UNITED
      STATES




S ECURITIES
      AND E XCHANGE C OMMISSION




Washington,
      D.C. 20549




FORM
      10-QSB








(X)
            Quarterly
                report pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934 for the quarterly period ended March 31, 2006





or





(
                )
            Transition
                report pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934.








333-86830(Commission
                File No.)





**ELECTRIC
      AQUAGENICS UNLIMITED, INC.**


(name
      of
      small business issuer in its charter)




Delaware
            
            87-0654478(State
                or other jurisdiction of incorporation or
                organization)
            
            (I.R.S.
                Employer Identification No.)1464
                W. 40 S. Suite #200, Lindon,
                Utah
            
            84042-1629(Address
                of principal executive offices)
            
            (Zip
                Code)Issuer’s
                telephone number:
            
            (801)
                443-1031




Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
      (or
      for such shorter period that the registrant was required to file such reports),
      and (2) has been subject to such filing requirements for the past 90 days.
      Yes x No  ̈





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





As
      of May
      10, 2006, the Registrant had 10,922,825 shares
      of
      Common Stock, $0.0001 par value outstanding.








**ELECTRIC
      AQUAGENICS UNLIMITED, INC.**


QUARTERLY
      REPORT ON FORM 10-QSB


March
      31,
      2006




INDEX


Page PART
                  I. FINANCIAL INFORMATIONITEM
                  1.
              Financial
                  StatementsConsolidated
                  Balance Sheets - March 31, 2006 and December 31, 2005
              3Consolidated
                  Statements of Operations - Three months ended March 31, 2006 and
                  2005
              5Consolidated
                  Statements of Cash Flows - Three months ended March 31, 2006 and
                  2005
              6Notes
                  to Consolidated Financial Statements
              8ITEM
                  2.
              Management's
                  Discussion and Analysis or Plan of Operation
              12ITEM
                  3.
              Controls
                  and Procedures
              18PART
                  II. OTHER INFORMATIONITEM
                  2.
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              19ITEM
                  6.
              Exhibits
              21SIGNATURES
              22





2





PART
      I -
      FINANCIAL INFORMATION





**ELECTRIC
      AQUAGENICS UNLIMITED, INC.**





***CONSOLIDATED
      BALANCE SHEETS***





ASSETS








March
                31,
            
            December
                312006
            
            2005(Unaudited)
            
            (Audited)


CURRENT
                ASSETSCash
                and cash equivalents
            
            $
            493,076
            
            $
            681,348Accounts
                receivable, net
            
            
            186,406
            
            
            122,771Accounts
                receivable - related party, net
            
            
            2,200
            
            
            1,061Current
                portion of notes receivable
            
            
            19,501
            
            
            18,834Current
                portion of notes receivable - related party
            
            
            42,196
            
            
            63,823Inventory,
                net
            
            
            2,249,644
            
            
            2,003,902Total
                current assets
            
            
            2,993,023
            
            
            2,891,739PROPERTY
                AND EQUIPMENT, net ofaccumulated
                depreciation of $295,205 and $245,211
            
            
            828,280
            
            
            946,702OTHER
                ASSETSNotes
                receivable
            
            
            62,463
            
            
            72,555Notes
                receivable - related party
            
            
            317,283
            
            
            306,829Patents
                and trademarks
            
            
            22,352
            
            
            22,352Investments
            
            
            374,075
            
            
            374,075Intellectual
                property
            
            
            1,187,612
            
            
            1,185,107Deposits
            
            
            21,737
            
            
            10,568Total
                other assets
            
            
            1,985,522
            
            
            1,971,486Total
                assets
            
            $
            5,806,825
            
            $
            5,809,927





See
      notes
      to consolidated financial statements.


3








**ELECTRIC
      AQUAGENICS UNLIMITED, INC.**





***CONSOLIDATED
      BALANCE SHEETS (Continued)***




LIABILITIES
      AND STOCKHOLDERS’ EQUITY (DEFICIT)





March
                  31,
              
              December
                  312006
              
              2005(Unaudited)
              
              (Audited)


CURRENT
                LIABILITIESAccounts
                payable
            
            $
            1,190,787
            
            $
            1,320,313Accrued
                expenses
            
            
            395,497
            
            
            346,759Warranty
                reserve
            
            
            96,800
            
            
            96,800Advance
                on sale of common stock -See Note 8
            
            
            1,000,000
            
            
            -Advance
                deposits on machine orders
            
            
            697,500
            
            
            -Current
                portion of long-term debt
            
            
            38,675
            
            
            38,675Total
                current liabilities
            
            
            3,419,259
            
            
            1,802,547LONG
                TERM LIABILITIESLong
                term debt, net of current portion
            
            
            147,823
            
            
            157,001Senior
                convertible note payable, net of discounts of $2,458,333and
                $2,708,333.
            
            
            541,667
            
            
            291,667Deferred
                licensing revenue
            
            
            891,667
            
            
            941,667Derivative
                liability - See Note 4
            
            
            5,331,309
            
            
            5,353,716Total
                long term liabilities
            
            
            6,912,466
            
            
            6,744,051Total
                Liabilities
            
            
            10,331,725
            
            
            8,546,598STOCKHOLDERS’
                EQUITY (DEFICIT)Common
                stock, $.0001 par value; 50,000,000 shares authorized;
              9,322,825and9,322,825issued and outstanding, respectively
            
            
            933
            
            
            933Additional
                paid in capital
            
            
            20,162,117
            
            
            19,838,331Accumulated
                deficit
            
            
            (24,687,950
            )
            
            (22,575,935
            )Total
                stockholders’ equity (deficit)
            
            
            (4,524,900
            )
            
            (2,736,671
            )Total
                liabilities and stockholders’ equity (deficit)
            
            $
            5,806,825
            
            $
            5,809,927










See
      notes
      to consolidated financial statements.


