U.S. SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549

                                 FORM 10-KSB

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934
     For the Fiscal Year Ended:  December 31, 2007
[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURIITES EXCHANGE
     ACT OF 1934 For the transition period from ___________ to ___________

                         Commission File No. 000-52652

                            CET SERVICES, INC.
            (Name of Small Business Issuer in its Charter)

          California                                   33-0285964
     (State or Other Jurisdiction                   (I.R.S. Employer
   of Incorporation or Organization)                Identification No.)

12503 E. Euclid Dr. #30, Centennial, Colorado                  80111
   (Address of Principal Executive Offices)                  (Zip code)

Issuer's telephone number:  (720) 875-9115

Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:  Common Stock, No
Par Value

Check whether the Registrant (1) has 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

Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-
KSB or any amendment to this Form 10-KSB. [X]

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

State issuer's revenues for its most recent fiscal year:  $2,102,670

State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was sold, of the average bid and asked price of such common equity, as
of a specified date within the past 60 days.  As of January 12, 2008, the
aggregate market value of the Company's common stock held by non-affiliates
was approximately $196,697.

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.  As of February 12, 2008,
5,574,489 shares of common stock were outstanding.

Transitional Small Business Disclosure Format (Check one):  YES [ ] NO [X]

Documents incorporated by reference:  None


                                    PART I

Item 1.  Description of Business.

The Company

     Incorporated in February 1988 pursuant to the laws of the State of
California, CET Services, Inc. (the "Company" or "CET") for more than a
decade was engaged in environmental consulting, engineering, remediation, and
related construction activities.  By 1998, revenues exceeded $66 million,
close to 50% of which was derived from work performed for the Environmental
Protection Agency ("EPA").  However, in August, 1999, the EPA issued a notice
of suspension, alleging that the Company engaged in intentional misconduct
with respect to billing for services under various contracts with the EPA.
The Company denied all allegations of wrongdoing in its relations with the
EPA and cooperated in full with the investigation. (See Item 3.-Legal
Proceedings and Note K-Commitments and Contingencies to the Consolidated
Financial Statements.) On April 27, 2007 the Company received notice that the
EPA OIG has closed all investigations involving CET.

     An Administrative Agreement with EPA allowed the lifting of the
suspension in November, 1999.  However, EPA revenues under the then-existing
contract never recovered to prior levels.  The EPA exercised the third year
option of the contract in January 2000, and was empowered to issue delivery
orders for up to $42 million in value; actual EPA revenues for 2000 were
$13.1 million.  The fourth and final option year was exercised in January
2001, with an empowered value of $44 million; actual EPA revenues in 2001
were $12.3 million.  In addition, revenue generation from other federal
agencies also failed to recover to pre-1999 levels.

     In view of the diminished level of EPA delivery orders received and with
no assurance that delivery orders would increase even if the Company was
successful in obtaining another EPA contract, management decided to forgo
bidding on a new contract.  At the billing levels experienced in the 2001-
2002 period, the overhead costs necessary to perform EPA work made such
efforts marginally profitable, at best.

     In addition, after careful review of the potential business available
and the highly competitive bidding practices being encountered, the Company
decided to not seek additional contracts in the water/wastewater treatment
and services market.  While an ongoing contract in this area may generate
$20,000 or more per month in revenue through 2008, the Company's main focus
is property development, primarily in urban areas and preferably having an
environmental remediation requirement as an element of the project.

     On February 16, 2007, the Company entered into an Agreement and Plan of
Merger with Zoi Interactive Technologies, Inc. The Company terminated the
agreement on July 9, 2007 as a result of Zoi's inability to make progress on
matters necessary to complete the proposed merger. The Company continues to
evaluate alternatives for its business.

Brownfields Remediation and Property Development

     Where applicable, many municipalities are actively seeking to restore
property currently idled by contamination in order to enhance the community's
tax base.  Often, these municipalities are eligible for federal aid, state
funds, and other types of special financing.  Also, towns and cities adjacent

                                       2

to or close to major metropolitan centers are encouraging gentrification of
older neighborhoods in order to revive the commercial and social activities
of the community.  The Company believes that these trends offer an
opportunity for niche property development.  Because of its past experience
in the environmental market place, the Company believes it can provide a
particular expertise and add value when remediation is required to bring the
development to fruition.

     The Company has substantially completed a redevelopment project under an
agreement with the City of Westminster, Colorado.  The project includes the
purchase of certain property, the demolition of existing structures,
environmental remediation, and construction of 50 new affordable housing
units.  Under the development agreement, the City of Westminster provided
approximately $901,000 toward the $1,601,000 purchase price of the property,
paid the Company approximately $185,000 for demolition work, and is providing
other assistance.  The Company was required to and has sold at least 10 of
the 50 housing units at a base price of $170,000, or less, to qualified
buyers; to make certain off-site improvements along street frontages; and to
provide the necessary insurance for the project.  As of December 31, 2007,
the Company has sold all of the units.

     The Westminster development is segmented into three sites.  Construction
at Site I, consisting of 23 housing units, is complete; and as of December
31, 2006, all units had been sold.  In developing this site, the Company
secured a $1.67 million construction loan in mid-2003 that was repaid in June
2004.  In late September 2004, the Company entered into an agreement with a
general contractor in the amount of approximately $2.75 million for the
construction of the remaining 27 housing units at Site II and III.  Shortly
thereafter, the Company secured a construction loan in the amount of
approximately $2.9 million.  As of December 31, 2007, all units have been
sold and the loan was repaid in full.

     In November 2004, the Company executed a second development agreement
with the City of Westminster under which the City would provide approximately
$410,000 and other assistance to the Company for the development of a
retail/office building of approximately 11,200 square feet, as well as twelve
townhomes.  The Company acquired the property necessary for this project in
May 2005, borrowing $326,000 and receiving $100,000 under the development
agreement (see Note E - Notes Payable to the Consolidated Financial
Statements). In October 2005, upon approval of the development plan, the
Company received the remaining $310,000 provided for under the development
agreement. In April 2007 the Company repaid the borrowings in full. The
Company has obtained a construction loan ( see Note D - Construction Loan) to
finance the construction of the retail/office building. The Company has a
contract to sell the building. The Company has deposited $85,000 with the
City of Westminster in lieu of a private improvement bond for this project.

     In addition, the Company owns a five-acre residential site in Aurora,
Colorado, "the Aurora project", and during 2004, completed a major
remediation at the site, aided by a Brownfields Cleanup Revolving Loan Fund
Agreement with City of Aurora in the amount of $471,495 (see Note E- Notes
Payable to the Consolidated Financial Statements). The Company has approval
to construct 54 residential townhomes on this site. The Company has this
property listed for sale with a local real estate broker.

     In January 2005, the Company entered into an operating agreement with a
newly-formed entity, Arizona Avenue, LLC, a Colorado limited liability
corporation in which the Company is a 50% owner.  The Company has been

                                       3


engaged by the LLC to manage the development of a five-acre site in Aurora,
Colorado. There have been no management fees in connection therewith during
the period. Through December 31, 2007, the Company has invested approximately
$297,000 to develop this project. The Company has approval to construct 54
residential townhomes on this site. The Company currently has this property
listed for sale with a local real estate broker.

     In April 2006, the Company entered into a contract to purchase two
buildings, an industrial building and a retail/office building, in Wheat
Ridge, Colorado. In May 2006, the Company entered into a contract to sell the
industrial building. In June 2006, the Company borrowed $694,000 (of which
$451,000 was drawn) from a local lender (see Note E - Notes Payable to the
Consolidated Financial Statements) and completed the purchase of both
buildings and the sale of the industrial building. The Company completed the
rehabilitation of the retail/office building and on April 10, 2007 sold the
property and paid the note payable in full.

     The Company believes it is subject to risks and uncertainties common to
the residential housing industry, including but not limited to (1) cyclical
markets sensitive to changes in general and local economic conditions; (2)
volatility of interest rates, which affects homebuilding demand and may
affect credit availability; (3) seasonal nature of the business due to
weather-related factors; (4) significant fluctuations in the price of
building materials; (5) demographic changes; and (6) changes in consumer
confidence and preferences.

     As described above, the Company holds real estate properties for
development.  This activity is expected to be the Company's primary focus for
the future.  The current and anticipated projects for land presently held are
for multi-family housing and retail/office properties.  The Company will seek
to find niche property sites, initially in the greater Denver area, that
offer an opportunity to upgrade value through demolition, remediation, and
construction.

     The Company's administrative functions are centralized in order to
control overhead costs and permit the direct engagement of key management
with local municipal authorities in project development.  Further, the
Company will attempt to minimize its fixed costs by contracting extensively
with third parties, such as architects, engineers, and contractors to design
and build.  The Company intends to continue using third-party realtors for
home sales.

     The pace of the Company's activity in the property development area will
be subject to a number of variables, many of which are outside its control.
These include market demand for the structures erected on the sites, interest
rates, and weather conditions, among others.  In addition, the Company has
limited financial resources, and there can be no assurance that external
financing will be available on terms acceptable to the Company.

Government Regulation

     In connection with its Brownfields remediation activity, the Company is
regulated by a myriad of federal, state, and local environmental and
transportation regulatory agencies, including but not limited to the EPA,
which regulates the generation and disposal of hazardous waste; the U.S.
Department of Labor, which sets safety and training standards for workers;

                                       4


the U.S. Department of Transportation, which regulates transportation of
hazardous materials and hazardous waste; and similar state and local
agencies.  Additionally, in the normal course of property development, the
Company is subject to local codes governing construction activity.

Potential Liability and Insurance

     In the construction of housing units, the Company requires the general
contractor to provide general liability and builders risk coverage.  However,
in providing environmental remediation services, the Company faces
substantial potential liability for environmental damage, personal injury,
property damage, economic losses, and fines and costs imposed by regulatory
agencies.  The Company's potential environmental liability arises, in part,
from the nature of the hazardous substances requiring remediation at the
development sites.

