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, 2006


                        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 Identification No.)
 incorporation or organization)

                     114 West Magnolia Street, Suite 400-142
                              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.

                                 [ ] Yes [X] 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 11, 2006, the issuer
had one class of common stock, with a par value of $0.001, of which 29,392,746
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, 2006 ............3
          Unaudited Consolidated Statements of Operations for the
            Three and Nine Months Ended July 31, 2006 and 2005.................4
          Unaudited Consolidated Statement of Stockholders' Deficiency and
            Comprehensive Loss for the Nine Months Ended July 31, 2006.........5
          Unaudited Consolidated Statement of Cash Flows for the
            Nine Months Ended July 31, 2006 and 2005...........................6
          Notes to Consolidated Financial Statements...........................8

Item 2: Management's Discussion and Analysis or Plan of Operation.............17

Item 3: Controls and Procedures...............................................19

                           PART II--OTHER INFORMATION

Item 2: Unregistered Sales of Equity Securities and Use of Proceeds...........20

Item 6: Exhibits..............................................................21

        Signatures............................................................22

                                       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, 2006
(unaudited)

Assets



Current assets:
<S>                                                                               <C>
              Cash                                                                $          49,811
              Accounts receivable                                                           617,192
              Inventory                                                                     192,185
              Due from related company                                                       15,899
              Prepaid expenses                                                               72,373
              --------------------------------------------------------------------------------------
              Total current assets                                                          947,460

Property and equipment, net                                                                 174,238

Deposits                                                                                     36,248

Goodwill                                                                                  2,087,462

Intangible assets                                                                           369,079
----------------------------------------------------------------------------------------------------

Total assets                                                                      $       3,614,487
====================================================================================================

Liabilities and Stockholders' Equity

Current liabilities:

              Accounts payable                                                    $         984,397
              Accrued expenses                                                              341,664
              Accrued wages                                                                 265,102
              Deferred Revenue                                                               46,968
              Loans payable, related parties                                                 11,195
              Tenant inducement                                                               4,792
              Due to shareholders                                                            36,049
              Current portion of long term debt                                             574,136
----------------------------------------------------------------------------------------------------
              Total current liabilities                                                   2,264,303
                                                                                     ---------------

Long term liabilities:
              Term loan, net of discount                                                    937,185
              Finance loans                                                                  26,563
                                                                                     ---------------

Total liabilities                                                                         3,228,051

Stockholders' Equity
       Preferred stock:
              $0.001 par value, authorized 10,000,000 shares
              issued and outstanding nil shares
       Common stock:
              $0.001 par value, authorized 100,000,000 shares
              issued and outstanding 28,137,465 shares                                       28,137
       Additional paid in capital                                                        14,385,169
       Accumulated deficit                                                              (13,970,439)
       Accumulated other comprehensive loss                                                 (56,431)
----------------------------------------------------------------------------------------------------
              Total stockholders' equity                                                    386,436
----------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity                                        $       3,614,487
====================================================================================================


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, 2006 and 2005
(unaudited)

                                                                Three            Three           Three           Three
                                                                months           months          months          months
                                                                ended July       ended July      ended July      ended July
                                                                31, 2006         31, 2006        31, 2006        31, 2006
<S>                                                        <C>                <C>              <C>             <C>
Revenue                                                    $        857,330   $       38,819   $   1,537,020   $     112,351

Cost of Sales                                                       644,522           31,212       1,119,339          81,828
                                                              ---------------------------------------------------------------

Gross Profit                                                        212,808            7,607         417,681          30,523

Expenses:
         General and administrative                               1,107,313          396,484       6,374,239       1,257,328

         --------------------------------------------------------------------------------------------------------------------
                                                                  1,107,313          396,484       6,374,239       1,257,328

Other income and expense:
         Interest expense                                           (71,695)          (9,092)       (111,402)        (18,456)
         Interest expense, related parties                             (580)            (540)         (1,660)         (1,620)
         Interest income                                                527                -           2,643               5
         --------------------------------------------------------------------------------------------------------------------
                                                                    (71,748)          (9,632)       (110,419)        (20,071)
-----------------------------------------------------------------------------------------------------------------------------
Net Loss for the period                                    $       (966,253)  $     (398,509)  $  (6,066,977)  $  (1,246,876)
=============================================================================================================================


Net Loss per share - basic and diluted                     $          (0.04)  $        (0.03)  $       (0.26)  $       (0.09)

Weighted average number of shares outstanding                    27,372,003       13,555,963      22,974,384      13,304,590
=============================================================================================================================


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, 2006
(unaudited)

                                                                                                         Accumulated
                                                          Common stock                                      other
                                                      ----------------------   Additional                  compre-        Total
                                                       Number of                paid-in     Accumulated    hensive     stocholders'
                                                         Shares    Amount       capital      deficit        loss         equity
                                                      ----------  --------   ------------ -------------   ---------   ------------
<S>                                                   <C>         <C>        <C>           <C>             <C>        <C>
Balance October 31, 2005                              19,106,921  $ 19,107   $  7,817,808  $ (7,903,462)   $(38,672)  $   (105,219)