4


**ELECTRIC
      AQUAGENICS UNLIMITED, INC.**





***CONSOLIDATED
      STATEMENTS OF OPERATIONS***


**(Unaudited)**




For
                the Three MonthsEnded
                March 31,**2006**
            
            **2005**(Restated)NET
                SALES
            
            $
            517,391
            
            $
            91,782COST
                OF GOODS SOLD
            
            
            319,746
            
            
            33,794GROSS
                PROFIT
            
            
            197,645
            
            
            57,988OPERATING
                EXPENSESDepreciation
                and amortization
            
            
            54,880
            
            
            32,500Research
                and development
            
            
            34,779
            
            
            279,686General
                and administrative
            
            
            1,967,403
            
            
            1,822,911Total
                operating expenses
            
            
            2,057,062
            
            
            2,135,097LOSS
                FROM OPERATIONS
            
            
            (1,859,417
            )
            
            (2,077,109
            )OTHER
                INCOME (EXPENSE)Interest
                expense
            
            
            (289,106
            )
            
            (13,916
            )Interest
                income
            
            
            14,101
            
            
            15,699Gain
                (loss) on derivative liability
            
            
            22,407
            
            
            -Other
                income (expense)
            
            
            -
            
            
            (26,002
            )Total
                other income (expense)
            
            
            (252,598
            )
            
            (24,219
            )LOSS
                BEFORE PROVISION FOR INCOME TAXES
            
            
            (2,112,015
            )
            
            (2,101,328
            )PROVISION
                FOR INCOME TAXES
            
            
            ---
            
            
            ---NET
                LOSS
            
            $
            (2,112,015
            )
            $
            (2,101,328
            )NET
                LOSS PER SHARE
            
            $
            (0.23
            )
            $
            (0.26
            )WEIGHTED
                AVERAGE OF SHARES OUTSTANDING
            
            
            9,322,825
            
            
            7,938,384








See
      notes
      to consolidated financial statements.


5


**ELECTRIC
      AQUAGENICS UNLIMITED, INC.**





***CONSOLIDATED
      STATEMENTS OF CASH FLOWS***


**(Unaudited)**





For
                the Three MonthsEnded
                March 31,**2006**
            
            **2005**


CASH
                FLOWS FROM OPERATING ACTIVITIES
            
            
            
            (Restated)Net
                loss
            
            $
            (2,112,015
            )
            $
            (2,101,328
            )Adjustments
                to reconcile net loss to net cashused
                in operating activities:Depreciation
            
            
            54,880
            
            
            32,500Common
                stock issued for services
            
            
            -
            
            
            72,500Warrants
                and options issued in lieu of cash
            
            
            323,786
            
            
            274,915Discount
                of note payable
            
            
            250,000
            
            
            -Loss
                on disposal of assets
            
            
            73,291
            
            
            -Changes
                in operating assets and liabilities:(Increase)
                in accounts receivable
            
            
            (63,635
            )
            
            (26,922
            )(Increase)
                decrease in accounts receivable - related party
            
            
            (1,139
            )
            
            49,170Increase
                in inventory
            
            
            (245,742
            )
            
            (487,623
            )Increase
                in deposits
            
            
            (11,169
            )
            
            -Increase
                (decrease) in accounts payable
            
            
            (129,526
            )
            
            302,513Increase
                in advance deposits on machine orders
            
            
            697,500
            
            
            -Increase
                (decrease) in deferred revenue
            
            
            (50,000
            )
            
            -Increase
                (decrease) in derivative liability
            
            
            (22,407
            )
            
            -Increase
                in accrued expenses
            
            
            48,738
            
            
            24,350Net
                cash used in operating activities
            
            
            (1,187,438
            )
            
            (1,859,925
            )CASH
                FLOWS FROM INVESTING ACTIVITIESAcquisition
                of property and equipment
            
            
            (9,749
            )
            
            (605,483
            )Investments
            
            
            -
            
            
            (93,907
            )Payments
                received from notes receivable
            
            
            9,425
            
            
            7,638Payments
                (Proceeds) from notes receivable - related party
            
            
            11,173
            
            
            (15,325
            )Acquired
                patents
            
            
            -
            
            
            (850
            )Intellectual
                property acquisition
            
            
            (2,505
            )
            
            (11,781
            )Net
                cash provided (used) in investing activities
            
            
            8,344
            
            
            (719,708
            )CASH
                FLOWS FROM FINANCING ACTIVITIESPayments
                on notes payable
            
            
            (9,178
            )
            
            (10,480
            )Proceeds
                from advance on sale of stock - Water Science, LLC
            
            
            1,000,000
            
            
            -Proceeds
                from issuance of common stock
            
            
            -
            
            
            3,035,000Net
                cash provided by financing activities
            
            
            990,822
            
            
            3,024,520NET
                INCREASE (DECREASE) IN CASH
            
            
            (188,272
            )
            
            444,887CASH
                and cash equivalents, beginning of period
            
            
            681,348
            
            
            389,222CASH
                and cash equivalents, end of period
            
            $
            493,076
            
            $
            834,109











See
      notes
      to consolidated financial statements.





6


**Electric
      Aquagenics Unlimited, Inc.**





**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**(Unaudited)
      (Continued)**






For
                  the Three MonthsEnded
                  March 31,**2006**
              
              **2005**
 Supplemental
                  Disclosures of Cash Flow Information:
              
              
              
              (Restated)Cash
                  paid during the period for:Interest
              
              $
              7,962
              
              $
              13,916Income
                  Taxes
              
              $
              -
              
              $
              -Supplemental
                  Disclosures of Non-cash Investing and Financing
                  Activities:Common
                  stock issued for services
              
              $
              -
              
              $
              72,500Warrants
                  issued for services
              
              $
              323,786
              
              $
              274,915





See
      notes
      to consolidated financial statements.











7





**Electric
      Aquagenics Unlimited, Inc.**





**CONDENSED
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**





**(Unaudited)**





**NOTE
      1 - BASIS OF PRESENTATION**





The
      accompanying consolidated financial statements were prepared by the Company
      without audit pursuant to the rules and regulations of the Securities and
      Exchange Commission (SEC). Certain information and footnote disclosures normally
      included in financial statements prepared in accordance with accounting
      principles generally accepted in the United States of America have been
      condensed or omitted pursuant to such rules and regulations. In management’s
      opinion all necessary adjustments, which consist primarily of normal recurring
      adjustments, to the financial statements have been made to present fairly the
      financial position and results of operations and cash flows. The results of
      operations for the respective periods presented are not necessarily indicative
      of the results for the respective complete years. The financial statements
      should be read in conjunction with the consolidated financial statements and
      notes thereto included in the Company's Annual Report on Form 10-KSB for the
      year ended December 31, 2005.





**NOTE** **2 - PRINCIPLES OF CONSOLIDATION**





The
      accompanying consolidated financial statements include the accounts of Electric
      Aquagenics Unlimited, Inc. and its wholly owned subsidiary Equilease, Inc.
      (collectively, the “Company”). All significant inter-company accounts and
      transactions have been eliminated.