     Because there are various exclusions and retentions attendant to
insurance policies, not all liabilities that may be incurred by the Company
will necessarily be covered by insurance.  In addition, certain of the
policies are "claims made" policies that only cover claims made during the
term of the policy.  If a policy terminates and retroactive coverage is not
obtained, a claim subsequently made, even a claim based on events or acts
that occurred during the term of the policy, might not be covered by the
policy.

     The market for liability insurance has been severely constrained at
times, due in part to high losses experienced by the insurance industry from
environmental impairment liability claims, including claims associated with
hazardous materials and toxic wastes.  Consequently, the available insurance
coverage for enterprises such as the Company may be reduced, eliminated
entirely, or priced beyond the reach of many companies.  To date, the Company
has been able to obtain the necessary insurance when required.  However,
there can be no assurance that the Company will be able to maintain adequate
liability insurance in the future.

Bonding Requirements

     Commercial remediation projects, as well as federal, state, and
municipal projects, often require contractors to post both performance and
payment bonds at the execution of a contract.  Performance bonds guarantee
that the project will be completed, and payment bonds guarantee that vendors
will be paid for equipment and other purchases.  A bond typically costs
between 1% and 3% of the project costs, and contractors without adequate
bonding may be ineligible to bid or negotiate on many projects.     No pay-
ments have been made on behalf of the Company under a performance or payment
bond.  However, as result of the Company's financial status, it has
experienced difficulty in obtaining bonding.

Employees

     As of February 1, 2008, the Company has one full-time employee who is
the Company's CEO.






                                       5


Item 2.  Description of Property.

     The Company headquarters and administrative facilities are located at
12503 E. Euclid Dr., #30, Centennial, Colorado, in approximately 3,252 square
feet of leased office space at a monthly rental of approximately $3,300.  The
lease expires August 31, 2008.  The Company's corporate and administrative
functions are conducted from these facilities.

Item 3.  Legal Proceedings.

     The Company is not a party to any material legal proceedings which are
pending before any court, administrative agency, or other tribunal.  Further,
the Company is not aware of any material litigation, which is threatened
against it in any court, administrative agency, or other tribunal.
Management believes that no pending litigation in which the Company is named
as a defendant will have a material adverse effect on the Company's financial
position or results of operations.

     Since early 1998, the Company has been the subject of an investigation
by the Office of the Inspector General (OIG) of the Environmental Protection
Agency (EPA). The Company cooperated fully in all OIG inquiries. On April 27,
2007 the Company received notice that the EPA OIG has closed all
investigations involving CET.

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

     No matters were submitted to a vote of the Company's security holders
during the quarter ended December 31, 2007.


                                   PART II

Item 5.  Market for Common Equity and Related Stockholder Matters.

     Principal Market or Markets.  Since July 2007, the Company's Common
Stock has been quoted on the OTC Bulletin Board ("OTCBB") under the symbol
"CETR".  From July 1995 until May 2007 the Company's Common Stock was listed
on the American Stock Exchange. The following table sets forth the high and
low sale prices for the Company's Common Stock as reported on the OTCBB and
AMEX for the periods indicated:

          Quarter Ended             High      Low

          March 31, 2006           $ 0.52    $ 0.30
          June 30, 2006              1.20      0.26
          September 30, 2006         0.89      0.65
          December 31, 2006          0.85      0.30

          March 31, 2007             0.53      0.30
          June 30, 2007              0.46      0.20
          September 30, 2007         0.35      0.15
          December 31, 2007          0.25      0.06

     Approximate Number of Holders of Common Stock.  The number of record
holders of the Company's common stock at January 12, 2008 was 35.  This does
not include approximately 640 shareholders that hold their shares in street
name.

                                      6


     Dividends.  The Board of Directors does not anticipate paying cash
dividends on the Company's Common Stock in the foreseeable future as it
intends to retain future earnings to finance the growth of the business.  The
payment of future cash dividends will depend on such factors as earnings
levels, anticipated capital requirements, the operating and financial
conditions of the Company, and other factors deemed relevant by the Board of
Directors.  The California Corporations Code provides that a corporation may
not pay dividends if the corporation is, or as a result of the distribution
would likely be, unable to meet its liabilities as they mature.

     Sales of Unregistered Securities.  During the quarter ended December 31,
2007, the Company issued 20,000 shares of Common Stock to Ann J. Heckler
which shares were not registered under the Securities Act of 1933, as
amended.  The shares were issued pursuant to the terms of a severance
agreement between Ms. Heckler and the Company.  Ms. Heckler served as an
employee and Secretary of the Company until October 8, 2007.

     In connection with this issuance, the Company relied on the exemption
from registration under the Securities Act of 1933, as amended (the "Act") as
provided in Section 4(2) of the Act. Ms. Heckler was sophisticated as to the
nature of the transaction and was given access to complete information
concerning the Company and was advised of the restricted status of the
securities. Ms. Heckler represented to the Company that she was acquiring the
common stock for investment purposes and not with a view toward distribution.
A customary restrictive legend was placed on the certificate for the common
stock and stop transfer instructions were given to the Company's transfer
agent.

Item 6.  Management's Discussion and Analysis or Plan of Operations.

     This Annual Report on Form 10-KSB contains forward-looking statements
(as such term is defined in the Private Securities Litigation Reform Act of
1995), and information relating to the Company that is based on beliefs of
management of the Company, as well as assumptions made by and information
currently available to management of the Company.  When used in this Report,
the words "estimate," "project," "believe," "could," "anticipate," "intend,"
"expect," and similar expressions are intended to identify forward-looking
statements.  Such statements reflect the current views of the Company with
respect to future events based on currently available information and are
subject to risks and uncertainties that could cause actual results to differ
materially from those contemplated in such forward-looking statements.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof.  The Company does not
undertake any obligation to release publicly any revisions to these forward-
looking statements to reflect events or circumstances after the date hereof
or to reflect the occurrence of unanticipated events.

General

     The Company's primary focus is property development, preferably in
conjunction with municipal authorities and where remediation is a material
consideration in the development activity.  After experiencing sharply
declining revenues as it withdrew from its historic environmental and water
services activities, the Company experienced a turbulent housing market in
2007. Ongoing water-related services continue and accounted for approximately
18% of revenues during the year ended December 31, 2007.  The Company's
headquarters and administrative offices are in Centennial, Colorado.

                                      7


     Our financial statements have been prepared assuming that we will
continue in business as a going-concern. As discussed in our financial
statements and in this section, during the years ended December 31, 2007 and
2006, we have incurred net losses of $1,265,000 which includes a $750,000
impairment charge related to real estate, and $339,000, respectively and at
December 31, 2007, we had notes payable of $471,000 due in June 2010 and a
$1,420,000 construction loan, of which $937,800 had been drawn as of December
31, 2007, due in July 2008.   The report of The Independent Registered Public
Accounting Firm on the Company's financial statements as of and for the year
ended December 31, 2007 includes a "going concern" explanatory paragraph
which means that the accounting firm expressed substantial doubt about the
Company's ability to continue as a going concern. Management's plans with
respect to these matters are described in this section and in our financial
statements, and this material does not include any adjustments that might
result from the outcome of this uncertainty. There is no guarantee that we
will be able to raise funds and there are no guarantees that we will not need
to raise further capital for operations and expansion in the near future.

     On February 16, 2007 the Company entered into a Merger Agreement with
Zoi Interactive Technologies, Inc. and on July 9, 2007 the Company terminated
the agreement as a result of Zoi's inability to make progress on matters
necessary to complete the proposed merger. The Company continues to evaluate
alternatives for its business.

Critical Accounting Policies & Estimates

     The Consolidated Financial Statements and Notes to the Consolidated
Financial Statements contain information that is pertinent to management's
discussion and analysis.  The preparation of 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.  The Company believes the following critical
accounting policies involve additional management judgment due to the
sensitivity of the methods, assumptions, and estimates necessary in
determining the related asset and liability amounts.

     The Company's real estate inventories are stated at the lower of cost or
fair value.  Fair value is based on estimated sales price less cost to sell.
Estimated sales price is based on appraisals, offers or management estimate.

     The Company's recorded net deferred tax assets are limited by the
underlying tax benefits that it expects to ultimately realize.  An adjustment
to income could be required if the Company were to determine that it could
realize tax benefits in amounts greater or less than the amounts previously
recorded.

     In the preparation of financial statements, the Company makes judgments
regarding the future outcome of contingent events and records loss
contingency amounts that are probable and reasonably estimated based on
available information. The amounts recorded may differ from the actual
amounts that occur when the uncertainty is resolved. The estimates that the
Company makes in accounting for contingencies and the gains and losses that
are recorded upon the ultimate resolution of these uncertainties may have a
significant effect on the liabilities and expenses in the financial
statements.


                                      8


Revenue Recognition - Real Estate

     In accordance with SFAS No. 66, revenue from the sale of real estate
inventories is recognized when a sufficient down payment has been received;
financing has been arranged; title, possession and other attributes of
ownership have been transferred to the buyer; and the Company is not
obligated to perform significant additional activities after sale and
delivery.  Capitalized costs are charged to direct costs upon closing.
Consideration received by the Company for real estate sales is cash.

     During development, all direct costs and those indirect costs related to
acquisition and development are capitalized.  Costs are allocated to various
units utilizing management's best estimate.  Because of the inherent
uncertainties in the estimating process, it is at least reasonably possible
that the estimates used will change in the near term.  Provisions for
estimated losses are recorded in the period in which such losses are
determined.  Changes in job performance, job conditions and estimated
profitability may result in revisions to costs and income and are recognized
in the period in which the revenues are determined; such revisions may be
material.

