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: September 30, 2004



[ ] 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)



|Delaware                          | 98-0200471              
|--------------------------------- | ------------------------
|(State or other jurisdiction
		of | (I.R.S.
		Employer      
|incorporation or
		organization)  | Identification
		Number)



|4235 Commerce Street                       |           
|------------------------------------------ | ----------
|Little River, South Carolina               | 29566     
|(Address of Principal
		Executive Offices) | (Zip Code)



(843) 390-2500

(Issuer's telephone
number, including area code)



Check whether the
issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the last 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 ____



The number of shares
of Common Stock, $0.001 par value, outstanding on September 30, 2004, was
19,599,793 shares.



Transitional Small
Business Disclosure Format (check one):



Yes      No X



---



PART I - FINANCIAL
INFORMATION

Item 1. Financial Statements.



Integrated
Environmental Technologies, Ltd.

(formerly Naturol
Holdings, Ltd.)

(A Development Stage
Company)

Condensed Consolidated
Balance Sheet



|                                                                                                                                                                   | September 30,
		2004 | December 31,
		2003
|------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------- | -------------------
|                                                                                                                                                                   | (Unaudited)          | (Audited)          
|Assets                                                                                                                                                             |                      |                    
|Current Assets:                                                                                                                                                    |                      |                    
|Cash                                                                                                                                                               | $      365,019       | $      284,221     
|Inventory                                                                                                                                                          | 57,200               | 15,000             
|Deposits and prepaid assets                                                                                                                                        | 89,268               | 2,526              
|Total current assets                                                                                                                                               | 511,487              | 301,747            
|                                                                                                                                                                   |                      |                    
|Building                                                                                                                                                           | 479,268              | -                  
|Equipment                                                                                                                                                          | 11,051               | 3,547              
|Accumulated depreciation                                                                                                                                           | (8,622)              | (296)              
|Total building and equipment                                                                                                                                       | 481,697              | 3,251              
|                                                                                                                                                                   |                      |                    
|Other asset-license agreement
		net of accumulated amortization of $5,508 and $1,695 at 9/30/04 and
		12/31/03                                                     | 69,492               | 73,305             
|                                                                                                                                                                   | $ 1,062,676          | $ 378,303          
|Liabilities and Stockholders'
		Equity                                                                                                                             |                      |                    
|Current liabilities:                                                                                                                                               |                      |                    
|Accounts payable                                                                                                                                                   | $ 63,012             | $ 61,945           
|Accrued liabilities                                                                                                                                                | 50,000               | -                  
|Current maturity of long-term
		debt                                                                                                                               | 15,000               | -                  
|Notes payable                                                                                                                                                      | 414                  | 5,000              
|Total current liabilities                                                                                                                                          | 128,426              | 66,945             
|                                                                                                                                                                   |                      |                    
|Long-term debt, net of
		current maturities                                                                                                                        | 293,685              | -                  
|                                                                                                                                                                   |                      |                    
|Stockholders' Equity                                                                                                                                               |                      |                    
|Common stock 200,000,000
		shares authorized par value $.001, 19,599,793 and 5,068,741 shares
		issued and outstanding at September 30, 2004 and December 31, 2003 | 19,600               | 5,069              
|Stock bought not issued                                                                                                                                            | 168                  | 7,306              
|Paid-in-capital                                                                                                                                                    | 1,947,399            | 812,980            
|Deficit accumulated during
		the developmental stage                                                                                                               | (1,326,602)          | (513,997)          
|                                                                                                                                                                   |                      |                    
|Total stockholders' equity                                                                                                                                         | 640,565              | 311,358            
|Total liabilities and
		stockholders' equity                                                                                                                       | $ 1,062,676          | $ 378,303          



See notes to condensed
consolidated financial statements

1

---



Integrated
Environmental Technologies, Ltd.

(formerly Naturol
Holdings, Ltd.)

(A Development Stage
Company)

