UNITED STATES

SECURITIES AND
EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-QSB



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

OF THE SECURITIES
EXCHANGE ACT OF 1934



For the quarterly
period ended March 31, 2005



[ ] TRANSITION REPORT
PURSUANT TO SECTION 13 OR

15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934



Commission file number
000-26309



INTEGRATED ENVIRONMENTAL TECHNOLOGIES, LTD.

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



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



4235 Commerce Street

Little River,
	South Carolina 29566


(Address of principal
executive offices)



(843) 390-2500


(Issuer's telephone
number, including area code)

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
last 12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days.

Yes X    
No ____

The number of shares of Common Stock, $0.001 par value,
outstanding on March 31, 2005, was 21,292,793 shares.

Transitional Small Business Disclosure Format (check one):

Yes     
No X

---

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Integrated
Environmental Technologies, Ltd.

(A Development Stage
Company)

Condensed Consolidated
Balance Sheet



|                                                                          | March 31, 2005
|------------------------------------------------------------------------- | --------------
|                                                                          | (Unaudited)   
|Assets                                                                    |               
|Current Assets:                                                           |               
|Cash                                                                      | $ 171,293     
|Accounts receivable                                                       | 31,384        
|Inventory                                                                 | 70,947        
|Deposits and prepaid assets                                               | 84,000        
|Total current assets                                                      | 357,624       
|                                                                          |               
|Building                                                                  | 479,268       
|Equipment                                                                 | 12,874        
|Accumulated depreciation                                                  | (15,408)      
|Total building and equipment                                              | 476,734       
|                                                                          |               
|Other asset-license agreement
		net of accumulated amortization of $8,051 | 66,949        
|                                                                          | $ 901,307     
|Liabilities and Stockholders'
		Equity                                    |               
|Current liabilities:                                                      |               
|Accounts payable                                                          | $ 83,152      
|Accrued liabilities                                                       | 124,450       
|Bank
		line of credit                                                     | 30,000        
|Current maturity of long-term debt                                        | 10,679        
|Notes payable                                                             | 65,000        
|Total current liabilities                                                 | 313,281       
|                                                                          |               
|Long-term debt, net of
		current maturities                               | 293,700       
|                                                                          |               
|Stockholders' Equity                                                      |               
|Common stock 200,000,000 shares authorized par value $.001, 21,292,793    | 21,293        
|Stock bought or earned not issued                                         | 1,205         
|Paid-in-capital                                                           | 2,609,839     
|Deficit accumulated during the developmental stage                        | (2,338,011)   
|                                                                          |               
|Total stockholders' equity                                                | 294,326       
|Total liabilities and stockholders' equity                                | $ 901,307     

See notes to condensed consolidated financial statements

1

---



Integrated
Environmental Technologies, Ltd.

(A Development Stage
Company)

Condensed Consolidated
Statement of Operations

Unaudited



|                                       | Three Months
		Ended
		March 31, 2005 | Three Months
		Ended
		March 31, 2004 | From Inception
		(September 18, 2001) to March 31, 2005
|-------------------------------------- | ------------------------------------- | ------------------------------------- | -------------------------------------------------------
|Sales                                  | $ 61,370                              | $ -                                   | $ 61,370                                               
|Cost of goods sold                     | 30,075                                | -                                     | 30,075                                                 
|Gross profit                           | 31,295                                | -                                     | 31,295                                                 
|                                       |                                       |                                       |                                                        
|Professional fees                      | 213,056                               | 27,186                                | 1,223,452                                              
|Administration fee                     | -                                     | 20,000                                | 120,600                                                
|Salary                                 | 81,641                                | 113,155                               | 523,516                                                
|Insurance expense                      | 18,518                                | -                                     | 50,810                                                 
|License fee                            | -                                     | -                                     | 50,000                                                 
|Depreciation and amortization          | 4,932                                 | 3,653                                 | 23,459                                                 
|Rent                                   | 4,050                                 | 3,875                                 | 34,525                                                 
|Expense of affiliate                   | -                                     | -                                     | 3,875                                                  
|Product testing                        | 14,500                                | -                                     | 40,178                                                 
|Office & miscellaneous
		expense       | 37,718                                | 12,328                                | 174,267                                                
|Travel & entertainment                 | 15,144                                | 3,351                                 | 90,570                                                 
|                                       | 389,559                               | 183,548                               | 2,335,252                                              
|Loss from operations                   | (358,264)                             | (183,548)                             | (2,303,957)                                            
|Other (income) expense:                |                                       |                                       |                                                        
|Interest income                        | (500)                                 | (141)                                 | (1,304)                                                
|Interest expense                       | 4,724                                 | 1,235                                 | 35,358                                                 
|                                       |                                       |                                       |                                                        
|                                       | 4,224                                 | 1,094                                 | 34,054                                                 
|                                       |                                       |                                       |                                                        
|Net loss                               | $ (362,488)                           | $ (184,642)                           | $ (2,338,011)                                          
|                                       |                                       |                                       |                                                        
|Net loss per share basic and
		diluted | $ (0.02)                              | $ (0.02)                              | $ (0.17)                                               
|                                       |                                       |                                       |                                                        
|Weighted average shares
		outstanding  | 18,839,585                            | 7,689,551                             | 13,904,034                                             



