UNITED STATES
                       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, 2006

                        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                  (I.R.S. Employer
  incorporation or organization)                 Identification No.)

                         3233 Grand Avenue, Suite N-353
                       Chino Hills, California 91709-1489
          -------------------------------------------------------------
          (Address and telephone number of principal executive offices)

                                 (909) 623-2502
                           ---------------------------
                           (Issuer'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. Yes |X| No |_|

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: $4,596,000

Indicate if the  registrant  is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes |_| No |X|

The aggregate market value of the issuer's common stock held by non-affiliates
of the registrant as of December 27, 2006 was approximately $789,000. Solely for
purposes of the foregoing calculation, all of the issuer's directors and
officers are deemed to be affiliates.

                      APPLICABLE ONLY TO CORPORATE ISSUERS

The number of shares outstanding of the issuer's Common Stock, par value $.001
per share (the "Common Stock"), as of December 27, 2006, was 32,530,840.

Transitional Small Business Disclosure Format:

Yes|_| No |X|

<PAGE>


                     ENTECH ENVIRONMENTAL TECHNOLOGIES, INC.
                              Report on Form 10-KSB
                  For the Fiscal Year Ended September 30, 2006

                                TABLE OF CONTENTS

                                                                            Page
                                     PART I

Item 1.   Description of Business..........................................    3

Item 2.   Description of Property..........................................    9

Item 3.   Legal Proceedings................................................   10

Item 4.   Submission of Matters to Vote of Security Holders................   11

                                     PART II

Item 5.   Market for Common Equity, Related Stockholder Matters
          and Small Business Issuer Purchases of Equity Securities.........   11

Item 6.   Management's Discussion and Analysis or Plan of Operation........   12

Item 7.   Financial Statements.............................................   17

Item 8.   Changes in and Disagreements with Accountants on Accounting
          and Financial Disclosure.........................................   18

Item 8A.  Controls and Procedures..........................................   18

Item 8B.  Other Information................................................   18

                                    PART III

Item 9.   Directors, Executive Officers, Promoters and Control Persons;
          Compliance with Section 16(a) of the Exchange Act................   18

Item 10.  Executive Compensation...........................................   20

Item 11.  Security Ownership of Certain Beneficial Owners and Management
          and Related Stockholder Matters..................................   21

Item 12.  Certain Relationships and Related Transactions...................   22

Item 13.  Exhibits.........................................................   23

Item 14   Principal Accountant Fees and Services...........................   27

Signatures ................................................................   28

<PAGE>


ITEM 1.  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 provide 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:

o    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;

                                       3
<PAGE>

o    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

o    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.

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.

GENERAL

H.B. COVEY, INC.

Our H.B. Covey subsidiary is a 58 year old construction and maintenance company
that specializes in construction and maintenance services to the retail
petroleum industry, to commercial and industrial users, to municipal
organizations, and in support of major equipment manufacturers. H.B. Covey
expanded its scope of services beginning in October 2004 to include installation
of major household appliances for major retailers.

H.B. Covey is western states oriented with the heaviest concentration of
infrastructure located in California. On occasion, we provide services in other
states to give core customers a "one stop" support capacity or to take advantage
of a target opportunity. The industry is subject to constant, increasingly
restrictive environmental regulation. Traditionally, H.B. Covey targets select
opportunities within these sectors that support the core competencies of its
work force. Examples of these skill sets include:

o    Complete fuel system installations and upgrades;

o    Installation of monitoring and point of sale equipment;

o    Alternative fueling systems including CNG and LNG;

o    Installation and removal of hoists, clarifiers, and underground storage
     tanks;

o    Installation of soil and groundwater remediation equipment;

o    Complete maintenance and support of all major equipment and electronics
     supported by a 24 hour per day maintenance dispatch center; and

CLIENT BASE. H.B. Covey has categorized its customer base into six categories in
order to efficiently develop, maintain and maximize our opportunities. A focused
approach and determination of viability is made for each potential customer. Our
ideal client spends in excess of $5 million in capital and maintenance each
year. It should have centralized decision-making structure and its payment terms
must be timely. It is our goal to retain our "relationship based" clients and
maximize the amount of opportunities and activities with those clients. Each
category has differences in target services and expectation of potential
revenue. The categories are guidelines and should not be considered exclusive of
any opportunity not listed.