Condensed Consolidated
Statement of Operations

Unaudited



|                                       | Three Months Ended September 30,
		2004 | Three Months Ended September 30,
		2003 | Nine Months
		Ended September 30, 2004 | Nine Months
		Ended September 30, 2003 | From Inception
		(September 18, 2001) to September 30, 2004
|-------------------------------------- | --------------------------------------- | --------------------------------------- | -------------------------------------- | -------------------------------------- | -----------------------------------------------------------
|Professional fees                      | $ 178,007                               | $ 63,009                                | $ 292,194                              | $ 77,009                               | $ 528,039                                                  
|Administration fee                     | -                                       | 65,600                                  | 20,000                                 | 65,600                                 | 120,600                                                    
|Salary                                 | 187,699                                 | -                                       | 346,921                                | -                                      | 375,921                                                    
|Insurance expense                      | 12,676                                  | -                                       | 24,343                                 | -                                      | 24,343                                                     
|License fee                            | -                                       | -                                       | -                                      | -                                      | 50,000                                                     
|Depreciation and amortization          | 4,280                                   | -                                       | 12,140                                 | -                                      | 14,131                                                     
|Rent                                   | 4,200                                   | 11,000                                  | 15,175                                 | 11,000                                 | 26,425                                                     
|Expense of affiliate                   | -                                       | -                                       | -                                      | -                                      | 3,875                                                      
|Product testing                        | -                                       | -                                       | -                                      | -                                      | 10,750                                                     
|Office & miscellaneous
		expense       | 22,029                                  | 12,074                                  | 63,405                                 | 12,127                                 | 94,667                                                     
|Travel & entertainment                 | 4,352                                   | 4,545                                   | 31,731                                 | 4,545                                  | 53,889                                                     
|                                       |                                         |                                         |                                        |                                        |                                                            
|                                       | 413,243                                 | 156,228                                 | 805,909                                | 170,281                                | 1,302,640                                                  
|Other income (expense):                |                                         |                                         |                                        |                                        |                                                            
|Interest income                        | -                                       | -                                       | (804)                                  | -                                      | (804)                                                      
|Interest expense                       | 4,089                                   | 3,692                                   | 7,500                                  | 9,474                                  | 24,766                                                     
|                                       |                                         |                                         |                                        |                                        |                                                            
|                                       | 4,089                                   | 3,692                                   | 6,696                                  | 9,474                                  | 23,962                                                     
|                                       |                                         |                                         |                                        |                                        |                                                            
|Net loss                               | $ 417,332                               | $ 159,920                               | $ 812,605                              | $ 179,755                              | $ 1,326,602                                                
|                                       |                                         |                                         |                                        |                                        |                                                            
|Net loss per share basic and
		diluted | $ (0.04)                                | $ (0.02)                                | $ (0.07)                               | $ (0.02)                               | $ (0.15)                                                   
|                                       |                                         |                                         |                                        |                                        |                                                            
|Weighted average shares
		outstanding  | 11,626,039                              | 8,442,650                               | 11,626,039                             | 8,442,650                              | 8,766,049                                                  



See notes to condensed
consolidated financial statements

2

---



Integrated
Environmental Technologies, Ltd.

(formerly Naturol
Holdings, Ltd.)

(A Development Stage
Company)

Condensed Consolidated
Statement of Cash Flows

Unaudited



|                                                                               | Nine Months
		Ended
		September 30,
		2004 | Nine Months
		Ended
		September 30,
		2003 | From Inception
		September 18, 2001 to September 30, 2004
|------------------------------------------------------------------------------ | ------------------------------------------ | ------------------------------------------ | ---------------------------------------------------------
|Cash flows from operating
		activities:                                        |                                            |                                            |                                                          
|Net loss                                                                       | $ (812,605)                                | $ (179,755)                                | $ (1,326,602)                                            
|Adjustments to reconcile net
		loss to net cash used in operating activities - |                                            |                                            |                                                          
|Depreciation and amortization                                                  | 12,140                                     | 544                                        | 14,130                                                   
|Warrants issued for services                                                   | 206,500                                    | 17,500                                     | 224,000                                                  
|Stock issued for services                                                      | 187,400                                    | -                                          | 237,400                                                  
|Changes in operating assets
		and liabilities:                                 |                                            |                                            |                                                          
|Inventory                                                                      | (42,200)                                   | (10,750)                                   | (57,200)                                                 
|Deposits and prepaid assets                                                    | (86,742)                                   | (3,026)                                    | (89,268)                                                 
|Accounts payable                                                               | 51,067                                     | (2,242)                                    | 63,012                                                   
|Accrued liabilities                                                            | 50,000                                     | -                                          | 50,000                                                   
|Cash used in operating
		activities                                            | (434,440)                                  | (177,729)                                  | (884,528)                                                
|                                                                               |                                            |                                            |                                                          
|Cash flows from investing
		activities:                                        |                                            |                                            |                                                          
|Purchase of building and
		equipment                                           | (486,773)                                  | (3,547)                                    | (490,320)                                                
|Advances on notes receivable                                                   | -                                          | (10,000)                                   | -                                                        
|Purchase of license agreement                                                  | -                                          | (75,000)                                   | (75,000)                                                 
|Cash used in investing
		activities                                            | (486,773)                                  | (88,547)                                   | (565,320)                                                
|                                                                               |                                            |                                            |                                                          
|Cash flows from financing
		activities:                                        |                                            |                                            |                                                          
|Payments on long-term debt                                                     | (10,065)                                   | -                                          | (10,065)                                                 
|Note payable, net                                                              | (4,586)                                    | 141,311                                    | 229,520                                                  
|Increase in long-term debt                                                     | 318,750                                    | -                                          | 318,750                                                  
|Proceeds from the sale of
		common stock                                       | 697,912                                    | 145,000                                    | 1,276,662                                                
|Cash provided by financing
		activities                                        | 1,002,011                                  | 286,311                                    | 1,814,867                                                
|                                                                               |                                            |                                            |                                                          
|Increase (decrease) in cash                                                    | 80,798                                     | 20,035                                     | 365,019                                                  
|Cash beginning of period                                                       | 284,221                                    | 243                                        | -                                                        
|Cash end of period                                                             | $ 365,019                                  | $ 20,278                                   | $ 365,019                                                
|                                                                               |                                            |                                            |                                                          
|Supplemental disclosure of
		cash flow information:                            |                                            |                                            |                                                          
|Cash paid for interest                                                         | $ 7,500                                    | $ -                                        | $ 24,766                                                 
|Cash paid for income taxes                                                     | -                                          | -                                          | -                                                        
|                                                                               |                                            |                                            |                                                          
|Noncash financing activities:                                                  |                                            |                                            |                                                          
|Stock issued for subscription
		receivable                                     | $ -                                        | $ -                                        | $ 28,400                                                 
|Stock issued and note assumed
		in reverse merger                              | -                                          | -                                          | 52,765                                                   
|Stock returned to the Company
		and cancelled                                  | -                                          | -                                          | 9,931                                                    
|Reverse stock split                                                            | -                                          | -                                          | 60,000                                                   
|Stock issued for accounts
		payable through exercise of options                | 50,000                                     | -                                          | 50,000                                                   
|Stock issued for conversion
		of note payable                                  | -                                          | 255,605                                    | 255,605                                                  



