SECURITIES
          AND EXCHANGE COMMISSION
 Washington,
          D.C. 20549
 
 
 
 FORM
          10-KSB
 
 ANNUAL
          REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 SECURITIES
          EXCHANGE ACT OF 1934
 For
          the Fiscal Year Ended September 30, 2007
 Commission
          File Number:000-32249
 
  ENTECH
          ENVIRONMENTAL TECHNOLOGIES, INC.
 (name
          of small business issuer as specified in its charter)
 Florida
                
                98-0222013(State
                    or other jurisdiction of
                  incorporation
                    or organization)
                
                (I.R.S.
                    Employer
                  Identification
                    No.)
 
 3233
          Grand Avenue, Suite N-353
 Chino
          Hills, California 91709-1489
 (Address
          and telephone number of principal executive offices)
 
 (909)
          623-2502
 (Registrant’s
          telephone number)
   _______________________
 (Former
          name or former address, if changed since last report)
 
 Joseph
          I.
          Emas, Attorney at Law
 1224
          Washington Avenue
 Miami
          Beach, Florida  33139
 Telephone:
          305.531.1174
 
 (Name,
          address and telephone number of agent for service)
 Securities
          Registered Under Section 12(b) of the Exchange Act:
 None
 Securities
          Registered Under Section 12(g) of the Exchange Act:
 Common
          Stock, $0.001
 
 Check
            whether the issuer (1) filed all
            reports required to be filed by Section 13 or 15(d) of the Exchange Act
            during
            the past 12 months (or for such shorter period that the registrant was
            required
            to file such reports), and (2) has been subject to such filing requirements
            for
            the past 90 days.     YesxNo ̈
  Check
            if there is no disclosure of
            delinquent filers in response to Item 405 of Regulation SB contained
            in this
            form, and no disclosure will be contained, to the best of registrant’s
            knowledge, in definitive proxy or information statements incorporated
            by
            reference in Part III of this Form 10KSB or any amendment to this Form
            10KSB.x
  State
            issuer’s revenues for its most
            recent fiscal year: $
  Indicate
            if the registrant is a shell
            company (as defined in Rule 12b-2 of the Exchange Act)as of September
            30, 2007.
    Yes xNo   o
  The
            aggregate market value of the
            registrant’s common stock held by non-affiliates of the registrant as of January
            14, 2008 was approximately $680,000. Solely for purposes of the foregoing
            calculation, all of the registrant’s directors and officers are deemed to be
            affiliates.
  APPLICABLE
            ONLY TO CORPORATE ISSUERS
  The
            number of shares outstanding of the
            registrant’s Common Stock, par value $.001 per share (the “Common Stock”), as of
            January 14, 2008, was 34,830,840.
  Transitional
            Small Business Disclosure
            Format:
  Yes ̈Nox
 
 1
 Table
              of Contents
 
 
 ENTECH
          ENVIRONMENTAL TECHNOLOGIES, INC.
 Report
          on Form 10-KSB
 For
          the Fiscal Year Ended September 30, 2007
 
 TABLEOF
          CONTENTS
 
  PART
          I
 
 PageItem
                      1.
                  Description
                      of
                      Business
                  3Item
                      2.
                  Description
                      of
                      Property
                  7Item
                      3.
                  Legal
                      Proceedings
                  7Item
                      4.
                  Submission
                      of Matters
                      to Vote of Security Holders
                  7PART
                      IIItem
                      5.
                  Market
                        for Common Equity, Related Stockholder Mattersand Small
                        Business Issuer Purchases of Equity Securities
                  7Item
                      6.
                  Management’s
                      Discussion and Analysis or Plan of Operation
                  9Item
                      7.
                  Financial
                      Statements
                  10Item
                      8.
                  Changes
                        in and Disagreements with Accountants on Accountingand
                        Financial Disclosure
                  28Item
                      8A.
                  Controls
                      and
                      Procedures
                  28Item
                      8B.
                  Other
                      Information
                  29PART
                      IIIItem
                      9.
                  Directors,
                        Executive Officers, Promoters and Control Persons;Compliance with Section 16(a) of the Exchange
                        Act
                  29Item
                      10.
                  Executive
                      Compensation
                  30Item
                      11.
                  Security
                        Ownership of Certain Beneficial Owners and
                        Managementand Related Stockholder
                        Matters
                  32Item
                      12.
                  Certain
                      Relationships and Related Transactions
                  32Item
                      13.
                  Exhibits
                  33Item
                      14
                  Principal
                      Accountant
                      Fees and Services
                  35Signatures
                  
                  36
  2
 Table
            of Contents
  ITEM1.                      
DESCRIPTION OF BUSINESS
 
 FORWARD-LOOKING
        STATEMENTS
 
 This
        Annual Report on Form 10-KSB contains, in addition to historical information,
        forward-looking statements regarding Entech Environmental Technologies, Inc.
        (the "Company" or "Entech"), which represent the Company's expectations or
        beliefs including, but not limited to, statements concerning the Company's
        operations, performance, financial condition, business strategies, and other
        information and that involve substantial risks and uncertainties. The Company's
        actual results of operations, some of which are beyond the Company's control,
        could differ materially. For this purpose, any statements contained in this
        Report that are not statements of historical fact may be deemed to be
        forward-looking statements. Without limiting the generality of the foregoing,
        words such as "may," "will," "expect," "believe," "anticipate," "intend,"
        "could," "estimate," or "continue" or the negative or other variations thereof
        or comparable terminology are intended to identify forward-looking statements.
        Factors that could cause or contribute to such differences include, but are
        not
        limited to, history of operating losses and accumulated deficit; need for
        additional financing; dependence on future sales of our services; competition;
        dependence on management; risks related to proprietary rights; government
        regulation; and other factors described under "Risk Factors" and throughout
        this
        Annual Report on Form 10-KSB. Actual results may differ materially from those
        projected. These forward-looking statements represent our judgment as of
        the
        date of the filing of this Annual Report on Form 10-KSB. We disclaim any
        intent or
        obligation to update these forward-looking statements
 
 COMPANY
        OVERVIEW
 
 We
        were
        initially incorporated in 1998 in Florida as Cyber Public Relations, Inc.
        for
        the purpose of providing Internet electronic commerce consulting services
        to
        small and medium size businesses. Cyber Public Relations never had any material
        operations or revenues. On January 21, 2004, pursuant to a Capital Stock
        Exchange Agreement between the stockholders of Environmental Technologies,
        Inc.,
        a Nevada corporation, the Environmental Technologies stockholders transferred
        all of their shares of the Environmental Technologies stock to Cyber Public
        Relations in exchange for 9,550,000 shares of the common stock of Cyber Public
        Relations.
 
 We
        changed our name to Entech Environmental Technologies, Inc. on March 22,
        2004 to
        more accurately reflect the change of our business. We provided a variety
        of
        services to customers ranging from large corporations to retail consumers,
        through H.B. Covey, Inc., a 57 year old construction and maintenance company
        that specializes in the installation and maintenance of fueling systems.
        We have
        recently expanded our scope of services to include installation of major
        household appliances for major retailers. We are based in southern California
        and provide service primarily in California.
 
 As
        a
        result of the stock exchange discussed above, Environmental Technologies,
        Inc.
        became a wholly-owned subsidiary of Cyber Public Relations, and the
        Environmental Technologies stockholders acquired 96.81 percent of the issued
        and
        outstanding shares of the common stock of Cyber Public Relations. Immediately
        following the exchange, Barron Partners LP acquired 2,000,000 shares of our
        common stock and warrants for the purchase of 7,150,000 shares of our common
        stock. However, on September 30, 2004, Barron Partners agreed to the
        cancellation of the warrants for the purchase of 7,150,000 shares of our
        common
        stock.
 
 Our
        wholly-owned subsidiary, Environmental Technologies, Inc. a Nevada corporation
        located in Chino Hills, California, was formerly known as Parr Development,
        Inc.
        which was incorporated in 2001. Before the mergers of its subsidiaries described
        in this section, Parr Development had not engaged in any operations. Parr
        Development changed its name to Environmental Technologies, Inc. in 2003.
        We are
        the result of the combination of several companies:
 
 -
        H.B.
        Covey, Inc., a California corporation incorporated in 1971 but which has
        been in
        business since 1948, (herein sometimes referred to as "H.B. Covey"), a fueling
        station diagnostic and maintenance company with petroleum construction
        experience in building and maintaining service stations, through which we
        conduct all of our current operations;
 
 -
        Christie-Peterson Development, a California corporation incorporated in 1995
        (herein sometimes referred to as "Christie-Peterson"), a provider of
        construction, repair, and maintenance services for petroleum service stations
        in
        California, Nevada, and Arizona, which was placed into Chapter 7 bankruptcy
        on
        September 30, 2004, and is no longer actively engaged in business;
        and
 
 -
        Advanced Fuel Filtration Services, Inc., a California corporation incorporated
        in 1995 (herein sometimes referred to as "AFFS"), a provider of comprehensive
        environmental management solutions for the petroleum industry, with operations
        including fuel and chemical transportation, hazardous and non-hazardous waste
        disposal, emergency HAZMAT response, and underground storage tank cleaning
        and
        filtration services, which was placed into Chapter 7 bankruptcy on September
        30,
        2004, and is no longer actively engaged in business.
 
 3
 Table
            of Contents
 We
        also
        acquired from the stockholders of AFFS all of the issued and outstanding
        shares
        of Advanced Petroleum Transport, Inc., a California corporation, with no
        business activities. As of the date of this report, Advanced Petroleum
        Transport, Inc. has conducted no operations.
  The
        mechanics of the combination of the component companies of Entech initially
        occurred with the reverse triangular mergers between each of Christie-Peterson,
        H.B. Covey and AFFS with three subsidiaries of Environmental Technologies.
        In
        each case, the stockholders of Christie-Peterson, H.B. Covey and AFFS existing
        before the mergers received shares of the common stock of Environmental
        Technologies in exchange for all of their shares in the merged companies.
        Following the reverse triangular mergers, Environmental Technologies had
        four
        wholly-owned subsidiaries, Christie-Peterson, H.B. Covey, AFFS, and Advanced
        Petroleum Transport, Inc.
 
 On
        December 9, 2005, we acquired all the assets and the right to use the name
        of
        Pacific Coast Testing, a California corporation, at a price of $125,000,
        $75,000
        payable at closing, the remainder payable over a twelve month period, subject
        to
        certain offsets.
 
 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.
 
 At
          this
          time, we have no operations, our assets consist primarily of cash, and
          our
          liabilities consist exclusively of payables and accrued expenses. 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.
 Our
          current business plan and our primary objective and focus for management
          over
          the next 12 months is to identify and acquire a suitable operating company
          with
          a view towards achieving long-term growth. As of the date of this report,
          we
          have not identified a particular industry and have determined not to restrict
          our search for a target company to any specific business, industry or
          geographical location.
 
 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.
 
 Accordingly,
          during 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, the Company entered into a Stock Sale and Purchase Agreement to sell
          its
          wholly owned subsidiary HB Covey for an aggregate selling price of $100,000
          in
          cash which the company was to receive by September 30, 2007, and 1.8 million
          in
          shares of Company stock which the company was to receive or cancel from
          the
          current CEO and CFO, Burr Northrop by December 31, 2007 . The sale of the
          business was for the book value of the property and equipment assets resulting
          in a gain of approximately $34,000. Under the terms of the sale, HB covey,
          Inc.
          assumed certain liabilities.
 We
          completed the sale during July 2007 and received the $100,000 in cash from
          Burr
          Northrop by September 30, 2007 consistent with the Sale and Purchase Agreement.
          As of September 30, 2007 the 1.8 million shares were not received or cancelled
          and the company recorded a receivable for the fair value of these shares
          as of
          September 30, 2007 in the amount of $120,000. The company cancelled the
          1.8
          million shares during the quarter ended December 31, 2007 consistent with
          the
          Sale and Purchase Agreement.
  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
 
 Most
        acquisitions of private operating companies by public shell companies are
        completed by way of merger pursuant to which the shareholders of the private
        company own a substantial majority of the issued and outstanding shares of
        the
        public company after completion of the merger. These transactions are often
        referred to as “reverse acquisitions” or “reverse mergers” and generally result
        in substantial additional dilution to the ownership interests of the
        stockholders of the public company. If any transaction is structured in this
        manner, our stockholders will suffer substantial dilution and all or a majority
        of our directors may resign and one or more new directors may be appointed
        without any vote by stockholders. We may complete such an acquisition upon
        the
        sole determination of our Board without any vote or approval by our
        stockholders. In certain circumstances, however, it may be necessary to call
        a
        stockholders' meeting and obtain approval of our stockholders, which may
        result
        in delay and additional expense in the consummation of any proposed transaction
        and may also give rise to certain appraisal rights to dissenting stockholders.
        Most likely, we will seek to structure any such transaction so as not to
        require
        stockholder approval.
 
 It
        is
        anticipated that the investigation of specific business opportunities and
        the
        negotiation, drafting and execution of relevant agreements, disclosure documents
        and other instruments will require substantial management time and attention
        and
        substantial cost for accountants, attorneys and other professionals. If we
        decide not to complete a transaction after we have incurred material transaction
        costs in connection with the investigation, negotiation and documentation
        related thereto, such costs will likely not be recoverable.
 
 4
 Table
            of Contents
 
 CORPORATE
        OFFICES
 
 The
        mailing address of our principal executive office is 3233 Grand Avenue, Suite
        N-353, Chino Hills, California 91709. Our telephone number is (909) 623-2502
        and
        our fax number is (909) 865-1244. Our e-mail address is entech@onebox.com.
        Our
        operational offices are located in Chino, California.
 