See notes to condensed
consolidated financial statements



2

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Integrated
Environmental Technologies, Ltd.

(A Development Stage
Company)

Condensed Consolidated
Statement of Cash Flows

Unaudited



|                                                                               | Three Months
		Ended March 31, 2005 | Three Months
		Ended March 31, 2004 | From Inception
		June 18, 2001 to March 31, 2005
|------------------------------------------------------------------------------ | ----------------------------------- | ----------------------------------- | ------------------------------------------------
|Cash flows from operating
		activities:                                        |                                     |                                     |                                                 
|Net
		loss                                                                     | $ (362,488)                         | $ (184,642)                         | $ (2,338,011)                                   
|Adjustments to reconcile net
		loss to net cash used in operating activities - |                                     |                                     |                                                 
|Depreciation and amortization                                                  | 4,933                               | 3,653                               | 23,459                                          
|Warrants issued for services                                                   | -                                   | -                                   | 224,000                                         
|Stock issued for services                                                      | 130,300                             | 78,000                              | 789,069                                         
|Changes in operating assets
		and liabilities:                                 |                                     |                                     |                                                 
|Accounts receivable                                                            | (31,384)                            | -                                   | (31,384)                                        
|Inventory                                                                      | (4,845)                             | -                                   | (70,947)                                        
|Notes receivable - affiliate                                                   | -                                   | (125,028)                           | -                                               
|Deposits and prepaid assets                                                    | 915                                 | -                                   | (84,000)                                        
|Accounts payable                                                               | (2,565)                             | 27,212                              | 83,152                                          
|Accrued liabilities                                                            | 83,087                              | -                                   | 124,450                                         
|Cash
		used in operating activities                                            | (182,047)                           | (200,805)                           | (1,280,212)                                     
|Cash flows from investing
		activities:                                        |                                     |                                     |                                                 
|Purchase of building and equipment                                             | (1,586)                             | (382,559)                           | (492,143)                                       
|Purchase of license agreement                                                  | -                                   | -                                   | (75,000)                                        
|Cash
		used in investing activities                                            | (1,586)                             | (382,559)                           | (567,143)                                       
|Cash flows from financing
		activities:                                        |                                     |                                     |                                                 
|Payments on long-term debt                                                     | (2,825)                             | (6,215)                             | (14,370)                                        
|Bank
		line of credit, net                                                     | 30,000                              | -                                   | 259,106                                         
|Increase in notes payable                                                      | 65,000                              | -                                   | 65,000                                          
|Increase in long-term debt                                                     | -                                   | 318,750                             | 318,750                                         
|Proceeds from the sale of common stock                                         | 83,500                              | 350,267                             | 1,390,162                                       
|Cash
		provided by financing activities                                        | 175,675                             | 662,802                             | 2,018,648                                       
|Increase (decrease) in cash                                                    | (7,958)                             | 79,438                              | 171,293                                         
|Cash beginning of period                                                       | 179,251                             | 284,220                             | -                                               
|Cash end of period                                                             | $ 171,293                           | $ 363,658                           | $ 171,293                                       
|                                                                               |                                     |                                     |                                                 
|Supplemental disclosure of
		cash flow information:                            |                                     |                                     |                                                 
|Cash
		paid for interest                                                       | $ 4,724                             | $ 1,235                             | $ 35,358                                        
|Cash
		paid for income taxes                                                   | -                                   | -                                   | -                                               
|                                                                               |                                     |                                     |                                                 
|Noncash financing activities:                                                  |                                     |                                     |                                                 
|Stock issued for subscription receivable                                       | $ -                                 | $ -                                 | $ 28,400                                        
|Stock issued and note assumed in reverse merger                                | -                                   | -                                   | 52,765                                          
|Stock returned to the Company and cancelled                                    | -                                   | -                                   | 9,931                                           
|Reverse stock split                                                            | -                                   | -                                   | 60,000                                          
|Stock issued for accounts payable through exercise of options                  | -                                   | 50,000                              | 50,000                                          
|Stock issued for conversion of note payable                                    | -                                   | -                                   | 255,605                                         
|Stock issued to employees                                                      | 2,800                               | -                                   | 172,071                                         
|Stock issued for services                                                      | -                                   | -                                   | 439,500                                         

