UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB


                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  FOR THE QUARTERLY PERIOD ENDED JULY 31, 2005


                        Commission File Number 333-106839


                     Essential Innovations Technology Corp.
        ----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

            Nevada                                               88-0492134
-------------------------------                              -------------------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                     142-114 West Magnolia Street, Suite 400
                              Bellingham, WA 98225
                    ----------------------------------------
                    (Address of principal executive offices)

                                  360-392-3902
                           ---------------------------
                           (Issuer's telephone number)

                                       n/a
               ---------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)


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

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

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of September 12, 2005, the issuer
had one class of common stock, with a par value of $0.001 per share, of which
13,555,963 shares were issued and outstanding.

Transitional Small Business Disclosure Format (Check one):  Yes [  ]   No [X]

<PAGE>

                                TABLE OF CONTENTS

                                                                           Page


                          PART I--FINANCIAL INFORMATION

Item 1:  Financial Statements:
           Unaudited Consolidated Balance Sheet as at July 31, 2005 .........3
           Unaudited Consolidated Statements of Operations for the
             Three and Nine Months Ended July 31, 2005 and 2004,.............4
           Unaudited Consolidated Statement of Stockholders' Deficiency and
             Comprehensive Loss for the Nine Months Ended July 31, 2005......5
           Unaudited Consolidated Statement of Cash Flows for the
             Nine Months Ended July 31, 2005 and 2004,.......................6
           Notes to Consolidated Financial Statements........................8

Item 2:  Management's Discussion and Analysis or Plan of Operation..........15

Item 3:  Controls and Procedures............................................17

                           PART II--OTHER INFORMATION

Item 2:  Unregistered Sales of Equity Securities and Use of Proceeds........18

Item 6:  Exhibits...........................................................18

         Signatures.........................................................19

                                       2
<PAGE>
<TABLE>
<CAPTION>
                          PART I--FINANCIAL INFORMATION
                          Item 1. Financial Statements


ESSENTIAL INNOVATIONS TECHNOLOGY CORP.

Consolidated Balance Sheet
(Expressed in United States dollars)
July 31, 2005
(unaudited)

Assets

Current assets:
<S>                                                                                    <C>
          Cash                                                                         $          85,744
          Accounts receivable                                                                     12,607
          Inventory                                                                               17,504
          Prepaid expenses and deposits                                                            4,195
          -----------------------------------------------------------------------------------------------
          Total current assets                                                                   120,050

Property and equipment, net                                                                       51,064

Geo site rights                                                                                  272,468

Deposits                                                                                          13,671
---------------------------------------------------------------------------------------------------------

Total assets                                                                           $         457,253
=========================================================================================================

Liabilities and Stockholders' Deficiency

Current liabilities:
          Accounts payable                                                             $         477,244
          Accrued expenses                                                                       115,445
          Accrued wages                                                                          523,987
          Tenant inducements                                                                      18,532
          Notes payable, related parties                                                          32,846
          Due to shareholders                                                                    481,162
          -----------------------------------------------------------------------------------------------
          Total current liabilities                                                            1,649,216

Stockholders' Deficiency
       Preferred stock:
          $0.001 par value, authorized 10,000,000 shares
          subscribed and unissued nil shares
       Common stock:
          $0.001 par value, authorized 100,000,000 shares
          issued and outstanding 13,555,963 shares                                                13,556
       Common stock issuable, 309,000 shares                                                         309
       Additional paid in capital                                                              5,353,154
       Accumulated deficit                                                                    (6,528,296)
       Accumulated other comprehensive loss                                                      (30,686)
---------------------------------------------------------------------------------------------------------
          Total stockholders' deficiency                                                      (1,191,963)
---------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' deficiency                                         $         457,253
=========================================================================================================

See accompanying notes to consolidated financial statements.

                                                       3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ESSENTIAL INNOVATIONS TECHNOLOGY CORP.

Consolidated Statements of Operations
(Expressed in United States dollars)
For the three and nine months ended July 31, 2005 and 2004
(unaudited)


                                                          Three months      Three months     Nine months       Nine months
                                                         ended July 31,    ended July 31,   ended July 31,    ended July 31,
                                                              2005              2004            2005               2004
<S>                                                     <C>               <C>              <C>               <C>
Revenue                                                 $        38,819   $             -  $       112,351   $             -

Cost of Sales                                                    31,212                 -           81,828                 -
                                                      ------------------------------------------------------------------------

Gross Profit                                                      7,607                 -           30,523                 -

Expenses:
      General and administrative                                396,484           211,754        1,257,328           943,891
      Research and development                                        -           102,634                -           273,422
      -----------------------------------------------------------------------------------------------------------------------
                                                                396,484           314,388        1,257,328         1,217,313

