UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C.  20549





FORM
10-Q





x  QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934





For
the quarterly period ended March 31,
2009





 ̈  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.








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





4235
      Commerce StreetLittle
      River, South Carolina
            
            29566(Address
      of principal executive offices)
            
            (Zip
      Code)





(843)
390-2500








Copies of Communications to:


Stoecklein
Law Group


Emerald
Plaza


402
West Broadway


Suite
690


San
Diego, CA 92101


(619)
704-1310


Fax
(619) 704-0556





Indicate
by check mark whether the registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 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 has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).


Yes
 ̈   No
 ̈





Indicate
by check mark whether the registrant is a large accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions of
“large accelerated filer,” accelerated filer” and “smaller reporting company” in
Rule 12b-2 of the Exchange Act.





Large
      accelerated filer   ̈
            Accelerated
      filer   ̈Non-accelerated
      filer   ̈ (Do not check if
      a smaller reporting company)
            Smaller
      reporting company  x





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 April 28,
2009, was 79,108,467 shares.













PART
I – FINANCIAL INFORMATION





Item
1.   Financial
Statements.





Integrated
      Environmental Technologies, Ltd.Condensed
      Consolidated Balance SheetsMarch
      31,
            
            
            December
      31,2009
            
            
            2008Assets
            
            Unaudited
            
            
            AuditedCurrent
      Assets:Cash
            
            $
            32,616
            
            
            $
            33,357Accounts
      receivable
            
            
            26,253
            
            
            
            22,505Inventory
            
            
            117,206
            
            
            
            133,043Prepaid
      expenses
            
            
            24,971
            
            
            
            36,508Total
      current assets
            
            
            201,046
            
            
            
            225,413Equipment
            
            
            13,045
            
            
            
            13,045Accumulated
      depreciation
            
            
            (10,915
            )
            
            
            (10,523
            )Total
      building and equipment
            
            
            2,130
            
            
            
            2,522$
            203,176
            
            
            $
            227,935Liabilities
      and Shareholders' Equity (Deficit)Current
      liabilities:Accounts
      payable
            
            $
            161,667
            
            
            $
            172,085Accrued
      expenses
            
            
            152,679
            
            
            
            123,750Notes
      payable
            
            
            405,800
            
            
            
            98,300Convertible
      notes
            
            
            501,000
            
            
            
            501,000Total
      current liabilities
            
            
            1,221,146
            
            
            
            895,135Shareholders'
      Equity (Deficit)Common
      stock 200,000,000 shares authorizedpar
      value $.001, 79,058,467 shares issued and outstandingat
      March 31, 2009 and December 31, 2008
            
            
            79,058
            
            
            
            79,058Paid-in
      capital
            
            
            7,847,278
            
            
            
            7,786,789Retained
      earnings (deficit)
            
            
            (8,944,306
            )
            
            
            (8,533,047
            )Total
      shareholders' equity (deficit)
            
            
            (1,017,970
            )
            
            
            (667,200
            )Total
      liabilities and shareholders' equity (deficit)
            
            $
            203,176
            
            
            $
            227,935





See
notes to condensed consolidated financial statements.




2





Integrated
      Environmental Technologies, Ltd.Condensed
      Consolidated Statements of Operations(Unaudited)For
      The Three Months Ended March 31,2009
            
            
            2008Sales
            
            $
            34,953
            
            
            $
            242,820Cost
      of sales
            
            
            16,882
            
            
            
            84,733Gross
      profit
            
            
            18,071
            
            
            
            158,087Professional
      and administrative fees
            
            
            82,183
            
            
            
            81,441Salary
            
            
            162,958
            
            
            
            194,212Depreciation
      and amortization
            
            
            392
            
            
            
            570Research
      and development
            
            
            -
            
            
            
            6,000Office
      & miscellaneous expense
            
            
            98,919
            
            
            
            67,616Bad
      debt expense
            
            
            30
            
            
            
            37,746Total
      operating expenses
            
            
            344,482
            
            
            
            387,585Loss
      from operations
            
            
            (326,411
            )
            
            
            (229,498
            )Other
      income (expense):Finance
      fees
            
            
            (60,489
            )
            
            
            (5,000
            )Interest
      expense
            
            
            (24,359
            )
            
            
            (62,284
            )Total
      other income (expense)
            
            
            (84,848
            )
            
            
            (67,284
            )Net
      loss
            
            $
            (411,259
            )
            
            $
            (296,782
            )Weighted
      average shares outstanding
            
            
            79,058,467
            
            
            
            68,139,698Net
      loss per share basic and diluted
            
            $
            (0.01
            )
            
            $
            (0.00
            )








See
notes to condensed consolidated financial statements.




3





Integrated
      Environmental Technologies, Ltd.Condensed
      Consolidated Statements of Cash Flows(Unaudited)For
      The Three Months EndedMarch
      31,2009
            
            
            2008Cash
      flows from operating activities:Net
      loss
            
            $
            (411,259
            )
            
            $
            (296,782
            )Adjustments
      to reconcile net loss to net cashused
      in operating activities:Depreciation
      and amortization
            
            
            392
            
            
            
            570Accretion
      of interest on convertible notes
            
            
            -
            
            
            
            44,174Stock,
      options and warrants issued for services
            
            
            60,489
            
            
            
            9,219Changes
      in operating assets and liabilities:Accounts
      receivable
            
            
            (3,748
            )
            
            
            (2,911
            )Inventory
            
            
            15,837
            
            
            
            70,514Deposits
      and prepaids
            
            
            11,537
            
            
            
            (6,986
            )Accounts
      payable
            
            
            (10,418
            )
            
            
            50,988Accrued
      expenses
            
            
            28,929
            
            
            
            29,124Cash
      used in operating activities
            
            
            (308,241
            )
            
            
            (102,090
            )Cash
      flows from financing activities:Proceeds
      from notes payable
            
            
            307,500
            
            
            
            35,000Cash
      provided by financing activities
            
            
            307,500
            
            
            
            35,000Decrease
      in cash
            
            
            (741
            )
            
            
            (67,090
            )Cash
      beginning of period
            
            
            33,357
            
            
            
            72,334Cash
      end of period
            
            $
            32,616
            
            
            $
            5,244Supplemental
      disclosure of cash flow information:Cash
      paid for interest
            
            $
            -
            
            
            $
            26,012Cash
      paid for income taxes
            
            $
            -
            
            
            $
            -Non-cash
      financing activities:Stock
      and warrants issued for services
            
            $
            60,489
            
            
            $
            9,219








See
notes to condensed consolidated financial statements.





