UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C.  20549





FORM
10-Q/A


Amendment
No. 1





x  QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 
 For
the quarterly period ended March 31,
2008
 
  ̈  TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 
 Commission
file number 000-26309


INTEGRATED ENVIRONMENTAL
TECHNOLOGIES, LTD.


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





Nevada
            98-0200471(State
      or other jurisdiction of incorporation or organization)
            (IRS
      Employer Identification No.)





4235
Commerce Street


Little
River, South Carolina 29566








(843)
390-2500








Copies of Communications to:


Stoecklein
Law Group


MacArthur
Court


4695
MacArthur Court


Eleventh
Floor


Newport
Beach, CA 92660


(949)
798-5690


Fax
(949) 258-5112





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





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange
Act).           Yes  ̈    No
x





The
number of shares of Common Stock, $0.001 par value, outstanding on May 16, 2008,
was 68,070,467 shares.





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











*EXPLANATORY
NOTE – The Registrant is amending this Form 10-Q to revise certain language in
Item 4T Controls and Procedures and to revise certain language in Exhibit 31. No
changes were made to the financial statements or other disclosures in the Form
10-Q for the quarter ended March 31, 2008.





PART
I – FINANCIAL INFORMATION





Item
1. Financial Statements.





Integrated
Environmental Technologies, Ltd.


Condensed
Consolidated Balance Sheets


Unaudited





March
      31,
            
            
            December
      31,2008
            
            
            2007AssetsCurrent
      Assets:Cash
            
            $
            5,244
            
            
            $
            72,334Accounts
      receivable
            
            
            52,095
            
            
            
            49,184Inventory
            
            
            239,121
            
            
            
            309,634Prepaid
      expenses
            
            
            22,127
            
            
            
            24,360Total
      current assets
            
            
            318,587
            
            
            
            455,512Equipment
            
            
            13,045
            
            
            
            13,045Accumulated
      depreciation
            
            
            (9,122
            )
            
            
            (8,552
            )Total
      building and equipment
            
            
            3,923
            
            
            
            4,493$
            322,510
            
            
            $
            460,005Liabilities
      and Shareholders' Equity (Deficit)Current
      liabilities:Accounts
      payable
            
            $
            142,805
            
            
            $
            91,817Accrued
      expenses
            
            
            125,499
            
            
            
            96,374Notes
      payable
            
            
            133,300
            
            
            
            98,300Convertible
      notes
            
            
            332,480
            
            
            
            288,306Total
      current liabilities
            
            
            734,084
            
            
            
            574,797Shareholders'
      Equity (Deficit)Common
      stock 200,000,000 shares authorizedpar
      value $.001, 68,070,467 and 68,010,467 shares issued and outstanding
      at03/31/08
      and 12/31/07
            
            
            68,070
            
            
            
            68,010Stock
      bought not issued, 60,000 and 120,000 shares at 03/31/08 and
      12/31/07
            
            
            60
            
            
            
            120Paid-in
      capital
            
            
            6,801,733
            
            
            
            6,801,733Retained
      earnings (deficit)
            
            
            (7,281,437
            )
            
            
            (6,984,655
            )Total
      shareholders' equity (deficit)
            
            
            (411,574
            )
            
            
            (114,792
            )Total
      liabilities and shareholders' equity (deficit)
            
            $
            322,510
            
            
            $
            460,005


See
notes to condensed consolidated financial statements


2


Integrated
Environmental Technologies, Ltd.


Condensed
Consolidated Statement of Operations


Unaudited





For
      the Three Months EndedMarch
      31,2008
            
            
            2007Sales
            
            $
            242,820
            
            
            $
            77,283Cost
      of sales
            
            
            84,733
            
            
            
            49,571Gross
      profit
            
            
            158,087
            
            
            
            27,712Professional
      and administrative fees
            
            
            81,441
            
            
            
            133,428Salary
            
            
            194,212
            
            
            
            235,308Depreciation
      and amortization
            
            
            570
            
            
            
            570Research
      and development
            
            
            6,000
            
            
            
            -Office
      & miscellaneous expense
            
            
            67,616
            
            
            
            136,222Bad
      debt expense
            
            
            37,746
            
            
            
            -Total
      operating expenses
            
            
            387,585
            
            
            
            505,528(Loss)
      from operations
            
            
            (229,498
            )
            
            
            (477,816
            )Other
      income (expense):Finance
      fees
            
            
            (5,000
            )
            
            
            -Interest
      expense
            
            
            (62,284
            )
            
            
            (39,565
            )Total
      other income (expense)
            
            
            (67,284
            )
            
            
            (39,565
            )Net
      (loss)
            
            $
            (296,782
            )
            
            $
            (517,381
            )Weighted
      average shares outstanding
            
            
            68,139,698
            
            
            
            49,014,939Net
      (loss) per share - basic and diluted
            
            $
            (0.00
            )
            
            $
            (0.01
            )




















See
notes to condensed consolidated financial statements


3


Integrated
Environmental Technologies, Ltd.


Condensed
Consolidated Statement of Cash Flows


Unaudited





For
      the Three Months EndedMarch
      31,2008
            
            
            2007Cash
      flows from operating activities:Net
      (loss)
            
            $
            (296,782
            )
            
            $
            (517,381
            )Adjustments
      to reconcile net loss to net cashused
      in operating activities:Depreciation
      and amortization
            
            
            570
            
            
            
            570Accretion
      of interest on convertible notes
            
            
            44,174
            
            
            
            10,810Stock
      issued for loan or interest costs
            
            
            -
            
            
            
            800Stock,
      options, warrants for services
            
            
            9,219
            
            
            
            170,792Changes
      in operating assets and liabilities:Accounts
      receivable
            
            
            (2,911
            )
            
            
            542Inventory
            
            
            70,514
            
            
            
            23,068Deposits
      and prepaids
            
            
            (6,986
            )
            
            
            -Accounts
      payable
            
            
            50,988
            
            
            
            42,590Accrued
      expenses
            
            
            29,124
            
            
            
            145,403Cash
      (used) in operating activities
            
            
            (102,090
            )
            
            
            (122,806
            )Cash
      flows from financing activities:Proceeds
      from notes payable
            
            
            35,000
            
            
            
            107,200Proceeds
      from the sale of common stock
            
            
            -
            
            
            
            13,000Cash
      provided by financing activities
            
            
            35,000
            
            
            
            120,200Decrease
      in cash
            
            
            (67,090
            )
            
            
            (2,606
            )Cash
      beginning of period
            
            
            72,334
            
            
            
            22,187Cash
      end of period
            
            $
            5,244
            
            
            $
            19,581Supplemental
      disclosure of cash flow information:Cash
      paid for interest
            
            $
            26,012
            
            
            $
            2,067Cash
      paid for income taxes
            
            $
            -
            
            
            $
            -Non-cash
      financing activities:Stock
      and warrants issued for services
            
            $
            9,219
            
            
            $
            408,894











See
notes to condensed consolidated financial statements


4
 Integrated
Environmental Technologies, Ltd.
 Notes
to Condensed Consolidated Financial Statements
 (Unaudited)


Note
1 – Basis of presentation





The
unaudited condensed consolidated financial statements have been prepared in
accordance with United States generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and reflect
all adjustments which, in the opinion of management, are necessary for a fair
presentation.  All such adjustments are of a normal recurring
nature.  The results of operations for the interim period are not
necessarily indicative of the results to be expected for a full
year.  Certain amounts in the prior year statements have been
reclassified to conform to the current year presentations.  The
statements should be read in conjunction with the financial statements and
footnotes thereto included in our Form 10-K for the year ended December 31,
2007.





The
financial statements include our wholly-owned subsidiary.  All
significant inter-company transactions and balances have been
eliminated.





Note
2 - Going concern





The
accompanying condensed consolidated financial statements have been prepared
assuming that we will continue as a going concern.  Our ability to
continue as a going concern is dependent upon attaining profitable operations
based on the development of products that can be sold.  We intend to
use borrowings and security sales to mitigate the affects of our cash position;
however, no assurance can be given that debt or equity financing, if and when
required, will be available.  The financial statements do not include
any adjustments relating to the recoverability and classification of recorded
assets and classification of liabilities that might be necessary should we be
unable to continue in existence.





