UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-QSB



[X]

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



For the quarterly period ended March 31, 2004



[  ]

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT



For the transition period from ________________ to _______________



33-31067

(Commission file number)



ITEC ENVIRONMENTAL GROUP, INC.

(Exact name of small business issuer as specified in its charter)



|DELAWARE(State or other jurisdiction of
incorporation or organization) | 31-1705310(I.R.S. Employer Identification No.)
|---------------------------------------------------------------------- | ----------------------------------------------





693 Hi Tech Parkway Suite 3,  Oakdale, CA    95361

(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 March 31, 2004, the issuer had 121,736,479  shares of common stock, $.001 par value, outstanding.



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















---







ITec Environmental Group, Inc.

31 March 2004 10-QSB





INDEX





PART I - FINANCIAL INFORMATION

Page



Item 1.  Consolidated Financial Statements (Unaudited)

1



Consolidated Balance Sheets as of March 31, 2004 and December 31, 2003

1-2



Consolidated Statements of Operations

for the three and months ended March 31, 2004 and 2003

and for the period from inception (March 28, 2000) through

March 31, 2004

3



Consolidated Statements of Cash Flows for the three months

ended March 31, 2004 and 2003 and for the period from

inception (March 28, 2000) through March 31, 2004

4-5



Notes to Consolidated Financial Statements

6-20



Item 2.  Management's Discussion and Analysis of Financial

Condition and Results of Operations

21



Item 3.  Controls and Procedures

26



PART II - OTHER INFORMATION



Item 1.  Legal Proceedings

27



Item 2.  Changes in Securities

27



Item 3.  Defaults upon Senior Securities

27



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

27



Item 5.  Other Information

27



Item 6.  Exhibits and Reports on Form 8-K

27



Certifications



SIGNATURES

28



i.









---

PART I.  FINANCIAL INFORMATION

ITEM 1   FINANCIAL STATEMENTS



ITEC ENVIRONMENTAL GROUP, INC.

A DEVELOPMENT STAGE COMPANY

CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2004 AND DECEMBER 31, 2003







|               |                                             |                      |              |           | March 31, 2004 |         | December 31, 2003
|-------------- | ------------------------------------------- | -------------------- | ------------ | --------- | -------------- | ------- | -----------------
|ASSETS         | (Unaudited)                                 |                      |              | (Audited)
|Current Assets |                                             |                      |              |           |               
|               | Cash & Cash Equivalents                     | $                    | 70,986       |           | $              | 125    
|               | Accounts Receivable (net)                   |                      | 268,987      |           |                | 268,987
|               | Inventory                                   |                      | 55,094       |           |                | 55,094 
|               |                                             |                      |              |           |                |         |                  
|               |                                             | Total Current Assets |              | 395,067   |                |         | 324,206          
|               |                                             |                      |              |           |                |         |                  
|Fixed Assets   |                                             |                      |              |           |               
|               | Furniture & Equipment (net of Depreciation) |                      | 236,902      |           |                | 250,607
|               |                                             |                      |              |           |                |         |                  
|               |                                             | Total Fixed Assets   |              | 236,902   |                |         | 250,607          
|               |                                             |                      |              |           |                |         |                  
|Other Assets   |                                             |                      |              |           |               
|               | Deposits                                    |                      | 43,049       |           |                | 10,224 
|               | Prepaid Expenses                            |                      | 97,589       |           |                | 12,416 
|               | Note Receivable - other                     |                      | 14,690       |           |                | 14,690 
|               | Note Receivable - officer                   |                      | 147,973      |           |                | 147,973
|               | License Fees (net of Amortization)          |                      | 12,500       |           |                | 15,000 
|               |                                             |                      |              |           |                |         |                  
|               |                                             | Total Other Assets   |              | 315,801   |                |         | 200,303          
|               |                                             |                      |              |           |                |         |                  
|               |                                             |                      | Total Assets | $         | 947,770        |         | $                













(continued)



See accompanying notes to these financial statements.

1



---

|                                             |                                                       |                           |                             |                                          | March 31, 2004 |           | December 31, 2003
|-------------------------------------------- | ----------------------------------------------------- | ------------------------- | --------------------------- | ---------------------------------------- | -------------- | --------- | -----------------
|LIABILITIES AND EQUITY                       | (Unaudited)                                           |                           |                             | (Audited)                               
|Current Liabilities                          |                                                       |                           |                             |                                          |               
|                                             | Accounts payable                                      | $                         | 835,655                     |                                          | $              | 932,321  
|                                             | Income taxes payable                                  |                           | -                           |                                          |                | 800      
|                                             | Accrued Liabilities - officer                         |                           | 96,332                      |                                          |                | 96,332   
|                                             | Accrued Liabilities                                   |                           | 237,932                     |                                          |                | 209,726  
|                                             | Capital lease obligation - short term                 |                           | 12,209                      |                                          |                | 10,078   
|                                             | Notes Payable                                         |                           | 2,120,714                   |                                          |                | 1,699,000
|                                             |                                                       |                           |                             |                                          |                |           |                  
|                                             |                                                       | Total Current Liabilities |                             | 3,302,842                                |                |           | 2,948,257        
|                                             |                                                       |                           |                             |                                          |                |           |                  
|Other Liabilities                            |                                                       |                           |                             |                                          |               
|                                             | Notes payable - Italian Investors                     |                           | 446,463                     |                                          |                | 446,463  
|                                             | Capital lease obligation - long term                  |                           | 25,893                      |                                          |                | 28,810   
|                                             | Deferred Revenue                                      |                           | 475,190                     |                                          |                | 475,190  
|                                             |                                                       |                           |                             |                                          |                |           |                  
|                                             |                                                       | Total Other Liabilities   |                             | 947,546                                  |                |           | 950,463          
|                                             |                                                       |                           |                             |                                          |                |           |                  
|                                             |                                                       |                           | Total Liabilities           |                                          | 4,250,388      |           |                  
|                                             |                                                       |                           |                             |                                          |                |           |                  
|EQUITY                                       |                                                       |                           |                             |                                          |               
|Preferred Stock, $0.001 par value            |                                                       |                           |                             |                                          |               
|                                             | 10,000,000 shares authorized none                     |                           |                             |                                          |                |          
|                                             | issued & outstanding                                  |                           | -                           |                                          |                | -        
|Common Stock, $0.001 par value,              |                                                       |                           |                             |                                          |               
|                                             | 750,000,000 shares authorized, issued and outstanding |                           |                             |                                          |                |          
|                                             | 121,736,479 and 70,512,008 on March 31, 2004          |                           | 121,737                     |                                          |                | 70,512   
|                                             | and December 31, 2003, respectively                   |                           |                             |                                          |                |          
|Paid in Capital                              |                                                       | 4,739,460                 |                             |                                          | 4,629,685     
|Accumulated deficit during development stage |                                                       | (8,163,815)               |                             |                                          | (7,823,801)   
|                                             |                                                       |                           |                             |                                          |                |           |                  
|                                             |                                                       |                           | Total Stockholders' deficit |                                          | (3,302,618)    |           |                  
|                                             |                                                       |                           |                             |                                          |                |           |                  
|                                             |                                                       |                           |                             |                                          |                |           |                  
|                                             |                                                       |                           |                             | Total Liabilities & Stockholders' Equity | $              | 947,770   |                  









See accompanying notes to these financial statements.