4


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,
2008.





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.  We may consider using 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, 2009:





Note
      payable, unsecured, bearing interest at a rate of 10% per
      annum.  .
            
            $
            50,000Note
      payable, unsecured, non-interest bearing.
            
            
            25,000Notes
      payable, unsecured, with a variable interest rate, and monthly principal
      and interest payments (see Note 7).
            
            
            23,300Note
      payable, secured by Benchmark Stock Acquisition Agreement, bearing
      interest at a rate of 6% per annum
            
            
            125,000Note
      payable, secured by Benchmark Stock Acquisition Agreement, bearing
      interest at a rate of 6% per annum
            
            
            25,000Note
      payable, secured by Benchmark Stock Acquisition Agreement, bearing
      interest at a rate of 6% per annum
            
            
            37,500Note
      payable, secured by Benchmark Stock Acquisition Agreement, bearing
      interest at a rate of 15% per annum, with a total interest payment of not
      less than 5% of the loan amount
            
            
            30,000Note
      payable, secured by Benchmark Stock Acquisition Agreement, with a flat
      interest of $13,500
            
            
            90,000$
            405,800







5


Note
4 - Convertible notes payable





As
of March 31, 2009, we had convertible loans totaling $501,000, which are
accruing interest at a rate of 10% per annum payable
semi-annually.  The company has extended the original maturity date of
January 2, 2009, and will continue to accrue interest at a rate of 10% per annum
until the notes are paid. The notes are currently in default.





Note
5 – 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.  On
May 19, 2008, concurrent with the receipt by us of $500,000, the Company issued
an additional 5,000,000 shares of our common stock.  On August 26,
2008, the Company entered into an addendum to the Stock Acquisition Agreement,
by which IET and Benchmark agreed to an acceleration of the fifth installment
for a reduced price of $400,000.





On
April 30, 2009 we received $500,000 from Benchmark and on May 8, 2009 we issued
5,000,000 shares of our common stock.





On
or before October 31, 2009, Benchmark will issue final payment under the terms
of the agreement 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.





Note
6 – Options and warrants





A
summary of stock options and warrants is as follows:




6





Options
            
            
            Average
              Price
            
            
            Warrants
            
            
            Average
              PriceOutstanding  1/1/09
            
            
            1,075,000
            
            
            $
            0.11
            
            
            
            700,000
            
            
            $
            0.11Granted
            
            
            
            
            
            
            -
            
            
            
            2,688,332
            
            
            
            0.10Cancelled
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Exercised
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Outstanding
      03/31/09
            
            
            1,075,,000
            
            
            $
            0.11
            
            
            
            3,388,332
            
            
            $
            0.10





In
the quarter ended March 31, 2009, we granted 2,688,332 warrants in connection
with our borrowings.  The value of the warrants as calculated using
the Black-Scholes model was $128,621 using the following weighted average
assumptions:  Strike Price $0.10; Stock Price $0.06; Volatility 156%;
Term 2.6 years; Dividend Yield 0%; Interest Rate 1.48%. We expensed as loan
costs $60,489 in the period ended March 31, 2009 and we will expense as loan
cost $68,132 in the quarter ended June 30, 2009.





Note
7 – Related-party transactions





We
have consulting agreements with a shareholder and a Director requiring payments
of $2,500 per month for each.  Additionally, we entered into a
consulting agreement which expired February 26, 2009 with a shareholder for
compensation of $5,000 per month.  On March 13, 2009, the Company
entered a consulting agreement with another shareholder for a term of two months
for $2,500 per month, to be paid in full upon completion of the
agreement.  As of March 31, we recorded $27,500 in consulting fee
expense.





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, 2009,
the future minimum payments are as follows:





Related-party
      compensation requirements2009
            
            
            180,0002010
            
            
            240,0002011
            
            
            240,000Total
            
            $
            780,000





On
August 17, 2006, the Company received an unsecured loan of $25,000 from a
shareholder at a variable interest rate.  As of March 31, 2009, the
remaining principal balance of the note is $23,300.





On
February 26, 2009, the Company borrowed $37,500 from a shareholder at an annual
interest rate of 6%.  The loan and interest are due on May 15,
2009.





On
March 13, 2009, the Company borrowed $30,000 from a shareholder at an annual
interest rate of 15%, with a total interest payment of not less than 5% of the
loan amount.  In the event that the principal and interest are not
paid by this date, the Company will incur a penalty of $3,000 per month, and the
interest rate will increase to 12% per annum beginning May 16,
2009.  In addition, the Company agreed to issue 300,000 warrants
exercisable for $0.10 per share of restricted common stock, expiring December
31, 2011.  The loan and interest are due May 11, 2009.  The
lender shall have the right to convert the entire note, including interest, to
restricted shares of common stock at $0.10 per share.





7


Note
8 – Commitments and Contingencies





On
August 22, 2006, we entered into a supply agreement with Aquastel, Inc., wherein
Aquastel agreed to supply us with C-50 and C-100 cells.  This
agreement was amended by addendum on September 13, 2006 to grant IET U.S.
exclusivity on these cells.  The term of the agreement was 3 years,
terminating on August 22, 2009.  On April 17, 2009, we decided to
terminate our August 22, 2006 Supply Agreement with Aquastel, and have notified
Aquastel of this fact.  Our decision was based on several factors, but
serious consideration was given to receiving notification from Aquastel of its
intent to relocate its electrolytic cell manufacturing operations outside of the
U.S., hence causing IET to re-evaluate its dependency upon an outside source for
electrolytic cells.





Throughout
our history in this business, IET has been working on improvements to
electrolytic cell technology, in particular, as specific components for our
proprietary EcaFlo® equipment system.  To that effect, we filed a
provisional patent application with the U.S. Patent and Trademark Office on May
6, 2009 for our EcaFlo®-specific cell.  Further development of EcaFlo®
system components will be on-going to improve the efficiency and reliability of
our EcaFlo® equipment system.





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, world-wide right, license and authority to
market, manufacture, sell and distribute EcaFlo® equipment 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.





Benchmark
and the Company have extended the deadline for fixing the minimum technology
fees payable to the Company under the Exclusive License and Distribution
Agreement while a major pumping services company, which has expressed an
interest in obtaining some level of exclusivity, completes its laboratory
analysis and field testing of Excelyte®. The testing is expected to be completed
in the second quarter of 2009.





Note
9 – Subsequent events





On
April 2, 2009, we sold 50,000 restricted shares of common stock for
$5,000.  The shares were issued on April 9, 2009.





