UNITEDSTATES

SECURITIESAND EXCHANGE COMMISSION

Washington,D.C. 20549

 

FORM10-QSB

 

[X]QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OFTHE SECURITIES EXCHANGE ACT OF 1934

 

[] TRANSITION REPORT PURSUANT TO SECTION 13 OR

15(d)OF THE SECURITIES EXCHANGE ACT OF 1934

 

Forthe quarterly period ended: March 31, 2004

 

Commissionfile number 000-26309

 

INTEGRATEDENVIRONMENTAL TECHNOLOGIES, LTD.

(FormerlyNaturol Holdings Ltd.)

(Exactname of small business issuer as specified in its charter)

 

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

**4235      Commerce Street**
**Little      River, South Carolina **  
** 29566**
(Address      of Principal Executive Offices)   
 (Zip      Code)
 
**(843)390-2500**
(Issuer'stelephone number, including area code)

 

Checkwhether the issuer (1) filed all reports required to be filed by Section 13 or15(d) of the Securities Exchange Act of 1934 during the last 12 months (or forsuch 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.

 

YesX No ____

 

       The number of shares of Common Stock, $0.001 par value, outstanding on March 31,2004, was 17,224,793 shares.

 

TransitionalSmall Business Disclosure Format (check one):

 

Yes___ No X
 

 

ITEM 1.FINANCIAL STATEMENTS

 
**IntegratedEnvironmental Technologies, Ltd.

(formerlyknown as Naturol Holdings, Ltd.)

(ADevelopment Stage Company)

CondensedConsolidated Balance Sheet

 **
March      31,

2004
December      31,

2003
(Unaudited)
(Audited)
Assets
Current      Assets:
         Cash
$                         363,658
$                         284,221
         Inventory
15,000
15,000
         Deposits and prepaid assets
127,554
2,526
             Total current assets
506,212
301,747
Building
380,569
-
Equipment
5,536
3,547
Accumulated      depreciation
(2,677)
(296)
               Total building and equipment
383,428
3,251
Other      asset-license agreement net of accumulated amortization of $2,966 and      $1,695 at 3/31/04 and 12/31/03
 

72,034
 

73,305
$                         961,674
$                         378,303
Liabilities      and Stockholders' Equity
Current      liabilities:
         Accounts payable
$                          39,156
$                           61,945
         Current maturity of long-term debt
15,000
-
         Notes payable
-
5,000
             Total current liabilities
54,156
66,945
Long-term      debt, net of current maturities
302,535
-
Stockholders'      Equity
         Common stock 200,000,000 shares authorized par value $.001, 17,224,793 and      5,068,741 shares issued and outstanding at March 31, 2004 and December 31,      2003
17,225
5,069
         Stock bought not issued
-
7,306
         Paid-in-capital
1,286,397
812,980
         Deficit accumulated during the developmental stage
(698,639)
(513,997)
             Total stockholders' equity
604,983
311,358
             Total liabilities and stockholders' equity
$                         961,674
$                         378,303
 

 
**Seenotes to condensed consolidated financial statements**
 

 
**IntegratedEnviromental Technologies, Ltd.

(formerlyknown as Naturol Holdings, Ltd.)

(ADevelopment Stage Company)

CondensedConsolidated Statement of Operations

Unaudited

 **
 

 

Three      Months

Ended

March      31, 2004
 

 

Three      Months

Ended

March      31, 2003
From

Inception

June      18, 2001

to

March      31, 2004
Professional      fees
$                     (27,186)
$                                -
$                 (263,031)
Administration      fee
(20,000)
-
(120,600)
Salary
(113,155)
-
(142,155)
License      fee
-
-
(50,000)
Depreciation      and amortization
(3,653)
-
(5,644)
Rent
(3,875)
-
(15,125)
Expense      of affiliate
-
-
(3,875)
Product      testing
-
-
(10,750)
Office      & miscellaneous expense
(12,328)
(26)
(43,590)
Travel      & entertainment
(3,351)
-
(25,510)
(183,548)
(26)
(680,280)
Other      income (expense):
         Interest income
141
-
141
         Interest expense
(1,235)
-
(18,500)
(1,094)
-
(18,359)
Net      loss
$                   (184,642)
$                          (26)
$                 (698,639)
Net      loss per share basic and diluted
$                         (0.02)
$                       (0.00)
$                       (0.08)
Weighted      average shares outstanding
7,689,551
10,891,454
9,098,216
 
**Seenotes to condensed consolidated financial statements**
 

 
**IntegratedEnviromental Technologies, Ltd.

(formerlyknown as Naturol Holdings, Ltd.)

