UNITED STATES


SECURITIES AND EXCHANGE
COMMISSION


Washington,
DC 20549











FORM 10-QSB










(MARK
      ONE)x
            QUARTERLY REPORT UNDER
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For the quarterly
      period ended December 31, 2007ORo
            TRANSITION REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
  ACTFor the transition period from
       ______________ to
______________






ENTECH
ENVIRONMENTAL, INC.




Florida
            77-0616120(State
      or other jurisdiction
              of
      incorporation or organization)
            (IRS
      Employer
              Identification
      Number)








3233
      Grand Avenue, Suite N-353, Chino Hills, CA
            91709-1489(Address
      of principal executive offices)
            (Zip
      Code)




(909)
623-2502
 (Registrant's
telephone number, including area code)






Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
file such reports), and (2) has been subject to such filing requirements for the
past 90 days.   Yes  x     
No  o
  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 13, 2008, the issuer had 76,781,218 shares of its common stock
issued and outstanding.
  Transitional
small business disclosure format (check one):  Yes o  
  No 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 
o
   Table of Contents


TABLE
OFCONTENTS


PART
      I   Financial InformationItem
      1.
            Financial Statements
            3Item
      2.
            Management's Discussion and Analysis or Plan of
      Operation
            10Item
      3.
            Controls and Procedures
            12PART
      II  Other InformationItem
      1.
            Legal Proceedings
            13Item
      2.
            Unregistered Sales of Equity Securities
            13Item
      3.
            Defaults Upon Senior Securities
            13Item
      4.
            Submission of Matters to Vote of Security
      Holders
            13Item
      5.
            Other Information
            13Item
      6.
            Exhibits
            13Signatures
            14






2
 Table of Contents




PART
I - FINANCIAL INFORMATION
 
 Item 1. FinancialStatements




ENTECH
      ENVIRONMENTAL TECHNOLOGIES, INC.BALANCE
      SHEETS(UNAUDITED)December
      31 2007
              
              
              September
      30 2007ASSETSCurrent
      assets:Cash
              
              $
              26,661
              
              
              $
              271Related
      party receivable
              
              
              -
              
              
              
              120,000Total
      current assets
              
              
              26,661
              
              
              
              120,271Property
      and equipment, net
              
              
              -
              
              
              
              245Total
      assets
              
              $
              26,661
              
              
              $
              120,516LIABILITIES
      AND DEFICIENCY IN STOCKHOLDERS' EQUITY:Current
      liabilities:Accounts
      payable
              
              $
              152,460
              
              
              $
              198,284Accrued
      interest and other
              
              
              716,103
              
              
              
              547,884Purchase
      price payable
              
              
              29,209
              
              
              
              29,209Due
      to affiliated entities
              
              
              272,371
              
              
              
              272,371Current
      portion of notes payable
              
              
              3,336,347
              
              
              
              2,743,039Total
      current liabilities
              
              
              4,506,490
              
              
              
              3,790,787Notes
      payable, net of current portion
              
              
              551,500
              
              
              
              453,335Commitments
      and contingencies
              
              
              -
              
              
              
              -Deficiency
      in stockholders' equity:Preferred
      stock, $.001 par value; 10,000,000 shares authorized;none
      issued and outstanding
              
              
              -
              
              
              
              -Common
      stock, $0.001 par value; 100,000,000 shares authorized; 32,976,340
      and34,530,840
      shares issued and outstanding, respectively
              
              
              32,977
              
              
              
              34,531Additional
      paid-in capital
              
              
              17,635,811
              
              
              
              17,699,585Common
      stock subscribed, 3,500 and 3,500 shares, respectively
              
              
              597
              
              
              
              597Accumulated
      deficit
              
              
              (22,700,715
              )
              
              
              (21,858,319
              )Total
      deficiency in stockholders' equity
              
              
              (5,031,330
              )
              
              
              (4,123,606
              )Total
      liabilities and deficiency in stockholders' equity
              
              $
              26,661
              
              
              $
              120,516See
      accompanying notes to the consolidated financial
    statements.