On
April 15, 2009, the Company borrowed $50,000 from an individual at an annual
interest rate of 15%, with a total interest payment of not less than 5% of the
loan amount.  In the event that the principal and interest are not
paid by this date, the Company will incur a penalty of $1,000 per
month.  In addition, the Company agreed to issue 500,000 warrants
exercisable for $0.10 per share of restricted common stock, expiring December
31, 2011.  The loan and interest are due May 10, 2009.  The
lender shall have the right to convert the entire note, including interest, to
restricted shares of common stock at $0.10 per share.  The loan and
interest were repaid on May 9, 2009.





8


On
April 24, 2009, we sold 150,000 restricted shares of common stock for
$15,000.  As part of the subscription agreement, the Company granted
the purchaser the option of requiring the Company to purchase all or any portion
of the shares at a purchase price of $0.105 per share.  This option
must be exercised, if at all, on May 11, 2009.  As further
consideration of this subscription agreement, the Company agreed to issue
150,000 warrants exercisable for $0.10 per share of restricted common stock,
expiring December 31, 2011.  The shares were issued on May 11,
2009.





On
April 30, 2009, as outlined in our June 20, 2007 Stock Acquisition Agreement
with Benchmark, we received the sixth installment of $500,000, and on May 8,
2009, the Company issued to Benchmark 5,000,000 shares of common
stock.








9





FORWARD-LOOKING
STATEMENTS





This document contains forward-looking
statements. 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. Additionally,
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995 most likely do not apply to our forward-looking statements as a result of
being a penny stock issuer. You should, however, consult further disclosures we
make in future filing of our Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K.





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;




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.







10


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, 2008.





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





The following discussion and analysis
of our financial condition and results of operations should be read in
conjunction with our consolidated financial statements and related notes
included elsewhere in this quarterly report. References in the following
discussion and throughout this quarterly report to “we”, “our”, “us”, “IET”,
“the Company”, and similar terms refer to Integrated Environmental Technologies,
Ltd. and its 100%-owned subsidiary, IET, Inc., unless otherwise expressly stated
or the context otherwise requires.





OVERVIEW
AND OUTLOOK





Integrated
Environmental Technologies, Ltd. is a manufacturing company that designs and
builds equipment incorporating innovative technologies which are focused on the
enhancement of the environment and the health, safety, and well-being of current
and future generations.  Our wholly-owned subsidiary, I.E.T., Inc.,
designs, manufactures, markets, sells, and installs proprietary EcaFlo®
equipment, featuring the electro-chemical activation (ECA) technology, in the
United States and throughout the world.





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





·
            Developing
      our ability to construct EcaFlo® equipment efficiently and
      cost-effectively;


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


·
            Identifying
      and obtaining required and beneficial federal and private regulatory
      certifications, registrations, and
approvals;


·
            Executing
      our business plan for oilfield applications and pursuing additional
      opportunities with Benchmark;


·
            Raising
      equity capital;


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


·
            Utilizing
      laboratory data and sales strategies to enter new
  markets;


·
            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.





11


We
have incurred losses since inception.  For the fiscal year ended
December 31, 2008, we had a net loss of $1,535,712 as compared to a net loss of
$1,950,182 for the fiscal year ended December 31, 2007.  For the three
months ended March 31, 2009, we had a net loss of $411,259 as compared to a net
loss of $296,782 for the three months ended March 31, 2008.  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 continue 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.





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.  On August 26, 2008, we executed an addendum to the investment
agreement and contract with Benchmark, wherein we agreed that as a result of an
economic down-turn, it was in the best interest of the Company and Benchmark to
make the fifth installment payment early and prior to October 31, 2008 as
previously agreed in the original investment agreement.  As
consideration for the acceleration of the fifth installment, we reduced the
payment amount to $400,000 from $500,000.  We have received six
installments for a total of $2,400,000.  We anticipate receiving the
remaining seventh installment of $1,000,000 in October 2009.





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, manufacture, sell and distribute EcaFlo®
equipment and solutions for use in Oilfield Applications to
Benchmark.





On August 18, 2008, we received our
product registration for EcaFlo® Anolyte from the United States Environmental
Protection Agency (“EPA”).  This registration process has been
completed in order to make important marketing and efficacy claims about our
EcaFlo® Anolyte product and its ability to be used as a high-level (hospital)
disinfection/antimicrobial product.  Additionally, other business
models are now allowed because this registration permits the distribution of
EcaFlo® Anolyte by container, as well as for use on-site where
produced.  The US EPA has conducted thorough investigations of the
scientific data relative to EcaFlo® Anolyte, as well as requiring a full battery
of independent, yet Company-sponsored, lab testing which was performed by
fully-certified, EPA-approved labs.  Based on the results of this
extensive research, we have been granted our registration of EcaFlo®
Anolyte.  This product is a highly effective, “green” biocide that may
be used for hard-surface disinfection for many applications, including medical,
dental, veterinary, schools, gyms and sports equipment; bacteria control for
food safety; oil and gas; water treatment; and infection control.





12


On
September 10, 2008, we issued a press release announcing that we are targeting
staph and other infections in schools, by continuing to sell EcaFlo® equipment
to a leading North Carolina-based supplier of janitorial and sanitation products
and solutions primarily involved in supplying state, county and local
governments with disinfecting and sanitizing products.





On September 24, 2008, we issued
another press release announcing the sale of additional EcaFlo® equipment to two
new customers representing interests in new market areas.  One company
is promoting the use of EcaFlo® equipment and solutions in the agricultural
industry, for use in livestock area surface disinfection.  The other
company plans to use the EcaFlo® equipment to produce solutions to effectively
treat biofilm build-up and various other agricultural applications, such as
veterinary clinics and dairy processing facilities that require thorough and
dependable hard-surface disinfection.





On November 17, 2008, we issued a press
release announcing that University General Hospital (UGH) is the first in the
nation to utilize Excelyte® (Benchmark’s name for EcaFlo® Anolyte) as a primary
disinfectant.  IET and UGH, through an exclusive industry arrangement
with Benchmark, signed a comprehensive agreement to evaluate the disinfecting
capabilities of Excelyte® along with the disinfecting products currently in use
in selected areas of the hospital, with the anticipation that Excelyte® will
ultimately replace all other disinfectants in all areas of the
hospital.