 EMPLOYEES
 
 We
        currently do not have any employees. We utilize the services of various
        consultants who provide, among other things, corporate secretary and accounting
        services to the Company. Since we do not have any significant operations,
        unless
        and until we complete an acquisition of an operating company, we do not intend
        to retain any additional personnel.
 
 RISK
        FACTORS
 
 THIS
        ANNUAL REPORT ON FORM 10-KSB INCLUDES FORWARD-LOOKING STATEMENTS ABOUT OUR
        BUSINESS AND RESULTS OF OPERATIONS THAT ARE SUBJECT TO RISKS AND UNCERTAINTIES.
        SEE "FORWARD-LOOKING STATEMENTS" ABOVE. FACTORS THAT COULD CAUSE OR CONTRIBUTE
        TO SUCH DIFFERENCES INCLUDE THOSE DISCUSSED BELOW. IN ADDITION TO THE RISK
        FACTORS DISCUSSED BELOW, WE ARE ALSO SUBJECT TO ADDITIONAL RISKS AND
        UNCERTAINTIES NOT PRESENTLY KNOWN TO US OR THAT WE CURRENTLY DEEM IMMATERIAL.
        IF
        ANY OF THESE KNOWN OR UNKNOWN RISKS OR UNCERTAINTIES ACTUALLY OCCUR, OUR
        BUSINESS COULD BE HARMED SUBSTANTIALLY.
 
 WE
        ARE
        NOT LIKELY TO SUCCEED UNLESS WE CAN OVERCOME THE MANY OBSTACLES WE
        FACE.
 
 As
        an
        investor, you should be aware of the difficulties, delays and expenses we
        encounter, many of which are beyond our control, including unanticipated
        market
        trends, employment costs, and administrative expenses. We cannot assure our
        investors that our proposed business plans as described in this report will
        materialize or prove successful, or that we will ever be able to finalize
        development of our products or services or operate profitably. If we cannot
        operate profitably, you could lose your entire investment in our securities.
        As
        a result of the nature of our business, initially we expect to sustain substantial
        operating expenses without generating significant revenues.
 
 OUR
        AUDITORS HAVE STATED WE MAY NOT BE ABLE TO STAY IN BUSINESS.
 
 Our
        auditors have issued a going concern opinion, which means that there is doubt
        that we can continue as an ongoing business for the next 12 months. Unless
        we
        can raise additional capital, we may not be able to achieve our objectives
        and
        may have to suspend or cease operations. See "Management's Discussion and
        Analysis of Financial Condition and Results of Operations."
 
 WE
          HAVE
          NOT ACHIEVED PROFITABLE OPERATIONS, WE HAVE A HISTORY OF LOSSES AND A LARGE
          ACCUMULATED DEFICIT AND WE EXPECT FUTURE LOSSES THAT MAY CAUSE OUR STOCK
          PRICE
          TO DECLINE. AT THE CURRENT TIME THE COMPANY HAS NO OPERATIONS AND IS CONSIDERED
          A SHELL COMPANY.
 
 We
          incurred net losses of approximately $3.2 million in fiscal year 2007,
          $1.47
          million in fiscal year 2006, $1.23 million in fiscal year 2005, $28.9 million
          in
          fiscal year 2004, $457,000 in fiscal year 2003. Our ability to operate
          profitably depends on generating sales and achieving sufficient gross profit
          margins. We cannot assure you that we will achieve or maintain profitable
          operations in the future. At the current time the company has no operations
          and
          is considered a shell company.
 
 We
        may
        continue to incur losses as we spend additional capital to develop and market
        our services and establish our infrastructure and organization to support
        anticipated operations. We cannot be certain whether we will ever earn a
        significant amount of revenues or profit, or, if we do, that we will be able
        to
        continue earning such revenues or profit. Also, the current economic weakness
        may limit our ability to develop and ultimately market our products and
        services. Any of these factors could cause our stock price to decline and
        result
        in you losing a portion or all of your investment in our
        securities.
 
 LACK
        OF INDEPENDENT
        DIRECTORS.
 
 We
        cannot
        guarantee that our board of directors will have a majority of independent
        directors in the future. In the absence of a majority of independent directors,
        our executive officers could establish policies and enter into transactions
        without independent review and approval thereof. This could present the
        potential for a conflict of interest between us and our stockholders, generally,
        and the controlling officers, stockholders or directors.
 
 5
 Table
            of Contents
  LIMITATION
        OF LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS.
 
 Our
        officers and directors are required to exercise good faith and high integrity
        in
        our management affairs. Our articles of incorporation provide, however, that
        our
        officers and directors shall have no liability to our stockholders for losses
        sustained or liabilities incurred which arise from any transaction in their
        respective managerial capacities unless they violated their duty of loyalty,
        did
        not act in good faith, engaged in intentional misconduct or knowingly violated
        the law, approved an improper dividend or stock repurchase, or derived an
        improper benefit from the transaction. Our articles and bylaws also provide
        for
        the indemnification by us of the officers and directors against any losses
        or
        liabilities they may incur as a result of the manner in which they operate
        our
        business or conduct the internal affairs, provided that in connection with
        these
        activities they act in good faith and in a manner that they reasonably believe
        to be in, or not opposed to, our best interests, and their conduct does not
        constitute gross negligence, misconduct or breach of fiduciary
        obligations.
 
 SECURITIES
        AND EXCHANGE COMMISSION RULES CONCERNING SALES OF LOW-PRICED SECURITIES MAY
        HINDER RE-SALES OF OUR COMMON STOCK.
 
 Because
        our common stock has a market price that is less than five dollars per share,
        our common stock is not listed on an exchange or quoted on Nasdaq and is
        traded
        on the OTC Bulletin Board, our shares are referred to as "penny stocks" within
        the definition of that term contained in Rules 15g-1 through 15g-9 promulgated
        under the Securities Exchange Act of 1934, as amended. These rules impose
        sales
        practices and disclosure requirements on certain broker-dealers who engage
        in
        certain transactions involving penny stocks. These additional sales practices
        and disclosure requirements could impede the sale of our securities, including
        securities purchased herein, in the secondary market. In general, penny stocks
        are low priced securities that do not have a very high trading volume.
        Consequently, the price of the stock is volatile and you may not be able
        to buy
        or sell the stock when you want. Accordingly, the liquidity for our securities
        may be adversely affected, with related adverse effects on the price of our
        securities.
 
 Under
        the
        penny stock regulations, a broker-dealer selling penny stocks to anyone other
        than an established customer or "accredited investor" (generally, an individual
        with a net worth in excess of $1,000,000 or annual income exceeding $200,000
        or
        $300,000 together with his or her spouse) must make a special suitability
        determination for the purchaser and must receive the purchaser's written
        consent
        to the transaction prior to the sale, unless the broker-dealer is otherwise
        exempt. In addition, unless the broker-dealer or the transaction is otherwise
        exempt, the penny stock regulations require the broker-dealer to deliver,
        prior
        to any transaction involving a penny stock, a disclosure schedule prepared
        by
        the Securities and Exchange Commission relating to the penny stock. A
        broker-dealer is also required to disclose commissions payable to the
        broker-dealer and the Registered Representative and current quotations for
        the
        securities. A broker-dealer is additionally required to send monthly statements
        disclosing recent price information with respect to the penny stock held
        in a
        customer's account and information with respect to the limited market in
        penny
        stocks.
 
 THERE
        MAY
        BE LIMITED LIQUIDITY IN OUR COMMON STOCK AND ITS PRICE MAY BE SUBJECT TO
        FLUCTUATION.
 
 There
        is
        only a limited market for our common stock, which is currently traded on
        the OTC
        Bulletin Board. We can provide no assurances that we will be able to have
        our
        common stock listed on an exchange or quoted on Nasdaq or that it will continue
        to be quoted on the OTC Bulletin Board. If there is no trading market for
        our
        common stock, the market price of our common stock will be materially and
        adversely affected.
 
 TO
        DATE,
        WE HAVE NOT PAID ANY CASH DIVIDENDS AND NO CASH DIVIDENDS WILL BE PAID IN
        THE
        FORESEEABLE FUTURE.
 
 We
        do not
        anticipate paying cash dividends on our common shares in the foreseeable
        future,
        and we cannot assure an investor that funds will be legally available to
        pay
        dividends or that even if the funds are legally available, that the dividends
        will be paid.
 
 VOLATILITY
        IN OUR COMMON SHARE PRICE MAY SUBJECT US TO SECURITIES LITIGATION, THEREBY
        DIVERTING OUR RESOURCES WHICH MAY HAVE A MATERIAL ADVERSE EFFECT ON OUR RESULTS
        OF OPERATIONS.
 
 The
        market for our common shares is characterized by significant price volatility
        when compared to seasoned issuers, and we expect that our share price will
        continue to be more volatile than a seasoned issuer for the indefinite future.
        In the past, plaintiffs have often initiated securities class action litigation
        against a company following periods of volatility in the market price of
        its
        securities. We may in the future be the target of similar litigation. Securities
        litigation could result in substantial costs and liabilities and could divert
        management's attention and resources.
 
 THE
        TRADING PRICE OF OUR COMMON STOCK MAY DECREASE DUE TO FACTORS BEYOND OUR
        CONTROL.
 
 The
        stock
        market from time to time has experienced extreme price and volume fluctuations,
        which have particularly affected the market prices for emerging growth companies
        and which often have been unrelated to the operating performance of the
        companies. These broad market fluctuations may adversely affect the market
        price
        of our common stock. If our shareholders sell substantial amounts of their
        common stock in the public market, the price of our common stock could fall.
        These sales also might make it more difficult for us to sell equity or equity
        related securities in the future at a price we deem appropriate.
 
 6
 Table
            of Contents
  ITEM
        2.                      
DESCRIPTION OF PROPERTY
  There
        are
        none. There is no physical property the company currently rents, leases,
        or
        occupies.
  ITEM
        3.                      
LEGAL PROCEEDINGS
 
 NK
          Heating & Air Conditioning filed complaint against the Company and its
          formerly owned subsidiary, CPI Development, Inc. in Los Angeles County
          Superior
          Court. The complaint alleges a breach of contract, and alleges damages
          of
          $98,000. As of December 2007, the Company has reached an understanding
          with NK
          Heating on settlement terms and is in the process of documenting these
          terms to
          settle all claims.
 As
        of
        June 30, 2007, the Company settled all disputes with former chairman and
        chief
        executive officer, Steven Rosenthal, who had filed a complaint against the
        Company in San Bernardino County Superior Court. The Company paid $13,000
        during
        April of 2007 in repayment of costs paid to third party creditors by Mr.
        Rosenthal. The complaint filed by Mr. Rosenthal has been dismissed without
        prejudice on August 31, 2007. Subsequently, the Company revised the settlement
        agreement and issued 1,200,000 shares of common stock to Mr. Rosenthal in
        August, 2007 and an additional 300,000 shares of common stock to Mr. Rosenthal
        to be issued in December 2007.
  Other
        than described above, 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
 
 ITEM4.                      
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
 None.
 
 ITEM
                  5.
              MARKET
                  FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
 Our
        common stock is quoted on the OTC Bulletin Board under the symbol "EEVT.OB"
        If
        we fail to stay current with our required filings under the Exchange Act,
        our
        shares will only be quoted on the "pink sheets."
 
 The
        below
        quotations reflect inter-dealer prices, without mark-up, mark-down or
        commission, and may not represent actual transactions.
 
 Year
                  ended 09/30/06
              
              High
              
              
              LowFirst
                  quarter
              
              $
              0.10
              
              
              $
              0.03Second
                  quarter
              
              $
              0.09
              
              
              $
              0.05Third
                  quarter
              
              $
              0.08
              
              
              $
              0.02Fourth
                  quarter
              
              $
              0.04
              
              
              $
              0.04Year
                  ended 09/30/07
              
              High
              
              
              LowFirst
                  quarter
              
              $
              0.05
              
              
              $
              0.02Second
                  quarter
              
              $
              0.04
              
              
              $
              0.01Third
                  quarter
              
              $
              0.06
              
              
              $
              0.01Fourth
                  quarter
              
              $
              0.07
              
              
              $
              0.03
 
 
 7
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            of Contents
  At
        September 30, 2007, there were 34,530,840 shares of our common stock
        outstanding. Our shares of common stock are held by approximately 85
        stockholders of record. The number of record holders was determined from
        the
        records of our transfer agent and does not include beneficial owners of common
        stock whose shares are held in the names of various security brokers, dealers,
        and registered clearing agencies.
 
 SECURITIES
        AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
 
 None.
 
 RECENT
        SALES OF UNREGISTERED SECURITIES
 
 As
        part
        of a settlement with former chairman and chief executive officer, Steven
        Rosenthal, the Company issued 1,200,000 of restricted common shares of Company
        stock during August 2007 and issued an additional 300,000 restricted common
        shares during December 2007.
 
 In
          addition, there was no general solicitation or advertising for the purchase
          of
          our shares. Our securities were sold only to persons with whom we had a
          direct
          personal preexisting relationship, and after a thorough discussion. Finally,
          our
          stock transfer agent has been instructed not to transfer any of such shares,
          unless such shares are registered for resale or there is an exemption with
          respect to their transfer.
 
 As
          part
          of a settlement with former officer, Bret Covey, the Company issued 800,000
          of
          restricted common shares of Company stock during August 2007.
 
 SECTION
        15(G) OF THE EXCHANGE ACT
 
 The
        shares of our common stock are covered by Section 15(g) of the Exchange Act,
        and
        Rules 15g-1 through 15g-6 promulgated thereunder, which impose additional
        sales
        practice requirements on broker-dealers who sell our securities to persons
        other
        than established customers and accredited investors.
 
 Rule
        15g-2 declares unlawful any broker-dealer transactions in "penny stocks"
        unless
        the broker-dealer has first provided to the customer a standardized disclosure
        document.
 