                                       4
<PAGE>

CATEGORY I; MAJOR OIL AND RETAIL COMPANIES. These companies sell fuel as their
primary retail strategy; have budgeted capital expenditures on a yearly basis;
have in excess of 250 locations and complementary geographic coverage; engage in
yearly maintenance contracts; and rely heavily on contracted services. These
companies include BP, Exxon Mobil Corporation, Chevron, Shell, Valero, and
Wal-Mart (Sam's Club).

CATEGORY II; LARGE INDEPENDENT AND REGIONAL OPERATORS. Generally these companies
are similar to the Category I list, however, they are smaller (less than 250
stations) and more regionally located. They have centralized decision-making
structure and have a significant requirement for our services. These companies
include USA Petroleum, Pilot Corporation, Giant Industries, Travel Centers of
America, Tower Energy, United Oil, Quick Stop Markets Inc., Nella Oil, and
Jayco.

CATEGORY III; INDUSTRIAL/COMMERCIAL. The industrial/commercial clients view
their fueling operations as "a necessary evil." They do not sell fuel but rather
install and maintain fueling systems to facilitate their primary revenue
generating functions. They typically lack knowledgeable personnel to manage
their fuel dispensing activities and rely heavily on relationships with
consultants and contractors. This group represents a significant opportunity for
relationship building and complete package sales. This group includes Ryder
Corporation, Hertz Corporation, UPS, Overnight Transport, Yellow Freight,
Roadway, Penske Leasing, Sempra Energy, and Consolidated Freight.

CATEGORY IV; MUNICIPAL ORGANIZATIONS. These potential clients operate large
fleets of vehicles that utilize both traditional and alternate fuel power.
Although bidding opportunities are commonly open to the public, we have been
able to foster longstanding relationships and extended contracts. These
opportunities typically require bid and performance bonds. The size and
complexity of the bid offerings coupled with the documentation and
capitalization requirements create a barrier of entrance that is often daunting
to our competition. Along with upgrades to traditional fueling systems mandated
by legislation these customers are aggressively converting fleets to alternative
fuel sources and taking advantage of substantial incentives and grant programs.
This group includes the City of Los Angeles, the United States Postal Service,
and the California Highway Patrol.

CATEGORY V; ORIGINAL EQUIPMENT MANUFACTURERS AND DISTRIBUTORS. H.B. Covey is an
authorized service company for the majority of the fueling equipment in use
today. We derive value from our ability to provide maintenance services during
the start up of the original equipment, in the performance of preventative and
warranty services, and engaging in time and material contracts with our
customers, the OEM's, and the distributors. The fueling equipment that H.B.
Covey is authorized to service includes, but is not limited to, equipment
manufactured by Tokheim Corporation, Gilbarco, Dresser Wayne, Gas Boy, Veeder
Root, API Ronan, Allied, EBW, FE Petro, EMCO, Hasstek, Healy, Incon, Red Jacket,
Ruby Verifone, SSI Blue Line, and CNG.

CATEGORY VI; TARGETS OF OPPORTUNITY. These clients are small independent
operators. They offer one-time opportunities and on-going maintenance contracts.
They are typically high maintenance requiring frequent communication with senior
management. There is limited opportunity for repeat business and we are
constantly wary of under-capitalization issues that often lead to disputes. We
are very selective in our analysis of these opportunities and typically quote
work with higher contingency percentages to offset our exposure to the
aforementioned risks.

FUTURE AND ON-GOING OPPORTUNITIES. The industry as a whole has undergone an
intense period of change. Retail petroleum divisions of oil companies are
redefining themselves as "retailers" as opposed to operators. More emphasis is
being placed on profitability facilitated by reductions in operating costs. The
market is in a period of contraction with mergers and acquisitions occurring in
hopes of creating higher margins through enhanced efficiencies and reduced
competition. Non-traditional fuel retailers (Costco, Sam's Club, K-Mart,
Wal-Mart, etc.) are focusing on customer retention by offering expanded services
including fueling operations at their existing and new facilities.