Recent
Developments





On April 16, 2009, we issued a press
release to formally introduce Benchmark Research & Technologies, Inc.
Excelyte® as a registered, “green,” microbiocide product under IET’s U.S.
Environmental Protection Agency product registration for EcaFlo®
Anolyte.  A copy of the press release is attached hereto as Exhibit
99.4.





On April 21, 2009, we issued a press
release announcing the registration of EcaFlo® Anolyte (trademark Excelyte®)
with the National Science Foundation as a “D2” antimicrobial – an “antimicrobial
agent not requiring rinse(ing)”. A copy of the press release is attached hereto
as Exhibit 99.5.





On April 28, 2009, we issued a press
release announcing that the U.S. EPA has approved EcaFlo® Anolyte (trademarked
Excelyte®), as a registered and effective biocide against MRSA
(Methicillin-Resistant Staphylococcus Aureus), a bacterial infection facing the
public today.  A copy of the press release is attached hereto as
Exhibit 99.6.





On May 5, 2009, the Houston Rockets
issued a press release announcing our partnership with the Houston Rockets,
whereby Houston is to be the first national sports market to showcase our
revolutionary “green” defensive technology.  IET and Benchmark have
entered into a sponsorship agreement with the Rockets.





Results
of Operations for the Three Months Ended March 31, 2009 and 2008





The
following table summarizes selected items from the statement of operations at
March 31, 2009 compared to March 31, 2008.








13


SALES
AND COST OF SALES:





Three
      Months Ended
              March
      31,
            
            
            Increase
      (Decrease)2009
            
            
            2008
            
            
            $
            
            
            
            %Sales
            
            $
            34,953
            
            
            $
            242,820
            
            
            $
            (207,867
            )
            
            
            (86
            %)Cost
      of Sales
            
            
            16,882
            
            
            
            84,733
            
            
            
            (67,851
            )
            
            
            (80
            %)Gross
      Profit
            
            
            18,071
            
            
            
            158,087
            
            
            
            (140,016
            )
            
            
            (89
            %)Gross
      Profit Percentage of Sales
            
            
            52
            %
            
            
            65
            %
            
            
            --
            
            
            
            (13
            %)





Sales





Our
sales for the three months ended March 31, 2009 were $34,953 compared to sales
of $242,820 in the three months ended March 31, 2008.  This resulted
in a decrease in sales of $207,867, or 86%, from the same period a year
ago.  The decrease in sales was as a result of a delay in finalizing
sales due to a change in economic positions for some of our customers and
another waiting period while regulatory approvals have been sought to allow
un-restricted use of the fluid solutions our EcaFlo® equipment
produces.  Sales of EcaFlo® equipment and solutions were severely
impaired during the period of time that the U.S. Environmental Protection Agency
(EPA) was studying, reviewing and making determinations about our product and
the requirement for an EPA product registration for “EcaFlo®
Anolyte.”  By law, we were required to restrict our marketing claims
and to cause no distribution of our product to occur other than on-site
generation and usage.  On August 18, 2008 we received our product
registration for EcaFlo® Anolyte from the EPA.  We fully expect sales
of our EcaFlo® equipment and solutions to expand rapidly from the receipt of our
product registration number.





According
to our oilfield distributor and industry partner, Benchmark Energy Products,
Benchmark continues to market Excelyte® (Benchmark’s product name for EcaFlo®
Anolyte), to the oil and gas industry,but the industry, which
is resistant to change, continues to use several “old technology” biocides
developed during the past 30 years.  Benchmark has spent significant
time and resources educating the industry about the benefits of Excelyte® vs.
the older biocides.  Testing has confirmed that the biocide most
widely used in the industry today is ineffective with current well treatment
practices and industry attempts to utilize increasingly poorer quality
water.  Benchmark has engaged a highly regarded oil and gas industry
biotechnology laboratory as an independent “expert” to help Benchmark mount a
“turnaround” in industry thinking concerning the dynamic required for biocides
to be effective with current well stimulation practices.  The findings
reported by this laboratory have validated that Excelyte® outperforms all other
biocides currently in use by the oil and gas industry, with the added benefit of
being the first totally “green” biocide.  In addition, special
consideration is being given to an oilfield entity, while conclusive business
plans are being developed and implemented.





Benchmark
and the Company have extended the deadline for fixing the minimum technology
fees payable to the Company under the Exclusive License and Distribution
Agreement while a major pumping services company, which has completed its
laboratory testing and expressed a high interest in obtaining some level of
exclusivity on the product, completes its field testing of
Excelyte®.  The testing is expected to be completed by the second
quarter of 2009.




14


During
the period of time that oil and gas industry sales continue to be developed, our
industry partner, Benchmark, has been dedicating time and extensive money to
third-party research.  Additionally, they have been focused on market
development work, and sales in different markets, such as the professional
sports and hospital, hard-surface disinfection markets.  Benchmark
management and key personnel – the “Excelyte® Team” – have brought many and
varied opportunities to the table for IET.  Benchmark and the Company
work hand-in-hand to advance the markets for EcaFlo® solutions (or “Excelyte®”)
and will continue to do so.





Cost
of sales / Gross profit percentage of sales





Our cost of sales for the three months
ended March 31, 2009 was $16,882, a decrease of $67,851, or 80% from $84,733 for
the three months ended March 31, 2008.  The decrease in our cost of
sales is as a result of a period of market development due to pending regulatory
approvals, registration and certifications required for sales to
occur.  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 less as a percentage of sales when we have
additional sales.





Gross
profit margins decreased by 13% from the prior year due to a lack of EcaFlo®
equipment sales, since our pricing structure allows for more profit on equipment
sales than on replacement parts and laboratory testing supplies.