(ADevelopment Stage Company)

CondensedConsolidated Statement of Cash Flows

Unaudited**
 

 

 

Three      Months

Ended

March      31, 2004
 

 

Three      Months

Ended

March      31, 2003
From

Inception

June      18, 2001

to

March      31, 2004
Cash      flows from operating activities:
         Net loss
$      (184,642)
$      (26)
$      (698,639)
         Adjustments to reconcile net loss to net cash used in operating activities      -
 

 
 

 
 

 
             Depreciation and amortization
3,653
-
5,644
             Warrants issued for services
-
-
17,500
             Stock issued for services
78,000
-
128,000
Changes      in operating assets and liabilities:
         Inventory
-
-
(15,000)
         Deposits and prepaid assets
(125,028)
-
(127,554)
         Accounts payable
27,212
-
39,156
         Cash used in operating activities
(200,805)
(26)
(650,893)
Cash      flows from investing activities:
         Purchase of building and equipment
(382,559)
-
(386,106)
         Purchase of license agreement
-
-
(75,000)
         Cash used in investing activities
(382,559)
-
(461,106)
Cash      flows from financing activities:
         Payments on long-term debt and net notes payable
(6,215)
-
227,890
         Increase in long-term debt
318,750
-
318,750
         Proceeds from the sale of common stock
350,267
-
929,017
         Cash provided by financing activities
662,802
-
1,475,657
Increase      (decrease) in cash
79,438
(26)
363,658
Cash      beginning of period
284,220
243
-
Cash      end of period
$      363,658
$      217
$      363,658
Supplemental      disclosure of cash flow information:
         Cash paid for interest
$      1,235
$      -
$      18,500
         Cash paid for income taxes
-
-
-      -
Noncash      financing activities:
         Stock issued for subscription receivable
$      -
$      -
$      28,400
         Stock issued and note assumed in reverse merger
-
-
52,765
         Stock returned to the Company and cancelled
-
-
9,931
         Reverse stock split
-
-
60,000
         Stock issued for accounts payable through exercise of warrants
50,000
-
50,000
         Stock issued for conversion of note payable
-
-
255,605
 
**Seenotes to condensed consolidated financial statements

 

 

IntegratedEnviromental Technologies, Ltd.

(Formerlyknown as Naturol Holdings Ltd.)

(ADevelopment Stage Company)

NotesTo Condensed Consolidated Financial Statements

 

Note1 - Basis of Presentation

 **
       Theunaudited condensed consolidated financial statements have been prepared inaccordance with United States generally accepted accounting principles forinterim financial information and with the instructions to Form 10-QSB andreflect all adjustments which, in the opinion of management, are necessary for afair presentation. All such adjustments are of a normal recurring nature. Theresults of operations for the interim period are not necessarily indicative ofthe results to be expected for a full year. Certain amounts in the prior yearstatements have been reclassified to conform to the current year presentations.The statements should be read in conjunction with the financial statements andfootnotes thereto included in our Form 10-KSB for the year ended December 31,2003.

 

       Wechanged our name to Integrated Enviromental Technologies, Ltd. on May 5, 2004.

 

       Ourbusiness is in the development stage and our major activities to date have beenlimited to developing and implementing our business plan, establishing businessstrategies and raising equity.
** **
       Thefinancial statements include our wholly owned subsidiary, IntegratedEnvironmental Technologies, Ltd, a Nevada corporation. All significantinter-company transactions and balances have been eliminated.

