UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-QSB

                                   (Mark One)

              [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended   September 30, 2003
                                                   ------------------

       [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
          For the transition period from ______________ to ___________


                        Commission File Number: 33-31067


                         ITec Environmental Group, Inc.
        ----------------------------------------------------------------
        (Exact name of small business issuer as specified in it charter)

                    Delaware                             31-1705310
        ------------------------------              -------------------
       (State or other jurisdiction of                 (IRS Employer
        incorporation or organization)              Identification No.)

                       693 Hi Tech Parkway Suite 3, Oakdale, CA
                     --------------------------------------
                    (Address of principal executive offices)

                                 (209) 848-3900
                            -------------------------
                           (Issuer's telephone number)


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 such shorter
period that the issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
                      Yes [X]    No [  ]


State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of September 30, 2003, the issuer
had 58,012,008 shares of common stock, $.001 par value, outstanding.

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




<PAGE>

                         ITec Environmental Group, Inc.
                            30 September 2003 10-QSB


                                   INDEX


PART I - FINANCIAL INFORMATION                                    Page

Item 1.  Consolidated Financial Statements (Unaudited)             3

  Review Report of Independent Certified Public Accountant         3

  Consolidated Balance Sheets                                      4-5

  Consolidated Statements of Income and Comprehensive Income
    for the three months ended September 30, 2003 and 2002         6

   Consolidated Statements of Income and Comprehensive Income
    for the nine months ended September 30, 2003 and 2002          7

  Consolidated Statements of Changes in Stockholders' Equity       8

  Consolidated Statements of Cash Flows for the nine months
    ended September 30, 2003                                       9

  Notes to Consolidated Financial Statements                     10-20

Item 2.  Management's Discussion and Analysis of Financial
              Condition and Results of Operations                 21

Item 3.  Controls and Procedures                                  25

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings                                        25

Item 2.  Changes in Securities                                    26

Item 3.  Defaults upon Senior Securities                          26

Item 4.  Submission of Matters to a Vote of Security Holders      26

Item 5.  Other Information                                        26

Item 6.  Exhibits and Reports on Form 8-K                         26

            Certifications

SIGNATURES                                                        27



                                   2
<PAGE>

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements


            REVIEW REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT


The Shareholders
ITEC ENVIRONMENTAL GROUP
(A Development -Stage Company)


We have reviewed the accompanying balance sheet of Itec Environmental Group as
of September 30, 2003, and the related statements of operations for the three
months and nine months then ended and cash flows for the nine months then ended,
in accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants. All
information included in these financial statements is the representation of the
management of Itec Environmental Group.

A review of interim financial statements consists principally of inquiries of
Company personnel responsible for financial matters and analytical procedures
applied to financial data. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.

We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet of Itec
Environmental Group as of December 31, 2002, and the related consolidated
statements of operations, shareholders' equity, and cash flows for the year then
ended (not presented herein); and in our report dated March 28, 2003, we
expressed an unqualified opinion on those consolidated financial statements. In
our opinion, the information set forth in the accompanying condensed balance
sheet as of September 30, 2003 is fairly stated, in all material respects, in
relation to the consolidated balance sheet from which it has been derived.



/s/ Henry Schiffer, C.P.A.
---------------------
Henry Schiffer, C.P.A.
AAC
Beverly Hills, California
November 12, 2003


                                       3
<PAGE>


                             ITEC ENVIRONMENT GROUP
                          BALANCE SHEET (Consolidated)


                                                         As of          As of
                                                        9/30/03        12/31/02
                                                      -----------    ----------
                  ASSETS                              (Unaudited)
 Current Assets
       Cash & Cash Equivalents                        $   100,100    $        -
       Accounts Receivable (net)                          284,333        51,774
       Inventory                                           64,461       238,466
       Other                                                4,865         8,000
                                                      -----------    ----------
    Total Current Assets                                  453,759       298,240
 Fixed Assets
       Furniture & Equipment net of Depreciation          214,016       106,189
                                                      -----------    ----------
    Total Fixed Assets                                    214,016       106,189
 Other Assets
       Deposits                                            10,224         5,158
       Prepaid Expenses                                    63,803        10,472
       Note Receivable                                     94,183        50,368
       Prepaid License Fees                                17,500        25,000
       Other-misc                                           3,833        40,590
       Deferred Tax Asset                               1,636,995     1,636,996
                                                      -----------    ----------
    Total Other Assets                                  1,826,538     1,768,584
                                                      -----------    ----------
    Total Assets                                      $ 2,494,313    $2,173,013
                                                      ===========    ==========



See accompanying notes to financial statements.

                                       4
<PAGE>


                             ITEC ENVIRONMENT GROUP
                          BALANCE SHEET (Consolidated), Continued


                                                         As of          As of
                                                        9/30/03        12/31/02
                                                      -----------    ----------
                                                      (Unaudited)

                  LIABILITIES

Current Liabilities
       Accounts Payable                               $   706,255    $  782,995
       Accrued Liabilities                                103,281        83,883
       Accrued Payroll                                     67,228       131,891
       Payroll/Sales Tax Liabilities                        9,078        13,166
                                                      -----------    ----------
    Total Current Liabilities                             885,842     1,011,935
 Other Liabilities
       Deferred Revenue                                   475,190       170,000
       Note Payable GMA                                 2,146,463     1,915,230
       Provision for Income Taxes                       1,353,433     1,544,103
                                                      -----------    ----------
    Total Other Liabilities                             3,975,086     3,629,333
                                                      -----------    ----------
    Total Liabilities                                   4,860,928     4,641,268
                                                      -----------    ----------
                  EQUITY

    Preferred Stock, no par value
        10,000,000 shares authorized none
        issued & outstanding
    Common Stock, no par value,
       750,000,000 shares authorized, 58,012,008
       shares issued & outstanding at 9/30/03              58,012       254,715
    Paid in Capital                                     4,260,403     3,517,163
    Accum deficit current period                         (444,897)   (2,462,421)
    Accum deficit during
       Development stage                               (6,240,133)   (3,777,712)
                                                      -----------    ----------
    Total Stockholders' deficit                        (2,366,615)   (2,468,255)
                                                      -----------    ----------
 Total Liabilities & Stockholders' Equity             $ 2,494,313    $2,173,013
                                                      ===========    ==========



See accompanying notes to financial statements.