EXPENSES:





Three
      Months Ended
              March
      31,
            
            
            Increase
      (Decrease)2009
            
            
            2008
            
            
            $
            
            
            
            %Expenses:Professional
      andadministrative
      fees
            
            $
            82,183
            
            
            $
            81,441
            
            
            $
            742
            
            
            
            1
            %Salary
            
            
            162,958
            
            
            
            194,212
            
            
            
            (31,254
            )
            
            
            (16
            %)Depreciation
      and amortization
            
            
            392
            
            
            
            570
            
            
            
            (178
            )
            
            
            (31
            %)Research
      and development
            
            
            -
            
            
            
            6,000
            
            
            
            (6,000
            )
            
            
            -Office
      and miscellaneous expense
            
            
            98,919
            
            
            
            67,616
            
            
            
            31,303
            
            
            
            46
            %Bad
      debt expense
            
            
            30
            
            
            
            37,746
            
            
            
            (37,716
            )
            
            
            (100
            %)Total
      operating expenses
            
            
            344,482
            
            
            
            387,585
            
            
            
            (43,103
            )
            
            
            (11
            %)(Loss)
      from operations
            
            
            (326,411
            )
            
            
            (229,498
            )
            
            
            96,913
            
            
            
            42
            %Other
      income (expense):Finance
      fees
            
            
            (60,489
            )
            
            
            (5,000
            )
            
            
            55,489
            
            
            
            1110
            %Interest
      expense
            
            
            (24,359
            )
            
            
            (62,284
            )
            
            
            (37,925
            )
            
            
            (61
            %)Total
      other income (expense)
            
            
            (84,848
            )
            
            
            (67,284
            )
            
            
            17,564
            
            
            
            26
            %Net
      (loss)
            
            $
            (411,259
            )
            
            $
            (296,782
            )
            
            $
            114,477
            
            
            
            39
            %








15





Professional
and Administrative Fees





Professional
and administrative fees for the three months ended March 31, 2009 were $82,183,
an increase of $742, or 1%, from $81,441 for the three months ended March 31,
2008.  The increase in professional and administrative fees was the
result of utilizing the services of financial consultants to assist us in
developing plans for financings and the improvement of share
value.  Whenever possible, we are trying to reduce outside
consultants, but we will still need some assistance for areas of our business in
which we do not have sufficient in-house expertise.





Salary
Expenses





Salary expenses for the three months
ended March 31, 2009 was $162,958, a decrease of $31,254, or 16%, from $194,212
for the three months ended March 31, 2008.  The decrease in salary
expenses was the result of decreasing hourly employee payroll expenses and
reducing our engineering staff, while accomplishing the production necessary for
meeting the Company’s sales of equipment.  We expect salary expense to
increase in the future as the 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 the three months ended March 31, 2009 were $392, a
decrease of $178, or 31%, from $570 for the three months ended March 31,
2008.  Depreciation expenses decreased slightly as the full
depreciable value of some equipment was reached.  At this point in
time, we anticipate our depreciation expenses to remain fairly
steady.





Office
and Miscellaneous





Office and miscellaneous expenses for
the three months ended March 31, 2009 were $98,919, an increase of $31,303, from
$67,616 for the three months ended March 31, 2008.  The increase in
office and miscellaneous expenses was as a result of the need for some one-time
equipment purchases and the restocking of supplies.





Bad
Debt





Bad
debt expense for the three months ended March 31, 2009 was $30, a decrease of
$37,716, or 100%, from $37,746 for the three months ended March 31,
2008.  The decrease in bad debt expense was as a result of our
customers having paid their debt to us.  We have historically had
limited write-offs as the result of bad debts.  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 collectability 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.





Loss
from Operations





The loss from operations for the three
months ended March 31, 2009 was $326,411, versus a loss from operations of
$229,498for the three months ended March 31, 2008, a change in loss from
operations of $96,913.  The increase in the loss from operations in
2009 was the result of a severe impairment of our ability to sell into markets
requiring regulatory approvals, registrations, and certifications.





16


Finance
Fees





Finance fees for the three months ended
March 31, 2009 were $60,489, as compared to $5,000 for the same period in
2008.  Our finance fees in the first quarter of 2009 were higher
because of warrants issued in connection with temporary working capital
loans.





Interest
Expense





Interest expense for the three months
ended March 31, 2009 were $24,359, as compared to $62,284 for the same period in
2008.  Our interest expense in 2008 was higher because of an increase
in loans requiring interest payments.





Net
(Loss)





Our
net loss for the three months ended March 31, 2009 was $411,259, an increase of
$114,477, or 39%, from $296,782 for the three months ended March 31,
2008.  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.





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®
systems.  Our plan of operation focuses on continuing the process of
commercialization of EcaFlo®equipment
and EcaFlo® solutions, known as EcaFlo® Anolyte (“Excelyte”) and EcaFlo®
catholyte.





Our direct attention continues to be
focused on providing our EcaFlo® devices to the markets at-hand:  the
oil and gas industry, food safety and agricultural applications, storm-water
treatment, water and wastewater treatment, and other hard surface
sanitation opportunities such as our recent entry into the professional sports
market.  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.  As a new “green” product, regulatory constraints continue
to provide unforeseen challenges, which we address and overcome
systematically.





Liquidity
and Capital Resources





The
following table summarizes total current assets, total current liabilities and
working capital at March 31, 2009 compared to December 31, 2008.








17





March
      31,
            
            
            December
      31,
            
            
            Increase
      / (Decrease)2009
            
            
            2008
            
            
            $
            
            
            %Current
      Assets
            
            $
            201,046
            
            
            $
            225,413
            
            
            $
            (24,367
            )
            
            
            (11
            %)Current
      Liabilities
            
            
            1,221,146
            
            
            
            895,135
            
            
            
            326,011
            
            
            
            36
            %Working
      Capital (deficit)
            
            $
            (1,020,100
            )
            
            $
            (669,722
            )
            
            $
            350,378
            
            
            
            52
            %





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.  We will continue to consider financing opportunities with
strategic industry partners outside of the oil and gas industry.





As
of March 31, 2009, we continue to use 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 in 7 installments and for
technology fees paid to IET per gallon of EcaFlo® fluids sold by Benchmark
within the oil and gas industry.  On August 26, 2008, we executed an
addendum to the investment agreement and contract with Benchmark, wherein we
agreed that as a result of an economic down-turn, it was in the best interest of
the Company and Benchmark to make the fifth installment payment early and prior
to October 31, 2008 as previously agreed in the original investment
agreement.  As consideration for the acceleration of the fifth
installment, we reduced the payment amount to $400,000 from
$500,000.  We have received six installments for a total of
$2,400,000.  From the remaining seventh installment we will receive a
total of $1,000,000 ($1,000,000 in October 2009).  A copy of the
addendum was attached as exhibit 10.21 to our quarterly report filed on November
13, 2008.





Financing.  On
August 17, 2006, the Company received an unsecured loan of $25,000 from Robert
Lucas, at a variable interest rate.  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
December 31, 2008 and 2007, interest paid was $5,575 and $2,069,
respectively.  As of March 31, 2009, the remaining principal balance
of the note is $23,300.





