection with a private offering, an
  investor purchased 50,000 of the Company's common stock at $0.10 per
  share or $5,000.

  On December 12, 2003, the Company issued 150,000 shares of common
  stock valued at $28,500 to a consultant for services provided.

  On December 30, 2003, in connection with a private offering, two
  investors purchased 200,000 of the Company's common stock at $0.05
  per share or $10,000.

  On December 30, 2003, the Company issued 2,527,223 shares to an
  investor in regards to an anti-dilution agreement.

  On December 30, 2003, the Company issued 6,000,000 shares of the
  Company's common stock valued at $900,000 to officers of the
  Company for services provided.

  On December 31, 2003, in connection with a private placement
  offering, the Company sold 300,000 shares of the Company's common
  stock to an investor at $0.05 per share or $15,000.  At December 31,
  2003 a stock subscription receivable of $15,000 is recorded relating
  to this private placement.





                                69

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------

NOTE 11 - Income Taxes
          ------------
  The Company recognized deferred tax assets and liabilities for the
  future tax consequences attributable to differences between the
  financial statement carrying amount of existing assets and liabilities
  and their respective tax bases. In addition, the Company also
  recognizes deferred tax assets for future tax benefits, such as net
  operating loss ("NOL") carryforwards, to the extent that realization
  of such benefits is more likely than not.

  The components of the net deferred tax assets as of December 31, 2003
  is as follows:

<TABLE>
<CATION>
    <S>                                  <C>
                                            2002
                                         -----------
    Accrued expenses                     $   215,000
    Stock based compensation                  56,000
    NOL carryforwards                      2,104,000
                                         -----------
        Total deferred tax asset           2,375,000

    Valuation allowance                   (2,375,000)
                                         -----------
    Net Deferred Tax Asset               $        --
                                         ===========
</TABLE>

  The valuation allowance increased $1,721,000 for the year ended
  December 31, 2003.

  At December 31, 2003, the Company had available NOL carryforwards
  for income tax purposes of approximately $6,189,000 which expires
  at various dates through 2023. The Company will not be able to
  utilize net operating losses which occurred prior to the acquisition
  of SSGG pursuant to the limitations described in Section 382 of the
  Internal Revenue Service Code.

  A reconciliation of the expected statutory tax rate and the effective
  rate is as follows:

<TABLE>
<CAPTION>
  <S>                                <C>                <C>
                                      2003               2002

  Expected statutory rate             34.0%              34.0%
  NOL without tax benefit            (34.0)             (34.0)
                                     -----              -----
  Total income taxes                    --%                --%
                                     =====              =====
</TABLE>

                                70

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------

NOTE 12 - Consulting Services Plan

  Effective as of January 10, 2002 the Company adopted a 2002 Consulting
  Service Plan ("2002 Plan") whereby 1,000,000 shares of the Company's
  common stock may be subject to stock awards.  Effective as of December
  2, 2002 the Company adopted a 2002-2003 Consulting Service Plan
  ("2002-2003 Plan") whereby an additional 1,000,000 shares of the
  Company's common stock may be subject to stock awards.  The purpose
  of the 2002 Plan and the 2002-2003 Plan is to advance interests of
  the Company by rewarding employees, directors, former directors,
  contractors and consultants to the Company (See Note 10).  As of
  December 31, 2003 1,000,000 and 300,000 (approximate) shares of the
  Company's common stock have been issued under the 2002  Plan and the
  2002-2003 Plan, respectively.

NOTE 13 - Warrants
          --------
  On December 30, 2003, an investor exercised warrants to purchase
  570,000 shares of the Company's common stock at $0.001 per share or
  $570.

  Transactions involving warrants are summarized as follows:

<TABLE>
<CAPTION>


  <S>                                    <C>               <C>
                                          Number             Weighted
                                            Of                Average
                                         Warrants          Exercise Price
                                         --------------------------------

  Balance - January 1, 2002                      --

  Warrants issued during the year           460,000        $    0.23

  Balance - December 31, 2002               460,000        $    0.23

  Warrants issued during the year         1,470,000        $    0.05

  Warrants exercised during the year       (570,000)       $    0.001

  Warrants expired during the year           (5,000)       $    0.10

  Balance - December 31, 2003             1,355,000        $     0.13
                                          =========

</TABLE>

  There were 1,355,000 and 460,000 warrants exercisable at December 31,
  2003 and 2002, respectively.
                                    71

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------
NOTE 14 - Segment Reporting
          -----------------
  The accounting policies of the segments are disclosed in the summary
  of significant accounting policies.  There are no intersegment sales.
  The Company evaluates performance based on income of loss from
  operations.