Other income and expense:
      Interest expense                                           (9,092)           (2,274)         (18,456)           (5,031)
      Interest expense, related parties                            (540)             (966)          (1,620)           (1,809)
      Interest income                                                 -                 3                5                17
      -----------------------------------------------------------------------------------------------------------------------
                                                                 (9,632)           (3,237)         (20,071)           (6,823)
-----------------------------------------------------------------------------------------------------------------------------
Loss from continuing operations                                (398,509)         (317,625)      (1,246,876)       (1,224,136)

Discontinued operation
      Loss from operations of discontinued segment                    -            (1,889)               -            (2,599)

Net loss for the period                                 $      (398,509)  $      (319,514) $    (1,246,876)  $    (1,226,735)
=============================================================================================================================

Loss per share - basic and diluted
      Continuing operations                             $         (0.03)  $         (0.03) $         (0.09)  $         (0.10)
      Discontinued operations                                         -                 -                -                 -
                                                      ------------------------------------------------------------------------
Net loss per share                                      $         (0.03)  $         (0.03) $         (0.09)  $         (0.10)

Weighted average number of shares outstanding                13,555,963        11,986,495       13,304,590        11,708,162
=============================================================================================================================

See accompanying notes to consolidated financial statements.

                                                               4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ESSENTIAL INNOVATIONS TECHNOLOGY CORP.

Consolidated Statement of Stockholders' Deficiency and Comprehensive Loss
(Expressed in United States dollars)
For the nine months ended July 31, 2005
(unaudited)
                                                                                                            Accumulated
                                                                                                              other
                                                                                  Additional                  compre-      Total
                                                 Common            Common stock     paid in    Accumulated    hensive  stockholders'
                                                 stock               issuable       capital      deficit       loss     deficiency
                                           -------------------   ---------------- -----------  -----------  ---------- -------------
                                           Number of             Number of
                                            Shares     Amount     Shares   Amount
<S>                                        <C>         <C>        <C>      <C>     <C>         <C>           <C>        <C>
Balance, October 31, 2004                  12,924,539  $12,925    104,241  $  104  $4,584,989  $(5,295,095)  $(23,949)  $  (721,026)

Loss for the period                                 -        -          -       -           -   (1,233,201)         -    (1,233,201)
Foreign currency translation                        -        -          -       -           -            -     (6,737)       (6,737)
                                                                                                                        -----------
Comprehensive loss                                                                                                       (1,239,938)

Issuance of common stock issuable             104,241      104   (104,241)   (104)          -            -          -             -

Common stock issued to related parties
  for services received
   three months ended January 31, 2005         90,373       90          -       -      90,283            -          -        90,373
   three months ended April 30, 2005          156,810      157          -       -     156,653            -          -       156,810

Common stock issued for services
  received three months ended
  April 30, 2005                               55,000       55          -       -      54,945            -          -        55,000

Common stock issued for geo-site rights
  three months ended April 30, 2005           225,000      225          -       -     224,775            -          -       225,000

Options issued to related parties for
  services received three months ended
  April 30, 2005                                    -        -          -       -      25,000            -          -        25,000

Options issued for geo-site rights three
  months ended April 30, 2005                       -        -          -       -      47,468            -          -        47,468

Options issued for services received
  three months ended July 31, 2005                  -        -          -       -      27,350            -          -        27,350

Common stock issuable for services
  received three months ended
  July 31, 2005                                     -        -    184,000     184      91,816            -          -        92,000

Common stock and warrants issuable for
  cash received three months ended
  July 31, 2005                                     -        -    125,000     125      49,875           -           -        50,000
                                          -----------------------------------------------------------------------------------------
Balance July 31, 2005                      13,555,963  $13,556    309,000  $  309  $5,353,154  $(6,528,296)  $(30,686)  $(1,191,963)
                                          =========================================================================================

See accompanying notes to consolidated financial statements.

                                                               5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ESSENTIAL INNOVATIONS TECHNOLOGY CORP.

Consolidated Statements of Cash Flows
(Expressed in United States dollars)
For the nine months ended July 31, 2005 and 2004 (unaudited)


                                                                            Nine months ended    Nine months ended
                                                                              July 31, 2005        July 31, 2004
<S>                                                                         <C>                  <C>
Cash provided by (used in):
Operations:
     Net Loss for the period                                                $      (1,246,876)   $      (1,226,735)
     Adjustment to reconcile net loss for the period to
     net cash used in operating activities:
         Loss on disposal of property and equipment                                         -                  398
         Loss on lapse of real estate option                                                -               10,000
         Depreciation of property and equipment                                        14,638               17,426
         Gain on tenant inducements                                                    (7,259)              (1,950)
         Common stock issued for services including related loss                      127,000              203,900
         Common stock issued to related parties for services                          247,183                    -
         Loss related to common stock issued to related parties
           for debt settlement and equipment                                                -              136,091
         Options and warrants issued for services                                      40,900                5,846
         Options and warrants issued to related parties for services                   25,000               37,498
         Foreign exchange effect on cash                                               (7,033)               2,203
         Changes in assets and liabilities
                Accounts receivable                                                    (3,642)               3,575
                Inventory                                                             (15,359)               7,691
                Prepaid expenses                                                       17,091             (12,925)
                Accounts payable                                                      223,051              127,269
                Accrued expenses and wages                                            478,804              467,067
     ---------------------------------------------------------------------------------------------------------------
     Net cash used in operating activities                                           (106,502)            (222,646)
                                                                          ------------------------------------------