See notes to condensed
consolidated financial statements

3

---



Integrated
Environmental Technologies, Ltd.

(Formerly
		known as Naturol Holdings Ltd.)

(A Development Stage
Company)

Notes To Condensed
Consolidated Financial Statements



Note 1 - Basis of
Presentation



The unaudited
condensed 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-QSB 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-KSB for the year ended December 31, 2003.



We changed our name
to Integrated Environmental Technologies, Ltd. on April 23, 2004.



Our business is in
the development stage and our major activities to date have been expanded to
include research, design and assembly of prototype EcaFloTM
devices, in addition to developing and implementing our business plan,
establishing business strategies and raising equity.



The financial
statements include our wholly owned subsidiary, I.E.T., Inc., a Nevada
Corporation. 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 - Long-Term
Debt



The long-term
		debt is a mortgage on a building we acquired on February 20, 2004. The
		interest rate is 0.5% over the bank prime rate and can be adjusted daily
		with a maximum interest rate of 8% and a minimum interest rate of 4.5%.
		The current rate is 4.5% and the term of the loan is five years on a
		30-year amortization with the final principal payment due 2/22/09.



4

---



Integrated
Environmental Technologies, Ltd.

(Formerly
		known as Naturol Holdings Ltd.)

(A Development Stage
Company)

Notes To Condensed
Consolidated Financial Statements



Note 4 - Common stock
and warrants



Through September 30,
2004, we sold a total 84.8 units. Each unit contains shares of our restricted
common stock and warrants, for a net amount of $347,615. The cost relating to
the security sales was $75,306. This cost was netted against the sales proceeds.
The cost consisted of travel expenses by a stockholder who was assisting us in
the sale of our stock and legal fees. Included in this amount is $29,805 which
was disclosed in our June 30, 2004 10-QSB as stock paid for but unissued.



We issued 205,000
shares of our stock to employees and our Directors in the third quarter. The
value assigned to the stock was $0.20 per share for a total cost of salary and
professional fees of $41,000.



In the third quarter
of 2004 we issued 50,000 shares of our stock to a Mr. Goran Blagojevic, a
consultant to us. The value assigned to the stock was $0.36 per share for a
total cost of professional fees of $18,000.



On August 20, 2004,
we issued 1,000,000 warrants to purchase our common stock at a price of $0.25
per share to Mr. Gary Grieco. The warrants expire on December 31, 2004. Using a
fair market value pricing model we determine the value of the options at the
date of issue was $206,500. We recorded as a professional fee the value of the
options with an offsetting amount also recorded as paid-in capital.



On August 5, 2004,
the Board of Directors approved the issuance of stock to employees totaling
168,000 shares and an additional 15,000 shares when certain work is completed.
84,000 shares were issued on October 1, 2004. The value assigned to the stock
was $0.30 per share for a total cost of salary of $50,400.