See notes to condensed consolidated financial statements

4

---



Integrated
Environmental Technologies, Ltd.

(A Development Stage
Company)

Notes To Condensed
Consolidated Financial Statements

Note 1 - Basis of Presentation

The unaudited condensed financial statements have been
prepared in accordance with United States generally accepted accounting
principles for interim financial information and with the instructions to Form
10-QSB and reflect all adjustments which, in the opinion of management, are
necessary for a fair presentation. All such adjustments are of a normal
recurring nature. The results of operations for the interim period are not
necessarily indicative of the results to be expected for a full year. Certain
amounts in the prior year statements have been reclassified to conform to the
current year presentations. The statements should be read in conjunction with
the financial statements and footnotes thereto included in our Form 10-KSB for
the year ended December 31, 2004.

The Company changed its name to Integrated Environmental
Technologies, Ltd. on April 23, 2004.

The Company's business is in the development stage and its
major activities to date have been limited to developing and implementing its
business plan, establishing business strategies and raising equity financing.

The financial statements include the Company's wholly owned
subsidiary, I.E.T., Inc. 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 the Company will continue as a going concern.
The Company's ability to continue as a going concern is dependent upon attaining
profitable operations based on the development of products that can be sold. The
Company intends to use borrowings and security sales to mitigate the affects 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 in existence.

Note 3 - Notes payable

The Company borrowed $50,000 from United Capital Group, Inc.
on February 1, 2005 with repayment due February 16, 2005. The Company
subsequently has repaid $10,000 and the current balance due is $40,000. The note
has an interest rate of 6%.

The Company has a line of credit from Crescent bank in the
amount of $50,250 with interest at prime plus 1%. At March 31, 2005 the line of
credit was $30,000.

4

---

Integrated
Environmental Technologies, Ltd.

(A Development Stage
Company)

Notes To Condensed
Consolidated Financial Statements

Note 4 - Common stock and warrants

750,000 shares that were recorded as bought but not issued at
December 31, 2004 were issued in the first quarter.

The Company sold 205,000 shares of its stock in the first
quarter of 2005 for a net amount of $41,000. The shares were not issued at March
31, 2005 and the par value of the shares is recorded as stock bought not issued.
Each share purchased included an "A" warrant that allowed for the purchase of a
share of common stock for $0.50 per share until December 31, 2005 and a "B"
warrant that allowed for the purchase of a share of common stock at a price of
$1.00 per share until December 31, 2006. 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. The shares
were issued directly and did not involve a public offering or general
solicitation. The recipients of the shares were afforded an opportunity for
effective access to files and records of the Company that contained the relevant
information needed to make their investment decision, including the financial
statements and 34 Act reports. The recipients had the opportunity to speak with
management on several occasions prior to making investment decisions. There was
no commission paid on the issuance and sale of the shares.

On March 18, 2005, the Company issued 10,000 shares to an
employee. The value of the stock on the date of issue was $0.28 per share and
was recorded as wage expense $2,800.

On March 29, 2005, the Company agreed to issue 850,000 shares
of its common stock to a stockholder for services rendered by the stockholder
and a cash payment of $42,500. The value of the transaction resulted in
professional fee expense totaling $127,500. The shares were not issued at March
31, 2005 and the par value of the shares of $850 is included as stock bought or
earned not issued.

Note 5 - License agreement

On September 4, 2003, the Company entered into a license
agreement with Electro-Chemical Technologies, Ltd. (licensor) and Laboratory of
Electrotechnology Ltd (supplier) whereby the Company has an exclusive,
royalty-bearing license under the patents and the technical information to
purchase, manufacture/assemble (with the exceptions of flow-through electrolytic
modules FEM), market, lease, sell, distribute and service Licensed Products
throughout the territory for use in licensed applications, provided, however,
that license/supplier shall retain the exclusive right to manufacture/assemble
FEM's and to supply FEM's to licensee. The license period goes through the date
of the last expiration of the patent of the technology (5/2018). A fee of
$75,000 was paid for the agreement and the fee is amortized over the period of
September 2003 through May 2018. There will be a royalty of 8% of the net sales
price due on any sales made by the Company. The amortization for the period
ended March 31, 2005 was $1,271.