On January 7, 2009, we executed a
promissory note with Gregory P. Jonas for the principal amount of
$25,000.  Pursuant to the promissory note, we agreed to repay the
principal amount and interest at the yearly rate of 6% by May 15,
2009.  In the event that the principal amount and interest is not
repaid by May 15, 2009, we agree to pay a penalty of $212.50 per month until the
balance is paid in full and the interest rate will increase to 12% per annum
beginning on May 16, 2009.  In consideration for the loan, we agreed
to issue Mr. Jonas 250,000 warrants exercisable for $0.10 per share and 34,722
warrants exercisable for $0.18 per share. The warrants will expire on December
31, 2011.  In addition, Mr. Jonas shall have the right to convert
either one-half or the entire note (including interest) to restricted shares of
the Company’s common stock at $0.10 per share.  In the event that Mr.
Jonas elects to convert the entire note to restricted shares of common stock, we
will issue an additional 93,750 warrants exercisable at $0.20 per share. If Mr.
Jonas elects to convert one-half of the note to restricted shares common stock,
we will issue an additional 46,875 warrants exercisable at $0.20 per
share.  The warrants will be effective on the conversion date and will
expire on December 31, 2011.  As additional consideration for the
loan, we agreed to issue options for 25,000 shares per year for three years at a
10% discount to market price as determined by a prior ten-day trading
average.





18


On January 16, 2009, we executed a
promissory note with Christopher Lank for the principal amount of
$125,000.  Pursuant to the promissory note, we agreed to repay the
principal amount and interest at the yearly rate of 6% by May 15,
2009.  In the event that the principal amount and interest is not
repaid by May 15, 2009, we agree to pay a penalty of $1,000 per month until the
balance is paid in full and the interest rate will increase to 12% per annum
beginning on May 16, 2009.  In consideration for the loan, we agreed
to issue Mr. Lank 1,250,000 warrants exercisable for $0.10 per share and 173,610
warrants exercisable for $0.18 per share. The warrants will expire on December
31, 2011.  In addition, Mr. Lank shall have the right to convert
either one-half or the entire note (including interest) to restricted shares of
the Company’s common stock at $0.10 per share.  In the event that Mr.
Lank elects to convert the entire note to restricted shares of common stock, we
will issue an additional 468,750 warrants exercisable at $0.20 per share. If Mr.
Lank elects to convert one-half of the note to restricted shares common stock,
we will issue an additional 234,375 warrants exercisable at $0.20 per
share.  The warrants will be effective on the conversion date and will
expire on December 31, 2011.  As additional consideration for the
loan, we agreed to issue options for 125,000 shares per year for three years at
a 10% discount to market price as determined by a prior ten-day trading
average.





On
February 27, 2009, we executed a promissory note with Gary Grieco for the
principal amount of $37,500.  Pursuant to the promissory note, we
agreed to repay the principal amount and interest at the yearly rate of 6% by
May 15, 2009.  The loan and interest were repaid on May 6,
2009.





On March 13, 2009, we executed a
promissory note with Harvey M. Burstein for the principal amount of
$30,000.  Pursuant to the promissory note, we agreed to repay the
principal amount and interest at the yearly rate of 15%, with a total interest
payment of not less than 5% of the loan amount, by May 11, 2009.  In
the event that the principal amount and interest is not repaid by May 11, 2009,
we agree to pay a penalty of $3,000 per month until the balance is paid in
full.  In consideration for the loan, we agreed to issue Mr. Burstein
300,000 warrants exercisable for $0.10 per share. The warrants will expire on
December 31, 2011.  In addition, Mr. Burstein shall have the right to
convert the entire note (including interest) to restricted shares of the
Company’s common stock at $0.10 per share.  The loan and interest were
repaid on May 11, 2009.





On March 17, 2009, we executed a
promissory note with an individual for the principal amount of
$90,000.  Pursuant to the promissory note, we agreed to repay the
principal amount and a fee of $13,500 by May 11, 2009.  In the event
that the principal amount and interest is not repaid by May 11, 2009, we agree
to pay a penalty of $4,500 per month until the balance is paid in
full.  In consideration for the loan, we agreed to issue 500,000
warrants exercisable for $0.10 per share. The warrants will expire on December
31, 2011.  In addition, there is a right to convert the entire note
(including interest) to restricted shares of the Company’s common stock at $0.10
per share.  The loan and fee were repaid on May 11, 2009.





19


On April 14, 2009, we executed a
promissory note with Ron Cohen for the principal amount of
$50,000.  Pursuant to the promissory note, we agreed to repay the
principal amount and interest at the yearly rate of 15% by May 10,
2009.  Additionally, we agreed to pay a penalty of $1,000 per month
until the balance is paid in full.  In consideration for the loan, we
agreed to issue 500,000 warrants exercisable for $0.10 per share. The warrants
will expire on December 31, 2011.  In addition, there is a right to
convert the entire note (including interest) to restricted shares of the
Company’s common stock at $0.10 per share.  The loan and interest were
repaid on May 9, 2009.





Satisfaction
of our cash obligations for the next 12 months.





As
of March 31, 2009, our cash balance was $32,616.  Our plan for
satisfying our cash requirements for the next twelve months is through
sales-generated income, proceeds from our stock acquisition agreement with
Benchmark, additional sales of our common stock, third-party financing, and/or
traditional bank financing.  We intend to make appropriate plans to
insure sources of additional capital in the future to fund growth and expansion,
and may consider 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.





20




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 ability to continue
as a going concern is dependent on attaining profitable
operations.  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.





EcaFlo®
Solutions and EcaFlo® Equipment





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, we have been able to make
decisions regarding market entry with our own specifically designed and
engineered devices.  Our engineering department has dedicated itself
to identifying and making quality improvements to our EcaFlo® systems, the
components utilized in our EcaFlo® systems, and the functionality between our
EcaFlo® systems and the end use of the fluid solutions produced by our EcaFlo®
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.  Currently we are focusing on on-site trials of our EcaFlo®
equipment and assisting customers with the integration of our EcaFlo® equipment
into their processes.





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.





21


We
are continuing to work together with Coastal Carolina University, as well as
independent laboratories and 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.





On
May 7, 2008, we announced that as a result of two invitations to showcase our
equipment at the Chemical Biological Incident Response Force’s Indian Head Base
(Maryland), our EcaFlo® equipment and solutions were accepted to be listed on
the United States Department of Homeland Security’s website.  In
addition, we have recently received a commitment from a Federal agency known as
DTRA (Defense Threat Reduction Agency) that purchase and use of our EcaFlo®
equipment and solutions in a homeland threat / defense exercise is
eminent.