Independent of the ongoing corporate shuffling, various oversight agencies have
imposed restrictive compliance deadlines and created effective methods to
monitor compliance. Legislation continues to provide substantial incentives and
judicial mandates for operators to convert fleets to clean burning fuel sources.
These directives have provided H.B. Covey numerous opportunities to service
customers in all categories.


                                       5
<PAGE>

H.B. Covey is currently involved in major oil capital rollout programs designed
to meet deadlines set by the California Air Recourse Board, South Coast Air
Quality Management District, and Regional Water Quality Control Boards. The most
urgent programs have various compliance deadlines ranging from December 31, 2002
through December 31, 2008. Levels of compliance vary through the various
categories. However, we estimate that the industry as a whole is 50 percent to
60 percent compliant. All fuel system operators will be forced to allocate
larger portions of their capital budgets to regulatory compliance. Additional
funds will be allocated to programs focused on image improvement, new technology
implementation, and installation of alternative fueling systems.

We anticipate that retail companies will have an increased expectation of
service to develop sophisticated metrics to measure performance. It is hoped
that these metrics and our commitment to service and operational excellence will
differentiate us from our competitors and allow us continued growth. The
technology utilized in today's fueling systems has become relatively high-tech.
H.B. Covey continues to train its employees and study regulations to provide a
value added approach in its sales effort.

H.B. Covey anticipates a robust, sellers market, for the foreseeable future (one
to three years). Sales in all categories will be fueled primarily by
opportunities mandated by regulatory compliance. We will align ourselves with
select partners (i.e., testing companies and environmental consultants) to
maximize referral business. Although opportunities are expected to be plentiful,
the group will be limited by our ability to employ a well-trained, highly
competent, work force. Additional challenges will come in the form of
capitalization and financial stability. Competition to retain qualified
management and skilled craftsmen will be intense. The most successful companies
will be those that are diverse enough to endure unpredictable capital cycles and
provide robust employment packages to its employees.

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 employ 16 petroleum service technicians and support personnel, 11
consumer services technicians and support personnel, 10 construction and support
personnel, and 5 management and administrative employees. As we grow, we will
need to attract an unknown number of additional qualified employees. Although we
have experienced no work stoppages and believe our relationships with our

employees are good, we could be unsuccessful in attracting and retaining the
persons needed. None of our employees are currently represented by a labor
union. Considered one of the fastest growing areas in the United States, the
Inland Empire area of southern California, where we are located, is expected to
provide a ready source of available labor to support our growth.

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.


                                       6
<PAGE>

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.

We incurred net losses of approximately $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 expenses are currently greater than our revenues. 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.

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.

INTENSE COMPETITION IN THE CONSTRUCTION AND MAINTENANCE INDUSTRY COULD REDUCE
OUR MARKET SHARE AND PROFITS.

We serve markets that are highly competitive and in which a large number of
local and regional companies compete. In particular, the engineering and
construction markets are highly competitive and require substantial resources
and capital investment in equipment, technology, and skilled personnel.

Competition also places downward pressure on our contract prices and profit
margins. Intense competition is expected to continue in these markets,
presenting us with significant challenges to our ability to achieve strong
growth rates and acceptable profit margins. If we are unable to meet these
competitive challenges, we could lose market share to our competitors and
experience an overall reduction in our profits.

OUR ACQUISITION STRATEGY INVOLVES A NUMBER OF RISKS.

We intend to pursue growth through the opportunistic acquisition of companies or
assets that will enable us to expand our service lines to provide more
cost-effective customer solutions. We routinely review potential acquisitions.
This strategy involves certain risks, including difficulties in the integration
of operations and systems, the diversion of our management's attention from
other business concerns, and the potential loss of key employees of acquired
companies. We may not be able to successfully acquire, and/or integrate acquired
businesses into our operations.

OUR PROJECTS EXPOSE US TO POTENTIAL PROFESSIONAL LIABILITY, PRODUCT LIABILITY,
OR WARRANTY OR OTHER CLAIMS.