 Rule
        15g-3 provides that it is unlawful for a broker-dealer to engage in a "penny
        stock" transaction unless the broker-dealer first discloses and subsequently
        confirms to the customer the current quotation prices or similar market
        information concerning the penny stock in question.
 
 Rule
        15g-4 prohibits broker-dealers from completing "penny stock" transactions
        for a
        customer unless the broker-dealer first discloses to the customer the amount
        of
        compensation or other remuneration received as a result of the penny stock
        transaction.
 
 Rule
        15g-5 requires that a broker-dealer executing a "penny stock" transaction,
        other
        than one exempt under Rule 15g-1, disclose to its customer, at the time of
        or
        prior to the transaction, information about the sales person's
        compensation.
 
 Our
        common stock may be subject to the foregoing rules. The application of the
        "penny stock" rules may affect our stockholders' ability to sell their shares
        because some broker-dealers may not be willing to make a market in our common
        stock because of the burdens imposed upon them by the "penny stock"
        rules.
 
 8
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  ITEM
                  6.
              MANAGEMENT’S
                  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
 The
        matters discussed in this “Management’s Discussion and Analysis of Financial
        Condition and Results of Operations” contain forward-looking statements that
        involve risks and uncertainties. See “Forward-Looking Statements.”
 
 OVERVIEW
 
 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, 2005 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. Our critical accounting policies
        are
        as follows:
 
 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.
 
 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.
 9
 Table
            of Contents
  LIQUIDITY
        AND CAPITAL RESOURCES
 
 During
          the year ended September 30, 2007, we generated a net operating loss of
          $3.2
          million, we used cash in operating activities of $400,000; and we raised
          $28,214
          through the issuance of convertible notes payable and the sale of common
          stock.
          We financed our operations primarily through the use of these
          proceeds.
 
 During
          the year ended September 30, 2006, we generated a net operating loss of
          $1.47
          million, we used cash in operating activities of $388,000; and we raised
          $187,000 through the issuance of convertible notes payable and the sale
          of
          common stock. We financed our operations primarily through the use of these
          proceeds.
 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 this Form 10-KSB, 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,
        2007. 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.
 
 RECENT
        DEVELOPMENTS
 
 None.
 
 OFF-BALANCE
        SHEET ARRANGEMENTS
 
 We
        do not
        have any off-balance sheet arrangements.
 
 Critical
        Accounting Policies and Recent Accounting Pronouncements
 
 For
        a
        complete discussion of our accounting policies and procedures and recent
        accounting pronouncements, see the footnotes to our financial statements
        beginning in Item 7.
 
 ITEM7.
        FINANCIAL STATEMENTS
 
 REPORT
        OF INDEPENDENT
        REGISTERED PUBLIC ACCOUNTING FIRM
  To
          the
          Board of Directors and Stockholders
 of
          Entech
          Environmental Technologies, Inc.
 
 We
          have
          audited the accompanying consolidated balance sheets of Entech Environmental
          Technologies, Inc. (Company) and subsidiaries as of September 30, 2007,
          and the
          related consolidated statements of income, stockholders' equity (deficit),
          and
          cash flows for the year then ended. These consolidated financial statements
          are
          the responsibility of the Company's management. Our responsibility is to
          express
          an opinion on these financial statements based on our audit. The financial
          statements of Entech Environmental Technologies,  Inc. as
          of  September  30, 2006 were audited by another auditor,
          whose report dated January 09, 2007 on those statements included an
          explanatory  paragraph describing conditions that raised substantial
          doubt as to the Company's ability to continue as a going concern as discussed
          in
          Note 1 to the financial statements.
 
 We
          conducted our audit in accordance with the standards of the Public Company
          Accounting Oversight Board (United States). Those standards require that
          we plan
          and perform the audit to obtain reasonable assurance about whether the
          consolidated financial statements are free of material misstatement. An
          audit
          includes examining, on a test basis, evidence supporting the amounts and
          disclosures in the consolidated financial statements. An audit also includes
          assessing the accounting principles used and significant estimates made
          by
          management, as well as evaluating the overall financial statement presentation.
          We believe that our audits provide a reasonable basis for our
          opinion.
 
 In
          our
          opinion, the consolidated financial statements referred to above present
          fairly,
          in all material respects, the consolidated financial position of Entech
          Environmental Technologies, Inc. and subsidiaries as of September 30, 2007
          and
          the results of their operations and their cash flows for the year then
          ended in
          conformity with accounting principles generally accepted in the United
          States of
          America.
 
 The
          accompanying consolidated financial statements have been prepared assuming
          the
          Company will continue as a going concern. As discussed further in Note
          1, the
          Company has incurred significant losses.  The Company's viability is
          dependent upon its ability to obtain future financing and the success of
          its
          future operations.  These factors raise substantial doubt about the
          Company's ability to continue as a going concern.  Management's plan
          in regard to these matters is also described in Note 1. The
          consolidated  financial  statements do
          not  include  any  adjustments  that  might  result  from  the  outcome  of
          this uncertainty.
 
 
 /s/
          Tarvaran Askelson &
Company, LLP
 
 Laguna
          Niguel, California
 December
          27, 2007
   10
  REPORT
          OF INDEPENDENT REGISTERED ACCOUNTING FIRM
 To
            the
            Board of Directors and Stockholders
 of  Entech
            Environmental Technologies, Inc.
 
 We
            have
            audited the accompanying consolidated balance sheet of Entech Environmental
            Technologies, Inc. (Company) and subsidiaries as of September 30, 2006,
            and the
            related consolidated statement of income, stockholders' equity (deficit),
            and
            cash flows for the year then ended. These consolidated financial statements
            are
            the responsibility of the Company's management. Our responsibility is
            to express
            an opinion on these financial statements based on our audits.
 
 We
            conducted our audit in accordance with the standards of the Public Company
            Accounting Oversight Board (United States). Those standards require that
            we plan
            and perform the audits to obtain reasonable assurance about whether the
            consolidated financial statements are free of material misstatement.
            The Company
            is not required to have, nor were we engaged to perform, an audit of
            its
            internal control over financial reporting. Our audits included consideration
            of
            internal control over financial reporting as a basis for designing audit
            procedures that are appropriate in the circumstances, but not for the
            purpose of
            expressing an opinion on the effectiveness of the Company's internal
            control
            over financial reporting. Accordingly, we express no such opinion. An
            audit
            includes examining, on a test basis, evidence supporting the amounts
            and
            disclosures in the consolidated financial statements. An audit also includes
            assessing the accounting principles used and significant estimates made
            by
            management, as well as evaluating the overall financial statement
            presentation.  We believe that our audits provide a reasonable basis
            for our opinion.
 
 In
            our
            opinion, the consolidated financial statements referred to above present
            fairly,
            in all material respects, the consolidated financial position of Entech
            Environmental Technologies, Inc. and subsidiaries as of September 30,
            2006, and
            the results of their operations and their cash flows for the year then
            ended in
            conformity with accounting principles generally accepted in the United
            States of
            America.
 
 The
            accompanying consolidated financial statements have been prepared assuming
            the
            Company will continue as a going concern. As discussed further in Note
            1, the
            Company has incurred significant losses from operations. The Company's
            viability
            is dependent upon its ability to obtain future financing and the success
            of its
            future operations. These factors raise substantial doubt about the Company's
            ability to continue as a going concern. Management's plan in regard to
            these
            matters is also described in Note 1. The consolidated financial statements
            do
            not include any adjustments that might result from the outcome of
 this
            uncertainty.
 
 
 /s/
            Mendoza Berger &
Company, LLP
 
 
 Irvine,
            California
 January
            9, 2007
 11
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 ENTECH ENVIRONMENTAL TECHNOLOGIES, INC.CONSOLIDATED BALANCE SHEETSEPTEMBER 30
 2007
                  
                  
                  2006AssetsCurrent
                      assets:Cash
                  
                  $
                  271
                  
                  
                  $
                  83,315Accounts
                      receivable, net allowance
                      for doubtful accounts totaling $-and
                      $42,641,
                      respectively
                  
                  
                  -
                  
                  
                  
                  620,118Costs
                      and estimated earnings in
                      excess of billings on uncompleted contracts
                  
                  
                  -
                  
                  
                  
                  71,424Inventories
                  
                  
                  -
                  
                  
                  
                  426,854Related
                      party
                      receivable
                  
                  
                  120,000
                  
                  
                  
                  -Prepaid
                      expenses and
                      other
                  
                  
                  -
                  
                  
                  
                  38,460Total
                      current
                      assets
                  
                  
                  120,271
                  
                  
                  
                  1,240,171Property
                      and equipment,
                      net
                  
                  
                  245
                  
                  
                  
                  384,306Other
                      assets
                  
                  
                  -
                  
                  
                  
                  40,092Total
                      assets
                  
                  $
                  120,516
                  
                  
                  $
                  1,664,569LIABILITIES
                      AND DEFICIENCY IN
                      STOCKHOLDERS' EQUITY:Current
                      liabilities:Accounts
                      payable
                  
                  $
                  198,284
                  
                  
                  $
                  443,186Accrued
                      interest and
                      other
                  
                  
                  547,884
                  
                  
                  
                  522,952Accrued
                      payroll
                  
                  
                  -
                  
                  
                  
                  89,188Billings
                      in excess of costs and
                      estimated earnings on uncompleted contracts
                  
                  
                  -
                  
                  
                  
                  182,432Purchase
                      price
                      payable
                  
                  
                  29,209
                  
                  
                  
                  36,791Due
                      to affiliated
                      entities
                  
                  
                  272,371
                  
                  
                  
                  793,025Current
                      portion of notes
                      payable
                  
                  
                  2,743,039
                  
                  
                  
                  1,099,546Current
                      portion of note payable -
                      related party
                  
                  
                  -
                  
                  
                  
                  27,894Total
                      current
                      liabilities
                  
                  
                  3,790,787
                  
                  
                  
                  3,195,014Notes
                      payable, net of current
                      portion
                  
                  
                  453,335
                  
                  
                  
                  115,261Note
                      payable - related party, net
                      of current portion
                  
                  
                  -
                  
                  
                  
                  92,253Commitments
                      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; 34,530,840 and32,530,840
                      shares issued and
                      outstanding, respectively
                  
                  
                  34,531
                  
                  
                  
                  32,531Additional
                      paid-in
                      capital
                  
                  
                  17,699,585
                  
                  
                  
                  16,896,511Common
                      stock subscribed, 3,500 and
                      3,500 shares, respectively
                  
                  
                  597
                  
                  
                  
                  597Accumulated
                      deficit
                  
                  
                  (21,858,319
                  )
                  
                  
                  (18,667,598
                  )Total
                      deficiency in stockholders'
                      equity
                  
                  
                  (4,123,606
                  )
                  
                  
                  (1,737,959
                  )Total
                      liabilities and deficiency
                      in stockholders' equity
                  
                  $
                  120,516
                  
                  
                  $
                  1,664,569
  See
        accompanying notes to the consolidated financial statements.
  12
 Table
            of Contents




ENTECH
      ENVIRONMENTAL TECHNOLOGIES, INC.


CONSOLIDATED
      STATEMENTS OF OPERATIONS


For the years ended September 3020072006Revenues, net$-$-Cost of goods sold--Gross profit--Operating expenses:Selling, general, and administrative expenses262,745195,651Depreciation and amortization3,5644,820Total operating expenses266,309200,471Loss from operations(266,309)(200,471)Settlement expense(118,000)-Amortization of note discount(526,146)(689,127)Liquidated damages(1,955,434)(500,606)Interest expense(222,620)(117,066)Loss before provision for income taxesand discontinued operations(3,088,509)(1,507,270)Provision for income taxes--Loss from continuing operations(3,088,509)(1,507,270)Income (Loss) from discontinued operations, net of taxes(136,087)38,531Gain on disposal of discontinued operations, net of taxes33,875-Net loss$(3,190,721)$(1,468,739)Net loss per share - basic and fully diluted$(0.10)$(0.05)Net loss per share - continuing operations$(0.09)$(0.05)Net loss per share - discontinued operations$-$0.00Basic and diluted weighted averagenumber of shares outstanding32,640,42932,312,591See accompanying notes to the consolidated financial statements.




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ENTECH ENVIRONMENTAL TECHNOLOGIES, INC.CONSOLIDATED STATEMENT OF DEFICIENCY IN STOCKHOLDERS' EQUITYFOR THE YEARS ENDED SEPTEMBER 30, 2006 AND 2007Common StockDeficiency InCommon StockAdditional PaidSubscribed,AccumulatedStockholders'SharesAmountIn CapitalNot issuedDeficitEquityBalances at September 30, 200528,405,825$28,406$15,943,420$136,598$(17,198,859)$(1,090,435)Issuance of previously subscribed shares4,225,0154,225131,776(136,001)-Shares issued in legal settlement1,000,0001,00089,00090,000Shares issued to a service-provider at $0.05 per share100,0001004,9005,000Net shares cancelled per-agreement with former employee(1,200,000)(1,200)1,200-Value of Beneficial conversion features504,523504,523Waiver of liquidation damages221,692221,692Net loss for the period from operations(1,507,270)(1,507,270)Net Income for the period from discontinued operations(38,531)(38,531)Balances at September 30, 200632,530,840$32,531$16,896,511$597$(18,667,598)$(1,737,959)Value of Beneficial conversion features739,074739,074Shares issued in legal settlement2,000,0002,00064,00066,000Net loss for the period from operations(3,088,509)(3,088,509)Net loss for the period from discontinued operations(102,212)(102,212)-Balances at September 30, 200734,530,840$34,531$17,699,585$597$(21,858,319)$(4,123,606)


See accompanying notes to the
      consolidated financial statements.