                                       5
<PAGE>
                             ITEC ENVIRONMENT GROUP
            CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME
                                  (Unaudited)
                                                Three Months Ended
                                            9/30/03             9/30/02
                                         ----------          ----------
 Revenues
    Fees                                 $        -          $        -
                                         ----------          ----------
       Total Income                               -                   -

 Cost of Goods Sold
    Commissions                                   -                   -
    Equipment Costs                               -                   -
                                         ----------          ----------
       Cost of Goods Sold                         -                   -

 Operating Expenses
    Consulting Fees                               -              86,700
    Payroll                                 164,002             150,126
    International Contract Service                               38,125
    Plant Expenses                            8,389                   -
    Professional Fees                        36,377              37,243
    Research and Development                      -               1,200
    Travel and Entertainment                 17,687              16,815
    Depreciation & Amortization              12,097               4,542
    Engineering                                   -              83,438
    Freight & Delivery                          675                 108
    Public Relations                            150               2,945
    Stockholder Expenses                     (1,467)             38,608
    Telephone                                 3,276              13,566
    Insurance                                21,691               6,784
    Rent                                     10,440               4,821
    Other-Misc                               (3,044)              4,693
    Repairs                                   1,879                 150
    Contract Labor                              251                 250
    Dues and Subscriptions                      677                 551
    Office Supplies                           1,834               2,620
    Office Equipment                            628                   -
    Equipment Lease                           1,249              (8,567)
    Postage                                     864               2,002
    Trade Shows and Printing                      -                 960
                                         ----------          ----------
       Total Operating Expenses             277,655             487,680

 Other Income(expense)
    Interest                                 (6,900)            (18,746)
    Currency Conversion Net Loss                  -                   -
    Other Income (net of expense)                                   794
    Income Tax                               85,367             149,135
                                         ----------          ----------
                                             78,467             131,183

       Total Net Income (Loss)           $ (199,188)         $ (356,497)
                                         ==========          ==========
 Shares Outstanding                      58,012,008          26,662,493
 EPS                                     $   (0.003)         $   (0.013)
 EPS - Fully Diluted                     $   (0.003)         $   (0.012)

See accompanying notes to financial statements.
                                       6
<PAGE>
                             ITEC ENVIRONMENT GROUP
            CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME
                                  (Unaudited)
                                                Nine Months Ended
                                           9/30/03            9/30/02
                                         ----------          ----------
 Revenues
    Fees                                 $  455,250          $        -
                                         ----------          ----------
       Total Income                         455,250                   -

 Cost of Goods Sold
    Commissions                                 200                   -
    Equipment Costs                         201,000                   -
                                         ----------          ----------
       Cost of Goods Sold                   201,200                   -

 Operating Expenses
    Consulting Fees                                             168,700
    Payroll                                 336,858             414,248
    International Contract Services          25,645             103,049
    Plant Expenses                           51,621                   -
    Professional Fees                       260,566             130,146
    Research and Development                  3,750              12,740
    Travel and Entertainment                 29,797              62,904
    Depreciation & Amortization              32,772              13,540
    Engineering                                   -             110,613
    Freight & Delivery                        5,737               8,627
    Public Relations                          4,350               7,715
    Stockholder Expenses                     (2,271)            183,947
    Telephone                                13,761              25,269
    Insurance                                44,497               6,695
    Rent                                     27,260               7,305
    Other-Misc                                  250               5,298
    Repairs                                   3,401               3,172
    Contract Labor                            2,845               2,966
    Dues and Subscriptions                    1,702               6,332
    Office Supplies                           5,128               9,412
    Office Equipment                            938                   -
    Equipment Lease                           6,301                  79
    Postage                                   2,270               5,868
    Trade Shows and Printing                     27               4,955
                                         ----------          ----------
       Total Operating Expenses             857,205           1,293,580

 Other Income(expense)
    Interest                                (32,412)            (76,232)
    Currency Conversion Net Loss                  -                   -
    Other Income (net of expense)                                   794
    Income Tax                              190,670             401,269
                                         ----------          ----------
                                            158,258             325,831

       Total Net Income (Loss)           $ (444,897)         $ (967,749)
                                         ==========          ==========
 Shares Outstanding                      58,012,008          26,662,493
 EPS                                     $   (0.008)         $   (0.036)
 EPS - Fully Diluted                     $   (0.007)         $   (0.034)

See accompanying notes to financial statements.
                                        7
<PAGE>


<TABLE>
<CAPTION>
                                        ITEC ENVIRONMENTAL GROUP
                       CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                 FOR THE PERIOD ENDED SEPTEMBER 30, 2003



                                    No. of Common    Stock        Additional      Accumulated     Total
                                    Stock Shares     Amount     Paid-In Capital     Deficit
                                    -----------------------------------------------------------------------

<S>                                  <C>          <C>           <C>               <C>           <C>
Balance at December 31, 2000           6,651,987     1,000                        $(1,396,093)  $(1,395,093)
                                     ----------------------------------------------------------------------

Balance at December 31, 2001          12,692,000   191,688       1,111,380         (3,777,713)   (2,474,645)
                                     ----------------------------------------------------------------------

Balance at December 31, 2002          41,997,068   254,715       3,517,163         (6,240,133)   (2,468,255)
                                     ----------------------------------------------------------------------

Balance at March 31, 2003             45,297,068   258,015       3,598,863         (6,420,465)   (2,563,587)

Balance at June 30, 2003              57,962,008    57,962       4,258,453         (6,485,841)   (2,169,426)
                                     ----------------------------------------------------------------------
Net Income for the period ended
    September 30, 2003                                                               (199,188)     (199,188)

Common Stock Issued for Services
    September 30, 2003                    50,000        50           1,950                            2,000
                                     ----------------------------------------------------------------------
Balance at September 30, 2003         58,012,008    58,012      $4,260,403        $(6,685,029)  $(2,366,614)
                                     ======================================================================
</TABLE>



See accompanying notes to financial statements.

                                       8
<PAGE>

                             ITEC ENVIRONMENT GROUP
                     STATEMENTS OF CASH FLOWS (CONSOLIDATED)
                                  (Unaudited)
                                                          Nine Months Ended
                                                         9/30/03       9/30/02
                                                       ----------    ----------
Cash Flows From Operating Activities

   Net Income                                          $ (444,897)   $ (967,749)
   Adjustments to reconcile Net Income
   to net cash provided by operations:
      Increase/Decrease in accounts receivable           (232,553)       (1,368)
      Increase/Decrease in Inventory                      156,973       (41,119)
      Increase/Decrease in accounts payable, accrued          -             -
      expenses and other                                 (115,637)       50,636
      Increase/Decrease in provision for income taxes    (190,670)     (401,269)
      Increase/Decrease in deferred revenue               305,191
      Increase/Decrease in other assets                   (27,396)       (9,259)
                                                       ----------    ----------
Net Cash provided by Operation Activities                (548,989)   (1,370,128)
                                                       ----------    ----------

Cash Flows From Investing Activities
      PP&E                                                (90,796)      (40,287)
      License Fee                                           7,500         7,500
      Deposits                                             (5,070)         (900)
      Notes Receivable                                    (26,025)
      Web Site                                             (3,833)
      Intercompany                                                    1,406,763
                                                       ----------    ----------
      Net cash used in investing activities              (118,224)    1,373,076
                                                       ----------    ----------

Cash Flows From Financing Activities
      Notes paybale                                       232,565
      Issuance of common stock                           (196,703)     (191,688)
      Capital raised                                      743,241       191,688
                                                       ----------    ----------
      Net Cash provided by Financing Activities           779,103           -
                                                       ----------    ----------

Net Cash increase for period                              111,890         2,948
                                                       ----------    ----------
Cash at beginning of period                               (11,791)        4,253

Cash at end of period                                  $  100,099    $    7,201
                                                       ==========    ==========


See accompanying notes to financial statements.