2



---



ITEC ENVIRONMENTAL GROUP, INC.

A DEVELOPMENT STAGE COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003

AND FOR THE PERIOD FROM INCEPTION (MARCH 28, 2000) THROUGH MARCH 31, 2004







|                                       |                             |                               |                         |                    |            |                |           |                |           | For the period  
|-------------------------------------- | --------------------------- | ----------------------------- | ----------------------- | ------------------ | ---------- | -------------- | --------- | -------------- | --------- | ----------------
|                                       |                             |                               |                         |                    |            |                |           |                |           | from Inception  
|                                       |                             |                               |                         |                    |            |                |           |                |           | (March 28, 2000)
|                                       |                             |                               |                         | Three Months Ended |            | through       
|                                       |                             |                               |                         | March 31, 2004     |            | March 31, 2003 |           | March 31, 2004
|                                       |                             |                               |                         | (Unaudited)        |            | (Unaudited)    |           | (Unaudited)   
|Income                                 |                             |                               |                         |                    |            |                |           |               
|                                       | Revenue                     | $                             | 1,750                   |                    | $          | 5,000          |           | $              | 494,387  
|                                       |                             |                               |                         |                    |            |                |           |                |           |                 
|                                       | Cost of goods               |                               | -                       |                    |            | -              |           |                | 229,841  
|                                       |                             |                               |                         |                    |            |                |           |                |           |                 
|                                       | Gross Profit                |                               | 1,750                   |                    |            | 5,000          |           |                | 264,546  
|                                       |                             |                               |                         |                    |            |                |           |                |           |                 
|Operating Expenses                     |                             |                               |                         |                    |            |                |           |               
|                                       | Plant Expenses              |                               | 5,635                   |                    |            | 7,272          |           |                | 151,101  
|                                       | Payroll                     |                               | 99,585                  |                    |            | 83,233         |           |                | 1,630,892
|                                       | Consulting Fees             |                               | 117,801                 |                    |            | 51,025         |           |                | 3,936,153
|                                       | Research and Development    |                               | -                       |                    |            | -              |           |                | 115,490  
|                                       | General and administrative  |                               | 36,634                  |                    |            | 85,743         |           |                | 1,983,881
|                                       | Depreciation & Amortization |                               | 16,205                  |                    |            | 4,542          |           |                | 105,314  
|                                       |                             | Total Operating Expenses      |                         | 275,860            |            |                | 231,815   |                |           | 7,922,831       
|                                       |                             |                               |                         |                    |            |                |           |                |           |                 
|Other Income(expense)                  |                             |                               |                         |                    |            |                |           |               
|                                       | Interest expense            |                               | 65,104                  |                    |            | 39,829         |           |                | 476,385  
|                                       | Other expense               |                               | 800                     |                    |            | 24             |           |                | 24,829   
|                                       |                             | Total other income (expenses) |                         | 65,904             |            |                | 39,853    |                |           | 501,214         
|                                       |                             |                               |                         |                    |            |                |           |                |           |                 
|                                       |                             | Net loss before taxes         |                         | (340,014)          |            |                | (266,668) |                |           | (8,159,499)     
|                                       |                             |                               |                         |                    |            |                |           |                |           |                 
|                                       |                             | Provision for income taxes    |                         | -                  |            |                | 2,200     |                |           | 4,316           
|                                       |                             |                               |                         |                    |            |                |           |                |           |                 
|                                       |                             |                               | Total Net Income (Loss) | $                  | (340,014)  |                | $         | (268,868)      |           | $               
|                                       |                             |                               |                         |                    |            |                |           |                |           |                 
|Shares Outstanding - basic and diluted |                             | 96,068,309                    |                         |                    | 44,080,401 |                |           | 29,872,697    
|Loss per share - Basic                 | $                           | (0.00)                        |                         | $                  | (0.01)     |                | $         | (0.27)        
|Loss per share - Diluted               | $                           | (0.00)                        |                         | $                  | (0.01)     |                | $         | (0.27)        





See accompanying notes to these financial statements.

3



---

|                                     |                                                    |                                                      |                                                     |           |                    |           |             |           |             |           | For the period  
|------------------------------------ | -------------------------------------------------- | ---------------------------------------------------- | --------------------------------------------------- | --------- | ------------------ | --------- | ----------- | --------- | ----------- | --------- | ----------------
|                                     |                                                    |                                                      |                                                     |           |                    |           |             |           |             |           | from inception  
|                                     |                                                    |                                                      |                                                     |           |                    |           |             |           |             |           | (March 28, 2000)
|                                     |                                                    |                                                      |                                                     |           | Three Months Ended |           | through    
|                                     |                                                    |                                                      |                                                     |           | March 31,          |           |             | March 31, |             |           | March 31,       
|                                     |                                                    |                                                      |                                                     | 2004      |                    | 2003      |             | 2004     
|                                     |                                                    |                                                      |                                                     |           | (Unaudited)        |           | (Unaudited) |           | (Unaudited)
|CASH FLOWS FROM OPERATING ACTIVITIES |                                                    |                                                      |                                                     |           |                    |           |             |          
|                                     | Net Loss                                           | $                                                    | (340,014)                                           |           | $                  | (268,868) |             | $         | (8,163,815)
|                                     | Adjustments to reconcile net loss to net cash used |                                                      |                                                     |           |                    |           |             |           |            
|                                     | by operating activities:                           |                                                      |                                                     |           |                    |           |             |           |            
|                                     |                                                    | Depreciation and amortization                        |                                                     | 13,705    |                    |           | 2,043       |           |             | 67,814   
|                                     |                                                    | Amortization of license fees                         |                                                     | 2,500     |                    |           | 2,500       |           |             | 37,500   
|                                     |                                                    | Bad debt expense                                     |                                                     | -         |                    |           | -           |           |             | 50,380   
|                                     |                                                    | Shares issued for Services                           |                                                     | 41,000    |                    |           | 15,000      |           |             | 2,841,703
|                                     |                                                    | Shares issued for compensation                       |                                                     | -         |                    |           | -           |           |             | 72,000   
|                                     |                                                    | Amortization of loan origination fees                |                                                     | 40,714    |                    |           | -           |           |             | 40,714   
|                                     |                                                    | Warrants issuance costs                              |                                                     | 1,000     |                    |           | -           |           |             | 6,000    
|                                     |                                                    |                                                      |                                                     |           |                    |           |             |           |             |           |                 
|                                     |                                                    |                                                      |                                                     |           |                    |           |             |           |             |           |                 
|                                     | Changes in assets and liabilities                  |                                                      |                                                     |           |                    |           |             |           |            
|                                     |                                                    | Decrease (increase) in accounts receivable           |                                                     | -         |                    |           | 13,744      |           |             | (319,367)
|                                     |                                                    | Decrease (increase) in inventory                     |                                                     | -         |                    |           | (13,000)    |           |             | (55,094) 
|                                     |                                                    | Decrease (increase) in prepaid expenses and deposits |                                                     | (117,998) |                    |           | 1,283       |           |             | (140,638)
|                                     |                                                    | Decrease (increase) in other assets/liabilities      |                                                     | (786)     |                    |           | (3,000)     |           |             | (786)    
|                                     |                                                    | Increase in accounts payable                         |                                                     | (96,665)  |                    |           | 75,027      |           |             | 835,656  
|                                     |                                                    | Increase in income taxes payable                     |                                                     | (800)     |                    |           | -           |           |             | -        
|                                     |                                                    | Increase (decrease) in accrued liabilities           |                                                     | 28,206    |                    |           | 35,334      |           |             | 334,264  
|                                     |                                                    | Increase (decrease) in deferred revenue              |                                                     | (1)       |                    |           | 173,576     |           |             | 475,189  
|                                     |                                                    |                                                      | Net cash used in operating activities               | $         | (429,139)          |           | $           | 33,639    |             | $         | (3,918,480)     
|                                     |                                                    |                                                      |                                                     |           |                    |           |             |           |             |           |                 
|CASH FLOWS FROM INVESTING ACTIVITIES |                                                    |                                                      |                                                     |           |                    |           |             |          
|                                     |                                                    | Purchase of property and equipment                   | $                                                   | -         |                    | $         | (29,081)    |           | $           | (255,688)
|                                     |                                                    | Purchase of license fee                              |                                                     | -         |                    |           | -           |           |             | (50,000) 
|                                     |                                                    | Advances made on notes receivable                    |                                                     | -         |                    |           | 12,500      |           |             | (162,663)
|                                     |                                                    |                                                      | Net cash (used in) provided by investing activities | $         | -                  |           | $           | (16,581)  |             | $         | (468,351)       
|                                     |                                                    |                                                      |                                                     |           |                    |           |             |           |             |           |                 
|                                     |                                                    |                                                      |                                                     |           |                    |           |             |           |             |           |                 
|CASH FLOWS FROM FINANCING ACTIVITIES |                                                    |                                                      |                                                     |           |                    |           |             |          
|                                     | Sale of common stock                               | $                                                    | -                                                   |           | $                  | 81,250    |             | $         | 1,821,494  
|                                     | Proceeds from issuance of notes payable            |                                                      | 500,000                                             |           |                    | (98,578)  |             |           | 2,646,463  
|                                     | Payments on capital lease obligations              |                                                      | -                                                   |           |                    | -         |             |           | (10,140)   
|                                     |                                                    |                                                      | Net cash provided by financing activities           | $         | 500,000            |           | $           | (17,328)  |             | $         | 4,457,817       









