UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549
                                   FORM 10-QSB

     [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                  For the quarterly period ended JUNE 30, 2004
                                       or
              [ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                              OF THE EXCHANGES ACT

                   For the transition period from to _________
                        Commission file number 000-14646

                      CLEAN SYSTEMS TECHNOLOGY GROUP, LTD.
        (Exact name of Small Business Issuer as Specified in Its Charter)

               NEW YORK                             06-1113228
    (State or other jurisdiction of             (I.R.S. Employer
    (incorporation or organization)           Identification Number)

            4 Ashlagan Street, P.O. Box 8624,Kiryat Gat, Israel 82021
            ---------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                               011 972 8 660 2108
                               ------------------
                (Issuer's telephone number, including area code)


Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.
Yes [ ] No [X]

The number of shares  outstanding of the registrant's  Common Stock,  $0.01 Par
Value, on March 31, 2005 was 81,962,670 shares.

Transitional Small Business Disclosure Format (check one):
Yes               No     X
    ----------       --------




<PAGE>

                                TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

                                                                           Page
                                                                          Number

Item 1.       Financial Statements.........................................4-11
Item 2.       Management's Discussion and Analysis or Plan of Operation...12-20
Item 3.       Controls and Procedures........................................20

PART II - OTHER INFORMATION

Item 1.       Legal Proceedings..............................................21
Item 2.       Unregistered sale of equity and use of proceeds................21
Item 3.       Defaults upon Senior Securities................................21
Item 4.       Submission of Matters to a Vote of Securities Holders..........21
Item 5.       Other information..............................................21
Item 6.       Exhibits and Reports on Form 8-K...............................21
              Signature Page.................................................22













                                       2

<PAGE>



PART I - FINANCIAL INFORMATION



ITEM 1.   FINANCIAL STATEMENTS
Consolidated Balance Sheet as of June 30, 2004 (Unaudited)...................4

Consolidated Statements of Operations for the three and six months
ended June 30, 2004 and 2003 (Unaudited).....................................5

Consolidated Statements of Cash Flows for the six months
ended June 30, 2004 and 2003 (Unaudited).....................................6

Notes to the Consolidated Financial Statements (Unaudited)................7-12




                                       3

<PAGE>

Clean Systems Technology Group, Ltd
Consolidated Balance Sheet
June 30, 2004
(Unaudited)
(in thousands)

ASSETS

Current assets:
   Cash and cash equivalents                                    $           586
   Account receivable - net of allowance                                  2,495
     for doubtful accounts of $110
   Inventory                                                              2,254
   Other current assets                                                     348
                                                                ----------------
     Total current assets                                                 5,683

Property and equipment - net                                              1,098

Investment                                                                  178

Other assets                                                                 66
                                                                ----------------

                                                                $         7,025
                                                                ================

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Current potion long term debt - Lines of credit
    and notes payable                                           $         1,629
   Due to related parties                                                    70
   Accounts payable                                                       1,900
   Accrued expenses                                                         585
   Accrued compensation                                                     659
   Other liabilities                                                        104
                                                                ----------------
     Total current liabilities                                            4,947
                                                                ----------------

Long-term debt                                                              580


Commitments and contingencies                                                 -

Shareholders' equity:
   Common stock, $0.01 par value, 110,000,000
    shares authorized, 81,962,670 issued and
    outstanding                                                             820
   Additional paid-in capital                                             5,411
   Stock subscription receivable                                            (97)
   Accumulated deficit                                                   (4,636)
                                                                ----------------
     Total shareholders' equity                                           1,498
                                                                ----------------

                                                                $         7,025
                                                                ================

See notes to unaudited consolidated financial statements.

                                       4

<PAGE>

Clean Systems Technology Group, Ltd
Consolidated Statements of Operations
(Unaudited)
(in thousands, except per share data)

<TABLE>
<CAPTION>

                                                                 Three months Ended                   Six months Ended
                                                          ---------------------------------    --------------------------------
                                                            June 30,           June 30,          June 30,          June 30,
                                                              2004               2003              2004              2003
                                                          -------------     ---------------    -------------     --------------
<S>                                                   <C>               <C>                 <C>              <C>
Revenues                                                  $      1,407      $          980     $      2,971      $       2,332
Cost of Revenues                                                   792                 845            1,686              1,624
                                                          -------------     ---------------    -------------     --------------
Gross profit                                                       615                 135            1,285                708

Selling, general and administrative expenses                       419                 328              803                655
                                                          -------------     ---------------    -------------     --------------

Income (loss) from operations                                      196               (193)              482                 53
                                                          -------------     ---------------    -------------     --------------