5

---

Integrated
Environmental Technologies, Ltd.

(A Development Stage
Company)

Notes To Condensed
Consolidated Financial Statements

Note 6 - Deposits and prepaid assets

The Company has recorded a deposit of $84,000 paid to SPDG
Naturol Ltd, not related to any of its companies, for an extraction plant with a
capacity of 150 Liters. The Company has not received this plant as of March 31,
2005.

Note 7 - Subsequent events

In April 2005, the Company borrowed $150,000 from
DaVinci-Franklin Fund I, LLC, as a second trust deed on its building. Payment of
principal and interest is due in full on or before August 29, 2005, which may be
extended to October 28, 2005 under certain conditions.

6

---

FORWARD-LOOKING STATEMENTS

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

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

Although we believe that the expectations reflected in any of
our forward-looking statements are reasonable, actual results could differ
materially from those projected or assumed in any 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:

increased competitive pressures from existing competitors
	and new entrants;

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

deterioration in general or regional economic conditions;

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

loss of customers or sales weakness;

inability to achieve future sales levels or other
	operating results;

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

operational inefficiencies in distribution or other
	systems.

For a detailed description of these and other factors that
could cause actual results to differ materially from those expressed in any
forward-looking statement, please see "Factors That May Affect Our Plan of
Operation" in this document and in our Annual Report on Form 10-KSB for the year
ended December 31, 2004.

Item 2. Plan of Operation.

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

7

---

Overview

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

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

As a company in an early development stage our ability to
proceed with our plan of operation has continuously been a function of our
ability to raise sufficient capital to continue our operations. At the end of
the first quarter of 2005 we had cash available of $171,293. Our cash
requirements on a monthly basis are approximately $80,000, excluding exceptional
expenses that are related to capital raising and securities registration
expenses.

We have continuously incurred losses since inception. For the
quarter ended March 31, 2004 we had a net loss of $184,642 as compared to a net
loss of $362,488 for the quarter ended March 31, 2005. This 96% increase in
overall losses is the result of our increased business activities. In the first
quarter of 2005, we generated our first revenues, amounting to $61,370. We
anticipate increased revenues in the 2nd quarter of 2005, however, losses are
anticipated to continue throughout fiscal 2005.

The forecast of sales-generated revenues in the EcaFloDivision will add to our labor costs, but it is anticipated that deposits
on customer purchase orders will off-set these expenses. Management intends to
closely monitor the costs associated with the production of EcaFlodevices in an attempt to minimize capital shortages during fiscal 2005.
Our ability to continue commercialization efforts in 2005 will be critical, as
the second and third quarters of 2005 will see an increase in "burn" rate due to
expansion efforts needed to transition the Company fully from development stage
into production stage. Capital, from investment financing through stockholders
exercising their "A" warrants in 2005, is anticipated in an amount up to
$1,612,500 if all warrants are exercised. As we continue to expand operational
activities, we anticipate experiencing net negative cash flows from operations,
and may be required to fund operations from bank borrowings if available that
could possibly be secured by contract sales of EcaFlo
devices in addition to continued equity sales of our common stock.

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

8

---

Plan of Operation

The two technologies that continue to drive our short-term
and long-term plans are the 1) EcaFlo Division, and
2) Essential Oils Extraction Division. Our plan of operation focuses on
continuing the process of commercialization of EcaFloDivision equipment while having our essential oil extraction plant
constructed and installed in the South Carolina facility.

EcaFloDivision:

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

On October 27, 2004, we amended our license and supply
agreement to add two additional applications by which we can utilize the
technology provided in the license and supply agreement. The additional
applications are: (1) the disinfection of storm water runoff; and (2) the
decontamination of oil well water.

Our focus has been re-directed to the markets at-hand:
storm-water treatment, wastewater treatment, petroleum industry applications and
food/beverage sanitation opportunities. FEM's (flow-through electrolytic
modules) continue to be the main components of the EcaFlo
Division equipment product line. We have established vendor relations with
domestic suppliers for the other components that are used in our equipment.
Engineering and design work on our first 8-FEM devices are complete. Parts have
been ordered, received and assembled to put forth this Division's first fully
functional 8-FEM device.