The United States Environmental
Protection Agency (“EPA”) has conducted thorough investigations of the
scientific data relative to EcaFlo® Anolyte product, as well as requiring a full
battery of independent, yet Company-sponsored, lab testing which was performed
by fully-certified, EPA-approved labs.  Based on the results of this
extensive research, we were granted our registration of EcaFlo® Anolyte on
August 18, 2008.  This product is a highly effective, “green” biocide
that may be used for hard-surface disinfection for many applications, including
medical, dental, veterinary, schools, gyms and sports equipment, bacteria
control for food safety, oil and gas, water treatment, and infection
control.  This registration process has been completed in order to
make important marketing and efficacy claims about our EcaFlo® Anolyte product
and its ability to be used as a high-level (hospital) disinfection/antimicrobial
product.  Additionally, other business models are now allowed because
this registration permits the distribution of EcaFlo® Anolyte by container, as
well as for use onsite where produced.  In addition, the EPA, as a
result of additional laboratory testing using AOAC protocols, has allowed us to
add MRSA-specific claims to our product registration label.





Benchmark,
along with a service company, have performed thorough oilfield bacteria testing
in a third-party, independent lab and are concluding field testing of Excelyte®
to ascertain specific comparison data between Excelyte® and traditionally-used
oilfield chemicals.  The results of this testing have pinpointed
specific uses for Excelyte® beyond the use for frac waters, which expands the
known oilfield market through additional applications.  The results of
this extensive testing are being reviewed by key members of a third-party, oil
and industry entity.





Significant
changes in the number of employees.





We
currently employ 8 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.




22


Consultants





Duke Van
Kalken.On June 30, 2008, we entered into a contractor
agreement with Duke Van Kalken, President of Aquastel, for a period of one
year.  Mr. Van Kalken was to provide assistance to the Company with
marketing and sales on a commission basis.  We terminated our
contractor relationship with Mr. Van Kalken on April 17, 2009.





United Capital Group,
Inc.  On August 26, 2008, we entered into a consulting
agreement with United Capital Group, Inc., wherein United Capital Group, Inc.
agreed to provide the Company with investor and public relations services. The
term of the agreement began on August 26, 2008 and terminated on February 26,
2009.  We agreed to compensate United Capital Group, Inc. with $5,000
upon execution of the agreement and a monthly fee of $5,000 commencing on
September 26, 2008 and payable on the 26th of each
successive month thereafter during the term of the agreement.





Legend Capital Management,
LLC.  On October 20, 2008, we entered into a consulting
agreement with Legend Capital Management LLC, wherein Legend Capital Management,
LLC agreed to devise and prepare a plan for investor relations and financing for
the Company.  The original term of the agreement began on October 20,
2008 and terminated on January 20, 2009.  We agreed to compensate
Legend Capital Management LLC with $18,000 for this term ($3,000 on November 1,
2008, and a monthly fee of $7,500 commencing on November 20, 2008 and payable on
the 20th of each
successive month thereafter during the original term of the
agreement).  Additionally, we agreed to issue Legend Capital
Management LLC, warrants to purchase 200,000 shares of the Company’s restricted
common stock at $0.10 per share, exercisable for five (5) years.  Both
parties have agreed to extend the agreement on a month-to-month
basis.





EGR
International.  On January 1, 2008, we entered into a
consulting agreement with EGR International, wherein EGR International agreed to
provide the Company with consulting services for special project
development.  We agreed to compensate EGR International with $2,500
per month.  We are currently working with EGR International on a
month-to-month, as needed, basis.





Harvey M.
Burstein.  On March 13, 2009, we entered into a consulting
agreement with Harvey M. Burstein, wherein Mr. Burstein agreed to provide a plan
for various investor and public relations services for the
Company.  The term of the agreement began on March 13, 2009 and
terminated on May 13, 2009.  We agreed to compensate Mr. Burstein with
$5,000, payable upon completion of the agreement.  The fee was paid in
full on May 13, 2009.





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.





23


Benchmark
and the Company have extended the deadline for fixing the minimum technology
fees payable to the Company under the Exclusive License and Distribution
Agreement while a major pumping services company, which has expressed an
interest in obtaining some level of exclusivity, completes its laboratory
analysis and field testing of Excelyte®. The analysis and testing is expected to
be completed in the second quarter of 2009.





Supply Agreement with D2W2,
LLC





On June 6, 2008, we entered into a
supply agreement with D2W2, LLC, wherein D2W2 agreed to purchase our products
(certain electro-chemical activation equipment) for resale. The term of the
agreement commenced on June 6, 2008 and will continue for two years and shall
automatically renew for a full five year term provided satisfactory marketing,
testing and sales progress is made by D2W2, and, shall continue thereafter, year
to year, upon the same terms and conditions, unless either party notifies the
other that it wishes to renegotiate or terminate.





Exclusive Distributorship
Agreement with Mickey’s Sales & Service





On September 8, 2008, the Company
entered into an exclusive distributorship agreement with Mickey’s Sales &
Service (“Mickey’s”), wherein IET granted to Mickey’s the exclusive right to
purchase, inventory, promote, and resell EcaFlo® products in North Carolina and
Virginia.  The term of the agreement commenced on September 8, 2008
and will continue for three years renewable annually upon agreement by both
parties, based on performance and market applications.  In addition,
Mickey’s was granted the exclusive rights to purchase, inventory, promote, and
resell EcaFlo® products in South Carolina, with a right of first refusal,
reviewed by the Company on a case-by-case basis, to respond to leads and
accomplish sales.





Exclusive Supply Agreement
with Aquastel, Inc.





On August 22, 2006, we entered into a
supply agreement with Aquastel, Inc., wherein Aquastel agreed to supply us with
C-50 and C-100 cells.  On September 13, 2006, this agreement was
amended by addendum for exclusivity.  The term of the agreement was 3
years, terminating on August 22, 2009.





On April 17, 2009, we decided to
terminate our August 22, 2006 Supply Agreement with Aquastel, and have notified
Aquastel of this fact.  Our decision was based on several factors, but
serious consideration was given to receiving notification from Aquastel of its
intent to relocate its electrolytic cell manufacturing operations outside of the
U.S., hence causing IET to re-evaluate its dependency upon an outside source for
electrolytic cells.





Throughout our history in this
business, IET has been working on improvements to electrolytic cell technology,
in particular, as specific components for our proprietary EcaFlo® equipment
system.  To that effect, we filed a provisional patent application
with the U.S. Patent and Trademark Office on May 6, 2009 for our
EcaFlo®-specific cell.  Further development of EcaFlo® system
components will be on-going to improve the efficiency and reliability of our
EcaFlo® equipment system.