**NOTE
      3 - INVENTORIES**





The
      composition of inventories is as follows at:




March
                31, 2006
            
            
            December
                31, 2005Finished
                goods
            
            $
            132,650
            
            $
            531,625Raw
                materials
            
            
            2,433,129
            
            
            1,792,277Allowance
                for obsolete inventory
            
            
            (316,135
            )
            
            (320,000
            )$
            2,249,644
            
            $
            2,003,902








**NOTE
      4 - SENIOR CONVERTIBLE DEBT**





In
      September 2005, the Company entered into a Senior Convertible Note with a third
      party in exchange for $3,000,000. Pursuant to the debt agreement, the note
      accrues interest at the rate of 3% per annum and is due, principal and interest
      together, on September 16, 2008. No principal or interest payments need to
      be
      paid during the loan period. The note may be converted into 1,000,000 shares
      of
      the Company’s $0.0001 par value common stock prior to the maturity date, and at
      any time, by the holder at a price per share equal to $3.00 per share, subject
      to certain other conversion adjustments. In connection with the issuance of
      the
      Note, the Company also granted a three year warrant to purchase up to two (2)
      million shares of the Company’s $0.0001 par value common stock for a purchase
      price of $2.76 per share. The exercise price of these warrants is to be adjusted
      if the Company should issue stock for less than the original exercise price.


8


**ELECTRIC
      AQUAGENICS UNLIMITED, INC.**





***CONDENSED
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS***





**NOTE
      4 - SENIOR CONVERTIBLE DEBT - continued**





Due
      to
      this feature wherein the conversion price is reset if shares are issued at
      a
      price less than the fixed conversion price, and pursuant to EITF 00-19, the
      Company has elected to bifurcate the conversion feature from the debt host
      and
      accounts for the feature as a derivative liability with changes in fair value
      being recorded in the income statement. As of March 31, 2006, the value of
      the
      derivative liability is $5,331,309.





Note
      5 -
      GOING CONCERN




During
      the current period, the Company incurred significant losses and a negative
      cash
      flow from operations. As a result, at March 31, 2006, the Company had a high
      level of equity financing transactions and additional financing will be required
      by the Company to fund its future activities and to support its operations.
      However, there is no assurance that the Company will be able to obtain
      additional financing. Furthermore, there is no assurance that rapid
      technological changes, changing customer needs and evolving industry standards
      will enable the Company to introduce new products and services on a continual
      and timely basis so that profitable operations can be attained. The Company’s
      ability to achieve and maintain profitability and positive cash flows is
      dependent upon its ability to increase sales and profit margins and control
      operating expenses. Management plans to mitigate its losses in the near term
      through the further development and marketing of its patents, trademarks, brand
      and product offerings.





NOTE
      6 -
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Stock
      Based-Compensation Expense





On
      January 1, 2006, the Company adopted Statement of Financial Accounting Standards
      No. 123 (revised 2004), “Share-Based Payment,” (“SFAS 123(R)”) which requires
      the measurement and recognition of compensation expense for all share-based
      payments to employees and directors including employee stock options  and
      stock purchases related to the Company’s employee stock option and award plans
      based on estimated fair values. SFAS 123(R) supersedes the Company’s previous
      accounting under Accounting Principles Board Option No. 25, “Accounting for
      Stock Issued to Employees” (“APB25”) for periods beginning in fiscal 2006. In
      March 2005, the Securities and Exchange Commission issued Staff Accounting
      Bulletin No. 107 (“SAB 107”) relating to SFAS 123(R). The Company has applied
      the provisions of SAB 107 in its adoption of SFAS 123(R).





The
      Company adopted SFAS 123(R) using the modified prospective transition method,
      which requires the application of the accounting standard as of January 1,
      2006,
      the first day of the Company’s fiscal year 2006. The Company’s financial
      statements as of and for the three month period ended March 31, 2006 reflect
      the
      impact of SFAS 123(R). In accordance with the modified prospective transition
      method, the Company’s financial statements for the prior year have not been
      restated to reflect, and do not include, the impact of SFAS 123(R). Stock-based
      compensation expense recognized under SFAS 123(R) for the three month period
      ended March 31, 2006 was $323,786 related to employee stock options issued
      during the period. There was no stock-based compensation expense related to
      employee stock options and employee stock purchases recognized during the three
      period ended March 31, 2005.


9


**ELECTRIC
      AQUAGENICS UNLIMITED, INC.**





***CONDENSED
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS***








Basic
      and
      Fully Diluted Loss Per Share





Basic
      and
      Fully Diluted net loss per share is computed using the weighted-average number
      of common shares outstanding during the period.




For
                  the Three Months EndedMarch
                  31,2006
            
            2005Loss
                (numerator)
            
            $
            (2,112,015
            )
            $
            (2,101,328
            )Shares
                (denominator)
            
            
            9,322,825
            
            
            7,938,384Per
                share amount
            
            $
            (0.23
            )
            $
            (0.26
            )





The
      Company’s outstanding stock options have been excluded from the basic net loss
      per share calculation for the three month period ended March 31, 2006 and 2005,
      because they are anti-dilutive.





NOTE
      7 -
      RESTATEMENT





The
      Company has restated its financial statements for the period ended March 31,
      2005. The Company determined that generally accepted accounting principles
      had
      not been followed in 2004 and for the first quarter of 2005 for the recording
      of
      certain types of transactions. See Note 18-Restatement of the Notes to the
      Consolidated Financial Statements for year ended December 31, 2005 and 2004
      in
      the Company’s 10-KSB for details of the restatement of the 2004 financial
      statements. The impact of the 2004 restatement of the balance sheet accounts
      carries forward and the 2004 changes to such accounts are part of the changes
      noted below. The type and impact of the changes to those transactions relating
      to the first quarter of 2005 are as follows:





Recognition
      of common stock and warrant issuances resulting in additional consulting and
      compensation expense of $274,915. A net decrease of $10,938 of various other
      general and administrative expenses.





The
      following table highlights the significant areas of change from those previously
      reported:





As
                previously reported March 31, 2005
            
            RestatedMarch
                31,2005
            
            ChangeTotal
                Assets
            
            $
            5,624,982
            
            $
            5,453,747
            
            $
            (189,235
            )Additional
                Paid in Capital
            
            $
            (11,348,141
            )
            $
            (15,555,451
            )
            $
            (4,207,310
            )Accumulated
                deficit
            
            $
            (7,917,774
            )
            $
            (11,429,013
            )
            $
            (3,511,239
            )Total
                Equity
            
            $
            (4,556,082
            )
            $
            (4,125,146
            )
            $
            430,936Net
                Sales
            
            $
            87,880
            
            $
            91,782
            
            $
            3,902Net
                Income (Loss)
            
            $
            (1,751,430
            )
            $
            (2,101,328
            )
            $
            (349,898
            )Basic
                Earnings (Loss) per Share
            
            $
            (0.31
            )
            $
            (0.26
            )
            $
            (0.05
            )


10


**ELECTRIC
      AQUAGENICS UNLIMITED, INC.**





***CONDENSED
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS***














NOTE
      8
      -SUBSEQUENT EVENTS





On
      May 1,
      2006, the Company sold and issued to Water Science, LLC, a Florida limited
      liability company (“Water Science”), a total of 1,600,000 shares of the
      Company’s $0.0001 par value common stock for a total of $4 million cash, or
      $2.50 per share.In
      connection with the transaction, Water Science advanced the Company $1 million
      in cash in January 2006, which has been recorded as a current liability in
      these
      financial statements. In a letter agreement executed in connection with this
      transaction, Water Science agreed that this transaction would not cause an
      adjustment to the conversion price of the Senior Convertible Note issued to
      Water Science in September 2005, nor would it cause an adjustment to the
      exercise price of the warrant issued to Water Science in September 2005.