                                       9
<PAGE>

                  ITEC ENVIRONMENTAL GROUP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2003

NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

     (a)  General
          -------

Beechport Capital Corp. ("Beechport") was organized as a Colorado corporation on
January 24, 1989, in order to evaluate,  structure and complete a merger with or
acquisition of, prospects consisting of private companies,  partnerships or sole
proprietorships.

ITEC Environmental  Group, Inc. ("Itec" or the "Company") was incorporated under
the laws of the State of  Delaware  on March 28,  2000.  Itec was formed for the
purpose of  acquiring  certain  patented  technology  and the  development  of a
worldwide market for its usage.

On May 4, 2001 Beechport  entered into a share  exchange  agreement with Itec to
acquire  all the  issued  and  outstanding  shares  of  common  stock of Itec in
exchange  for  6,651,987  shares of  Beechport's  common  stock.  This  business
combination  resulted in the shareholders of ITEC owning  approximately 66.5% of
the issued and outstanding  shares of the Beechports's  common stock (10,000,000
shares were  outstanding  upon  completion  of the  transaction),  and Beechport
holding 100% of the issued and outstanding shares of Itec's common stock.

At a special September 27, 2002 meeting of the shareholders of Beechport Capital
Corp.,  the  Company  authorized  a merger of  Beechport  into its  wholly-owned
subsidiary, Itec Environmental Group, Inc.

The  Company's  business  plan is to attempt to build on the  foundation  of the
patented  technology and proprietary  equipment and to form strategic  alliances
and a  management  team to become a worldwide  supplier of oil and  agricultural
chemical  container  recycling  equipment  and related  systems.  The  Company's
initial  marketing  of the  technology  will be  concentrated  in Italy,  but is
intending to market in the future in the United States and other countries.

The  Company's  subsidiary,   ECO2  Environmental  Systems,  Inc.  ("ECO2")  was
incorporated under the laws of the State of Delaware on April 10, 2000. The only
activity to date has been the registration of a trademark for ECO2.


                                       10
<PAGE>

NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES, Continued

     (b)  Basis of Presentation
          ---------------------

The accompanying unaudited interim financial statements of the Company have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States for interim financial information.

Accordingly,  they do not include all of the  information  and notes required by
accounting  principles  generally  accepted  in the United  States for  complete
financial  statements.   The  accompanying   financial  statements  reflect  all
adjustments (consisting of normal recurring accruals), which are, in the opinion
of management,  considered  necessary for a fair presentation of the results for
the interim periods presented. Operating results for the quarter ended September
30, 2003 are not necessarily  indicative of the results that may be expected for
the fiscal year ending December 31, 2003. These financial  statements  should be
read in  conjunction  with the  audited  financial  statements  included  in the
Company's amended Annual Report on Form 10-KSB/A for the year ended December 31,
2002.

     (c)  Per Share Information
          ---------------------

Basic net earnings  (loss) per common share is computed by dividing net earnings
(loss)  applicable  to common  shareholders  by the  weighted-average  number of
common shares  outstanding  during the period.  Diluted net earnings  (loss) per
common share is determined  using the  weighted-average  number of common shares
outstanding during the period,  adjusted for the dilutive effect of common stock
equivalents,  consisting  of shares that might be issued upon exercise of common
stock options or warrants.

     (d)  Furniture and Equipment
          -----------------------
Property and equipment are recorded at cost.  Depreciation  is provided over the
estimated useful lives of the related assets using the straight-line  method for
financial  statement  purposes.  The  Company  uses other  depreciation  methods
(generally,   accelerated   depreciation   methods)  for  tax   purposes   where
appropriate.  Amortization  of  leasehold  improvements  is  computed  using the
straight-line  method  over  the  shorter  of the  remaining  lease  term or the
estimated useful lives of the improvements.

     (e)  Revenue and Expense Recognition
          -------------------------------

As of September 30, 2003, the Company had revenue of $455,000 for the nine month
period  then ended.  The Company  intends to  recognize  revenues  from sales of
equipment upon delivery as earned as per SAB 101.

Amounts  billed in advance of the  period in which a service  is  rendered  or a
product is delivered are recorded as a liability  under "Deferred  Revenue".  At
September  30,  2003,  deferred  revenue  for the nine month  period  then ended
totaled $475,190 for the sale of ECO2 systems not yet shipped.


                                       11
<PAGE>

NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES, Continued

     (e)  Revenue and Expense Recognition, continued
          ------------------------------------------

Itec's  primary  revenue  source,  the  ECO2TM  Environmental  System,  is a new
cost-effective,   environmentally  sensitive  technology  for  cleaning  plastic
contaminated  by  substances  that make most  types of  plastic  ineligible  for
traditional  recycling  programs.  Itec will also provide additional services to
purchasers of the ECO2TM  Environmental  System in exchange for recurring  fees.
These services will include:  extended warranty upgrades,  technical support and
trouble-shooting,  training for operators, consulting for material feedstock and
product sales,  and software  upgrades that will allow the ECO2TM  Environmental
System to clean other contaminated  plastic materials.  It is intended that this
recurring revenue or royalty fees will average 9% of annual gross revenue of our
customers  for a period of five  years.  Our  revenue  should be in the range of
$28,000 - $35,000 per system per year.  We also intend to require  purchasers of
the ECO2TM Environmental  System to enter into five year maintenance  agreements
providing for fees of $25,000 per year,  payable in equal monthly  installments,
for telephonic monitoring of the ECO2TM System and software upgrades.

Effective January 1, 2001, the Company adopted SFAS No. 131,  "Disclosures about
Segments of an Enterprise  and Related  Information".  As of September 30, 2003,
revenue  attributed to foreign sales was $450,000 for the nine month period then
ended with all sales being earned in Italy.

The  Company  contracts  with  others for the  manufacturing  of the  equipment.
General and administrative expenses and the costs of advertising are expensed as
incurred.

     (f)  Concentrations
          --------------

Financial  instruments that potentially subject the Company to concentrations of
credit  risk  consist   principally  of  temporary  cash  investments  and  cash
equivalents and trade accounts  receivables.  At September 30, 2003, the Company
had no amounts of cash or cash  equivalents in U.S.  financial  institutions  in
excess of amounts insured by agencies of the U.S.  Government.  At September 30,
2003,  the  Company  had  net  trade  receivables  of  $284,333.  Initial  trade
receivables  are  expected to be  principally  from  customers  in Italy.  Since
initial  anticipated   customers  will  be  from  one  geographic   location,  a
concentration  of credit risk could exist due to  potential  changes in economic
activity in that area.  The Company  does not require  collateral  for its trade
accounts receivables.