Note 5-License
agreement



On September 4, 2003
the Company entered into a license agreement with Electro-Chemical Technologies,
Ltd. (licensor) and Laboratory of Electrotechnology Ltd (supplier) whereby the
company has an exclusive, royalty-bearing license under the patents and the
technical information to purchase, manufacture/assemble (with the exceptions of
flow-through electrolytic modules FEM), market, lease, sell, distribute and
service Licensed Products throughout the territory for use in licensed
applications, provided, however, that license/supplier shall retain the
exclusive right to manufacture/assemble FEM's and to supply FEM's to licensee.
The license period goes through the date of the last expiration of the patent of
the technology (5/2018). A fee of $75,000 was paid for the agreement and the fee
is amortized over the period of September 2003 through May 2018. There will be a
royalty of 8% of the net sales price due on any sales made by the Company. The
amortization for the nine month period ended September 30, 2004 was $3,813. This
license agreement was amended on October 27, 2004 - See subsequent events.



5

---



Integrated
Environmental Technologies, Ltd.

(Formerly
		known as Naturol Holdings Ltd.)

(A Development Stage
Company)

Notes To Condensed
Consolidated Financial Statements



Note 6-Deposits and
prepaid assets



We have recorded a
deposit of $84,000 paid to SPDG Naturol Ltd, not related to any of our
companies, for an extraction plant with a capacity of 150 Liters. We have not
received this plant as of September 30, 2004.



We have prepaid
insurance of $2,286 relating to our building. The insurance will be amortized
over the one-year life of the policy.



Note 7-Related party
transactions



One of our
stockholders has loaned us money, which was repaid on or before September 30,
2004, except for an interest payment of $414.



Note 8-Subsequent
events



On October 27, 2004,
we amended our License and Supply Agreement with Electro-Chemical Technologies
Ltd. as the Licensor and Laboratory of Electrotechnology Ltd. the Supplier.
Pursuant to the terms of the Amendment, we expanded the applications by which we
can utilize the technology provided in the License and Supply Agreement. As
consideration for the grant of the two additional applications, we were
obligated to pay additional license fees of $12,000 and $13,000 in advanced
royalties.



6

---



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 or 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 or 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:

- increased
		competitive pressures from existing competitors and new entrants;
- increases in
		interest rates or our cost of borrowing or a default under any material
		debt agreements;
- deterioration
		in general or regional economic conditions;
- adverse state
		or federal legislation or regulation that increases the costs of
		compliance, or adverse findings by a regulator with respect to existing
		operations;
- loss of
		customers or sales weakness;
- inability to
		achieve future sales levels or other operating results;
- the
		unavailability of funds for capital expenditures and/or general working
		capital; and
- 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
"Factors That May Affect Our Plan of Operation" in this document and "Risk
Factors" in our Annual Report on Form 10-KSB for the year ended December 31,
2003.



Item 2. Plan of
Operation.



Throughout this
Quarterly Report references to "we", "our", "us", "IET", "the Company", and
similar terms refer to Integrated Environmental Technologies, Ltd. and its 100%
owned subsidiary I.E.T., Inc.



7

---



Overview



Integrated
		Environmental Technologies, Ltd. has evolved over a period of
		approximately three years from a one-technology development stage
		company (formerly Naturol Holdings Ltd.) to a two-division company that
		has entered its final phases of development prior to becoming an
		income-generating technology company. We have focused our attentions on
		several critical issues:

- Stabilizing and enhancing our financial position;
- Developing our abilities to construct the equipment required for
				our EcaFloTM Division and
				Essential Oils Extraction Division
- Developing and enhancing our testing protocol with Coastal
				Carolina University in regards to our EcaFloTM
				technology;
- Developing a relationship with Clemson University to produce
				testing assistance with our Essential Oils Extraction Division;
				and
- Commencing the process of developing a brand identity campaign
				through the appearance at various trade shows.

As a company
		in an early development stage our ability to proceed with our plan of
		operation has continuously been a function of our ability to raise
		sufficient capital to continue our operations. At the end of the first
		quarter of 2004 we had cash available of $363,658. As of the end of the
		second quarter of 2004 we had cash available of $173,949, and as of the
		end of third quarter we had cash available of $365,019. Our cash
		requirements on a monthly basis are approximately $59,000, excluding
		exceptional expenses that are related to capital raising and securities
		registration expenses. We believe that we are sufficiently capitalized
		for approximately six months of operation.



We have
		continuously incurred losses since inception. For the nine months ended
		September 30, 2003 we had a net loss of $179,755 as compared to a net
		loss of $812,605 for the period ending September 30, 2004. This 352%
		increase in overall losses is the result of our increased business
		activities, which includes increased salary expenses for increased
		personnel, professional fees, and increased office expenses in setting
		up our new office and lab facilities in South Carolina. Although we
		anticipate revenues to commence in the 1st quarter of 2005,
		we also anticipate continued losses throughout the 1st and 2nd
		quarter of 2005.