The
      Company also issued warrants to purchase up to 6,400,000 shares of the Company’s
      $0.0001 par value common stock in exchange for the payment of $2.76 per
      share.


11


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





The
      following discussion and analysis provides information which management believes
      is relevant to an assessment and understanding of the Company’s condensed
      results of operations and financial condition. The discussion should be read
      in
      conjunction with the financial statements included in our annual report on
      Form
      10-KSB, and notes thereto.





**Overview**





Electric
      Aquagenics Unlimited, Inc. (referred to herein sometimes as “EAU,” “we,” “us,”
or the “Company”) is in the business of developing, manufacturing and marketing
      equipment that uses water electrolysis to create fluids. These fluids have
      various commercial applications and may be used in organic, agricultural and
      consumer products that clean, disinfect, remediate, hydrate and moisturize
      and
      do not contain or leave harmful residues associated with chemical-based
      disinfecting and cleaning agents (“EOW Technology”). For example, our
      agricultural treatment products systemically treat all facets and phases of
      the
      food chain, from soil to animal grain, by eliminating dangerous and unhealthy
      pathogens and augmenting the same with natural organic growth stimulating
      substances which are highly effective in increasing the growth in plants and
      weight gain and production in animals. The electrolyzed fluids created by the
      EOW Technology (referred to herein sometimes as the “EO Fluids” or “Empowered
      WaterTM) generated by our patented and specialized equipment currently replace
      many of the traditional products used in commercial, industrial and residential
      disinfecting and cleaning.




We
      also
      develop, manufacture and market consumer products that support a healthy
      lifestyle, such as our Perfect Empowered Drinking WaterTM, Perfect Oxygenated
      TherapyTM products, formerly marketed under the name “Aquagen® Stabilized Oxygen
      Products,” and our Perfect Hand Sanitizer and ProtectantTM. The fluids that
      incorporate the EO Technology and our consumer products are environmentally
      safe
      and non toxic. We plan to expand the market for our Perfect Oxygenated TherapyTM
products and to develop other personal use products, such as skin care products,
      periodontal products and a foot sanitizer product. We also intend to continue
      to
      develop and market commercial and residential cleaning products, such as bottled
      surface cleaning products.




We
      have
      identified the following industries for early stage sales and marketing focus:
      1) poultry processing, 2) bottled drinking water and consumer products, and
      3)
      agricultural products. We focus on these markets because we believe that we
      have
      either a competitive advantage in the marketplace or a leading strategic
      industry partner for specific products and/or can provide an attractive value
      proposition to commercial end users or consumers for products that use or embody
      our EO Technology, EO Fluids or Perfect Oxygenated TherapyTM products. To
      penetrate these markets, we have entered into joint venture agreements with
      industry leading partners that have significant existing market share or we
      have
      found high-level industry professionals to help us manage the particular market
      or market channel.





We
      are
      continuing our testing with Tyson Foods, Inc with continued good results in
      proving the effectiveness of the EOW Technology in killing salmonella and other
      bacteria in poultry processing. Due to very encouraging results in increasing
      milk production and milk fat in dairy cattle, the Company is building a large
      production machine to further verify initial test results on a larger commercial
      scale and to prove the effectiveness of its technology in this
      market.





Past
      revenues have been generated primarily from equipment sales to the carpet and
      living surfaces industries, and some consumer product sales; but we intend
      to
      derive future EOW Technology revenues from recurring fees charged to customers
      based on per-unit or per-gallon of fluid used after equipment is installed;
      and
      we intend to drive our consumer and agriculture products to create greater
      revenues.




Our
      operations are currently funded by a combination
      of revenues and capital funding.


12


On
      February 15, 2006, we executed an amended exclusive licensing and product
      supplier agreement with Zerorez Franchising Systems, Inc., (“Zerorez”) an
      affiliated entity, to provide Zerorez its Primacide water solutions and water
      generators for its franchisees in the carpet and living surface cleaning
      industry. The Company is committed to sell to Zerorez the Primacide B water
      generator for over the next 25 years under this agreement. On May 11, 2006,
      the
      Company amended and restated this exclusive licensing and product supplier
      agreement with Zerorez to include different warranty provisions. Zerorez is
      not
      obligated to purchase any minimum amount of product under this
      agreement.





On
      March
      28, 2006, we entered into an agreement with Brand Velocity, Inc., whereby Brand
      Velocity agreed to perform certain strategic planning and corporate assessment
      consulting services. By the terms of Brand Velocity’s engagement, it agreed to
      interview our key executives and review all of our relevant corporate
      communications, business plans and investor communications in order to help
      us
      better articulate our current and future business strategies. Under the Brand
      Velocity agreement, Brand Velocity agreed to create a document to help us
      develop our market channels, build brand recognition and establish clear
      marketing and development objectives for 2006





Results
      of Operations





The
      following discussion should be read in conjunction with selected financial
      data
      and the financial statements and notes to financial statements.





*Selected
      Financial Information*




Three
                months ended March 31,2006
            
            2005Revenue,
                net
            
            $
            517,391
            
            $
            91,782Gross
                profit (loss)
            
            
            197,645
            
            
            57,988Operating
                loss
            
            
            (1,859,417
            )
            
            (2,077,109
            )Other
                income (expense)
            
            
            (252,598
            )
            
            (24,219
            )Net
                income (loss)
            
            
            (2,112,015
            )
            
            (2,101,328
            )





13








March
                31,2006
            
            March
                31,2005
            
            December
                31,2005Balance
                Sheet Data:Cash
                and Cash Equivalents
            