(continued)



See accompanying notes to these financial statements.

4



---





ITEC ENVIRONMENTAL GROUP, INC.

A DEVELOPMENT STAGE COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003

AND FOR THE PERIOD FROM INCEPTION (MARCH 28, 2000) THROUGH MARCH 31, 2004







|                                                                      |                                      |   |                                                  |             |        |             |   |             |           | For the period  
|--------------------------------------------------------------------- | ------------------------------------ | - | ------------------------------------------------ | ----------- | ------ | ----------- | - | ----------- | --------- | ----------------
|                                                                      |                                      |   |                                                  |             |        |             |   |             |           | from inception  
|                                                                      |                                      |   |                                                  |             |        |             |   |             |           | (March 28, 2000)
|                                                                      |                                      |   |                                                  |             |        |             |   |             |           | through         
|                                                                      |                                      |   |                                                  | March 31,   |        | March 31,   |   | March 31,  
|                                                                      |                                      |   |                                                  | 2004        |        | 2003        |   | 2004       
|                                                                      |                                      |   |                                                  | (Unaudited) |        | (Unaudited) |   | (Unaudited)
|                                                                      |                                      |   |                                                  |             |        |             |   |             |           |                 
|                                                                      |                                      |   | Increase (decrease) in cash and cash equivalents | $           | 70,861 |             | $ | (270)       |           | $               
|                                                                      |                                      |   |                                                  |             |        |             |   |             |           |                 
|                                                                      |                                      |   | Balance at beginning of year                     |             | 125    |             |   | 393         |           |                 
|                                                                      |                                      |   |                                                  |             |        |             |   |             |           |                 
|                                                                      |                                      |   | Balance at end of year                           | $           | 70,986 |             | $ | 123         |           | $               
|                                                                      |                                      |   |                                                  |             |        |             |   |             |           |                 
|Supplemental disclosures:                                             |                                      |   |                                                  |             |        |             |   |            
|                                                                      |                                      |   |                                                  |             |        |             |   |             |           |                 
|                                                                      | Cash paid for interest               | $ | -                                                |             | $      | 986         |   | $           | 109,467  
|                                                                      | Cash paid for taxes                  | $ | 1,600                                            |             | $      | 2,200       |   | $           | 4,000    
|                                                                      |                                      |   |                                                  |             |        |             |   |             |           |                 
|Supplemental Schedule of Non-Cash Investing and Financing Activities: |                                      |   |                                                  |             |        |            
|                                                                      |                                      |   |                                                  |             |        |             |   |             |           | For the period  
|                                                                      |                                      |   |                                                  |             |        |             |   |             |           | from inception  
|                                                                      |                                      |   |                                                  |             |        |             |   |             |           | (March 28, 2000)
|                                                                      |                                      |   |                                                  |             |        |             |   |             |           | through         
|                                                                      |                                      |   |                                                  | March 31,   |        | March 31,   |   | March 31,  
|                                                                      |                                      |   |                                                  | 2004        |        | 2003        |   | 2004       
|                                                                      |                                      |   |                                                  |             |        |             |   |             |           |                 
|                                                                      | Common stock issued for compensation | $ | -                                                |             | $      | -           |   | $           | 72,000   
|                                                                      |                                      |   |                                                  |             |        |             |   |             |           |                 
|                                                                      | Common stock issued for services     | $ | 41,000                                           |             | $      | 15,000      |   | $           | 2,841,703
|                                                                      |                                      |   |                                                  |             |        |             |   |             |           |                 
|                                                                      | Warrants issuance                    | $ | 1,000                                            |             | $      | -           |   | $           | 6,000    
|                                                                      |                                      |   |                                                  |             |        |             |   |             |           |                 
|                                                                      | Debt conversion into common stock    | $ | 20,000                                           |             | $      | -           |   | $           | -        





See accompanying notes to these financial statements.

5



---



ITEC ENVIRONMENTAL GROUP, INC.

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2004 AND DECEMBER 31, 2003





1.

Description of Business and Significant Accounting Policies



This summary of significant accounting policies of ITec Environmental Group, Inc. (f/k/a Beechport Capital Corp.) and Subsidiary is presented to assist in understanding the Companys financial statements and is stated in United States dollars.  The financial statements and notes are representations of the Companys management, who is responsible for their integrity and objectivity.  These accounting policies conform to generally accepted accounting principles in the United States of America and have been consistently applied in the preparation of the financial statements.





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.



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 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.



Unless the context indicates otherwise, all references herein to the Company include ITec Environmental Group, Inc., its predecessor, Beechport Capital Corporation, and its wholly-owned subsidiary, ECO2 Environmental Systems, Inc.