Loss for the period                                            -         -              -    (6,066,977)          -     (6,066,977)
Foreign currency translation                                   -         -              -             -     (17,759)       (17,759)
                                                                                                                       -----------
Comprehensive loss                                                                                                      (6,084,736)

Common stock and warrants issued for
    cash received
            three months ended January 31, 2006          568,167       568        208,682             -           -        209,250
            three months ended April 30, 2006            488,750       489        178,511             -           -        179,000
            three months ended July 31, 2006           1,597,542     1,598        482,665             -           -        484,263

Common stock issued to related
parties for services received
            three months ended January 31, 2006          191,590       192         95,603             -           -         95,795
            three months ended April 30, 2006          2,331,778     2,332        984,702             -           -        987,034
            three months ended July 31, 2006              50,000        50         18,450             -           -         18,500

Common stock issued to related parties
to settle accrued wages and consulting fees
             three months ended January 31, 2006         371,370       371        185,314             -           -        185,685

Common stock issued for services received
             three months ended January 31, 2006         354,465       354        127,146             -           -        127,500
             three months ended April 30, 2006           600,000       600        299,400             -           -        300,000
             three months ended July 31, 2006            329,887       330        115,786             -           -        116,116

Common stock issued for acquisition of
subsidiaries                                           1,171,230     1,171        502,961             -           -        504,132

Warrants issued in connection with financings                  -         -      1,230,423             -           -      1,230,423

Common stock issued on exercise of options                25,000        25          6,225             -           -          6,250

Common stock issued in relation to Geo-
Site Rights                                              225,000       225           (225)            -           -              -

Common stock issued to related parties
to repay loans and advances                              444,409       444        132,879             -           -        133,323

Common stock issued to repay loans and
consulting fees                                          220,000       220         65,780             -           -         66,000

Common stock issued for purchase of automobile            61,356        61         15,278             -           -         15,339

Warrants issued to related parties for
services                                                       -         -        446,311             -           -        446,311

Warrants issued in settlement of loans
and consulting fees                                            -         -         47,360             -           -         47,360

Options issued to related parties for
services received
             three months ended January 31, 2006               -         -        378,813             -           -        378,813
             three months ended April 30, 2006                 -         -        753,179             -           -        753,179
             three months ended July 31, 2006                  -         -         38,608             -           -         38,608

Options issued for services received
             three months ended January 31, 2006               -         -         37,474             -           -         37,474
             three months ended April 30, 2006                 -         -        169,618             -           -        169,618
             three months ended July 31, 2006                  -         -         46,418             -           -         46,418
                                                      ------------------------------------------------------------------------------

Balance July 31, 2006                                 28,137,465  $ 28,137   $ 14,385,169 $ (13,970,439)  $ (56,431)  $    386,436
                                                      ==============================================================================


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, 2006 and 2005
(unaudited)

                                                                     Nine months          Nine months
                                                                     ended July           ended July
                                                                     31, 2006             31, 2005
                                                                    ------------        ------------
<S>                                                                 <C>                 <C>
Cash provided by (used in):

Operations:
    Net Loss for the period                                         $ (6,066,977)       $ (1,246,876)
    Adjustment to reconcile net loss for the period to
    net cash used in operating activities:
       Depreciation of property and equipment                             22,554              14,638
       Amortization of intangible assets                                  41,563                   -
       Amortization of debt discount                                     470,025                   -
       Gain on tenant inducements                                         (7,733)             (7,259)
       Common stock issued for services                                  543,616             127,000
       Common stock issued to related parties
          for services                                                 1,101,329             247,183
       Options issued for services                                       253,510              40,900
       Options issued to related parties for services                  1,170,600              25,000
       Warrants issued for financings                                    270,423                   -
       Warrants issued to related parties for services                   446,311                   -
       Warrants issued in settlement of loans and consulting fees         47,360                   -
       Foreign exchange on loan payable                                    5,770                   -
       Changes in assets and liabilities
              Accounts receivable                                         55,957              (3,642)
              Inventory                                                  (74,626)            (15,359)
              Prepaid expenses                                           (57,666)             17,091
              Accounts payable                                           171,207             223,051
              Accrued expenses and wages                                 471,815             478,804
              Deferred revenue                                          (191,846)                  -
    ----------------------------------------------------------------------------        ------------
    Net cash used in operating activities                             (1,326,808)            (99,469)
                                                                    ------------        ------------

Investments:
    Purchase of property and equipment                                   (50,263)             (5,510)
    Deposits                                                             (22,291)                  -
    Cash component to acquire subsidiaries                              (952,897)                  -
    ----------------------------------------------------------------------------        ------------
    Net cash used in investing activities                             (1,025,451)             (5,510)
                                                                    ------------        ------------