            $
            493,076
            
            $
            834,109
            
            $
            681,348Total
                Current Assets
            
            
            2,993,023
            
            
            2,198,451
            
            
            2,891,739Total
                Assets
            
            
            5,806,825
            
            
            5,453,747
            
            
            5,809,927Total
                Current Liabilities
            
            
            2,721,759
            
            
            1,105,744
            
            
            1,802,547Long
                Term Debt
            
            
            689,490
            
            
            222,857
            
            
            448,668Total
                liabilities and stockholders’ equity
            
            $
            5,806,825
            
            $
            5,453,747
            
            $
            5,809,927





**Financial
      Position**





We
      had
      $493,076 in cash as of March 31, 2006. Our working capital as of March 31,
      2006
      was $(426,236) compared to $1,089,192 at December 31, 2005. The primary reason
      for the decline in our working capital was current liabilities increasing by
      $1,697,500 due to the advance on the sale of common stock to Water Science,
      LLC
      and advance deposits on machine orders to Water Science, LLC. On May 1, 2006
      the
      Company closed the sale of common stock to Water Science and the $1,000,000
      current liability was transferred to equity. The $697,500 advance deposits
      liability will be reduced as the Company delivers machines to Water Science.
      This should occur during the second and third quarter of 2006. At March 31,
      2006, our stockholders’ deficit was $4,524,900. In light of these circumstances,
      the ability of the Company to continue as a going concern is in substantial
      doubt. The attached financial statements do not include any adjustments that
      might result from the outcome of this uncertainty.





**Discussion**





The
      Company had total revenues of $517,391 for the three months ended March 31,
      2006, which represents an increase of 464% from the $91,782 in total revenues
      for the same period one year earlier. A majority of this increase came from
      consumer products sales of approximately $227,000 and agriculture enhancement
      products of approximately $234,000 in the current quarter versus no consumer
      sales or agriculture enhancement product sales in the first quarter for 2005.
      Management believes that this trend will continue generating significant
      revenues from both its consumer and agriculture enhancement sales. Management
      also believes that agriculture machine sales will be realized in the second
      quarter as it has taken deposits on eight machines from Water Science the
      company that holds a license agreement with the Company to distribute its
      products in Latin America..





Research
      and development expenses incurred in the first quarter of 2006 decreased
      $244,907 or 88% compared to those expenses incurred during the same period
      one
      year earlier due to the Company beginning to move from the development stage
      to
      the sale of its developed products. We anticipate that our research and
      development expenditures will continue at approximately this same level or
      a
      little higher due to research it intends to continue in the dairy and feed
      lot
      markets. While the Company will continue improve its products and their
      performance, it believes it has developed proven products that have commercial
      value in its targeted markets.





The
      Company’s general and administrative expenses totaled $1,967,403 during the
      first quarter of 2006, compared to $1,822,911 during the first quarter of 2005.
      This 8% increase in general and administrative expenses is attributable to
      an
      increase in salary and contract labor expense and benefits of $533,877 over
      the
      prior year period. This increase is partially offset by decreases in marketing
      expenses of $127,087, capital funding expense of $334,965 and rent expense
      of
      $23,768 over the first quarter in 2005. The Company is currently trying to
      reduce its general and administrative expenses and has reduced its workforce
      by
      10% at the end of the quarter and is challenging all of its expenditures.


14





Total
      other expense increased from $24,219 for the first quarter 2005 to $252,598
      in
      2006 or $228,379. The majority of this increase is due to an increase of
      interest expense relating to the derivative liability of approximately $278,000
      compared to no derivative liability expense in the same period for
      2005.





**Liquidity
      and Capital Resources**




At
      March
      31, 2006, we had cash and cash equivalents of $493,076, compared to $681,348
      at
      December 31, 2005. We
      have
      had continuing operating losses of $2,112,015 for the three months ended March
      31, 2006, compared with operating losses of $2,101,328 for the three months
      ended March 31, 2005. The net loss per share for the first quarter of 2006
      was
      $(0.23) per share compared to a $(0.26) per share for the same period in 2005.
      The decrease is attributable to a higher weighted-average of shares outstanding
      (1,384,441) during 2006. Our working capital as of March 31, 2006 was $(426,236)
      for reasons discussed above.





Net
      cash
      used in operating activities in the three month period ended March 31, 2006
      was
      $1,187,438, compared to $1,859,925 for the same period in 2005. The primary
      uses
      of cash were an increase in inventory of $245,742, an increase of accounts
      receivable of $63,635 and a decrease in accounts payable of $129,526. Advances
      on machine orders increased $697,500 during the quarter which reduced the
      operating cash requirements for the Company. Sales have increased during the
      quarter resulting in a corresponding increase in accounts
      receivable.





At
      March
      31, 2006, the Company’s inventory was $2,249,644, representing an increase of
      12.3% from the $2,003,902 on hand at December 31, 2005. T his
      increase in inventory resulted from taking advantage of volume pricing and
      low
      precious metal prices at the time and in the Company’s anticipating orders of
      large generators. The Company is in the process of building machines for Water
      Science during the early part of 2006 and has increased its inventory over
      the
      December 31, 2005 inventory levels due to ordering parts for these machines.
      Management anticipates converting part of this inventory to sales and cash
      during the next three to four months. We believe that these large generators
      will be utilized both in the live processing, agriculture applications and
      the
      dairy markets. Management believes these sales will be realized during 2006
      and
      that inventory will be reduced to more normal inventory levels.





The
      operating outflow of cash was offset by the Company issuing warrants and stock
      options in lieu of cash during the quarter of $323,786. The Company adopted
      SFAS
      123R and expenses stock options given to employees. The operating loss was
      increased by the following items which had no cash flow impact. The Company
      recognized a non-cash gain from the discounting of the Company’s note payable to
      Water Science of $250,000. See Note 4 to the Company’s unaudited consolidated
      financial statements. The Company identified and wrote-off leasehold
      improvements relating to a prior leased location totaling $73,291 in connection
      with the Aquagen purchase made on December 31, 2004.





Our
      working capital requirements for the foreseeable future will vary based upon
      a
      number of factors, including, our timing in the implementation of our business
      plan, our growth rate and the level of our revenues. We have no commitments
      to
      fund any future capital expenditures. Our current assets, along with cash
      generated from anticipated revenues, will not provide us with sufficient funding
      for the next twelve months. We anticipate that we will need approximately two
      to
      three million dollars in funding to execute our business plan over the next
      twelve months and at least an additional $5,000,000 or more in funding
      thereafter. However, if we able to expand our sale of EO machines as
      anticipated, we will need significantly more capital to fund that
      expansion.


15





The
      $1,000,000 advance on the sale of the Company’s common stock to Water Science
      was received in January 2006. The sale of the common stock was consummated
      on
      May 1, 2006. The advance was classified as a current liability at March 31
      due
      to the short term nature of the liability. The liability was transferred to
      equity at the closing and recording of the transaction. See part
      II **,
      -** Item
      2
      Unregistered Sales of Equity Securities and Use of Proceeds **** and
      Note
      8- Subsequent Events in the condensed notes to consolidated financial
      statements.