Note
3 - Notes payable





Notes
payable consisted of the following at March 31, 2008:





Note
      payable, unsecured, bearing interest at a rate of 10% per annum (see Note
      8)
            
            $
            35,000Note
      payable, unsecured, bearing interest at a rate of 10% per annum, matured
      September 30, 2006, unable to locate lender.
            
            
            50,000Note
      payable, unsecured, non-interest bearing, unable to locate
      lender
            
            
            25,000Notes
      payable, unsecured, bearing interest at rate of 18% per annum, with
      monthly principal and interest payments.
            
            
            23,300$
            133,300





Note
4 - Convertible notes payable





As
of March 31, 2008, we had convertible loans totaling $501,000, accruing interest
at a rate of 10% per annum payable semi-annually and maturing on January 2,
2008.  We accrete interest between the date of issuance of the units
and the maturity date for the convertible notes to reflect the difference
between what was received for the notes and what will be paid at
maturity.  As of


5
 Integrated
Environmental Technologies, Ltd.
 Notes
to Condensed Consolidated Financial Statements
 (Unaudited)


March
31, 2008, we had accreted interest of $44,174 and had a balance of un-accreted
interest of $168,520.





Note
5 - Common stock





During
the three months ended March 31, 2008, we issued 60,000 previously authorized
shares of common stock.





On
June 20, 2007, the Company entered into a “Stock Acquisition Agreement” with
Benchmark Performance Group, Inc. (“Benchmark”).  Pursuant to the
agreement, Benchmark agreed to purchase 35,000,000 shares of common stock for a
total purchase price of $3,500,000 or $0.10 per share.  On June 27,
2007, 5,000,000 shares were issued pursuant to the agreement for cash proceeds
of $188,000 and the conversion of $312,000 that was a deposit for equipment to
be purchased for a total of $500,000.  On October 31, 2007 an
additional 5,000,000 shares were issued pursuant to the agreement resulting in
total proceeds of $1,000,000.  The remaining 25,000,000 shares will be
issued pursuant to the agreement under the terms as follows:  (1)
Benchmark will issue three equal payments in the amount of $500,000 every six
months beginning on or before April 30, 2008 and continuing through April 30,
2009. Upon receipt of each payment, the Company will cause to be issued
5,000,000 shares of common stock.  Upon issuance of each 10,000,000
shares, the Company will initiate a registration of the shares; (2) on or before
October 31, 2009, Benchmark will issue final payment in the amount of
$1,000,000.  Upon receipt, the Company will cause to be issued
10,000,000 shares of common stock and initiate a final registration for the
remaining unregistered shares.





Pursuant
to the Agreement, Benchmark shall have the right to maintain an equity position
in the Company equal to the equity position it would own upon the issuance of
all shares due under the agreement.  If at any time during the
Anti-Dilution Period, the Company were to issue any shares of common stock which
would impair the equity position of Benchmark, then the Company shall issue a
warrant to purchase shares of common stock at an exercise price of $0.10 per
share, which would upon exercise, reinstate their equity
position.  The warrants will be exercisable at any time through
October 31, 2009.





In
addition, Benchmark can acquire additional shares of common stock whereby the
purchase would give Benchmark 51% of the Company’s total outstanding
equity.  Benchmark will be able to purchase these additional shares at
any time through October 31, 2009, at an exercise price equal to the weighted
average per share price of common stock over the 22 trading days prior plus a
15% per share control premium to the date we receive written notice of their
desire to make this purchase.  See Note 8 - Subsequent
Events.





Note
6 – Options and warrants





A
summary of stock options and warrants is as follows:





6
 Integrated
Environmental Technologies, Ltd.
 Notes
to Condensed Consolidated Financial Statements
 (Unaudited)








Options
            
            
            Average
              Price
            
            
            Warrants
            
            
            Average
              PriceOutstanding  01/01/08
            
            
            1,075,000
            
            
            $
            0.116
            
            
            
            5,204,000
            
            
            $
            0.249Granted
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Cancelled
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Exercised
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Outstanding
      03/31/08
            
            
            1,075,000
            
            
            $
            0.116
            
            
            
            5,204,000
            
            
            $
            0.249





Note
7 – Related-party transactions





We
have consulting agreements with a shareholder and a Director requiring payments
of $2,500 per month for each.  As of March 31, 2008, we recorded
$22,500 in consulting fees.





We
have employment agreements with two of our executives whereby we have agreed to
annual compensation in the amount of $240,000.  As of March 31, 2008,
the future minimum payments are as follows:





Related-party
      compensation requirements2008
            
            $
            180,0002009
            
            
            240,0002010
            
            
            240,0002011
            
            
            240,000Total
            
            $
            720,000





We
borrowed $16,000 on January 18, 2008 for working capital from an officer of the
company. Interest on the loan was $1,000.  The loan and interest were
repaid on January 25, 2008.





Note
8 –Subsequent events





On
April 16, 2008, the Company entered into a loan agreement with a corporate
officer for the principal amount of $9,000.  Pursuant to the loan
agreement, the Company promised to repay the principal amount of $9,000 plus a
flat interest of $500 by May 1, 2008.  The loan and interest were
repaid on May 13, 2008.





On
April 23, 2008, we entered into a Share Purchase Agreement with AD Capital, LLC
(“AD Capital”).  Pursuant to the agreement, AD Capital has agreed to
purchase up to an aggregate of $150,000 and a minimum of $60,000 in convertible
debentures from us.  Further, we have agreed to pay a due diligence
fee in the amount of $10,000 and issue warrants to purchase up to 300,000 shares
of our common stock, of which 150,000 are exercisable at a strike price of $0.05
per share and the remaining 150,000 are exercisable at $0.25 per
share.  As of March 31, 2008, AD Capital had advanced $35,000 towards
the agreement.  We paid $5,000 of the due diligence fee, receiving net
proceeds of $30,000.  The remaining $115,000 was funded during April
2008 net of the due diligence fee, and the complete short-term note was
re-paid to AD Capital in full on May 5, 2008.


On
May 19, 2008, concurrent with the receipt by us of $500,000, the Company issued
5,000,000 shares of our common stock to Benchmark Performance Group, Inc.,
pursuant to our Stock Acquisition Agreement dated June 20,
2007.


7


FORWARD-LOOKING
STATEMENTS





This document contains “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act
of 1995.  All statements other than statements of historical fact are
“forward-looking statements” for purposes of federal and state securities laws,
including, but not limited to, any projections of earnings, revenue or other
financial items; any statements of the plans, strategies and objections of
management for future operations; any statements concerning proposed new
services or developments; any statements regarding future economic conditions or
performance; any statements of belief; and any statements of assumptions
underlying any of the foregoing.





Forward-looking statements may include
the words “may”, “could”, “estimate”, “intend”, “continue”, “believe”, “expect”
or “anticipate” or other similar words.  These forward-looking
statements present our estimates and assumptions only as of the date of this
report.  Except for our ongoing securities laws, we do not intend, and
undertake no obligation, to update any forward-looking statement.





Although we believe that the
expectations reflected in any of our forward-looking statements are reasonable,
actual results could differ materially from those projected or assumed in any of
our forward-looking statements.  Our future financial condition and
results of operations, as well as any forward-looking statements, are subject to
change and inherent risks and uncertainties.  The factors impacting
these risks and uncertainties include, but are not limited to:





o
            our
      current lack of working capital;




o
            implementation
      of our business plan within the oil and gas industry with
      Benchmark;




o
            increased
      competitive pressures from existing competitors and new
      entrants;




o
            increases
      in interest rates or our cost of borrowing or a default under any material
      debt agreements;




o
            the
      fact that our accounting policies and methods are fundamental to how we
      report our financial condition and results of operations, and they may
      require our management to make estimates about matters that are inherently
      uncertain;




o
            substantial
      dilution to our stockholders as the result of the issuance of our common
      stock in exchange for debt and/or equity financing, including additional
      shares to Benchmark;




o
            potential
      change in control upon completion of the Benchmark
    agreements;




o
            deterioration
      in general or regional economic
conditions;




o
            adverse
      state or federal legislation or regulation that increases the costs of
      compliance, or adverse findings by a regulator with respect to existing
      operations;




o
            changes
      in U.S. GAAP or in the legal, regulatory and legislative environments in
      the markets in which we operate;




o
            loss
      of customers or sales weakness;




o
            excessive
      product failure and related warranty
expenses;




8


o
            inability
      to achieve future sales levels or other operating
  results;




o
            the
      unavailability of funds for capital expenditures and/or general working
      capital; and




o
            operational
      inefficiencies in distribution or other
systems.