The Company is a development stage entity and is primarily engaged in activities to become a worldwide supplier of oil and agricultural chemical container recycling equipment and related systems.  The Company's business objective is to attempt to build on the foundation of the licensed patented technology, to develop proprietary recycling equipment, and to form strategic alliances to become a supplier of recycling equipment and operate plastic waste recycling plants.  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.  The Company's initial marketing of its technology is concentrated in Italy.  In the future, the Company will be marketing its technology in the United States and other countries.  The initial focus of the Companys research and development efforts will be the generation of products for recycling of plastic waste.  The Company has limited experience in manufacturing of recycling systems and operating plastic waste recycling plants.  There can be no assurance that the Company will not encounter problems in marketing and selling its proprietary recycling systems.



6





---



ITEC ENVIRONMENTAL GROUP, INC.

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2004 AND DECEMBER 31, 2003





1.

Description of Business and Significant Accounting Policies (continued)



General (continued)



The Companys success will depend in part on its ability to obtain patents and maintain product license rights, maintain trade secrets and operate without infringing on the proprietary rights of others, both in the United States and other countries.  There can be no assurance that patents licensed by the Company will not be challenged, invalidated, or circumvented, or that the rights granted thereunder will provide proprietary protection or competitive advantages to the Company.



For the three month ended March 31, 2004, revenues of $1,750 were from a sale of granulated oil bottles.  The Company has no significant operating history and, from March 28, 2000, (inception) to March 31, 2004, has generated a net loss of $8,163,815.  The accompanying financial statements for the three month ended March 31, 2004, have been prepared assuming the Company will continue as a going concern.  During the year 2004, management intends to raise additional debt and/or equity financing to fund future operations and to provide additional working capital.  However, there is no assurance that such financing will be obtained in sufficient amounts necessary to meet the Companys needs.



The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern.





Basis of presentation



The accompanying unaudited interim consolidated financial statements represent the financial activity of ITec Environmental Group, Inc. and its subsidiaries.  The consolidated financial statements for the three and twelve months ended March 31, 2004 and December 31, 2003, have been prepared in accordance with generally accepted accounting principles for interim financial information in the US and in accordance with the instructions to Form 10-QSB and Rule 10-01 of Regulation S-X.  Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  For further information, refer to consolidated financial statements and footnotes thereto for the fiscal quarter ended March 31, 2004, included herein.  The consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries.  All inter-company transactions were eliminated.  The Companys fiscal year ends on December 31 each year.  The financial statements and notes are representations of the management and the Board of Directors who are responsible for their integrity and objectivity.



The results of operations for such periods are not necessarily indicative of the results expected for the full fiscal year or for any future period.  The financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Companys Annual Report on Form 10-KSB for the fiscal year ended December 31, 2003.



7







---



ITEC ENVIRONMENTAL GROUP, INC.

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2004 AND DECEMBER 31, 2003





1.

Description of Business and Significant Accounting Policies (continued)



Use of estimates in the preparation of financial statement



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.





Contingencies



Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur.  The Companys management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment.  In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Companys legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.



If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Companys financial statements.  If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.



Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.





Cash equivalents



The Company considers deposits that can be redeemed on demand and investments that have original maturities of less than three months when purchased to be cash equivalents.





Concentrations



Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments, cash equivalents and trade accounts receivables.  At March 31, 2004 and December 31, 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 March 31, 2004 and December 31, 2003 the Company had a net trade receivable of $268,987, which is from a single customer in Italy.  Management anticipates that initial customers for its recycling systems will be from Italy.  The Company does not require collateral for its trade accounts receivables.



8





---



ITEC ENVIRONMENTAL GROUP, INC.

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2004 AND DECEMBER 31, 2003





1.

Description of Business and Significant Accounting Policies (continued)



Revenue and expense recognition



The Company recognizes revenues from sales of equipment and products upon delivery to customers.  When products are configured to customer requirements, revenue is recorded upon the successful completion of any final test procedures.





Deferred revenue



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 March 31, 2004 and December 31, 2003, deferred revenue for the year then ended totaled $475,190 for the future sale of ECO2 systems.



The Company contracts with others for the manufacturing of the equipment.





Allowance for doubtful accounts



The Company uses the allowance method to account for uncollectible accounts receivable.  The Company provides an allowance for doubtful accounts equal to the estimated uncollectible amounts, and the allowance estimate is based on a review of the current status of trade accounts receivable.  It is reasonably possible that the Companys estimate of the allowance for doubtful accounts will change.  Accounts receivable are presented net of an allowance for doubtful accounts of $50,380 at March 31, 2004 and December 31, 2003.





Inventory



Inventory consisted principally of auxiliary of the recycling equipment and is stated at the lower of cost (first-in, first-out method) or market.  Market is determined based on net realizable value.  Appropriate consideration is given to obsolescence, excessive levels, deterioration and other factors in evaluating net realizable value.  Inventory amounted to $55,094 at March 31, 2004 and December 31, 2003.





Advertising cost



The Company expenses advertising cost as incurred.  There were no advertising costs for the three months ended March 31, 2004 and 2003.



9





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ITEC ENVIRONMENTAL GROUP, INC.

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2004 AND DECEMBER 31, 2003





1.

Description of Business and Significant Accounting Policies (continued)



Basic and diluted net earnings per share



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.  In periods where losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.





Fair value of financial instruments



The Company measures its financial assets and liabilities in accordance with generally accepted accounting principles.  For certain of the Company's financial instruments, including cash and cash equivalents, accounts payable and accrued liabilities, the carrying amounts approximate fair value due to their short maturities.  The amounts shown for notes payable also approximate fair value because current interest rates offered to the Company for debt of similar maturities are substantially the same.





Income taxes



The Company utilizes SFAS No. 109, "Accounting for Income Taxes," which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.  Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.  The provision for income taxes represents the tax payable for the period and the change during the period in deferred tax assets and liabilities.





Comprehensive income (loss)



Comprehensive income consists of net income and other gains and losses affecting shareholders equity that, under generally accepted accounting principles are excluded from net income in accordance with Statement on Financial Accounting Standards No. 130, Reporting Comprehensive Income.  The Company, however, does not have any components of comprehensive income (loss) as defined by SFAS No. 130 and therefore, for the three months ended March 31, 2004 and 2003, comprehensive income (loss) is equivalent to the Companys reported net income (loss).



10





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ITEC ENVIRONMENTAL GROUP, INC.

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2004 AND DECEMBER 31, 2003





1.

Description of Business and Significant Accounting Policies (continued)



Stock option plan



Financial Accounting Standards Board Statement No. 123 (Accounting for Stock-Based Compensation) encourages, but does not require, companies to record compensation cost for stock-based employee compensation plans based on the fair value of options granted.  The Company has elected to continue to account for stock-based compensation using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25 (Accounting for Stock Issued to Employees) and related interpretations and to provide additional disclosures with respect to the pro forma effects of adoption had the Company recorded compensation expense as provided in FAS-123.