Other (expense) income
   Interest expenses                                              (91)               (199)            (153)              (369)
   Other (expense) income                                         (54)               (402)               11              (423)
                                                          -------------     ---------------    -------------     --------------
     Total other (expense) income                                (145)               (601)            (142)              (792)
                                                          -------------     ---------------    -------------     --------------

Income (loss) before provision for income taxes                     51               (794)              340              (739)

Provision for income taxes                                           2                  49               14                 56
                                                          -------------     ---------------    -------------     --------------

Net income (loss)                                         $         49      $        (843)     $        326      $       (795)
                                                          =============     ===============    =============     ==============


Net income (loss) per share - basic                       $          -      $       (0.02)     $          -      $      (0.02)
                                                          =============     ===============    =============     ==============

Net income (loss) per share - diluted                     $          -      $       (0.02)     $          -      $      (0.02)
                                                          =============     ===============    =============     ==============


Weighted average number of common shares - basic            81,962,670          49,328,287       80,179,263         47,549,210
                                                          =============     ===============    =============     ==============
Weighted average number of common shares - diluted          81,962,670          49,328,287       80,179,263         47,549,210
                                                          =============     ===============    =============     ==============

</TABLE>




See notes to unaudited consolidated financial statements.

                                       5

<PAGE>

Clean Systems Technology Group, Ltd
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)

<TABLE>
<CAPTION>

                                                                                        Six months Ended
                                                                             ---------------------------------------
                                                                                 June 30,              June 30,
                                                                                   2004                  2003
                                                                             -----------------     -----------------
Operating Activities:
<S>                                                                          <C>                   <C>
     Net income (loss)                                                       $            326      $          (795)
     Adjustments to reconcile net income (loss) to net cash
        used in operating activities:
           Depreciation                                                                   157                   149

           Gain from the sale of property and equipment                                     -                    10
     Changes in operating assets and liabilities:
        Account receivable                                                             (1,214)                 (372)
        Inventory                                                                         (39)                  127
        Other assets                                                                      (33)                   41
        Accounts payable                                                                   26                   280
        Accrued expenses                                                                    8                    40
        Accrued compensation                                                              (83)                 (146)
        Other liabilities                                                                (178)                    4
                                                                             -----------------     -----------------
Net cash used in operating activities                                                  (1,030)                 (662)
                                                                             -----------------     -----------------

Investing Activities:

     Acquisition of property and equipment                                               (17)                     -

     Proceeds from sale of property and equipment                                          -                     44
                                                                             -----------------     -----------------
Net cash (used in) provided by investing activities                                      (17)                    44
                                                                             -----------------     -----------------

Financing Activities:

     Proceeds from lines of credit and notes payable                                       -                    317
     Repayments of lines of credit and notes payable                                     (43)                   (97)

     Proceeds from issuance of common stock                                            1,108                    429

     Offering costs associated with issuance of common stock                             (20)                     -
                                                                             -----------------     -----------------
Net cash provided by financing activities                                               1,045                   649
                                                                             -----------------     -----------------

Net (decrease) increase in cash                                                            (2)                   31

Cash and cash equivalents at beginning of year                                            588                    23
                                                                             -----------------     -----------------

Cash and cash equivalents at end of period                                   $            586      $             54
                                                                             =================     =================

Supplemental disclosure of cash flow information:
     Cash Paid for:
        Interest                                                             $            151      $            152
                                                                             =================     =================
        Income taxes                                                         $              -      $              -
                                                                             =================     =================
</TABLE>


See notes to unaudited consolidated financial statements.

                                       6

<PAGE>

                      CLEAN SYSTEMS TECHNOLOGY GROUP, LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
(All amounts in thousands, except share and per share data or as otherwise
noted)


 [1]     BASIS OF PRESENTATION

         The accompanying un audited consolidated financial statements of Clean
         Systems Technology Group, Ltd. have been prepared in accordance with
         generally accepted accounting principles for interim financial
         information and with the instructions to Form 10-QSB and Item 310(b) of
         Regulation S-B. Accordingly, they do not include all information and
         footnotes required by generally accepted accounting principles for
         complete financial statements. In the opinion of management, all normal
         recurring adjustments considered necessary in order to make the interim
         financial statements not misleading have been included Results for the
         six months ended June 30, 2004 are not necessarily indicative of the
         results that may be expected for the year ending December 31, 2004.
         These interim unaudited consolidated financial statements should be
         read in conjunction with the consolidated financial statements and
         footnotes thereto of the Company and management's discussion and
         analysis of financial condition and results of operations included in
         the Company's annual report on Form 10-KSB for the year ended December
         31, 2003.