On January 24, 2005, we entered into a sales contract with
Maverick Stimulation Company, LLC, a Colorado-based oilfield service company
specializing in production enhancement of oil and gas wells, to deliver our
first EcaFlo 080 device for a total purchase price of
$31,369.65 (paid in full on March 1, 2005).

On March 2, 2005, we entered into an agreement with Coastal
Carolina University to perform experiments on the effects of solutions generated
by our electrochemical activation technology in killing microorganisms in or on
samples of materials supplied by us. We agreed to form a continuing relationship
in the form of an internship for the research described above. Interns will be
selected by their availability for research projects with microorganisms and
ability in conducting such. We will interview prospects and make the selection
from students in a pool supplied by the Department of Biology. The term is from
February 22, 2005 through December 10, 2008 to run concurrently with the
existing collaborative agreement dated December 11, 2003. We agreed to
compensate the Intern for the provisions of services described above and we
agreed to reimburse the Department of Biology for any supplies needed by the
Intern.

9

---

Essential Oils Extraction Division:

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

Subsequent Event

On May 6, 2006, we issued a press release announcing the
commencement of a strategic plan intended to address the best method for
establishing a wholly owned subsidiary company for our Essential Oils Extraction
Division. Management has implemented a plan to investigate the most effective
way to structure the Essential Oils Division as a stand-alone subsidiary company
with the intent to distribute shares to our stockholders. Future press releases
will address the logistical steps being investigated as part of the strategic
plan.

Satisfaction of our cash obligations for the next 12 months.

As of March 31, 2005, our cash balance was $171,293. We
believe that this amount will provide sufficient cash for the next two months.
Our plan for satisfying our cash requirements for the next twelve months is
through additional equity, third party financing, and/or traditional bank
financing. We anticipate sales-generated income during that same period of time,
but do not anticipate generating sufficient amounts of revenues to meet our
working capital requirements. Consequently, we intend to make appropriate plans
to insure sources of additional capital in the future to fund growth and
expansion through additional equity or debt financing or credit facilities.

Since inception, we have financed cash flow requirements
through debt financing and the issuance of common stock for cash and services.
As we 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 to the extent necessary to provide
working capital.

On February 1, 2005, we entered into a Promissory Note with
United Capital Group, Inc. for the principal amount of $50,000. Pursuant to the
note we promised to pay to the order of United Capital Group, Inc. the sum of
$50,000 together with interest thereon at 6% per annum on any unpaid balance.
According to the note the outstanding principal and accrued but unpaid interest
was due and payable on February 16, 2005. The parties have mutually agreed to
extend the due date. On March 16, 2005, we paid $10,000 toward this debt.

The Company has a line of credit from Crescent bank in the
amount of $50,250 with interest at prime plus 1%. At March 31, 2005 the line of
credit was $30,000.

10

---

We anticipate incurring operating losses over 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.

On April 1, 2005, we executed a promissory note payable to
DaVinci-Franklin Fund I, LLC in the amount of $150,000 ("Note") plus interest
according to the provisions provided in the promissory note attached as an
exhibit to the Form 8-K filed on April 13, 2005. The Note is secured by a second
mortgage on our real property located at 4235 Commerce Street, Little River, SC
29566. Pursuant to the terms of the Note, payment of principal and interest is
due in full on or before August 29, 2005, which may be extended to October 28,
2005 under certain conditions.

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 Division

Product development within this division has moved ahead at a
rapid pace throughout the first quarter of 2005. As a result of positive
laboratory test results from the Water Quality Lab at Coastal Carolina
University, in combination with internal profit margin comparisons between
prototype EcaFlo devices and their respective
markets, we have been able to make decisions regarding market entry with our own
specifically designed and engineered devices. We have passed the
design/engineering stage for a specific 8-FEM EcaFlo
device and our engineering department has finalized vendor relations with
strategic suppliers. Our administrative service department has finalized credit
relations with these vendors in order to receive ordered parts by purchase
order, and, as these device components have been received, the engineering
department has assembled the 8-FEM unit and tested the device in our own "shop."
Technical support is being provided to our engineering department by our
licensor's personnel, who are knowledgeable in all matters concerning the ECA
science, the technology and any modifications we need to make to achieve optimal
efficacy for practical applications. Vital testing results have significantly
improved our ability to complete our goals ahead of time and enter our markets
with specific EcaFlo devices with a firm confidence
level.