In accordance with APB-25, compensation cost for stock options is recognized in income based on the excess, if any, of the quoted market price of the stock at the grant date of the award or other measurement date over the amount an employee must pay to acquire the stock.  Generally, the exercise price for stock options granted to employees equals or exceeds the fair market value of the Companys common stock at the date of grant, thereby resulting in no recognition of compensation expense by the Company.  The Company has no outstanding options as of December 31, 2003.



The FASB released Interpretation No. 44, Accounting for Certain Transactions Involving Stock Compensation.  This Interpretation addresses certain practice issues related to APB Opinion No. 25 in regards to options or warrants granted to employees and other third-parties.  The Companys policies comply with the guidance provided by FIN No.44.



During the three months ended March 31, 2004 and 2003, the Company did not issue any options or warrants.





Segment reporting



The Company adopted SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information".  The Company determined that it operates in a single business segment that includes the design, development and manufacture of recycling equipment and products for the commercial waste management industry.  Revenue of $5,000 for the period from January 1, 2003 to March 31, 2003, was attributable to foreign sales in Italy.  All sales and related purchase transactions are done in US dollars.  There were no foreign sales during the three month period ended March 31, 2004.





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.  Development stage companies use the same accounting principles as established operating companies.



11





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ITEC ENVIRONMENTAL GROUP, INC.

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2004 AND DECEMBER 31, 2003





1.

Description of Business and Significant Accounting Policies (continued)



Business risks and uncertainties



The Company operates in the evolving field of materials recycling processing.  New developments could both significantly and adversely affect existing and emerging technologies in the field.



The Companys success in developing additional marketable products and processes and achieving a competitive position will depend on its ability to retain qualified management personnel and to raise sufficient capital to meet its operating and development needs.



While the Company is seeking financing through equity and loans, there can be no assurance that the Company will be successful in accomplishing its objectives.



Currently, the Company is focused on sales of its recycling equipment in Italy.  The potential for adverse financial impact can result from negative effects of economic conditions within Italy.  Since the Company's business is principally in one area, this concentration of operations results in an associated risk and uncertainty.





Reclassifications



Certain reclassifications have been made to the prior years financial statements to conform to the current year presentation.





Recent accounting pronouncements



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 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.



12





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ITEC ENVIRONMENTAL GROUP, INC.

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2004 AND DECEMBER 31, 2003





1.

Description of Business and Significant Accounting Policies (continued)



Recent accounting pronouncements (continued)



In April 2003, the FASB issued SFAS 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities, which amends SFAS 133 for certain decisions made by the FASB Derivatives Implementation Group.  In particular, SFAS 149: (1) clarifies under what circumstances a contract with an initial net investment meets the characteristic of a derivative, (2) clarifies when a derivative contains a financing component, (3) amends the definition of an underlying instrument to conform it to language used in FASB Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, and (4) amends certain other existing pronouncements.  This Statement is effective for contracts entered into or modified after June 30, 2003, and for hedging relationships designated after June 30, 2003.  In addition, most provisions of SFAS 149 are to be applied prospectively.  The Company does not expect the adoption of SFAS 149 will have a material impact on its financial position, cash flows or results of operations.



In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity (SFAS 150).  SFAS 150 changes the accounting for certain financial instruments that under previous guidance issuers could account for as equity.  It requires that those instruments be classified as liabilities in balance sheets.  The guidance in SFAS 150 is generally effective for all financial instruments entered into or modified after May 31, 2003, and otherwise is effective on July 1, 2003.  The Company does not expect the adoption of SFAS 150 will have a material impact on its financial position, cash flows or results of operations.







2.

Going Concern



The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern.  The Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern.  The Company incurred a net loss of $340,014 during the three months ended March 31, 2004, and, as of that date, had a working capital deficiency of $2,907,774 and net capital deficiency of $3,302,618.  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 financing.  The Company has received an additional $500,000 as of March 31, 2004 and another $500,000 in May 2004 in debt financing.  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.



13





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ITEC ENVIRONMENTAL GROUP, INC.

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2004 AND DECEMBER 31, 2003





3.

Property and Equipment



Property and equipment at March 31, 2004 and December 31, 2003 consist of the following:



|                                | 2004 |          | 2003
|------------------------------- | ---- | -------- | ----
|                                |      |          |     
|Manufacturing equipment         | $    | 242,461  |     
|Office furniture                |      | 12,502   |     
|Computer equipment and software |      | 34,883   |     
|Leasehold improvements          |      | 14,870   |     
|                                |      |          |     
|Total property and equipment    |      | 304,716  |     
|Less accumulated depreciation   |      | (67,814) |     
|                                |      |          |     
|Total                           | $    | 236,902  |     



Depreciation expense for the three months ended March 31, 2004 and 2003 was $13,705 and $2,043, respectively.







4.

Accrued Liabilities



Accrued liabilities at March 31, 2004 and December 31, 2003 consist of the following:



|                          | 2004 |         | 2003
|------------------------- | ---- | ------- | ----
|Accrued payroll           | $    | 147,150 |     
|Accrued interest          |      | 48,625  |     
|Accrued professional fees |      | 40,681  |     
|Other                     |      | 1,476   |     
|                          |      |         |     
|Total                     | $    | 237,932 |     























5.

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 March 31, 2004 and December 31, 2003, 121,736,479 and 70,512,008 shares of common stock were issued and outstanding.



14





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ITEC ENVIRONMENTAL GROUP, INC.

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2004 AND DECEMBER 31, 2003





5.

Common Stock (continued)



As described in Note 1, on May 4, 2001, Beechport entered into a merger 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.  The transaction was accounted for as a reverse merger.  Therefore, ITec was deemed to be the accounting acquirer.



This transaction is treated as 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 recorded under the reverse merger guidelines.





Sale of Common Stock



In 2002, the Company through a private placement with a group of investors issued 22,305,068 shares of its common stock for $1,641,902.



In 2003, the Company through a private placement with a group of investors issued 6,042,043 shares of its common stock for $172,940.





Common Stock Issued for Services



In 2002, the Company issued 7,000,000 shares of Common Stock, valued at $888,438, in lieu of cash to consultants in payment for consulting services performed.



In 2003, the Company issued 8,039,417 shares of Common Stock, valued at $320,137, in lieu of cash to consultants in payment for consulting services performed.



In 2003, the Company issued 12,500,000 shares of Common Stock, valued at $500,000 to a consultant in payment for consulting services performed, under a consulting services agreement.



In 2003, the Company issued 2,000,000 shares of Common Stock, valued at $72,000, in lieu of cash to officers and employees in payment for services performed.



In 2004, the Company issued 736,667 shares of Common Stock, valued at $41,000, in lieu of cash to consultants in payment for services performed.





Common Stock Issued for Debt Conversion



In 2004, the holder of a 5% Convertible Debenture Note converted $20,000 of the principal note into 487,804 shares of the Companys Common Stock.



15





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ITEC ENVIRONMENTAL GROUP, INC.

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2004 AND DECEMBER 31, 2003





5.

Common Stock (continued)



Common Stock held in Escrow account



In 2004, Company executed a $500,000 note payable agreement with Cornell Capital whereby the Company had agreed to put in an escrow 50,000,000 shares of the Companys common stock.  As of March 31, 2004, the holder of this note payable had converted $100,000 of the principal into 10,000,000 shares of the Companys common stock.