Proceeds
      from the private sale of our common stock to Water Sciences should be sufficient
      to fund our continuing operations at our current level through at least August
      2006 or later depending on the ability of the Company to generate sales.
      Management recognizes that additional funding will be required to finance growth
      and to achieve our strategic objectives. Management is actively pursuing
      additional sources of funding. We
      have
      no contractual arrangements that will provide us with funds and there can be
      no
      assurance that we will obtain the necessary funding, or that such funding,
      if
      obtained, will be on terms that are favorable to the Company or its
      shareholders. Failure to raise the required capital could prevent us from
      achieving our business objectives and may result in substantially reducing
      or
      even terminating operations.





If
      the
      Company does not raise sufficient funds in the future, we may not be able to
      fund expansion, take advantage of future opportunities, meet our existing debt
      obligations or respond to competitive pressures or unanticipated
      requirements. Future
      financing transactions may include the issuance of equity or debt securities,
      obtaining credit facilities, or other financing mechanisms. However, inability
      to establish a public market for our common stock, or once we have a market
      for
      our common stock, a subsequent decline in the trading price of our common stock
      and the downturn in the U.S. stock and debt markets could make it more difficult
      for us to obtain financing through the issuance of equity or debt securities.
      Even if we are able to raise the funds required, it is possible that we could
      incur unexpected costs and expenses, fail to collect significant amounts owed
      to
      us, or experience unexpected cash requirements that would force us to seek
      alternative financing. Further, if we issue additional equity or debt
      securities, stockholders may experience additional dilution, or the new equity
      securities may have rights, preferences or privileges senior to those of
      existing holders of our common stock.





**Off-Balance
      Sheet Arrangements**





We
      do not
      have any off-balance sheet arrangements that have or are reasonably likely
      to
      have a current or future effect on our financial condition, changes in financial
      condition, revenues or expenses, results of operations, liquidity, capital
      expenditures or capital resources that is material to investors.





**Critical
      Accounting Policies**





The
      preparation of financial statements and related disclosures in conformity with
      U.S. generally accepted accounting principles and our discussion and analysis
      of
      our financial condition and results of operations require us to make judgments,
      assumptions and estimates that affect the amounts reported in our consolidated
      financial statements and accompanying notes.  Note 1 of the notes to
      consolidated financial statements in Part II, Item 7 of the Company's
      Annual Report on Form 10-KSB, dated December 31, 2005, describes the
      significant accounting policies and methods used in preparation of our
      consolidated financial statements.  We base our estimates on historical
      experience, current trends, future projections, and on various other assumptions
      we believe to be reasonable under the circumstances, the results of which form
      the basis for making judgments about the carrying values of assets and
      liabilities.  Actual results may differ from these estimates.  We
      believe the following to be our critical accounting estimates because they
      are
      both important to the portrayal of our financial condition and results and
      they
      require us to make judgments and estimates about matters that are inherently
      uncertain.




16





Our
      critical accounting policies and estimates include the following:




Revenue
      recognition;





Impairment
      of long-lived assets; and





Allowances
      for doubtful accounts.





*Revenue
      Recognition.* We
      recognize revenue when goods are shipped and title passes to the customer or
      when services are performed in accordance with contract terms. The Company
      provides an allowance for sales returns based on current and historical
      experience.





*Impairment
      of long-lived assets.* Long-lived
      assets are reviewed for impairment whenever events or changes in circumstances
      indicate that the carrying amount of such assets may not be recoverable.
      Determination of recoverability is based on an estimate of undiscounted future
      cash flows resulting from the use of the asset and its eventual disposition.
      Measurement of an impairment loss for long-lived assets that management expects
      to hold and use is based on the fair value of the asset. Long-lived assets
      are
      reported at the lower of carrying or fair value less costs to sell.





*Allowance
      for doubtful accounts.* The
      Company sells its products to large grocery and commercial customers. It
      regularly reviews its aging and reserves for amounts that may be at risk in
      collection. The Company has historically had very few uncollectible
      amounts.




**Recent
      Accounting Pronouncements**





On
      January 1, 2006, the Company adopted Statement of Financial Accounting Standards
      No. 123 (revised 2004), “Share-Based Payment,” (“SFAS 123(R)”) which requires
      the measurement and recognition of compensation expense for all share-based
      payments to employees and directors including employee stock options  and
      stock purchases related to the Company’s employee stock option and award plans
      based on estimated fair values. SFAS 123(R) supersedes the Company’s previous
      accounting under Accounting Principles Board Option No. 25, “Accounting for
      Stock Issued to Employees” (“APB25”) for periods beginning in fiscal 2006. In
      March 2005, the Securities and Exchange Commission issued Staff Accounting
      Bulletin No. 107 (“SAB 107”) relating to SFAS 123(R). The Company has applied
      the provisions of SAB 107 in its adoption of SFAS 123(R).





The
      Company adopted SFAS 123(R) using the modified prospective transition method,
      which requires the application of the accounting standard as of January 1,
      2006,
      the first day of the Company’s fiscal year 2006. The Company’s financial
      statements as of and for the three month period ended March 31, 2006 reflect
      the
      impact of SFAS 123(R). In accordance with the modified prospective transition
      method, the Company’s financial statements for the prior year have not been
      restated to reflect, and do not include, the impact of SFAS 123(R). Stock-based
      compensation expense recognized under SFAS 123(R) for the three month period
      ended March 31, 2006 was $323,786 related to employee stock options issued
      during the period. There was no stock-based compensation expense related to
      employee stock options and employee stock purchases recognized during the three
      period ended March 31, 2005.





In
      November 2004, the FASB issued SFAS No. 151, “Inventory Costs, an amendment of
      ARB No. 43, Chapter 3,” which clarifies the accounting for abnormal amounts of
      idle facility expense, freight, handling costs, and waste material. This
      statement is effective for inventory cost incurred during fiscal years beginning
      after June 15, 2005. SFAS No. 151 is not currently applicable to the company,
      and we believe that the adoption of SFAS No. 151 will not have a material impact
      on our results of operations.




In
      December 2004, the FASB issued SFAS No. 153, “Exchanges of Non-monetary Assets,
      an amendment of APB Opinion No. 29,” which replaces the exception from fair
      value measurement in APB Opinion No. 29 with a general exception for exchanges
      of non-monetary assets that do not have commercial substance. This statement
      is
      effective for non-monetary asset exchanges occurring in fiscal periods beginning
      after June 15, 2005. SFAS No. 153 is not currently applicable to the company,
      and we believe that the adoption of SFAS No. 153 will not have a material impact
      on our results of operations.