Investments:
     Purchase of property and equipment                                                (5,510)              (3,938)
     Proceeds from disposal of assets                                                       -                8,360
     ---------------------------------------------------------------------------------------------------------------
     Net cash used in investing activities                                             (5,510)               4,422
                                                                          ------------------------------------------

Financing:
     Subscription for common stock                                                     50,000                8,052
     Redemption of preferred stock                                                          -               (4,000)
     Tenant inducements received                                                        5,574                    -
     Advances from shareholders                                                       142,095              218,341
     Loan proceeds received                                                                 -                6,511
     ---------------------------------------------------------------------------------------------------------------
     Net cash provided by financing activities                                        197,669              228,904
                                                                          ------------------------------------------

Increase in cash during the period                                                     85,657               10,680

Cash at beginning of the period                                                            87                2,626
                                                                          ------------------------------------------

Cash at end of the period                                                   $          85,744    $          13,306
                                                                          ==========================================

See accompanying notes to consolidated financial statements.

                                                               6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ESSENTIAL INNOVATIONS TECHNOLOGY CORP.

Consolidated Statement of Cash Flows (continued)
(Expressed in United States dollars)
For the nine months ended July 31, 2005 and 2004
(unaudited)


Supplementary Information:


                                                                            Nine months ended    Nine months ended
                                                                              July 31, 2005        July 31, 2004
<S>                                                                         <C>                  <C>
     Interest paid                                                          $               -    $               -
     Income taxes paid                                                                      -                    -
     Non-cash transactions:                                                                 -                    -
       Common shares issued for acquisition of geo site
         rights                                                                       225,000                    -
       Fair value of warrants issued for acquisition of
         geo site rights                                                               47,468                    -
       Payment on shareholder debt by issuance of
         common shares                                                                      -              381,771

See accompanying notes to consolidated financial statements.

                                                               7
</TABLE>
<PAGE>

          NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                           (In United States Dollars)

Note 1. Description of Business and Summary of Significant Accounting Policies

Organization
------------

Essential Innovations Technology Corp. (the "Company") was incorporated under
the laws of the state of Nevada on April 4, 2001. The Company's subsidiary,
Essential Innovations Corporation, is engaged in the manufacturing and
distribution of the "EI Elemental Heat Energy System" family of geothermal heat
products and technology. Up to January 31, 2005, substantially all of the
Company's efforts had been directed towards product and distribution chain
development primarily in western Canada. Effective as of February 1, 2005,
management has determined that the Company has emerged from the development
stage.

Future Operations
-----------------

The Company's consolidated financial statements have been prepared using
accounting principles generally accepted in the United States applicable to a
going concern, which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. To date, the Company has not
generated positive cash flow from operations. It is the Company's intention to
raise additional funds to finance the further development of its business until
positive operating cash flow can be generated from its operations. However,
there can be no assurance that such additional funds will be available to the
Company when required or on terms acceptable to the Company. Such limitations
could have a material adverse effect on the Company's business, financial
condition or operations and these consolidated financial statements do not
include any adjustment that could result. Failure to obtain sufficient
additional funding would require the Company to reduce or limit its operating
activities.

Basis of Preparation
--------------------

The accompanying unaudited interim consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information, with the instructions to Form 10-QSB, and with Regulation
S-B. Accordingly, they do not include all the information and footnotes required
by generally accepted accounting principles for complete financial statements.
The results of operations reflect interim adjustments, all of which are of a
normal recurring nature and which, in the opinion of management, are necessary
for a fair presentation of the results for such interim period. The results
reported in these interim consolidated financial statements should not be
regarded as necessarily indicative of results that may be expected for the
entire year. Certain information and note disclosure normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the Securities and
Exchange Commission's rules and regulations. These unaudited interim
consolidated financial statements should be read in conjunction with the audited
consolidated financial statements included in the Company's Annual Report on
Form 10-KSB for the year ended October 31, 2004.