3
 Table of Contents


ENTECH
      ENVIRONMENTAL TECHNOLOGIES, INC.STATEMENTS
      OF OPERATIONS(UNAUDITED)For
      the three months ended December 312007
                
                
                2006Revenues,
      net
                
                $
                -
                
                
                $
                -Operating
      expenses:Selling,
      general, and administrative expenses
                
                
                30,753
                
                
                
                23,284Depreciation
      and amortization
                
                
                245
                
                
                
                1,205Total
      operating expenses
                
                
                30,998
                
                
                
                24,489Loss
      from operations
                
                
                (30,998
                )
                
                
                (24,489
                )Other
      income
                
                
                21,724
                
                
                
                -Interest
      expense
                
                
                (833,122
                )
                
                
                (670,734
                )Loss
      before provision for income taxesand
      discontinued operations
                
                
                (842,396
                )
                
                
                (695,223
                )Provision
      for income taxes
                
                
                -
                
                
                
                -Loss
      from continuing operations
                
                
                (842,396
                )
                
                
                (695,223
                )Loss
      from discontinued operations, net of taxes
                
                
                -
                
                
                
                (110,038
                )Net
      loss
                
                $
                (842,396
                )
                
                $
                (805,261
                )Net
      loss per share - basic and fully diluted
                
                $
                (0.02
                )
                
                $
                (0.02
                )Net
      loss per share - continuing operations
                
                $
                (0.02
                )
                
                $
                (0.02
                )Net
      loss per share - discontinued operations
                
                $
                -
                
                
                $
                -Basic
      and diluted weighted averagenumber of shares
      outstanding
                
                
                34,347,449
                
                
                
                33,630,840See
      accompanying notes to the consolidated financial
    statements.
 
 4
 Table of Contents
  ENTECH
      ENVIRONMENTAL TECHNOLOGIES, INC.STATEMENTS
      OF CASH FLOWS(UNAUDITED)For
      the three months ended December 31,2007
                
                
                2006Net
      loss
                
                $
                (842,396
                )
                
                $
                (805,261
                )Cash
      flows from continuing operating activities:Adjustments
      to reconcile net loss to  net cash provided by (used in)
      operating activities:Depreciation
      and amortization
                
                
                245
                
                
                
                1,205Common
      stock issued for settlements
                
                
                7,900
                
                
                
                -Settlement
      of accounts payable
                
                
                22,724
                
                
                
                -Amortization
      of note discount
                
                
                158,094
                
                
                
                115,878Changes
      in:Other
      assets
                
                
                -
                
                
                
                18,844Accounts
      payable and accrued expenses
                
                
                651,927
                
                
                
                434,248Net
      cash used in continuing operating activities
                
                
                (46,954
                )
                
                
                (235,086
                )Net
      cash provided discontinued operations from continuing
      operations
                
                
                -
                
                
                
                182,795Net
      cash used in operating activities
                
                
                (46,954
                )
                
                
                (52,291
                )Cash
      flows from investing activities:Net
      cash used in continuing  investing activities
                
                
                -
                
                
                
                -Net
      cash provided by discontinued operations from investing
      activities
                
                
                -
                
                
                
                19,000Net
      cash provided by investing activities
                
                
                -
                
                
                
                19,000Cash
      flows from financing activities:Net
      proceeds from notes payable
                
                
                73,344
                
                
                
                15,000Net
      cash provided by continuing financing activities
                
                
                73,344
                
                
                
                15,000Net
      cash used by discontinued operations from financing
    activities
                
                
                -
                
                
                
                (6,766
                )Net
      cash provided by financing activities
                
                
                73,344
                
                
                
                8,234Net
      increase (decrease) in cash
                
                
                26,390
                
                
                
                (25,057
                )Cash
      at beginning of period
                
                
                271
                
                
                
                83,315Cash
      at end of period
                
                $
                26,661
                
                
                $
                58,258Supplemental
      Disclosures of Cash Flow Information :Cash
      paid during the period for interest
                
                $
                -
                
                
                $
                10,742Common
      stock issued to consultants for services
                
                $
                -
                
                
                $
                5,000Common
      stock issued for accounts payable
                
                $
                1,000
                
                
                $
                127,935Common
      stock issued for legal settlements
                
                $
                6,900
                
                
                $
                -Beneficial
      conversion feature of convertible note payable
                
                $
                46,772
                
                
                $
                504,523Related
      Party Receivable
                
                $
                120,000
                
                
                $
                -Cancelation
      of Common Stock
                
                $
                (120,000
                )
                
                $
                -
  See
accompanying notes to the consolidated financial statements.
  5
 Table of Contents
  NOTE
1 – BUSINESS, BASIS OF PRESENTATION and GOING CONCERN ISSUES
 
 Entech
Environmental Technologies, Inc. ("Entech" or the "Company"), formerly Cyber
Public Relations, Inc., was formed in June, 1998 under the laws of the State of
Florida. The Company, through its H.B. Covey subsidiary, provided construction
and maintenance services to petroleum service stations in the southwestern part
of the United States of America, and provides installation services for consumer
home products in Southern California.
 
 The
Company was formed for the purpose of engaging in the environmental services
business. The Company had been unable to execute its business plan, and exited
the environmental services business. The Company is now considered a shell
corporation under applicable rules of the Securities Exchange Commission
promulgated under the Securities Exchange Act of 1934, as amended.
 