     (g)  Cash Equivalents
          ----------------

The Company considers all short-term investments in securities that mature in 90
days or less to be cash equivalents.


                                       12
<PAGE>

NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES, Continued

     (h)  Allowance for Doubtful Accounts
          -------------------------------

An   allowance   for  doubtful   accounts  is  provided  to  reflect   potential
uncollectible  receivables.  As of September  30, 2003,  Allowance  for Doubtful
Accounts was $186,605 of which $121,480 is for a note receivable from an officer
stockholder without adequate collateral.

         (i)  Use of Estimates in the Preparation of Financial Statements
          -----------------------------------------------------------The
preparation  of financial  statements  in  conformity  with  generally  accepted
accounting principles 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 financial  statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.

      (j)  Geographic Area of Operations
          -----------------------------

Currently, the Company operates its business principally in Italy. The potential
for severe  financial  impact  can  result  from  negative  effects of  economic
conditions within the markets or geographic areas.  Since the Company's business
is  principally  in one area,  this  concentration  of operations  results in an
associated risk and uncertainty.

     (k)  Goodwill and Intangible Assets
          -----------------------------
Effective  July 1, 2001, the Company  adopted SFAS No. 142,  "Goodwill and Other
Intangible  Assets,"  which  requires that goodwill and  intangible  assets with
indefinite lives no longer be amortized but rather be reviewed annually, or more
frequently if impairment indicators arise, for impairment.  Separable intangible
assets  that are not  deemed  to have an  indefinite  life will  continue  to be
amortized  over their useful  lives.  In  assessing  the  recoverability  of the
Company's goodwill and intangibles,  the Company must make assumptions regarding
estimated future cash flows and other factors to determine the fair value of the
respective  assets. If these estimates or assumptions  change in the future, the
Company may need to record an impairment  charge for these assets. An impairment
charge would reduce  operating  income in the period it was determined  that the
charge was needed.

         (l) Development Stage Company
             -------------------------

The Company  adopted SFAS No. 7 "Accounting  and Reporting by Development  Stage
Enterprises".  This  Statement  specifies  the  guidelines  for  identifying  an
enterprise in the  development  stage and the standards of financial  accounting
and reporting for such an enterprise.  This Statement requires development stage
companies to do their accounting and to prepare their financial statements using
the same accounting principles as established operating companies.


                                       13
<PAGE>

NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES, Continued

         (m) Future Impact of Recently Issued Standards
             ------------------------------------------

In June 2001,  the FASB  issued SFAS No. 143,  Accounting  for Asset  Retirement
Obligations.  SFAS No.  143  requires  that we record the fair value of an asset
retirement  obligation  as a  liability  in the period in which we incur a legal
obligation  associated  with the  retirement  of tangible long lived assets that
resulted from the acquisition,  construction,  development, and/or normal use of
the assets. We would also record a corresponding  asset that is depreciated over
the life of the  asset.  Subsequent  to the  initial  measurement  of the  asset
retirement obligation, the obligation will be adjusted at the end of each period
to reflect the passage of time and  changes in the  estimated  future cash flows
underlying  the  obligation.  Our adoption of SFAS No. 143 effective  October 1,
2002 did not have a significant impact on our financial statements.  However, in
the event that we make  alterations to certain leased  facilities in the future,
our  landlord  may be  entitled  to  require  us to restore  the  property  upon
termination  of the  related  lease at our  expense.  As such,  any  significant
alterations  might  have  a  material  impact  on  our  consolidated   financial
statements.

In June 2001,  the FASB  issued  SFAS No.  142,  Goodwill  and Other  Intangible
Assets.  SFAS  No.  142  requires  that  goodwill  and  intangible  assets  with
indefinite  useful  lives no longer be  amortized,  but  instead  be tested  for
impairment at least annually in accordance  with the provisions of SFAS No. 142.
SFAS No. 142 also requires that intangible  assets with definite useful lives be
amortized  over  their  respective  estimated  useful  lives to their  estimated
residual  values,  and reviewed for impairment in accordance  with SFAS No. 121,
Accounting for the Impairment of Long-Lived  Assets and for Long-Lived Assets to
Be  Disposed  Of.  Goodwill  and other  intangible  assets  acquired in business
combinations  completed  before July 1, 2001 are amortized until the adoption of
SFAS No. 142, after which only intangible assets with definite useful lives will
continue to be  amortized.  Our adoption of SFAS No. 142 effective on October 1,
2002 did not result in a transitional  impairment charge, change of useful lives
or residual values of intangible  assets acquired,  or the  reclassification  of
existing  intangible assets to conform with new classification  criteria in SFAS
No. 141. We will perform an annual  goodwill  impairment  test during the fourth
quarter of each fiscal year. There can be no assurance that at the time the test
is completed an impairment charge may not be recorded.



                                       14
<PAGE>

NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES, Continued

         (m) Future Impact of Recently Issued Standards, continued
             ------------------------------------------

In August 2001,  the FASB issued SFAS No. 144,  Accounting for the Impairment or
Disposal of Long-Lived  Assets,  which  supersedes  both SFAS Statement No. 121,
Accounting for the Impairment of Long-Lived  Assets and for Long-Lived Assets to
Be Disposed Of, and the accounting  and reporting  provisions of APB Opinion No.
30, Reporting the Results of Operations--Reporting  the Effects of Disposal of a
Segment of a Business,  and  Extraordinary,  Unusual and Infrequently  Occurring
Events  and  Transactions,  for the  disposal  of a segment  of a  business  (as
previously  defined in that  Opinion).  SFAS No.  144  retains  the  fundamental
provisions in SFAS No. 121 for  recognizing and measuring  impairment  losses on
long-lived  assets held for use and long-lived assets to be disposed of by sale,
while also resolving significant implementation issues associated with SFAS 121.
For example,  SFAS No. 144 provides  guidance on how a long-lived  asset that is
used as part of a group should be evaluated for impairment, establishes criteria
for when a long-lived  asset is held for sale, and prescribes the accounting for
a  long-lived  asset that will be disposed  of other than by sale.  SFAS No. 144
retains  the  basic  provisions  of APB No.  30 on how to  present  discontinued
operations  in the statement of operations  but broadens  that  presentation  to
include a component of an entity  (rather than a segment of a business).  Unlike
SFAS No. 121 an impairment  assessment under SFAS No. 144 will never result in a
write-down of goodwill.  Rather, goodwill is evaluated for impairment under SFAS
No. 142, Goodwill and Other Intangible Assets. We adopted the provisions of SFAS
No. 144 effective October 1, 2002. The adoption of SFAS No.
144 did not have a significant impact on our Consolidated Financial Statements.