On January 24, 2005, we sold our first EcaFlo
080 device for a total purchase price of $31,369.65 (paid in full on March 1,
2005) to Maverick Stimulation Company, LLC, a Colorado-based oilfield service
company specializing in production enhancement of oil and gas wells. We
subsequently sold another device, resulting in total gross revenues for the
first quarter of $61,370.

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Current research initiatives are centered on providing
specific water quality regulatory agencies with toxicity testing reports that
will serve to quell any question that may arise regarding the potential of
negative impact on the environment (i.e.: estuary) associated with the use of
ECA solutions. We are finding that, through the use of test data and technical
expertise, we are able to better educate environmental regulators and gain their
support and endorsement for certain ECA applications within the storm water
treatment arena, the petroleum industry, and with food and beverage safety
control agencies. At petroleum industry trade shows, our marketing and sales
department personnel was able to produce test results showing potential
customers that aliquots of petroleum well "frac" waters that were treated with a
1% EcaFlodevice-generated anolyte solution showed
total bacteria kill in less than 10 minutes. Furthering that data, our approach
is to point out that these kinds of results eliminate the need for voluminous
regulatory compliance paperwork to be submitted, in addition to costing less
than the use of traditional biocidal chemicals that are currently put into "frac
water." The petroleum industry market continues to develop as a result of our
strategic alliance with Pentagon Technical Services, a small consulting firm
with ties into this industry, which has contracted with us as a manufacturer's
representative/sales and distribution agent.

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

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

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

Further research and development efforts will be implemented
with our strategic university partners, going concerns within the petroleum and
wine industries, and possibly, with nationally accredited research labs. We view
research and development as an integral portion of our product development plan
and will use the measurable outcomes from research projects as catalysts for
market development. The results of this research guide us in determining what to
design and build and who will buy "it."

Essential Oils Division

We are currently working on a strategic plan intended to
address the best method for establishing a wholly owned subsidiary company for
this division. In order to fully focus on the momentum we have built in the
EcaFlo  Division, we believe it prudent to hold the
intellectual property contained in the Essential Oils Extraction Division in a
separate company whereby our current stockholders will benefit by distributing
shares in both technology companies. We are in the early stages of investigating
the best structure for this division, and will continue exploring options.

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The verbal commitment to Clemson University's Nutraceutical
Research Institute (NRI), to join as a "Supporting Member" upon receipt and
installation of extraction equipment within our facility, remains intact. In
addition to the lab availability at Coastal Carolina University, we have found
that Clemson University, a world renowned, agricultural, land-grant university
is anxious to associate itself with research that we need to further our goal of
introducing an environment-friendly source of pure essential oils into the
nutraceutical and pharmaceutical industries. Costs associated with this
membership have been analyzed and it remains in the Company's best interest to
join this group at such time as the Essential Oils Extraction Division is
structured appropriately.

Expected Purchase or sale of plant and significant equipment.

We continue to be involved in negotiations with the Coach
House Group, UK, our joint venture partner, who provide us with the Naturol
essential oils extraction technology. These discussions are centered on the
$84,000 deposit we paid for this extraction equipment to SPDG Naturol - the
Coach House Group - in January of 2004. Discussions with Coach House Group
continue in anticipation of developing a strategy to move the technology forward
in the future.

Significant changes in the number of employees.

We currently employ 6 full time employees, 1 part time
employee and have a consulting agreement with 1 individual. The 6 full time
employees are engaged in management, marketing and sales, engineering and
administrative services; our part time employee is within our engineering
department; and the consultant provides technical/scientific support to the
EcaFlo Division of our Company. We continue to
anticipate an increase in employees in the next twelve months as we add assembly
personnel, shipping and receiving personnel and additional administrative
support personnel.

Going Concern

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

Off-Balance Sheet Arrangements.

As of March 31, 2005, 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 is material to investors.

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FACTORS THAT MAY AFFECT OUR PLAN OF OPERATION

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

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

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

- The continuation of our efforts to raise adequate
		working capital through equity investment and the generation of sales
		revenues;
- The continued success of lab testing that supports
		the development of our EcaFlo technology
		product lines;
- Demand for our EcaFlo
		technology;
- The level of our competition;
- Our ability to maintain key management and technical
		support staff, and to attract more employees with similar
		characteristics; and
- The continuation of our efforts to efficiently
		develop products to commercialize while maintaining quality and
		controlling costs.