14
 Table
          of Contents




ENTECH ENVIRONMENTAL TECHNOLOGIES, INC.CONSOLIDATED STATEMENTS OF CASH FLOWSFor the years ended September 30,20072006Net loss(3,190,721)(1,468,739)Cash flows from continuing operating activities:Adjustments to reconcile net loss to  net cashprovided by (used in) operating activities:Depreciation and amortization3,5644,820Common stock issued for services-5,000Common stock issued for settlement66,000Settlement of accounts payable-(37,935)Amortization of note discount526,146490,143Changes in:Related party receivable(120,000)-Other assets4,244(756)Accounts payable and accrued expenses2,311,115618,657Net cash used in continuing operating activities(399,652)(388,810)Net cash provided by discontinued operations from continuing operations1,611,756180,928Net cash used in operating activities1,212,104(207,882)Cash flows from investing activities:Purchases of property and equipment--Net cash used in continuing  investing activities--Net cash provided by (used in) discontinued operations from investing activities268,364(95,185)Net cash provided by (used in) investing activities268,364(95,185)Cash flows from financing activities:Net proceeds from notes payable28,214183,724Net cash provided by continuing financing activities28,214183,724Net cash provided by (used in) discontinued operations from financing activities(1,591,726)89,505Net cash provided by (used in) financing activities(1,563,512)273,229Net increase (decrease) in cash(83,044)(29,838)Cash at beginning of period83,315113,153Cash at end of period$271$83,315Supplemental Disclosures of Cash Flow Information :Cash paid during the period for interest$6,663$10,742Common stock issued to consultants for services$-$5,000Common stock issued for accounts payable$-$127,935Common stock issued for legal settlement$66,000$-Beneficial conversion feature of convertible note payable$739,074$504,523See accompanying notes to the consolidated financial statements.15Table of Contents


ENTECH
        ENVIRONMENTAL TECHNOLOGIES, INC.
 
 NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
        30, 2007 AND 2006
 
 
 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.
 
 Business
        Combination and
        Corporate Recapitalization
 
 On
        December 30, 2003, Environmental Technologies, Inc. , a company formed under
        the
        laws of the State of Nevada ("Entech NV") acquired through a Share Exchange
        Agreement, all of the issued and outstanding stock of CPI Development, Inc.,
        formally Christie Peterson Development Corporation, Inc. ("CPI"), Advanced
        Fuel
        Filtration Systems Inc. ("Advanced Fuel") and H.B. Covey. From its inception
        and
        up to December 30, 2003, Entech NV had no significant assets or operations.
        Subsequent to the acquisition, CPI, Advanced Fuel, and H.B. Covey became
        wholly-owned subsidiaries of Entech NV. The value of Entech NV's common stock
        issued was the historical cost of Entech NV's net tangible assets, which
        did not
        differ materially from their fair value. In accordance with Statement of
        Financial Accounting Standards No. 141, Business Combinations, CPI, Advanced
        Fuel and H.B. Covey were collectively the acquired entities.
 
 In
        connection with Entech NV's acquisition of CPI, the total consideration paid
        was
        $3,238,483 and the significant components of the transaction were as
        follows:
 
 Net
                  liabilities assumed in excess of assets
              
              $
              3,238,483Cash
                  paid
              
              
              -Total
                  consideration paid / goodwill
              
              $
              3,238,483
 
 On
        September 30, 2004, CPI filed bankruptcy under Chapter 7 of the U.S. Bankruptcy
        Code.
 
 In
        Connection with Entech NV's acquisition of Advanced Fuel, the total
        consideration paid was $2,855,626 and the significant components of the
        transaction were as follows:
 
 Net
                  liabilities assumed in excess of assets
              
              $
              1,855,626Note
                  payable
              
              
              1,000,000Total
                  consideration paid / goodwill
              
              $
              2,855,626
 
 On
        September 30, 2004, Advanced Fuel filed bankruptcy under Chapter 7 of the
        U.S.
        Bankruptcy Code.
  In
        connection with Entech NV's acquisition of H.B. Covey, the total consideration
        paid was $954,911 and the significant components of the transaction were
        as
        follows:
 
 Net
                  assets acquired in excess of liabilities
              
              $
              (45,089
              )Note
                  payable
              
              
              1,000,000Total
                  consideration paid / goodwill
              
              $
              954,911
 
  16
 Table
            of Contents
  On
        January 21, 2004, Entech NV completed a Capital Stock Exchange Agreement
        ("Agreement") with Cyber Public Relations, Inc. ("Cyber") an inactive publicly
        registered shell corporation with no significant assets or operations. For
        accounting purposes, Entech NV was the surviving entity. The transaction
        was
        accounted for using the purchase method of accounting. The total purchase
        price
        and carrying value of net assets acquired of Cyber was $297,578. From June
        1998
        until the date of the merger, Cyber was an inactive corporation with no
        significant assets and liabilities. As Cyber Public Relations, Inc. was an
        inactive corporation with no significant operations, the Company recorded
        the
        carryover historical basis of net tangible assets acquired, which did not
        differ
        materially from their historical cost. The results of operations subsequent
        to
        the date of merger are included in the Company's consolidated statements
        of
        losses.
 
 Effective
        with the Agreement, all of the previously issued outstanding common stock,
        preferred stock, options and warrants owned by the Entech NV shareholders
        were
        exchanged for an aggregate of 9,550,000 shares of Cyber's restricted common
        stock. As a result of the Agreement, there was a change in control of the
        Cyber.
        Subsequent to the recapitalization, Cyber changed its name to Entech
        Environmental Technologies, Inc.
 
 Effective
        with the Agreement, all shares previously outstanding common stock, preferred
        stock, options and warrants other than 315,000 shares of common stock owned
        by a
        significant Cyber stockholder were returned to the Company for cancellation.
        In
        accordance with SOP 98-5, the Company expensed $297,578 as organization
        costs.
 
 The
        total
        consideration paid was $297,578 and the significant components of the
        transaction were as follows:
 
 Common
                  stock retained
              
              $
              315Liabilities
                  assumed in excess of assets
              
              
              22,263Cash
                  paid
              
              
              275,000Total
                Consideration Paid/Goodwill
              
              $
              297,578
  Up
            until
            July 2007, our Company was organized to 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. 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 1.8 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 this
            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 and accrued expenses. 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.
 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
 
 Discontinued
        Operations and
        Deconsolidation
 
 The
        Company's business plan contemplated the integration of CPI, Advanced Fuel,
        and
        H.B. Covey into a coordinated group providing a broad spectrum of services
        to
        fuel distribution facilities. The Company was unable to complete this
        integration and realize its business plan, and encountered severe operational
        and cash flow problems. In June 2004, the Company's board of directors
        authorized management to proceed with the disposal of two subsidiaries, CPI
        and
        Advanced Fuel. On September 30, 2004, the Company formally filed for Chapter
        7
        bankruptcy protection for CPI and Advanced Fuel in Los Angeles County,
        California.
 
 In
        June
        2006, the HB Covey, Inc. discontinued the operations of the Consumer Services
        division, which consisted primarily of installation of home consumer products
        for a major retailer. The employees of the Consumer Services division were
        laid-off in and the fixed assets used in the Consumer Services Division were
        transferred to the Company's other divisions. The net loss from these
        discontinued operations are included as a component of discontinued operations
        from the sale of HB Covey, Inc.
 
 17
 Table
            of Contents
  In
        July
        2007, the Company executed a Purchase and Sale Agreement for the sale of
        100% of
        the Company’s wholly owned subsidiary HB Covey, Inc. with Burr Northrop, the CEO
        and CFO and shareholder of the Company. Pursuant to the terms of the Agreement,
        the Company agreed to sell HB Covey, Inc. for an aggregate selling price
        of
        $100,000 in cash and 1.8 million in shares of Company stock. Under the terms
        of
        the sale, HB covey, Inc. assumed certain liabilities. We completed the sale
        during July 2007.
 
 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 statement of operations and consolidated
        statement of cash flows of the Company for the years ended September 30,
        2007
        and September 30, 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 years ended September 30, 2007 and 2006,
          the
          Company incurred losses from continuing operations of $3.2 million and
          $1.46
          million, respectively. As of September 30, 2007, the Company has negative
          working capital of $3.67 million, an accumulated deficit of $21.9 million,
          current portion of notes payable of $2,743,000 after full amortization
          of the
          note discount, and accounts payable and accrued expenses of
          $746,000.
 
 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 5.
          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.
 
 NOTE
        2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 A
        summary
        of the significant accounting policies applied in the preparation of the
        accompanying consolidated financial statements follows.
 
 Use
        of
        Estimates
 
 The
        preparation of financial statements in conformity with accounting principles
        generally accepted in the United States of America requires management to
        make
        estimates and assumptions that affect the reported amounts of assets and
        liabilities and disclosure of contingent assets and liabilities at the date
        of
        the financial statements, and the reported amounts of revenues and expenses
        during the reported periods. Actual results could materially differ from
        those
        estimates.
 
 Fair
        Value of Financial
        Instruments
 
 The
        Company measures its financial assets and liabilities in accordance with
        accounting principles generally accepted in the United States of America.
        The
        estimated fair values approximate their carrying values because of the
        short-term maturity of these instruments or the stated interest rates are
        indicative of market interest rates.
 
 Concentration
        of Credit
        Risk
 
 Financial
        instruments and related items, which potentially subject the Company to
        concentrations of credit risk, consist primarily of cash, cash equivalents
        and
        receivables. The Company places its cash and temporary cash investments with
        credit quality institutions. At times, such investments may be in excess
        of the
        FDIC insurance limit.
 
 18
 Table
            of Contents
  Property
        and
        Equipment
 
 Property
        and equipment are valued at cost. Depreciation and amortization are provided
        over the estimated useful lives up to five years using the straight-line
        method.
        The estimated service lives of property and equipment are as
        follows:
 
 Transportation
                  equipment
              
              Five
                  yearsTools
                  and equipment
              
              Five
                  yearsOffice
                  furniture and equipment
              
              Three
                  yearsLeasehold
                  improvements
              
              Five
                  years
 
 Long-Lived
        Assets
 
 The
        Company has adopted Statement of Financial Accounting Standards No. 144 (“SFAS
        144”). The Statement requires that long-lived assets and certain identifiable
        intangibles held and used by the Company be reviewed for impairment whenever
        events or changes in circumstances indicate that the carrying amount of an
        asset
        may not be recoverable. Events relating to recoverability may include
        significant unfavorable changes in business conditions, recurring losses,
        or a
        forecasted inability to achieve break-even operating results over an extended
        period. The Company evaluates the recoverability of long-lived assets based
        upon
        forecasted undiscounted cash flows. Should an impairment in value be indicated,
        the carrying value of intangible assets will be adjusted, based on estimates
        of
        future undiscounted cash flows resulting from the use and ultimate disposition
        of the asset. SFAS No. 144 also requires assets to be disposed of be reported
        at
        the lower of the carrying amount or the fair value less costs to
        sell.
 
 Stock
        Based
        Compensation
 
 The
        Company did not issue any stock-based employee compensation during the years
        ended September 30, 2007 and 2006.
 
 In
        December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
        Compensation-Transition and Disclosure-an amendment of SFAS 123." This statement
        amends SFAS No. 123, "Accounting for Stock-Based Compensation," to provide
        alternative methods of transition for a voluntary charge to the fair value
        based
        method of accounting for stock-based employee compensation. In addition,
        this
        statement amends the disclosure requirements of SFAS No. 123 to require
        prominent disclosures in both annual and interim financial statements about
        the
        method of accounting for stock-based employee compensation and the effect
        of the
        method used on reported results. The Company has chosen to continue to account
        for stock-based compensation using the intrinsic value method prescribed
        in APB
        Opinion No. 25 and related interpretations. Accordingly, compensation expense
        for stock options is measured as the excess, if any, of the fair market value
        of
        the Company's stock at the date of the grant over the exercise price of the
        related option. The Company has adopted the annual disclosure provisions
        of SFAS
        No. 148 in its financial reports for the year ended September 30, 2007 and
        2006
        and for subsequent periods.
 
 In
        December 2004, the Financial Accounting Standards Board issued Statement
        of
        Financial Accounting Standards No. 123R, "Share-Based Payment ("SFAS 123R"),
        which is effective as of the beginning of the first interim or annual period
        beginning after December 31, 2005. SFAS 123R requires all share-based payments
        to employees to be expensed over the requisite service period based on the
        grant-date fair value of the awards. The Statement allows for either prospective
        or retrospective adoption and requires that the unvested portion of all
        outstanding awards upon adoption be recognized using the same fair value
        and
        attribution methodologies previously determined under Statement No 123,
        "Accounting for Stock-Based Compensation." Since the Company does not have
        any
        defined benefit post-retirement plans, the adoption of this pronouncement
        did
        not have any impact on the Company's results of operations or financial
        condition.
 
 Income
        Taxes
 
 The
        Company has implemented the provisions on Statement of Financial Accounting
        Standards No. 109, "Accounting for Income Taxes" (“SFAS 109”). SFAS 109 requires
        that income tax accounts be computed using the liability method. Deferred
        taxes
        are determined based upon the estimated future tax effects of differences
        between the financial reporting and tax reporting bases of assets and
        liabilities given the provisions of currently enacted tax laws.
 