Financing:
    Subscription for common stock                                        872,513              50,000
    Proceeds received from exercise of options                             6,250                   -
    Proceeds of term loan                                              2,000,000                   -
    Repayment of term loan                                               (12,500)                  -
    Porceeds of short term loan                                          258,000                   -
    Repayment of short term loan                                        (258,000)                  -
    Payout of subsidiary loans on acquisition                           (548,900)                  -
    Tenant inducements received                                                -               5,574
    Advances from shareholders                                           134,858             142,095
    Repayment of finance loans                                            (4,249)                  -
    Repayment of loan payable                                            (30,450)                  -
    ----------------------------------------------------------------------------        ------------
    Net cash provided by financing activities                          2,417,522             197,669
    ----------------------------------------------------------------------------        ------------

Increase in cash during the period                                        65,263              92,690
Foreign exchange effect on cash                                          (17,759)             (7,033)
Cash at beginning of the period                                            2,307                  87
                                                                    ------------        ------------

Cash at end of the period                                           $     49,811        $     85,744
                                                                    ============        ============


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, 2006 and 2005
(unaudited)


Supplementary Information:

                                                                     Nine months          Nine months
                                                                     ended July           ended July
                                                                     31, 2006             31, 2005
                                                                    ------------        ------------
<S>                                                                 <C>                 <C>
     Interest paid                                                  $          -        $          -
     Income taxes paid                                                         -                   -
     Non-cash transactions:
         Common shares issued to related parties to settle
             accrued wages and consulting fees                           185,685                   -
         Common shares issued for geo-site rights                            225                 225
         Fair value of warrants issued for acquisition of
             geo-site rights                                                   -              47,468
         Common shares issued to acquire subsidiaries                    504,132                   -
         Warrants issued to secure term loan                             960,000                   -
         Common shares issued to related parties to repay
         loans and advances                                              133,323                   -
         Common shares issued to repay loans and
         consulting fees                                                  66,000                   -
         Common shares issued for acquisition of automobile               15,339                   -




See accompanying notes to consolidated financial statements.

                                                       7
</TABLE>
<PAGE>

          NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS


Note 1.  Description of Business and Summary of Certain 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,
installation, and distribution of the "EI Elemental Heat Energy System" family
of geothermal heat products and technology in Canada, the United States, and
Mexico, though its sales to date are primarily in western Canada. Until January
31, 2005, the Company was in the development stage and 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, the
Company had sales of these products and management determined that the Company
had emerged from the development stage.

Future Operations

The Company's consolidated financial statements have been prepared in conformity
with accounting principles generally accepted in the United States applicable to
a going concern that contemplates the realization of assets and liquidation of
liabilities in the normal course of business. As discussed above, the Company
recently emerged from the development stage and it has not yet generated
positive cash flows from operations. It is the Company's intention to borrow
funds and to raise additional equity to finance the further development of a
market for its products until positive 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 necessitate reduction or limitation of the Company's
operating activities.

Basis of Consolidation

The accompanying unaudited interim consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information, the instructions to Form 10-QSB, and 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, 2005.

These consolidated financial statements include the accounts of Essential
Innovations Technology Corp. and its wholly-owned subsidiaries, Essential
Innovations Corporation, Essential Innovations Asia Limited, Pacific Geo
Exchange Inc., and Earth Source Energy Inc. All significant inter-company
balances and transactions have been eliminated.

                                       8
<PAGE>

Intangible Assets

Intangible assets consist of geo-site rights, intellectual property, and option
rights agreements. Intangible assets with definite lives or bases for
productivity are recorded at cost and are amortized over the expected life of
the asset. Intangible assets with indefinite lives are not amortized but are
evaluated periodically for impairment. Management tests intangible assets for
impairment at least annually.

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 installation contracts are recognized on the percent of completion
method, measured by the percentage of costs incurred to date to estimated total
costs for each contract. Because of the inherent uncertainties in estimating
costs, it is at least reasonably possible that the estimates used may change in
the near term. If estimated costs to complete a contract indicate a loss based
on management analysis, provision is made in the current period for the total
anticipated loss. The lives of these contracts are typically twelve months or
less, but performance may occur in two separate years.

Net Loss per Share

Basic net loss per share is calculated by dividing the net loss attributable to
common stockholders by the weighted average number of shares of common stock
outstanding in the period. Diluted loss per share takes into consideration
shares of common stock outstanding (computed under basic loss per share) and
potentially dilutive securities. The potentially dilutive equity instruments
described more completely in Notes 5 and 6 outstanding during the nine months
ended July 31, 2006 and 2005, are antidilutive due to the Company's losses.

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.

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 statements of
operations, which amount was not material for the nine months ended July 31,
2006, and 2005.

                                       9
<PAGE>

Stock-Based Compensation

Prior to November 1, 2005, the Company accounted for stock-based compensation in
accordance with Accounting Principles Board ("APB") Opinion No. 25, Accounting
for Stock Issued to Employees, and related interpretations, as permitted by
Statement of Financial Accounting Standards ("SFAS") No. 123, Accounting for
Stock-Based Compensation. In December 2004, SFAS No. 123(R), Share-Based
Payment, which addresses the accounting for employee stock options, was issued.
SFAS No. 123(R) revises the disclosure provisions of SFAS No. 123 and supersedes
APB Opinion No. 25. SFAS No. 123(R) requires that the cost of all employee stock
options, as well as other equity-based compensation arrangements, be reflected
in the financial statements over the vesting period based on the estimated fair
value of the awards. The Company adopted SFAS No. 123(R) as of November 1, 2005,
using the modified prospective application. Adopting SFAS No. 123(R) resulted in
additional compensation of $1,287,874 being recorded in the nine months ended
July 31, 2006, which resulted in a net effect on basic and diluted earnings per
share of $(0.06). There was no impact on cash flows.