Results of Operations

     The following table presents, for the periods indicated, the percentage
relationship which certain items of the Company's statements of income bear
to revenue and the percentage increase or (decrease) in the dollar amount of
such items:


                                       Percentage
                                    Relationship to      Period to
                                    Project Revenue       Period
                                      Year Ended          Change
                                   ------------------    ---------
                                                         2007 vs.
                                     2007       2006       2006
                                   -------    -------    ---------
Revenue                             100.0%     100.0%      (29.5)%
Costs:
 Direct                            (134.1)      91.3         3.6

Gross (loss) profit                 (34.1)       8.7      (375.0)

Operating expenses                   33.5       21.6         9.5
                                   -------    -------    --------
Operating loss                      (67.6)     (12.9)     (271.4)
Other income                          7.5        1.5       259.7
                                   -------    -------    --------
Net loss                            (60.1%)    (11.4%)    (272.9)%
                                   -------    -------    --------

2007 Compared to 2006

     Revenue.  Revenues were $2,102,670 in 2007, down from $2,980,970 in
2006.  The decrease reflects fewer sales of residential housing units at the
Company's development project in Westminster, Colorado.  Ongoing water
services activity accounted for 18% of total revenue.

                                      9


     Cost of Revenue.  Cost of revenue for 2007 was $2,819,475, up from
$2,720,312 in the prior year.  The increase reflects the $750,000 impairment
loss related to certain real estate properties.

     Operating Expenses.  Selling General and Administrative costs were
$704,559 in 2007, as compared to $643,350 in 2006.  The increase reflects the
additional cost of $ 92,325 for the severance agreements with members of
management.

     Other Income (Expense).  Other income for 2007 was $156,804 which arose
primarily from a gain from the recovery of bad debt of $147,125 previously
written off in 2001. Other income for 2006 was $43,596, arising primarily
from a gain on the elimination of payables of $43,936 incurred in 2000.

     Net Loss.  In 2007 a net loss of $1,264,560 was incurred as compared to
a net loss of $339,096 in 2006.  The increase is primarily the result of a
750,000 impairment loss related to certain real estate properties.

Liquidity and Capital Resources

     The Company's sources of liquidity and capital resources historically
have been net cash provided by operating activities, funds available under
its financing arrangements, and proceeds from offerings of equity securities.
In the past, these sources have been sufficient to meet its needs and finance
the Company's business.  The Company can give no assurance that the
historical sources of liquidity and capital resources will be available for
future development and acquisitions, and it may be required to seek
alternative financing sources not necessarily favorable to the Company.

     The Company is in the process of completing its Westminster
redevelopment project and is selling its other real estate properties. The
Company is investigating potential future business operations. Currently the
Company is not looking to acquire other real estate investments or develop
additional properties.

     In connection with the Westminster redevelopment project discussed in
Item 1. Business, the Company has obtained a construction loan (see Note D -
Construction Loan) to finance the construction of a retail/office building.
The Company has a contract to sell the building. The Company has deposited
$85,000 with the City of Westminster in lieu of a private improvement bond
for this project. The $85,000 is expected to be refunded when the Company
completes the construction of the retail/office building in Westminster,
Colorado.

     In June 2006, the Company borrowed $694,000 (of which $451,000 was
drawn) from a local lender (see Note E - Notes Payable to the Consolidated
Financial Statements) to complete the purchase of a retail/office building
and the purchase and sale of an industrial building. This note was paid in
full on April 10, 2007, upon the sale of the property.

     In March 2004, the Company purchased a residential property site in
Westminster, Colorado, for $258,000 and financed the purchase with a $161,000
loan from a local lender (see Note E- Notes Payable to the Consolidated
Financial Statements). The note was repaid in full on January 9, 2007. The
Company intends to incorporate this parcel into a future redevelopment
project.  If the Company is unsuccessful in negotiating a redevelopment plan
with the City of Westminster, then the Company has the option to sell this
property to the City of Westminster.

                                      10

     With respect to the Aurora project, the Company has completed major
remediation at the site aided by a Brownfields Cleanup Revolving Loan Fund
Agreement in the amount of $471,495 (see Note E- Notes Payable to the
Consolidated Financial Statements).  The Company has approval to construct 54
residential townhomes. The Company has this property listed for sale with a
local real estate broker.

     Capital Commitments.  In January 2005, the Company entered into an
operating agreement with a newly formed entity, Arizona Avenue, LLC, a
Colorado limited liability corporation in which the Company is a 50% owner.
The Company has been engaged by the LLC to manage the development of a five-
acre site in Aurora, Colorado.  There were no management fees in connection
therewith during the years ended December 31, 2007 and 2006.  As of December
31, 2007, the Company has contributed $297,110 of its required $465,000
contribution. The Company has approval to construct 54 residential townhomes.
The Company's remaining contribution, expected to be funded from current
operations, is to be paid prior to Arizona Avenue, LLC's application for a
construction loan to build 54 town homes on land contributed by the other 50%
owner.  Profits and losses, which are generally to be allocated 50% to the
Company and 50% to the other owner, were not material for the year-ended
December 31, 2007. The Company currently has this property listed for sale
with a local real estate broker.

     The Company headquarters and administrative facilities are located at
12503 E. Euclid Dr., #30, Centennial, Colorado, in approximately 3,252 square
feet of leased office space at a monthly rental of approximately $3,300.  The
lease expires August 31, 2008.  The Company's corporate and administrative
functions are conducted from these facilities.

     Contractual Obligations at December 31, 2007:

                                 Payments Due By Period
                          --------------------------------------
     Contractual                          Less Than
     Obligations            Total          1 Year      1-3 Years
     -----------          ----------      --------     ---------
     Construction Loan    $  937,810      $937,810         -
     Notes Payable        $  471,495          -        $471,495
     Operating Leases     $   26,400      $ 26,400         -
                          ----------      --------     --------
     Total                $1,435,705      $964,210     $471,495
                          ==========      ========     ========

     Off-Balance Sheet Transactions.  The Company has no off-balance sheet
transactions.

     Common Stock Dividend Policy.  Since the capitalization of the Company
in 1995, the Company has not paid, and does not currently intend to pay in
the foreseeable future, cash dividends on its Common Stock.  Future earnings,
if any, are expected to be retained for the development of the business of
the Company.

	Recent Accounting Pronouncements. The Company has evaluated all recent
accounting pronouncements and believes such pronouncements do not have a
material effect on the Company's financial statements.

Item 7.  Financial Statements.

     See pages F-1 through F-17.


                                      11


Item 8.  Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.

     None.

Item 8A(T).  Controls and Procedures.

Disclosure Controls and Procedures

     As of December 31, 2007, under the supervision and with the
participation of the Company's Chief Executive Officer and the Chief
Financial Officer, management has evaluated the effectiveness of the design
and operation of the Company's disclosure controls and procedures. Based on
that evaluation, the Chief Executive Officer and the Chief Financial Officer
have concluded that the Company's disclosure controls and procedures were
effective as of December 31, 2007.

Changes in Internal Control over Financial Reporting

     There were no changes in internal control over financial reporting that
occurred during the last fiscal quarter covered by this report that have
materially affected, or are reasonably likely to affect, the Company's
internal control over financial reporting.

Management's Report on Internal Control over Financial Reporting

     Our management is responsible for establishing and maintaining adequate
internal control over financial reporting, as such term is defined in the
Securities Exchange Act of 1934 Rule 13a-15(f). Our Chief Executive Officer
and Chief Financial Officer conducted an evaluation of the effectiveness of
our internal control over financial reporting based on the framework in
Internal Control - Integrated Framework, issued by the Committee of
Sponsoring Organizations of the Treadway Commission ("COSO Framework").

     Based on this evaluation, management has concluded that our internal
control over financial reporting was not effective as of December 31, 2007.
Our principal Chief Executive Officer and Chief Financial Officer concluded
we have a material weakness due to lack of segregation of duties. Our size
has prevented us from being able to employ sufficient resources to enable us
to have an adequate level of supervision and segregation of duties within our
internal control system. There is one person involved in processing of
transactions. Therefore, it is difficult to effectively segregate accounting
duties. While we strive to segregate duties as much as practicable, there is
an insufficient volume of transactions to justify additional full time staff.
As a result of this material weakness we have implemented remediation
procedures whereby in December 2007 we engaged an outside accounting and
consulting firm to review and assist us with our SEC filings. We believe that
this outside consultant's review improved our disclosure controls and
procedures. If this review is effective throughout a period of time, we
believe it will help remediate the segregation of duties material weakness.
However, we may not be able to fully remediate the material weakness unless
we hire more staff.  We will continue to monitor and assess the costs and
benefits of additional staffing.



                                    12


     This annual report does not include an attestation report of the
Company's independent registered public accounting firm regarding internal
control over financial reporting. Management's report was not subject to
attestation by the Company's independent registered public accounting firm
pursuant to temporary rules of the SEC that permit the company to provide
only management's report on internal control in this annual report.

Item 8B.  Other Information.

     None.

                                  PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.

     The following table sets forth the name and age of each Director and
Executive Officer of the Company, indicating all positions and offices with
the Company presently held:

       Name           Age       Positions and Offices Held
----------------      ---       ---------------------------

Craig C. Barto        50        Director

Steven H. Davis       54        Chief Executive Officer, President,
                                and Director

John D. Hendrick      64        Director

Dale W. Bleck         57        Chief Financial Officer

     There is no family relationship between any Director or Executive
Officer of the Company.

     The Company has an Audit Committee and a Compensation and Nominating
Committee

     The Audit Committee presently consists of Craig C. Barto and John D.
Hendrick, each of whom is independent under the standards of the American
Stock Exchange currently in effect for the Company.  The Audit Committee
reviews financial statements and other data prior to release to the public.
In addition, the Committee meets with the Company's independent registered
public accounting firm in connection with the Company's audit.  During 2006,
the Audit Committee met three (3) times and during 2007, the Audit Committee
met one time. As a result of the resignation of George Pratt as a director of
the Company in May 2007, the Company does not currently have an audit
committee financial expert.  In addition, since the Company is not currently
listed on an exchange, it is not required to have an audit committee
financial expert.  Due to the Company's limited operations at this time, the
Board of Directors believes that the lack of such an expert on the audit
committee does not adversely affect the ability of the Audit Committee to
carry out its responsibilities.




                                       13


     The Compensation and Nominating Committee presently consists of Craig C.
Barto and John D. Hendrick.  The Compensation and Nominating Committee
reviews compensation matters relating to the Executive Officers of the
Company and makes recommendations to the Board of Directors.  This Committee
is also responsible for identifying and reviewing the qualifications of
potential nominees for election to the Board of Directors.  The Compensation
and Nominating Committee met three (3) times during 2006 and one time during
2007.