To achieve profitable operations, we must, alone or with
others, successfully act on the factors stated above, along with continually
developing ways to enhance our production efforts, now that we are commencing
production in the EcaFlo Division. Since inception, we have
incurred a net loss of $2,238,011 and at March 31, 2005 we had stockholders'
equity of $294,326.

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

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 they 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.

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

Based on our current proposed plans and assumptions, we
anticipate that our existing funds will only be sufficient to fund our
operations and capital requirements for approximately 2 months. Furthermore, the
commercialization expenses of our two technologies will be very substantial,
i.e., well in excess of the amount of cash that we currently have. Accordingly,
we will have to (i) obtain additional debt or equity financing during the next
3-month period in order to fund the further development of our products and
working capital needs, and/or (ii) enter into a strategic alliance with a larger
company to provide our required funding.

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

As a result of our deficiency in working capital at December
31, 2004, our auditors have included a paragraph in their report regarding
substantial doubt about our ability to continue as a going concern. Our plans in
this regard are to seek additional funding through future equity private
placements or debt facilities.

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

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

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

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.

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

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

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

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

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

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

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Potential issuance of additional common stock could dilute
existing stockholders.

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

Item 3. Controls and Procedures.

We maintain disclosure controls and procedures designed to
ensure that information required to be disclosed in reports filed under the
Securities Exchange Act of 1934, as amended, is recorded, processed, summarized
and reported within the specified time periods. As of the end of the period
covered by this report, William E. Prince, our Chief Executive Officer and
Principal Financial Officer evaluated the effectiveness of our disclosure
controls and procedures. Based on the evaluation, which disclosed no significant
deficiencies or material weaknesses, Mr. Prince, our Chief Executive Officer and
Principal Financial Officer concluded that our disclosure controls and
procedures are effective. There were no changes in our internal control over
financial reporting that occurred during the 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.

None

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

On March 18, 2005, we issued 10,000 shares of our restricted
common stock to Steve Johnson as a sign-on bonus pursuant to his employment
agreement dated February 10, 2005. We believe that the issuance and sale of the
shares was exempt from the registration and prospectus delivery requirements of
the Securities Act of 1933 by virtue of Section 4(2).

On March 29, 2005, we agreed to issue 850,000 shares of our
common stock to a stockholder for services rendered by the stockholder and a
cash payment of $42,500. As of March 31, 2005, the shares were not issued. We
believe that the issuance and sale of the shares was exempt from the
registration and prospectus delivery requirements of the Securities Act of 1933
by virtue of Section 4(2).

Item 3. Defaults Upon Senior Securities.

On February 1, 2005, we entered into a Promissory Note with
United Capital Group, Inc. for the principal amount of $50,000. Pursuant to the
note we promised to pay to the order of United Capital Group, Inc. the sum of
$50,000 together with interest thereon at 6% per annum on any unpaid balance on
February 16, 2005. The parties have mutually agreed to extend the due date. On
March 16, 2005, we paid $10,000 toward this debt. We are in default for the
remaining $40,000 and accrued interest.

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

None.

Item 5. Other Information.

On May 12, 2005, we held our annual meeting of
		stockholders. Business conducted at the meeting included the following
		proposals:

1. To elect directors for the upcoming year;
2. To reaffirm Weaver & Martin, LLC as auditors for the
		next year; and
3. To transact such other business as may properly come
		before the Annual Meeting or any adjournment or postponement.

Each share of Common Stock was entitled to one vote.
		Only shareholders of record at the close of business on April 11, 2005,
		were entitled to vote. The number of outstanding shares at that time was
		21,292,793 by approximately 181 stockholders. The required quorum of
		shareholders was present at the meeting.

Election of New Directors

On May 12, 2005, our stockholders of record on April
		11, 2005, elected William E. Prince, Paul Branagan, Dr. Valgene Dunham,
		James C. Pate, and Marion C. Sofield as directors of the Company.

William E. Prince has served as Chairman of the
Board, Chief Executive Officer, and a Director of the Company since August 27,
2003. Presently, Mr. Prince is also the President of I.E.T., Inc. Mr. Prince
served as Executive Director of the Albemarle Economic Development Commission
from 1999 to August 2003. Mr. Prince was branch and regional manager of Law/Gibb
Group, an employee owned international environmental engineering consultants
from 1996 to 1999. Mr. Prince was Vice President and branch manager for
Froehling & Robertson, a family owned environmental consulting firm from 1994 to
1996. From 1990 to 1994, Mr. Prince served as Vice President for Business
Development and was a principal and owner with Ragsdale Consultants, Inc., and
DSA Design Group, both privately held engineering and environmental consultants.
From 1979 to 1990 Mr. Prince held various management positions with Law
Engineering and Environmental Services, an employee owned international
consulting firm. Primary responsibilities were new ventures and company growth.