In July 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal  Activities.  SFAS No. 146 revises the accounting for specified
employee and contract terminations that are part of restructuring activities and
nullifies  Emerging Issues Task Force (EITF) Issue 94-3,  Liability  Recognition
for Certain Employee  Termination  Benefits and Other Costs to Exit an Activity.
Companies will be able to record a liability for a cost  associated with an exit
or disposal  activity only when the liability is incurred and can be measured at
fair  value.  Commitment  to an exit plan or a plan of disposal  expresses  only
management's intended future actions and therefore does not meet the requirement
for  recognizing a liability and related  expense.  SFAS No. 146 only applies to
termination  benefits  offered for a specific  termination  event or a specified
period.  It will not  affect  accounting  for the costs to  terminate  a capital
lease.  We are  required to adopt SFAS No. 146 for exit or  disposal  activities
initiated  after  December 31,  2002.  We are  evaluating  this new standard but
expect that the effects of  adoption,  if any,  would  relate  solely to exit or
disposal activities undertaken in the future.

In November 2002, the FASB issued  Interpretation  No. 45 (FIN 45),  Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  Including  Indirect
Guarantees of Indebtedness to Others,  an  interpretation of FASB Statements No.
5, 57 and 107 and a rescission of FASB  Interpretation No. 34. FIN 45 elaborates
on the disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under guarantees  issued. FIN 45 also clarifies
that a guarantor  is required to  recognize,  at  inception  of a  guarantee,  a
liability  for  the  fair  value  of  the  obligation  undertaken.  The  initial
recognition  and  measurement  provisions of FIN 45 are applicable to guarantees
issued or  modified  after  December  31,  2002 and are not  expected  to have a
material effect on our Financial Statements.

                                       15
<PAGE>

NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES, Continued

         (m) Future Impact of Recently Issued Standards, continued
             ------------------------------------------

In December  2002,  the FASB issued SFAS No.  148,  Accounting  for  Stock-Based
Compensation--Transition and Disclosure--an amendment of FASB Statement No. 123.
SFAS No. 148 amends SFAS No. 123,  Accounting for Stock Based  Compensation  and
provides  alternative  methods for accounting for a change by registrants to the
fair value method of accounting for stock-based compensation. Additionally, SFAS
No. 148 amends the disclosure requirements of SFAS No. 123 to require disclosure
in the  significant  accounting  policy  footnote  of both  annual  and  interim
financial  statements of the method of accounting for  stock-based  compensation
and the related pro-forma  disclosures when the intrinsic value method continues
to be used.  SFAS No. 148 is effective for fiscal years ended after December 15,
2002, and disclosures are effective for the first fiscal quarter beginning after
December 15, 2002.  We do not believe that  adoption of SFAS No. 148 will have a
material  effect on our financial  condition or results of  operations.  We will
continue to apply the intrinsic value method of accounting prescribed by APB No.
25, Accounting for Stock Issued to Employees.

In January 2003, the FASB issued  Interpretation No. 46 (FIN 46),  Consolidation
of Variable Interest Entities, an interpretation of ARB No. 51. FIN 46 addresses
the  consolidation  by business  enterprises  of variable  interest  entities as
defined in the Interpretation. FIN 46 is effective for all new variable interest
entities  created or acquired  after  January 31, 2003.  For  variable  interest
entities  created or acquired prior to February 1, 2003 the provisions of FIN 46
must be applied for the first interim period  beginning after June 15, 2003. The
application of FIN 46 is not expected to have a material effect on the Company's
condensed  consolidated  financial  statements.  The  Company  does not have any
variable  interest  entities,  therefore this  Interpretation is not expected to
have an impact on its consolidated financial statements.


NOTE 2 - BASIS OF PRESENTATION - GOING CONCERN

The  accompanying  financial  statements  have been prepared in conformity  with
generally accepted accounting principles, which contemplates continuation of the
Company as a going concern.  However,  the Company has suffered recurring losses
from operations and has a net capital  deficiency that raises  substantial doubt
about the  Company's  ability to  continue  as a going  concern.  Management  is
attempting to raise  additional  equity.  The Company filed a Form SB-2A on June
20,  2003,  in an effort to raise up to $5 million in  additional  equity.  This
registration filing is currently under review by the SEC. There is no guarantee,
however,  that this  offering  or any other  efforts  will result in the Company
raising sufficient capital or any capital or additional financing.

In view of these  matters,  continuing as a going concern is dependent  upon the
Company's ability to meet its financing requirements,  raise additional capital,
and the success of its future operations or completion of a successful  business
combination.  Management plans to pursue  financing  arrangements and aggressive
sales of equipment to remedy the capital and loss  circumstances  to provide the
opportunity for the Company to continue as a going concern.

                                       16
<PAGE>

NOTE 3 - COMMON STOCK

The Articles of Incorporation of Itec authorize a maximum of 750,000,000  shares
of $0.001  par value  common  stock and  10,000,000  shares of $0.001  par value
preferred stock. Each share of common stock is entitled to one voting right, the
right to share in earnings,  and the right to share in assets upon  liquidation.
At  September  30,  2003,  58,012,008  shares of common  stock  were  issued and
outstanding.

As previously discussed, on May 4, 2001, Beechport entered into a share exchange
agreement with Itec to acquire all the issued and  outstanding  shares of common
stock of Itec in exchange for 6,651,987 shares of Beechport's common stock. This
business  combination  resulted in the shareholders of Itec owning approximately
66.5% of the  issued  and  outstanding  shares  of the  Company's  common  stock
(10,000,000 shares were outstanding upon completion of the transaction), and the
Company  holding  100% of the issued  and  outstanding  shares of Itec's  common
stock.

This  transaction is a  recapitalization  of Itec, with no revaluation of assets
and liabilities.  Beechport was a shell  corporation at the time of the exchange
and therefore the acquisition was not recorded as a purchase transaction.

During third quarter 2003,  50,000 restricted common stock shares were issued to
a vendor for services rendered as part of our SB-2A  registration.  These shares
are included as part of our current registration  offering. The five day average
closing price of the shares was $.04.

The  Company  filed its Form  SB-2A on June 20,  2003,  in an effort to raise an
additional $5 million in equity.  This registration is currently under review by
the SEC.


NOTE 4 - NOTES PAYABLE

The Company entered into an agreement with Glenwood Marketing Associates,  Inc.,
(GMA)  effective  April 25, 2000,  whereby GMA agreed to lend  $1,100,000 to the
Company.  From this  $1,100,000  loan,  the  Company  agreed to pay  $200,000 of
capital  formation  fees to GMA.  These fees were expensed in the year incurred.
The loan  bears  interest  at 10% per annum  payable in  monthly  interest  only
payments for the 36-month term of the loan.