     Set forth below are the names of all directors, nominees for director,
and executive officers of the Company, all positions and offices with the
Company held by each such person, the period during which he has served as
such, and the principal occupations and employment of such persons during at
least the last five years:

     Craig C. Barto has been a Director of the Company since 1991. He is also
the President and Chairman of the Board of Directors of Signal Hill
Petroleum, Inc., Barto/Signal Petroleum, Inc., Signal Hill Operating, Inc.,
and Signal Oil and Refining, Inc., which operate businesses such as Paramount
and Fletcher oil refineries.  A graduate of UCLA with a degree in Economics
in 1979, Mr. Barto was instrumental in the growth of the Signal Hill
Petroleum companies in the oil business with the reclamation of a marginal
operation in the West Newport Oil Field in Orange County, California.  In
addition to the oil and gas operations, Mr. Barto is also responsible for the
commercial and residential development of over 100 acres of some of the last
undeveloped hilltop property in Southern California.

     Steven H. Davis has served as the Company's Chief Executive Officer,
President, and a Director since 1991.  Prior to that time he was operating
partner of Lincoln Property Company which developed over 3 million square
feet of buildings in California, Nevada, and Colorado.  He has almost 20
years of experience in construction, financing, and developing industrial
real estate.  Mr. Davis graduated from Brown University with an emphasis in
Economics in 1975 and obtained an MBA from the University of Southern
California in 1977.  As President, Mr. Davis manages the Company's business
affairs and has been instrumental in securing financing, negotiating bonding
agreements, projecting and analyzing the feasibility of expansion, mergers
and acquisitions, and formulating business relationships with customers,
financial entities, and the legal community.

     John D. Hendrick has been a Director of the Company since November 2000.
Since March 2000, Mr. Hendrick has been General Manager of the Centennial
Water & Sanitation District in Highlands Ranch, Colorado.  From 1996 to 2000,
he was owner of Hendrick Engineering, which provided consulting services for
water resources and water supply matters.  Mr. Hendrick has over thirty years
experience in the water industry in various capacities including hydrologist,
engineer, manager, and consultant.  Mr. Hendrick received a Bachelor's Degree
in Agricultural Engineering from Cornell University in 1965, a Master's
Degree in Agricultural Engineering from the University of Illinois in 1967,
and a Ph.D in Hydrology and Water Resources from Colorado State University in
1972.

     Dale W. Bleck has been Chief Financial Officer since September 1999, and
he was been employed by the Company from March 1999 until January 2008.  Mr.
Bleck intends to continue to serve as the Company's Chief Financial Officer
on a part-time basis until March 2008. Since January 28, 2008, Mr. Bleck has

                                       14



been employed as Chief Financial Officer of BioMedical Technology Solutions,
Inc., a privately-held company based in Englewood, Colorado engaged in
providing biomedical waste systems to health care providers. From May 1998 to
March 1999, he was Chief Financial Officer of Spartan Steel Products, Inc., a
distributor of steel products in Evergreen, Colorado.  From January 1987 to
May 1998, he was Controller (until April 1991) and then Corporate Analyst for
Western Dairymen Cooperative, Inc., a dairy cooperative in Thornton,
Colorado. Mr. Bleck received a B.S. Degree in Accounting from Illinois State
University in 1972 and a M.B.A. Degree from Colorado State University in
1998.

     The Company's executive officers hold office until the next annual
meeting of directors of the Company.  There are no known arrangements or
understandings between any director or executive officer and any other person
pursuant to which any of the above-named executive officers or directors was
selected as an officer or director of the Company.

Section 16(a) Beneficial Reporting Compliance

     Based solely on a review of Forms 3 and 4 and amendments thereto
furnished to the Company during its most recent fiscal year, and Forms 5 and
amendments thereto furnished to the Company with respect to its most recent
fiscal year and certain written representations, no persons who were officers
and directors or beneficial owner of 10% or more of the stock of the Company
failed to file on a timely basis reports required by Section 16(a) of the
Exchange Act during the most recent fiscal year.

Code of Ethics

     The Board of Directors has adopted a Code of Ethics which applies to all
of the Company's executive officers, directors and employees.  A copy of the
Code of Ethics is available by writing to the Corporate Secretary, CET
Services, Inc., 12503 E. Euclid Dr. #30, Centennial, Colorado 80111.

Item 10. Executive Compensation.

     The following table sets forth information concerning the compensation
received for services rendered in all capacities to the Company for the year
ended December 31, 2007 by the Company's President and each other executive
officer whose compensation exceeded $100,000 during such years.


















                                       15





                                     SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
_________________________________________________________________________________________________
                                                                    Change in
                                                                    Pension
                                                                    Value and
                                                                    and Non-
                                                                    qualified
                                                        Non-Equity  Deferred    All
                                                        Incentive   Com-        Other
Name and                                Stock   Option  Plan        sation      Compen-
Principal              Salary    Bonus  Awards  Awards  Compen-     Earnings    sation   Total
Position         Year   ($)       ($)    ($)     ($)     sation ($)    ($)       ($)      ($)
---------------  ----  --------  -----  ------  ------  ----------  ----------  ------ --------
<S>              <C>   <C>        <C>    <C>     <C>       <C>         <C>       <C>      <C>
Steven H. Davis  2007  $125,008    0      0       0        0            0      $3,029  $128,037
  - CEO                                                                          (1)
                 2006  $125,008    0      0       0        0            0      $3,707  $128,715
                                                                                 (1)
Dale W. Bleck    2007   $97,747    0      0       0        0            0      $2,831  $100,578
  - CFO                                                                          (1)
                 2006  $100,000    0      0       0        0            0      $2,856  $102,856
                                                                                 (1)
Ann J. Heckler
- Secretary (2)  2007  $ 55,648    0    $2,999    0        0            0      $48,829 $107,476
                                                                                 (3)
________________________________________________________________________________________________

(1)  Includes Simple IRA contributions by the Company.

(2)  Ms. Heckler resigned as Secretary effective October 8, 2007.

(3)  Includes $1,669 for Simple IRA contributions; $12,711 as payment for accrued vacation time;
and $34,449 paid pursuant to a severance agreement.
</TABLE>



     The Company has no formal employment agreements with any of its
Executive Officers.  Each of the executive officers is employed "at will."
Steven H. Davis is currently paid a salary of $125,000 per year and Dale W.
Bleck was paid $100,000 per year until January 28, 2008, when he ceased being
a full time employee of the Company.

     On September 24, 2007, the Company entered into a severance agreement
with Dale W. Bleck, Chief Financial Officer of the Company, and Ann J.
Heckler, who was then Secretary of the Company.  The Severance Agreements
provide that if the Company terminates either of these person's employment
with the Company or its affiliates, without cause or if either of them
resigns from their employment, they will receive a severance payment equal to
one-half of their annual salary at the time of termination. These persons,
and their dependents, will also receive a continuation of medical, dental,
vision and similar benefits for a period of six months after termination of
their employment at the Company's expense.

     In addition to the above, upon a termination of employment without cause
or by their resignation, each of these persons would be eligible to receive a
grant of common stock equal to the number of options they each currently

                                    16


hold, without any further cost to them.  Mr. Bleck currently holds options to
purchase 32,500 shares of the Company's common stock and Ms. Heckler held
options to purchase 20,000 shares.

     Each of Mr. Bleck and Ms. Heckler have agreed that after the date of
termination of employment they would provide, as requested by the Company, up
to one hundred eighty (180) hours of service to the Company during the twelve
(12) month period commencing on the date of termination.

     On October 8, 2007 Ms. Heckler's employment was terminated without
cause, and she received 20,000 shares of the Company's Common Stock; $12,711
as payment for accrued vacation time; and $34,449, which was the equivalent
of six months' salary.

Compensation of Directors

     Members of the Board of Directors receive a fee of $1,000 per Board
meeting attended, including telephone meetings.  They are also entitled to
reimbursement of reasonable travel expenses incurred by them in attending
board or committee meetings.

     On September 17, 2003, the Board of Directors granted Craig Barto and
George Pratt, who were then non-employee Directors of the Company, options to
purchase 10,000 shares of common stock at $.32 per share.  These options were
not granted under any plan.  The options are exercisable until September 17,
2008, except that they will expire three months after the termination of
serving as a Director of the Company, for reasons other than death, and one
year after termination as a result of death. The options held by George Pratt
expired three months after his resignation on May 9, 2007.

     On September 24, 2007, the Board of Directors granted John Hendrick, a
non-employee Director of the Company, options to purchase 10,000 shares of
common stock at $.25 per share.  These options were not granted under any
plan.  The options are exercisable until September 17, 2008, except that they
will expire three months after the termination of serving as a Director of
the Company, for reasons other than death, and one year after termination as
a result of death.

                        DIRECTOR COMPENSATION FOR 2007


<TABLE>
<CAPTION>
_________________________________________________________________________________________________
                                                            Change
                                                            in Pension
                                                            Value and
                                                            and Non-
                                                            qualified
                                              Non-Equity    Deferred
                Fees                          Incentive     Compen
                Earned or   Stock    Option   Plan          sation        All Other
                Paid in     Awards   Awards   Compen-       Earnings      Compensation   Total
    Name        Cash ($)    ($)      ($)      sation($)     ($)               ($)          ($)
-------------   ---------   ------   ------   -----------   -----------   ------------   --------
<S>              <C>         <C>      <C>        <C>           <C>            <C>          <C>
Craig Barto      $3,000       0        0          0             0              0         $3,000
George Pratt(1)  $1,000       0        0          0             0              0         $1,000
John Hendrick    $3,000       0     $2,500        0             0              0         $5,500
__________________________________________________________________________________________________

(1)  Mr. Pratt resigned as a Director on May 9, 2007.
</TABLE>



                                       17

Simple IRA Plan

     On April 1, 2004, the Company established a Simple IRA plan for its
employees under which they may defer a portion of their salaries up to
allowable limits.  The Company will match such deferrals on a dollar-for-
dollar basis not to exceed 3% of an employee's compensation or applicable
limits.