Paul Branagan has served as a Director of the
Company since January 19, 2004. Mr. Branagan graduated from the University of
Nevada Las Vegas with a B.S. in physics. From 1993 to the present Mr. Branagan
has been the President and Senior Scientist of Branagan & Associates, Inc., a
consulting research and engineering company. From August 21, 2002 to present Mr.
Branagan has been the President and Director of Petrol Oil and Gas, Inc. a 34
Act Reporting Corporation. From 1975 to 1993 he was the Project Manager,
Assistant Oil and Gas Division Manager and Senior Scientist of CER Corporation
of Las Vegas, Nevada. Since 1999, Mr. Branagan has been the President and a
member of the board of directors of Millennium Plastics Corporation, a 34 Act
Reporting Corporation.

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Dr. Valgene L. Dunham has served as a Director of
the Company since January 19, 2004. Dr. Dunham is also the Vice President for
Grants, Contract Administration and Research Planning for Coastal Carolina
University in South Carolina. In the fall semester of 2002, Dr. Dunham served as
the Special Assistant to the President of Coastal Carolina University. In the
summer of 2002, Dr. Dunham served as Interim Provost of Coastal Carolina
University. From 1995 through 2002, Dr. Dunham served as Dean of the College of
Natural & Applied Sciences of Coastal Carolina University. In 1969, Dr. Dunham
received his Ph.D. in Botany from Syracuse University in New York. In 1965, Dr.
Dunham received his Masters in General Science from Syracuse University in New
York.

James C. Pate, 65, President of Fisher
Enterprises and J. C. Pate Engineering, located in Fayetteville, North Carolina,
has a broad range of experience in all phases of construction projects,
including site acquisition, economic analysis, planning, design, and project
management on varied architectural and civil engineering projects. Mr. Pate has
previously served as engineering manager with Exxon Oil and the U.S. Army Corps
of Engineers. Areas of expertise include developing and review of design
alternatives, concept designs and working drawings, and associated budgets and
schedules, financing/funding alternatives, as well as value engineering. Mr.
Pate has extensive experience with all facets of environmental engineering
issues. Typical projects that Mr. Pate manages include airports, industrial
buildings, water systems and waste water systems, landfills, fuel handling and
storage facilities, locks and dams, bridges, waterways, shopping centers,
marinas, docks, and wharfs, land development, condominiums and golf courses

Marion Sofield has served as Secretary
of the Company since April 23, 2004 and has served as a Director of the Company
since August 5, 2004. Presently, Ms. Sofield is also Vice President of
Operations for I.E.T., Inc. Formerly the Executive Director of Matrix Technology
Alliance, Inc. (2003-2004), Ms. Sofield joined our staff to develop and
implement operating systems and production capabilities that will move the
Company into a production mode. Ms. Sofield has eight years of experience, from
1993-2002, in economic development management and has owned and operated two
successful businesses of her own. From 1983 through 1987, Ms. Sofield served as
a Corporate Secretary/Treasurer for Lord-Wood, Larsen Associates, Inc., a civil
engineering firm formerly located in West Hartford, Connecticut. Ms. Sofield, a
1983 graduate of Radford University, was recently honored in Washington, D.C. as
the 2003 Business Person of the Year by the United States of America's Business
Advisory Council.

Item 6. Exhibits and Reports on Form 8-K.

Exhibits

|31* | Certification pursuant to Section 302 of the
		Sarbanes-Oxley Act
|--- | -----------------------------------------------------------------
|32* | Certification pursuant to Section 906 of the
		Sarbanes-Oxley Act

* Filed herewith.



Reports on Form 8-K



Form 8-K filed on January 7, 2005; Stock transactions,
Consulting & Employment Agreements.

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Form 8-K filed on March 29, 2005; Cooperative Research
Agreement.

Form 8-K filed on April 13, 2005; Promissory Note payable to
DaVinci-Franklin Fund I, LLC.

SIGNATURES

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

INTEGRATED ENVIRONMENTAL TECHNOLOGIES, LTD.

(Registrant)







By: /s/ William E. Prince

William E. Prince, President &

Chief Executive Officer (On behalf of

the registrant and as principal accounting

officer)



Date: May 16, 2005