 In
        September 2005, the Emerging Issues Task Force reached a consensus on EITF
        05-8,
“Income Tax Consequences
        of Issuing Convertible Debt with a Beneficial Conversion Feature,”which provides guidance
        on tax basis differences that arise from issuing convertible debt with a
        beneficial conversion feature.
        EITF 00-27, “Application of Issue No. 98-5 to Certain Convertible Instruments,”
requires that an in-the-money non-detachable conversion feature embedded
        in a
        convertible security be accounted for separately. This type of beneficial
        conversion feature is recognized and measured separately by allocating a
        portion
        of the proceeds on the issuance of the instrument, equal to the intrinsic
        value
        of the conversion option, to additional paid-in-capital. The convertible
        security is recorded at face value and a discount is recognized equal to
        the
        amount that is allocated to additional paid-in-capital. The consensus is
        required to be applied in fiscal periods beginning after December 15, 2005,
        by
        retroactive restatement of prior financial statements retroactive to the
        issuance of the convertible debt.
  In
        June
        2006, the FASB issued Interpretation No. 48, "Accounting for Uncertainty
        in
        Income Taxes-an interpretation of FASB Statement No. 109." This Interpretation
        prescribes a recognition threshold and measurement attribute for the financial
        statement recognition and measurement of a tax position taken or expected
        to be
        taken in a tax return, and provides guidance on derecognition, classification,
        interest and penalties, accounting in interim periods, disclosure, and
        transition. This Interpretation is effective for fiscal years beginning after
        December 15, 2006. The Company is currently assessing the impact of this
        Interpretation.
  19
 Table
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  Net
        Loss Per Common
        Share
 
 The
          Company computes earnings (loss) per share under Financial Accounting Standard
          No. 128, "Earnings Per Share" (“SFAS 128”). Net loss per common share is
          computed by dividing net loss by the weighted average number of shares
          of common
          stock and dilutive common stock equivalents outstanding during the year.
          Dilutive common stock equivalents consist of shares issuable upon conversion
          of
          convertible notes and the exercise of the Company's warrants (calculated
          using
          the treasury stock method). During 2007 and 2006, common stock equivalents
          are
          not considered in the calculation of the weighted average number of common
          shares outstanding because they would be anti-dilutive, thereby decreasing
          the
          net loss per common share.
 Reclassifications
 
 Certain
        reclassifications have been made in prior year's financial statements to
        conform
        to classifications used in the current year.
 
 New
        Accounting Pronouncements
 
 In
        February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
        Assets and Financial Liabilities (“SFAS 159”). SFAS 159 permits entities to
        measure many financial assets and financial liabilities at fair value.
        Unrealized gains and losses on items for which the fair value option has
        been
        elected are reported in earnings. SFAS 159 is effective for the Company
        beginning with its fiscal year 2009. The Company is currently assessing the
        impact of SFAS 159 on its financial position and results of
        operations.
 
 In
          December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”(“SFAS 141(R)”), which replaces
          SFAS No. 141. SFAS No. 141(R) establishes
          principles and requirements for how an acquirer recognizes and measures
          in its
          financial statements the identifiable assets acquired, the liabilities
          assumed,
          any non-controlling interest in the acquiree and the goodwill acquired.
          The
          Statement also establishes disclosure requirements which will enable users
          to
          evaluate the nature and financial effects of the business combination.
          SFAS
          141(R) is effective for fiscal years beginning after December 15, 2008.
          The
          adoption of SFAS 141(R) will have an impact on accounting for business
          combinations once adopted, but the effect is dependent upon acquisitions
          at that
          time.
 
 In
          December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests
          in
          Consolidated Financial Statements – an amendment of Accounting Research Bulletin
          No. 51”(“SFAS 160”), which establishes accounting and reporting
          standards for ownership interests in subsidiaries held by parties other
          than the
          parent, the amount of consolidated net income attributable to the parent
          and to
          the noncontrolling interest, changes in a parent’s ownership interest and the
          valuation of retained non-controlling equity investments when a subsidiary
          is
          deconsolidated. The Statement also establishes reporting requirements that
          provide sufficient disclosures that clearly identify and distinguish between
          the
          interests of the parent and the interests of the non-controlling owners.
          SFAS
          160 is effective for fiscal years beginning after December 15, 2008. The
          Company
          has not determined the effect that the application of SFAS 160 will have
          on its
          consolidated financial statements.
 
 Other
          accounting standards that have been issued or proposed by the FASB or other
          standards-setting bodies that do not require adoption until a future date
          are
          not expected to have a material impact on the financial statements upon
          adoption.
 
 NOTE
        3 – PROPERTY AND EQUIPMENT
 
 Major
        classes of property and equipment at September 30 consist of the
        followings:
 
 2007
              
              
              2006Transportation
                  equipment
              
              $
              --
              
              
              $
              683,194Tools
                  and equipment
              
              
              --
              
              
              
              163,545Office
                  furniture and equipment
              
              
              14,460
              
              
              
              241,724Leasehold
                  improvements
              
              
              --
              
              
              
              150,00014,460
              
              
              
              1,238,463Less
                  accumulated depreciation and amortization
              
              
              (14,215
              )
              
              
              (854,157
              )Net
                  property and equipment
              
              $
              245
              
              
              $
              384,306
 
 Depreciation
        expense totaled $4,300 and $115,000 from both continuing operations and
        discontinued operations for the years ended September 30, 2007 and 2006
        respectively.
 
 20
 Table
            of Contents
  NOTE
        4 – DUE TO AFFILIATED ENTITIES
  As
        discussed in Note 1, the Company completed a reorganization in 2004, and
        after
        failing to realize the then current business plan, two of the entities filed
        for
        bankruptcy protection in September 2004. The Company wrote-off its receivables
        from these entities in 2004. As of September 30, 2007 and 2006, the Company
        had
        liabilities to the affiliated entities totaling $272,000 and $793,000,
        respectively.
 
 NOTE
        5 – 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. The Company has recorded
        liquidated damages of approximately $1.2 million from inception of the note
        to
        September 30, 2007.
 
 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. The Company
        has
        recorded liquidated damages of approximately $27,000 from inception of the
        note
        to September 30, 2007.
  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.The Company has recorded
        liquidated damages of approximately $66,000 from inception of the note to
        September 30, 2007.
 
 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.The Company has recorded
        liquidated damages of approximately $85,000 from inception of the note to
        September 30, 2007.
 
 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. The Company has recorded liquidated damages of approximately
        $266,000 from inception of the note to September 30, 2007.
 21
 Table
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  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. The Company has recorded liquidated damages
        of
        approximately $3,000 from inception of the note to September 30,
        2007.
 
 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..
        The Company has recorded liquidated damages of approximately $81,000 from
        inception of the note to September 30, 2007.
 
 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.The Company has recorded
        liquidated damages of approximately $56,000 from inception of the note to
        September 30, 2007.
 
 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. The Company has recorded liquidated damages of approximately
        $200 from inception of the note to September 30, 2007.
  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.The Company has recorded
        liquidated damages of approximately $2,000 from inception of the note to
        September 30, 2007.
 
 The
          notes
          referenced above are secured by the Company's assets. Conversion of the
          convertible notes and exercise of the warrants issued pursuant to NPA #1,
          NPA
          #2, NPA #3 and NPA #4 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.
 
 22
 Table
            of Contents
  Notes
        issued subsequent to the year ended September 30, 2007 include the
        following:
 
 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.
 
 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.
 
 Borrowings
        under the Note Purchase Agreement and the related discounts are as follows
        as of
        September 30:
 
 2007
              
              
              2006Note
                  proceeds
              
              $
              3,761,029
              
              
              $
              1,566,535Discount
                  for value assigned to Beneficial Conversion Feature and Note
                  Warrants
              
              
              (2,305,609
              )
              
              
              (1,566,535
              )Amortization
                  of discounts
              
              
              1,740,954
              
              
              
              1,214,807Net
                  carrying value of notes payable
              
              $
              3,196,374
              
              
              $
              1,214,807
 
 The
        values assigned to the Beneficial Conversion Feature and the Note Warrants
        are
        treated as a discount to the Notes, and are being amortized to interest expense
        over the terms of the Notes.
  The
          aggregate amounts of existing long-term debt maturing in each of the next
          five
          years is as follows: 2008 – $2,743,039; 2009 – $453,335; 2010 – $0: 2011 –$0;
          2012 - $0.
 NOTE
          6 – CAPITAL STOCK
 
 Issued
        and
        outstanding
 
 In
        December 2005, the Company entered into a settlement agreement with a vendor
        to
        satisfy accounts payable totaling $162,935. Terms of the agreement provided
        for
        payment in cash of $35,000, and the issuance of 1,000,000 shares of common
        stock. The common shares issued were valued at $90,000, or $0.09 per share,
        which was the fair market value of the common stock on the agreement date.
        The resulting
        gain on settlement totaling $37,935 was recorded as other income.
 
 In
        March
        2006, the Company cancelled 1,500,000 shares previously issued to a former
        employee, and in April 2006, the Company issued 300,000 shares to replace
        the
        cancelled shares pursuant to an agreement between the Company and the former
        employee.
 
 23
 Table
            of Contents
  In
        April
        2006, the Company issued 100,000 shares for public relations services covering
        the three months from March to May, 2006. The Company recorded compensation
        expense of $5,000 based on the closing market price of $0.05 on the date
        of
        issuance, April 4, 2006.
 
 During
        the year ended September 30, 2006, the Company issued 4,225,015 shares that
        were
        previously subscribed. As of September 30, 2006, the Company has subscribed
        for
        the issuance of 4,225 shares of common stock for services rendered.
 
 As
          of
          September 30, 2007, the Company has outstanding convertible notes that
          are
          convertible into 150 million common shares and has outstanding warrants
          that are
          exercisable for 22 million common shares. Conversion of the convertible
          notes
          and exercise of the warrants for 20 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.
 
 As
          part
          of a settlement with former chairman and chief executive officer, Steven
          Rosenthal, the Company issued 1,200,000 of restricted common shares of
          Company
          stock during August 2007 and issued an additional 300,000 restricted common
          shares during December 2007.
 
 As
          part
          of a settlement with former officer, Bret Covey, the Company issued 800,000
          of
          restricted common shares of Company stock during August 2007.
 
 The
          Company did not grant any stock options during the years ended September
          30,
          2007 or 2006.
  Shares
        subscribed, not
        issued
 
 The
        Company did not subscribe any shares during the years ended September 30,
        2007
        and 2006.
 
 Following
        is a summary of the subscribed share activity:
 
 Common
                  Stock Subscribed, Not Issued (Shares)IncentiveCash
              
              
              Compensation
              
              
              Services
              
              
              Other
              
              
              TotalBalance
                  at September 30, 2005
              
              
              4,000,015
              
              
              
              -
              
              
              
              228,500
              
              
              
              -
              
              
              
              4,228,515Issuance
                  of subscribed shares
              
              
              (4,000,015
              )
              
              
              
              
              
              
              (225,000
              )
              
              
              -
              
              
              
              (4,225,015
              )Balance
                  at September 30, 2006
              
              
              -
              
              
              
              -
              
              
              
              3,500
              
              
              
              -
              
              
              
              3,500Balance
                  at September 30, 2007
              
              
              -
              
              
              
              -
              
              
              
              3,500
              
              
              
              -
              
              
              
              3,500
 NOTE
        7 – WARRANTS TO PURCHASE COMMON STOCK
 24
 Table
            of Contents
 
 The
          Company did not grant any stock options during the years ended September
          30,
          2007 or 2006.
 
 Transactions
          involving warrants are summarized below:
 
 Warrants
                  outstanding
              
              
              Weighted
                  average exercise priceBalance
                  at September 30, 2005
              
              
              24,355,555
              
              
              $
              0.91Granted
              
              
              -Exercised
              
              
              -Cancelled
              
              
              (3,150,000
              )Balance
                  at September 30, 2006
              
              
              21,205,555
              
              
              $
              0.25Granted
              
              
              1,056,800Exercised
              
              
              -Expired
              
              
              (800,000
              )Balance
                  at September 30, 2007
              
              
              21,462,355
              
              
              $
              0.15
  The
        following is a further breakdown of the warrants outstanding as of September
        30,
        2007:
 
 Exercise
                  prices
              
              
              Number
                  outstanding and exercisable
              
              
              Weighted
                  average remaining contractual life (years)
              
              
              Weighted
                  average exercise price outstanding and
                  exercisable$
              0.025
              
              
              
              1,056,800
              
              
              
              1.73
              
              
              $
              0.0250.050
              
              
              
              4,000,000
              
              
              
              3.25
              
              
              
              0.0500.150
              
              
              
              15,930,180
              
              
              
              2.05
              
              
              
              0.1501.100
              
              
              
              475,375
              
              
              
              1.33
              
              
              
              1.10021,462,355
              
              
              
              2.24
              
              
              $
              0.146
 
 
 The
        following is a further breakdown of the warrants outstanding as of September
        30,
        2006:
 
 Exercise
                  prices
              
              
              Number
                  outstanding and exercisable
              
              
              Weighted
                  average remaining contractual life (years)
              
              
              Weighted
                  average exercise price outstanding and
                  exercisable$
              0.050
              
              
              
              4,000,000
              
              
              
              4.25
              
              
              $
              0.0500.150
              
              
              
              15,930,180
              
              
              
              3.05
              
              
              
              0.1501.100
              
              
              
              475,375
              
              
              
              2.33
              
              
              
              1.1002.000
              
              
              
              2,000,000
              
              
              
              3.33
              
              
              
              2.0002.500
              
              
              
              400,000
              
              
              
              0.38
              
              
              
              2.5003.000
              
              
              
              400,000
              
              
              
              0.38
              
              
              
              3.00021,205,555
              
              
              
              3.16
              
              
              $
              0.250
 
 25
 Table
            of Contents
  NOTE
        8 – INCOME TAXES
 
 The
        Company adopted Financial Accounting Standard No. 109, which requires the
        recognition of deferred tax liabilities and assets for the expected future
        tax
        consequences of events that have been included in the financial statement
        or tax
        returns. Under this method, deferred tax liabilities and assets are determined
        based on the difference between financial statements and tax bases of assets
        and
        liabilities using enacted tax rates in effect for the year in which the
        differences are expected to reverse.
 