  Summarized financial information concerning the Company's reportable
  segments is show in the following table.

<TABLE>
<CAPITAL>

<S>                  <C>          <C>          <C>          <C>             <C>
                        Gas          Wind         AXP         General
                     Gathering      Dancer        1000      Corporation        Total
                     -----------------------------------------------------------------

For the Year Ended December 31, 2003

Revenue              $   1,245    $ 377,676    $   4,341    $        --     $   383,262
                     =========    =========    =========    ===========     ===========

Operating loss       $ (23,474)   $(189,681)   $(279,941)   $(4,159,677)    $(4,652,773)
                     =========    =========    =========    ===========     ===========

Net loss             $ (72,974)   $(192,214)   $(279,941)   $(4,496,528)    $(5,041,657)
                     =========    =========    =========    ===========     ===========

Capital Expenditures $      --    $  42,976    $      --    $     1,670     $    44,646
                     =========    =========    =========    ===========     ===========

Total identifiable
 assets at December
 31, 2003            $ 187,931    $ 295,548    $ 245,858    $    42,274     $   771,611
                     =========    =========    =========    ===========     ===========

</TABLE>





                                    72

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------
NOTE 14 - Segment Reporting, continued
          -----------------
<TABLE>
<CAPITAL>

<S>                  <C>          <C>          <C>          <C>             <C>
                        Gas          Wind         AXP         General
                     Gathering      Dancer        1000      Corporation        Total
                     -----------------------------------------------------------------
For the Year Ended December 31, 2002

Revenue              $   84,327    $  14,930    $      --    $        --     $    99,257
                     ==========    =========    =========    ===========     ===========

Operating loss       $(184,438)    $ (14,384)   $      --    $(1,475,878)    $(1,674,700)
                     =========     =========    =========    ===========     ===========

Net loss             $(184,438)    $ (16,284)   $      --    $(1,480,267)    $(1,680,989)
                     =========     =========    =========    ===========     ===========

Capital Expenditures $  94,051     $  92,500    $      --    $     5,000     $   191,551
                     =========     =========    =========    ===========     ===========

Total identifiable
 assets at December
 31, 2002            $ 286,234     $ 129,181    $      --    $    20,509     $   435,924
                     =========     =========    =========    ===========     ===========
</TABLE>

NOTE 15 - Related party and other items
          ----------------------------
  Securities and Exchange Commission Matter
  -----------------------------------------
  On October 23, 2003, the Commission entered a cease-and-desist order
  against the Company resulting from the Company's issuance of certain
  shares of its common stock in January 2002 pursuant to an S-8
  registration statement. The order requires the Company to cease and
  desist from committing or causing any violations and any future
  violations of Sections 5(a) and 5(c) of the Securities Act of 1933.



                                  73

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------
NOTE 15 - Related party and other items, continued
          -----------------------------

  Letter of intent
  ----------------
  On March 7, 2003, the Company entered into a letter of intent which
  was subsequently amended on April 3, 2003, whereby the Company would
  sell its 100% membership interest in Gas Gathering for $500,000 to
  American West Resources ("American West"). On May 8, 2003, the
  Company entered into a revised letter of intent with American West
  whereby the purchase price would be $500,000, if the closing occurs
  on or before November 1, 2003, $650,000 if the closing occurs between
  November 2, 2003 and May 1, 2004 and $800,000 if the closing occurs
  between May 2, 2004 and November 1, 2004. Upon closing the Company
  would also retain an 8% net profit interest in Gas Gathering as
  defined in the letter of intent.

  Prior to closing, American West will operate the system and receive
  all gross proceeds until November 1, 2003, with the Company receiving
  50% of net proceeds thereafter until closing. The President, Chief
  Executive Officer and majority shareholder of America West is the
  father in law of the Company's President and Chief Executive Officer.
  There can be no assurance that this sale will take place. This segment
  of the Company's business will be treated as discontinued operations
  in accordance with FASB 144, when and if the sale is deemed probable
  by management.