These unaudited interim consolidated financial statements include the accounts
of Essential Innovations Technology Corp. and its wholly-owned subsidiaries,
Essential Innovations Corporation, or EIC, and Essential Innovations Asia
Limited, or EIAL. EIC was incorporated on February 9, 2001, and as noted above,
the Company was incorporated on April 4, 2001. At that time, all of the existing
shareholders of EIC exchanged their common shares for common shares of the
Company. The Company had no assets and liabilities at the time of the exchange.
Since the only assets of the combined entity after the exchange were those of
the subsidiary prior to the exchange, a change in ownership did not take place.
Since this exchange lacked substance, it was not a purchase event and has been

                                       8
<PAGE>

accounted for based on existing carrying amounts of the subsidiary's assets and
liabilities, consistent with the guidance contained in FASB Technical Bulletin
85-5 Issues Relating to Accounting for Business Combinations. All significant
inter-company balances and transactions have been eliminated.

Cash
----

Cash consists of checking accounts held at financial institutions in the United
States, Canada and Hong Kong.

Inventory
---------

Inventory consists of finished products and parts, which are stated at the lower
of cost (first-in, first-out method) or market.

Property and Equipment
----------------------

Property and equipment are stated at cost less accumulated depreciation, unless
the estimated future undiscounted cash flows expected to result from either the
use of an asset or its eventual disposition is less than its carrying amount in
which case an impairment loss is recognized based on the fair value of the
asset.

Depreciation of property and equipment is based on the estimated useful lives of
the assets and is computed using straight-line and accelerated methods over
lives ranging between three and five years. Repairs and maintenance are charged
to expense as incurred. Expenditures for new facilities and expenditures that
substantially increase the useful lives of existing assets are capitalized, as
well as interest costs associated with major capital projects until ready for
their intended use.

Tenant Inducements
------------------

Tenant inducements are related to a rent-free period received by the Company
upon entering into a lease for its manufacturing and research and development
facilities and are capitalized and amortized over the initial term of the
related lease.

Research and Development Expenses
---------------------------------

Research and development costs are expensed as incurred. Costs incurred to date
include personnel and facilities costs, depreciation and amortization of
research and development related property and equipment and licensing fees for
technology used in the development effort.

Advertising Expenses
--------------------

Advertising costs will be expensed as incurred. No advertising expense has been
incurred since inception.

Revenue Recognition
-------------------

Revenues from the sales of geothermal products are recognized as the sales are
made, the price is fixed and determinable, collectibility is probable and no
significant Company obligations with regard to the products remain. Revenues
from contracts are recognized on a percent of completion basis.

                                       9
<PAGE>

Discontinued Operations
-----------------------

On August 16, 2004, the Company and SOTA Instruments, Inc. agreed to terminate
their International Marketing Agreement. Accordingly, operating results of this
segment have been presented as discontinued operations in these consolidated
financial statements.

Income Taxes
------------

Income taxes are accounted for under the asset and liability method. Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and operating
loss and tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date. To
the extent that it is not considered to be more likely than not that a deferred
tax asset will be realized, a valuation allowance is provided.

Investment Tax Credits
----------------------

The Company follows the cost reduction method of accounting for investment tax
credits, or ITC, whereby the benefit of assistance is recognized as a reduction
in the cost of the related capital asset or expenditure when receipt of the ITC
is considered to be reasonably assured. Any adjustments necessary to ITC are
recorded in the period the adjustments are known.

Loss per Share
--------------

Basic loss per share is calculated by dividing the net loss available to common
stockholders by the weighted average number of common shares outstanding in the
period. Diluted loss per share takes into consideration common shares
outstanding (computed under basic loss per share) and potentially dilutive
securities. There is no dilutive effect at July 31, 2005 and 2004, due to the
Company's losses. Common stock issuable is considered outstanding as of the
original approval date for purposes of earnings per share computations.


Comprehensive Loss
------------------

Statement of Financial Accounting Standards, or SFAS, No. 130 establishes
standards for reporting comprehensive income (loss) and its components in
financial statements. Comprehensive loss, as defined, includes all changes in
equity (net assets) during a period from nonowner sources. To date, the Company
has not had any significant transactions that are required to be reported in
other comprehensive loss, except for foreign currency translation adjustments.

Use of Estimates
----------------

The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and liabilities at
the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the fiscal year. Actual results may differ from
those estimates.

                                       10
<PAGE>

Foreign Operations and Currency Translation
-------------------------------------------

The Company translates foreign assets and liabilities of its subsidiaries, other
than those denominated in U.S. dollars, at the rate of exchange at the balance
sheet date. Revenues and expenses are translated at the average rate of exchange
throughout the year. Gains or losses from these translations are reported as a
separate component of other comprehensive income (loss), until all or a part of
the investment in the subsidiaries is sold or liquidated. The translation
adjustments do not recognize the effect of income tax because the Company
expects to reinvest the amounts indefinitely in operations.

Transaction gains and losses that arise from exchange rate fluctuations on
transactions denominated in a currency other than the local functional currency
are included in "general and administrative expenses" in the statement of
operations, which amount was not material for the three- and nine-month periods
ended July 31, 2005 and 2004.