6.

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 in California Superior Court for Stanislaus County entitled Itec Environmental Group v. Glenwood Marketing Associates, Inc., Frank Zangara, individually and d.b.a. Glenwood Marketing Associates, Inc., Glenwood Marketing, Inc., Glenwood Marketing Association, and/or Glenwood Marketing Corp., and Does 1-50, seeking a declaratory judgment regarding its alleged obligations under a $1,100,000 loan agreement with Glenwood Marketing Associates, Inc. dated April 2000. In July 2003, the Company withdrew this action.



On June 30, 2003, an action was commenced in New York State Supreme Court in Nassau County entitled Glenwood Marketing Association, Inc. v. Itec Environmental Group, Inc, Gary DeLaurentiis and Lisa Fitzpatrick.  The complaint asserts that Itec allegedly defaulted on payments due to Glenwood Marketing under a $1,100,000 loan, entitling Glenwood to recover $1,235,408.50 for breach of contract.  The complaint further alleges that a subsequent letter agreement modified the loan agreement, entitling Glenwood to convert the amount allegedly due into 70,193,636.36 shares of Itec stock, and demands delivery of the shares.  The complaint also alleges that Itec permitted DeLaurentiis and Fitzpatrick to divert and convert funds loaned by Glenwood for their own use and demands an accounting and judgment for monies allegedly due Glenwood as well as $1,500,000 in damages for unjust enrichment.  In addition, the complaint requests preliminary injunctive relief preventing transfer, encumbrance, pledge or sale of any Itec assets, appointment of a receiver to take possession of Itec's accounts and receivables and demands punitive damages of $5,000,000.



On July 14, 2003, the Nassau County court issued a Temporary Restraining Order.



16





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ITEC ENVIRONMENTAL GROUP, INC.

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2004 AND DECEMBER 31, 2003





6.

Notes Payable (continued)



On July 30, 2003, defendants removed the case to the United States District Court for the Eastern District of New York.  On April, 5, 2004, the Court, among other things, ruled that the state court's temporary restraining order had expired no later than August 9, 2003.  The Court also set a schedule for completion of discovery and other pre-trial proceedings.  On April 8, 2004, the Company filed an amended answer denying the central allegations of the plaintiffs complaint and asserting numerous affirmative defenses, including, among other things that the alleged agreement or agreements involved are unenforceable, criminally usurious, unconscionable, fraudulent and were breached by plaintiff.



The value allocated to the Note Warrant is being amortized to interest expense over the term of the Note.  The balance at March 31, 2004 is $600,000.



In February 2004, the SB2 registration filed in June 2003 to raise up to $5 million in equity was declared effective.



On February 24, 2004, ITec (holder or the Company) executed an agreement with Cornell Capital Partners, LP whereby the Company issued $500,000 in notes payable.  This note bears an annual interest rate of 24% beginning ninety (90 days) from the date of the note.  The Company agreed to put in an escrow with the law firm, Butler Gonzalez, LLP, fifty million (50,000,000) shares of the Companys common stock (escrowed shares) and twenty (20) advance notices of not less than $25,000 each.  The law firm shall release these advance notices to the holder every seven (7) calendar days commencing March 1, 2004.  In the event that the escrowed shares are insufficient to repay all amounts due under the note, the Company will immediately place in escrow additional shares of common stock sufficient to repay all the outstanding balance of the note.  At the option of the holder, the interest due can be paid either by Companys common stock or cash.  The term of the loan agreement required the Company to pay a $190,000 loan origination fee.  This amount is amortized over the term of the loan.  The balance at March 31, 2004 is $149,286.



7.

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 which are 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.  This license 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 a bankruptcy filing 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.

17





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ITEC ENVIRONMENTAL GROUP, INC.

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2004 AND DECEMBER 31, 2003





7.

Technology License (continued)



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.



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 March 31, 2004, management believes that there is no impairment in the carrying value of any of its long-lived assets.  Accumulated amortization at March 31, 2004 and December 31, 2003 amounted to $37,500 and $35,000 respectively.







8.

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 $21,197 has been waived for the year ended December 31, 2003; $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 March 31, 2004 and December 31, 2003, a balance of $147,973 was still due on the loan.







9.

Income Taxes



At March 31, 2004, the Company has available approximately $7,819,000 in net operating loss carryforwards available to offset future federal and state income taxes, respectively, which expire through 2021.  Realization is dependent on generating sufficient taxable income prior to expiration of the loss carryforwards.  A change of greater than 50% of the Company ownership could significantly reduce the availability of the tax credits.  This and other components of deferred tax asset accounts are described above.  At March 31, 2004 and December 31, 2004, the Company has provided a valuation allowance to reduce its net deferred tax asset to zero.  The amount of deferred tax asset considered realizable, however, can be revised in the near term based upon future operating conditions during the carryforwards period.



18





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ITEC ENVIRONMENTAL GROUP, INC.

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2004 AND DECEMBER 31, 2003





10.

Stock Options and Warrants



The following table summarizes information with respect to stock options outstanding and exercisable at March 31, 2004:



|                         | Options and Warrants Outstanding |                                         | Options and Warrants Exercisable
|------------------------ | -------------------------------- | --------------------------------------- | --------------------------------
|Range of Exercise
Prices |                                  | Number
Outstanding as of March 31, 2004 |                                 
|                         |                                  |                                         |                                 
|$0.12                    |                                  | 1,200,000                               |                                 
|$0.18                    |                                  | 2,000,000                               |                                 
|                         |                                  |                                         |                                 
|                         |                                  |                                         |                                 
|                         |                                  | 3,200,000                               |                                 



The options and warrants expire 4 years from the original date of grant.  In October 2003, warrants convertible into 1,000,000 shares of common stock were granted in conjunction with debt financing.







11.

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 activities to date were the registration of a trademark for ECO2 and the sale of a recycling machine to an Italian company operating in Italy.







12.

Agreements



The Company has entered into an agreement with Cesmet Laboratories SRL, (Cesmet) 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.  The Company paid fees of none and $6,411 to Cesmet in three months ending at March 31, 2004 and 2003, respectively.  Effective July 1, 2003, the Company terminated its agreement with Cesmet.



The Company has no employment agreements with its officers.



19





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ITEC ENVIRONMENTAL GROUP, INC.

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2004 AND DECEMBER 31, 2003





13.

Subsequent Events



On April 9, 2004, a holder of the Companys 5% Convertible Notes has elected to convert an aggregate of $25,000 principal amount of the note into 1,050,420 shares.



On April 12, 2004, a holder of the Companys 5% Convertible Notes has elected to convert an aggregate of $20,000 principal amount of the note into 80,000 shares.



On April 20, 2004, a holder of the Companys 5% Convertible Notes has elected to convert an aggregate of $25,000 principal amount of the note into 584,112 shares.



On April 1, 2005, the Company issued warrants convertible into 2,700,000 shares of common stock at an exercise price of $0.05 per share. These warrants were issued to a holder of a note payable to extend the maturity date of the note payable.