The following table illustrates the effects on net loss if the fair value method
had been applied to all outstanding and vested awards for the nine months ended
July 31, 2005:
<TABLE>
<CAPTION>
                                                                                              2005
                                                                                        ------------------
<S>                                                                                         <C>
        Net loss, as reported
                                                                                            $(1,246,876)
        Add stock-based employee compensation expense included in reported net loss,
          net of tax                                                                            272,981
        Deduct total stock-based employee compensation expense determined under the
          fair-value method, net of tax                                                        (308,075)
                                                                                        ------------------
        Pro forma net loss
                                                                                            $(1,281,970)
                                                                                        ==================
        Pro forma net loss per share
                                                                                                $(0.10)
                                                                                        ==================
</TABLE>

Recent Accounting Pronouncement

In July 2006, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation (FIN) No. 48, "Accounting for Uncertainty in Income Taxes-an
interpretation of FASB Statement No. 109." This interpretation provides guidance
for recognizing and measuring uncertain tax positions, as defined in SFAS No.
109, "Accounting for Income Taxes." FIN No. 48 prescribes a threshold condition
that a tax position must meet for any of the benefit of an uncertain tax
position to be recognized in the financial statements. Guidance is also provided
regarding derecognition, classification, and disclosure of uncertain tax
positions. FIN No. 48 is effective for fiscal years beginning after December 15,
2006. The Company does not expect that this interpretation will have a material
impact on its financial position, results of operations, or cash flows.

Note 2.  Acquisition of Subsidiaries

The Company has purchased 100% of the issued and outstanding shares of Pacific
Geo Exchange Inc. and its wholly-owned subsidiary Earth Source Energy Inc. The
purchase price of $1,457,030 was paid in cash of $952,897 and 1,171,230 common
shares of the Company with a fair value of $504,133. In addition, the Company
paid out $548,900 of debt of the acquired companies.

The acquisition was effective as of March 6, 2006. The operations of the
acquired subsidiaries are consolidated as of that date.

                                       10
<PAGE>

Of the sums paid, $100,920 (Cdn $116,000) and 279,209 common shares of the
Company are being held in escrow pending a final accounting of the acquired
companies. These amounts have been included in the purchase consideration.

The acquisition has been recorded as a purchase and the Company has recorded
goodwill of $2,087,462 in relation to this acquisition.

During the three months ended July 31, 2006, the Company has determined that the
assumed liabilities, as of the date of acquisition, of Pacific Geo Exchange Inc.
and Earth Source Energy Inc. were $174,805 greater than those reported as at the
fiscal quarter ended April 30, 2006. The effect of the increase in assumed
liabilities has been an increase in the purchase price of the same amount. As a
result of this purchase price adjustment, the Company has increased the goodwill
arising from this acquisition by $174,805.
<TABLE>
<CAPTION>
A summary of the assets and liabilities acquired is as follows:
<S>                                                                  <C>              <C>
Assets
Accounts receivable                                                                   $   537,913
Inventory                                                                                  65,136
Prepaid expenses                                                                           10,362
Due from related parties                                                                   15,718
Fixed assets                                                                               91,874
                                                                                     ------------

Intangible assets recorded in connection with purchase                                  2,087,462

Total assets                                                                            2,808,465

Liabilities

Bank indebtedness                                                                         389,937
Accounts payable and accrued expenses                                                     493,754
Deferred revenue                                                                          238,816
Due to related parties                                                                    110,115
Long-term debt                                                                            118,813
                                                                                     ------------
                                                                                        1,351,435
                                                                                     ------------
Net assets acquired                                                                   $ 1,457,030

Acquisition paid
              Cash                                                  $  952,897
              Shares                                                   594,133
                                                                    ----------
                                                                    $1,457,030

                                       11
</TABLE>
<PAGE>

Pro forma results of the Company for the nine months ended July 31, 2006, as if
the acquisition occurred on November 1, 2005, are:
<TABLE>
<CAPTION>
                                                                         Pacific Geo Exchange
                                                                                 Inc.
                                                 Essential Innovations    Earth Source Energy     Pro forma
                                                    Technology Corp              Inc.            Consolidated
<S>                                                  <C>                       <C>                <C>
Revenue                                              $     277,843             $ 2,014,550        $ 2,292,393
Cost of revenue                                            229,721               1,347,914          1,577,635
                                                     -------------             -----------        -----------
Gross Profit                                                48,122                 666,636            714,758
                                                     -------------             -----------        -----------

Expenses:
   General and administrative                            6,019,211                 561,196          6,580,407
                                                     -------------             -----------        -----------