Stock Option Plans

     On March 1, 1995, the Company adopted an Incentive Stock Option Plan
(the "Plan") for key personnel.  A total of 550,000 shares of common stock
were reserved for issuance pursuant to the exercise of stock options under
the Plan.  The Plan expired on March 1, 2005, but options granted prior to
the expiration of the Plan will continue in accordance with their terms. In
August 1996, the Company filed a registration statement on Form S-8 to
register the shares of the Company's common stock reserved for issuance under
the Plan.

     As of December 31, 2006, options for 52,500 shares were outstanding at
prices ranging from $0.25 to $1.31 per share under the Plan.

               OUTSTANDING EQUITY AWARDS AT 2007 FISCAL YEAR-END


<TABLE>
<CAPTION>
_______________________________________________________________________________________________________________

                                                                                                       Equity
                                                                                                       Incentive
                                                                                             Equitu    Plan
                                                                                             Incen-    Awards:
                                                                                             tive      Market
                                                                                             Plan      or
                                                                                             Awards:   Payout
                                                                                             Number    Value of
                                         Equity                                    Market    of        Unearned
                                         Incentive                       Number    Value     Unearned  Shares,
                                         Plan                            of        of        Shares,   Units or
                             Number of   Awards:                         Shares    Shares    Units or  Other
                 Number of   Securities  Number of                       or Units  or Units  Other     Rights
                 Securities  Underlying  Securities                      of Stock  of Stock  Rights    That
                 Underlying  Unexercised Underlying  Option              That      That      That      Have
                 Unexercised Options (#) Unexercised Exercise Option     Have Not  Have Not  Have Not  Not
                 Options (#) Unexer-     Unearned    Price    Expiration Vested    Vested    Vested    Vested
     Name        Exercisable cisable     Options (#) ($)      Date       (#)       ($)       (#)       ($)
---------------  ----------- ----------- ----------- -------- ---------- --------- --------- --------  ---------
<S>                 <C>         <C>         <C>       <C>       <C>         <C>      <C>       <C>       <C>
Steven H. Davis       O          0           0         0         0           0        0         0         0
- CEO
Dale W. Bleck      7,500         0           0       $1.31    6/8/2009       0        0         0         0
- CFO             25,000         0           0       $0.4375  12/1/2010      0        0         0         0
_______________________________________________________________________________________________________________
</TABLE>












                                      18


                    EQUITY COMPENSATION PLAN INFORMATION

     The following table provides information as of December 31, 2007, with
respect to shares of the Company's common stock that may be issued under
equity compensation plans:
____________________________________________________________________________
                                                              Number of
                                                              securities
                                                              remaining
                          Number of                           available
                          securities         Weighted-        for future
                          to be issued       average          issuance under
                          upon exer-         exercise         equity compen-
                          cise of out-       price of         sation plans
                          standing           outstanding      (excluding
                          options,           options,         securities
                          warrants           warrants         reflected in
                          and rights         and rights       column (a))
Plan category             (a)                (b)              (c)
____________________________________________________________________________

Equity compensation         32,500             $ .64               0
plans approved by
security holders

Equity compensation         20,000             $ .29               0
plans not approved          ------             -----              ---
by security holders

Total                       52,500             $ .50               0
_____________________________________________________________________________


Item 11. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters.

     The following table sets forth the number and percentage of shares of
the Company's no par value common stock owned beneficially, as of February
16, 2008, by any person, who is known to the Company to be the beneficial
owner of 5% or more of such common stock, and, in addition, by each Director,
Nominee for Director, and Executive Officer of the Company, and by all
Directors, Nominees for Director, and Executive Officers of the Company as a
group.  Information as to beneficial ownership is based upon statements
furnished to the Company by such persons.

   Name and Address             Amount and Nature of        Percent
  of Beneficial Owners          Beneficial Ownership        of Class
-----------------------         --------------------        --------

Craig C. Barto                        713,554 (1)             12.8%
2901 Orange Ave.
Long Beach, CA 90807

Steven H. Davis                     1,185,907 (2)             21.3%
12503 E. Euclid Dr. # 30
Centennial, CO  80111



                                      19




John D. Hendrick                       11,100 (3)               .2%
62 W. Plaza Drive,
Highlands Ranch, CO 80126

Dale W. Bleck                          32,500 (4)              0.6%
12503 E. Euclid Dr. # 30
Centennial, CO  80111

All directors, nominees for         1,943,061                 34.8%
director, and executive officers
as a group (4 persons)

Ross C. Gordon                        367,000                  6.6%
234 Michelle Lane
Alamo, CA  94507
__________________

(1) Includes 703,554 shares held directly and 10,000 shares underlying stock
options exercisable within 60 days held by Mr. Barto.

(2) Includes 1,185,907 shares held directly.

(3) Includes 1,100 shares held directly and 10,000 shares underlying stock
options exercisable within 60 days held by Mr. Hendrick.

(4) Represents shares underlying stock options exercisable within 60 days
held by Mr. Bleck.

Item 12. Certain Relationships and Related Transactions.

     The Company sells water it acquires under a water lease to the
Centennial Water & Sanitation District.  John D. Hendrick, who became a
Director of the Company in November 2000, is the General Manager of the
Centennial Water & Sanitation District.  The Centennial Water & Sanitation
District makes payments to an escrow agent who distributes the funds
primarily to the lessor and the remainder to the Company.  During 2007, 2006
and 2005, the Company invoiced the Centennial Water & Sanitation District
$377,594, $320,750 and $344,894, respectively, under this arrangement.

     This transaction was approved by the Board of Directors and was made on
terms as fair and reasonable to the Company as those that could be obtained
from non affiliated third parties.  Any future transactions between the
Company and its officers, directors, employees and affiliates that are
outside the scope of the Company's employment relationship with such persons
will be subject to the approval of a majority of the disinterested members of
the Board of Directors based upon a determination that the terms are at least
as favorable to the Company as those that could be obtained from unrelated
parties.










                                        20




Item 13.  Exhibits.

     The following exhibits are filed herewith:

Exhibit
Number     Description                          Location
-------    -----------------------------        ---------
3.1        Amended and Restated Articles of     Incorporated by reference to
           Incorporation                        Exhibit 3.1 to the Company's
                                                Form SB-2 Registration
                                                Statement No. 33-91602

3.2        Bylaws                               Incorporated by reference to
                                                Exhibit 3.2 to the Company's
                                                Form SB-2 Registration
                                                Statement No. 33-91602

3.3        Certificate of Amendment of          Incorporated by reference to
           Articles of Incorporation            Exhibit 3.3 to the Company's
                                                Annual Report on Form 10-K
                                                for the year ended December
                                                31, 2003.

10.1       Incentive Stock Option Plan          Incorporated by reference to
                                                Exhibit 10.1 to the Company's
                                                Form SB-2 Registration
                                                Statement No. 33-91602

10.2       Form of Incentive Stock Option       Incorporated by reference to
           Agreement                            Exhibit 10.2 to the Company's
                                                Form SB-2 Registration
                                                Statement No. 33-91602

10.5       Development Agreement with           Incorporated by reference to
           the City of Westminster, CO.         Exhibit 10.9 to the Company's
                                                Annual Report on Form 10-K
                                                for the year ended December
                                                31, 2002.

10.6       Severance Agreement with             Incorporated by reference to
           Dale W. Bleck                        Exhibit 10.1 to the Company's
                                                Report on Form 8-K filed on
                                                September 25, 2007.

10.7       Severance Agreement with             Incorporated by reference to
           Ann J. Heckler                       Exhibit 10.2 to the Company's
                                                Report on Form 8-K filed on
                                                September 25, 2007.

21         Subsidiaries of the Registrant       Filed herewith electronically

23.1       Consent of GHP Horwath, P.C.         Filed herewith electronically

31.1       Certification of Chief Executive     Filed herewith electronically
           Officer Pursuant to Section 302
           of the Sarbanes-Oxley Act of 2002



                                       21




31.2       Certification of Chief Financial     Filed herewith electronically
           Officer Pursuant to Section 302
           of the Sarbanes-Oxley Act of 2002

32.1       Certification of Chief Executive     Filed herewith electronically
           Officer Pursuant to 18 U.S.C.
           Section 1350

32.2       Certification of Chief Financial     Filed herewith electronically
           Officer Pursuant to 18 U.S.C.
           Section 1350

Item 14.  Principal Accountant Fees and Service.

     The following table presents aggregate fees for professional services
rendered by GHP Horwath, P.C. for the years ended December 31, 2007 and 2006;
for the audit of the Company's annual financial statements and fees billed
for other services rendered by GHP Horwath, P.C. during those periods:

                                        2007             2006

            Audit Fees (1)            $60,365          $46,133
            Audit Related Fees           -                -
            Tax Fees (2)                7,385            5,000
            All Other Fees               -                -
                                      -------          -------
               Total                  $67,750          $51,133

(1) These are fees for professional services for the audits of the Company's
annual financial statements and review of financial statements included in
the Company's 10-QSB filings, and services that are normally provided in
connection with statutory and regulatory filings or engagements.

(2) These are fees for the preparation of the Company's federal and state tax
returns.

                     Audit Committee Pre-approval Policy

     The Company's independent registered public accounting firm may not be
engaged to provide non-audit services that are prohibited by law or
regulation to be provided by it, nor may the Company's independent registered
public accounting firm be engaged to provide any other non-audit service
unless it is determined that the engagement of the independent registered
public accounting firm  provides a business benefit resulting from its
inherent knowledge of the Company while not impairing its independence.  The
Audit Committee must pre-approve the engagement of the Company's independent
registered public accounting firm to provide permissible non-audit services.
All non-audit services provided by the independent registered public
accounting firm in 2006 and 2007 were pre-approved by the Audit Committee.







                                     22




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Board of Directors and Stockholders
CET Services, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheet of CET Services,
Inc. and subsidiaries as of December 31, 2007, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of
the two years in the period ended December 31, 2007. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of CET
Services, Inc. and subsidiaries as of December 31, 2007, and the results of
their operations and their cash flows for each of the two years in the period
ended December 31, 2007, in conformity with accounting principles generally
accepted in the United States of America.