17








In
      May
      2005, the FASB issued Statement of Financial Accounting Standards No. 154
“Accounting Changes and Error Corrections, an amendment of APB Opinion 20 and
      FASB Statement No. 3,” which changes the requirements for accounting for and
      reporting on a change in accounting principle. This statement is effective
      for
      accounting changes and corrections of errors made in fiscal years beginning
      after December 15, 2005. We believe that the adoption of SFAS No. 154 will
      not
      have a material impact on our results of operations.





In
      March
      2006, the FASB issued SFAS No. 156 “Accounting for Servicing of Financial
      Assets, an amendment of FASB No. 140,” which modifies the accounting for and
      reporting of servicing asset and servicing liabilities. This statement is
      effective as of the beginning of our first fiscal year that begins after
      September 15, 2006. SFAS No. 156 is not currently applicable to the company
      and,
      we believe that the adoption of SFAS No. 156 will not have a material impact
      on
      our results of operations.





**Inflation**





We
      do not
      expect the impact of inflation on operations to be significant.




**Forward-Looking
      Statements**





All
      forward-looking statements contained herein are deemed by the Company to be
      covered by and to qualify for the safe harbor protection provided by the Private
      Securities Litigation Reform Act of 1995. Prospective shareholders should
      understand that several factors govern whether any forward-looking statement
      contained herein will be or can be achieved. Any one of those factors could
      cause actual results to differ materially from those projected herein. These
      forward-looking statements include plans and objectives of management for future
      operations, including plans and objectives relating to the products and the
      future economic performance of the Company. Assumptions relating to the
      foregoing involve judgments with respect to, among other things, future
      economic, competitive and market conditions, future business decisions, and
      the
      time and money required to successfully complete development projects, all
      of
      which are difficult or impossible to predict accurately and many of which are
      beyond the control of the Company. Although the Company believes that the
      assumptions underlying the forward-looking statements contained herein are
      reasonable, any of those assumptions could prove inaccurate and, therefore,
      there can be no assurance that the results contemplated in any of the
      forward-looking statements contained herein will be realized. Based on actual
      experience and business development, the Company may alter its marketing,
      capital expenditure plans or other budgets, which may in turn affect the results
      of operations. In light of the significant uncertainties inherent in the
      forward-looking statements included therein, the inclusion of any such statement
      should not be regarded as a representation by the Company or any other person
      that the objectives or plans will be achieved *.*





**Item
      3.** **Controls
      and Procedures**





Our
      internal control over financial reporting is a process designed to provide
      reasonable assurance regarding the reliability of financial reporting and the
      preparation of financial statements for external reporting purposes in
      accordance with U.S. generally accepted accounting principles (“GAAP”). Under
      the supervision and with the participation of our management, including our
      Chief Executive Officer and Chief Financial Officer, management conducted a
      review, evaluation, and assessment of the effectiveness of the design and
      operation of the Company’s disclosure controls and procedures as of March 31,
      2006, pursuant to Exchange Act Rule 15d-15.





A
      material weakness, as defined under standards established by the Public Company
      Accounting Oversight Board’s Auditing Standard No. 2, is a control deficiency,
      or combination of control deficiencies, that results in more than a remote
      likelihood that a material misstatement of annual or interim financial
      statements would not be prevented or detected.


18








As
      part
      of our year-end reporting and the preparation of this report for 10-QSB, for
      the
      first quarter 2006, management determined that our previous filings with the
      SEC
      had failed to follow generally accepted accounting principles and to employ
      proper accounting disclosures. These determinations indicate that we have a
      material weakness in our internal controls over financial reporting.
      Additionally, management concluded it was necessary to restate our consolidated
      financial statements for the year ended December 31, 2004, and for the quarters
      ended March 31, 2005, June 30, 2005 and September 30, 2005.





Management
      also determined that another inherent internal control weakness exists due
      to
      the size of our accounting staff, comprised of two accountants, and due to
      the
      general ledger system which allows for entries to be changed with no tracking
      of
      such changes available. We initiated the correction of these weaknesses in
      the
      first quarter 2006.





In
      addition, our auditors noted that some balance sheet accounts were not timely
      reconciled which could result in deficiencies in monthly and quarterly internal
      and external financial statements.





**Remediation
      of Material Weaknesses**





Management
      is required to ensure that its personnel in all areas have the required
      competence, resources, training, and supervision; that policies and procedures
      necessary for their assigned levels of responsibility are in place; and that
      sufficient staff is present to effectively perform all processes necessary
      to
      maintaining a proper internal control environment. Management is also
      responsible for maintaining effective internal control processes over its
      financial and reporting process.





In
      order
      to remediate the aforementioned material weaknesses, management is taking the
      following actions:





·
            Management
                engaged a new independent public accounting firm on March 9,
                2006;


·
            Management
                hired a new Chief Financial Officer, H. Warren Jaynes, on February
                15,
                2006;


·
            Management
                has implemented a regular routine of reconciling all balance sheet
                accounts on a regular timely basis to ensure the accuracy of our
                records;


·
            Our
                Chief Financial Officer conducts a quarterly meeting with all senior
                executives to discuss our Internal Controls over Financial Reporting
                and
                Disclosure and review all pertinent matters with such senior executives.
                The first meeting was held on March 31, 2006;
                and


·
            Management
                intends to purchase and implement a new general ledger system during
                the
                third quarter of 2006 allowing for better internal accounting
                controls.








**PART
      II - OTHER INFORMATION**





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





On
      February 15, 2006, we granted stock options exercisable for 300,000 shares
      of
      common stock to Warren Jaynes, our Chief Financial Officer. The options are
      exercisable at $2.76 per share. One hundred thousand of the shares vest on
      the first anniversary of the Agreement; and twenty-five thousand shares will
      vest every three months thereafter. The sale of the above referenced
      securities was exempt from registration with the Securities and Exchange
      Commission under Sections 4(2) and 4(6) of the Securities Act of 1933 and Rule
      506 of Regulation D promulgated thereunder. We did not use an underwriter
      in connection with this offering.




On
      May 1,
      2006, we entered into a Subscription Agreement, a Warrant Agreement, a
      Registration Rights Agreement and an Amended and Restated Exclusive License
      and
      Distribution Agreement with Water Science an accredited and sophisticated
      investor and our senior lender and a major customer. Pursuant to the
      Subscription Agreement, we sold and issued to Water Science 1,600,000 shares
      of
      our $0.0001 par value common stock for an aggregate purchase price of $4
      million, or $2.50 per share. Pursuant to the Warrant Agreement, we granted
      to
      Water Science a three year warrant to purchase up to a total of 6,400,000 shares
      of our $0.0001 par value common stock for a purchase price of $2.76 per share.