The Company has also conveyed a covenant, so long as GMA acts in accordance with
the terms of the  agreement,  to hold GMA harmless  from any and all claims that
may accrue  and to  indemnify  and hold GMA  harmless  from any and all  losses,
claims,  liabilities and expenses,  including reasonable costs of investigation,
counsel  fees and  disbursements,  which may be imposed  upon or incurred by GMA
with the conduct of its own business with the Company.

In June 2003, the Company filed a lawsuit against Glenwood Marketing Associates,
Inc.,  for  declaratory  relief  from  the note  outstanding  in the  amount  of
$1,100,000.   This  proceeding  was  filed  in  California  Superior  Court  for
Stanislaus County. Service was effected on the defendant in June 2003.


                                       17
<PAGE>

NOTE 4 - NOTES PAYABLE, Continued

In June 2003,  Glenwood Marketing  Associates,  Inc. filed a lawsuit against the
Company  seeking a Temporary  Restraining  Order to refrain from entering into a
Line of Credit with or transfer of stock to Cornell Capital. This proceeding was
filed in Supreme  Court of the State of New York for Nassau  County.  In August,
this  action was moved into the United  States  District  Court for the  Eastern
District  of New York.  In  November  2003,  Itec filed a motion for a change of
venue to the United States District Court, Eastern District of California.

In July 2003,  the Company  withdrew its lawsuit for  declaratory  relief in the
amount of  $1,100,000  against  Glenwood  Marketing  Associates,  Inc.  filed in
California Superior Court for Stanislaus County.

In July,  the  Company  borrowed  $100,000  through a Note  Payable  bearing  8%
interest  annually  due and payable in  December  2003.  In August,  the Company
rolled the aforementioned  $100,000 Promissory Note due in December, 2003 into a
new  $600,000  Promissory  Note  Payable  bearing 8% interest  annually  due and
payable in January 2004.


NOTE 5 - LEASES

Effective  April 2001,  the Company  entered into a lease  agreement  for office
facilities in  California.  Under terms of the lease,  the Company agreed to pay
monthly  lease  payments  of $900 for 36 months.  This lease was  terminated  in
February 2003 without cost to the Company.

Effective  January 2003, the Company  entered into a lease  agreement for office
and plant facilities in California. Under terms of the lease, the Company agreed
to pay monthly lease payments of $3,480 for 24 months.

Effective  January 2003 the Company  entered into various lease  agreements  for
office and plant equipment. The terms of these leases vary from 24 to 60 months.

Future minimum rentals under these operating leases are as follows:

                    Year Ending December 31,
                            2003                             19,486
                            2004                             59,603
                            2005                             20,283
                            2006                             10,048
                            2007                              8,903
                                                       ------------
                            Total                      $    118,323
                                                       ============



                                       18
<PAGE>

NOTE 6 - TECHNOLOGY LICENSE

Effective  June 30, 2000,  the Company  entered into a five-year  patent license
agreement with Honeywell  International,  Inc. (Honeywell),  whereby the Company
obtained a  non-exclusive,  nontransferable  worldwide  license to practice  the
methods  and to  make,  use,  and  sell,  the  products  and/or  covered  by the
proprietary  rights,  limited to the field of use of separating  and  recovering
motor  oil from  high  density  polyethylene  plastic.  Under  the  terms of the
agreement,  the Company agreed to pay a $50,000  non-refundable  initial license
fee and an additional  minimum  annual royalty  commencing  upon delivery of the
first  equipment  to an Itec  customer,  of the  greater of $50,000 or 5% of the
gross sales of all products and or services  sold in the United States and 3% of
the products and or services sold in countries other than the United States. The
initial  license  fee of $50,000 is not  creditable  toward the  minimum  annual
royalty and was payable in three equal  installments.  The first installment was
due upon the execution of the contract,  the second on December 1, 2001, and the
third on April 1, 2001. At March 31, 2002, $33,333 was accrued as a liability.

On April 25, 2001, Honeywell revised the payment schedule to reflect the updated
delivery  schedule so that the previous  December 1, 2001 payment was due on May
30, 2002 and the final  payment due December 31, 2003. As of September 30, 2003,
the $16,667 paid and the additional  $33,333  accrued have been accounted for as
prepaid expenses based upon the revised  agreement,  whereby these amounts apply
only  upon  shipment  of the  first  equipment  systems.  The  amounts  are  not
refundable  and will be expensed upon  shipment.  This  agreement  automatically
renews for additional  one-year  periods after the end of the initial  five-year
term unless  written  notice is given by either party of its intent to terminate
the agreement. Honeywell may terminate this agreement in the event of bankruptcy
or insolvency of the Company,  an assignment for the benefit of creditors of the
Company,  the  nationalization of the industry which encompasses any products or
services,  any  suspension  of  payments  under  the terms of the  agreement  by
government  regulation,   the  Company's  failure  to  commence  manufacture,  a
substantial  change in ownership of the Company (whether  resulting from merger,
acquisition,  consolidation  or otherwise),  another company or person acquiring
control of the  Company,  or the  existence of a state of war between the United
States and any country where the Company has a license to  manufacture  products
or provide services.  In addition, if either party to the agreement defaults for
any reason in any of the obligations under the terms of the agreement, the other
party will have the right to terminate  the agreement by giving at least 60 days
written notice.

There are no rights to  sub-license  granted under the terms of this  agreement.
The Company has agreed to invest in the commercial development of the technology
and market for the product by committing resources at minimum in accordance with
various requirements as set forth in the commercialization  plan provided by the
Company for consideration to Honeywell when the Company applied for the license.
The terms of the agreement  require the Company to observe all applicable United
States and foreign  laws,  regulations,  rules,  and decrees with respect to the
transfer  of the  proprietary  rights  and  related  technical  data to  foreign
countries  and failure to conform to such laws,  regulations,  rules and decrees
may result in criminal liability.



                                       19
<PAGE>

NOTE 6 - TECHNOLOGY LICENSE, Continued

The  $50,000  license  fee is  recorded  as an  intangible  asset  and is  being
amortized  over  the  initial  five  year  term of the  license  agreement  on a
straight-line  basis.  Management's  policy with respect to  long-lived  assets,
including  intangible assets, is to periodically review the carrying amounts, at
least  annually,  to determine if there is any impairment in the carrying value.
As of September 30, 2003, management believes that there is no impairment in the
carrying value of any of its long-lived assets.


NOTE 7 - RECEIVABLE RELATED PARTY

On July 5, 2000,  the Company's  Board of Directors  approved and authorized the
Company  to  make a loan of  $250,000  to the  Company's  President.  The  loan,
according to the minutes of the Board  meeting,  is interest  only for ten years
with the total principal due at the end of ten years.  Interest in the amount of
$18,958 has been waived in the year ended  December  31, 2002 and $9,479 in year
ended December,  2001 by the board of directors and was recorded as compensation
expense in the  respective  periods.  As of  September  30,  2003,  $161,973 was
advanced on the loan.  An allowance of $121,480 has been  recorded  against this
receivable.