Financial Instruments
---------------------

The Company has the following financial instruments: cash, accounts receivable,
accounts payable, accrued expenses and wages, notes payable to related parties
and amounts due to stockholders. The carrying value of these financial
instruments approximates their fair value due to their liquidity or their
short-term nature.

Concentration of Credit Risk
----------------------------

Financial instruments that potentially subject the Company to credit risk
consist principally of cash and accounts receivable. Cash is deposited with high
credit quality financial institutions.

Stock-based Compensation
------------------------

The Company accounts for equity instruments issued to nonemployees in accordance
with the provisions of SFAS No. 123 and Emerging Issues Task Force 96-18. All
transactions in which goods or services are the consideration received for the
issuance of equity instruments are accounted for based on the fair value of the
consideration received or the fair value of the equity instrument, whichever is
more reliably measurable.

The Company accounts for stock-based compensation arrangements with employees in
accordance with the provisions of Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees ("APB No. 25") and related
interpretations and complies with the disclosure provisions of SFAS No. 123,
Accounting for Stock-Based Compensation. Under APB No. 25, compensation expense
is based on the difference, if any, between fair value of the Company's stock
and the exercise price of options issued on the date of grant ("the
intrinsic-value method"). Unearned compensation, if any, is amortized over the
vesting period of the individual options.

                                       11
<PAGE>

As allowed by SFAS No. 123, the Company has elected to continue to apply the
intrinsic-value method of accounting described above, and has adopted only the
disclosure requirements of SFAS No. 123. The following table illustrates the
effect on net loss if the fair-value method had been applied to all outstanding
and unvested awards in each period:
<TABLE>
<CAPTION>
                                                                              2005                     2004
                                                                       --------------------     --------------------
<S>                                                                        <C>                      <C>
Net loss, as reported                                                      $(1,233,201)             $(1,226,735)
Add stock-based employee compensation expense included in
    reported net loss, net of tax                                              272,981                   61,403
Deduct total stock-based employee compensation expense
    determined under the fair-value method, net of tax                        (308,075)                (128,365)
                                                                       --------------------     --------------------

Pro forma net loss                                                         $(1,268,295)             $(1,293,697)
                                                                       ====================     ====================

Pro forma net loss per share                                               $     (0.10)             $    (0.11)
                                                                       ====================     ====================

Note 2. Property and Equipment
<CAPTION>
Property and equipment consist of the following:
<S>                                                                       <C>
Computer equipment                                                        $  5,310
Computer software                                                            1,862
Office furniture and equipment                                              21,399
Leasehold improvements                                                      44,815
                                                                   -------------------

                                                                            73,386
Less accumulated depreciation                                              (22,322)
                                                                   -------------------

                                                                          $ 51,064
                                                                   ===================
</TABLE>
Note 3. Geo - Site Rights

The Company acquired the exclusive rights to provide a geo-field operating lease
and to supply its heating and cooling units to a new residential subdivision in
Westbank, British Columbia, for 225,000 common shares of the Company for fair
value of $225,000 and 150,000 warrants, with a fair value of $47,468,
exercisable until 2010, for 150,000 common shares of the Company, 75,000 at
$0.75 per share and 75,000 at $1.00 per share. The Company has guaranteed that
the 225,000 common shares of the Company will have an aggregate fair market
value of at least $225,000 one year after issuance, and if the aggregate fair
market value is less than $225,000, the Company will issue additional common
shares to make the aggregate value $225,000.

Note 4. Related-party Transactions and Balances

Notes Payable, Related Parties
------------------------------

During 2003, a director and officer of the Company made an unsecured loan to the
Company in the amount of $30,600, due on demand, payable monthly as to interest
only at 8%, with the principal to be repaid in full on or before April 1, 2004.
In connection with this loan, options were granted that entitle the holder to
purchase 50,000 common shares of the Company until 2012: 25,000 at $0.25 per
share and 25,000 at $0.50 per share. The fair value of the options of $37,978
was recorded as interest expense during 2003. During 2004, the loan was extended
and the Company agreed to pay an additional $6,511 in refinancing costs. The
balance remaining at July 31, 2005, is $32,846.

                                       12
<PAGE>

Due to Stockholders
-------------------

Amounts due to stockholders at July 31, 2005, are unsecured, without specific
terms of repayment and non-interest-bearing with the exception of $30,000, for
which interest is 12% of the principal amount, regardless of when repayment is
made. During 2002, warrants were granted that entitle the holder of the $30,000
loan to purchase 50,000 common shares at $0.35 per share. The fair value of the
warrants of $11,329 has been included in additional paid-in capital. During
2003, a stockholder settled $72,645 of non-interest-bearing loans in exchange
for 290,580 fully-paid common shares. The common shares were recorded at their
estimated fair value of $145,290, calculated by reference to the fair value of
the shares at the time of the settlement, and the Company recognized an
additional expense of $72,645. During 2004, $7,976 of amounts due to
stockholders were settled by the issuance of 10,635 fully-paid common shares.
The Company recognized an additional expense of $2,659 on these transactions.
The balance remaining due at July 31, 2005, is $481,162. Subsequent to July 31,
2005, the various stockholders agreed to convert the outstanding balances into
1,202,238 common shares.