We construct and maintain large fueling station and storage facilities in which
system failure could be disastrous. Notwithstanding the fact that we generally
will not accept liability for consequential damages in our contracts, any
catastrophic occurrence in excess of insurance limits at projects where our
services are performed could result in significant warranty or other claims
against us. Such liabilities could potentially exceed our current insurance
coverage and the fees we derive from those services. A partially or completely
uninsured claim, if successful and of a significant magnitude, could potentially
result in substantial losses.

WE ARE EXPOSED TO POTENTIAL ENVIRONMENTAL LIABILITIES.

We  are  subject  to  environmental   laws  and  regulations,   including  those
concerning:

o    Emissions into the atmosphere;

o    Discharge into soil and ground water;

o    Handling and disposal of waste materials; and

o    Health and safety.


                                       7
<PAGE>


Our business often involves working around and with volatile, toxic and
hazardous substances and other highly regulated materials, the improper
characterization, handling or disposal of which could constitute violations of
federal, state or local statutes and laws, and result in criminal and civil
liabilities. Environmental laws and regulations generally impose limitations and
standards for certain pollutants or waste materials and require us to obtain a
permit and comply with various other requirements. Governmental authorities may
seek to impose fines and penalties on us, or revoke or deny issuance or renewal
of operating permits, for failure to comply with applicable laws and
regulations.

The environmental health and safety laws and regulations to which we are subject
are constantly changing, and it is impossible to predict the effect of such laws
and regulations on us in the future. We cannot ensure that future laws and
regulations will not significantly adversely affect us.

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.

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.

MANAGEMENT OF POTENTIAL GROWTH.

We may experience rapid growth which will place a significant strain on our
managerial, operational, and financial systems resources. To accommodate our
current size and manage growth, we must continue to implement and improve our
financial strength and our operational systems, and expand, train and manage our
sales and distribution base. There is no guarantee that we will be able to
effectively manage the expansion of our operations, or that our facilities,
systems, procedures or controls will be adequate to support our expanded
operations. Our inability to effectively manage our future growth would have a
material adverse effect on us.

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.


                                       8
<PAGE>


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.

ITEM 2.  DESCRIPTION OF PROPERTY

We lease our 8,000 square foot warehouse and office space in Chino, California
from Burr D. Northrop, our President. The monthly rental rate is $6,500, and the
lease provides for 3% annual increases in rent beginning in August, 2007. The
lease term is for five years, and expires in July, 2010. Total future payments
under the lease as of September 30, 2006 total $313,400. We believe that these
facilities are adequate for our current operations. However, we expect that we
could locate other suitable facilities at comparable rates, should we need more
space.

We leased a storage yard near our warehouse and office space in Chino. The
monthly rent under the lease was $1,000 per month. This lease was terminated in
June, 2006.


                                       9
<PAGE>

We leased two storage units in Los Angeles County for storing water heaters,
parts and equipment that we utilized in our Consumer Services Division. The
combined monthly rent for these two units is $526 per month. This lease was
terminated in June, 2006.

Future payouts under the leases for the warehouse, office and storage spaces are
as follows:

  Year         Amount
--------    -----------
  2007          78,400
  2008          80,800
  2009          83,200
  2010          71,000
             ----------
             $ 313,400
             ==========


ITEM 3.  LEGAL PROCEEDINGS

Entech was named as a defendant in several legal proceedings in the State of
California alleging breach of contract and various fees in connection with the
activities of our subsidiaries, Christie-Peterson Development, Advanced Fuel
Filtration Systems, Inc., and H. B. Covey, Inc. The plaintiffs seek monetary
damages. CPI and AFFS commenced Chapter 7 bankruptcy proceedings on September
30, 2004.

The proceedings described below are in various stages. While the ultimate effect
of the legal actions described below cannot be predicted with certainty, we
expect that the proceedings against our subsidiaries will not result in
liability to us due to the ongoing bankruptcy of CPI and AFFS.