 
**Note2 - Going Concern

 **
       Theaccompanying condensed consolidated financial statements have been preparedassuming that we will continue as a going concern. Our ability to continue as agoing concern is dependent upon attaining profitable operations based on thedevelopment of products that can be sold. We intend to use borrowings andsecurity sales to mitigate the affects of our cash position, however, noassurance can be given that debt or equity financing, if and when required, willbe available. The financial statements do not include any adjustments relatingto the recoverability and classification of recorded assets and classificationof liabilities that might be necessary should we be unable to continue inexistence.

 
**Note3 - Long-Term Debt

 **
       Thelong-term debt is a mortgage on a building we acquired on February 20, 2004. Theinterest rate is .5% over the bank prime rate and can be adjusted daily with amaximum interest rate of 8% and a minimum interest rate of 4.5%. The currentrate is 4.5% and the term of the loan is five years on a 30-year amortizationwith the final principal payment due 2/22/09.

 
**Note 4- Common stock and warrants

 **
       Allof the shares that were recorded as bought but not issued at December 31, 2003were issued in the first quarter.

 

 
**IntegratedEnviromental Technologies, Ltd.

(Formerlyknown as Naturol Holdings Ltd.)

(ADevelopment Stage Company)

NotesTo Condensed Consolidated Financial Statements**
 

       Wesold 4,200,000 shares of our stock in the first quarter of 2004 for a net amountof $350,267. The cost relating to the security sales was $69,024. This wasnetted against the sale proceeds. Cost consisted of mainly travel expenses by ashareholder who was assisting us in the sale of our stock.

 

       OnMarch 10, 2004, we issued 100,000 shares to Mr. William Prince, our President,and 50,000 shares to Ms. Marion Soffield as an inducement to work full time forus. The value of our stock on the date of issue was $.52 per share and werecorded as wage expense $78,000 that was the fair market value of the stockissued to our employees.

 

       OnJanuary 13, 2004, 500,000 warrants owned by our legal firm, were exercised. Wehad a $50,000 payable recorded as due to the firm and this was used by the firmfor the exercise price of the warrants. On January 22, 2004, we filed an S-8Registration with the Securities and Exchange Commission registering the 500,000shares of common stock to Stoecklein Law Group.

 
**Note5 - License agreement

 **
       OnSeptember 4, 2003, the Company entered into a license agreement withElectro-Chemical Technologies, Ltd. (licensor) and Laboratory ofElectrotechnology Ltd. (supplier) whereby the company has an exclusive,royalty-bearing license under the patents and the technical information topurchase, manufacture/assemble (with the exceptions of flow-through electrolyticmodules, "FEM"), market, lease, sell, distribute and service LicensedProducts throughout the territory for use in licensed applications, provided,however, that license/supplier shall retain the exclusive right tomanufacture/assemble FEM's and to supply FEM's to licensee. The license periodgoes through the date of the last expiration of the patent of the technology(5/2018). A fee of $75,000 was paid for the agreement and the fee is amortizedover the period of September 2003 through May 2018. There will be a royalty of8% of the net sales price due on any sales made by the Company. The amortizationfor the period ended March 31, 2004 was $1,271.

 
**Note 6- Deposits and prepaid assets

 **
       Wehave recorded a deposit of $36,000 paid to Electro-Chemical Technologies, Ltd.for the purchase of 600 FEM's that haven't been received by us as of March 31,2004.

 

       Wehave recorded a deposit of $84,000 paid to SPDG Naturol Ltd, not related to anyof our companies, for an extraction plant with a capacity of 150 Liters. We havenot received this plant as of March 31, 2004.

 

       Wehave prepaid insurance of $5,028 relating to our building. The insurance will beamortized over the one-year life of the policy. The remaining deposits relate tooffice space at a former location.

 

 
**IntegratedEnviromental Technologies, Ltd.

(Formerlyknown as Naturol Holdings Ltd.)

(ADevelopment Stage Company)

NotesTo Condensed Consolidated Financial Statements

 

Note 7- Related party transactions

 **
       August27, 2003, IET entered into a contractual agreement with Matrix TechnologyAlliance, Inc. ("Matrix"), wherein Matrix agreed to providemanagerial, secretarial, bookkeeping and other clerical support services,including office space. An IET employee formerly acted as the executive directorof Matrix. The IET employee resigned from the position as executive director ofMatrix, effective February 27, 2004 and accepted a position with IET on March 1,2004. The contract with Matrix was terminated on March 1, 2004. We paid Matrix$20,000 in the quarter ended March 31, 2004 prior to the termination of thecontract.