Other Related-party Transactions
--------------------------------

During the three and nine months ended July 31, 2005, the Company incurred
consulting fees and related expenses to a company controlled by an officer and
director of the Company in the amounts of $37,500 and $105,000. It was agreed
the outstanding amounts will be converted into 236,413 common shares subsequent
to July 31, 2005.

Note 5. Share Capital

Preferred Shares
----------------

During 2002, the Company increased its authorized capital with the creation of
10,000,000 preferred shares with a $0.001 par value. The designation of rights
including voting powers, preferences and restrictions shall be determined by the
board of directors before the issuance of any shares.

Common Shares
-------------

During 2005:

         o        The Company issued 104,241 common shares, which were issuable
                  at October 31, 2004.

         o        The Company issued 247,183 common shares to certain employees
                  and consultants for services provided with a fair value of
                  $229,138. The common shares have been recorded at their
                  estimated fair value of $1.00 per share on the dates the
                  services were provided, and the Company has recorded
                  additional compensation of $18,045.

         o        The Company issued 55,000 common shares to certain consultants
                  for services provided with a fair value of $55,000.

         o        The Company issued 225,000 common shares for the acquisition
                  of exclusive rights to provide a geo - utility to a
                  residential project.

         o        The Company received a subscription of $50,000 for 125,000
                  common shares and 125,000 warrants to purchase 125,000 common
                  shares at $0.50 per share exercisable until July 31, 2010.

                                       13
<PAGE>

         o        The Company agreed to issue 184,000 common shares to certain
                  consultants for services provided with a fair value of $92,000
                  being the fair market value of the shares at the time the
                  contracts were entered into. The shares have not been issued
                  as at July 31, 2005.

         o        The Company agreed with certain directors, employees and
                  consultants to convert accrued and unpaid salaries and fees
                  totaling $519,804 into 1,137,897 common shares. The shares
                  have not been issued as at July 31, 2005.

Stock Purchase Warrants
-----------------------

At July 31, 2005, the Company had outstanding warrants, which expire in 2007, to
purchase 100,000 shares of the Company's common stock, at $0.35 per share;
warrants, which expire in 2010, to purchase 150,000 shares of the Company's
common stock, 75,000 at $0.75 per share and 75,000 at $1.00 per share, and
warrants, which expire in 2010, to purchase 125,000 shares of the Company's
common stock at $0.50 per share. At July 31, 2005, 375,000 shares of common
stock were reserved for these warrants.

Note 6. Stock-based Compensation

Although the Company does not have a formal stock option plan, during 2004 and
2003, the Company issued stock options to directors, employees, advisors and
consultants.
<TABLE>
<CAPTION>
A summary of the Company's stock options is as follows:

                                                                                                 Weighted Average
                                                                        Number of Options         Exercise Price
                                                                       --------------------     --------------------
<S>                    <C> <C>                                                 <C>                      <C>
Outstanding at October 31, 2003                                                4,870,000                0.75
Granted
    Options issued to directors, employees, advisors, and
      consultants                                                                690,000                1.14
                                                                       --------------------

Outstanding at October 31, 2004                                                5,560,000                0.79
    Options forfeited                                                            (75,000)              (1.25)
    Options issued to employees                                                   80,000                0.63
     Options issued to consultants                                               250,000                0.50
                                                                       --------------------
Outstanding at July 31, 2005                                                   5,815,000                0.76
                                                                       ====================

The following table summarizes stock options outstanding at July 31, 2005:
<CAPTION>
                                                                   Average Remaining                 Number
                                   Number Outstanding at           Contractual Life              Exercisable at
       Exercise Price                  July 31, 2005                    (Years)                  July 31, 2005
-----------------------------    --------------------------     ------------------------    -------------------------
         <S>                              <C>                            <C>                        <C>
         $0.25                              404,750                       3.68                         404,750
          0.50                              837,250                       5.20                         587,250
          0.75                            1,498,000                       8.46                       1,498,000
          1.00                            2,726,250                       7.73                       2,688,750
          1.25                               50,000                       6.50                          50,000
          1.50                              282,500                       7.00                         245,000
          2.00                               16,250                       6.00                          16,250
                                 --------------------------                                 -------------------------
                                          5,815,000                                                  5,740,000
                                 ==========================                                 =========================
</TABLE>
                                       14
<PAGE>

The fair value of each option granted is estimated at the date of grant using
the Black-Scholes option-pricing model. The assumptions used in calculating the
fair value of the options granted were risk-free interest rate of 5.0%, a
five-year expected life and a dividend yield of 0.0%.