We do not expect the outcome of these matters to have a material effect on our
financial condition or the results of our operations. The following lawsuits
have been filed against us:

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. The Company believes that it has meritorious defenses to the
plaintiff's claims and intends to vigorously defend itself against the
Plaintiff's claims.

Corona Service Park, et al filed complaint against the Company in the Central
District of California of the United States District Court. The complaint
alleges a breach of contract. The Company believes that it has meritorious
defenses to the plaintiff's claims and intends to vigorously defend itself
against the Plaintiff's claims.

Our former chairman and chief executive officer, Steven Rosenthal filed a
complaint against the Company in San Bernardino County Superior Court. The claim
alleges the Company owes $761,539 relating to the termination of his employment
agreement in 2004. As of the date of this report, we are disputing Mr.
Rosenthal's claim that our obligations to him under the employment contract are
still in force and effect.

Pursuant to the agreement with Mr. Rosenthal, which was to terminate on November
30, 2006, he was to receive a salary of $360,000 per year, plus bonuses, cost of
living increases, and other benefits. The agreement was renewable. In addition,
Mr. Rosenthal received 1,000,000 shares of our common stock upon execution of
his agreement. We have taken the position that the agreement has been
terminated.

The Company is also subject to other legal proceedings and claims which arise in
the ordinary course of its business. Although occasional adverse decisions or
settlements may occur, the Company believes that the final disposition of such
matters will not have material adverse effect on its financial position, results
of operations or liquidity.

Other than described above, we are not engaged in any other litigation, and are
unaware of any claims or complaints that could result in future litigation. We
will seek to minimize disputes with our customers but recognize the
inevitability of legal action in today's business environment as an unfortunate
price of conducting business.


                                       10
<PAGE>

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

During the fourth quarter of the fiscal year ended September 30, 2005, the
shareholders of the Company elected Burr D. Northrop and Terence F. Leong to the
Company's Board of Directors to hold office until the Company's Annual Meeting
of Stockholders in 2006 or until their successors are duly elected and
qualified; and ratified the appointment of Mendoza Berger & Company, LLP, as the
Company's independent certified public accountant for the fiscal year ending
September 30, 2006 and 2005

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 09/30/05              High               Low
----------------------------     -------------      -------------
      First quarter              $     0.16         $     0.05
      Second quarter             $     0.10         $     0.05
      Third quarter              $     0.19         $     0.05
      Fourth quarter             $     0.08         $     0.06

    Year ended 09/30/06              High               Low
----------------------------     -------------      -------------
      First quarter              $     0.18         $     0.03
      Second quarter             $     0.09         $     0.05
      Third quarter              $     0.08         $     0.02
      Fourth quarter             $     0.04         $     0.04




At September 30, 2006, there were 32,530,840 shares of our common stock
outstanding. Our shares of common stock are held by approximately 88
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

During the three months ended December 31, 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.

During the three months ended March 31, 2006, the Company cancelled 1,500,000
shares previously issued to a former employee and issued 300,000 shares to
replace the cancelled shares pursuant to an agreement between the Company and
the former employee. The Company issued 100,000 shares for public relations
services covering and 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 three months 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.

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.


                                       11
<PAGE>

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.


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

Our HBC subsidiary is a 59 year old construction and maintenance company that
specializes in construction and maintenance services for the retail petroleum
industry, commercial and industrial users, municipal organizations, and in
support of major equipment manufacturers. HBC expanded its scope of services to
include installation of major household appliances for major retailers in
October 2004.

HBC is western states oriented with the heaviest concentration of infrastructure
located in California. On occasion, we will provide services in various other
states in order to provide a "one stop" support capacity to a core customer or
to take advantage of a target opportunity. The industry, as a whole, is fueled
by a constant barrage of environmental regulations which continue to evolve and
become increasingly restrictive. Traditionally, HBC has targeted select
opportunities within these sectors that support the core competencies of its
work force. Examples of these skill sets include:


o    Complete fuel system installations and upgrades;

o    Installation of monitoring and point of sale equipment;

o    Alternative fueling systems including CNG and LNG;

o    Installation and removal of hoists, clarifiers, and underground storage
     tanks;

o    Installation of soil and groundwater remediation equipment;

o    Complete maintenance and support of all major equipment and electronics
     supported by a 24 hour per day maintenance dispatch center; and