The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern.  As discussed in
Note A to the consolidated financial statements, the Company incurred net
losses of $1,265,000 and $339,000 during the years ended December 31, 2007
and 2006, respectively, and at December 31, 2007 has a construction loan of
$938,000 payable in July 2008. These factors raise substantial doubt about
the Company's ability to continue as a going concern.  Management's plans in
regard to these matters are also described in Note A.  The consolidated
financial statements do not include any adjustments that might result from
the outcome of this uncertainty.

GHP HORWATH, P.C.

/s/ GHP HORWATH, P.C.


Denver, Colorado
March 27, 2008


                                     F-1


                                CET SERVICES, INC.

                            CONSOLIDATED BALANCE SHEET

                                                               December 31,
                                                                   2007
                                                               ------------
ASSETS
  Cash                                                         $   229,179
  Accounts receivable                                               83,428
  Real estate inventories                                        3,269,230
  Prepaid expenses                                                  17,392
  Equipment and improvements - net                                    -
  Deposits                                                          88,114
  Investment in LLC                                                297,110
                                                               -----------
TOTAL ASSETS                                                   $ 3,984,453
                                                               ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
  Accounts payable                                             $    84,709
  Accrued expenses                                                  83,427
  Retainage payable                                                 65,895
  Accrued construction expense                                     235,591
  Construction loan                                                937,810
  Notes payable                                                    471,495
                                                               -----------
TOTAL LIABILITIES                                                1,878,927
                                                               -----------
COMMITMENTS AND CONTINGENCIES                                         -

STOCKHOLDERS' EQUITY:
  Preferred stock (no par value) - authorized 5,000,000
   shares, no shares issued and outstanding
  Common stock (no par value) - authorized 20,000,000
   shares; 5,574,489 shares issued and outstanding               8,331,007
  Paid-in capital                                                  107,785
  Accumulated deficit                                           (6,333,266)
                                                               -----------
     Total stockholders' equity                                  2,105,526
                                                               -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                     $ 3,984,453
                                                               ===========










The accompanying notes are an integral part of this statement.

                                      F-2



                              CET SERVICES, INC.

                    CONSOLIDATED STATEMENTS OF OPERATIONS

                                                  Years Ended December 31,
                                                   2007             2006
                                                -----------      -----------

REVENUE                                         $ 2,102,670      $ 2,980,970

COST OF REVENUE:
  Direct                                          2,069,475        2,720,312
  Impairment costs                                  750,000             -
                                                -----------      -----------
     Gross (loss) profit                           (716,805)         260,658
                                                -----------      -----------

OPERATING EXPENSES:
  Selling, general and administrative expenses      704,559          643,350
                                                -----------      -----------
     Operating loss                              (1,421,364)        (382,692)
                                                -----------      -----------
OTHER INCOME (EXPENSE):
  Interest income                                    18,341           13,789
  Interest expense                                   (9,430)         (15,065)
  Gain on elimination of payables                      -              43,936
  Other income (expense), net                       147,893              936
                                                -----------      -----------
                                                    156,804           43,596
                                                -----------      -----------
NET LOSS                                        $(1,264,560)     $  (339,096)
                                                ===========      ===========

Basic and diluted loss per common share         $     (0.23)     $     (0.06)
                                                ===========      ===========
Weighted average number of common shares,
 basic and diluted                                5,559,914        5,554,489
                                                ===========      ===========













The accompanying notes are an integral part of these statements.

                                     F-3




                               CET SERVICES, INC.

               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                     Years ended December 31, 2007 and 2006



<TABLE>
<CAPTION>

                                                                                       Total
                                   Common stock         Paid-in     Accumulated    stockholders'
                              Shares        Amount      capital       deficit         equity
                             ---------    ----------    --------    -----------    -------------
<S>                          <C>          <C>           <C>         <C>            <C>
Balance at January 1, 2006   5,554,489    $8,331,007    $104,786    $(4,729,610)    $3,706,183

Net loss for the year                                                  (339,096)      (339,096)
                             ---------    ----------    --------    -----------     ----------
Balance at December 31,
  2006                       5,554,489    $8,331,007    $104,786    $(5,068,706)    $3,367,087

Common stock issued under
  severance agreement           20,000                     2,999                         2,999

Net loss for the year                                                (1,264,560)    (1,264,560)
                             ---------    ----------    --------    -----------     ----------
Balance at December 31,
  2007                       5,574,489    $8,331,007    $107,785    $(6,333,266)    $2,105,526
                             =========    ==========    ========    ===========     ==========

</TABLE>























The accompanying notes are an integral part of these statements.

                                   F-4



                              CET SERVICES, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                 Years Ended December 31,
                                                  2007             2006
                                               -----------      -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss                                      $(1,264,560)     $  (339,096)
 Adjustments to reconcile net loss to net
  cash provided by (used in) operating
  activities:
   Depreciation                                        534            1,432
   Gain (loss) on disposal of equipment              2,500             (425)
   Gain on elimination of payables                    -             (43,936)
   Allowance for impairment of real estate         750,000             -
   Stock issued under severance agreement            2,999             -
   Changes in operating assets and liabilities:
    (Increase) decrease in accounts receivable     (35,795)           22,124
    Increase (decrease) in accrued construction
     expense                                       235,591           (25,207)
    Decrease (increase) in prepaid expenses         14,127            (1,065)
    Increase in deposits                           (85,090)             -
    Decrease in real estate inventories            161,829           835,938
    (Decrease) increase in accounts payable        (24,849)           35,023
    Increase (decrease) in accrued expenses         26,546              (156)
    Increase (decrease) in retainage payable        65,895            (5,356)
                                               -----------      ------------
      Net cash (used in) provided by
       operating activities                       (150,273)          479,276
                                               -----------      ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
 Investment in LLC                                 (16,720)          (17,023)
 Proceeds from sale of equipment                      -                  500
                                               -----------      ------------
      Net cash used in investing activities        (16,720)          (16,523)
                                               -----------      ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Decrease in restricted cash                          -               43,119
 Payments on notes payble                         (938,000)         (543,658)
 Proceeds from notes payable                          -              694,000
 Proceeds from (payments on) on construction
   loan                                            937,810          (652,322)
                                               -----------      ------------
     Net cash used in financing activities            (190)         (458,861)
                                               -----------      ------------
(Decrease) increase in cash                       (167,183)            3,892
                                               -----------      ------------
Cash at beginning of year                          396,362           392,470
                                               -----------      ------------
Cash at end of year                            $   229,179      $    396,362
                                               ===========      ============
                                  (continued)

                                      F-5



                              CET SERVICES, INC.

                     CONSOLIDATED STATEMENT OF CASH FLOWS

                                 (continued)


                                                 Years Ended December 31,
                                                  2007             2006
                                               -----------      -----------
Supplemental disclosures of cash flow
 information:
  Cash paid during the year
   Interest (including $7,705 in 2007 and
    $70,616 in 2006 capitalized to real
    estate inventories)                        $    17,135      $    85,681
                                               ===========      ===========

































The accompanying notes are an integral part of these statements.

                                     F-6



                              CET SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - ORGANIZATION AND DESCRIPTION OF COMPANY, GOING CONCERN AND
MANAGEMENT PLANS

     Organization and description of Company

     CET Services, Inc. ("CET" or the "Company") was incorporated on February
9, 1988 under the laws of the State of California. The Company has one
wholly-owned subsidiary, Community Builders, Inc., a Colorado corporation.

     The Company is focused on property development in urban areas.  Initial
efforts in this area involve residential housing where land remediation tasks
are required. Reflecting highly competitive pricing and the consequent margin
erosion coupled with limited opportunities, the Company's water/wastewater
services business was substantially reduced in 2003.  The remaining activity
in this area will be completed in the normal course of business.

Going concern and management's plans

The consolidated financial statements have been prepared assuming the Company
will continue as a going concern. The Company has incurred net losses of
approximately $1,265,000, which includes a $750,000 impairment loss related
to its real estate, and $339,000 during the years ended December 31, 2007 and
2006, respectively.  At December 31, 2007, the Company has two notes; one of
approximately $471,000 payable in June 2010 and a construction loan of
$1,420,000, of which $938,000 has been drawn, payable in July 2008. These
factors raise substantial doubt about the Company's ability to continue as a
going concern. The accompanying consolidated financial statements do not
include any adjustments relating to the recoverability of assets or the
amounts of liabilities that may result should the Company be unable to
continue as a going concern.  The following paragraph describes management's
plans with regard to these conditions.

In July 2007, the Company secured a $1.42 million construction loan for the
construction of a retail/office building on Site IV of its initial
redevelopment project in the City of Westminster, Colorado. The Company has a
contract to sell the building and anticipates the closing to occur near the
end of May 2008.  at which time the construction loan will be paid.

On February 16, 2007, the Company entered into an Agreement and Plan of
Merger with Zoi Interactive Technologies, Inc. On July 9, 2007 the Company
terminated the agreement and continues to explore alternatives.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

                                   GENERAL

Consolidation

The consolidated financial statements include the accounts of CET Services,
Inc., and its wholly-owned subsidiary.  All significant inter-company
transactions have been eliminated.

                                     F-7


                              CET SERVICES, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Cash

For purposes of the statement of cash flows, the Company considers all highly
liquid cash investments with an original maturity of three months or less to
be cash.

Income Taxes

The Company accounts for income taxes in accordance with the Statement of
Financial Accounting Standards ("SFAS") No. 109, Accounting for Income Taxes,
using the asset and liability method.  Under this method, deferred tax assets
and liabilities are recognized for the future tax consequences attributable
to differences between the financial statements carrying amount of existing
assets and liabilities and their tax bases, as well as net operating losses.
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 or liabilities of a change in tax rates is recognized in the
period in which the tax change occurs.  A valuation allowance is provided to
reduce the deferred tax assets to a level, that more likely than not, will be
realized.