 

 
**Item2. Plan of Operation**
 

       Thisreport contains forward-looking statements. Actual results and events coulddiffer materially from those projected, anticipated, or implicit, in theforward-looking statements as a result of the risk factors set forth below andelsewhere in this report.

 

       Withthe exception of historical matters, the matters discussed herein areforward-looking statements that involve risks and uncertainties. Forward-lookingstatements include, but are not limited to, statements concerning our ability toimplement our business strategy. Our actual results could differ materially fromthe results discussed in such forward-looking statements. The followingdiscussion of our financial condition and results of operations should be readin conjunction with our financial statements and the related notes theretoappearing elsewhere herein.

 
**Overview**
 

       IntegratedEnvironmental Technologies, Ltd. ("IET"), formerly Naturol Holdings,Ltd., a Delaware corporation, was incorporated on February 2, 1999. On January17, 2002, IET completed a reverse triangular merger between Coronado SubsidiaryCorp. ("CSC"), a Nevada corporation and a wholly-owned subsidiary ofIET, and Naturol Inc. ("Naturol"), a Nevada corporation, whereby IETissued 50,000,009 shares (pre 5 to 1 reverse split) of its common stock inexchange for 100% of Naturol's outstanding common stock. Pursuant to the termsof the merger, Naturol merged with CSC wherein CSC ceased to exist and Naturolbecame a wholly-owned subsidiary of IET. IET is a development stage company, hasno revenues to date and has raised capital for initial development through theissuance of its securities.

 

       OnAugust 27, 2003, IET, as the sole stockholder of Naturol, Inc., authorized theamendment to Naturol Inc.'s Articles of Incorporation to change its name toIntegrated Environmental Technologies Ltd., a Nevada corporation ("IET-SUB").

 

       Sinceour incorporation on February 2, 1999, we have not been engaged in anysignificant operations nor have we had any significant revenues, as we are inthe development stage. Our recent activities include the execution of a Licenseagreement, through IET-SUB, with Electro-Chemical Technologies Ltd., a Nevadacorporation, and Laboratory of Electrotechnology Ltd., a Russian limitedliability company. IET-SUB has also entered into a Collaborative Agreement withCoastal Carolina University, whereby the University will assist IET-SUB inimplementing a multi-faceted business strategy based on two core propertytechnologies: 1) a state of the art process that can extract superior oils frombotanicals in an effective, cost-competitive and environmentally safe manner;and 2) a technology for electrochemical activation (ECA) that produces solutionshaving potential applications ranging from destroying potentially harmfulmicroorganisms such as salmonella and anthrax to neutralizing dangerous chemicalagents.

 

       Wehave yet to generate revenues from any source and there is a substantial goingconcern issue as to whether we will ever be able to commercialize our twotechnologies and generate sufficient, if any, revenues to satisfy our workingcapital requirements.  Since inception, we have been dependent on the saleof our equity securities and loans from affiliates to satisfy our workingcapital requirements.  We continue to have a working capital deficiencythat raises substantial concern regarding our ability to continue as a goingconcern.
** 

 

Planof Operation**
 

       Duringthe next twelve months, our plan is to implement strategies that will result inthe commercial application of both the Essential Oils Extraction and Ecasoltechnologies. Assembly and distribution of Ecasol water cleansing anddisinfection "units" and the process of extracting essential botanicaloils will occur in our new production facility located in Myrtle Beach, SouthCarolina.

 
***Satisfactionof our cash obligations for the next 12 months.

 

       InJanuary of 2004 we completed a private capital raise of $420,000, which nettedus $350,267. We believe that the proceeds will provide sufficient cash for thenext 6 months. We plan on satisfying our additional cash obligations over thenext twelve months through additional equity and/or third party financing. We donot anticipate generating revenues sufficient enough to satisfy our workingcapital requirements within the next twelve months. Consequently, we will berequired to seek additional capital in the future to fund growth and expansionthrough additional equity or debt financing or credit facilities. No assurancecan be made that such financing would be available, and if available it may takeeither the form of debt or equity. In the event we cannot obtain the necessarycapital to pursue our strategic plan, we may have to cease or significantlycurtail our operations. This would materially impact our ability to continueoperations.