24


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.





Off-Balance
Sheet Arrangements.





As
of March 31, 2009, 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 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, 2008 and 2007, we had three customers, which represented 41%,
16%, and 12% and 52%, 11%, and 7% of sales, respectively.  We
continually evaluate the creditworthiness of our customers and typically require
a deposit of 50% of the total purchase price with each EcaFlo® equipment
order.





We evaluate the collectability 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.  As of
December 31, 2008 and 2007, there was no reserve for bad debts.





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 are
effective 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.





25


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 December 31, 2008 and March 31,
2009, 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 sales-generated revenue, future equity 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.





26


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 a former member of the military,
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 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 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.





27


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.





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.





28


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.





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.





29


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.





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.





30


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





On January 7, 2009, pursuant to the
promissory note executed on January 7, 2009 with Gregory P. Jonas, we agreed to
issue warrants to purchase 250,000 shares of our common stock, exercisable for
$0.10 per share and warrants to purchase 34,722 shares of our common stock,
exercisable for $0.18 per share.  The warrants expire on December 31,
2011.  As additional consideration for the loan, we agreed to issue
options for 25,000 shares per year for three years at a 10% discount to market
price as determined by a prior ten-day trading average.  We believe
that the issuance of the warrants and options 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 and options 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 and options, 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.





On January 16, 2009, we agreed to issue
warrants to purchase 1,250,000 shares of our common stock, exercisable for $0.10
per share and warrants to purchase 173,610 shares of our common stock,
exercisable for $0.18 per share, expiring on December 31, 2011 to Christopher
Lank pursuant to the promissory note executed on January 16, 2009.  As
additional consideration for the loan, we agreed to issue options for 125,000
shares per year for three years at a 10% discount to market price as determined
by a prior ten-day trading average.  We believe that the issuance of
the warrants and options 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 and options 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 and options, 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.





On March 13, 2009, we agreed to issue
warrants to purchase 300,000 shares of our common stock, exercisable for $0.10
per share expiring on December 31, 2011 to Harvey M. Burstein pursuant to the
promissory note executed on March 13, 2009.  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.




31


On
March 17, 2009, we agreed to issue warrants to purchase 500,000 shares of our
common stock, exercisable for $0.10 per share expiring on December 31, 2011 to
John Teichman pursuant to the promissory note executed on March 17,
2009.  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.





On
March 13, 2009, we sold a total of 150,000 shares of our restricted common stock
to 1 accredited investor for a total purchase price of $15,000, all of which was
paid in cash. The 150,000 shares have not been issued as of the date of this
filing. In consideration of the execution of the subscription agreement, we
agreed to issue to the investor 150,000 warrants exercisable for $0.10 per share
of our restricted common stock, expiring December 31, 2011.  We
believe that the issuance and sale of the shares and warrants 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 and
warrants were sold directly by us and did not involve a public offering or
general solicitation. The recipient of the shares and warrants was 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 believed
that the recipient, immediately prior to the sale of the shares and warrants,
had such knowledge and experience in our financial and business matters that
they were capable of evaluating the merits and risks of their investment. The
recipient had the opportunity to speak with our management on several occasions
prior to its investment decision. There were no commissions paid on the issuance
and sale of the shares.





On
March 26, 2009, we sold a total of 50,000 shares of our restricted common stock
to 1 accredited investor for a total purchase price of $5,000, all of which was
paid in cash. The 50,000 shares were issued on April 9, 2009. 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 sold directly by us and
did not involve a public offering or general solicitation. 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 their
investment decision, including the financial statements and 34 Act reports. We
reasonably believed that the recipient, immediately prior to the sale of the
shares, had such knowledge and experience in our financial and business matters
that they were capable of evaluating the merits and risks of their investment.
The recipient had the opportunity to speak with our management on several
occasions prior to its investment decision. There were no commissions paid on
the issuance and sale of the shares.





On
May 8, 2009, we issued 5,000,000 shares of our common stock to Benchmark
Performance Group, Inc., in exchange for the sixth installment of $500,000
(received on May 1, 2009) 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.





32


Issuer
Purchases of Equity Securities





The Company did not repurchase any of
its equity securities during the quarter ended March 31, 2009.





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 fourth quarter of 2008 and the first quarter
of 2009.





Item
5.                     Other
Information.





Press
Releases





On April 16, 2009, we issued a press
release to formally introduce Benchmark Research & Technologies, Inc.
Excelyte® as a registered, “green,” microbiocide product under IET’s U.S.
Environmental Protection Agency product registration for EcaFlo®
Anolyte.  A copy of the press release is attached hereto as Exhibit
99.4.





On April 21, 2009, we issued a press
release announcing the registration of EcaFlo® Anolyte (trademark Excelyte®)
with the National Science Foundation as a “D2” antimicrobial – an “antimicrobial
agent not requiring rinse(ing)”. A copy of the press release is attached hereto
as Exhibit 99.5.





On April 28, 2009, we issued a press
release announcing that the U.S. EPA has approved EcaFlo® Anolyte (trademarked
Excelyte®), as a registered and effective biocide against MRSA
(Methicillin-Resistant Staphylococcus Aureus), a bacterial infection facing the
public today.  A copy of the press release is attached hereto as
Exhibit 99.6.





33


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
            
            X99.1
            
            Press
      Release dated August 20, 2008 – IET Receives US EPA Product
      Registration
            
            
            
            10-Q
            
            09/30/08
            
            99.1
            
            11/13/0899.2
            
            Press
      Release dated September 10, 2008 – IET Targets MRSA (Staph) Infections in
      Schools with “Green” Biocide
            
            
            
            10-Q
            
            09/30/08
            
            99.2
            
            11/13/0899.3
            
            Press
      Release dated September 24, 2008 – IET Builds Sales into New
      Markets
            
            
            
            10-Q
            
            09/30/08
            
            99.3
            
            11/13/0899.4
            
            Press
      Release dated April 16, 2009 – IET and BRT introduce Excelyte®, a new
      ‘green’ disinfecting solution.
            
            X99.5
            
            Press
      Release dated April 21, 2009 – IET announces NSF Registration of EcaFlo®
      Anolyte (Excelyte®)
            
            X99.6
            
            Press
      Release dated April 28, 2009 – IET announces MRSA – Specific EPA
      Registration of EcaFlo® Excelyte®
            
            X







34


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, Chief Executive Officer


And
Principal Financial Officer (On behalf of


the
registrant and as principal accounting


officer)





Date:
May 15, 2009





35