The forecast of
sales-generated revenues in the EcaFloTM Division will add to our
labor costs, but it is anticipated that deposits on guaranteed customer purchase
orders will off-set these expenses. Company Management will closely monitor the
costs associated with the production of EcaFloTMdevices so that
capital shortages will not occur during the remainder of 2004. Our ability to
continue commercialization efforts in 2005 will be critical, as the first and
second quarters of 2005 will see an increase in "burn" rate due to expansion
efforts needed to transition the company fully from development stage into
production stage. Income, from investment financing through stockholders
exercising their "A" warrants in 2005, is anticipated. As the company continues
to expand operational activities, we anticipate experiencing net negative cash
flows from operations, and may be required to fund operations from bank
borrowings that could possibly be secured by contract sales of EcaFloTM
devices in addition to continued equity sales of our common stock.



8

---



There can be
		no assurance that subsequent additional financing, if and as necessary,
		would be available, or if it is available, that it would be on
		acceptable terms. The terms of additional financing could involve a
		change of control and/or require stockholders approval. If additional
		financing is not available when, and if, required or is not available on
		acceptable terms, or we are unable to arrange a suitable strategic
		opportunity, we will be in significant financial jeopardy and we may be
		unable to continue our operations at current levels without significant
		changes to our business plan, if at all.



Plan of Operation



The two technologies
that continue to drive our short-term and long-term plans are the EcaFloTM
Division, and 2) Essential Oils Extraction Division. Our updated plan of
operation focuses on continuing the process of commercialization of EcaFloTMDivision equipment while having our essential oil extraction plant
constructed and installed in the South Carolina facility.



EcaFloTMDivision:



Our plans to provide
small water volume purification units have been abandoned. The United States
market is currently saturated with water "purification" units that claim to
"purify" water but that actually primarily "filter" water. We have determined
that I.E.T. should not waste valuable time and energies on developing equipment
to compete in this market. This determination is based upon two basic facts: 1)
I.E.T. will not be able to achieve profit margins that are large enough to
justify the labor costs and design changes ("Westernization") associated with
small volume - lower cost - recreational use equipment; and 2) changing the
consumer's mind about the functional difference between water purification units
versus water filtration systems would consume huge amounts of money and effort
in advertising campaigns that would have a high probability of failure.



Our focus has been
re-directed to the markets at-hand: storm-water treatment, wastewater treatment,
petroleum industry applications and food/beverage sanitation opportunities.
FEM's (flow-through electrolytic modules) continue to be the main components of
the EcaFloTMDivision equipment product
line. We have established vendor relations with domestic suppliers for the other
components that are used in our equipment. Engineering and design work on our
first 4-FEM devices are complete. Parts have been ordered, received and
assembled to put forth this Division's first fully functional 4-FEM device.
Final phase, in-house lab testing is underway.



On October 27, 2004,
we amended our License and Supply Agreement with Electro-Chemical Technologies
Ltd. as the Licensor and Laboratory of Electrotechnology Ltd. the Supplier.
Pursuant to the terms of the Amendment, we expanded the applications by which we
can utilize the technology provided in the License and Supply Agreement to go
into (a) recreational water purification units producing small volumes
per hour of potable water; (b) residential water purification units; (c) water
purification units for use by small businesses such as offices, motels and
restaurants, and state and local government facilities, not including municipal
water systems; (d) the disinfection of storm water runoff; and (e) the
decontamination of oil well water. As consideration for the grant of the two
additional applications we were obligated to pay additional license fees of
$12,000 and $13,000 in advanced royalties.



9

---

Essential Oils
Extraction Division:



Negotiations with the
Coach House Group, UK, are being held relative to the costing and delivery of
the extraction plant that I.E.T. undertook in the third quarter of 2004. I.E.T.
paid the Coach House Group $84,000 in the first quarter of 2004 for a 150-liter
oil extraction "plant" that will be utilized by the company (2/3 capacity) and
its university research partners (1/3 capacity). I.E.T. had quotes for the
"plant" prepared and submitted by United States companies in order to get the
very best price for the equipment. Discussions with the Coach House Group center
on ordering the equipment so that I.E.T. may utilize the "plant" more
expeditiously. I.E.T. has initiated marketing efforts for its extracted
essential oils within the nutraceutical, pharmaceutical and food additive
industries. Although these efforts are preliminary, the contact base is being
developed so that markets will be easier to penetrate when this Division is
operational.



Satisfaction of our
cash obligations for the next 12 months.



As of September 30,
2004, our cash balance was $365,019. We believe that this amount will provide
sufficient cash for the remainder of 2004 and the first quarter of 2005. Our
plan for satisfying our cash requirements for the next twelve months is through
additional equity, third party financing, and/or traditional bank financing. We
anticipate sales-generated income during 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.



We anticipate
incurring operating losses, at least through the first quarter of fiscal 2005.
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.