 Up until
July 2007, our Company was organized to provide construction and maintenance
services to petroleum service stations in the southwestern part of the United
States of America, and provides installation services for consumer home products
in Southern California. We operated our business through our wholly-owned
subsidiary, H.B. Covey Inc.
 
 In June
2007, we determined to dispose of all of the assets of the HB Covey, Inc, and
entered into discussions with a prospective purchaser.
 
 During
July 2007, we entered into an agreement to sell those assets for an aggregate
selling price of $100,000 in cash and 1.9 million in shares of Company stock
from current CEO and CFO, Burr Northrop. Under the terms of the sale, HB Covey,
Inc. assumed certain liabilities. We completed the sale during July 2007.
Subsequent to the sale the company has no operations and no income.
  At this
time, we have no operations, our assets consist primarily of cash, and our
liabilities consist exclusively of payables, accrued expenses and debt. Since
July 2007, our operations have consisted solely of identifying and completing a
business combination with an operating company and compliance with our reporting
obligations under federal securities laws.
  Due to
the lack of growth in this business segment, we have been simultaneously seeking
alternate business opportunities in other industries. Depending upon the
business opportunity, we may acquire assets or technologies to develop our own
business or we may seek out business opportunities with established business
entities for the merger of a target business with our Company. Management is
looking to raise debt and equity to finance its acquisition of technologies and
assets.
 
 The
Company is now considered a shell corporation under applicable rules of the
Securities Exchange Commission promulgated under the Securities Exchange Act of
1934, as amended. Having been unable to execute our business plan, we have
exited this business and are, therefore, considered a shell corporation under
applicable rules of the Securities and Exchange Commission (the “SEC”)
promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). In that regard, we are actively seeking to complete a business
combination with an operating company
 These
financial statements should be read in conjunction with the financial statements
and the notes thereto included in the Company's Annual Report for the fiscal
year ended September 30, 2007 in Form 10-KSB filed with the Securities and
Exchange Commission. The results of operations for interim periods are not
necessarily indicative of the results for any subsequent quarter or the entire
fiscal year ended September 30, 2007.
 
 For
comparability purposes, certain figures for the prior periods have been
reclassified where appropriate to conform to the financial statement
presentation used in current reporting period. These reclassifications had no
effect on reported net loss.
 
 The
consolidated financial statements included the accounts of the Company; the
results of operations of its wholly-owned subsidiary, H.B. Covey, Inc. are
included in discontinued operations. The balance sheets of CPI and Advanced Fuel
have been de-consolidated as of September 30, 2004, and are not included in the
balance sheet, consolidated statements of operations and consolidated statements
of cash flows of the Company for the periods ended December 31, 2007 and
December 31, 2006.
 
 Going Concern
Issues
 
 The
accompanying consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. As shown in the accompanying
financial statements during the quarters ended December 31, 2007 and December
31, 2006, the Company incurred losses from continuing operations of $842,000 and
$695,000, respectively. As of December 31, 2007, the Company has negative
working capital of $4.479 million, an accumulated deficit of $22.7 million,
current portion of notes payable of $3,336,000 after full amortization of the
note discount, and accounts payable and accrued expenses of
$869,000.
  Other
than cash received from the collection of accounts receivable for construction,
maintenance and consumer services, the Company’s cash resources are generally
limited to borrowings under the Note Purchase Agreement as discussed in Note 2.
To date, the Company has borrowed $1.2 million under the agreement, which
provides for total aggregate borrowings of $1.5 million. The Note Purchase
Agreement provides certain restrictions on the Company’s ability to raise funds
from other resources. As a result of these restrictions and the Company having
no current operations, payments to vendors, lenders and employees may be
delayed.
 
 These
factors raise substantial doubt about the Company’s ability to continue as a
going concern. The accompanying financial statements do not include any
adjustments that might result from the outcome of this uncertainty. The
Company’s existence is dependent upon management’s ability to develop profitable
operations and to resolve its liquidity problems. Management anticipates the
Company will attain profitable status and improve its liquidity through a
business combination and/or an acquisition of a profitable operating
company.
  6
 Table of Contents
 
 NOTE
2 – NOTE PURCHASE AGREEMENTS AND LIQUIDATED DAMAGES
 
 In
September 2004, the Company entered into a Note Purchase Agreement ("NPA #1")
whereby the Company would borrow a minimum of $100,000 and a maximum of
$1,500,000 pursuant to a secured convertible note or convertible notes. Through
September 30, 2006, the Company has borrowed $1.1 million under NPA #1, and this
amount was due on September 30, 2006. The notes are currently in default. The
note bears interest at 8% per year, is due on demand. The notes are convertible
into 42.5 million common shares, and the Company issued warrants to purchase
15.9 million common shares to the note holder pursuant to NPA #1. The shares
underlying the convertible notes and warrants have registration rights. The
registration rights agreement for NPA #1 provides for liquidated damages equal
to 36% per annum of the note principal in the event that a registration
statement to register the underlying shares is not filed timely or declared
effective timely. The Company filed a registration statement to register the
shares underlying the convertible note payable and warrants on June 8, 2006. The
registration statement has not been declared effective by the Securities and
Exchange Commission, and the Company will incur liquidated damages until the
registration statement is declared effective.
 