                                       12
<PAGE>

HBC is generally divided into two divisions: Construction and Maintenance
Services. Beginning in October 2004, the Company operated in three segments:
Construction Services; Maintenance Services, and Consumer Services. Beginning in
December 2005, the Company added a new division called Testing Services.
Beginning June 2006, the Company closed its Consumer Services division and
merged the Testing Services division into the Maintenance Services division. The
diversity of the two divisions provides stability and diversification, yet
focuses on basic core competencies.

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:

Revenue Recognition The Company recognizes revenues from fixed-price and
modified fixed-price construction contracts on the percentage-of-completion
method, measured by the percentage of cost incurred to date to estimated total
cost for each contract. Provisions for estimated losses on uncompleted contracts
are made in the period in which such losses are determined. Changes in job
performance, job conditions, and estimated profitability may result in revisions
to costs and income, which are recognized in the period in which the revisions
are determined. Changes in estimated job profitability resulting from job
performance, job conditions, contract penalty provisions, claims, change orders,
and settlements, are accounted for as changes in estimates in the current
period.

The Company recognizes revenue from repair and installation services, in
accordance with SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in
Financial Statements" ("SAB 101"). SAB 101 requires that four basic criteria
must be met before revenue can be recognized: (1) persuasive evidence of an
arrangement exists; (2) delivery has occurred or services have been rendered;
(3) the selling price is fixed and determinable; and (4) collectibility is
reasonably assured.

The SEC's Staff Accounting Bulletin, or SAB, No. 104, Revenue Recognition,
provides guidance on the application of generally accepted accounting principles
to selected revenue recognition issues. We believe that our revenue recognition
policy is appropriate and in accordance with generally accepted accounting
principles and SAB No. 104.

Allowance for Doubtful Accounts We also maintain an allowance for doubtful
accounts for potential uncollectible accounts receivable arising from our
customers' inability to make required payments. Our estimate is determined by
analyzing historical bad debts, customer payment history and patterns, customer
creditworthiness, and economic, political or regulatory factors affecting the
customer's ability to make the required payments.

Inventories and Related Allowances. Net inventories are valued at the lower of
the first-in, first-out, or FIFO, cost or market value and have been reduced by
an allowance for excess, obsolete and potential scrap inventories. The estimated
allowance for excess and obsolete inventories is based on inventories on hand
compared to estimated future usage and sales and assumptions about the
likelihood of scrap or obsolescence.

RECENT DEVELOPMENTS

None


                                       13
<PAGE>

RESULTS OF CONTINUING OPERATIONS

Years ended September 30, 2006 and 2005

As previously stated, beginning in October 2004, the Company operated in three
segments: Construction Services; Maintenance Services, and Consumer Services.
Beginning in December 2005, the Company added a new division called Testing
Services. Beginning June 2006, the Company closed its Consumer Services division
and merged the Testing Services division into the Maintenance Services division.
The Company's other segment includes primarily general and administrative
expenses. The results of operations and the cash flows of the Consumer Services
division have been presented in the consolidated financial statements as
discontinued operations. Prior to the discontinuation of the Consumer Services
division, the Consumer Services division was presented as a separate operating
segment and included with continuing operations. Accordingly management excluded
these discontinued operations from its discussion and analysis of continuing
operations for years ended September 30, 2006 and 2005.

REVENUE

Revenues totaled $4.6 million for 2006, a decrease of $0.5 million over 2005
when revenues totaled $5.1 million. During 2006, we recognized $2.2 million in
revenue from construction services and $2.4 million from maintenance services.
We had more construction and maintenance contracts in 2005 than 2006. We entered
into the contract with a major home product retailer to install hot water
heaters in October 2004, and we recognized $1.1 million in revenue under this
contract in 2005, accounting for the remaining $1.1 million of the increase in
revenues.