For a detailed description of these and
other factors that could cause actual results to differ materially from those
expressed in any forward-looking statement, please see “Item 1A. Risk Factors”
in this document and in our Annual Report on Form 10-K for the year ended
December 31, 2007.





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





Throughout this Report, references to
“we”, “our”, “us”, “IET”, “the Company”, and similar terms refer to Integrated
Environmental Technologies, Ltd. and its 100%-owned subsidiary, IET,
Inc.





OVERVIEW
AND OUTLOOK





Integrated
Environmental Technologies, Ltd. has evolved from a development-stage company to
an income-generating original equipment manufacturing company.  We
have focused our attentions on several critical issues:





·
            Raising
      equity capital;


·
            Developing
      our ability to construct EcaFlo®
equipment;


·
            Developing
      and enhancing our testing protocol with researchers at Coastal Carolina
      University, and independent companies
      and laboratories;


·
            Developing
      a relationship and entering into an agreement with
    Benchmark;


·
            Researching
      market application areas and identifying and establishing distributorship
      agreements;


·
            Continuing
      to develop and maintain relationships with university and independent
      laboratories for research assistance on EcaFlo® applications;
      and


·
            Furthering
      the process of building a brand identity and sales track record through
      the appearance at various trade and professional shows and
      conferences.





We
have incurred losses since inception.  For the first quarter ended
March 31, 2008, we had a net loss of $296,782 as compared to a net loss of
$517,381 for the quarter ended March 31, 2007.  Our ability to proceed
with our plan of operation has continuously been a function of our ability to
increase revenues and raise sufficient capital to continue our
operations.





Management
intends to closely monitor the costs associated with the production of
EcaFlo®devices
in an attempt to minimize capital shortages.  As we continue to expand
operational activities and execute our business plan for oilfield operations
with our industry partner and licensee, Benchmark Energy Products, we anticipate
experiencing positive cash flows from operations in future
quarters.  Debt borrowings may be considered from time to time if
needed.


9




On
June 20, 2007, we executed a Stock Acquisition Agreement with Benchmark
Performance Group, Inc. (“Benchmark”).  Pursuant to the Stock
Acquisition Agreement, Benchmark agreed to purchase 35,000,000 shares of our
common stock for a total purchase price of $3,500,000 (“Purchase Price”) or
$0.10 per share.  The purchase price will be paid in seven (7)
installments over a period of 30 months.  As of March 31, 2008, three
installments ($1,000,000) have been paid and as of May 22, 2008, four
installments ($1,500,000) have been paid.





In connection with the Stock
Acquisition Agreement, we entered into an Exclusive License and Distribution
Agreement with Benchmark, wherein we granted the exclusive, world-wide right,
license and authority to market, sell and distribute for use in the manufacture
of fluids and solution for use in Oilfield Applications to
Benchmark.





Results
of Operations for the Three Months Ended March 31, 2008 and 2007





The
following table summarizes selected items from the statement of operations at
March 31, 2008 compared to March 31, 2007.





SALES
AND COST OF GOODS SOLD:





Three
      Months Ended
              March
      31,
            
            
            Increase
      (Decrease)2008
            
            
            2007
            
            
            
            
            
            $
            
            %Sales
            
            $
            242,820
            
            
            $
            77,283
            
            
            $
            165,537
            
            
            
            214
            %Cost
      of Goods Sold
            
            
            84,733
            
            
            
            49,571
            
            
            
            35,162
            
            
            
            71
            %Gross
      Profit
            
            
            158,087
            
            
            
            27,712
            
            
            
            130,375
            
            
            
            470
            %Gross
      Profit Percentage of Sales
            
            
            65
            %
            
            
            36
            %
            
            
            --
            
            
            
            29
            %





Sales





Our
sales for the three months ended March 31, 2008 were $242,820 compared to sales
of $77,283 in the three months ended March 31, 2007.  This resulted in
an increase in sales of $165,537, or 214%, from the same period a year
ago.  We believe that our products are gaining recognition in the
marketplace which will result in increased sales.  Oilfield industry
sales should increase in future quarters as a result of our agreement with
Benchmark.





Cost
of goods sold / Gross profit percentage of sales





Our cost of goods sold for the three
months ended March 31, 2008 was $84,733, an increase of $35,162, or 71% from
$49,571 for the three months ended March 31, 2008.  The increase in
our cost of goods sold is as a result of having additional sales of EcaFlo®
equipment during this period of time.  We are continuing to update and
upgrade our product line and we closely monitor the cost of all of our
products.  We believe the cost of sales will increase
slightly


10


less
as a percentage of sales when we have additional sales.  Gross profit
margins increased by 29% from the prior fiscal quarter because of the product
mix of our sales and our FEM-3 cell replacement program.





EXPENSES:





Three
      Months Ended
              March
      31,
            
            
            Increase
      (Decrease)2008
            
            
            2007
            
            
            $
            
            
            
            %Expenses:Professional
      andAdministrative
      fees
            
            $
            81,441
            
            
            $
            133,428
            
            
            $
            (51,987
            )
            
            
            (39
            %)Salaries
      and wages
            
            
            194,212
            
            
            
            235,308
            
            
            
            (41,096
            )
            
            
            (17
            %)Depreciation
      and amortization
            
            
            570
            
            
            
            570
            
            
            
            --
            
            
            
            --Research
      and development
            
            
            6,000
            
            
            
            --
            
            
            
            6,000
            
            
            
            --Office
      and miscellaneous expense
            
            
            67,616
            
            
            
            136,222
            
            
            
            (68,606
            )
            
            
            (50
            %)Bad
      debt expense
            
            
            37,746
            
            
            
            --
            
            
            
            37,746
            
            
            
            --Total
      operating expenses
            
            
            387,585
            
            
            
            505,528
            
            
            
            (117,943
            )
            
            
            (23
            %)(Loss)
      from operations
            
            
            (229,498
            )
            
            
            (477,816
            )
            
            
            (248,318
            )
            
            
            (52
            %)Other
      income (expense):Finance
      fees
            
            
            (5,000
            )
            
            
            --
            
            
            
            (5,000
            )
            
            
            --Interest
      expense
            
            
            (62,284
            )
            
            
            (39,565
            )
            
            
            22,719
            
            
            
            57
            %Total
      other expense
            
            
            (67,284
            )
            
            
            (39,565
            )
            
            
            27,719
            
            
            
            70
            %Net
      (loss)
            
            $
            (296,782
            )
            
            $
            (517,381
            )
            
            $
            (220,599
            )
            
            
            (43
            %)





Professional
and Administrative Fees





Professional
and administrative fees for the three months ended March 31, 2008 were $81,441,
a decrease of $51,987, or 39%, from $133,428 for the three months ended March
31, 2007.  The decrease in professional and administrative fees was
the result of reducing costs associated with outside professional services and
consultants while maintaining strong levels of support to meet the company’s
developing business.  Whenever possible, we are trying to reduce
outside consultants but we will still need some assistance as we do not have
sufficient in-house expertise for areas of our business.





Salary
Expenses





Salary expenses for the three months
ended March 31, 2008 was $194,212, a decrease of $41,096, or 17%, from $235,308
for the three months ended March 31, 2007.  The decrease in salary
expenses was the result of decreasing hourly employee payroll expenses and
reducing our engineering staff by one member, while accomplishing the production
necessary for meeting the company’s sales of equipment.  We expect
salary expense to increase in the future as the


11


Company
grows and as sales volume increases.  We may need to continue issuing
stock and stock options in exchange for services and adequate personnel
compensation.





Depreciation
and Amortization Expenses





Depreciation
and amortization expenses for both of the three months ended March 31, 2008 and
2007 was $570, respectively.  At this point in time we anticipate our
depreciation expenses to remain stable.





Office
and Miscellaneous





Office and miscellaneous expenses for
the three months ended March 31, 2008 were $67,616, a decrease of $68,606, from
$136,222 for the three months ended March 31, 2007.  The decrease in
office and miscellaneous expenses was as a result of having well-stocked our
office and the lack of need for one-time equipment purchases during this period
of time.





Bad
Debt





We
did not incur bad debt expense during the three months ended March 31, 2007 as
compared to $37,746 being expensed during the three months ended March 31,
2008.  We have historically had limited write-offs as the result of
bad debts.  It is our policy to regularly monitor our customers’
ability to pay prior to the purchase of our products.