         On October 17, 2001, Entertainment International Ltd. ("ENTI"), through
         its wholly-owned subsidiary ENTI Acquisition I Corp., closed a
         transaction (the "Transaction") providing for the acquisition of CSTI
         Hi-Tec, Ltd. ("CSTI Hi-Tec") an Israeli corporation. All of the issued
         and outstanding shares of CSTI Hi-Tec were exchanged for shares of
         ENTI's unregistered restricted common stock. Simultaneously with the
         closing, the Board of Directors authorized a one for twenty reverse
         stock split of all ENTI's issued and outstanding common stock. All
         references in the accompanying consolidated financial statements to the
         number of shares have been restated to reflect the reverse stock split.

         For accounting purposes, the Transaction has been accounted for as a
         reverse acquisition under the purchase method for business
         combinations, and accordingly the Transaction has been treated as a
         recapitalization of CSTI Hi-Tec, with CSTI Hi-Tec as the acquirer. The
         shares issued in the Transaction are treated as being issued for cash
         and are shown as outstanding for all periods presented in the same
         manner as for a stock split. The consolidated financial statements
         reflect the financial position and the result of operations of CSTI
         Hi-Tec and its subsidiaries and ENTI as of June 30, 2004 and for the
         three and six months ended June 30, 2004 and 2003. Pro forma
         information on the Transaction is not presented as, at the date of the
         Transaction, ENTI was considered a public shell and accordingly, the
         Transaction was not considered a business combination. On December 27,
         2001, ENTI amended its certificate of incorporation to change its name
         from Entertainment International, Ltd. to Clean Systems Technology
         Group, Ltd. (the "Company" or "CSTI").


                                       7

<PAGE>

[2]      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         The accounting policies followed by the Company are set forth in Note 2
         to the Company's consolidated financial statements included in the
         Company's Form 10-KSB for the year ended December 31, 2003.

         Reclassifications - Certain reclassifications have been made to prior
         period consolidated financial statements to conform to the current
         period presented.

         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, the
         disclosure of contingent assets and liabilities and the reported
         amounts of revenues and expenses during the reporting period. Actual
         results could differ from those estimates.

         Significant estimates include the Company's estimate of allowance for
         doubtful accounts and its revenue recognition policy using the
         percentage of completion method of accounting for contracts.

         Revenue Recognition -

         The Company follows the percentage-of-completion method of accounting
         for contracts that extend for periods in excess of one year.
         Accordingly, income is recognized in the ratio that costs incurred
         bears to estimated total costs. Where contracts in progress are subject
         to negotiation and it is probable that the additional costs will be
         recovered, none of the costs are recognized in the income statement
         until pricing has been approved. Similarly, the revenue is not
         recognized until realization is assured beyond a reasonable doubt.
         Adjustments to cost estimates are made periodically, and losses
         expected to be incurred on contracts in progress are charged to
         operations in the period such losses are determined. The aggregate of
         cost incurred on contracts in progress in excess of related billings is
         shown as a current asset, and the aggregate of billings on contracts in
         progress in excess of related costs incurred as shown as a current
         liability.

         Recent accounting pronouncements -

         -        In November 2004, the Financial Accounting Standards Board
                  issued (`the FASB") issued Statement of Financial Accounting
                  Standards No. 151 ("SFAS No. 151"), "Inventory Costs, an
                  amendment of ARB No. 43, Chapter 4." SFAS No. 151 clarifies
                  that abnormal inventory costs such as costs of idle
                  facilities, excess freight and handling costs, and wasted
                  materials (spoilage) are required to be recognized as current
                  period costs. The provisions of SFAS No.151 are effective for
                  inventory costs incurred during fiscal years beginning after
                  June 15, 2005. Management is currently evaluating the
                  provisions of SFAS No. 151 and does not expect the adoption
                  will have a material impact on the Company's financial
                  position, results of operations or cash flows.

                                       8

<PAGE>

         -        In December 2004, the FASB finalized SFAS No. 123R
                  "Share-Based Payment" ("SFAS 123R"), amending SFAS No. 123,
                  effective beginning the Company's first quarter of fiscal
                  2006. SFAS 123R will require the Company to expense stock
                  options based on grant date fair value in its financial
                  statements. Further, adoption of SFAS No. 123R will require
                  additional accounting related to income tax effects and
                  additional disclosure regarding cash flow effects resulting
                  from share-based payments arrangements. The adoption of SFAS
                  123R will not effect the Company's cash flows or financial
                  position, but may have an adverse impact on results of
                  operations if options are granted in the future.