In May 2004, the Company obtained an additional $500,000 in debt financing and it placed 50 million shares of common stock into escrow to secure the amount of the debt financing.



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ITEM 2.  Management's Discussion and Analysis or Plan of Operation



We use patented technology and proprietary equipment to design and  market worldwide oil and agricultural chemical container recycling equipment and related systems.  Itec's initial marketing of the technology is concentrated in California and Italy.



We license environmental technology using a carbon dioxide cleaning process from Honeywell International, Inc.  This new environmental technology, the System, is believed by management to be the only pollution reduction and recycling system on the market today that allows for the 100% recycling of plastic motor oil containers and the residual oil left inside each container.  By using the carbon dioxide cleaning process, the Company can focus on environmental protection and environmental safety by creating no chemical waste disposal in the oil recycling and plastic recycling process.



We had revenue of $1,750 for the three months ended March 31, 2004, compared with $5,000 for the three month period ended March 31, 2003.



There were no cost of goods sold related to sales for the first quarter of 2004 and 2003.  The components that make up the cost of goods sold include the auxiliary parts, labor and purchased equipment.  These sales were for granulated oil bottles and territory fees, respectively, and have no cost of goods components.



Total operating expenses increased by $44,045, or 19%, from $231,815 for the three months ended March 31, 2003 to $275,860 for the three months ended March 31, 2004.  The increase is mainly attributable to increase of $66,776 in consulting fees for the first quarter of 2004, as compared to the same period of 2003.  In first quarter of 2004, the Company incurred more fees in association with business issues and developing a plan to raise additional capital.  The increase is offset by $49,109 reduction in general and administrative expenses.



Depreciation and amortization expense increased 257% to $16,205 for the three months ended March 31, 2004, compared to $4,542 for the three months ended March 31, 2003.  The increase is due to purchases of new plant and office equipment in the remainder of 2003 and to property and equipment being placed in service during 2003 which was purchased in earlier years.



The Company recorded net interest expense of $65,104 for the three months ended March 31, 2004, as compared to $39,829 for the three months ended March 31, 2003, an increase of 63.45%.  The increase is attributed to the amortization of loan origination fees of $40,714.  For the quarter ending March 31, 2004, there were no accruals of interest expense associated with Glenwood Marketing Associates, Inc. disputed note payable in the amount of $1,100,000.  Our position is that we are no longer obligated under the terms of this note, and this matter is currently being litigated as described under Part II, Item 1., Legal Proceedings.



Our net losses increased 27.5% for the three months ended March 31, 2004 to $340,014, compared with $268,668 for the three months ended March 31, 2003.  The increase is due to primarily increases in consulting and professional fees and interest expense.



At March 31, 2004, we have available approximately $7,823,801 and $340,014 in net operating loss carry-forwards from prior years and current year to date, respectively, available to offset future federal and state income taxes which expire through 2021.  Realization is dependent on generating sufficient taxable income prior to expiration of the loss carry-forwards.  A change of greater than 50% of the Company ownership could significantly reduce the availability of these tax credits.  At December 31, 2003, we have provided a valuation allowance to reduce its net deferred tax asset to zero.  The amount of deferred tax asset considered realizable, however, can be revised in the near term based upon future operating conditions during the carry-forwards period.



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Liquidity and Capital Resources



Historically, our working capital needs have been satisfied primarily through private placements of our securities and other debt instruments, such as short and long-term notes with certain investors.  We reasonably expect to continue to do so in the future, but cannot guarantee that such financing activities will be sufficient to fund our current and future projects and our ability to meet our cash and working capital needs.



At March 31, 2004, we had a working capital deficit of $2,907,774, compared to a working capital deficit of $2,624,051 at December 31, 2003.  The 10.8% increase in our working capital deficit is primarily attributed to increases in notes payable.



As of March 31, 2004, we had total assets of $947,770 and a total shareholder's holder's deficit of $3,302,618, compared with total assets of $775,116 and total stockholder's deficit of $3,123,604 at December 31, 2003.  Total assets increased due to the increase in cash, property and equipment related to the receipt of operating funds from debt instruments.  Total shareholders' deficit increased by 5.7% for the period ended March 31, 2004 due to the Company's additions to accumulated deficit in 2004 through operating losses.



For the three months ended March 31, 2004, cash used by operating activities increased to $428,353 from cash flows provided from operating activities of $33,639 for the comparable period ended March 31, 2003.  This increase is attributed to the expansion in our development activities and operating expenses in 2004.



For the three months ended March 31, 2004, we realized $500,000 in aggregate proceeds from notes payables.  For the comparable period in 2003, we had a reduction in notes payable of $98,577 and realized proceeds from the sale of common stock in the amount of $81,250.



Off-Balance Sheet Arrangements



We do not have any off balance sheet arrangements that have or are likely to have a material current or future effect on the Company's financial condition, or changes in financial condition, liquidity or capital resources or expenditures.



We have experienced cash flow shortages due to operating losses primarily attributable to development, marketing, administrative and other costs associated with our business. Cash flows from operations have not been sufficient to meet our obligations. Therefore, we have had to raise funds through several financing sources and transactions. At least until we reach breakeven volume in sales and/or acquire the capability to manufacture and sell our products profitably, or acquire other lines of business that will enable us to breakeven, we will continue to rely on cash from external financing sources. While we anticipate being able to utilize our current financing arrangements with Cornell Capital during the next 12 months as described in our prior SEC filings, there can be no assurance that these funds will be available or available in a timely manner.



Over the next 12 months, we intend to continue marketing  our ECO2TM Environmental System on a world wide basis and open a plastic recycling plant in Stanislaus County, California..



In 2000 and 2001 we received funds from Italian investors who are also business owners or partners in companies that have signed purchase orders for equipment being marketed by Itec.  During 2003, $368,768 of the notes payable have been reclassified from debt to deferred revenue.  An additional $200,917 may be reclassified from deferred revenue to revenue in 2004.  The balance of $245,546 may be reclassified to revenue during 2005.  However, no assurances can be given in this regard to future activity.



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The note holders are also customers of Itec to purchase ECO2 systems who have signed purchase orders.  Knowing that the research and development schedule could last many months or years, Itec suggested that they instead receive a note receivable from Itec at a rate of 5% per annum until Itec was prepared to deliver their order for an ECO2 system.  So instead of simply placing their deposits for systems in a deferred revenue account, Itec is showing this as a note payable.  During 2003, Itec started its deliveries; these various notes are being converted to deferred revenue as the customer's system moves through the assembly process.  Then upon deliver and acceptance of the ECO2 system in Italy, Itec will then recognize the revenue from the sale.



Concurrently in the United States, we plan to both market the ECO2 Environmental System and in California operate a full scale recycling plant.  We have signed a two year lease on a 6,900 sq ft building and have purchased or leased all equipment necessary for the plastic recycling test plant in California.  The recycling pilot plant opened for operations in June 2003 and is located in Oakdale, CA. with two full time employees being hired for this operation.



We currently have contacts in place for all needed raw product and we are seeking additional sources of product for future growth. .



We have sold and we continue to market 3 different sizes of Granulators to Cities, Counties and private businesses throughout California.