  During the year ended December 31, 2003, America West sold on behalf
  of the Company fixed assets with a net book value of $49,500 for
  $27,500 resulting in a receivable from America West payable to the
  Company.  Subsequent to this sale the Company wrote off the $27,500
  receivable

  Equity Line of Credit
  ---------------------
  On May 1, 2003, the Company entered into an agreement with Cornell
  Capital Partners, LP ("Cornell") for a proposed $3,500,000 equity
  credit line.  At closing the Company issued a 5% convertible
  debenture in the amount of $130,000 due May 1, 2006. The debenture
  is for full satisfaction of fees and expenses and was fully earned
  by Cornell upon entering into the equity line of credit agreement.
  On December 12, 2003 the Company and Cornell entered into a
  termination agreement whereby the equity line of credit would be
  terminated.  The Company issued 722,222 shares of common stock at
  $0.19 per share or $137,222 which was in full satisfaction of the
  $130,000 principal balance and $7,222 of interest relating to the
  convertible debenture.

NOTE 16 - Subsequent Events
          -----------------
  Equity Transactions
  -------------------
  On January 7, 2004 and January 15, 2004, the Company issued an
  aggregate of 40,000 shares of common stock valued $6,400 to a
  consultant for services to be provided.

                               74

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------
NOTE 16 - Subsequent Events
          -----------------
  Equity Transactions, continued
  -------------------

  On January 15, 2004, the Company issued an aggregate of 300,000
  shares of common stock valued at $54,000 to officers of the Company
  for services to be provided.

  On January 23, 2004 through March 12, 2004, in connection with a
  private placement offering, the Company sold an aggregate of
  15,455,000 shares of common stock to investors at $0.10 per share or
  $1,545,500.  In consideration of consulting services to be provided,
  the Company has granted the right of first refusal for future
  financing for a period of six months to one of these investors.  As
  additional consideration for consulting service, the Company has also
  issued warrants to this investor to purchase 500,000 shares of the
  Company's common stock with an exercise price of $0.20 which expires
  in one year.

  On January 23, 2004, the Company issued an aggregate of 119,000 shares
  of common stock valued at $19,040 to two consultants for services to
  be provided.

  On January 30, 2004, the Company issued 130,000 shares of common stock
  valued at $11,180 to a former employee in connection with a
  termination agreement.

  On March 1, 2004, in connection with a private placement offering, the
  Company sold 1,350,000 shares of common stock to an investor at $0.20
  per share or $270,000.  In connection with this private placement
  offering the Company issued warrants to purchase 405,000 shares of the
  Company's common stock with an exercise price of $0.40 expiring on
  February 26, 2006.

  On March 1, 2004, the Company issued 25,000 shares of common stock
  valued at $12,750 to a consultant for services to be provided.

  On March 9, 2004, the Company issued 20,000 shares of common stock
  valued at $9,000 to a consultant for services to be provided.

  On March 12, 2004, the Company issued 410,424 shares of common stock
  to a stockholder in satisfaction of a $40,000 note payable plus
  accrued interest.

  On April 6, 2004, the Company issued 3,000,000 shares of common
  stock to officers for services performed.

  Authorized Shares
  -----------------
  On February 18, 2004, the company filed a Certificate of Amendment to
  its articles of Incorporation to increase their authorized shares of
  common stock to 180,000,000.



                                  75

               ENERGY & ENGINE TECHNOLOGY CORPORATION AND SUBSIDIARIES
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------
NOTE 16 - Subsequent Events
          -----------------

  Asset Acquisition
  -----------------
  On March 4, 2004 the Company has entered into a term sheet, subject
  to a definitive purchase agreement with BMZ Generators & Welders, Inc
  ("BMZ") which is the Company's manufacturer of the AXP 1000 product,
  to purchase certain assets and intellectual property of BMZ.  Under
  the term sheet the Company would purchase certain assets of BMZ for
  $108,000 of which the Company has already deposited with BMZ.  The
  Company would also purchase all existing and future intellectual
  property rights of BMZ.  The purchase price of the intellectual
  property is $1,000,000 with $200,000 paid in cash at closing,
  $300,000 in the Company's restricted common stock upon receipt of
  certain documentation from BMZ and $500,000 in the Company's
  restricted common stock upon certain milestones over a five year
  period.


































                                  76