 In
December 2005, the Company executed a Note Purchase Agreement ("NPA #2") to
provide for repayment of the advance by Burr Northrop that was used to pay the
initial purchase price in the acquisition of Pacific Coast Testing. NPA #2
provides for funding of $100,000 pursuant to a convertible note payable, and the
funding did not occur until January 2006. Accordingly, the transaction was
recorded in January 2006. The note bears interest at 8% per year, is due
December 30, 2007. The note is convertible into 4.0 million shares of common
stock. The Company issued warrants to purchase 4.0 million common shares to the
note holder in December 2005. The value of the note proceeds were allocated to
the beneficial conversion feature and the warrants, resulting in a discount
equal to the face value of the note. The note discount is being amortized to
interest expense beginning on the funding date. The shares underlying the
convertible note and warrants have registration rights. The registration rights
agreement for NPA #2 provides for liquidated damages equal to 36% of the note
principal in the event that a registration statement to register the underlying
shares is not declared effective. The Company filed a registration statement to
register the shares underlying the convertible note payable and warrants on June
8, 2006. The registration statement has not been declared effective by the
Securities and Exchange Commission, and the Company will incur liquidated
damages until the registration statement is declared effective.
  In
January 2006, the Company executed a Note Purchase Agreement ("NPA #3") to
convert $236,680 of accrued liquidated damages on NPA #1 into a note payable.
The note bears interest at 8%, is due December 30, 2007 and is convertible into
approximately 9.5 million shares of common stock based on a conversion rate of
one common share for every $.025 of note principal. The value of the note
proceeds were allocated to the beneficial conversion feature, resulting in a
discount equal to the face value of the note. The note discount is being
amortized to interest expense beginning on the funding date. The shares
underlying the convertible note have registration rights. The registration
rights agreement for NPA #3 provides for liquidated damages equal to 36% of the
note principal in the event that a registration statement to register the
underlying shares is not declared effective. The Company filed a registration
statement to register the shares underlying the convertible note payable on June
8, 2006. The registration statement has not been declared effective by the
Securities and Exchange Commission, and the Company will incur liquidated
damages until the registration statement is declared effective.
 
 In April
2006, the Company executed a Note Purchase Agreement ("NPA #4) to convert
$167,843 of accrued liquidated damages on NPA #1, NPA #2 and NPA #3 into a note
payable. The note bears interest at 8%, is due April 30, 2008, and is
convertible into approximately 6.7 million shares of common stock based on a
conversion rate of one common share for every $.025 of note principal. The value
of the note proceeds were allocated to the beneficial conversion feature,
resulting in a discount equal to the face value of the note. The note discount
is being amortized to interest expense beginning on the funding date. The shares
underlying the convertible note have registration rights. The registration
rights agreement for NPA #4 provides for liquidated damages equal to 36% of the
note principal in the event that a registration statement to register the
underlying shares is not declared effective. The Company filed a registration
statement to register the shares underlying the convertible note payable on June
8, 2006. The registration statement has not been declared effective by the
Securities and Exchange Commission, and the Company will incur liquidated
damages until the registration statement is declared
effective.
 
 In
October, 2006 the Company executed a Note purchase Agreement to convert $848,313
of accrued liquidated damages into a note payable. The note bears interest at
8%, is due on October 17, 2008, and is convertible into approximately 34 million
shares of common stock based on a conversion rate of one common share for every
$.025 of note payable. The shares underlying the convertible note have
registration rights. The registration rights agreement provides for liquidated
damages equal to 36% of the note principal in the event that a registration
statement to register the underlying shares is not declared effective. The
Company filed a registration statement to register the shares underlying the
convertible note payable on June 8, 2006. The registration statement has not
been declared effective by the Securities and Exchange Commission, and the
Company will incur liquidated damages until the registration statement is
declared effective.
  In
December 2006, the Company executed a Note purchase Agreement to borrow $15,000
pursuant to a secured convertible note or convertible note. The note bears
interest at 8%, is due on December 11, 2008, and is convertible into
approximately 600,000 shares of common stock based on a conversion rate of one
common share for every $.025 of note payable and the Company issued warrants to
purchase 225,000 common shares to the note holder. The shares underlying the
convertible note have registration rights. . The registration rights agreement
provides for liquidated damages equal to 36% of the note principal in the event
that a registration statement to register the underlying shares is not declared
effective. The Company filed a registration statement to register the shares
underlying the convertible note payable on June 8, 2006. The registration
statement has not been declared effective by the Securities and Exchange
Commission, and the Company will incur liquidated damages until the registration
statement is declared effective.
  7
 Table of Contents
 