Note 7. Commitment

During the three months ended July 31, 2005, the Company entered into a one-year
agreement with a firm to provide services in return for Cdn $10,000 per month
and up to one million options, depending upon attainment of milestones, at
prices varying between $0.50 per share to $1.50 per share

Note 8. Subsequent Events

Subsequent to July 31, 2005, the Company

         (a)      agreed with four executive officers to convert $99,500 in
                  accrued and unpaid remuneration into 248,750 common shares;

         (b)      agreed with three employees to convert $71,358 in accrued and
                  unpaid remuneration and bonuses into 178,396 common shares;

         (c)      agreed to issue 1,775,000 common shares for services provided
                  under five consulting agreements with a fair value of
                  $710,000;

         (d)      agreed with three executive officers to convert $360,093 of
                  loans into 900,234 common shares;

         (e)      agreed with an employee to convert a loan of $60,788 into
                  151,972 common shares;

         (f)      agreed with a consultant to convert $12,295 of accrued and
                  unpaid services into 34,946 common shares;

         (g)      acquired certain proprietary information and financial models
                  related to the Company's development of a geo-utility business
                  for 75,000 common shares, 150,000 options to purchase 150,000
                  common shares of the Company at prices varying between $0.75
                  and $1.00 per share until July 31, 2009, and royalties varying
                  between 0.5% and 2.5% of revenue generated from the
                  geo-utility business;

         (h)      agreed with three stockholders to convert $61,963 of loans
                  into 155,574 of common shares; and

         (i)      received a subscription for 60,000 common shares at $0.50 per
                  share.


        Item 2. Management's Discussion and Analysis or Plan of Operation

         The following discussion should be read in conjunction with the
accompanying condensed consolidated financial statements for the three- and
nine-month periods ended July 31, 2005 and 2004, and our annual report on Form
10-KSB for the year ended October 31, 2004, as amended, including the financial
statements and notes thereto.

                                       15
<PAGE>

Forward-Looking Information May Prove Inaccurate

         This report contains statements about the future, sometimes referred to
as "forward-looking" statements. Forward-looking statements are typically
identified by the use of the words "believe," "may," "could," "should,"
"expect," "anticipate," "estimate," "project," "propose," "plan," "intend" and
similar words and expressions. Statements that describe our future strategic
plans, goals or objectives are also forward-looking statements. We intend the
forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934.

         Readers of this report are cautioned that any forward-looking
statements, including those regarding our management's current beliefs,
expectations, anticipations, estimations, projections, proposals, plans or
intentions are not guarantees of future performance or results of events and
involve risks and uncertainties. The forward-looking information is based on
present circumstances and on our predictions respecting events that have not
occurred, that may not occur, or that may occur with different consequences from
those now assumed or anticipated. Actual events or results may differ materially
from those discussed in the forward-looking statements as a result of various
factors. The forward-looking statements included in this report are made only as
of the date of this report. We are not obligated to update such forward-looking
statements to reflect subsequent events or circumstances.

Introduction

         Management believes the most significant features of our financial
condition are that (i) we are continuing to expand the manufacturing, sales and
installation the EI Elemental Heat Energy System; (ii) certain executive
officers, employees, consultants and stockholders have agreed to convert accrued
and unpaid remuneration and loans, totaling some $1,124,232 as at July 31, 2005,
into common shares; and (iii) subsequent to July 31, 2005, we have been able to
obtain certain proprietary information and consultant services, valued at
$740,000, for 1,850,000 common shares.

Results of Operations

         Comparison of the Three and Nine Months Ended July 31, 2005,
         with the Three and Nine Months Ended July 31, 2004

         We have generated gross revenue of $38,819 and $112,351 with related
costs of revenue of $31,212 and $81,828 in the three- and nine-month periods
ended July 31, 2005, respectively. There were no revenues or cost of revenue for
the three and nine months ended July 31, 2004.

         Our operating expenses for the three and nine months ended July 31,
2005, were $382,809 and $1,243,653, respectively, as compared to $314,388 and
$1,217,313 for the comparable periods in 2004, an increase of 22% and 2%,
respectively. This reflects the finalization of many of our products and the
commencement of commercialization of the products. There were no research and
development charges included in operating expenses for the three and nine months
ended July 31, 2005, as compared to $102,634 and $273,422, respectively, for the
three and nine months ended July 31, 2004.

         We had ten full-time employees as of July 31, 2005, as compared to
eight full-time employees at July 31, 2004.

                                       16
<PAGE>

Liquidity and Capital Resources

         As of July 31, 2005, our current assets stood at $120,050, as compared
to $32,577 at October 31, 2004. As of July 31, 2005, our current liabilities
were $1,649,216, as compared to $807,167 at October 31, 2004. Net cash used in
operating activities increased to $106,502 for the nine months ended July 31,
2005, as compared to $222,646 for the nine months ended July 31, 2004.