Other income and expense:
    Interest expense                                      (105,967)                 (5,435)          (111,402)
    Interest expense, related parties                       (1,660)                 (1,187)            (2,847)
    Interest income                                          2,643                     124
                                                     -------------             -----------        -----------
                                                                                                        2,767
                                                          (104,984)                 (6,498)          (111,482)
                                                     -------------             -----------        -----------
Net loss for the period                              $  (6,076,073)            $    98,942        $(5,977,131)
                                                     =============             ===========        ===========
</TABLE>

Note 3. Intangible Assets

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 shares of the Company's common stock
with a fair value of $225,000 and 150,000 warrants, with a fair value of
$47,468, exercisable until 2010, for 150,000 shares of the Company's common
stock, 75,000 at $0.75 per share and 75,000 at $1.00 per share. The Company
guaranteed that the 225,000 shares of the Company's common stock would 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 shares of common stock to make the aggregate value $225,000. The
225,000 shares had an aggregate value of $112,500 and the Company has issued an
additional 225,000 shares of the Company's common stock to make up the deficit.
The cost will be amortized on a pro rata-per-unit basis as residential units are
sold. As of July 31, 2006, no amortization has been taken.

Intellectual Property

The Company acquired certain proprietary information that provides the basis for
the effective implementation and operation of the geo-utility business concept
in return for 75,000 fully paid and nonassessable shares of the Company's common
stock and options to purchase 150,000 shares of its common stock, 37,500 at
$0.75 per share and 37,500 at $1.00 per share exercisable until July 31, 2009,
and 37,500 at $1.25 per share and 37,500 at $1.50 per share exercisable until
July 31, 2010. These have been recorded at the fair value of $57,496. In
addition the vendor is entitled to a royalty of 2.5% from gross revenue of
geo-utility projects in which the Company is directly involved and 0.5% of gross
fees from geo-utility projects where the Company provides project management.
This intangible asset has an indefinite life. Management evaluates the asset for
impairment on at least an annual basis.

                                       12
<PAGE>

Option Rights Agreement

During 2005, and modified in April 2006 to reduce the cost to exercise the
option, the Company obtained the exclusive rights to acquire, from a director of
the Company and his partner, who is the father of the Company's Chief Executive
Officer, a new technology within the geothermal heating and cooling and any
other heating, ventilating, and air conditioning related application. The
Company paid for this option by issuing 50,000 fully paid and nonassessable
shares of its common stock and options to acquire 50,000 shares of the Company's
common stock at a price of $0.75 per share exercisable for five years. These
have been recorded at the fair value of $55,156. The Company has until September
2007 to determine whether it will exercise the option. The cost to exercise the
option is an additional 250,000 shares of the Company's common stock and options
to acquire 250,000 shares of the Company's common stock at $0.75 per share
exercisable for five years from the date of exercising the option. In addition
the Company will be obligated to pay a royalty of 2.5% of the gross revenue
generated from the technology. The cost is being amortized over one year on a
straight-line basis.


Note 4. Related-Party Transactions and Balances

Loans 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 shares of the Company's common stock 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, including accrued interest, at July 31, 2006, is
$11,195.

Due to Stockholders

Amounts due to stockholders at July 31, 2006, are unsecured, without specific
terms of repayment and non-interest bearing. The balance remaining due at July
31, 2006, is $36,049.

Other Related-Party Transactions

During the nine months ended July 31, 2006 and 2005, the Company incurred
consulting fees and related expenses to a company controlled by an officer and
director of the Company in the amount of $112,500 and $112,500, respectively.
During the nine months ended July 31, 2006, $112,500 of the amount owing was
converted into 208,333 shares of the Company's common stock based on the fair
value of the common stock at the transaction dates. In addition warrants to
purchase 208,333 shares of the Company's common stock at $0.30 per share until
2011 were also issued. The balance remaining due at July 31, 2006, is $37,500.
Subsequent to July 31, 2006, this amount was settled by the issuance of shares
of common stock of the Company.


Note 5. Term Loan

The Company arranged term financing of $2 million to complete the acquisition of
Pacific Geo Exchange Inc. and Earth Source Energy Inc. This loan is secured
against all assets of the Company and bears interest, payable monthly, at the
rate of prime plus 3%, with a minimum interest rate of 8%. The loan is repayable
in 32 monthly payments of $62,500 commencing July 2006. The Company paid a
principal payment of $12,500 in July 2006 with the shortfall of $50,000 being
paid subsequent to July 31, 2006.

                                       13
<PAGE>

The Company also arranged a $4 million revolving line of credit with an interest
rate of prime plus 2%. This revolving line of credit did not close and the
facility has been cancelled.

The Company issued warrants to purchase 8,586,754 shares of common stock,
exercisable at $0.001 per share until 2050, in connection with these two loans.
As the $4 million revolving loan did not close, warrants to purchase 5,667,258
shares of common stock were returned to the Company.