 In
December, 2006 the Company executed a Note purchase Agreement to convert
$333,791 of accrued liquidated damages into a note payable. The note bears
interest at 8%, is due on August 15, 2009, and is convertible into approximately
13 million shares of common stock based on a conversion rate of one common share
for every $.025 of note payable. The shares underlying the convertible note have
registration rights. The registration rights agreement provides for liquidated
damages equal to 36% of the note principal in the event that a registration
statement to register the underlying shares is not declared effective. The
Company filed a registration statement to register the shares underlying the
convertible note payable on June 8, 2006. The registration statement has not
been declared effective by the Securities and Exchange Commission, and the
Company will incur liquidated damages until the registration statement is
declared effective.
 
 In June,
2007, the Company executed a Note purchase Agreement to convert $784,512 of
accrued liquidated damages into a note payable. The note bears interest at 8%,
is due on June 20, 2009, and is convertible into approximately 31 million shares
of common stock based on a conversion rate of one common share for every $.025
of note payable. The shares underlying the convertible note have registration
rights. The registration rights agreement provides for liquidated damages equal
to 36% of the note principal in the event that a registration statement to
register the underlying shares is not declared effective. The Company filed a
registration statement to register the shares underlying the convertible note
payable on June 8, 2006. The registration statement has not been declared
effective by the Securities and Exchange Commission, and the Company will incur
liquidated damages until the registration statement is declared
effective.
 
 In August
2007, the Company executed a Note purchase Agreement to borrow $20,795 pursuant
to a secured convertible note or convertible note. The note bears interest at
8%, is due on August 15, 2009, and is convertible into approximately 831,000
shares of common stock based on a conversion rate of one common share for every
$.025 of note payable and the Company issued warrants to purchase 831,000 common
shares to the note holder. The shares underlying the convertible note have
registration rights. . The registration rights agreement provides for liquidated
damages equal to 36% of the note principal in the event that a registration
statement to register the underlying shares is not declared effective. The
Company filed a registration statement to register the shares underlying the
convertible note payable on June 8, 2006. The registration statement has not
been declared effective by the Securities and Exchange Commission, and the
Company will incur liquidated damages until the registration statement is
declared effective.
  In
August, 2007, the Company executed a Note purchase Agreement to convert $192,083
of accrued liquidated damages into a note payable. The note bears interest at
8%, is due on August 15, 2009, and is convertible into approximately 7.7 million
shares of common stock based on a conversion rate of one common share for every
$.025 of note payable. The shares underlying the convertible note have
registration rights. The registration rights agreement provides for liquidated
damages equal to 36% of the note principal in the event that a registration
statement to register the underlying shares is not declared effective. The
Company filed a registration statement to register the shares underlying the
convertible note payable on June 8, 2006. The registration statement has not
been declared effective by the Securities and Exchange Commission, and the
Company will incur liquidated damages until the registration statement is
declared effective.
 
 In
October 2007, the Company executed a Note purchase Agreement to borrow $12,000
pursuant to a secured convertible note or convertible note. The note bears
interest at 8%, is due on October 24, 2009, and is convertible into
approximately 480,000 shares of common stock based on a conversion rate of one
common share for every $.025 of note payable and the Company issued warrants to
purchase 480,000 common shares to the note holder. The shares underlying the
convertible note have registration rights. . The registration rights agreement
provides for liquidated damages equal to 36% of the note principal in the event
that a registration statement to register the underlying shares is not declared
effective. The Company filed a registration statement to register the shares
underlying the convertible note payable on June 8, 2006. The registration
statement has not been declared effective by the Securities and Exchange
Commission, and the Company will incur liquidated damages until the registration
statement is declared effective.
 