         Net cash spent on investing activities increased to $5,510 for the nine
months ended July 31, 2005, as compared to net cash received during the nine
months ended July 31, 2004, of $4,422, due to no proceeds from disposal of
assets in 2005.

         Net cash of $197,669 provided by financing activities during the nine
months ended July 31, 2005, consists mainly of advances from stockholders of
$142,095 and a subscription for common stock of $50,000, as compared to net cash
of $228,904 during the comparable nine months ended July 31, 2004, which was
also derived primarily from advances by stockholders.

         Our current balances of cash will not meet our working capital and
capital expenditure needs for the whole of the current year. Because we are not
currently generating sufficient cash to fund our operations, we will need to
rely on external financing to meet future capital and operating requirements.
Any projections of future cash needs and cash flows are subject to substantial
uncertainty. Our capital requirements depend upon several factors, including the
rate of market acceptance, our ability to get to production and generate
revenues, our level of expenditures for production, marketing and sales,
purchases of equipment, and other factors. We can make no assurance that
financing will be available in amounts or on terms acceptable to us, if at all.
Further, if we issue equity securities, stockholders may experience additional
dilution or the new equity securities may have rights, preferences or privileges
senior to those of existing holders of common stock, and debt financing, if
available, may involve restrictive covenants that could restrict our operations
or finances. If we cannot raise funds, when needed, on acceptable terms, we may
not be able to continue our operations, grow market share, take advantage of
future opportunities, or respond to competitive pressures or unanticipated
requirements, all of which could negatively impact our business, operating
results, and financial condition.


                         Item 3. Controls and Procedures

         We maintain disclosure controls and procedures that are designed to
ensure that information required to be disclosed by us in the reports that we
file or submit to the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, is recorded, processed, summarized and
reported within the time periods specified by the Securities and Exchange
Commission's rules and forms, and that information is accumulated and
communicated to our management, including our principal executive and principal
financial officers (whom we refer to in this periodic report as our Certifying
Officers), as appropriate to allow timely decisions regarding required
disclosure. Our management evaluated, with the participation of our Certifying
Officers, the effectiveness of our disclosure controls and procedures (as
defined in Rule 13a-15(e) under the Securities Exchange Act) as of July 31,
2005, pursuant to Rule 13a-15(b) under the Securities Exchange Act. Based upon
that evaluation, our Certifying Officers concluded that, as of July 31, 2005,
our disclosure controls and procedures were effective.

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

                                       17
<PAGE>

                           PART II--OTHER INFORMATION

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

Sales of Unregistered Securities

         In July 2005, we agreed to issue 125,000 common shares and 125,000
warrants to purchase 125,000 common shares at $0.50 per share expiring July 31,
2010, for total cash consideration of $50,000 or $0.40 per share. The investor
has represented that it is not a resident of the United States, acknowledged
that the securities will constitute restricted securities, and consented to
restrictive legends on the certificates to be issued. This transaction was
effected in reliance on Regulation S.

         In September 2005, we agreed to issue 60,000 common shares and 60,000
warrants to purchase 60,000 common shares at $0.50 per share expiring September
2010 for total cash consideration of $30,000, or $0.50 per share. The investor
has represented that it is not a resident of the United States, acknowledged
that the securities will constitute restricted securities, and consented to
restrictive legends on the certificates to be issued. This transaction was
effected in reliance on Regulation S.


                                Item 6. Exhibits

         The following exhibits are filed as a part of this report:

   Exhibit
    Number*                 Title of Document                           Location
----------------  ----------------------------------------------------  --------

    Item 31       Rule 13a-14(a)/15d-14(a) Certifications
----------------  ----------------------------------------------------  --------
     31.01        Certification of Principal Executive Officer          Attached
                  Pursuant to Rule 13a-14

     31.02        Certification of Principal Financial Officer          Attached
                  Pursuant to Rule 13a-14

    Item 32       Section 1350 Certifications
----------------  ----------------------------------------------------  --------
     32.01        Certification Pursuant to 18 U.S.C. Section 1350,     Attached
                  as Adopted Pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002 (Chief Executive
                  Officer)

     32.02        Certification Pursuant to 18 U.S.C. Section 1350,     Attached
                  as Adopted Pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002 (Chief Financial
                  Officer)
---------------
o    All exhibits are numbered with the number preceding the decimal indicating
     the applicable SEC reference number in Item 601 and the number following
     the decimal indicating the sequence of the particular document.

                                       18
<PAGE>

                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                          Registrant

                                          ESSENTIAL INNOVATIONS TECHNOLOGY CORP.


Date:  September 13, 2005                 By: /s/ Jason McDiarmid
                                             ------------------------------
                                             Jason McDiarmid, President and
                                             Chief Executive Officer


Date:  September 13, 2005                 By: /s/ Kenneth G.C. Telford
                                             ------------------------------
                                             Kenneth G.C. Telford
                                             Chief Financial Officer

                                       19