(Loss)
from Operations





The loss from operations for the three
months ended March 31, 2008 was $229,498, versus a loss from operations of
$477,816 for the three months ended March 31, 2007, a change in loss from
operations of $248,318.  The decrease in the loss from operations in
the first quarter of 2008 was the result of an increase in sales and our ability
to produce EcaFlo® equipment more efficiently.





Interest
Expense





Interest expense for the three months
ended March 31, 2008 was $62,284 as compared to $39,565 for the same period in
2007.  Our interest expense in 2008 was high because of temporary
working capital loans that had high interest rates and fees.





Net
(Loss)





Our
net loss for the three months ended March 31, 2008 was $296,782, a decrease of
$220,599, or 43%, from $517,381 for the three months ended March 31,
2007.  We continue to have a net loss and believe the loss will be
reduced and profitability will be attained in future quarters as the sales of
our products increase.





12


Operation
Plan





The
technology that drives our short-term and long-term plans is electro-chemical
activation (ECA), which is the center point of our EcaFlo®
technology.  Our plan of operation focuses on continuing the process
of commercialization of EcaFlo®equipment
and EcaFlo® solutions, known as anolyte and catholyte.





Our direct attention continues to be
focused on providing our EcaFlo® devices to the markets at-hand:  oil
and gas industry, food safety and agricultural applications, storm-water
treatment, water and wastewater treatment, and other hard surface
sanitation opportunities.  In many cases, clinical and laboratory
testing and research have now moved to field trials by
end-users.  Anticipated positive results in field testing should
result in increased sales in future quarters.





Liquidity
and Capital Resources





The
following table summarizes total current assets, total current liabilities and
working capital at March 31, 2008 compared to December 31, 2007.





March
      31,
            
            
            December
      31,
            
            
            Increase
      / (Decrease)2008
            
            
            2007
            
            
            $
            
            
            %Current
      Assets
            
            $
            318,587
            
            
            $
            455,512
            
            
            $
            (136,925
            )
            
            
            (30
            %)Current
      Liabilities
            
            
            734,084
            
            
            
            574,797
            
            
            
            159,287
            
            
            
            28
            %Working
      Capital (deficit)
            
            $
            (415,497
            )
            
            $
            (119,285
            )
            
            $
            296,212
            
            
            
            248
            %





Liquidity
is a measure of a company’s ability to meet potential cash
requirements.  We have historically met our capital requirements
through the issuance of stock, by borrowings, and through sales-generated
revenue.  In the future, we anticipate we will be able to provide the
necessary liquidity we need by the revenues generated from the sales of our
products and the incremental equity investment, by contract from Benchmark
Performance Group, Inc.  We will continue to consider financing
opportunities with strategic industry partners outside of the oil and gas
industry.





As
of March 31, 2008, we continue to use equity sales and traditional and/or debt
financing, in addition to sales-generated revenue, to provide the capital we
need to run the business.  In the future, we need to generate enough
revenues from the sales of our products in order for us to not have to sell
additional stock or obtain additional loans.  On June 20, 2007, we
entered into an investment agreement and contract with Benchmark Performance
Group, Inc.  The contract provides for an equity investment of
$3,500,000 over a period of 30 months and for technology fees paid to IET per
gallon of EcaFlo® fluids sold by Benchmark within the oil and gas
industry.  As of March 31, 2008, we have received $1,000,000 of the
$3,500,000 equity investment and as of May 22, 2008, we received the fourth
installment of $500,000 for a total of $1,500,000 of the $3,500,000 equity
investment.


13


Financing.  The
Company borrowed $50,000 from Defense Technology Systems, Inc. (“DTS”) on August
15, 2006.  This note was to mature on September 30, 2006 with $5,000
interest due at that date and interest at 10% thereafter.  DTS and Red
River Capital were engaged by IET to provide a financing package to the Company
and were unable to deliver as contracted.  Repeated attempts to
contact Red River Capital have been unsuccessful.





On
August 17, 2006, the Company received an unsecured loan of $25,000 from Robert
Lucas, at an interest rate of 18% per annum.  Pursuant to the note
agreement, the Company agreed to issue 100,000 shares of common stock as a loan
fee.  On April 3, 2007, the shares were issued.  As of March
31, 2008, we have paid interest of $2,545, and the remaining principal balance
of the note is $23,300.





On
October 1, 2006, the Company borrowed $25,000 from Red River Capital on an
unsecured note.  DTS and Red River Capital were engaged by IET to
provide a financing package to the Company and were unable to deliver as
contracted.  Repeated attempts to contact Red River Capital have been
unsuccessful.





On
January 18, 2008, we entered into a loan agreement with Marion C. Sofield, our
Vice President of Operations, for the principal amount of
$16,000.  Pursuant to the loan agreement, we promised to pay to the
order of Ms. Sofield the principal amount of $16,000 plus a flat interest of
$1,000.  The loan and interest were repaid on January 25,
2008.





On
April 16, 2008, we entered into a loan agreement with Marion C. Sofield, our
Vice President of Operations, for the principal amount of $9,000.  In
addition, we agreed to pay a flat  fee of $500 as interest
consideration.  The principal together with fees is due in full May 1,
2008.  We repaid the loan in full on May 13, 2008.





On April 23, 2008, we entered into a
Securities Purchase Agreement with AD Capital, LLC, wherein we agreed to sell
and AD Capital agreed to purchase up to an aggregate of $150,000 in principal
amount of debentures.  Pursuant to the agreement, we issued 150,000
warrants exercisable at $0.05 per share, expiring in five years (4/23/13) and
150,000 warrants exercisable at $0.25 per share, expiring in five years
(4/23/13).  The warrants and $10,000 were issued to AD Capital as
payment in full for fees associated with the convertible debenture in the amount
of $150,000.  The convertible debenture is convertible by AD Capital
only in the event of default by the Company in repayment of the $150,000 on or
before June 25, 2008, plus 10% interest.  On May 5, 2008, we repaid
the $150,000 to AD Capital; therefore the convertible debenture is null and
void.  AD Capital retains the 150,000 $0.05 warrants and the 150,000
$0.25 warrants as agreed.





Satisfaction
of our cash obligations for the next 12 months.





As
of March 31, 2008, our cash balance was $5,244.  Our plan for
satisfying our cash requirements for the next twelve months is primarily from
our agreement with Benchmark, through additional sales of our common stock,
third-party financing, and/or traditional bank financing.  As of May
22, 2008, we received the fourth installment of $500,000 from Benchmark pursuant
to our agreement dated June 20, 2007.  We anticipate sales-generated
income during


14


that
same period of time, but do not anticipate generating sufficient amounts of
revenues to meet our working capital requirements.  Consequently, we
intend to make appropriate plans to insure sources of additional capital in the
future to fund growth and expansion through additional equity or debt financing
or credit facilities.





Since
inception, we have financed cash flow requirements through debt financing and
the issuance of common stock for cash and services.  As we continue to
expand operational activities, we may continue to experience net negative cash
flows from operations, pending receipt of sales or development fees, and will be
required to obtain additional financing to fund operations through common stock
offerings and debt borrowings, giving consideration to loans and working
diligently to move sales ahead to the extent necessary to provide working
capital.





We
may continue to incur operating losses over the majority or some portion of the
next twelve months.  Our lack of operating history makes predictions
of future operating results difficult to ascertain.  Our prospects
must be considered in light of the risks, expenses, and difficulties frequently
encountered by companies in their early stage of development, particularly
companies in new and rapidly evolving technology markets.  Such risks
include, but are not limited to, an evolving and unpredictable business model
and the management of growth.  To address these risks we must, among
other things, implement and successfully execute our business and marketing
strategy, continue to develop and upgrade technology and products, respond to
competitive developments, and continue to attract, retain and motivate qualified
personnel.  There can be no assurance that we will be successful in
addressing such risks, and the failure to do so can have a material adverse
effect on our business prospects, financial condition and results of
operations.





As
a result of our cash requirements and our lack of working capital, although not
anticipated, we may continue to issue stock in exchange for loans and/or equity,
which may have a substantial dilutive impact on our existing
stockholders.