 In
November 2007, the Company executed a Note purchase Agreement to borrow $10,820
pursuant to a secured convertible note or convertible note. The note bears
interest at 8%, is due on November 13, 2009, and is convertible into
approximately 432,000 shares of common stock based on a conversion rate of one
common share for every $.025 of note payable and the Company issued warrants to
purchase 432,000 common shares to the note holder. The shares underlying the
convertible note have registration rights. . The registration rights agreement
provides for liquidated damages equal to 36% of the note principal in the event
that a registration statement to register the underlying shares is not declared
effective. The Company filed a registration statement to register the shares
underlying the convertible note payable on June 8, 2006. The registration
statement has not been declared effective by the Securities and Exchange
Commission, and the Company will incur liquidated damages until the registration
statement is declared effective.
  8
 Table of Contents
 
 In
November, 2007, the Company executed a Note purchase Agreement to convert
$506,807 of accrued liquidated damages into a note payable. The note bears
interest at 8%, is due on November 30, 2009, and is convertible into
approximately 20 million shares of common stock based on a conversion rate of
one common share for every $.025 of note payable. The shares underlying the
convertible note have registration rights. The registration rights agreement
provides for liquidated damages equal to 36% of the note principal in the event
that a registration statement to register the underlying shares is not declared
effective. The Company filed a registration statement to register the shares
underlying the convertible note payable on June 8, 2006. The registration
statement has not been declared effective by the Securities and Exchange
Commission, and the Company will incur liquidated damages until the registration
statement is declared effective.
 
 In
December 2007, the Company executed a Note purchase Agreement to borrow $50,525
pursuant to a secured convertible note or convertible note. The note bears
interest at 8%, is due on December 18, 2009, and is convertible into
approximately 2 million shares of common stock based on a conversion rate of one
common share for every $.025 of note payable and the Company issued warrants to
purchase 2 million common shares to the note holder. The shares underlying the
convertible note have registration rights. . The registration rights agreement
provides for liquidated damages equal to 36% of the note principal in the event
that a registration statement to register the underlying shares is not declared
effective. The Company filed a registration statement to register the shares
underlying the convertible note payable on June 8, 2006. The registration
statement has not been declared effective by the Securities and Exchange
Commission, and the Company will incur liquidated damages until the registration
statement is declared effective.
 
 The notes
referenced above are secured by the Company's assets. Conversion of the
convertible notes and exercise of the warrants issued pursuant to the notes
payable are limited such that the note holder can not convert notes or exercise
warrants that would result in beneficial ownership by the holder or its
affiliates of more than 4.9% of the outstanding common shares on the conversion
or exercise date.
 
 For
income tax purposes the entire amount of the proceeds received at issuance of
the debt is treated as the tax basis of the convertible debt
security.
 
 NOTE
3 – CAPITAL STOCK
 
 Issued and
outstanding
 
 As part
of a settlement with former chairman and chief executive officer, Steven
Rosenthal, the Company issued 300,000 restricted common shares during December
2007.
 
 As part
of a settlement with former registered accounting firm, RBSM, the Company issued
45,500 of restricted common shares of Company stock during December
2007.
 
 As part
of the sale of HB Covey, the Company canceled 1,900,000 of restricted common
shares of Company stock returned to the Company by CEO, Burr Northrop during
December 2007.
 
 As of
December 31, 2007, the Company has outstanding convertible notes that are
convertible into 173 million common shares and has outstanding warrants that are
exercisable for 24 million common shares. Conversion of the convertible notes
and exercise of the warrants for 24 million common shares are limited such that
the note holder can not convert notes or exercise warrants that would result in
beneficial ownership by the holder or its affiliates of more than 4.9% of the
outstanding common shares on the conversion or exercise date.
 
 NOTE
4- DISCONTINUED OPERATIONS
 
 HB Covey,
Inc.
 
 In July
2007, the Company entered in to an agreement to sell its wholly owned
subsidiary, HB Covey, Inc. Accordingly, HB Covey, Inc. has been presented as a
discontinued operation within the consolidated financial statements in
accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of
Long-Lived Assets”. HB Covey was acquired in 2004 and is a fueling station
diagnostic and maintenance company with petroleum construction experience in
building and maintaining service stations.
  NOTE
5- SUBSEQUENT EVENT
  The
Company elected on February 13, 2008 to change its year end from September 30 to
December 31.
  9
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 Item 2. Management'sDiscussion and Analysis or Plan of
Operations
 
 FORWARD-LOOKING
INFORMATION
 
 Much of
the discussion in this Item is "forward looking" as that term is used in Section
27A of the Securities Act and Section 21E of the Securities Exchange Act of
1934. Actual operations and results may materially differ from present plans and
projections due to changes in economic conditions, new business opportunities,
changed business conditions, and other developments. Other factors that could
cause results to differ materially are described in our filings with the
Securities and Exchange Commission.
 
 There are
several factors that could cause actual results or events to differ materially
from those anticipated, and include, but are not limited to general economic,
financial and business conditions, changes in and compliance with governmental
laws and regulations, including various state and federal environmental
regulations, our ability to obtain additional financing from outside investors
and/or bank and mezzanine lenders and our ability to generate sufficient
revenues to cover operating losses and position us to achieve positive cash
flow.
 