 Components
        of the deferred tax benefit (expense) as of September 30 were as
        follows:
 
 2007
              
              
              2006Current:Federal
              
              $
              -
              
              
              $
              -State
              
              
              -
              
              
              
              -Deferred:Federal
              
              
              1,020,000
              
              
              
              364,000State
              
              
              175,000
              
              
              
              93,000Change
                  in valuation allowance
              
              
              (1,195,000
              )
              
              
              (457,000
              )Total
              
              $
              -
              
              
              $
              -
 
 Components
        of deferred tax asset (liability) as of September 30 were as
        follows:
 
 2007
              
              
              2006Deferred
                  tax liabilities current:
                Beneficial
                  conversion features
              
              $
              (225,000
              )
              
              $
              (293,000
              )Deferred
                  tax asset non-current:Net
                  operating loss carryovers
              
              
              7,157,000
              
              
              
              6,030,000Valuation
                  allowance
              
              
              (6,932,000
              )
              
              
              (5,737,000
              )Net
                  deferred tax asset
              
              $
              -
              
              
              $
              -
 
 For
        income tax reporting purposes, the Company's aggregate unused federal net
        operating losses approximate $18 milliion, which expire through 2027, subject
        to
        limitations of Section 382 of the Internal Revenue Code, as amended. The
        Company
        is currently evaluating any limitations on the net operating losses as provided
        by Section 382 of the Internal Revenue Code.
 
 The
        Company has provided a valuation reserve against the full amount of the net
        deferred tax asset, because in the opinion of management based upon the earning
        history of the Company, it is more likely than not that the benefits will
        not be
        realized.
 
 Reconciliation
        of the differences between the statutory tax rate and the effective income
        tax
        rates were as follows:
 
 2006
              
              
              2005Statutory
                  federal tax benefit rate
              
              
              34.00
              %
              
              
              34.00
              %Statutory
                  state tax benefit rate
              
              
              5.83
              %
              
              
              5.83
              %39.83
              %
              
              
              39.83
              %Valuation
                  allowance
              
              
              (39.83
              %)
              
              
              (39.83
              %)Effective
                  income tax rate
              
              
              0.00
              %
              
              
              0.00
              %
 
 
 26
 Table
            of Contents
 NOTE
        9 – COMMITMENTS AND CONTINGENCIES
 
 Litigation
 
 NK
        Heating & Air Conditioning filed complaint against the Company and its
        formerly owned subsidiary, CPI Development, Inc. in Los Angeles County Superior
        Court. The complaint alleges a breach of contract, and alleges damages of
        $98,000. As of December 2007, the Company has reached an understanding with
        NK
        Heating on settlement terms and is in the process of documenting these terms
        to
        settle all claims.
 
 As
        of
        June 30, 2007, the Company settled all disputes with former chairman and
        chief
        executive officer, Steven Rosenthal, who had filed a complaint against the
        Company in San Bernardino County Superior Court. The Company paid $13,000
        during
        April of 2007 in repayment of costs paid to third party creditors by Mr.
        Rosenthal. The complaint filed by Mr. Rosenthal has been dismissed without
        prejudice on August 31, 2007. Subsequently, the Company revised the settlement
        agreement and issued 1,200,000 shares of common stock to Mr. Rosenthal in
        August, 2007 and an additional 300,000 shares of common stock to Mr. Rosenthal
        to be issued in December 2007. Other
        than described above, 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
 
 NOTE
        10 – RELATED PARTY TRANSACTIONS
 
 For
        the
        years ended 2007 and 2006, The Company paid Terence Leong, a board member,
        or
        his company an aggregate of $- and $11,000 for consulting services provided
        to
        the Company.
 
 HB
          Covey,
          Inc. leased 8,000 square feet of warehouse and office space in Chino, California
          from CEO and CFO, Burr D. Northrop, the Company’s President. The monthly rental
          rate was $6,500,  Total payments under the lease for the year ended
          September 30, 2007 were $58,500.
 During
            July 2007, we entered into an agreement to sell the assets of HB Covey,
            Inc. for
            an aggregate selling price of $100,000 in cash and 1.8 million in shares
            of
            Company stock from CEO and CFO, Burr Northrop. Under the terms of the
            sale, HB
            covey, Inc. assumed certain liabilities. We completed the sale during
            July 2007.
            As of December 31, 2007 Mr. Northrop has yet to return the 1.8 million
            shares to
            the Company at a fair value of $120,000, which has been recorded on the
            balance
            sheet as a receivable from related party.
 
 NOTE
            11- 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.
 
 The
            Company entered into a Stock Sale and Purchase Agreement to sell its
            wholly
            owned subsidiary HB Covey for an aggregate selling price of $100,000
            in cash
            which the company was to receive by September 30, 2007, and 1.8 million
            in
            shares of Company stock which the company was to receive or cancel from
            the
            current CEO and CFO, Burr Northrop by December 31, 2007 . The sale of
            the
            business was for the book value of the property and equipment assets
            resulting
            in a gain of approximately $34,000. Under the terms of the sale, HB covey,
            Inc.
            assumed certain liabilities.
 
 We
            completed the sale during July 2007 and received the $100,000 in cash
            from Burr
            Northrop by September 30, 2007 consistent with the Sale and Purchase
            Agreement.
            As of September 30, 2007 the 1.8 million shares were not received or
            cancelled
            and the company recorded a receivable for the fair value of these shares
            as of
            September 30, 2007 in the amount of $120,000. The company cancelled the
            1.8
            million shares during the quarter ended December 31, 2007 consistent
            with the
            Sale and Purchase Agreement.
  The
            results of the discontinued operations of HB Covey, Inc. included in
            the
            accompanying consolidated statements of operations for the years ended
            September 30, 2007 and 2006 were as follows (in
            thousands):
 2007
              
              
              2006Net
                  Revenue
              
              $
              2,566
              
              
              $
              5,332Less
                  Cost of Revenue & Operating Expenses
              
              
              2,712
              
              
              
              5,251Income
                  (loss) from operations
              
              
              (146
              )
              
              
              81Other
                  Expenses
              
              
              20
              
              
              
              43Income
                  Before Provision for Income Taxes
              
              
              (166
              )
              
              
              38Provision
                  for Income Taxes
              
              
              30
              
              
              
              -Income
                  (loss) from Discontinued Operations
              
              
              (136
              )
              
              
              38Income
                  (Loss) from Disposal of Discontinued Operations, net of Income
                  Taxes
              
              
              33
              
              
              
              -Total
                  Income (Loss) from Discontinued Operations
              
              $
              (103
              )
              
              $
              38
  27
 Table
            of Contents
 The
        Company has not allocated approximately $7,000 and $14,000 in interest to
        discontinued operations for the years ended September 30, 2007 and 2006,
        respectively. The
        assets and liabilities of HB Covey, Inc. included in the consolidated balance
        sheets as of September 30, 2007 and 2006 were as follows (in
        thousands):
 2007
              
              2006Assets:Current
                  assets
              
              $
              —
              
              
              $
              1,236Property
                  and Equipment, Net
              
              
              —
              
              
              
              380Other
                  Assets
              
              
              —
              
              
              
              40Total
                  Assets
              
              
              —
              
              
              
              1,656Liabilities:Current
                  Liabilities
              
              
              —
              
              
              
              1,236Long-Term
                  Liabilities
              
              
              —
              
              
              
              92Total
                  Liabilities
              
              
              —
              
              
              
              2,333Net
                  Assets (Liabilities)
              
              
              
              
              
              
              (677
              )
  ITEM8                          
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
        DISCLOSURE
  The
          Company elected to terminate its engagement of Mendoza Berger & Company LLP.
          as the independent registered public accounting firm responsible for auditing
          the Company's financial statements. The termination, which was effective
          as of
          May 15, 2007, was approved by the Company's Board of Directors.
  Mendoza
          Berger & Company LLP.'s report on the Company's financial statements for the
          two years ended September 30, 2006 and 2005 did not contain an adverse
          opinion
          or a disclaimer of opinion, and was not qualified or modified as to uncertainty,
          audit scope, or accounting principles with the exception that Mendoza Berger
          & Company LLP.'s Audit Reports, contained an explanatory note which raised
          substantial doubt as to the ability of the Company to continue as a going
          concern. During the Company's two most recent fiscal years ended September
          30,
          2006 and 2005 and the subsequent interim period ended Devember 31,2006
          which
          preceded the termination of Mendoza Berger & Company LLP., the Company did
          not have any disagreements with Mendoza Berger & Company LLP. on any matter
          of accounting principles or practices, financial statement disclosure,
          or
          auditing scope or procedure, which disagreements, if not resolved to the
          satisfaction of Mendoza Berger & Company LLP., would have caused it to make
          reference to the subject matter of the disagreements in connection with
          its
          report.
  The
          Company engaged Tarvaran Askelson & Company, LLP to serve as the independent
          registered public accounting firm responsible for auditing the Company's
          financial statements. The engagement, which was effective as of May 15,
          2007,
          was approved by the Company's Board of Directors.
 
 ITEM8A.                      
CONTROLS AND PROCEDURES
 
 We
        carried out an evaluation, under the supervision and with the participation
        of
        our management, including our Chief Executive Officer and Chief Financial
        Officer, of the effectiveness of the design and operation of our disclosure
        controls and procedures (as defined in Sections 13a-14(c) and 15d- 14(c)
        of the
        Securities Exchange Act of 1934, as amended) as of the end of the period
        covered
        by this report. The evaluation was undertaken in consultation with our
        accounting personnel. Based on that evaluation, the 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
        the
        reports that we file or submit under the Securities Exchange Act of 1934
        is
        recorded, processed, summarized and reported within the time periods specified
        in the Securities and Exchange Commission's rules and forms.
 
 There
        were no significant changes in our internal controls or in other factors
        that
        could significantly affect internal controls subsequent to the date of their
        evaluation.
 
 Effective
        2005, the Company dismissed Russell Bedford Stefanou Mirchandani, LLP ("RBSM")
        by declining to renew the engagement of RBSM as the independent accountant
        engaged to audit the financial statements of the Company and engaged Mendoza
        Berger & Co., LLP as its new independent registered public accounting firm
        for fiscal year ending September 30, 2006 and 2005.
 
 On
        May
        21, 2007, the Company dismissed Mendoza Berger & Co., LLP by declining to
        renew the engagement of Mendoza Berger & Co., LLP as the independent
        accountant engaged to audit the financial statements of the Company and engaged
        Tarvaran Askelson, LLP as its new independent registered public accounting
        firm
        for fiscal year ending September 30, 2007.
 
 While
        we
        believe our disclosure controls and procedures and our internal control over
        financial reporting are adequate, no system of controls can prevent all error
        and all fraud. A control system, no matter how well designed and operated,
        can
        provide only reasonable, not absolute, assurance that the control system's
        objectives will be met. Further, the design of a control system must reflect
        the
        fact that there are resource constraints, and the benefits of controls must
        be
        considered relative to their costs. Because of the inherent limitations in
        all
        control systems, no evaluation of controls can provide absolute assurance
        that
        all control issues and instances of fraud, if any, within our company have
        been
        detected. These inherent limitations include the realities that judgments
        in
        decision-making can be faulty, and that breakdowns can occur because of simple
        error or mistake. Controls can also be circumvented by the individual acts
        of
        some persons, by collusion of two or more people, or by management override
        of
        the controls. The design of any system of controls is based in part upon
        certain
        assumptions about the likelihood of future events, and there can be no assurance
        that any design will succeed in achieving its stated goals under all potential
        future conditions. Over time, controls may become inadequate because of changes
        in conditions or deterioration in the degree of compliance with its policies
        or
        procedures. Because of the inherent limitations in a cost-effective control
        system, misstatements due to error or fraud may occur and not be
        detected.
 
 28
 Table
            of Contents
  ITEM8B.                      
OTHER INFORMATION
 
 None.
 
 ITEM9.
              DIRECTORS,
                  EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
                  SECTION
                  16(a) OF THE EXCHANGE ACT
 
 The
        following table sets forth the name, age, and position of each executive
        officer
        and director who have served during the fiscal year ended September 30, 2007
        and
        the term of office of each director of the Company.
 
 Name
              
              Age
              
              PositionBurr
                  D. Northrop
              
              44
              
              President/Principal
                  Financial Officer/ Principal Accounting Officer/Chairman ofthe
                  Board of DirectorsTerence
                  F. Leong
              
              42
              
              Director
 
 Directors
        of the Company hold their offices until the next annual meeting of the Company’s
        shareholders until their successors have been duly elected and qualified
        or
        until their earlier resignation, removal of office or death. The officers
        of the
        Company are elected by the Board of Directors to serve until their successors
        are elected and qualified.
 
 BURR
        D. NORTHROP:
        Burr D. Northrop managed compliance programs and fuel system renovations
        at
        Connor Environmental from March 1990 until June 1993. He served as president
        of
        Kaliber Construction and Engineering from June 1992 until June 1994, where
        he
        undertook soil and groundwater remediation projects. From 1992 until the
        present, he has served as vice president, secretary, treasurer, and president
        of
        H.B. Covey, Inc., our wholly-owned subsidiary. He was elected as our president
        on September 28, 2004.
 
 TERENCE
        F. LEONG:
        Terence F. Leong, since 1996, has been the owner of Walker Street Associates,
        a
        management consulting firm. Mr. Leong started assisting the Company in August,
        2004 by preparing a comprehensive review of the Company, its management and
        its
        operations. Mr. Leong joined the Board of Directors in September, 2004. He
        assists the Company on its capital requirements, strategic and operational
        management of its current and future operations.
 