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



EcaFloTM
Division



Product development
within this division has moved ahead at a rapid pace throughout the entire third
quarter of 2004. 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 EcaFloTM devices and their
respective markets, we have been able to make wise decisions regarding market
entry with our own specifically designed and engineered devices. We are one full
quarter ahead of the schedule we reported in our June 30, 2004 10-QSB filing. We
had previously stated, "As demonstration and trials are successfully
accomplished, design of equipment customized to meet customer needs is expected
to begin in the fourth quarter of 2004." Not only have we passed the
design/engineering stage for a specific 4-FEM EcaFloTMdevice, but
our engineering department has finalized vendor relations with strategic
suppliers. Our administrative service department has finalized credit relations
with these vendors in order to receive ordered parts by purchase order, and, as
these device components have been received, the engineering department has
assembled the 4-FEM unit and is testing the device in our own "shop." Technical
support is being provided to our engineering department by our licensor's
personnel, who is infinitely knowledgeable in all matters concerning the ECA
science, the technology and any modifications we need to make to achieve optimal
efficacy for practical applications. Vital testing results have significantly
improved our ability to complete our goals ahead of time and to enter our
markets with specific EcaFloTM devices with a firm confidence
level.



10

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Current research
initiatives are centered on providing specific water quality regulatory agencies
with toxicity testing 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 ECA 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 recent petroleum industry
trade shows, our marketing and sales department personnel was able to produce
test results showing potential customers that aliquots of petroleum well "frac"
waters that were treated with a 1% EcaFloTMdevice-generated
anolyte solution showed total bacteria kill in less than 10 minutes. Furthering
that data, our approach is to point out that these kinds of results eliminate
the need for voluminous regulatory compliance paperwork to be submitted, in
addition to costing less than the use of traditional biocidal chemicals that are
currently put into "frac water." The petroleum industry market continues to
develop as a result of our strategic alliance with Pentagon Technical Services,
a small consulting firm with ties into this industry, which has contracted with
us as a manufacturer's representative/sales and distribution agent.



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 working
together with Coastal Carolina University and Clemson University to develop a
more comprehensive approach to documenting test results that pertain to the use
of EcaFloTMin a plethora of applications.



Of significant
importance is the fact that we have moved away from designing, building and
supplying the recreational use water "purification" market. This business
decision was based upon conclusive analysis of profit margins that are not large
enough to justify the labor costs and design changes ("Westernization")
associated with small volume - lower cost - recreational use equipment and our
ability to throw large amounts of money at changing the consumer's mind about
the functional difference between water purification units ("ours") versus water
filtration systems ("theirs").



Further research and
development efforts will be implemented with our strategic university partners
and, possibly, 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 design
and build and who will buy "it."



11

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Essential Oils
Division



We have received
preliminary reports from Coastal Carolina University's research on the subject
of using sea urchins eggs and embryos in bioassays of plant extracts. The
results of the tests indicate a possible correlation between two of the
presented extracted oils, in this case Neem seed and Griffonia simplifollia
plant oils, and the growth and development of the sea urchins and sea urchins
eggs. The significance of these results is undetermined at this time and will be
reported in subsequent information releases.



We are currently
contemplating a membership with Clemson University's Nutraceutical Research
Institute (NRI) as a "Supporting Member." In addition to the lab availability at
Coastal Carolina University, we have found that Clemson University, a world
renowned, agricultural, land-grant university is anxious to associate itself
with research that we need to further our goal of introducing an
environment-friendly source of pure essential oils into the nutraceutical and
pharmaceutical industries. Costs associated with this membership are being
analyzed and a "menu" of services, such as bioassays, is being developed by
Clemson University's NRI to address our research needs. A decision on this
membership offer will be made in the fourth quarter of 2004.



As previously stated,
1/3 of our extraction plant will be dedicated to the university system for
research purposes. The extraction plant will have a 150-Liter capacity, thus we
will have the capability of producing extracted essential oils in the remaining
100-Liter portion of the plant.



Once again, the
results of research performed by our University partners and/or nationally
certified labs will play a major role in assisting us in the determination of
viable markets for our essential oil extracts.



Expected Purchase or
sale of plant and significant equipment.



We are involved in
negotiations with the Coach House Group, UK, our joint venture partner, who
provide us with the Naturol essential oils extraction technology, by which we
hope to engage a United States company to construct our extraction "plant." We
paid an $84,000 deposit for this extraction equipment to SPDG Naturol - the
Coach House Group - in January of this year. In an effort to expedite our
receipt of the equipment, our engineering department has worked closely over the
past three months with the Coach House Group engineers. Several design element
modifications have occurred as a result of these conversations and should we
contract to have this "plant" built for us locally, it may greatly improve our
ability to get the oil extraction plant operational within our South Carolina
facility more quickly and for less money than originally anticipated. In this
instance, the savings appear to justify the delay.