 Readers
are cautioned not to place undue reliance on the forward-looking statements
contained herein, which speak only as of the date hereof. We believe the
information contained in this Form 10-QSB to be accurate as of the date hereof.
Changes may occur after that date. We will not update that information except as
required by law in the normal course of its public disclosure
practices.
 
 Additionally,
the following discussion regarding our financial condition and results of
operations should be read in conjunction with the financial statements and
related notes contained in Item 1 of Part I of this Form 10-QSB, as well as the
financial statements in Item 7 of Part II of our Form 10-KSB for the fiscal year
ended September 30, 2007.
  PLAN
OF OPERATION
 
 Overview
and Recent Transactions
 
 Up until
June 2007, our Company was organized to provide construction and maintenance
services to petroleum service stations in the southwestern part of the United
States of America, and provides installation services for consumer home products
in Southern California. We operated our business through our wholly-owned
subsidiary, H.B. Covey Inc. Having been unable to execute our business plan, we
have exited this business, and are, therefore, considered a shell corporation
under applicable rules of the SEC. In that regard, we are actively seeking to
complete a business combination with an operating company.
 
 Due to
the lack of growth in this business segment, we have been simultaneously seeking
alternate business opportunities in other industries. Depending upon the
business opportunity, we may acquire assets or technologies to develop our own
business or we may seek out business opportunities with established business
entities for the merger of a target business with our Company. Management is
looking to raise debt and equity to finance its acquisition of technologies and
assets.
 
 10
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 Plan
to Acquire an Operating Company
 
 Our
current business plan consists solely of identifying and acquiring a suitable
operating company to acquire and maintain compliance with our reporting
obligations under federal securities laws.
 
 We
anticipate that the selection of a business combination will be complex and
subject to substantial risk. Based on general economic conditions, technological
advances being made in some industries and shortages of available capital, we
believe that there are numerous firms seeking access to the capital markets
and/or the perceived benefits of becoming a publicly traded corporation. Such
perceived benefits include, among other things, facilitating or improving the
terms on which additional equity financing may be obtained, providing liquidity
for the principals of and investors in a business, creating a means for
providing incentive stock options or similar benefits to incentivize key
employees, and offering greater flexibility in structuring acquisitions, joint
ventures and the like through the issuance of stock. Potentially available
business combinations may occur in many different industries and at various
stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities extremely difficult
and complex. Unless we acquire an operating company, we do not expect to retain
any additional personnel, incur any capital expenditures, or incur any research
and development expenses. Our ability to generate future revenue and earnings is
dependent on identifying and acquiring an operating company. Although we have
evaluated potential acquisition targets and engaged in general discussions and
due diligence activities regarding the acquisition of an operating company, we
have not entered into any agreement to acquire an operating company. There can
be no assurance that we will be able to identify an acceptable operating
company, complete an acquisition, or that any business we acquire will generate
profits or increase the value of the Company.
  DISCONTINUED
OPERATIONS
 
 In July
2007, the Company entered in to an agreement to sell its wholly owned
subsidiary, HB Covey, Inc. Accordingly, HB Covey, Inc. has been presented as a
discontinued operation within the consolidated financial statements in
accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of
Long-Lived Assets”. HB Covey was acquired in 2004 and is a fueling station
diagnostic and maintenance company with petroleum construction experience in
building and maintaining service stations.  The net loss from
discontinued operations for the three months ended December 31, 2007 and 2006
was $0 and $110,000 respectively.
  SUBSEQUENT
EVENT
 
 The
Company elected on February 13, 2008 to change its year end from September 30 to
December 31.
  LIQUIDITY
AND CAPITAL RESOURCES
 
 During
the three months ended December 31, 2007 and 2006 we incurred net losses from
Continuing operations of $842,000 and $695,000, respectively. During the three
months ended December 31, 2007 our continuing operations used $47,000 of cash
and received net proceeds from financing activities of $73,000.
 
 At
December 31, 2007, we have negative working capital of $4.472 million, and we
have outstanding obligations to Barron Partners of an aggregate of $4.3 million
excluding discounts consisting of $1.4 million due on demand and another $2.3
million that comes due at various dates during 2008. We filed a registration
statement to register the shares underlying the convertible notes payable on
June 2, 2006, and will continue to incur liquidated damages at the rate of 36%
per year on the outstanding balance of the notes payable until such registration
statement is effective. We requested for withdrawal of the registration
statement on May 2, 2007.
 