 

       Sinceinception, we have financed cash flow requirements through debt financing andissuance of common stock for cash and services. As we expand operationalactivities, we may continue to experience net negative cash flows fromoperations, pending receipt of servicing or licensing fees, and will be requiredto obtain additional financing to fund operations through common stock offeringsand bank borrowings to the extent necessary to provide working capital.

 

       Weanticipate incurring operating losses, at least through the first quarter offiscal 2005. Our lack of operating history makes predictions of future operatingresults difficult to ascertain. Our prospects must be considered in light of therisks, expenses and difficulties frequently encountered by companies in theirearly stage of development, particularly companies in new and rapidly evolvingmarkets such as technology related companies. Such risks include, but are notlimited to, an evolving and unpredictable business model and the management ofgrowth. To address these risks we must, among other things, implement andsuccessfully execute our business and marketing strategy, continue to developand upgrade technology and products, respond to competitive developments, andattract, retain and motivate qualified personnel. There can be no assurance thatwe will be successful in addressing such risks, and the failure to do so canhave a material adverse effect on our business prospects, financial conditionand results of operations.

 
**GoingConcern**
 

       Theconsolidated financial statements included in this filing have been prepared inconformity with generally accepted accounting principles that contemplate thecontinuance of the Company as a going concern. The Company's cash position maybe inadequate to pay all of the costs associated with testing, production andmarketing of products. Management intends to 

 

 

useborrowings and security sales to mitigate the effects of its cash position,however no assurance can be given that debt or equity financing, if and whenrequired will be available. The financial statements do not include anyadjustments relating to the recoverability and classification of recorded assetsand classification of liabilities that might be necessary should the Company beunable to continue existence.
* 
**Summaryof product and research and development that we will perform for the term of ourplan.**
 

**       EcasolDivision**
 

       Ourplan provides for commencing production of small volume water purification unitsand custom demonstration units for wastewater treatment by the end of the secondquarter of 2004. Additionally, concurrent with our finalizing contractualagreements, we intend to commence the distribution of small volume waterpurification units to the recreational vehicle and camping industry and to homesupply outlets for in-home models. We have paid a deposit of $36,000 toward thepurchase of the main components of these units, the "FEMs". Upon ourreceipt of the FEMs we will be able to complete the units.

 

       Researchand development will continue over the next twelve months for the EcasolDivision to identify and design Ecasol solution delivery systems for additionalapplications. Demonstration projects continue to be identified and areevaluated. These projects facilitate wastewater treatment for residentialpackage plants, municipal storm water run-off water treatment purposes andagriculture wastewater systems. We have successfully completed one wastewaterdemonstration project with the U.S. Army Corps of Engineers and the MissouriDepartment of Natural Resources. We are incorporating the research data obtainedfrom the Missouri project with the planned demonstration projects into thecustom design of future delivery systems. Measurable outcomes of researchprojects are being implemented and documentation is being finalized fordisinfection solutions for the food industry and biohazard applications.

 
**       EssentialOils Extraction Division**
 

       Weare furthering our goal to initiate production of essential oils from botanicalsusing the essential oil extraction process over the next twelve months. Ouressential oil extraction division is awaiting our 150 Liter oil extraction"plant" in order to begin implementing plans with Coastal CarolinaUniversity to utilize one-third of the capacity of a 150 Liter demonstrationunit for both research and production. The essential oils extracted are to bemarketed to nutraceutical, pharmaceutical, and food additive suppliers.Definitive markets are being developed in anticipation of the provision of thepurest essential oils.

 

       Testsamples from SPDG Naturol Ltd. ("SPDG") have been received by CoastalCarolina University, and CCU, through its close association with ClemsonUniversity, will move forward on analyzing the botanical samples and theirpotential ability to be grown in the local area. SPDG, our strategic partnerfrom Europe, owns the Exclusive Rights for extraction technology for the use inindustries such as: soybean oil for both human consumables and for industrialapplications, flaxseed oil for industrial uses, veronia for industrial epoxy,aloe, rose and jasmine for cosmeceutical use.