Estimated Fair Value Information

SFAS No. 107, Disclosure about Fair Value of Financial Instruments, requires
disclosure of the estimated fair value of an entity's financial instrument
assets and liabilities, as defined, regardless of whether recognized in the
financial statements of the reporting entity.  The fair value information
does not purport to represent the aggregate net fair value of the Company.

The fair values of cash accounts, accounts receivable and accounts and
retainage payable approximate their carrying amounts due to their short-term
maturity.  The carrying value approximates fair value for the construction
loan and for notes payable, as their interest rates are variable market
rates.

Use of Estimates

In preparing financial statements in conformity with accounting principles
generally accepted in the United States of America, management is required to
make estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date
of the financial statements, and the reported amounts of revenue and expenses
during the reporting period.  Actual results could differ from those
estimates.

Concentrations of Credit Risk

The Company's cash balances, which are at times in excess of federally
insured levels, are maintained at a large regional bank, and are continually
monitored to minimize the risk of loss.  The Company grants credit to its
customers, whose balances are continually monitored to minimize the risk of
loss.

                                     F-8


                              CET SERVICES, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Concentrations of Credit Risk (Continued)

The Company's residential housing segment has one primary project which is
expected to provide a significant portion of the Company's revenues and cash
flow in the immediate future.  If any unforeseen circumstance would interrupt
the development and completion of this project, it would have a material
adverse effect on the Company's financial position, results of operations,
and liquidity.

Earnings per Share

The Financial Accounting Standards Board's ("FASB") Statement of Financial
Accounting Standards No. 128, Earnings Per Share ("SFAS 128") requires the
presentation of basic earnings per share ("EPS") and, for companies with
potentially dilutive securities such as convertible debt, options and
warrants, diluted EPS.

In 2007 and 2006, basic loss per share data was computed by dividing net loss
by the weighted average number of common shares outstanding during the
period. For the years ended December 31 2007 and 2006 diluted loss per share
is equivalent to basic loss per share since the computation does not give
effect to potentially dilutive securities including stock options and
warrants, as their effect would have been anti-dilutive.

Stock-Based Compensation

The Company applies the provisions of, and accounts for stock-based
compensation in accordance with the Financial Accounting Standards Board's
("FASB") Statement of Financial Accounting Standards No. 123-revised 2004
("SFAS 123R"), "Share-Based Payment". Under the fair value recognition
provisions of this statement, stock-based compensation cost is measured at
the grant date based on the fair value of the award and is recognized as
expense on a straight-line basis over the requisite service period, which is
the vesting period.

Through March 1, 2005, the Company had an incentive stock option plan ("the
Plan") which is more fully described in Note H.  The Plan terminated on March
1, 2005, and no additional options may be granted under the Plan.

Recent Accounting Pronouncements

The Company has evaluated all recent accounting pronouncements and believes
such pronouncements do not have a material effect on the Company's financial
statements.







                                     F-9


                              CET SERVICES, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Pronouncements (Continued)

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities-Including an Amendment of FASB
Statement No. 115 ("SFAS No. 159"). SFAS No. 159 allows companies the choice
to measure many financial instruments and certain other items at fair value.
This gives a company the opportunity to mitigate volatility in reported
earnings caused by measuring related assets and liabilities differently
without having to apply complex hedge accounting provisions. SFAS No. 159 is
effective for fiscal years beginning after November 15, 2007.

In September 2006, the FASB issued Statement of Financial Accounting
Standards ("SFAS") No. 157, Fair Value Measurement, ("FAS 157"), which
establishes a framework for measuring fair value in accordance with GAAP, and
expands disclosures about fair value measurements. FAS 157 is effective for
fiscal years, and the interim periods within those fiscal years, beginning
after November 15, 2008 for non-financial assets and liabilities, and is
generally effective for fiscal years beginning after November 15, 2007 for
financial assets and liabilities. The Company is currently evaluating the
potential impact of FAS No. 157 on its financial statements.

                         WATER/WASTE WATER SERVICES

Accounts Receivable

Credit is extended based on evaluation of a customer's financial condition
and, generally, collateral is not required.  Accounts receivable are due
within thirty days and are stated at amounts due from customers net of an
allowance for doubtful accounts. Accounts that are outstanding longer than
the contractual payment terms are considered past due. The Company determines
its allowance by considering a number of factors, including the length of
time trade accounts receivable are past due, the Company's previous loss
history, the customer's current ability to pay its obligation to the Company,
and the condition of the general economy and the industry as a whole.  At
December 31, 2007, no allowance for doubtful accounts was determined to be
necessary.

During the second quarter of 2007, the Company recorded $147,125 of other
income upon the recovery of bad debt written off in 2001 related to the
Company's former commercial remediation operations (a line of business in
which the Company no longer operates).

Contracts

As noted in previous reports, the Company has essentially withdrawn from the
Water/Waste Water Services business.  Service continues to be provided to one
customer, Centennial Water & Sanitation District (Note-M), which accounted
for less than 18% of 2007 revenues.  Basically, the services are provided
under fixed-price contracts where revenue is recorded as costs are incurred
as a percentage of estimated total costs.  Due to uncertainties in the
estimation process, actual results could differ from estimates used.

                                     F-10


                              CET SERVICES, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Contracts (Continued)

Provisions for losses on uncompleted contracts are made in the period in
which such losses are determined.  Recoveries are recorded to revenue when
received.

In the first quarter of 2006, the Company determined that payables incurred
in 2000 in connection with the Company's former commercial remediation
operations, (a line of business in which the Company no longer operates), had
been legally released.  Accordingly, the Company recorded a non-operating
gain of $43,936 on the elimination of the payables.

                            PROPERTY DEVELOPMENT

Real Estate Inventories

Real estate inventories consist of land and land under development, finished
lots and a retail/office building under construction. All direct costs,
including land, home construction costs, interest and real estate taxes, and
indirect costs related to construction or development are capitalized during
the construction and development period.  Land and improvement costs are
allocated within a project based on relative sales value.

Real estate inventories are stated at the lower of cost or fair value.  Fair
value is based on estimated sales price less cost to sell. Estimated sales
price is based on appraisals, offers and management's estimate. Real estate
inventories are assessed for impairment when circumstances warrant such a
review. If management determines that impairment has occurred, a loss is
recognized based on the difference between assets' carrying values and their
estimated fair values.

Revenue Recognition

In accordance with SFAS No. 66, revenue from the sale of real estate
inventories is recognized when a sufficient down payment has been received;
financing has been arranged; title, possession and other attributes of
ownership have been transferred to the buyer; and the Company is not
obligated to perform significant additional activities after sale and
delivery.  Capitalized costs are charged to direct costs upon closing.
Consideration received by the Company for real estate sales is cash.

NOTE C - REAL ESTATE INVENTORIES AND IMPAIRMENT

Real estate inventories at December 31 consist of the following:

                                                         2007
                                                      ----------
     Retail/office building                           $1,619,052
     Apartment building                                  252,720
     Land - Westminster                                  417,000
     Land - Aurora                                       980,458
                                                      ----------
                                                      $3,269,230
                                                      ==========
                                     F-11


                              CET SERVICES, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE C - REAL ESTATE INVENTORIES AND IMPAIRMENT (Continued)

In June 2007, the Company recorded a $750,000 impairment charge related to
the property on Idalia Court in Aurora, Colorado. This charge reflects recent
market conditions in the residential housing industry and was based on
appraisals obtained for certain real estate properties.

NOTE D - CONSTRUCTION LOAN

In July 2007, the Company secured a $1.42 million construction loan from a
bank to construct an 11,200 sq. ft. office building in Westminster, Colorado.
The loan is for a term of one year bearing interest at prime plus 0.75% (8.0%
at December 31, 2007). As of December 31, 2007, the Company has $937,810
outstanding on this loan.

NOTE E - NOTES PAYABLE

In June 2006, the Company signed a promissory note in the amount of $694,000
(of which $451,000 was drawn) with a local lender to finance the purchase and
the remodeling of a retail/office building and the purchase of an adjacent
industrial building located in Wheat Ridge, Colorado. The note was for a term
of one year bearing interest at prime plus 0.75% with monthly interest-only
payments. The principal was due at maturity and the loan was collateralized
by a first deed of trust on the property. This note was paid in full on April
10, 2007, upon the sale of the property.

In May 2005, the Company, supplemented by $100,000 available under a November
2004 development agreement with the City of Westminster, purchased two
properties in a redevelopment area within the City. The Company obtained two
notes, $126,000 and $200,000, from a local lender to complete the purchase.
The notes were for a term of two years bearing interest at prime plus 0.75%,
with monthly interest-only payments. The principal was due at maturity, and
the notes were collateralized by a first deed of trust on the properties. The
notes were paid in full on May 2, 2007.

In April 2005, the Company obtained a loan in the amount of $161,000 from a
local lender to replace a $161,000 draw note which financed the purchase of a
property located in Westminster, Colorado. The loan was repaid on January 9,
2007 and bore interest at the rate of prime plus 0.75% with monthly interest-
only payments.

In June 2004, the Company signed a Brownfields Cleanup Revolving Loan Fund
Agreement with the City of Aurora, Colorado, for approximately $471,000, to
finance the remediation of a five-acre site on which the Company has approval
to construct 54 residential townhomes.  The loan is for a period of three
years with interest at 2% per annum payable monthly. In June 2007, the
Company signed a First Amendment to the Brownfields Cleanup Revolving Loan
Fund Agreement which extends the loan for an additional three year period.
The principal is to be repaid at 1/54th of the outstanding balance within 30
days of each residential unit sale, and the loan is collateralized by a deed
of trust on the property. This property is listed for sale with a local real
estate broker.


                                     F-12


                              CET SERVICES, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE F - INVESTMENT

In January 2005 the Company entered into an operating agreement with a newly-
formed entity, Arizona Avenue, LLC, a Colorado limited liability corporation
in which the Company is a 50% owner.  The Company accounts for this
investment using the equity method of accounting.  The Company has been
engaged by the LLC to manage the development of a five-acre site in Aurora,
Colorado. The Company has approval to construct 54 residential townhomes.
There were no management fees in connection therewith during the years ended
December 30, 2007 and 2006. As of December 31 2007, the Company has invested
approximately $297,000 to develop this project. Profits and losses, which are
generally to be allocated 50% to the Company and 50% to the other owner, were
not material for the year ended December 31, 2007.  This property is
currently listed for sale with a local real estate broker.