 INVOLVEMENT
        IN CERTAIN LEGAL PROCEEDINGS
 
 To
        the
        best of our knowledge, during the past five years, none of the following
        occurred with respect to a present or former director or executive officer
        of
        the Company: (1) any bankruptcy petition filed by or against any business
        of
        which such person was a general partner or executive officer either at the
        time
        of the bankruptcy or within two years prior to that time; (2) any conviction
        in
        a criminal proceeding or being subject to a pending criminal proceeding
        (excluding traffic violations and other minor offenses); (3) being subject
        to
        any order, judgment or decree, not subsequently reversed, suspended or vacated,
        of any court of any competent jurisdiction, permanently or temporarily
        enjoining, barring, suspending or otherwise limiting his involvement in any
        type
        of business, securities or banking activities; and (4) being found by a court
        of
        competent jurisdiction (in a civil action), the Securities and Exchange
        Commission or the commodities futures trading commission to have violated
        a
        Federal or state securities or commodities law, and the judgment has not
        been
        reversed, suspended or vacated.
 
 SECTION
        16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
 
 Section
        16(a) of the Securities Exchange Act of 1934, as amended, requires our executive
        officers, directors and persons who own more than 10% of a registered class
        of
        our equity securities to file certain reports with the SEC regarding ownership
        of, and transactions in, our securities. Such officers, directors and 10%
        shareholders are also required by the SEC to furnish us with all Section
        16(a)
        forms that they file.
 
 Section
        16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s
        directors and executive officers, and persons who beneficially own more than
        10%
        of a registered class of the Company’s equity securities, to file reports of
        beneficial ownership and changes in beneficial ownership of the Company’s
        securities with the SEC on Form 3 (Initial Statement of Beneficial Ownership),
        Form 4 (Statement of Changes of Beneficial Ownership of Securities) and Form
        5
        (Annual Statement of Beneficial Ownership of Securities). Directors, executive
        officers and beneficial owners of more than 10% of the Company’s Common Stock
        are required by SEC regulations to furnish the Company with copies of all
        Section 16(a) forms that they file. Except as otherwise set forth herein,
        based
        solely on review of the copies of such forms furnished to the Company, or
        written representations that no reports were required, the Company believes
        that
        for the fiscal year ended September 30, 2006, beneficial owners complied
        with
        Section 16(a) filing requirements applicable to them, except that our executives
        are in the process of completing the appropriate forms but have not filed
        such
        forms for fiscal year ended September 30, 2006.
 
 29
 Table
            of Contents
  CODE
        OF ETHICS
 
 We
        have
        adopted a code of ethics that applies to our principal executive officer,
        principal financial officer, principal accounting officer or controller,
        or
        persons performing similar functions. The code of ethics is designed to deter
        wrongdoing and to promote:
 
 -
        Honest
        and ethical conduct, including the ethical handling of actual or apparent
        conflicts of interest between personal and professional
        relationships;
 
 -
        Full,
        fair, accurate, timely, and understandable disclosure in reports and documents
        that we file with, or submits to, the SEC and in other public communications
        made by us;
 
 -
        Compliance with applicable governmental laws, rules and
        regulations;
 
 -
        The
        prompt internal reporting of violations of the code to an appropriate person
        or
        persons identified in the code; and
 
 -
        Accountability for adherence to the code.
 
 A
        copy of our code of ethics that applies to our principal executive officer,
        principal financial officer, principal accounting officer or controller,
        or
        persons performing similar functions was filed as Exhibit 14.1 to the Annual
        Report on Form 10-KSB for September 30, 2004.
 
 We
        will provide to any person without charge, upon request, a copy of our code
        of
        ethics. Any such request should be directed to our corporate secretary at
        3233
        Grand Avenue, Suite N-353, Chino Hills, California 91709.
 
 ITEM
        10.                      
EXECUTIVE COMPENSATION
 
 SUMMARY
        OF CASH AND CERTAIN OTHER
        COMPENSATION
 
 The
        following table provides certain summary information concerning the compensation
        earned by the named executive officers (determined as of the end of the most
        recent fiscal year) for services rendered in all capacities to Entech
        Environmental Technologies, Inc. and our subsidiaries for the fiscal years
        ended
        September 30, 2007 and 2006. No other officer had compensation of $100,000
        or
        more for 2007 and 2006.
  Summary
                      Compensation
                      TableAnnual
                      compensation
                  
                  
                  Long
                      term
                      compensationAwards
                  
                  
                  PayoutsName
                      and principal
                      position
                  Year
                  
                  Salary
                      ($)
                  
                  
                  Bonus
                      ($)
                  
                  
                  Other
                      annual compensation
                      ($)
                  
                  
                  Restricted
                      tock awards
                      ($)
                  
                  
                  Securities
                      underlying options /
                      SARs
                  
                  
                  LTIP
                      payouts
                      ($)
                  
                  
                  All
                      other compensation
                      ($)Burr
                      D. Northrop
                      (1)
                  2007
                  
                  120,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  10,0002006
                  
                  
                  150,010
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  12,000Kenneth
                      Green
                      (2)
                  2007
                  
                  90,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  6,3002006
                  
                  
                  120,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  9,010
  (1)
                    Mr. Northrop became president
                    during September 2004 and became CFO in October
                    2006.Annual
                    compensation includes
                    salary paid to Mr. Northrop from HB Covey, Inc. Other compensation
                    includes a car allowance.(2)
                    Mr. Green serves as a vice
                    president. Annual compensation includes salary paid to Mr. Green
                    from HB
                    Covey, Inc. Other compensation includes a car
                    allowance.
 
 30
 Table
              of Contents
 Employment
        Agreements, Termination of Employment and Change-in-Control
        Arrangement
 There
        are
        no current employment agreements between the named executive officers in
        the
        table above and us.
 
 Options
        and Stock Appreciation Rights Grant Table
 
 There
        were no grants of stock options to the Named Executive Officers during the
        fiscal year ended September 30, 2007.
 
 Aggregated
        Option Exercises and Fiscal Year-End Option Value Table
  We
        did
        not have any outstanding stock options or stock appreciation rights at end
        the
        fiscal year ended September 30, 2007.
 
 Long-Term
        Incentive Plan Awards Table
 
 We
        do not
        have any Long-Term Incentive Plans.
 
 Compensation
        of Directors
 
 During
        2006 and 2007, we did not compensate any of our directors for their services
        as
        board members.
 
 INDEMNIFICATION
        OF OFFICERS AND
        DIRECTORS
 
 Our
        Articles of Incorporation and Bylaws
        provide for indemnification of officers and directors to the fullest extent
        permitted byFloridalaw.
        It is possible that we will be
        required to pay certain judgments, fines and expenses incurred by an officer
        or
        director, including reasonable attorneys fees, as a result of actions or
        proceedings in which such officers and directors are involved by reason of
        being
        or having been an officer or director provided that said officers or directors
        acted in good faith.
 
 DISCLOSURE
        OF SECURITIES AND EXCHANGE
        COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
        LIABILITIES
 
 Insofar
        as indemnification for
        liabilities arising under the Securities Act may be permitted to our directors,
        officers and controlling persons pursuant to the foregoing provisions, or
        otherwise, we have been advised that in the opinion of the SEC such
        indemnification is against public policy as expressed in the Securities Act
        and
        is, therefore, unenforceable.
 
 In
        the event that a claim for
        indemnification against such liabilities (other than the payment of expenses
        incurred or paid by a director, officer or controlling person of Intelligent
        Business Systems Group, Inc. in the successful defense of any action, suit
        or
        proceeding) is asserted by such director, officer or controlling person in
        connection with the securities being registered, we will, unless in the opinion
        of our counsel the matter has been settled by controlling precedent, submit
        to a
        court of appropriate jurisdiction the question whether such indemnification
        by
        it is against public policy as expressed in the Securities Act and will be
        governed by the final adjudication of such issue.
 
 31
 Table
            of Contents
  ITEM
                  11.
              SECURITY
                  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
                  STOCKHOLDER MATTERS.
 
 The
        following table sets forth, as of September 30, 2007, information concerning
        ownership of our securities by:
 
 -
        Each
        person who owns beneficially more than five percent of the outstanding shares
        of
        our common stock;
 -
        Each
        director;
 -
        Each
        named executive officer; and
 -
        All
        directors and officers as a group.
 
 Shares
                  beneficially owned (2)Name
                  of beneficial owner (1)
              
              Number
              
              
              PercentBurr
                  D. Northrop
              
              
              4,283,524
              
              
              
              13.2
              %Kenneth
                  Green
              
              
              1,000,000
              
              
              
              3.1
              %Terence
                  F. Leong
              
              
              950,000
              
              
              
              2.9
              %All
                  directors and executive officers as a group (three
                  persons)
              
              
              6,233,524
              
              
              
              19.2
              %
  (1)
                  Unless otherwise indicated, the address for each of these stockholders
                  is
                  c/o EntechEnvironmental
                  Technologies, Inc. 3233 Grand Avenue, Suite N-353, Chino Hills,
                  CA,
                  91709.Also,
                  unless otherwise indicated, each person named in the table above
                  has the
                  sole voting andinvestment
                  power with respect to our shares of common stock which he or she
                  beneficially owns.(2)
                  Beneficial ownership is determined in accordance with the rules
                  of the
                  Securities and ExchangeCommission.
                  As of December 31, 2007, there were issued and outstanding 34,830,840
                  sharesof
                  our common stock.
 
 There
        are
        no arrangements, known to us, including any pledge by any person of our
        securities, the operation of which may at a subsequent date result in a change
        in control of Entech Environmental Technologies, Inc.
 
 ITEM
        12.                      
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
 We
            entered into a note purchase agreement with Barron Partners LP in September
            2004, and have borrowed a total of $1.2 million under this agreement
            excluding
            interest and accrued liquidated damages through September 30, 2007. The
            notes
            issued pursuant to the agreement are convertible into approximately 150
            million
            shares at September 30, 2007. We also issued warrants to purchase approximately
            20 million shares at conversion prices ranging from $0.025 to $0.15 per
            share.
 
 HB
            Covey,
            Inc. leased 8,000 square feet of warehouse and office space in Chino,
            California
            from CEO and CFO, Burr D. Northrop, the Company’s President. The monthly rental
            rate was $6,500,  Total payments under the lease for the year ended
            September 30, 2007 were $58,500. The lease was terminated upon the sale
            of HB
            Covey.
 
 During
            July 2007, we entered into an agreement to sell the assets of HB Covey,
            Inc. for
            an aggregate selling price of $100,000 in cash and 1.8 million in shares
            of
            Company stock from CEO and CFO, Burr Northrop. Under the terms of the
            sale, HB
            covey, Inc. assumed certain liabilities. We completed the sale during
            July 2007.
            As of December 31, 2007 Mr. Northrop has yet to return the 1.8 million
            shares to
            the Company at a fair value of $90,000, which has been recorded on the
            balance
            sheet as a receivable from related party.
  The
          Company paid Terence Leong, a board member, or his company an aggregate
          of $-
          and $11,000 for consulting services provided to the Company for 2007 and
          2006,
          respectively.
 
 32
 Table
            of Contents
  Except
        as
        noted above, no related party had any material interest, direct or indirect,
        in
        any transaction with us or in any presently proposed transaction that has
        or
        will materially affect us:
 