One of our vendors has built 2 mobile granulating systems and is signing up accounts that will be serviced by this vendor..  This arrangement will continue at least until  the volume of contaminated oil containers is  sufficient to warrant these customers (cities, counties or private industry) to purchase granulators directly from Itec.  In this program, our vendor is collecting the fee from the City or County from their State of California "Opportunity" or "Block" Grants distributed to them by the California Intergraded Waste Management Board ("CIWMB").



Funds for these types of grants come from the Oil Recycling Fund that is administered by CIWMB.  .



In March 2004, Itec completed a lease for a larger building to install a full production recycling operation in Stanislaus County, California.  It is a five year lease with a five year option.  It has a sliding scale rent structure starting at $4,000 per month in month 5 and reaching $18,370 in month 10, with CPI increases on an annual basis.  This lease would be for a 50,000 sq ft steel frame building in a heavy industrial complex, and it would include approximately 3,500 sq ft of office space.  All infrastructure including rail sidings are in place.  Installation of equipment will take three months with the first testing of systems currently anticipated to commence in June 2004.  After completing the testing of the system, the start-up operational phase will take an additional two months. Itec intends to utilize both buildings, continuing to use the current location in Oakdale as our corporate offices and as a testing and research facility.



In addition to general administrative expenses, payroll and benefits, and legal and audit expenses, our cash needs for the next twelve months to implement portions of our business plan will require at least the following: Sales and marketing - approximately no less than $445,000  to fund both the European office and our US activities, brochures and trade show meetings, advertising and promotions.  Research and development - approximately no less than$380,000  comprised of continuing research and testing in the use of bio-solvents and their effect on the cleaning process, testing of all samples of plastic for residue after the CO2 process, developing additional suppliers and manufactures of the ECO2 system and related equipment.  Capital projects - approximately no less than $700,000 to start up the full scale recycling/processing plant in California.



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Strategic Alliance Agreements



Itec continues to engage in  discussions for the purpose of entering into manufacturing, technology and sales alliances.  Such discussions are ongoing.



While the Company has not signed any definitive agreements, the Company is also actively seeking acquisitions or business opportunities to, among other things, increase revenues and improve stockholder value, which businesses or lines of business may or may not relate to the current core business of the Company.



Significant Accounting Policies and Estimates



Management's Discussion and Analysis of Financial Condition and Results of Operations discusses the Company's consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America.  The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  On an on-going basis, management evaluates its estimates and judgments, including those related to reserves and intangible assets.  Management bases its estimates and judgments on historical experiences 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 value of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.  The most significant accounting estimates inherent in the preparation of the Company's financial statements include estimates as to the appropriate carrying value of certain assets and liabilities which are not readily apparent from other sources, primarily allowance for doubtful accounts recovery of intangible assets.  These accounting policies are described at relevant sections in this discussion and analysis and in the notes to the consolidated financial statements included in our Annual Report on Form l0-KSB for the fiscal year ended December 31, 2003.



Equity



Itec filed in June 2003 a SB-2 registration statement with the Securities and Exchange Commission seeking approval to issue up to 260,250,000 shares of its common stock for $5,000,000 of equity with Cornell Capital Partners, LP.  On February 12, 2004, Itec received notice ordering declared effective that registration statement.





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, 2003 and the other Quarterly Reports on Form 10-QSB filed by us in our fiscal year 2004, which runs from January 1, 2004 to December 31, 2004.



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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:



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 2003 audit report referring to our recurring operating losses and a substantial doubt about our ability to continue as a going concern.  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 $8.1 million at March 31, 2004.



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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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 March 31, 2004 (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 as of the end of the quarter.



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 is reasonably likely to materially affect the Company's internal control over financial reporting.





PART II



ITEM 1.  Legal Proceedings



In June 2003, the Company filed a lawsuit in California Superior Court for Stanislaus County entitled Itec Environmental Group v. Glenwood Marketing Associates, Inc., Frank Zangara, individually and d.b.a. Glenwood Marketing Associates, Inc., Glenwood Marketing, Inc., Glenwood Marketing Association, and/or Glenwood Marketing Corp., and Does 1-50, seeking a declaratory judgment regarding its alleged obligations under a $1,100,000 loan agreement with Glenwood Marketing Associates, Inc. dated April 2000. In July 2003, the Company withdrew this action.



On June 30, 2003, an action was commenced in New York State Supreme Court in Nassau County entitled Glenwood Marketing Association, Inc. v. Itec Environmental Group, Inc, Gary DeLaurentiis and Lisa Fitzpatrick.  The complaint asserts that Itec allegedly defaulted on payments due to Glenwood Marketing under a $1,100,000 loan, entitling Glenwood to recover $1,235,408.50 for breach of contract.  The complaint further alleges that a subsequent letter agreement modified the loan agreement, entitling Glenwood to convert the amount allegedly due into 70,193,636.36 shares of Itec stock, and demands delivery of the shares.  The complaint also alleges that Itec permitted DeLaurentiis and Fitzpatrick to divert and convert funds loaned by Glenwood for their own use and demands an accounting and judgment for monies allegedly due Glenwood as well as $1,500,000 in damages for unjust enrichment.  In addition, the complaint requests preliminary injunctive relief preventing transfer, encumbrance, pledge or sale of any Itec assets, appointment of a receiver to take possession of Itec's accounts and receivables and demands punitive damages of $5,000,000.



On July 14, 2003, the Nassau County court issued a Temporary Restraining Order.



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On July 30, 2003, defendants removed the case to the United States District Court for the Eastern District of New York.  On April, 5, 2004, the Court, among other things, ruled that the state court's temporary restraining order had expired no later than August 9, 2003.  The Court also set a schedule for completion of discovery and other pre-trial proceedings.  On April 8, 2004, the Company filed an amended answer denying the central allegations of the plaintiffs complaint and asserting numerous affirmative defenses, including, among other things that the alleged agreement or agreements involved are unenforceable, criminally usurious, unconscionable, fraudulent and were breached by plaintiff.





ITEM 2.  Changes in Securities and Use of Proceeds



During the first quarter, the Company issued and sold to Cornell Capital Partners $500,000 of the Companys common stock pursuant to that certain June, 2003 Equity Line of Agreement as previously filed with the SEC in reliance upon the provisions of Regulation D (Regulation D) of the Securities Act of 1933, as amended, and the regulations promulgated thereunder.



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 and acting 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 and acting Chief Financial Officer pursuant to 18 U.S.C. Section 1350.



(b) Reports on Form 8-K



Form 8-K filed on March 25, 2004, Item 5 Other Events, to report announced changes to its Board of Directors, and incorporated by reference herein.



Form 8-K/A filed on January 07, 2004, Item 7, Financial Statements, Pro Forma Financial Information and Exhibits, Letter from Henry Schiffer, CPA, an Accountancy Corporation and incorporated by reference herein.



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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:  May 17, 2004

ITEC ENVIRONMENTAL GROUP, INC.

(Registrant)





BY  /s/ Gary M. De Laurentiis

Gary M. De Laurentiis

Chief Executive Officer

Acting Chief Financial Officer





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