Significant changes
in the number of employees.



We currently employ 5
full time employees, 1 part time employee and have a consulting agreement with 1
individual. The 5 full time employees are engaged in management, marketing and
sales, engineering and administrative services; our part time employee is within
our engineering department; and the 1 consultant we engage provides
technical/scientific support to the EcaFloTM Division of our
company. 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. Our projections include the
addition of 2 multi-functional assembly personnel in the fourth quarter of this
year.



12

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Addition to the Board
of Directors



On August 5, 2004, we
held our third quarter meeting of our Board of Directors. The meeting was
conducted in a teleconference format, with Members of the Board of Directors
having been given appropriate notice and an agenda for the meeting. Members in
attendance were: William E. Prince, Chairman, Michael Cunningham, Valgene Dunham
and Paul Branagan. In addition, Marion Sofield attended the meeting as a guest
until the Board adopted, by majority vote, her acceptance as a member of our
Board of Directors. Ms. Sofield currently serves as the company's Secretary, as
well.



Marion C. Sofield,
age 43, is a Director of the Company and holds the office of Secretary for
Integrated Environmental Technologies Ltd. Presently, Sofield is the Vice
President of Operations for I.E.T. Formerly the Executive Director of Matrix
Technology Alliance, Inc. (2003-2004), Ms. Sofield joined the staff of I.E.T. to
develop and implement operating systems and production capabilities that will
move the Company into a production mode. Sofield has eight years of experience,
from 1993-2002, in economic development management and has owned and operated
two successful businesses of her own. From 1983 through 1987, Ms. Sofield served
as a Corporate Secretary/Treasurer for Lord-Wood, Larsen Associates, Inc., a
civil engineering firm formerly located in West Hartford, Connecticut. Sofield,
a 1983 graduate of Radford University, was recently honored in Washington, D.C.
as the 2003 Business Person of the Year by the United States of America's
Business Advisory Council.



Going Concern



The consolidated
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 intends to use 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.



Off-Balance Sheet
Arrangements.



We do not have any
off-balance sheet arrangements that have or are reasonably likely to have a
current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that is material to investors.



13

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FACTORS THAT MAY
AFFECT OUR PLAN OF OPERATION



We are a development
stage company with a minimal operating history, which raises substantial doubt
as to our ability to successfully develop profitable business operations.



We have a limited
operating history. 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 staffed by retired military personnel who
have experiences that center on the primary mechanical and electrical aspects of
the two technologies that we are moving forward. Of course, 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 and the generation of sales revenues;
- The continued
		success of lab testing that supports the development of our technology
		product lines;
- Demand for
		our technologies;
- The level of
		our competition;
- Our ability
		to maintain key management and technical support staff, and to attract
		more employees with similar characteristics;
- 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 EcaFloTM Division, and in
the future as we commence production in the Essential Oils Extraction Division.Since inception, we have incurred a net loss of $1,326,602 and at September
30, 2004 we had stockholders' equity of $640,565.



We have issued
proposals for our products to potential customers, but can give no assurance
there will be sales associated with these proposals, or other proposals
submitted in the future.



We recognize that,
despite our best efforts, we may not be successful in our commercialization
process, although we have submitted several proposals for EcaFloTM devices into
the hands of potential customers. There is no assurance that we will be able to
obtain approval from regulatory agencies, that we will be able to manufacture
voluminous quantities of our products with acceptable quality, or that the
market for our product will continue to exist.



At these final phases
between developmental stage and production stage business operations, even with
our good faith efforts, potential investors have a high possibility of losing
their investment.



14

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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, and in the extraction of
essential oils. 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 they may development.
Management forecasts should not be relied upon as an indication of future
performance. While management believes its estimates of 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 our existing funds will only
be sufficient to fund our operations and capital requirements for approximately
6 months. Furthermore, the commercialization expenses of our two technologies
will be very substantial, i.e., well in excess of the amount of cash that we
currently have. Accordingly, we will have to (i) obtain additional debt or
equity financing during the next 12-month period 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.



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 December 31, 2003, 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 private placements or debt facilities.



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.

15

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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.



The shares of our
common stock are 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 you 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 and methods for extracting oil from
botanicals 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.



16

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Potential issuance of
additional common stock could dilute existing stockholders.



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 are
currently seeking additional equity and/or debt financing, which may result in
additional shares of our common stock. The issuance of additional common stock
in the future will reduce the proportionate ownership and voting power of the
common stock offered hereby.



Item 3. Controls and
Procedures.



We are a development
stage company with no revenues during the period covered by this quarterly
report. Our board of directors had responsibility for our internal controls and
procedures over our financial reporting.