         -        In December 2004, the FASB issued SFAS No. 153, "Exchanges of
                  Nonmonetary Assets - an amendment for APB Opinion No. 29".
                  This statement amends APB Opinion No. 29 to eliminate the
                  exception for nonmonetary exchanges of similar productive
                  assets and replaces it with a general exception for exchanges
                  of nonmonetary assets that do not have commercial substance. A
                  nonmonetary exchange has commercial substance if future cash
                  flows of the entity are expected to change significantly as a
                  result of the exchange. The provisions of SFAS No. 153 are
                  effective for the Company's year ended December 31, 2006.
                  Management is currently evaluating the impact of the adoption
                  of SFAS No. 153 on the Company's consolidated financial
                  position, liquidity, or results of operations.

[3]      INVENTORY

         Inventory, which consists of raw materials, is valued at the lower of
         cost or market. Cost is determined by the weighted average method.

[4]      NET INCOME PER SHARE

         Earnings per share are calculated in accordance with the provisions of
         Statement of Accounting Standards No. 128, "Earnings per Share" ("SFAS
         128"). SFAS 128 requires the reporting of both basic earnings per
         share, which is the weighted-average number of common shares
         outstanding, and diluted earnings per share, which includes the
         weighted-average number of common shares outstanding and all dilutive
         potential common shares outstanding, utilizing the treasury stock
         method. For the three and six months ended June 30, 2004 and 2003, the
         shares issued in the Transaction are treated as outstanding for all
         periods presented. Share and per share amounts reflect the effect of
         the one for twenty reverse stock split in October 2001.

[5]      ISSUANCE OF SHARES

         During the six month ended June 30,2004, the Company issued 11,080,000
         shares of common stock at $0.10, for proceeds of $1,108, inclusive of
         issuance costs of $20.

[6]      OTHER (EXPENSE) INCOME

         Aggregate amounts in other (income) expense are primarily the result of
         foreign currency translation adjustments. Substantially all of the
         Company's sales are made in U.S. dollars. In addition, a substantial
         portion of the Company's costs are incurred in U.S. dollars. Since the
         U.S. dollar is the primary currency in the economic environment in
         which the Company operates, the U.S. dollar is its functional currency.

                                       9

<PAGE>

         During the six months ended June 30, 2004, certain assets and
         liabilities were denominated in NIS (New Israeli Shekel) while the
         payments to suppliers were linked to the U.S. dollar.

[7]      GEOGRAPHIC REPORTING

         Revenues by geographic classifications are as follows:

                              [IN U.S. $ THOUSANDS]

                                  ISRAEL      ITALY       FRANCE        TOTAL
                                  ------      -----       ------        -----

For the three month period
         ended June 30, 2004      $   656    $   751     $    --        $ 1,407
For the three month period
         ended June 30, 2003      $   965    $    15     $    --        $   980

                                  ISRAEL      ITALY       FRANCE        TOTAL
                                  ------      -----       ------        -----

For the six month period
         ended June 30, 2004      $ 1,336    $ 1,635     $    --        $ 2,971
For the six month period
         ended June 30, 2003      $ 2,075    $    30     $   227        $ 2,332

         Assets by geographic classifications are as follows:

                              [IN U.S. $ THOUSANDS]

                                  ISRAEL      ITALY       FRANCE        TOTAL
                                  ------      -----       ------        -----

As of June 30, 2004               $ 6,144    $  881      $    --        $ 7,025

[8]      COMMITMENTS AND CONTINGENCIES

         The Company, from time to time, is a party to claims and lawsuits, in
         the ordinary course of business. The Company has accrued amounts to
         cover such claims if management believes, with advice of counsel, that
         losses are probable.

         The Company has initiated legal proceedings in India to recover costs
         incurred in a project for a European customer. Total receivable as of
         June 30, 2004 for this project is approximately $400,000. As management
         can not reasonably determine the outcome of this matter, a reserve of
         approximately $100,000 has been accounted for with regards to this
         receivable.


                                       10

<PAGE>

[9]      SUBSEQUENT EVENTS

         -        Line of Credit

                  In July 2004 the Company entered into a line of credit
                  agreement for up to $1,000,000. This line bears interest at
                  LIBOR + 5%. The LIBOR rate at the date of the Line was
                  approximately 1.4%. This line is available through March 31,
                  2006, with prescribed repayments of principal and interest
                  throughout the life of the line of credit. This line is
                  collateralized by the assignment of a receivable from a
                  customer of the Company's Italian subsidiary Clean Systems
                  Technology Italia S.r.l for approximately $983,000. In
                  addition the Company has placed into an escrow account
                  1,212,121 shares of its common stock with a value of
                  approximately $400,000, as security in the event of
                  non-payment. The line requires a credit extension fee of 2% of
                  the available credit, or $20,000. This fee has been recorded
                  as a discount against net proceeds the line of credit, and is
                  being amortized as interest expense over the life of the line.