The Company has recorded a discount against the loan based on the relative fair
value of the warrants to purchase 2,919,496 shares of common stock related to
the $2 million term loan in the amount of $960,000. As the lender has agreed not
to hold more than 4.99% of the Company's stock at any one time, only that
portion of the debt discount equivalent to the exercising of warrants that would
equate to 4.99% of the Company's outstanding stock as at the date of funding has
been expensed as interest in the amount of $391,000. The balance of the debt
discount is being amortized over 36 months.

Note 6. Share Capital

Preferred Stock

The Company's authorized capital includes 10,000,000 shares of preferred stock,
$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.

No shares of preferred stock are issued and outstanding as of July 31, 2006.

Common Stock

During the nine months ended July 31, 2006, the Company:

         o  issued 44,000 shares of common stock and warrants to purchase 44,000
            shares of common stock of the Company at $0.50 per share until 2010
            for $22,000.
         o  issued 666,250 shares of common stock and warrants to purchase
            666,250 shares of common stock of the Company at $0.40 per share
            until 2010 for $266,500.
         o  issued 15,000 shares of common stock and warrants to purchase 15,000
            shares of common stock of the Company at $0.35 per share until 2011
            for $5,250.
         o  issued 1,929,209 shares of common stock and warrants to purchase
            1,929,209 shares of common stock of the company at $0.30 per share
            until 2011 for $578,763.
         o  issued 1,284,352 shares of common stock for payment of services with
            a fair value of $543,616.
         o  issued 371,370 shares of common stock to certain employees for
            payment of accrued wages and consulting fees in the amount of
            $185,685.
         o  issued 191,590 shares of common stock to related parties for
            payments of services with a fair value of $95,795.
         o  issued 1,171,230 shares of common stock with a fair value of
            $504,133 in connection with acquisition of subsidiaries.
         o  issued 225,000 shares of common stock with a fair value of $112,500
            to settle the shortfall in value of shares issued in 2005 with
            regards to acquisition of geo-site rights.

                                       14
<PAGE>

         o  issued 25,000 shares of common stock upon options being exercised to
            purchase shares of common stock at $0.25 per share.
         o  issued 1,250,000 shares of common stock to certain management of the
            Company for contract renewals with a fair value of $662,500.
         o  issued 979,166 shares of common stock to certain employees for
            payment of accrued wages in the amount of $293,750.
         o  issued 152,612 shares of common stock to certain employees for
            payments of services with a fair value of $49,284.
         o  issued 444,409 shares of common stock and warrants to purchase
            444,409 shares of common stock at $0.30 per share until 2011 to
            related parties to settle repayment of loans and advances of
            $133,323.
         o  issued 220,000 shares of common stock and warrants to purchase
            116,667 shares of common stock at $0.30 per share until 2011 to
            settle repayment of loans and consulting fees.
         o  issued 61,356 shares of common stock for the purchase of automotive
            equipment with a fair value of $15,339.


Stock Purchase Warrants

At July 31, 2006, the Company had outstanding warrants to purchase 8,332,657
shares of the Company's common stock as follows:

            Number of warrants           Exercise Price                 Expiry
            ------------------           --------------                 ------
                  100,000                    $0.35                       2007
                   75,000                     0.75                       2010
                   75,000                     1.00                       2010
                  417,500                     0.40                       2010
                  270,000                     0.50                       2010
                3,469,451                     0.30                       2011
                   15,000                     0.35                       2011
                  373,750                     0.40                       2011
                  317,460                     0.63                       2011
                  300,000                     0.01                       2011
                2,919,496                     0.001                      2050

At July 31, 2006, 8,332,657 shares of common stock were reserved.

During the nine months ended July 31, 2006, the Company both issued and
cancelled options to purchase 5,667,258 shares of the Company's common stock at
$0.001.


Note 7.  Stock-based Compensation

Although the Company does not have a formal stock option plan, during the nine
months ended July 31, 2006, the Company issued stock options to directors,
employees, advisors, and consultants.

                                       15
<PAGE>

A summary of the Company's stock options is as follows:
<TABLE>
<CAPTION>
                                                                                                 Weighted Average
                                                                        Number of Options         Exercise Price
                                                                       --------------------    --------------------
<S>                                                                        <C>                       <C>
Outstanding at October 31, 2005                                              6,515,000                 $0.78
     Options exercised                                                         (25,000)                (0.25)
     Options issued:
                         to consultants                                        125,000                  0.40
                         to employees and directors                          1,375,000                  0.30
                         to employees                                           90,000                  0.37
                         to employees                                          250,000                  0.63
                         to consultant                                         250,000                  0.50
                         to employees and directors                          1,250,000                  0.53
                         to consultants                                        304,887                  0.30
                                                                       --------------------
Outstanding at July 31, 2006                                                10,134,887                  0.65
                                                                       ====================

<CAPTION>
The following table summarizes stock options outstanding at July 31, 2006:


                                                                   Average Remaining                 Number
                                   Number Outstanding at           Contractual Life              Exercisable at
       Exercise Price                  July 31, 2006                    (Years)                  July 31, 2006
-----------------------------    --------------------------     ------------------------    -------------------------
<S>                                      <C>                             <C>                       <C>
         $0.25                              379,750                       2.47                         379,750
          0.30                            1,679,887                       4.56                       1,679,887
          0.37                               90,000                       4.75                          90,000
          0.40                              125,000                       4.60                         125,000
          0.50                            1,087,250                       3.74                       1,087,250
          0.53                            1,250,000                       4.75                       1,250,000
          0.63                              250,000                       4.67                         250,000
          0.75                            1,835,500                       5.20                       1,835,500
          1.00                            3,051,250                       3.97                       3,051,250
          1.25                               87,500                       4.11                          50,000
          1.50                              282,500                       3.62                         245,000
          2.00                               16,250                       4.08                          16,250
                                 --------------------------                                 -------------------------
                                         10,134,887                                                 10,059,887
                                 ==========================                                 =========================
</TABLE>

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 5-year
expected life, volatility of 160%, and a dividend yield of 0.0%.

Note 8. Letters of Intent

The Company has entered into a non-binding letter of intent to acquire all of
the issued and outstanding shares of two drilling companies for a combined price
of $4,614,650 (Cdn $5,185,000) payable, in cash on closing of $1,557,500 (Cdn
$1,750,000); a one-year promissory note in the amount of $445,000 (Cdn $500,000)
with interest of 8% per annum payable monthly; a five-year term note in the
amount of $1,054,650 (Cdn $1,185,000) payable monthly as to principal of Cdn
$20,567 and interest calculated at 8% per annum; an amount of $1,557,500 (Cdn
$1.75 million) to be paid at closing by issuing shares of the Company's common

                                       16
<PAGE>

stock at an agreed value of US $0.50 per share with the exact number of shares
to be determined at closing dependent on the exchange rate of the Canadian
dollar. In addition the vendors will be issued warrants to purchase shares of
the Company's common stock with an aggregate value of Cdn $1.5 million, the
exact number and exercise price to be determined at closing dependent on the
exchange rate of the Canadian dollar and weighted average trading price of the
Company's common stock. The Company will also refinance approximately $2,225,000
(Cdn $2,500,000) of secured debt of the acquired companies. This acquisition is
expected to close during the fourth fiscal quarter of 2006.

In addition, the Company has agreed to enter into five-year consulting
agreements with two senior managers of the acquired companies. These agreements
will have annual remuneration of Cdn $150,000 and Cdn $125,000 together with an
option package.

The Company has also entered into a letter of intent to incorporate two joint
ventures in the Peoples Republic of China. One joint venture will be for the
manufacture of the Company's products and the second will be involved in the
distribution and installation of geothermal exchange systems in China. The
Company will be responsible for transferring certain technology and know-how and
the Chinese partner will be responsible for providing start-up financing.

Note 9. Subsequent Events

Subsequent to July 31, 2006, the Company:

         o  issued 233,332 shares of its common stock and warrants to purchase
            233,332 shares of its common stock at $0.30 per share until 2011 for
            total proceeds of $65,000.
         o  issued 933,949 shares of its common stock and warrants to purchase
            933,949 shares of its common stock at $0.30 per share until 2011 to
            certain employees and consultants for payment of accrued wages and
            fees in the amount of $280,185.
         o  issued 88,000 shares of its common stock and options to purchase
            200,000 shares of its common stock at $0.30 per share until 2011 to
            certain employees and consultants for services received.
         o  approved the issuance of a total of 350,000 shares of its common
            stock and options to purchase a total of 500,000 shares of its
            common stock at $0.30 until 2011 to two new board members.


        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, 2006 and 2005, and our annual report on Form
10-KSB for the year ended October 31, 2005, including the financial statements
and notes thereto.

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.

                                       17
<PAGE>

         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 we have closed on a $2 million term loan, which permitted us
to finalize the acquisition of Pacific Geo Exchange Inc. and Earth Source Energy
Inc. and accelerate expansion of the manufacturing, sales, and installation the
EI Elemental Heat Energy System, and cancelled a revolving $4 million credit
line.


Results of Operations

         Comparison of the Three and Nine Months Ended July 31, 2006,
         with the Three and Nine Months Ended July 31, 2005

         We have generated gross revenue of $1,537,020 and $857,330 with related
costs of revenue of $1,119,339 and $644,522 in the nine and three months ended
July 31, 2006, respectively, as compared to gross revenues of $112,351 and
$38,819 and cost of revenue of $81,828 and $31,212 for the nine and three months
ended July 31, 2005. This is primarily due to our acquisition of Earth Source
Energy Inc. and the inclusion of its gross revenues and cost of sales for the
period of ownership commencing March 7, 2006.

         Our operating expenses for the nine and three months ended July 31,
2006, were $6,374,239 and $1,107,313, respectively, as compared to $1,257,328
and $396,484 for the comparable periods in 2005, an increase of 407% and 179%
respectively. This reflects investor relations costs of $732,317 and $108,503
for the nine and three months, respectively; $998,371 ($297,409 of which is
noncash) and $126,987 ($26,987 of which is noncash), for the respective nine and
three months ended July 31, 2006, for financing costs related to the acquisition
and conversion of certain debt; $1,436,507 and $1,057,694 recorded in accordance
with the Company's adoption of SFAS No. 123(R) for options issued to employees
and directors for the nine and three months ended July 31, 2006, as compared to
$25,000 for both the nine and three months ended July 31, 2005.