Going
Concern





The
financial statements included in this filing have been prepared in conformity
with generally accepted accounting principles that contemplate the continuance
of the Company as a going concern.  The Company's cash position may be
inadequate to pay all of the costs associated with testing, production and
marketing of products.  Management will consider borrowings and
security sales to mitigate the effects of its cash position; however, no
assurance can be given that debt or equity financing, if and when required, will
be available.  The financial statements do not include any adjustments
relating to the recoverability and classification of recorded assets and
classification of liabilities that might be necessary should the Company be
unable to continue existence.





Summary
of product and research and development that we have accomplished and that we
will continue to perform for the term of our plan.


15


EcaFlo®
Division





As
a result of positive laboratory test results from the Water Quality Lab at
Coastal Carolina University, in combination with internal profit margin
comparisons between prototype EcaFlo® devices, and utilizing a reputable United
States source of electrolytic cells and their respective markets, we have been
able to make decisions regarding market entry with our own specifically designed
and engineered devices.  Our engineering department has worked with
AquaStel, our new supplier, in order to develop prototype EcaFlo® equipment that
features the larger volume cells.  Equipment design
and construction of several EcaFlo® models (C-101, C-102 and C-104) is
complete and pricing has been developed to reflect the upgrades we have made in
our equipment.  Vital testing results have significantly improved our
ability to complete our goals ahead of time and enter our markets with specific
EcaFlo® devices with a firm confidence level, in addition to allowing us the
opportunity to modify existing EcaFlo® equipment to meet customer
demand.





Current
research initiatives are centered on providing specific water quality regulatory
agencies with reports that will serve to quell any question that may arise
regarding the potential of negative impact on the environment (i.e.: estuary)
associated with the use of EcaFlo® anolyte and
catholyte solutions.  We are finding that, through the use of
test data and technical expertise, we are able to better educate environmental
regulators and gain their support and endorsement for certain ECA applications
within the storm water treatment arena, the petroleum industry, and with food
and beverage safety control agencies.  At petroleum industry trade
shows, our marketing and sales department personnel presented test results
showing potential customers that aliquots of petroleum well “frac” waters
treated with EcaFlo® device-generated anolyte solution showed bacterial kill in
less than 5 minutes.  Furthering that data, our approach is to point
out that the use of EcaFlo® solutions to obtain these successful results can
eliminate the need for voluminous regulatory compliance paperwork and the higher
cost associated with the use of traditional biocidal chemicals that are
currently used to treat “frac” water.





We
are continuing our research to identify opportunities where we can provide our
innovative technology in value-added services within the food and beverage
production and processing industry, medical and healthcare markets, the
hospitality industry, as well as in homeland defense applications.





We
are continuing to work together with Coastal Carolina University, as well as
other universities associated with several of our customers’ specific research
requirements, to develop a more comprehensive approach to documenting test
results that pertain to the use of EcaFlo®solutions
in a plethora of applications.





Further
research and development efforts will be implemented with our strategic
university partners, going concerns within the oil and gas and food safety
industries, and with nationally-accredited research labs.  We view
research and development as an integral portion of our product development plan
and will use the measurable outcomes from research projects as catalysts for
market development.  The results of this research guide us in
determining what to further implement into our EcaFlo® equipment
designs.


16


Significant
changes in the number of employees.





We
currently employ 9 full-time, permanent employees.  These employees
are engaged in management, marketing and sales, engineering, production and
administrative services.  We continue to anticipate an increase in
employees in the next twelve months as we add assembly personnel, shipping and
receiving personnel and additional administrative support
personnel.





Amended
Employment Agreements





William E. Prince.On May 30,
2007, we executed an amended employment agreement with our President and CEO,
William E. Prince, wherein we extended the termination date from December 31,
2009 to March 30, 2012.  Additionally, we increased Mr. Prince’s
annual salary from $74,400 to $130,000, which shall be paid in equal, bi-weekly
installments retroactive to April 1, 2007.





Marion C. Sofield.On May 30,
2007, we executed an amended employment agreement with our Executive Vice
President, Marion C. Sofield, wherein we extended the termination date from
December 31, 2009 to March 30, 2012.  Additionally, we increased Ms.
Sofield’s annual salary from $72,000 to $110,000, which shall be paid in equal,
bi-weekly installments retroactive to April 1, 2007.





Consultants





John Sanders. On May 29,
2007, we entered into a consulting agreement with John Sanders, wherein Mr.
Sanders agreed to assist the Company with corporate development in order to
enhance the Company’s shareholder value.  The term of the agreement
began on May 29, 2007 and will terminate on May 28, 2008.  We agreed
to pay Mr. Sanders the equivalent of $2,500 per month by issuing 50 units of our
10% convertible debenture (includes 150,000 restricted shares of common stock
and 100,000 Series “C” Warrants, exercisable at $0.25 per share through December
31, 2008) and pay for mutually agreed upon travel and expenses incurred in the
performance of the agreement.  The 50 units were issued to Mr. Sanders
on June 28, 2007.





CBG Advanced Studies, Inc. On
September 7, 2007, we entered into a consulting agreement with CBG Advanced
Studies, Inc. (“CBG”), wherein CBG agreed to assist the Company in developing
appropriate and effective market penetration plans relative to the use of our
EcaFlo® equipment and solutions within U.S. military and civilian
decontamination market areas.  The term of the agreement began on
September 7, 2007 and will terminate on August 31, 2008.  We agreed to
compensate CBG with 30,000 shares of our restricted common stock on a quarterly
basis, $2,000 per month for the first three (3) months, and pay for mutually
agreement upon travel and expenses incurred in the performance of the
agreement.





Pentagon Technical Services,
Inc.We entered into a Representative Agreement with Pentagon
Technical Services, Inc. on August 1, 2005.Due to conflicts with
the Benchmark Exclusive License and Distribution Agreement, our agreement with
Pentagon was terminated on


17


July
31, 2007.  However, discussions are ongoing with Pentagon and
Benchmark, seeking to reach an agreement that will effectively benefit all
parties in advancing the technology.





TEN Associates,
LLC.  On March 3, 2008, we entered into a consulting agreement
with TENAssociates,
LLC (Tom Nelson), wherein TENAssociates agreed to provide the Company with investor relations
services.  The term of the agreement began on March 3, 2008 and will
terminate in three months on June 3, 2008.  We agreed to compensate
TENAssociates with
$3,000 per month for the three months.





Exclusive License and
Distribution Agreement





On
June 20, 2007, in connection with the Stock Acquisition Agreement with
Benchmark, we entered into an Exclusive License and Distribution Agreement,
wherein we granted the exclusive, worldwide right, license, and authority to
market, manufacture, sell and distribute EcaFlo® fluids and solutions for use in
Oilfield Applications to Benchmark Energy Products. The agreement provides for
special pricing of equipment to Benchmark and per-gallon technology fees, paid
to IET on the EcaFlo® fluids sold by Benchmark, for a five-year period
consistent with the license period.





Critical
Accounting Policies and Estimates





Our
discussion of financial conditions and results of operations is based upon the
information reported in our financial statements.  The preparation of
these statements requires us to make assumptions and estimates that affect the
reported amounts of assets, liabilities, revenues and expenses as well as the
disclosure of contingent assets and liabilities at the date of our financial
statements.  We base our assumptions and estimates on historical
experience and other sources that we believe to be reasonable at the
time.  Actual results may vary from our estimates due to changes in
circumstances, weather, politics, global economics, mechanical problems, general
business conditions and other factors.  Our significant estimates are
related to the valuation of warrants and options.





Revenue
Recognition





We
recognize sales revenue when title passes and all significant risks of ownership
change, which occurs either upon shipment or delivery based on contractual
terms.  We are in discussions with Benchmark relative to the fact that
Benchmark’s own trucking group prefers to pick up the EcaFlo® equipment that is
ordered and paid for, in order to deliver the equipment to their own
locations.  We believe that the sale has occurred when the equipment
is on our loading dock awaiting pick-up by Benchmark, but will obtain written
resolution before future sales are recorded in this manner.





Off-Balance
Sheet Arrangements.





As
of March 31, 2008, we did not have any off-balance sheet arrangements that had
or are reasonably likely to have a current or future effect on our financial
condition, changes in


18


financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that are material to investors.





Item
3. Quantitative and Qualitative Disclosures About Market Risk.





Concentration
of Credit Risk





We sell products to customers in
diversified industries and geographical regions.  During the years
ended December 31, 2007 and 2006, we had three customers, which represented 52%,
11%, and 7%, and 35%, 16%, and 14% of sales, respectively.  We
continually evaluate the creditworthiness of our customers and typically require
a deposit of 40% - 50% of the total purchase price with each EcaFlo® equipment
order.