 

 

       Plansfor research and development for the extracted oils are anticipated to beongoing throughout the next twelve months. IET intends to incorporate theresearch findings relative to new crop products into an evolving marketing planworking with university agricultural research programs in areas where theagricultural economy is in transition from tobacco to new, what is believed tobe, financially productive replacement crops. The 150 L extraction plantequipment is designed in modules of 50 L each to allow for the dedication of onemodule to research, development, and demonstration, while allowing the two othermodules to be utilized for production.
* 
**Expectedpurchase or sale of plant and significant equipment.**
 

       Werecently moved into our new offices and production facilities and therefore donot anticipate requiring any significant plant and/or equipment with theexception of the essential oil extraction "plant," which we ordered.We placed a deposit of $84,000 on the Plant, ordered from SPDG, which cost atotal of $280,000. We expect delivery of the plant in the second quarter of2004.
* 
**Significantchanges in the number of employees.

 

       Wehave 2 employees. We anticipate employing new key personnel by the end of thesecond quarter. The positions expected to be filled are: director of marketing;sales and distribution; executive administrative assistant/bookkeeper; and,Ecasol division - technical manager.
* ***Off-BalanceSheet Arrangements**
 

       Wedo not have any off-balance sheet arrangements that have or are reasonablylikely to have a current or future effect on our financial condition, changes infinancial condition, revenues or expenses, results of operations, liquidity,capital expenditures or capital resources that is material to investors.
** 

Item3. Controls and Procedures

 **
       Weare a development stage company with no revenues during the period covered bythis quarterly report. Our board of directors had responsibility for ourinternal controls and procedures over our financial reporting.

 

       Wehave implemented and maintain disclosure controls and procedures which consistof: the control environment, risk assessment, control activities, informationand communication and monitoring. Our scope of internal control thereforeextends to policies, plans procedures, processes, systems, activities,initiatives, and endeavors required of a company with our limited transactions,revenues, expenses, and operations. These controls and procedures are designedto ensure that the information required to be disclosed in our Exchange Actreports is recorded, processed, summarized and reported within the time periodsspecified in the SEC's rules.

 

       Therehave been no significant changes (including corrective actions with regard tosignificant deficiencies or material weaknesses) in our internal controls or inother factors that could significantly affect the controls subsequent to thedate of the evaluation referenced below.

 

 

       Within90 days prior to the date of this report, we carried out an evaluation, underthe supervision of Bill Prince, our President, of the effectiveness of thedesign and operation of the Company's disclosure controls and procedures. Basedon the foregoing, Mr. Prince concluded that, given the Company's limitedoperations, our disclosure controls and procedures were effective.

 
**PARTII--OTHER INFORMATION

 

Item 1.Legal Proceedings

 **
       None

 
**Item 2.Changes in Securities

 **
       InJanuary of 2004, we sold 4,200,000 shares of common stock to 39 accreditedinvestors for a total purchase price of $420,000, all of which was paid in cash.We believe that the issuance and sale of the shares was exempt from theregistration and prospectus delivery requirements of the Securities Act of 1933by virtue of Section 4(2) and Regulation D Rule 506. The shares were issueddirectly by us and did not involve a public offering or general solicitation.The recipients of the shares were afforded an opportunity for effective accessto files and records of the Company that contained the relevant informationneeded to make their investment decision, including the financial statements and34 Act reports. We reasonably believe that the recipients, immediately prior toissuing the shares, had such knowledge and experience in the financial andbusiness matters that they were capable of evaluating the merits and risks ofthere investment. The recipients had the opportunity to speak with ourmanagement on several occasions prior to their investment decision. There was nocommission paid on the issuance and sale of the shares.

 

       OnJanuary 13, 2004, the Stoecklein Law Group exercised its warrants and on January22, 2004, we filed an S-8 Registration with the Securities and ExchangeCommission registering the 500,000 shares of common stock to Stoecklein LawGroup.