                  In the event of non-payment the lender may convert any unpaid
                  portion of the unpaid line of credit into shares of the
                  Company's common stock at the lower of $0.20 per share or 67%
                  of quoted market price of the Company's common stock on the
                  date of conversion.

                  Through March 31, 2005, the Company has drawn approximately
                  $850,000 under this line of credit.


                                       11

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-QSB contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended and Section
21E of the Securities Exchange Act of 1934, as amended. Forward-looking
statements include statements concerning plans, objectives, goals, strategies,
future events or performance and underlying assumptions and other statements,
which are other than statements of historical facts. These statements are
subject to uncertainties and risks including, but not limited to, product and
service demand and acceptance, changes in technology, economic conditions, the
impact of competition and pricing, government regulation, and other risks, many
of which are beyond the Company's control, defined in this document and in
statements filed from time to time with the Securities and Exchange Commission.
These cautionary statements and any other cautionary statements that may
accompany the forward-looking statements expressly qualify all such
forward-looking statements. In addition, Clean Systems Technology Group, Ltd.
disclaims any obligation to update any forward-looking statements to reflect
events or circumstances after the date hereof.

OVERVIEW

CSTI designs, engineers, manufactures, installs and services ultra high purity
systems for transportation of clean gases and liquids from the source, where the
gases and liquids are stored, to the point of use for the following processing
industries:

     o    Micro-electronics (semi conductors);
     o    Optical fibers;
     o    Pharmaceuticals and Bio-technology; and
     o    Metal blades.

CSTI product lines provide a total solution for the four major gas and chemical
systems from source to the point of use referenced above. Since the gases and
the chemicals are pure and extremely dangerous, the systems that CSTI
manufactures must have the highest levels of safety and quality.

CSTI products are divided into three main categories:

     o    Systems for ultra high purity gases from source to point of use;
     o    Pre-manufactured products sub-systems; and
     o    System upgrades.

         A strategic decision was adopted by CSTI to be involved in the fiber
optic industry. Since May 2002 to date five types of processing machines have
been developed to solve smooth fabrication and quality problems of the fibers.
These machines are to be manufactured for CSTI clients in the fiber industry.
The prototype of the first machine was launched in January 2005.

                                       12

<PAGE>

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

This discussion and analysis of the Company's financial condition and results of
operations is based on its consolidated financial statements that have been
prepared under accounting principles generally accepted in the United States of
America. All significant accounting policies are disclosed in note 2 to the
consolidated financial statements included in Form 10-KSB. The consolidated
financial statements and the related notes thereto should be read in conjunction
with the following discussion of the Company's critical accounting policies.
Critical accounting policies and estimates are:

     o    Revenue Recognition
     o    Use of Estimates

REVENUE RECOGNITION - The Company follows the percentage-of-completion method of
accounting for contracts that extend for periods in excess of one year.
Accordingly, income is recognized in the ratio that costs incurred bears to
estimated total costs. Adjustments to cost estimates are made periodically, and
losses expected to be incurred on contracts in progress are charged to
operations in the period such losses are determined. The aggregate of cost
incurred on contracts in progress in excess of related billings is shown as a
current asset, and the aggregate of billings on contracts in progress in excess
of related costs incurred as shown is a current liability.

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, the disclosure of contingent assets and
liabilities and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

















                                       13

<PAGE>

RESULTS OF OPERATIONS

The following table sets forth, as a percentage of total revenue, certain
consolidated statements of operations data for the periods indicated. These
operating results are not necessarily indicative of the results for any future
period.

<TABLE>
<CAPTION>

                                            THREE MONTHS                     SIX MONTHS
                                               ENDED                            ENDED
                                              JUNE 30,                        JUNE 30,
                                              -------                         --------
                                       2004             2003           2004                2003
                                       ----             ----           ----                ----

                                         %               %                 %                 %

<S>                                     <C>             <C>             <C>                <C>
Revenues                                100             100             100                100
Cost of revenues                         56              86              57                 70
Administrative and general               30              33              27                 28
Income (loss) from operations            14             (19)             16                  2
Interest (expense)                       (6)            (20)             (5)               (16)
Other (expense) income                   (4)            (41)              0                (18)
Income (loss) before provision
         for income taxes                 4             (80)             11                (32)
(Benefit) provision for income taxes      -               5               0                  2
                                       ----             ----             ----              ----

Net income (loss)                         4             (85)             11                (34)
                                       ====             ====            =====              ====
</TABLE>