 o
              Any
                  of our directors or officers;
 o
              Any
                  person proposed as a nominee for election as a
                  director;
 o
              Any
                  person who beneficially owns, directly or indirectly, shares
                  carrying
 o
              more
                  than 10% of the voting rights attached to our outstanding shares
                  of
 o
              common
                  stock;
 o
              Any
                  of our promoters;
 o
              Any
                  relative or spouse of any of the foregoing persons who has the
                  same
 o
              house
                  as such person.
  ITEM13.
          EXHIBITS
  1.1**
                Investment
                    Banking Agreement with
                    Windstone Capital Partners dated October24,
                    20032.1**
                Plan
                    and Agreement of Triangular
                    Merger Between Environmental Technologies, Inc.,Parr
                    Sub One, Inc. and
                    Christie-Peterson Development dated December 29,
                    20032.2**
                Agreement
                    of Merger between
                    Christie-Petersen Development and Parr Sub One, Inc.filed
                    December 30,
                    20032.3**
                Plan
                    and Agreement of Triangular
                    Merger BetweenEnvironmental
                    Technologies, Inc.,
                    Parr SubTwo,
                    Inc. and Advanced Fuel
                    Filtration Systems, Inc. dated December 29, 20032.4**
                Agreement
                    of Merger between
                    Advanced Fuel Filtration, Inc. and Parr Sub Two, Inc. filedDecember
                    30,
                    20032.5**
                Plan
                    and Agreement of Triangular
                    Merger Between Environmental Technologies, Inc., Parr SubThree,
                    Inc. and H.B. Covey, Inc.
                    dated December 29, 20032.6**
                Agreement
                    of Merger between H.B.
                    Covey, Inc. and Parr Sub Three, Inc. filed December 30,20032.7
                    **
                Asset
                    Purchase Agreement between Entech Environmental Technologies,
                    Inc, and
                    Burr Northrop, dated July 11, 2007 (executed July 13,
                    2007)3.1.1**
                Articles
                    of Incorporation of Cyber
                    Public Relations, Inc., filed June 18, 19983.1.2**
                Amended
                    and Restated Articles of
                    Incorporation of Cyber Public Relations, Inc., changing thename
                    of the corporation to Entech
                    Environmental Technologies, Inc., filed March 22,
                    20043.1.3**
                Articles
                    of Incorporation of Point
                    2 Point Services, Inc., filed April 5, 20013.1.4**
                Certificate
                    of Amendment to
                    Articles of Incorporation of Point 2 Point Services, Inc.,
                    changingthe
                    name of the corporation to
                    Parr Development, Inc., filed December 31, 20023.1.5**
                Amended
                    and Restated Articles of
                    Incorporation of Parr Development, Inc., changing the nameof
                    the corporation to
                    Environmental Technologies, Inc., filed November 25,
                    20033.1.6**
                Articles
                    of Incorporation of Parr
                    Sub One, Inc. filed December 19, 20033.1.7**
                Articles
                    of Incorporation of Parr
                    Sub Two, Inc. filed December 19, 20033.1.8**
                Articles
                    of Incorporation of Parr
                    Sub Three, Inc. filed December 19, 20033.1.9**
                Articles
                    of Incorporation of
                    Christie-Petersen Development filed September 15,
                    19953.1.10**
                Articles
                    of Incorporation of
                    YLD/Clean Fuels, Inc. filed September 18, 19953.1.11**
                Certificate
                    of Amendment of
                    Articles of Incorporation of YLD/Clean Fuels,Inc.,
                    changing thename
                    of the corporation to
                    Advanced Fuel Filtration, Inc., filed September 27,
                    19973.1.12**
                Articles
                    of Incorporation of H.B.
                    Covey, Inc., filed March 19, 19713.2.1**
                Bylaws
                    of Cyber Public Relations,
                    Inc., adopted July 5, 19983.2.2**
                Amended
                    Bylaws of Cyber Public
                    Relations, Inc. adopted February 16, 20043.2.3**
                Amended
                    and Restated Bylaws of
                    Entech Environmental Technologies, Inc., adopted April28,
                    20043.2.4**
                Bylaws
                    of Point 2 Point Services,
                    Inc3.2.5**
                Bylaws
                    of Parr Sub One, Inc. ,
                    adopted December 29, 20033.2.6**
                Bylaws
                    of Parr Sub Two, Inc.,
                    adopted December 29, 20033.2.7**
                Bylaws
                    of Parr Sub Three, Inc.,
                    adopted December 29, 20033.2.8**
                Bylaws
                    of Christie-Petersen
                    Development, adopted September 22, 19953.2.9**
                Bylaws
                    of YLD/Clean Fuels, Inc.
                    dated October 6, 19953.2.10**
                Bylaws
                    of Entech Environmental
                    Technologies, Inc. adopted February 4, 20043.2.11**
                Restated
                    Bylaws of H.B. Covey,
                    Inc. adopted April 1, 19993.3.1**
                Charter
                    of the Audit Committee of
                    the Board of Directors of Cyber Public Relations, Inc.,adopted
                    January 29,
                    20043.3.2**
                Charter
                    of the Compensation
                    Committee of the Board of Directors of Cyber Public Relations,Inc.,
                    adopted January 29,
                    20044.1**
                Registration
                    Rights Agreement with
                    Barron Partners, LP regarding registration of shares, datedJanuary
                    23,
                    20044.2**
                Registration
                    Rights Agreement with
                    Wood Capital Associates, regarding registration of shares,dated
                    January 23,
                    20044.3**
                Registration
                    Rights Agreement with
                    Patricia L. Fiorese, regarding registration of shares,dated
                    January 23,
                    20044.4**
                Registration
                    Rights Agreement with
                    Vance Luedtke, regarding registration of shares, datedJanuary
                    23,
                    20044.5**
                Registration
                    Rights Agreement with
                    Diane C. Burge, regarding registration of shares, datedJanuary
                    23,
                    20044.6**
                Registration
                    Rights Agreement with
                    Clayton Chase, regarding registration of shares, datedJanuary
                    23,
                    20044.7**
                Registration
                    Rights Agreement with
                    James W. Moldermaker, regarding registration ofshares,
                    dated January 23,
                    2004   33
 Table
                of Contents
  4.8**
                Registration
                    Rights Agreement with
                    J. Kevin Wood, regarding registration of shares, datedJanuary
                    23,
                    20044.9**
                Registration
                    Rights Agreement with
                    Thomas Sheridan, regarding registration of shares,dated
                    January 23,
                    20044.10**
                Registration
                    Rights Agreement with
                    San Diego Torrey Hills Capital, regarding registrationof
                    shares, dated January 23,
                    20044.11**
                Registration
                    Rights Agreement with
                    Norman E. Clarke, regarding registration of shares,dated
                    January 23,
                    20044.12**
                Registration
                    Rights Agreement with
                    Steven R. Green, regarding registration of shares, datedJanuary
                    23,
                    200410.1**
                Robert
                    K. Christie Employment
                    Agreement, dated December 15, 200310.2**
                Steven
                    D. Rosenthal Employment
                    Agreement, dated December 15, 200310.3**
                Douglas
                    L. Parker Employment
                    Agreement, dated December 15, 200310.4**
                James
                    R. Christ Employment
                    Agreement, dated December 31, 200310.5**
                Stock
                    Pledge Agreement between
                    Robert K. Christie and Environmental Technologies, Inc.dated
                    December 29,
                    200310.6**
                Stock
                    Purchase Escrow Agreement
                    between Barron Partners, LP, Cyber Public Relations,Inc.
                    and Harbour, Smith, Harris
                    &Merritt, P.C. dated January 21, 200410.7**
                Capital
                    Stock Exchange Agreement
                    between the Registrant and the Stockholders of Environmental
                    Technologies, Inc., dated January 21, 200410.8**
                Stock
                    Purchase Agreement between
                    Environmental Technologies, Inc. and Barron Partners,LP
                    dated January 14,
                    200410.9**
                Amendment
                    to Stock Purchase
                    Agreement between Environmental Technologies, Inc. and Barron
                    Partners, LP dated January 21, 200410.10**
                Lease
                    Agreement, effective October
                    1, 199910.11**
                Lease
                    Agreement, effective
                    September 1, 200110.12**
                Lease
                    Agreement, effective
                    November 15, 200210.13**
                Amendment
                    No. 2 to Lease,
                    effective July 31, 200310.14**
                First
                    Amendment to Lease,
                    effective September 3, 200310.15**
                Cyber
                    Public Relations, Inc. A
                    Warrant for the Purchase of Common Stock10.16**
                Cyber
                    Public Relations, Inc. B
                    Warrant for the Purchase of Common Stock10.17**
                Cyber
                    Public Relations, Inc. C
                    Warrant for the Purchase of Common Stock10.18**
                Cyber
                    Public Relations, Inc. D
                    Warrant for the Purchase of Common Stock10.19**
                Cyber
                    Public Relations, Inc. E
                    Warrant for the Purchase of Common Stock10.20**
                Cyber
                    Public Relations, Inc.
                    Warrant for the Purchase of Common Stock, Wood CapitalAssociates10.21**
                Cyber
                    Public Relations, Inc.
                    Warrant for the Purchase of Common Stock, Patricia L.Fiorese10.22**
                Cyber
                    Public Relations, Inc.
                    Warrant for the Purchase of Common Stock, Vance
                    Luedtke10.23**
                Entech
                    Environmental Technologies,
                    Inc. Warrant for the Purchase of Common Stock, Diane C. Burge10.24**
                Entech
                    Environmental Technologies,
                    Inc. Warrant for the Purchase of Common Stock, Clayton Chase10.25**
                Entech
                    Environmental Technologies,
                    Inc. Warrant for the Purchase of Common Stock, James W. Moldermaker10.26**
                Entech
                    Environmental Technologies,
                    Inc. Warrant for the Purchase of Common Stock, J.Kevin
                    Wood10.27**
                Entech
                    Environmental Technologies,
                    Inc. Warrant for the Purchase of Common Stock, Thomas Sheridan10.28**
                Entech
                    Environmental Technologies,
                    Inc. Warrant for the Purchase of Common Stock, SanDiego
                    Torrey Hills
                    Capital10.29**
                Entech
                    Environmental Technologies,
                    Inc. Warrant for the Purchase of Common Stock, Norman E. Clarke10.30**
                Entech
                    Environmental Technologies,
                    Inc. Warrant for the Purchase of Common Stock, Steven R. Green10.31**
                Settlement
                    Agreement with Norman
                    T. Reynolds, Esq., dated September 23, 200410.32**
                Settlement
                    Agreement with
                    Stonegate Securities, dated September 21, 200410.33**
                Settlement
                    Agreement with Russell
                    Bedford Stefanou Mirchandani LLP, dated September21,
                    200410.34**
                Settlement
                    Agreement with Birch
                    Advisors Ltd. dated September 30, 200410.35**
                Settlement
                    Agreement with Gerald
                    Foster dated September 30, 200410.36**
                Secured
                    Convertible Note between
                    Entech Environmental Technologies, Inc. and BarronPartners,
                    L.P. dated September 30,
                    200410.37**
                Cyber
                    Public Relations, Inc.
                    Warrant for the Purchase of Common Stock, Barron Partners,L.P.10.38**
                Note
                    Purchase Agreement between
                    Environmental Technologies, Inc. and Barron Partners,LP
                    dated September 30,
                    200410.39**
                Registration
                    Rights Agreement with
                    Barron Partners, LP regarding registration of shares,dated
                    September 30,
                    200410.40**
                Entech
                    Environmental Technologies,
                    Inc. Warrant for the Purchase of Common Stock forBarron
                    Partners,
                    LP10.41**
                Escrow
                    Agreement between Entech
                    Environmental Technologies, Inc., Robert K. Christieand
                    Norman T. Reynolds dated
                    September 29, 200410.42**
                Warrant
                    Cancellation from Barron
                    Partners, L. P. dated September 30, 200410.43**
                Settlement
                    Agreement with San
                    Diego Torrey Hills Capital, Inc. dated September 1,
                    200410.44**
                Settlement
                    Agreement with Donald
                    G. St. Clair, CPA dated September 30, 200410.45**
                Termination
                    of Investment Banking
                    Agreement dated September 1, 200421.*
                Subsidiaries23.1*
                Consent
                    of Independent Auditors23.2*
                Consent
                    of Independent Prior Auditors31.1*
                Certification
                    of Chief Executive Officer pursuant to 18 U.S.C. Sec.1350, as
                    adopted
                    pursuant to Sec.302 of the Sarbanes-Oxley Act of 2002.31.2*
                Certification
                    of Principal Financial and Accounting Officer pursuant to 18
                    U.S.C.
                    Sec.1350, as adopted pursuant to Sec.302 of the Sarbanes-Oxley
                    Act of
                    2002.32.2*
                Certification
                    of Chief Executive Officer pursuant to 18
                    U.S.C. Sec.1350, as
                    adoptedpursuant
                    to .906 of the
                    Sarbanes-Oxley Act of 2002.32.2*
                Certification
                    of Principal Financial and Accounting Officer pursuant to 18
                    U.S.C. Sec.1350, as
                    adoptedpursuant
                    to .906 of the
                    Sarbanes-Oxley Act of
                    2002.
  
 34
 Table
            of Contents
 ITEM14.
              PRINCIPAL
                  ACCOUNTANT FEES AND SERVICES
  Year
          ended
          2007:
 
 AUDIT
          FEES
 
 The
          aggregate fees billed by Tarvaran Askelson & Company for professional
          services rendered for the audit of our annual financial statements for
          2007 were
          $31,550 and aggregate fees billed by Mendoza Berger & Company, LLP
          ("Mendoza") for 2007 were $12,610.
 AUDIT-RELATED
          FEES
 
 The
          aggregate fees billed by Mendoza and Tarvaran Askelson for assurance and
          related
          services that are reasonably related to the performance of the audit or
          review
          of our financial statements for 2007 were $0.
 
 ALL
          OTHER
          FEES
 
 Other
          fees billed by Tarvaran Askelson & Company for professional services
          rendered, other than as stated under the captions Audit Fees and Audit-Related
          Fees for 2007 were $20,525.
 
 Year
          ended
          2006:
 
 AUDIT
          FEES
 
 The
          aggregate fees billed by Mendoza for professional services rendered for
          the
          audit of our annual financial statements for 2006 were $54,231.
 
 AUDIT-RELATED
          FEES
 
 The
          aggregate fees billed by Mendoza for assurance and related services that
          are
          reasonably related to the performance of the audit or review of our financial
          statements for 2006 were $3,970.
 
 ALL
          OTHER
          FEES
 
 There
          were no other fees billed by Mendoza for professional services rendered,
          other
          than as stated under the captions Audit Fees and Audit-Related Fees for
          2006.
 AUDITOR
          INDEPENDENCE
 
 Our
          Board
          of Directors considers that the work done for us in the year ended September
          30,
          2006 by Mendoza is compatible with maintaining Mendoza’s independence.. Our
          Board of Directors considers that the work done for us related to the audit
          for
          the year ended September 30, 2007 by Tarvaran Askelson & Company, LLP is
          compatible with maintaining Tarvaran Askelson’s independence.
 
 AUDITOR'S
          TIME ON TASK
 
 All
          of
          the work expended by Tarvaran Askelson & Company, LLP and Mendoza on our
          September 30, 2006 and 2007 audits was attributed to work performed by
          their
          full-time, permanent employees.
 
 35
 Table
            of Contents
 
 
 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.
 
 ENTECH
          ENVIRONMENTAL TECHNOLOGIES, INC.
 
  Signature
                  Title
                  Date/s/Burr D.
                      Northrop
                  
                  
                  Chief
                      Executive Officer and
                      Director
                  
                  
                  January
                      14, 2008/s/Burr D.
                      Northrop
                  
                  
                  Principal
                      Accounting
                      Officer
                  
                  
                  January
                      14, 2008
 
 Pursuant
          to the requirements of the Securities Exchange Act of 1934, this report
          has been
          signed below by the following persons in the capacities and on the dates
          indicated.
  Signatures
                
                Title
                
                Date/s/
                    Burr D.
                    Northrop
                  Burr
                    D. Northrop
                
                Chief
                    Executive
                    Officer
                  Principal
                    Financial
                    Officer
                
                January  14,
                    2008/s/
                    Terence F.
                    Leong
                  Terence
                    F. Leong
                
                Director
                
                January
                    14, 2008


36