The Company maintains
disclosure controls and procedures designed to ensure that information required
to be disclosed in reports filed under the Securities Exchange Act of 1934, as
amended, is recorded, processed, summarized and reported within the specified
time periods. As of the end of the period covered by this report, the Company's
Chief Executive Officer or President evaluated the effectiveness of the
Company's disclosure controls and procedures. Based on the evaluation, which
disclosed no significant deficiencies or material weaknesses, the Company's
Chief Executive Officer or President concluded that the Company's disclosure
controls and procedures are effective. There were no changes in the Company's
internal control over financial reporting that occurred during the Company's
most recent fiscal quarter that have materially affected, or are reasonably
likely to materially affect, the Company's internal control over financial
reporting.



PART II - OTHER
INFORMATION



Item 1. Legal
Proceedings.



None.



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



From April through
September 30, 2004, we sold 84.8 units consisting of 2,120,000 shares of
restricted common stock and 2,120,000 warrants to accredited investors for a
total price of $422,921, all of which was paid in cash. We believe that the
issuance and sale of the shares was exempt from the registration and prospectus
delivery requirements of the Securities Act of 1933 by virtue of Section 4(2)
and Regulation D Rule 506. The shares were issued directly by us and did not
involve a public offering or general solicitation. The recipients of the shares
were afforded an opportunity for effective access to files and records of the
Company that contained the relevant information needed to make their investment
decision, including the financial statements and 34 Act reports. We reasonably
believe that the recipients, immediately prior to issuing the shares, had such
knowledge and experience in the financial and business matters that they were
capable of evaluating the merits and risks of their investment. The recipients
had the opportunity to speak with our management on several occasions prior to
their investment decision. There was no commission paid on the issuance and sale
of the shares.



17

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Issuances to
Officers, Directors and Employees



On July 15, 2004, we
issued a total of 7,500 shares of common stock to our Directors (2,500 shares
each) excluding Executive Officers for attending our board meeting immediately
following our annual meeting of stockholders on April 23, 2004. We believe that
the issuance and sale of the shares was exempt from the registration and
prospectus delivery requirements of the Securities Act of 1933 by virtue of
Section 4(2).



On July 15, 2004, we
issued 100,000 shares of common stock to the President of the Company as partial
compensation for the first and second quarter. We believe that the issuance and
sale of the shares was exempt from the registration and prospectus delivery
requirements of the Securities Act of 1933 by virtue of Section 4(2).



On July 15, 2004,
2004, we issued 50,000 shares of common stock to the Secretary of the Company as
partial compensation for the first and second quarter. We believe that the
issuance and sale of the shares was exempt from the registration and prospectus
delivery requirements of the Securities Act of 1933 by virtue of Section 4(2).



On July 15, 2004, we
issued a total of 30,000 shares of common stock to Sherwood L. Jones, 25,000
shares as a sign on bonus for serving as Sr. Vice President, Business
Acquisitions of I.E.T., Inc., and 5,000 shares as partial compensation for the
second quarter. We believe that the issuance and sale of the shares was exempt
from the registration and prospectus delivery requirements of the Securities Act
of 1933 by virtue of Section 4(2).



On July 15, 2004, we
issued a total of 7,500 shares of common stock to Rebecca K. Grieco, 5,000
shares as a sign on bonus for serving as an employee for I.E.T., Inc. and 2,500
shares as partial compensation for the second quarter. We believe that the
issuance and sale of the shares was exempt from the registration and prospectus
delivery requirements of the Securities Act of 1933 by virtue of Section 4(2).



On August 10, 2004,
we issued 10,000 shares of common stock to Les Birtchet as a sign on bonus for
serving as part-time Industrial Engineer/Production Manager for I.E.T., Inc. We
believe that the issuance and sale of the shares was exempt from the
registration and prospectus delivery requirements of the Securities Act of 1933
by virtue of Section 4(2).



Issuances to
Consultants



On September 7, 2004,
we issued 50,000 shares of common stock to Goran Blagojevic as payment for
consulting services. We believe that the issuance and sale of the shares was
exempt from the registration and prospectus delivery requirements of the
Securities Act of 1933 by virtue of Section 4(2).



Item 3. Defaults Upon
Senior Securities.



None.

18

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



None.



Item 5. Other
Information.



None



Item 6. Exhibits.



Exhibits



|10* | Amendment to
		License and Supply Agreement with Electro-Chemical Technologies
|--- | ------------------------------------------------------------------------------
|31* | Certification
		pursuant to Section 302 of the Sarbanes-Oxley Act             
|32* | Certification
		pursuant to Section 906 of the Sarbanes-Oxley Act             

*Filed
		herewith.



19

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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 E. Prince

William E. Prince, President &

Chief Financial Officer (On behalf of

the registrant and as principal
accounting

officer)



Date: November 12, 2004

20