         We had 32 full-time employees as of July 31, 2006, as compared to 10
full-time employees at July 31, 2005.

Liquidity and Capital Resources

         As of July 31, 2006, our current assets stood at $947,460, as compared
to $193,472 at October 31, 2005. As of July 31, 2006, our current liabilities
were $2,264,303, as compared to $763,551 at October 31, 2005. As at July 31,
2006, our long-term liabilities were $963,748, as compared to nil at October 31,
2005. Net cash used in operating activities increased to $1,326,808 for the nine
months ended July 31, 2006, as compared to $99,469 for the nine months ended
July 31, 2005.

         Net cash spent on investing activities increased to $1,025,451,
including the cash component of $952,897 paid as part of the acquisition of
Pacific Geo Exchange Inc., for the nine months ended July 31, 2006, as compared
to net cash spent during the nine months ended July 31, 2005, of $5,510.

                                       18
<PAGE>

         Net cash of $2,417,522 provided by financing activities during the nine
months ended July 31, 2006, consists of proceeds from the term loan of $2
million; the issuance of common stock for $872,513; net advances from
stockholders of $134,858, and a repayment of financial obligations of Pacific
Geo Exchange Inc. in the amount of $548,900, as compared to net cash of $197,669
provided during the comparable nine months ended July 31, 2005, which was
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,
2006, pursuant to Rule 13a-15(b) under the Securities Exchange Act. Based upon
that evaluation, our Certifying Officers concluded that, as of July 31, 2006,
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.

                                       19
<PAGE>

                           PART II--OTHER INFORMATION

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

         In May 2006, we agreed to issue 60,000 shares of common stock to
certain employees for services received with a fair value of $22,200.

         In July 2006, we agreed to issue 210,000 shares of common stock and
warrants to purchase 210,000 shares of common stock at $0.30 per share expiring
July 2011 for total cash consideration of $63,000, or $0.30 per share, to a
company controlled by an officer and director of the Company.

         In July 2006, we agreed to issue 105,000 shares of common stock and
warrants to purchase 105,000 shares of common stock at $0.30 per share expiring
July 2011 for total cash consideration of $31,500, or $0.30 per share, to an
officer and director of the Company.

         In June 2006, we agreed to issue 74,209 shares of common stock and
warrants to purchase 74,209 shares of common stock at $0.30 per share expiring
June 2011 for total cash consideration of $22,263, or $0.30 per share, to an
employee of the Company.

         In July 2006, we agreed to issue 50,000 shares of common stock and
warrants to purchase 50,000 shares of common stock at $0.40 per share expiring
July 2011 for total cash consideration of $20,000, or $0.40 per share.

         In June 2006, we agreed to issue 25,000 shares of common stock to a
consultant for services received with a fair value of $9,904.

         In July 2006, we agreed to issue 5,000 shares of common stock to a
consultant for services received with a fair value of $2,200.

         In each of the above transactions with our officers, directors,
employees, and consultants, the recipient represented that he or she was 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. These transactions were effected in reliance on Regulation S.

         In May 2006, we agreed to issue 800,000 shares of common stock and
warrants to purchase 800,000 shares of common stock at $0.30 per share expiring
May 2011 for total cash consideration of $240,000, or $0.30 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 May 2006, we agreed to issue 166,666 shares of common stock and
warrants to purchase 166,666 shares of common stock at $0.30 per share expiring
May 2011 for total cash consideration of $50,000, or $0.30 per share to an
officer and director of the Company. The investor has represented that he 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 May 2006, we agreed to issue 220,000 shares of common stock for
services received with a fair value of $79,200. No general solicitation was
used, the terms of the transaction were negotiated directly between the person
performing the services and our executive officers, and the recipient
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 the exemption in Section 4(2) of the
Securities Act of 1933 as not involving any public offering.

                                       20
<PAGE>

         In May 2006, we agreed to issue 60,300 shares of common stock and
warrants to purchase 60,300 shares of common stock at $0.30 per share expiring
May 2011 for total cash consideration of $18,090, or $0.30 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 May 2006, we agreed to issue 70,000 shares of common stock and
warrants to purchase 70,000 shares of common stock at $0.30 per share expiring
May 2011 for total cash consideration of $21,000, or $0.30 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 May 2006, we agreed to issue 61,367 shares of common stock and
warrants to purchase 61,367 shares of common stock at $0.30 per share expiring
May 2011 for total cash consideration of $18,410, or $0.30 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 May 2006, we agreed to issue 61,356 shares of common stock for an
automobile with a fair value of $15,339. 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.

                                       21
<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 14, 2006                By:  /s/ Jason McDiarmid
                                            ------------------------------------
                                            Jason McDiarmid, President and
                                            Chief Executive Officer


Date:  September 14, 2006                By:  /s/ Kenneth G.C. Telford
                                            ------------------------------------
                                            Kenneth G.C. Telford
                                            Chief Financial Officer

                                       22