THREE MONTHS ENDED JUNE 30, 2004 COMPARED WITH THREE MONTHS ENDED JUNE 30, 2003

REVENUES

Revenues in 2004 of $1,407,000 increased $427,000 (or 43.6%) from $980,000 in
2003. This increase was due to wake- up of world economy after few years of
slowdown of the Hi - tech industry. Management's strategic decision is to
continue to be a premier industry leader in Israel as well as to continue to
gain market share in the European and Central Asian markets. During the three
months ended June 30, 2004 and 2003, revenues to customers in Israel amounted to
$656,000 and $ 965,000, respectively. Revenues to non-domestic customers
amounted to $751,000 and $15,000 for the three months ended June 30, 2004 and
2003, respectively. In general, the Company is not dependent upon any single
customer or group of customers. The nature of the Company's business is such
that it works on several large contracts at any one time. Therefore, several
customers may comprise a significant portion of CSTI's revenues during any
fiscal period. Once the Company installs a system for its customer, the customer
is generally dependent on the Company for future upgrades of that system.

                                       14

<PAGE>

COST OF REVENUES

The following table sets forth a comparison of the costs of revenues for the
periods indicated:

                                                        THREE MONTHS ENDED
                                                             JUNE 30,
                                                      2 0 0 4         2 0 0 3
                                                      -------         -------
                                                (Chart Amounts are in Thousands)

Cost of materials and inventory                     $  264           $    379
Salaries, subcontractors and related expenses          311                305
Cost of service abroad                                  32                 13
Rent and taxes                                          47                  9
Vehicles and transportation                             59                 53
Equipment maintenance and insurance                     30                 43
Depreciation and Amortization                           47                 37
Miscellaneous                                            2                  6
                                                  ---------          ---------

Cost of Revenues                                    $  792           $    845
                                                  =========          ========

Cost of revenues has decreased by $53,000 (or 6%) to $792,000 in 2004 from
$845,000 in 2003. The decrease is in line with the overall decline in Company
cost. The purchase cost of materials significantly varied in 2004 versus 2003
Due to change in the scope of work. Materials, inventory costs and labor, as a
percentage of revenues was 41% in 2004 as compared to 70% in 2003. The average
number of employees during 2004 was 62 as compared to 60 for 2003. Other costs
such as rent and taxes, transportation, equipment maintenance and insurance and
depreciation have changed in relative proportion to the decrease in revenues.

GROSS PROFIT

Gross profit has increased by $480,000 (or 356%) to $615,000 in 2004 from
$135,000 in 2003. Gross profit margins remained varied at 44% in 2004 versus 14%
in 2003.










                                       15

<PAGE>

ADMINISTRATIVE & GENERAL EXPENSES

The following table sets forth details regarding selling, general and
administrative expenses for the periods indicated:

                                                     THREE MONTHS
                                                         ENDED
                                                        JUNE 30,
                                                 2004             2003
                                                 ----             ----
                                                 (chart in thousands)

Salaries and related expenses                   $  135            $  99
Professional fees                                  135               56
Telephone and office maintenance                    65              101
Travel vehicles and transportation                  12                9
Depreciation                                        28               24
Sales and marketing                                 44               39
                                                ------            ------

                                                $  419            $ 328
                                                ======            ======

Administrative & General Expenses ("SG&A") have increased $91,000 (or 28%) to
$419,000 in 2004 from $328,000 in 2003. The increase is primarily attributable
to the increase in revenue and the improvement of worldwide economy.

INTEREST EXPENSE

Interest expense decreased by $109,000 to $90,000 in 2004 from $199,000 in 2003.
The decrease is primarily attributable to a lower level of interest rate in 2004
as compared to 2003 and new investment by shareholders.

The decrease is primarily attributable to lower interest rates on credit lines
and notes payable in 2004 as compared to 2003, and the repayments of credit
lines and the conversion of the convertible notes into shares of the Company's
common stock in 2003.

                                       16

<PAGE>



OTHER INCOME (EXPENSE)

The decrease in other expense of $348,000 to $54,000 in 2004 as compared to of
$402,000 in 2003 is primarily the result of foreign currency translation
adjustments. Substantially all of the Company's sales are made in U.S. dollars.
In addition, a substantial portion of the Company's costs are incurred in U.S.
dollars. Since the U.S. dollar is the primary currency in the economic
environment in which the Company operates, the U.S. dollar is its functional
currency.

During the three months ended June 30, 2004 and 2003, certain assets and
liabilities were denominated in NIS (New Israeli Shekel) while the payments to
suppliers was linked to the U.S. dollar.

SIX MONTHS ENDED JUNE 30, 2004 COMPARED WITH THE SIX MONTHS ENDED JUNE 30, 2003
(AMOUNTS IN THOUSANDS UNLESS OTHERWISE INDICATED).