We evaluate the collectibility of
accounts receivable regularly and it is our policy to record an allowance when
the results of the evaluation indicate an increased risk related to the
customer's ability to meet their financial obligations.





Item
4T. Controls and Procedures.





Evaluation
of Disclosure Controls and Procedures





Our
Chief Executive Officer and Principal Financial Officer, William E. Prince, has
evaluated the effectiveness of our disclosure controls and procedures (as
defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended)
as of the end of the period covered by this Report. Based on that evaluation,
Mr. Prince concluded that our disclosure controls and procedures did not operate
effectively as of the end of the period covered by this report in timely
alerting him to material information relating to us (including our consolidated
subsidiaries) required to be included in our periodic SEC filings and in
ensuring that information required to be disclosed by us in the reports that we
file or submit under the Act is accumulated and communicated to our management,
including our principal executive and principal financial officer, or persons
performing similar functions, as appropriate to allow timely decisions regarding
required disclosure.





The
material weakness relates to the monitoring and review of work performed by a
financial consultant in the preparation of the financial statements, footnotes
and financial data included in the report we file or submit under the Exchange
Act.  Our financial consultant oversees that our financial reporting
is prepared and presented in an effective manner by our sole in-house accounting
employee.  This lack of accounting staff results in a lack of
segregation of duties and accounting technical expertise necessary for an
effective system of internal control.





In
order to mitigate this material weakness to the fullest extent possible, all
financial reports we file or submit under the Exchange Act are reviewed by the
Chief Executive Officer and President, and the Board of Directors for
reasonableness.  All unexpected results are
investigated.  At any time, if it appears that any control can be
implemented to continue to mitigate such weaknesses, it is immediately
implemented.  We are in the process of


19


implementing
appropriate procedures for monitoring and reviewing the work performed by our
financial consultant.





Notwithstanding
this material weakness, we believe that the consolidated financial statements
included in this report fairly present, in all material respects, our
consolidated financial position and results of operations as of and for the
quarter ended March 31, 2008.





Changes
in Internal Control Over Financial Reporting





There
were no changes in our internal control over financial reporting that occurred
during our most recent fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.





PART
II – OTHER INFORMATION





Item
1. Legal Proceedings.





We are not a party to any material
legal proceedings.





Item
1A. Risk Factors.





FACTORS
THAT MAY AFFECT OUR RESULTS OF OPERATIONS





We
are required to make accounting estimates and judgments in preparing our
consolidated financial statements.





In preparing our consolidated financial
statements in accordance with accounting principles generally accepted in the
United States, we make certain estimates and assumptions that affect the
accounting for and recognition of assets, liabilities, revenues and
expenses.  These estimates and assumptions must be made because
certain information that is used in the preparation of our consolidated
financial statements is dependent on future events, or cannot be calculated with
a high degree of precision from data available.  In some cases, these
estimates are particularly difficult to determine and we must exercise
significant judgment.  The estimates and the assumptions having the
greatest amount of uncertainty, subjectivity and complexity are related to our
accounting for bad debts, returns and allowances, warranty and repair costs,
derivatives, and asset impairments.  Actual results could differ
materially from the estimates and assumptions that we use, which could have a
material adverse effect on our financial condition and results of
operations.





Our
auditor’s report reflects the fact that without realization of additional
capital, it would be unlikely for us to continue as a going
concern.





As
a result of our deficiency in working capital at March 31, 2008, our auditors
have included a paragraph in their report regarding substantial doubt about our
ability to continue as a going concern.  Our plans in this regard are
to seek additional funding through future equity


20


private
placements, with traditional financing firms and/or with an industry partner, or
debt facilities.





We
have minimal operating history, which raises substantial doubt as to our ability
to successfully develop profitable business operations.





We
have a limited operating history.  However, our management team has
extensive experience in project development and managing corporate
assets.  A highly successful professional who brings more than three
decades of business development experience to us from the environmental
engineering industry heads our marketing and sales department.  The
Company’s engineering department is headed by former military personnel who has
expertise that centers on the primary mechanical and electrical aspects of our
technologies.  Our prospects must be considered in light of the risks,
expenses and difficulties frequently encountered in establishing a business in
our intended industries.  Outside of the high levels of expertise
noted above and our concentrated effort to be the leading provider in our
industries, there is nothing at this time on which to base an assumption that
our business operations will prove to be successful or that we will ever be able
to operate profitably.





Our
future operating results will depend upon many factors, including:





·
            The
      continuation of our efforts to raise adequate working capital through
      equity investment, traditional financing, the continuation of payments
      from Benchmark pursuant to our agreement and the generation of sales
      revenues;


·
            The
      continued success of lab and field testing that supports the development
      of our EcaFlo® technology product
lines;


·
            Demand
      for our EcaFlo® equipment and
solutions;


·
            The
      level of our competition;


·
            Our
      ability to maintain key management and technical support staff, and to
      attract more employees with similar characteristics;
  and


·
            The
      continuation of our efforts to efficiently develop products to
      commercialize while maintaining quality and controlling
    costs.





To
achieve profitable operations, we must, alone or with others, successfully act
on the factors stated above, along with continually developing ways to enhance
our production efforts, now that we are commencing production in the EcaFlo®
Division.





As
we move forward in production stage business operations, even with our good
faith efforts, potential investors have a high possibility of losing their
investment.





Due
to the intrinsic nature of our business, we expect to see growth in competition
and the development of new and improved technologies within the realm of
electro-chemical activation processes and products.  While we will
always keep a close eye on technological advancement in these areas, management
forecasts are not necessarily indicative of our ability to compete with newer
technology, as it may develop.  Management forecasts should not be
relied upon as an indication of future performance.  While management
believes its estimates of


21


projected
occurrences and events are within the timetable of its business plan, our actual
results may differ substantially from those that are currently
anticipated.





We
will need additional capital in the future to finance our planned growth, which
we may not be able to raise or it may only be available on terms unfavorable to
us or our stockholders, which may result in our inability to fund our working
capital requirements and harm our operational results.





Based on our current proposed plans and
assumptions, we anticipate that we will need additional capital to fund our
operations.  Furthermore, the commercialization expenses of our
EcaFlo® Division will be substantial, i.e., in excess of the amount of cash that
we currently have.  Accordingly, we will have to (i) obtain additional
debt or equity financing in order to fund the further development of our
products and working capital needs, and/or (ii) enter into a strategic alliance
with a larger company to provide our required funding.  As a result of
our low-priced stock, and our continuous need for additional capital, we may
consider issuing significant amounts of our common stock in exchange for either
debt or equity.  The continued issuance of our common stock would have
a substantial dilutive impact on our current stockholders.  If we are
unable to obtain additional equity or debt financing, we may be forced to
terminate operations.





Because
our common stock is deemed a low-priced “Penny” stock, an investment in our
common stock should be considered high risk and subject to marketability
restrictions.





Since
our common stock is a penny stock, as defined in Rule 3a51-1 under the
Securities Exchange Act, it will be more difficult for investors to liquidate
their investment even if and when a market develops for the common
stock.  Until the trading price of the common stock rises above $5.00
per share, if ever, trading in the common stock is subject to the penny stock
rules of the Securities Exchange Act specified in rules 15g-1 through
15g-10.  Those rules require broker-dealers, before effecting
transactions in any penny stock, to:





·
              Deliver
      to the customer, and obtain a written receipt for, a disclosure
      document;
 ·
              Disclose
      certain price information about the
stock;
 ·
              Disclose
      the amount of compensation received by the broker-dealer or any associated
      person of the broker-dealer;
 ·
              Send
      monthly statements to customers with market and price information about
      the penny stock; and
 ·
              In
      some circumstances, approve the purchaser’s account under certain
      standards and deliver written statements to the customer with information
      specified in the rules.




Consequently, the penny
stock rules may restrict the ability or willingness of broker-dealers to sell
the common stock and may affect the ability of holders to sell their common
stock in the secondary market and the price at which such holders can sell any
such securities.  These additional procedures could also
limit our ability to raise additional capital in the future.





Our
stock is thinly traded; as a result you may be unable to sell at or near ask
prices or at all if you need to liquidate your shares.