Pursuant
      to the Registration Rights Agreement, we agreed to register with the Securities
      and Exchange Commission all of the shares purchased by the Subscription
      Agreement and all of the shares underlying the Warrant Agreement during the
      period between the one year anniversary and the two year anniversary of the
      date
      of the Registration Rights Agreement.




19






Pursuant
      to the Amended and Restated Exclusive License and Distribution Agreement,
      certain terms in the original Exclusive License and Distribution Agreement
      entered into between Water Science and us on or about September 19, 2005, were
      clarified, specifically with respect to what products and technology is intended
      to be covered by the License Agreement, and to specify the initial pricing
      with
      respect to such products.




We
      paid a
      placement fee of $240,000 to SunTrust Robinson Humphrey Capital Markets Division
      ("SunTrust") in connection with the placement of the 1,600,000 shares of common
      stock. The placement fee was paid to SunTrust pursuant to the terms of an
      Engagement Letter dated October 31, 2005 (the "Engagement Letter") whereby
      SunTrust was appointed as our exclusive placement agent in connection with
      the
      sale of securities. Pursuant to the terms of the Engagement Letter, which may
      be
      terminated by either party at any time, SunTrust is entitled to a placement
      fee
      of 6.0% of the gross proceeds received by the Company from any sale by the
      Company of its securities. The
      sale
      of the above referenced securities was exempt from registration with the
      Securities and Exchange Commission under Section 4(2) of the Securities Act
      of
      1933 and Rule 506 of Regulation D promulgated thereunder.





On
      May 1,
      2006, we entered into a consulting agreement with JL Montgomery Consulting,
      LLC,
      a Florida limited liability company and an accredited and sophisticated
      investor. By the terms of this agreement, JL Montgomery Consulting agreed to
      assist the Company in locating and structuring equity and long-term debt
      financing; to help establish financial policies and procedures; to offer
      strategic financial assistance; to provide strategic business planning; to
      offer
      financial advice to the Company and its Board of Directors on financial matters;
      and to introduce the Company to third parties, including independent companies,
      governmental contacts, and/or third party individuals interested in purchasing
      our products or forming a business relationship with us. As compensation, we
      granted to LJ Montgomery Consulting a five-year, fully vested warrant to
      purchase up to 500,000 of our $.0001 common stock at the price of $2.76 per
      share. The sale of the securities was exempt from registration with the
      Securities and Exchange Commission under Section 4(2) of the Securities Act
      of
      1933 and Rule 506 of Regulation D promulgated thereunder.


20








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





EXHIBIT
                NO.
            DESCRIPTION
                OF EXHIBIT3(i).1
            Articles
                of Incorporation (Incorporated by reference from registration statement
                on
                Form SB-2 filed with the SEC on July 29, 2002 (File No.
                333-86830)3(i).2
            Certificate
                of Amendment of Certificate of Incorporation (Incorporated by reference
                from registration statement on Form SB-2 filed with the Securities
                and
                Exchange Commission on July 29, 2002 (File No.
                333-86830)3(ii).1
            Bylaws
                (Incorporated by reference from registration statement on Form SB-2
                filed
                with the Securities and Exchange Commission on April 24, 2002 (File
                No.
                333-86830).10.1
            Senior
                Convertible Note by and between the Company and Water Sciences, LLC,
                in
                the principal amount of $3,000,000, dated September 16 2005 (Incorporated
                by reference to Exhibit 10.2 of the Company’s Form 8-K/A, dated October
                12, 2005)10.2
            Stock
                purchase Agreement between the Company and Tasker Capital Corp. dated
                as
                of April 22, 2005 (Incorporated by reference to Exhibit 10.1 of the
                Company’s Form 10-KSB, dated December 31, 2005)10.3
            Limited
                Liability Corporation Dissolution and Settlement Agreement between
                the
                Company, American Mold Guard, and Zero Plus, LLC, dated as of December
                8,
                2005 (Incorporated by reference to Exhibit 10.2 of the Company’s Form
                10-KSB, dated December 31, 2005)10.4
            Employment
                Agreement with Gaylord Karren, dated as of June 11, 2005 (Incorporated
                by
                reference to Exhibit 10.3 of the Company’s Form 10-KSB, dated December 31,
                2005)10.5
            Employment
                Agreement with John Hopkins, dated as of June 11, 2005 (Incorporated
                by
                reference to Exhibit 10.4 of the Company’s Form 10-KSB, dated December 31,
                2005)10.6
            Employment
                Agreement with Warren Jaynes, dated as of February 15, 2006 (Incorporated
                by reference to Exhibit 10.5 of the Company’s Form 10-KSB, dated December
                31, 2005)10.7
            Joint Venture
              Agreement between the Company and William R. Jackson, PhD, dated as
              of
              October 11, 2005 (Incorporated by reference to Exhibit 10.6 of the
              Company’s Form 10-KSB, dated December 31, 2005)10.8
            Subscription
              Agreement, by and between the Company and Water Science, LLC, dated
              May 1,
              2006 (Incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K,
              dated May 4, 2006)10.9
            Warrant
                Agreement, by and between the Company and Water Science, LLC, dated
                May 1,
                2006 (Incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K,
                dated May 4, 2006)10.10
            Registration
                Rights Agreement by and between the Company and Water Science, LLC,
                dated
                May 1, 2006 (Incorporated by reference to Exhibit 10.3 of the Company’s
                Form 8-K, dated May 4, 2006)10.11
            Amended
                and Restated Exclusive License and Distribution Agreement, by and
                between
                the Company and Water Science, LLC, dated May 1, 2006 (Incorporated
                by
                reference to Exhibit 10.4 of the Company’s Form 8-K, dated May 4,
                2006)10.12
            Engagement
                Letter by and between the Company and SunTrust Robinson Humphrey
                Capital
                Markets Division, dated May 1, 200610.13
            Consulting
                Agreement by and between the Company and JL Montgomery Consulting,
                LLC,
                dated May 1, 200610.14
            Consulting
                Agreement by and between the Company and Brand Velocity, Inc, dated
                March
                28, 2006


21





31.1
            Certification
                byGaylord
                M. Karrenunder Section 302 of the Sarbanes-Oxley Act of
                2002.31.2
            Certification
                byH.
                Warren Jaynesunder Section 302 of the Sarbanes-Oxley Act of
                2002.32.1
            Certification
                ofGaylord
                M. Karrenpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002.32.2
            Certification
                ofH.
                Warren Jaynespursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002.











SIGNATURES





Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the Registrant has duly caused this report to be signed on its behalf
      by
      the undersigned; thereunto duly authorized, on May 15, 2006.




ELECTRIC
              AQUAGENICS UNLIMITED,INC.By:
            /s/
              Gaylord M. KarrenChief
                Executive Officer
              Principal
                Executive Officer







22