REVENUES

Revenues in the first six months of 2004 of $2,971,000 increased $639,000 (or
27%) from $2,332,000 in the first six months of 2003. This increase is mainly
due to wake-up of world economy after a few years of slowdown in Hi - Tech
industry sector. During the six months ended June 30, 2004 and 2003, revenues to
customers in Israel amounted to $1,336,000 and $2,075,000, respectively.
Revenues to Italian and other non-domestic costumers amounted to $1,635,000 and
$257,000 for the six months ended June 30, 2003 and 2002, respectively.

COST OF REVENUES
The following table sets forth a comparison of the costs of revenues for the
periods indicated:

                                                        SIX MONTHS ENDED
                                                            JUNE 30,
                                                    2 0 0 4           2 0 0 3
                                                    -------           -------
                                                (Chart Numbers are in Thousands)

Cost of materials and inventory                     $  671            $  622
Salaries subcontractors and related expenses           579               584
Cost of service abroad                                  50                68
Rent and taxes                                          88                58
Vehicles and transportation                            112               106
Equipment maintenance and insurance                     87                85
Depreciation                                            95                89
Miscellaneous                                            4                12
                                                    -------           -------
Cost of revenues                                    $1,686            $1,624
                                                    =======           =======

Cost of revenues has increased by $62,000 (or 3.8%) to $1,686,000 in the first
six month of 2004 from $1,624,000 in the first six months of 2003. Costs did not
significantly change as a result of changes in the scope of projects done. The
purchase cost of materials increased 8% in the first six months of 2004 over
2003. Materials, inventory costs and labor as a percentage of revenues was 42%
in the first six months of 2004 as compared to 52% in the first six months of
2003 reflecting. a change in scope of the projects done by the company. The
average number of employees during 2004 was 62 as compared to 60 for 2003. Other
costs such as rent and taxes, transportation, equipment maintenance and
insurance and depreciation have changed in relative proportion to the decrease
in revenues.

                                       17

<PAGE>

GROSS PROFIT

Gross profit has increased by $577,000 to $1,285,000 in the first six months of
2004 from $708,000 in the first six months of 2003. Gross profit percentage
increased to 43% in 2004 from 30% in 2003. During the six months ended June 30,
2004,a substantial portion of revenues was earned in Italy being a change in
trend from the comparative six month period for 2003. Further, the projects
worked on in the first six months of 2004 were more labor intensive than the
materials intensive projects of the first six months of 2003.


ADMINISTRATIVE & GENERAL EXPENSES

The following table sets forth details regarding administrative and general
expenses for the periods indicated:

                                                        SIX MONTHS ENDED
                                                            JUNE 30,
                                                  2 0 0 4             2 0 0 3
                                                  -------             --------
                                                (Chart Numbers are in Thousands)

Salaries and related expenses                    $   265              $     177
Professional fees                                    290                    161
Telephone and office maintenance                     107                    154
Travel vehicles and transportation                    22                     19
Depreciation                                          60                     57
Sales, marketing & miscellaneous                      59                     87
                                                  -------             ----------

                                                  $  802              $     655
                                                  =======             ==========

Administrative and general expenses ("SG&A") have increased by $ 147,000 (or
22%) to $802,000 in the first six months of 2004 from $655,000 in the first six
months of 2003. The increase is primarily attributable to the increase in
generating activities.

INTEREST EXPENSE

Interest expense decreased by $216,000 to $153,000 in the first six months of
2004 from $369,000 in the first six months of 2003. The decrease is primarily
attributable to the lower level of interest rates and new investment made by
shareholders in 2004 as compared to 2003.

The decrease is primarily attributable to lower interest rates on credit lines
and notes payable in 2004 as compared to 2003, and the repayments of credit
lines and the conversion of the convertible notes into shares of the Company's
common stock in 2003.

                                       18

<PAGE>

OTHER (EXPENSE) INCOME

The decrease in other (expense) income of $434,000, resulted in income of
$11,000 in the first six months of 2004 as compared to an expense of $(423,000)
in the first six months of 2003. This is primarily the result of a foreign
currency translation adjustment.

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2004, the Company had cash and cash equivalents of $586,000 as
compared to $54,000 at June 30, 2003.

Net cash used in operating activities was $933,000 for the six months ended June
30, 2004 as compared to $662,000 for the six months ended June 30, 2003.

Net cash (used in) provided by investing activities were $(17,000) and $44,000
for the six months ended June 30, 2004 and 2003, respectively. The $61,000
difference is primarily due to proceeds from the sale of property and equipment
of $44,000 in 2003, versus the acquisition of property and equipment in 2004 of
$14,000.