22





The
shares of our common stock have historically been thinly-traded on the OTC
Bulletin Board, meaning that the number of persons interested in purchasing our
common shares at or near ask prices at any given time may be relatively small or
non-existent.  This situation is attributable to a number of factors,
including the fact that we are a small company which is relatively unknown to
stock analysts, stock brokers, institutional investors and others in the
investment community that generate or influence sales volume, and that even if
we came to the attention of such persons, they tend to be risk-averse and would
be reluctant to follow an unproven, early-stage company such as ours or purchase
or recommend the purchase of our shares until such time as we became more
seasoned and viable.  As a consequence, there may be periods of
several days or more when trading activity in our shares is minimal or
non-existent, as compared to a seasoned issuer which has a large and steady
volume of trading activity that will generally support continuous sales without
an adverse effect on share price.  We cannot give you any assurance
that a broader or more active public trading market for our common shares will
develop or be sustained, or that current trading levels will be
sustained.  Due to these conditions, we can give investors no
assurance that they will be able to sell their shares at or near ask prices or
at all if they need money or otherwise desire to liquidate their
shares.





We
are subject to significant competition from large, well-funded
companies.





The
industries we intend to compete in are characterized by intense competition and
rapid and significant technological advancements.  Many companies,
research institutions and universities are working in a number of areas similar
to our primary fields of interest to develop new products, some of which may be
similar and/or competitive to our products.  Furthermore, many
companies are engaged in the development of water “purifying” products of which
may be similar and/or competitive to our products and
technology.  Most of the companies with which we compete have
substantially greater financial, technical, manufacturing, marketing,
distribution and other resources than us.





We
are highly dependent on William E. Prince, our CEO, president and
chairman.  The loss of Mr. Prince, whose knowledge, leadership and
technical expertise upon which we rely, would harm our ability to execute our
business plan.





Our
success depends heavily upon the continued contributions of William E. Prince,
whose knowledge, leadership and technical expertise would be difficult to
replace, and on our ability to retain and attract technical and professional
staff.  If we were to lose his services, our ability to execute our
business plan would be harmed and we may be forced to cease operations until
such time as we could hire a suitable replacement for Mr. Prince.  We
also have other key employees who manage our operations and perform critical
engineering and design functions, as well as direct the overall marketing and
sales of our products.  If we were to lose their services, senior
management would be required to expend time and energy to replace and train
their replacements.  To the extent that we are smaller than our
competitors and have fewer resources, we may not be able to attract the
sufficient number and quality of staff.





Potential
issuance of additional common stock could dilute existing
stockholders.


23


We
are authorized to issue up to 200,000,000 shares of common stock.  To
the extent of such authorization, our board of directors has the ability,
without seeking stockholder approval, to issue additional shares of common stock
in the future for such consideration as the board of directors may consider
sufficient.  We may seek additional equity financing, which if sought
or obtained may result in additional shares of our common stock being
issued.





Pursuant
to the Stock Acquisition Agreement with Benchmark, we agreed that throughout the
period commencing with the closing date and ending October 31, 2009, Benchmark
shall have the right and ability to maintain an equity position in the Company
equal to the equity position it would own upon the issuance of shares to it
following payment of the seventh installment if, between the date of closing and
the date of such payment and issuance of shares, we were to issue no additional
shares of our common stock (approximately 40.61%) to any other
party.  If we default pursuant to the anti-dilution language in the
agreement (considered a “Warrant Right Event”) then we will be obligated to
issue to Benchmark a warrant entitling it to purchase, at $0.10 per share, such
additional number of shares of our common stock as would, upon exercise, make
Benchmark the holder of the same total percentage of all our outstanding equity
securities as it held prior to the Warrant Right Event. The warrants will be
exercisable at any time through October 31, 2009.





The
issuance of additional common stock in the future will reduce the proportionate
ownership and voting power of the common stock held by our existing
stockholders.





Our
internal controls may be inadequate, which could cause our financial reporting
to be unreliable and lead to misinformation being disseminated to the
public.




Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting.  As defined in Exchange Act Rule
13a-15(f), internal control over financial reporting is a process designed by,
or under the supervision of, the principal executive and principal financial
officer and effected by the board of directors, management and other personnel,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles and includes those policies and
procedures that: (i) pertain to the maintenance of records that in reasonable
detail accurately and fairly reflect the transactions and dispositions of our
assets; (ii) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that our receipts and expenditures
are being made only in accordance with authorizations of management and
directors of the Company, and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition
of our assets that could have a material effect on the financial
statements.




We
have a limited number of personnel that are required to perform various roles
and duties as well as be responsible for monitoring and ensuring compliance with
our internal control procedures.  As a result, our internal controls
may be inadequate or ineffective, which could cause our financial reporting to
be unreliable and lead to misinformation being disseminated to the
public.  Investors relying upon this misinformation may make an
uninformed investment decision.


24





If
we fail to remain current on our reporting requirements, we could be removed
from the OTC Bulletin Board, which would limit the ability of broker-dealers to
sell our securities and the ability of stockholders to sell their securities in
the secondary market.





Companies
trading on the OTC Bulletin Board, such as us, generally must be reporting
issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and
must be current in their reports under Section 13, in order to maintain price
quotation privileges on the OTC Bulletin Board.  More specifically,
FINRA has enacted Rule 6530, which determines eligibility of issuers quoted on
the OTC Bulletin Board by requiring an issuer to be current in its filings with
the Commission.  Pursuant to Rule 6530(e), if we file our reports late
with the Commission three times in a two-year period or our securities are
removed from the OTC Bulletin Board for failure to timely file twice in a
two-year period, then we will be ineligible for quotation on the OTC Bulletin
Board.  As a result, the market liquidity for our securities could be
severely adversely affected by limiting the ability of broker-dealers to sell
our securities and the ability of stockholders to sell their securities in the
secondary market.  As of the date of this filing, we have one late
filing reported by FINRA.





Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.





On March 17, 2008, we issued 60,000
shares to CBG Advanced Studies for the first two quarters pursuant to the
Consulting Agreement dated September 7, 2007.  We believe that the
issuance of the shares was exempt from the registration and prospectus delivery
requirements of the Securities Act of 1933 by virtue of Section 4(2).  The recipient of
the shares was afforded an opportunity for effective access to files and records
of the Company that contained the relevant information needed to make its
investment decision, including the Company’s financial statements and 34 Act
reports.  We reasonably believe that the recipient, immediately prior
to issuing the shares, had such knowledge and experience in our financial and
business matters that it was capable of evaluating the merits and risks of its
investment.  The recipient had the opportunity to speak with our
president and directors on several occasions prior to its investment
decision.





Subsequent
Issuances





On April 23, 2008, we issued to AD
Capital, LLC 150,000 warrants exercisable at $0.05 per share, expiring in five
years (4/23/13) and 150,000 warrants exercisable at $0.25 per share, expiring in
five years (4/23/13) pursuant to the Securities Purchase Agreement dated April
23, 2008.  We believe that the issuance of the warrants was exempt
from the registration and prospectus delivery requirements of the Securities Act
of 1933 by virtue of Section 4(2).  The recipient of
the warrants was afforded an opportunity for effective access to files and
records of the Company that contained the relevant information needed to make
its investment decision, including the Company’s financial statements and 34 Act
reports.  We reasonably believe that the recipient, immediately prior
to issuing the warrants, had such knowledge and experience in our financial and
business matters that it was capable of evaluating the merits and risks of its
investment.  The recipient had the opportunity to speak with our
president and directors on several occasions prior to its investment
decision.


25





On
May 19, 2008, the Company issued 5,000,000 shares of our common stock to
Benchmark Performance Group, Inc., pursuant to our Stock Acquisition Agreement
dated June 20, 2007.  We believe that the issuance of the shares was
exempt from the registration and prospectus delivery requirements of the
Securities Act of 1933 by virtue of Section 4(2).  The recipient of
the shares was afforded an opportunity for effective access to files and records
of the Company that contained the relevant information needed to make its
investment decision, including the Company’s financial statements and 34 Act
reports.  We reasonably believe that the recipient, immediately prior
to issuing the shares, had such knowledge and experience in our financial and
business matters that it was capable of evaluating the merits and risks of its
investment.  The recipient had the opportunity to speak with our
president and directors on several occasions prior to its investment
decision.





Issuer
Purchases of Equity Securities





The Company did not repurchase any of
its equity securities during the quarter ended March 31, 2008.





Item
3.                      
Defaults Upon Senior Securities.