 

       InFebruary 2004, we issued 2,556,052 shares of common stock to 3GC Ltd. pursuantto an Equity-for-Debt Exchange Agreement, wherein we agreed to exchange$255,605.14 of current notes we held payable to 3GC for 2,556,052 shares ofcommon stock. We believe that the issuance of the shares was exempt from theregistration and prospectus delivery requirements of the Securities Act of 1933by virtue of Section 4(2).

 

       OnMarch 10, 2004, we issued 100,000 shares of common stock to William E. Prince asa sign on bonus for serving as an officer and director of the Company. Webelieve that the issuance of the shares was exempt from the registration andprospectus delivery requirements of the Securities Act of 1933 by virtue ofSection 4(2).

 

       OnMarch 10, 2004, we issued 50,000 shares of common stock to Marion C. Sofield asa sign on bonus for her serving as Executive Vice President of IET-SUB. Webelieve that the issuance of the shares was exempt from the registration andprospectus delivery requirements of the Securities Act of 1933 by virtue ofSection 4(2).
 

 
**Item 3.Defaults by the Company upon its Senior Securities

 **
       None

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

 **
       Wedid not submit any matters to a vote of our stockholders during the firstquarter, however, on April 23, 2004 we held our annual meeting of stockholders.Business conducted at the meeting included the following proposals:

 

       (1)To change our name to Integrated Environmental Technologies, Ltd.;

       (2)To elect directors for the upcoming year;

       (3)To ratify the appointment of our auditors.

 

       Eachshare of Common Stock was entitled to one vote. Only shareholders of record atthe close of business on March 29, 2004, were entitled to vote. The number ofoutstanding shares at that time was 17,224,793 by approximately 94 shareholders.The required quorum of shareholders was present at the meeting.

 

Electionof New Directors

 

       OnApril 23, 2004, our shareholders of record on March 29, 2004, elected William E.Prince, Dr. Valgene Dunham, Paul Branagan, and Michael J. Cunningham asdirectors of the Company.

 

       **WilliamE. Prince****,**age 53****is Chairman of the Board, Chief ExecutiveOfficer, and a Director of the Company. Mr. Prince served as Executive Directorof the Albemarle Economic Development Commission from 1999 to August 2003. Mr.Prince was branch and regional manager of Law/Gibb Group, an employee ownedinternational environmental engineering consultants from 1996 to 1999. Mr.Prince was Vice President and branch manager for Froehling & Robertson, afamily owned environmental consulting firm from 1994 to 1996. From 1990 to 1994,Mr. Prince served as Vice President for Business Development and was a principaland owner with Ragsdale Consultants, Inc., and DSA Design Group, both privatelyheld engineering and environmental consultants. From 1979 to 1990 Mr. Princeheld various management positions with Law Engineering and EnvironmentalServices, an employee owned international consulting firm. Primaryresponsibilities were new ventures and company growth.

 

       **Dr.Valgene L. Dunham**, age 63, is a Director of the Company. Dr. Dunham isalso the Vice President for Grants, Contract Administration and ResearchPlanning for Coastal Carolina University in South Carolina. In the fall semesterof 2002, Dr. Dunham served as the Special Assistant to the President of CoastalCarolina University. In the summer of 2002, Dr. Dunham served as Interim Provostof Coastal Carolina University. From 1995 through 2002, Dr. Dunham served asDean of the College of Natural & Applied Sciences of Coastal CarolinaUniversity. In 1969, Dr. Dunham received his Ph.D. in Botany from SyracuseUniversity in New York. In 1965, Dr. Dunham received his Masters in GeneralScience from Syracuse University in New York.

 

 

       **PaulBranagan**, age 59, is a Director of the Company. Mr. Branagan graduatedfrom the University of Las Vegas Nevada with a B.S. in physics. From 1993 to thepresent Mr. Branagan has been the President and Senior Scientist of Branagan& Associates, Inc. From August 21, 2002 to present Mr. Branagan has been thePresident and Director of Petrol Oil and Gas, Inc. From 1975 to 1993 he was theProject Manager, Assistant Oil and Gas Division Manager and Senior Scientist ofCER Corporation of Las Vegas, Nevada. Since 1999, Mr. Branagan has been thePresident and a member of the board of directors of Millennium PlasticsCorporation, a 34 Act Reporting Nevada Corporation.