Net cash provided by financing activities was $948,000 and $649,000 for the six
months ended June 30, 2004 and 2003, respectively. The increase was primarily
due to the sale of the Company's common stock to support the Company's working
capital position in 2004 versus 2003.

THE FOLLOWING SUMMARIZES CERTAIN FINANCING OUTSTANDING AS OF JUNE 30, 2004:

[a] Bank Guarantees - Certain customers require the Company to obtain bank
guarantees of a portion of the contract undertaken. The Company has an agreement
with the bank under which such guarantees are available. In the event the
Company is unable to perform all aspects of the contracts, the bank will make
contractual payments to customers and then seek reimbursement from the Company.
As of June 30, 2004, the bank had extended approximately $96,000 in guarantees
to one customer.

In July 2004 the Company entered into a line of credit agreement for up to
$1,000,000. This line bears interest at LIBOR + 5%. The LIBOR rate at the date
of the Line was approximately 1.4%. This line is available through March 31,
2006, with prescribed repayments of principal and interest throughout the life
of the line of credit. This line is collateralized by the assignment of a
receivable from a customer of the Company's Italian subsidiary Clean Systems
Technology Italia S.r.l for approximately $983,000. In addition the Company has
placed into an escrow account 1,212,121 shares of its common stock with a value
of approximately $400,000, as security in the event of non-payment. The line
requires a credit extension fee of 2% of the available credit, or $20,000. This
fee has been recorded as a discount against net proceeds the line of credit, and
is being amortized as interest expense over the life of the line.

In the event of non-payment the lender may convert any unpaid portion of the
unpaid line of credit into shares of the Company's common stock at the lower of
$0.20 per share or 67% of quoted market price of the Company's common stock on
the date of conversion.

Through March 31, 2005, the Company has drawn approximately  $850,000 under this
line of credit.

                                       19

<PAGE>

Assuming there is no significant adverse change affecting the business, the
Company believes that additional equity funding and cash flow from operations
will be sufficient to fund its needs for at least the next twelve months.

ITEM 3. CONTROLS AND PROCEDURES.

            The Company maintains "disclosure controls and procedures," as such
term is defined in Rules 13a-15e and 15d-15e of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), that are designed to ensure that
information required to be disclosed in its reports, pursuant to the Exchange
Act, is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms, and that such information is accumulated
and communicated to its management, including its Chief Executive Officer and
Chief Financial Officer, as appropriate, to allow timely decisions regarding the
required disclosures. In designing and evaluating the disclosure controls and
procedures, management has recognized that any controls and procedures, no
matter how well designed and operated, can provide only reasonable assurances of
achieving the desired control objectives, and management necessarily is required
to apply its judgment in evaluating the cost benefit relationship of possible
controls and procedures.

            The Company's Chief Executive Officer and Chief Financial Officer
have evaluated the effectiveness of the Company's "disclosure controls and
procedures" as of the end of the period covered by this Quarterly Report on Form
10-QSB. Based on their evaluation, the principal executive officer and principal
financial officer concluded that the Company's disclosure controls and
procedures are effective. There were no significant changes in the Company's
internal controls or in other factors that could significantly affect these
controls subsequent to the date the controls were evaluated.
















                                       20

<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Other than as previously disclosed in the Company's Form 10-KSB, and the
attached financial statements, the Company is not party to any other material
legal proceedings.

ITEM 2. UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS

We sold an aggregate of 11,080,000 shares of Common Stock for gross proceeds of
$1,088,000. The sales were made pursuant to Section 4(2) of the Securities Act
of 1933, as amended.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

         None

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

         None

ITEM 5. OTHER INFORMATION

         None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits.

         31.1     Certification pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 2002.

         31.2     Certification pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 2002.

         32.1     Certification  pursuant  to  18  U.S.C. Section  1350, as
                  adopted pursuant to Section  906 of the Sarbanes-Oxley Act of
                  2002.

         32.2     Certification  pursuant  to  18  U.S.C. Section  1350, as
                  adopted pursuant to Section  906 of the Sarbanes-Oxley Act of
                  2002.

(b) Reports on Form 8-K.

         There were no reports filed on Form 8-K during the quarter ended June
30, 2004.


                                       21

<PAGE>

                                   SIGNATURES


In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on behalf by the undersigned, thereunto duly
authorized.


CLEAN SYSTEMS TECHNOLOGY GROUP, LTD.


Dated: April 12, 2005             By: /S/ JACOB LUSTGARTEN
                                  ------------------------
                                    Jacob Lustgarten
                                    Chief Executive Officer and
                                    Chairman of the Board


Dated: April 12, 2005             By: /S/ YONA LIEBOWITZ
                                  ----------------------
                                    Yona Liebowitz
                                    Chief Financial Officer