NOTE 8 - AGREEMENT
The Company has  entered  into an  agreement  with Cesmet  Laboratories  SRL, an
Italian  company for a cooperative  effort and the  oversight of ITEC's  Italian
operations.  The fees for this  agreement are on a time and expense basis billed
monthly. A director of the Company is a 50% owner of Cesmet Laboratories SRL.


NOTE 9 - SUBSIDIARY

On April 11, 2001, ITEC formed a wholly owned  subsidiary and incorporated it as
a Delaware corporation known as ECO2 Environmental Systems. The only activity to
date was the registration of a trademark for ECO2.


NOTE 10 - SUBSEQUENT EVENTS

In  November  2003,  Itec filed a motion  for a change of venue in the  Glenwood
Marketing Associates,  Inc. lawsuit to the United States District Court, Eastern
District of California.





                                       20
<PAGE>


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

Itec continues to operate as a "Development Stage Company".

During the next twelve months Itec intends to continue marketing its ECO2
cleaning system for eventual sales. In February 2003, Itec opened a plastic
recycling plant in Oakdale, California to be used as a testing and research
facility. Itec continues to develop and refine its ECO2 cleaning process.

Expenses for the three months ending September 30 2003 were as follows:
Professional Fees & Consulting $36,400; Payroll $164,000;
Interest $6,900; G&A $77,300.

We do not have sufficient cash or lines of credit for the next twelve months to
remain operational and pay our debts and expenses as they come due, but are in
the process of raising funds through a registered offering. Through this
offering, we expect to have sufficient cash or lines of credit to satisfy our
needs for the twelve months ending September 30, 2004. The "offering" refers to
an equity line of credit via Cornell Capital for which Itec has filed an SB-2A
with the SEC on June 20, 2003. As of September 30, 2003, the SEC was still
reviewing our registration statement.

As of September 30, 2003, the testing and evaluation of the first Gen-2 system
delivered to our first Italian customer continues. Further manufacturing and
delivery of Gen-2 ECO2 systems will continue once those results and evaluations
have been completed.

The Italian Governments IG program which is the primary funding source for our
Italian customers continues to move at a very slow pace. Itec continues to
receive assurances from the Italian Government that the IG program is on
schedule and all funding is available. Due to the extended time that the Italian
program has taken, however, Itec may explore other business opportunities and
options available to it in the future.

Forward-Looking Statements

In addition to historical information, this Quarterly Report on Form 10-QSB
contains forward-looking statements that involve risks and uncertainties that
could cause our actual results to differ materially. Factors that might cause or
contribute to such differences include, but are not limited to, those discussed
in the section entitled "Management's Discussion and Analysis of Financial
Position and Results of Operations--Risk Factors." When used in this report, the
words "expects," "anticipates," "intends," "plans," "believes," "seeks,"
"estimates" and similar expressions are generally intended to identify
forward-looking statements. You should not place undue reliance on these
forward-looking statements, which reflect our opinions only as of the date of
this Quarterly Report. We undertake no obligation to publicly release any
revisions to the forward-looking statements after the date of this document. You
should carefully review the risk factors described in other documents we file
from time to time with the Securities and Exchange Commission, including the
Annual Report on Form 10-KSB for the fiscal year ended December 31, 2002 and the
other Quarterly Reports on Form 10-QSB filed by us in our fiscal year 2003,
which runs from January 1, 2003 to December 31, 2003.

                                       21
<PAGE>

Critical Accounting Policies and Estimates

Management's Discussion and Analysis of Financial Condition and Results of
Operations discusses the Company's condensed consolidated financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States. The preparation of these condensed consolidated
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the condensed consolidated
financial statements and the reported amounts of revenues and expenses during
the reporting period. We believe that the estimates, judgments and assumptions
upon which we rely are reasonable based upon information available to us at the
time that these estimates, judgments and assumptions are made. To the extent
there are material differences between these estimates, judgments or assumptions
and actual results, our financial statements will be affected.

On an on-going basis, management evaluates its estimates and judgments,
including those related to revenue recognition, bad debts, inventories, income
taxes and intangibles. Management bases its estimates and judgments on
historical experience and on various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions. Management believes the
following critical accounting policies, among others, affect its more
significant judgments and estimates used in the preparation of its condensed
consolidated financial statements.

Deferred Tax Assets

The Company has approximately $1.6 million in deferred tax assets as of
September 30, 2003 to record against future income. The Company does not have a
valuation allowance against this asset as it believes it is more likely than not
that the tax assets will be realized. The Company has considered future income
expectations and prudent tax strategies in assessing the need for a valuation
allowance. In the event the Company determines in the future that it needs to
record a valuation allowance, an adjustment to deferred tax assets would be
charged against income in the period of determination.

Allowances for Doubtful Accounts

We make judgments as to our ability to collect outstanding receivables and
provide allowances for the portion of receivables when collection becomes
doubtful. Provisions are made based upon a specific review of all significant
outstanding invoices. For those invoices not specifically reviewed, provisions
are provided at differing rates, based upon the age of the receivable. In
determining these percentages, we analyze our historical collection experience
and current economic trends. If the historical data we use to calculate the
allowance for doubtful accounts does not reflect the future ability to collect
outstanding receivables, additional provisions for doubtful accounts may be
needed and the future results of operations could be materially affected.



                                       22
<PAGE>

RESULTS OF OPERATIONS

REVENUES AND EXPENSES FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003 AND THE NINE
MONTHS ENDED SEPTEMBER 30, 2003 AS COMPARED TO THE THREE MONTHS ENDED SEPTEMBER
30, 2002 AND THE NINE MONTHS ENDED SEPTEMBER 30, 2002

We had no revenues during this past quarter as compared to no revenues for the
three months ended September 30, 2002. Revenues were $455,250 for the nine
months ended September 30, 2003 as compared to no revenues for the nine months
ended September 30, 2002. Our operating loss for the quarter was $199,188
compared to a loss of $441,559 for the three months ended September 30, 2002.
The operating loss was $444,897 for the nine months ended September 30, 2003 as
compared to a loss of $967,749 for the nine months ended September 30, 2002. The
decrease in our operating loss is attributable to a decrease in operating
expenses of $436,375.

LIQUIDITY AND CAPITAL RESOURCES

Our current assets increased from $298,240 as of December 31, 2002 to $453,759
as of September 30, 2003. Our current liabilities reduced from $1,011,935 as of
December 31, 2002 to $885,842 as of September 30, 2003. Our working capital
deficit has been reduced from $713,695 as of December 31, 2002 to $432,083 as of
September 30, 2003. Our total assets increased from $2,173,013 to $2,494,313.
This increase is attributable to an increase in cash, accounts receivable and
furniture and equipment. Total liabilities increased from $4,641,268 to
$4,860,928 which is primarily attributable to an increase in deferred revenue.