 

       **MichaelJ. Cunningham** OBE Mphil (Cantab), age 60, is a Director of the Company.From 1994 to the present, Mr. Cunningham has been Chairman and CEO of The CoachHouse Group UK Ltd ("CHGUK"), a specialist research and developmentcompany, based in the UK with offices and associates world-wide. Mr. Cunninghamis also Chairman and CEO of The Sustainable Projects Development Group, a UKbased subsidiary of CHGUK, specializing in the identification and development ofsustainable technologies utilizing natural resources and materials, withprojects underway in several countries. Since 2000, Mr. Cunningham has been aDirector of Healthworld International, a start-up company developing naturalmedicines and neutraceutical products from botanical and animal sources inAfrica. From 1994 to 1997, Mr. Cunningham was CEO of London Minsk DevelopmentCompany, specializing in the conversion of military technologies to commercialuse and the development and application of economic offset programs. He wasappointed Professor at Lancaster University in 1994. He was the recipient of theYuri Gargarin Medal for services to Russian Space Industry in 1993. In 1987, hewas a Lecturer, Examiner and did post-graduate programs at Cambridge UniversityCentre of International Studies. In 1985 he was an Officer of the Order of theBritish Empire

 
**Item 5.Other Information

 **
**       **BuildingPurchase
 

       OnJanuary 2, 2004, IET-SUB entered into a Contract of Sale with JMW Investments("JMW"), wherein JMW agreed to sell and convey and IET-SUB agreed topurchase the real property commonly known as 4235 Commerce Street in the StrandIndustrial Park, Little River, South Carolina together with a 12,000 square footbuilding and improvements thereto located on the property for a purchase priceof $380,569. The interest rate is .5% over the bank prime rate and can beadjusted daily with a maximum interest rate of 8% and a minimum interest rate of4.5%. The current rate is 4.5% and the term of the loan is five years on a30-year amortization with the final principal payment due 2/22/09. The buildingis situated on two lots. On February 20, 2004, IET-SUB closed escrow on theproperty. We moved into the building on May 3, 2004, after completing minorrenovations to the building. A copy of the Contract of Sale was attached as anexhibit to Form 8-K filed on March 1, 2004.

 

NewDirectors

 

       OnJanuary 19, 2004, our then sole officer and director, Mr. Prince appointedMichael J. Cunningham and Dr. Valgene L. Dunham as Directors of the Company. Mr.Cunningham and Dr. Dunham shall serve until the next annual meeting ofstockholders. Mr. Cunningham is Chairman and CEO of SPDG Naturol Ltd.

 

Terminationof Matrix Agreement

 

Effectiveon March 1, 2004, the agreement with Matrix was terminated.

 

 
**SubsequentEvent**
 

Changeof Name

 

       OnMay 5, 2004, we filed a Certificate of Amendment of Certificate of Incorporationto change our name to Integrated Environmental Technologies, Ltd. A copy of theamendment is attached hereto as an exhibit.

 
**Item 6.Exhibits and Reports of Form 8-K

 **
(a)Exhibits
 
3(i)
Certificate      of Amendment of Certificate of Incorporation
31
Certification      pursuant to Section 302 of the Sarbanes-Oxley Act
32
Certification      pursuant to Section 906 of the Sarbanes-Oxley Act
 

(b)Form 8-K
 

           Form    8-K filed on January 8, 2004; Collaborative Agreement.

       Form8-K filed on March 1, 2004; Contract of Sale and new directors.

 

 

SIGNATURES

 

       Pursuantto the requirements of the Securities Exchange Act of 1934, the Registrant hasduly caused this report to be signed on its behalf by the undersigned, thereuntoduly authorized.

 

I**NTEGRATEDENVIRONMENTAL TECHNOLOGIES, LTD.**
(Registrant)

 

 

By:/S/WilliamE.Prince            
WilliamE. Prince, President

 

Date:May 14, 2004
** ********** |
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