None.





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





We did not submit any matters to a vote
of our security holders during the first quarter of 2008.





Item
5.                      
Other Information.





None.





26


Item
6.                      
Exhibits.





Exhibits





Incorporated
      by referenceExhibit
              number
            
            Exhibit
      description
            
            Filed
              herewith
            
            Form
            
            Period
              ending
            
            Exhibit
      No.
            
            Filing
              date2(a)
            
            Agreement
      and Plan of Merger between Coronado Explorations Ltd and Naturol,
      Inc.
            
            
            
            8-K
            
            
            
            2(a)
            
            10/25/012(b)
            
            Amendment
      No. 1 to the Agreement and Plan of Merger between Coronado Explorations
      Ltd and Naturol, Inc.
            
            
            
            8-K
            
            
            
            2(b)
            
            1/25/022(c)
            
            Agreement
      and Plan of Merger and Reincorporation
            
            
            
            8-K
            
            
            
            2(c)
            
            3/10/083(i)(a)
            
            Certificate
      of Incorporation of Coronado Explorations Ltd. – Dated February 2,
      1999
            
            
            
            10SB12G
            
            
            
            2(a)
            
            6/9/993(i)(b)
            
            Amended
      and Restated Articles of Incorporation of Coronado Explorations Ltd. –
      Dated May 20, 1999
            
            
            
            10SB12G
            
            
            
            2(b)
            
            6/9/993(i)(c)
            
            Certificate
      of Amendment of Certificate of Incorporation of Coronado Explorations Ltd.
      – Dated October 5, 2000
            
            
            
            10-KSB
            
            1/31/02
            
            3(i)(c)
            
            4/30/023(i)(d)
            
            Articles
      of Incorporation of Naturol, Inc. – Dated June 9, 2001
            
            
            
            10-KSB
            
            1/31/02
            
            3(i)(d)
            
            4/30/023(i)(e)
            
            Certificate
      of Amendment to Articles of Incorporation of I.E.T., Inc.
            
            
            
            10-QSB
            
            6/30/04
            
            3
            
            8/23/043(i)(f)
            
            Certificate
      of Amendment of Certificate of Incorporation of Naturol Holdings Ltd. –
      Dated May 5, 2004
            
            
            
            10-QSB
            
            3/31/04
            
            3(i)
            
            5/14/043(i)(g)
            
            Certificate
      of Merger between Coronado Subsidiary Corp. and Naturol, Inc. – Dated
      January 14, 2001
            
            
            
            8-K
            
            
            
            3(i)(g)
            
            1/25/023(i)(h)
            
            Articles
      of Incorporation of Integrated Environmental Technologies, Ltd. – Dated
      January 11, 2008
            
            
            
            8-K
            
            
            
            3(i)(h)
            
            3/10/083(i)(i)
            
            Articles
      of Merger of Integrated Environmental Technologies, Ltd., Nevada
      corporation and Integrated Environmental Technologies, Ltd., Delaware
      corporation – Dated February 15, 2008 (Nevada)
            
            
            
            8-K
            
            
            
            3(i)(j)
            
            3/10/083(i)(j)
            
            Certificate
      of Merger of Integrated Environmental Technologies, Ltd., Nevada
      corporation and Integrated Environmental Technologies, Ltd., Delaware
      corporation – Dated February 18, 2008 (Delaware)
            
            
            
            8-K
            
            
            
            3(i)(j)
            
            3/10/083(ii)(a)
            
            Bylaws
      of Coronado Explorations Ltd. – Dated February 9, 2001
            
            
            
            8-K
            
            
            
            3(ii)(e)
            
            1/25/023(ii)(b)
            
            Bylaws
      of Naturol, Inc. – Dated June 9, 2001
            
            
            
            10-KSB
            
            1/31/02
            
            3(ii)(f)
            
            4/30/023(ii)(c)
            
            Bylaws
      of Integrated Environmental Technologies, Ltd., a Nevada corporation –
      Dated January 11, 2008
            
            
            
            8-K
            
            
            
            3(ii)(c)
            
            3/10/0810.1
            
            License
      Agreement among Integrated Environmental Technologies Ltd.,
      Electro-Chemical Technologies Ltd. and Laboratory of Electrotechnology
      Ltd. – Dated September 4, 2003
            
            
            
            10-QSB
            
            9/30/03
            
            10.8
            
            11/19/0310.2
            
            Supply
      Agreement – Dated September 4, 2003
            
            
            
            10-QSB
            
            9/30/03
            
            10.9
            
            11/19/0310.3
            
            Letter
      Agreement between SPDG Naturol Ltd. and Integrated Environmental
      Technologies Ltd. – Dated October 14, 2003
            
            
            
            10-QSB
            
            9/30/03
            
            10.10
            
            11/19/0310.4
            
            Collaborative
      Agreement with Integrated Environmental Technologies Ltd. and Coastal
      Carolina University – Dated December 11, 2003
            
            
            
            8-K
            
            
            
            10.2
            
            1/08/0410.5
            
            Contract
      of Sale – JMW Investments – Dated January 2, 2004
            
            
            
            8-K
            
            
            
            10.1
            
            3/1/0410.6
            
            Consultant
      and Employee Stock Compensation Plan – Dated January 21,
    2004
            
            
            
            S-8
            
            
            
            10.3
            
            1/22/0410.7
            
            Letter
      of Intent with Pentagon Technical Services – Dated June 15,
      2004
            
            
            
            10-QSB
            
            6/30/04
            
            10
            
            8/23/0410.8
            
            Amendment
      to License and Supply Agreement with Electro-Chemical
      Technologies
            
            
            
            10-QSB
            
            9/30/04
            
            10
            
            11/12/0410.9
            
            Consulting
      Agreement of Joseph Schmidt, dated November 18, 2004.
            
            
            
            8-K
            
            
            
            10.1
            
            1/07/0510.10
            
            Letter
      Amending Joseph Schmidt’s Consulting Agreement.
            
            
            
            8-K
            
            
            
            10.2
            
            1/07/0510.11
            
            Consulting
      Agreement of XXR Consulting, Inc., dated December 8, 2004.
            
            
            
            8-K
            
            
            
            10.3
            
            1/07/0510.12
            
            Employment
      Agreement of William E. Prince, dated January 3, 2005.
            
            
            
            8-K
            
            
            
            10.4
            
            1/07/0510.13
            
            Employment
      Agreement of Marion Sofield – January 3, 2005
            
            
            
            8-K
            
            
            
            10.5
            
            1/07/0510.14
            
            Addendum
      to Marion Sofield’s Employment Agreement – Dated February 28,
      2005
            
            
            
            10-KSB
            
            12/31/04
            
            10.6
            
            3/30/0510.15
            
            Employment
      Agreement of Steve Johnson – Dated February 10, 2005
            
            
            
            10-KSB
            
            12/31/04
            
            10.7
            
            3/30/0510.16
            
            DaVinci-Franklin
      Fund I, LLC – Dated April 1, 2005
            
            
            
            8-K
            
            
            
            10.1
            
            4/13/0510.17
            
            Agreement
      with Red River Capital Partners dated June 14, 2006
            
            
            
            10-QSB
            
            6/30/06
            
            10
            
            8/14/0610.18
            
            Stock
      Acquisition Agreement dated June 20, 2007
            
            
            
            8-K
            
            
            
            10.1
            
            8/21/0710.19
            
            Exclusive
      License and Distribution Agreement dated June 20, 2007
            
            
            
            8-K
            
            
            
            10.2
            
            8/21/0710.20
            
            Registration
      Rights Agreement dated June 21, 2007
            
            
            
            8-K
            
            
            
            10.3
            
            8/21/0716
            
            Letter
      of Andersen, Andersen & Strong, L.C. regarding change in certifying
      accountant – Dated April 18, 2002
            
            
            
            8-K
            
            
            
            16
            
            4/26/0231
            
            Certification
      pursuant to Section 302 of the Sarbanes-Oxley Act
            
            X32
            
            Certification
      pursuant to Section 906 of the Sarbanes-Oxley Act
            
            X














27














SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.





INTEGRATED
ENVIRONMENTAL TECHNOLOGIES, LTD.


(Registrant)











By: /s/ William
Prince_____________________


William
E. Prince, Chief Executive Officer


And
Principal Financial Officer (On behalf of


the
registrant and as principal accounting


officer)





Date:
September 18, 2008





28