NOTE G - DEPOSITS

At December 31, 2007, deposits include $85,000 deposited with the City of
Westminster in lieu of a private improvement bond. The $85,000 is expected to
be refunded when the Company completes the construction of the retail/office
building in Westminster, Colorado.

NOTE H - STOCK OPTIONS

The Company has adopted an Incentive Stock Option Plan (the Plan) for key
personnel.  A total of 550,000 shares of the Company's common stock are
reserved for issuance pursuant to the exercise of stock options (the Options)
which may be granted to full-time employees, including officers and directors
who are also employees of the Company.  The Plan is administered by the Board
of Directors.  In addition to determining who will be granted Options, the
Board of Directors has the authority and discretion to determine when Options
will be granted and the number of Options to be granted.  The Board of
Directors may grant Options intended to qualify for special treatment under
the Internal Revenue Code of 1986, as amended (Incentive Stock Options) and
may determine when each Option becomes exercisable, the duration of the
exercise period for Options, and the form of the instruments evidencing
Options granted under the Plan. The Options generally have a term of 10 years
when issued and vest over one to five years. The Plan terminated on March 1,
2005 and no additional options may be granted under the Plan.

The maximum aggregate fair market value (determined as of the date of grant)
of the shares in to which the Incentive Stock Options become exercisable for
the first time during any calendar year may not exceed $100,000.  The Plan
provides that the purchase price per share for each Incentive Stock Option on
the date of grant may not be less than 100 percent of the fair market value
of the Company's common stock on the date of grant.  However, any Option
granted under the Plan to a person owning more than 10 percent of the
Company's common stock shall be at a price of at least 110 percent of such
fair market value.

In September 2007, the Company granted options to purchase 10,000 shares of
common stock to a director. The options have an exercise price of $0.25 per
share, are immediately exercisable and have a term of one year. The fair
value of these options, calculated using a Black-Scholes option pricing

                                     F-13


                              CET SERVICES, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE H - STOCK OPTIONS (Continued)

model, was not significant. The assumptions used in the Black-Scholes model
were; no expected dividends, expected volatility of 189%, risk free interest
rate of 4.5% and an expected life of one year.

A summary of the status of the Plan follows:

                                                                Weighted
                                                             average exercise
                                                  Shares     price per share
                                                  ------     ----------------
Outstanding at January 1, 2006                    72,500          $0.48
 Granted                                            -               -
 Exercised                                          -               -
 Canceled                                           -               -
                                                  ------          -----
Outstanding at December 31, 2006                  72,500          $0.48
                                                  ------          -----
Total exercisable at December 31, 2006            72,500          $0.48
                                                  ======          =====

                                                                Weighted
                                                             average exercise
                                                  Shares     price per share
                                                  ------     ----------------
Outstanding at January 1, 2007                    72,500          $0.48
 Granted                                          10,000           0.25
 Exercised                                          -               -
 Canceled                                        (30,000)          0.36
                                                  ------          -----
Outstanding at December 31, 2007                  52,500          $0.50
                                                  ------          -----
Total exercisable at December 31, 2007            52,500          $0.50
                                                  ======          =====

The following information applies to options outstanding and exercisable at
December 31, 2007:

                                          Weighted
                                           average       Weighted
                                          remaining      average
Range of                   Number        contractual     exercise
exercise prices          outstanding     life (years)     price
---------------          -----------     ------------    --------
$0.25 - $0.50              45,000            1.94         $0.37
$1.30 - $1.95               7,500            1.44         $1.31
                           ------
                           52,500
                           ======

The intrinsic value of all of the Company's options at December 31, 2007 is
not significant.

                                     F-14


                              CET SERVICES, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE I - TAXES ON INCOME

At December 31, 2007, the Company has net operating loss carry forwards for
regular income tax purposes of approximately $7.0 million that expire in
various amounts in years 2018 through 2027.

Realization of the deferred tax asset depends on achieving future taxable
income.  The Company incurred losses in recent years and does not consider it
sufficiently likely that the Company will realize the benefit of the deferred
tax asset and, accordingly, has recorded a valuation allowance equal to the
deferred tax asset.

Deferred tax assets and liabilities consist of the following at December 31:

                                        2007
                                     ----------
      NOL carryforward                2,398,000
      Less Valuation reserve         (2,398,000)
                                     ----------
                                     $    -
                                     =========

Reconciliation between the expected federal income tax expense computed by
applying the Federal statutory rate to income before income taxes and the
actual provision (benefit) for taxes on income for the year ended December 31
is as follows:

                                       2007             2006
                                    ----------       ----------
     Expected income tax benefit
      at statutory rate             $ (140,000)      $ (115,300)
     Change in valuation reserve       155,500          128,100
     State taxes                       (15,500)         (12,800)
     Other                                -                -
                                    ----------       ----------
                                    $     -          $     -
                                    ==========       ==========

The Company adopted the provisions of Financial Accounting Standards Board
Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an
Interpretation of FASB Statement No. 109 ("FIN 48"), on January 1, 2007.
There were no unrecognized tax benefits and there was no effect on the
Company's financial condition or results of operations as a result of
implementing FIN 48

The Company files income tax returns in the U.S. federal jurisdiction and
various state and foreign jurisdictions. The Company is no longer subject to
U.S. federal tax examinations for years before 2004. State jurisdictions that
remain subject to examination range from 2003 to 2007.  Management does not
believe there will be any material changes in our unrecognized tax positions
over the next 12 months.




                                     F-15


                              CET SERVICES, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE I - TAXES ON INCOME (Continued)

The Company's policy is to recognize interest and penalties accrued on any
unrecognized tax benefits as a component of income tax expense. As of the
date of adoption of FIN 48, there was no accrued interest or penalties
associated with any unrecognized tax benefits, nor was any interest expense
recognized during the quarter.

NOTE J - LEASE COMMITMENTS

The Company is obligated under an operating lease for its facility.  The
lease expires in August 2008.  The lease also provides for payments of taxes
and certain common area costs and expenses.

The following is a summary of the future minimum rent due under the lease at
December 31, 2007:

     Year ending December 31,
     ------------------------
              2008                   $ 26,400

Total rent expense for the years ended December 31, 2007 and 2006 was $43,116
and $41,606, respectively.

NOTE K - COMMITMENTS AND CONTINGENCIES

The Company is not a party to any material legal proceedings, which are
pending before any court, administrative agency, or other tribunal.  Further,
the Company is not aware of any material litigation, which is threatened
against it in any court, administrative agency, or other tribunal.
Management believes the outcome on any pending litigation that would have a
material adverse effect on the Company's financial position or results of
operations is remote.

Since early 1998, the Company had been the subject of an investigation by the
Office of the Inspector General (OIG) of the Environmental Protection Agency
(EPA). The Company cooperated fully in all OIG inquiries. On April 27, 2007
the Company received notice that the EPA OIG has closed all investigations
involving CET.

On September 24, 2007, the Company entered into severance agreements with its
CFO and Secretary of the Company. The agreements have a three year term and
provide for severance payments of 50% of annual salary plus 32,500 shares of
the Company's common stock to the CFO, and 50% of annual salary plus 20,000
shares of the Company's common stock to the Secretary of the Company. The
severance payments are payable upon termination of employment with the
Company. The Secretary of the Company terminated employment on October 8,
2007. At December 31, 2007, the Company has accrued $54,876 under the
severance agreements.


                                     F-16


                              CET SERVICES, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE L - SEGMENT INFORMATION

CET has determined that its reportable segments are those that are based on
the Company's method of internal reporting, which disaggregates its business
by product category.  CET's revenues and expenses are generated from two
segments, residential housing development and construction and
water/wastewater services.  Transfers and sales between reportable segments,
if any, are recorded at cost. All of the Company's operations and customers
are located in Colorado.  A summary of the Company's business segments is
shown below (in thousands).

                                             Water/
                                Residential  wastewater
December 31, 2007               Housing      Services    Corporate  Total
-----------------               -----------  ----------  ---------  -------
Revenue                         $ 1,725      $ 378       $  -       $ 2,103

Segment profit (loss)              (735)        18        (548)      (1,265)

Interest income                    -            -           18           18
Interest expense                   -            -           (9)          (9)
Depreciation and amortization                   -            1            1
Segment assets                    3,651         -          333        3,984

December 31, 2006
-----------------
Revenue                         $ 2,660      $ 321       $  -       $ 2,981
Segment profit (loss)               245         15        (599)        (339)
Interest income                    -            -           14           14
Interest expense                   -            -          (15)         (15)
Depreciation                       -            -            1            1
Segment assets                   4,181          -          762        4,943

NOTE M - RELATED PARTY TRANSACTIONS

The Company sells water it acquires under a water lease to the Centennial
Water & Sanitation District.  John D. Hendrick, a Director of the Company, is
the General Manager of the Centennial Water & Sanitation District.  The
Centennial Water & Sanitation District makes payments to an escrow agent who
distributes the funds primarily to the lessor and the remainder to the
Company.  During 2007 and 2006, the Company invoiced the Centennial Water &
Sanitation District $377,594 and $320,750, respectively, and recorded a
profit of $17,880 and $15,303, respectively, under this arrangement.











                                    F-17


                                 SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                     CET SERVICES, INC.


Dated:  April 3, 2008                By/s/ Steven H. Davis
                                       Steven H. Davis
                                       President and Chief Executive Officer

     Pursuant to the requirement of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Company and in the capacities and on the date indicated.

             Signature                   Capacity                Date



/s/ Steven H. Davis              President,                  April 3, 2008
Steven H. Davis                  Chief Executive Officer,
                                 and Director



/s/ Craig C. Barto               Director                    April 3, 2008
Craig C. Barto



/s/ John D. Hendrick             Director                    April 3, 2008
John D. Hendrick



/s/ Dale W. Bleck                Chief Financial Officer     April 4, 2008
Dale W. Bleck