 In order
to execute our business plan, we will need to acquire additional debt or equity
financing. Our independent certified public accountants have stated in their
report, included in our Form 10-KSB for the year ended September 30, 2006, and
in Note 1 of this Form 10-QSB that due to our net loss and negative cash flows
from operations, in addition to a lack of operational history, there is a
substantial doubt about our ability to continue as a going concern. In the
absence of significant revenue and profits, we will be completely dependent on
additional debt and equity financing arrangements. There is no assurance that
any financing will be sufficient to fund our capital expenditures, working
capital and other cash requirements for the fiscal year ending September 30,
2006. No assurance can be given that any such additional funding will be
available or that, if available, can be obtained on terms favorable to us. If we
are unable to raise needed funds on acceptable terms, we will not be able to
execute our business plan, develop or enhance existing services, take advantage
of future opportunities or respond to competitive pressures or unanticipated
requirements. A material shortage of capital will require us to take drastic
steps such as further reducing our level of operations, disposing of selected
assets or seeking an acquisition partner. If cash is insufficient, we will not
be able to continue operations.
  11
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  ACCOUNTING
POLICIES INVOLVING MANAGEMENT ESTIMATES AND ASSUMPTIONS
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions in certain circumstances that affect amounts reported in the
accompanying financial statements and related footnotes. In preparing these
financial statements, management has made its best estimates and judgments of
certain amounts included in the financial statements, giving due consideration
to materiality. We do not believe there is a great likelihood that materially
different amounts would be reported related to the accounting policies described
below. However, application of these accounting policies involves the exercise
of judgment and use of assumptions as to future uncertainties and, as a result,
actual results could differ from these estimates. Our senior management has
discussed the development and selection of the critical accounting estimates,
and related disclosures, with the Audit Committee of our Board of
Directors.
  Financial
Reporting Release No. 60, which was released by the Securities and Exchange
Commission, or SEC, in December 2001, requires all companies to include a
discussion of critical accounting policies or methods used in the preparation of
financial statements. The Notes to Consolidated Financial Statements included in
our Annual Report on Form 10-KSB for the year ended September 30, 2006 includes
a summary of our significant accounting policies and methods used in the
preparation of our financial statements. In preparing these financial
statements, we have made our best estimates and judgments of certain amounts
included in the financial statements, giving due consideration to materiality.
The application of these accounting policies involves the exercise of judgment
and use of assumptions as to future uncertainties and, as a result, actual
results could differ from these estimates.
 
 Item 3. Controlsand Procedures
  Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed by us in the reports that we
file or submit under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Securities and Exchange
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed by us in the reports that we file under the Exchange
Act is accumulated and communicated to our management, including our principal
executive and financial officers, as appropriate to allow timely decisions
regarding required disclosure.
 
 Evaluation
of Disclosure and Controls and Procedures. As of the end of the period covered
by this Quarterly Report, we conducted an evaluation, under the supervision and
with the participation of our chief executive officer and chief financial
officer, of our disclosure controls and procedures (as defined in Rules
13a-15(e) of the Exchange Act). Based on this evaluation, our chief executive
officer and chief financial officer concluded that our disclosure controls and
procedures are effective to ensure that information required to be disclosed by
us in reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in
Securities and Exchange Commission rules and forms.
 
 Changes
in Internal Controls Over Financial Reporting. There have not been any changes
in the our internal control over financial reporting (as such term is defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter
to which this report relates that have materially affected, or are reasonably
likely to materially affect, our internal control over financial
reporting.
  12
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 PART
II - OTHER INFORMATION
 
 Item 1. LegalProceedings
 
 The
Company is not engaged in any other litigation, and is unaware of any claims or
complaints that could result in future litigation. All known proceedings
against the Company have been settled
 
 Item 2. UnregisteredSales of Equity Securities and Use of
Proceeds
 
 As part
of a settlement with former chairman and chief executive officer, Steven
Rosenthal, the Company issued 300,000 restricted common shares during December
2007.
 
 As part
of a settlement with former registered accounting firm, RBSM, the Company issued
45,500 of restricted common shares of Company stock during December
2007.
 
 As part
of the sale of HB Covey, the Company canceled 1,900,000 of restricted common
shares of Company stock returned to the Company by CEO, Burr Northrop during
December 2007.
 
 Item 3. Defaults Upon Senior Securities
 None.
 
 Item 4. Submissionof Matters to a Vote of Security
Holders
 
 None.
 
 Item 5. OtherInformation
 
 None.
 
 Item 6. Exhibits
 
 
 
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SIGNATURES
 
 
 Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the small
business issuer’scaused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
  ENTECH
      ENVIRONMENTAL TECHNOLOGIES, INC.Date:
      February 14, 2008
                By:
                /s/ Burr
      D NorthropBurr
      D NorthropChief
      Executive Officer
                  and
      Chief Financial Officer
 
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