The Company has suffered recurring losses from operations and has a net capital
deficiency that raises substantial doubt about the Company's ability to continue
as a going concern. As of September 30, 2003 the Company does not have
sufficient cash or lines of credit for the next twelve months to remain
operational and pay our debts and expenses as they come due, but is in the
process of raising funds through a registered offering. Through this offering
the Company is attempting to obtain sufficient cash or lines of credit to
satisfy its needs for the twelve months ending September 30, 2004.

The Company filed Form SB-2A with the SEC on June 20, 2003 in an effort to raise
an additional $5 million of equity. This registration filing is currently under
review by the SEC. There is no guarantee, however, that this offering or any
other efforts will result in the Company raising sufficient capital or any
capital or additional financing.

RISK FACTORS

The following risk factors should be considered carefully in addition to the
other information presented in this report. This report contains forward looking
statements that involve risks and uncertainties. Our actual results may differ
significantly from the results discussed in the forward looking statements.
Factors that might cause such differences include, but are not limited to, the
following:



                                       23
<PAGE>

IF WE CANNOT OBTAIN ADDITIONAL FUNDS WHEN NEEDED, OR ACHIEVE PROFITABILITY WE
MAY NOT BE ABLE TO CONTINUE AS A GOING CONCERN.

Our independent auditors have included an explanatory paragraph in their 2002
audit report referring to our recurring operating losses and a substantial doubt
about our ability to continue as a going concern. Management is evaluating
various funding alternatives and believes funds will be available from obtaining
additional financing and from sales revenue sufficient to support planned
operations through September 30, 2004. However, there can be no assurance that
we will be able to raise additional funds or achieve planned sales volumes. If
we do not secure additional funding, we will be unable to conduct all of our
product development efforts as planned, and we may need to cease operations or
sell assets. In addition, the existence of the explanatory paragraph in the
audit report may in and of itself cause our stock price to decline as certain
investors may be restricted or precluded from investing in companies that have
received this notice in an audit report.

Our management has implemented plans designed to reduce our cash requirements
through reductions in operating expenditures and reductions in development
activities should collaborative partners or additional funding not be secured.
However, there can be no assurance that we will be able to successfully
implement these plans or that we will be able to do so without significantly
harming our business, financial condition or results of operations.

WE DO NOT HAVE A LONG OPERATING HISTORY, WHICH MAKES IT DIFFICULT FOR YOU TO
EVALUATE OUR BUSINESS.

Because limited historical information is available on our revenue trends and
operations, it will be difficult for you to evaluate our business. Our prospects
must be considered in light of the substantial risks, expenses, uncertainties
and difficulties encountered by any emerging technology.

WE HAVE A HISTORY OF LOSSES.

We have never been profitable, and we have had operating losses since our
inception. To date, we have engaged primarily in research and development
efforts. The further development and commercialization of our products will
require substantial development, regulatory, sales and marketing, manufacturing
and other expenditures. We have only generated limited revenues from product
sales.
Our accumulated deficit was about $6.7 million at September 30, 2003.

IF WE CANNOT OBTAIN ADDITIONAL FUNDS WHEN NEEDED, WE WILL NOT BE ABLE TO
IMPLEMENT OUR BUSINESS PLAN.

We will require substantial additional capital to develop our products,
beginning and scaling up manufacturing, and marketing our products. We have
historically funded a significant portion of our activities through stock
issuance. We are seeking additional equity investment through various sources.
If we are not able to secure additional equity investment or lines of credit it
may seriously limit our ability to execute our business plan.


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<PAGE>
Cautionary Statement:

This report 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. These statements include statements regarding
intent, belief or current expectations of the Company and its management. These
forward-looking statements are not guarantees of future performance and involve
a number of risks and uncertainties that may cause the Company's actual results
to differ materially from the results discussed in these statements. Factors
that might cause such differences include, but are not limited to, those
described under the heading, "Critical Accounting Policies and Estimates"
herein, or and other factors described in the Company's future filings with the
SEC. The above referenced sections do not apply to our company.


ITEM 3.  CONTROLS AND PROCEDURES

An evaluation was carried out by the Company's management, including our Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the
design and operation of the Company's disclosure controls and procedures as of
September 30, 2003 (as defined in Rule 13a-15(e) or 15d-15(e) under the
Securities Exchange Act of 1934). Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that the design and
operation of these disclosure controls and procedures were effective.

During the period covered by this report, there have been no changes in the
Company's internal control over financial reporting that have materially
affected or are reasonably likely to materially affect the Company's internal
control over financial reporting.


                                     PART II

ITEM 1.  LEGAL PROCEEDINGS

In early 2003 the Company filed a lawsuit against Fedegari Autoklaven A.G. for
fraud, breach of contract and unfair business practices. This legal proceeding
was filed in California Superior Court for Stanislaus County. Service was
effected on the defendant in June 2003. This case has been moved to U.S.
District Court, Eastern Division of California. The Defendant moved to dismiss
for lack of jurisdiction and improper venue. On 6 November, 2003 the U.S.
District Court granted the Defendant its motion to dismiss.

In June 2003, the Company filed a lawsuit against Glenwood Marketing Associates,
Inc., for declaratory relief from the note outstanding in the amount of
$1,100,000. This proceeding was filed in California Superior Court for
Stanislaus County. Service was effected on the defendant in June 2003.

In June 2003, Glenwood Marketing Associates, Inc. filed a lawsuit against the
Company seeking a Temporary Restraining Order to refrain from entering into a
Line of Credit with or transfer of stock to Cornell Capital. This proceeding was
filed in Supreme Court of the State of New York for Nassau County. In August,
this action was moved into the United States District Court for the Eastern
District of New York.

In July 2003, the Company withdrew its lawsuit for declaratory relief in the
amount of $1,100,000 against Glenwood Marketing Associates, Inc. filed in
California Superior Court for Stanislaus County.

                                       25
<PAGE>


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

RECENT SALES OF UNREGISTERED SECURITIES.

During third quarter 2003, 50,000 restricted common stock shares were issued to
a vendor for services rendered as part of our SB-2A registration. These shares
are included as part of our current registration offering. The average value of
the shares was $0.04.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES   (NONE)


ITEM 4.  SUBMISSION 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 of Chief Executive Officer pursuant to 18 U.S.C. Section
     1350,as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section
     1350,as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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

32.2 Certification of Chief Financial Officer 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

         Form 8-K filed on August 12, 2003 to report the issuance of a
promissory note in the amount of $600,000 and issuance of warrants, and
incorporated by reference herein.




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<PAGE>

                                   SIGNATURES

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


Dated:  November 13, 2003            ITEC ENVIRONMENTAL GROUP, INC.
                                     (Registrant)


                                 BY  /s/ Gary M. De Laurentiis
                                     -------------------------
                                     Gary M. De Laurentiis
                                     Chief Executive Officer


                                 BY  /s/ Michael E. Hofmann
                                     -------------------------
                                     Michael E. Hofmann
                                     Chief Financial Officer



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