The decrease in construction and maintenance revenues is attributed to the
closing of the Consumer Services, although management continues to focus on
organic growth within the remaining divisions. The team continued to maximize
opportunities afforded by its current customer base and was successful in
winning and completing other lucrative contracts.

COST OF GOODS SOLD

Cost of goods sold totaled $2.6 million for 2006, a decrease of $0.3 million
over 2005 when costs of goods sold totaled $2.9 million. Our gross margin in
2006 was 42% compared to 43% in 2005. Cost of sales decreased as a function of
decreased sales, and our gross margin improved due to proficient management,
controlled overhead expenses and improved purchasing power.

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses totaled $1.8 million for 2006, a
decrease of $0.5 million from 2005 when selling, general and administrative
expenses totaled $2.9 million. Decreases and increases in components of selling,
general and administrative expense are discussed below.

In 2005, we recorded $150,000 of expense related to the reorganization. We did
not incur these expenses in 2006. Our bad debt expense decreased by $34,000 from
2005 to 2006, as we continue to reduce our collection exposure related to our
receivables. Our use of attorneys and consultants decreased significantly after
the reorganization, and legal and consulting expense decreased by $255,000 from
2005 to 2006. Our expenses related to the truck fleet increased by $22,000 in
2006 over 2005, and this was primarily the result of the reduction of our fleet
of vehicles. Our employee related costs decreased by $143,000 in 2006 from 2005,
and this was primarily the result of us having fewer employees on board. Our
general liability and auto insurance premiums decreased during 2006 for reasons
stated above, resulting in a decrease in insurance expense of $30,000 in 2006
over 2005.

DEPRECIATION AND AMORTIZATION

Depreciation and amortization expense for 2006 totaled $115,381, which $10,067
was from discontinued operations, an increase of $56,587 over 2005 when
depreciation and amortization expense totaled $58,794. The increase is due to
higher depreciable asset bases throughout the majority of the year ended
September 30, 2006 because of the acquisition of depreciable assets.


                                       14
<PAGE>

GOODWILL IMPAIRMENT

During 2005, we wrote-off the goodwill recorded in its acquisition of PCT in the
aggregate amount of $21,532.

INTEREST EXPENSE

Interest expense for 2006 totaled $1.32 million, and includes amortization of
the note discount of $689,000 on the convertible notes payable issued to Barron,
liquidated damages of $500,000 related to our failure to file a registration
statement to register the common shares underlying the convertible notes payable
and warrants issued to Barron, and the remainder represents "regular" interest
on our outstanding obligations.

Interest expense for 2005 totaled $1.15 million, and includes amortization of
the note discount of $500,000 on the convertible notes payable issued to Barron,
liquidated damages of $370,000 related to our failure to file a registration
statement to register the common shares underlying the convertible notes payable
and warrants issued to Barron, and the remainder represents "regular" interest
on our outstanding obligations.

LOSS FROM CONTINUING OPERATIONS

For the reasons stated above, the loss from continuing operations for 2006
totaled $1.28 million as compared to $1.15 million in 2005.

RESULTS OF DISCONTINUED OPERATIONS

We recorded a loss from discontinued operations of $184,787 for 2006 compared to
$81,952 for 2005 related to the disposal of the Consumer Services division.

LIQUIDITY AND CAPITAL RESOURCES

During the year ended September 30, 2006, we generated a net operating loss of
$1.46 million, we provided cash from operating activities of $36,230; we
purchased property and equipment totaling $100,685, and we raised $273,000
through the issuance of convertible notes payable and the sale of common stock.
We financed our operations primarily through the use of these proceeds.

At September 30, 2005, we had negative working capital of $1.4 million, and we
owed Barron $1.1 million. We have not filed a registration statement to register
the shares underlying the convertible notes payable, and will continue to incur
liquidated damages at the rate of 36% per year on the outstanding balance of the
notes payable until such registration statement is effective.

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, 2006. No assurance can be given that any such additional
funding will be available or that, if available, can be obtained on terms
favorable to us. If we are unable to raise needed funds on acceptable terms, we
will not be able to execute our business plan, develop or enhance existing
services, take advantage of future opportunities or respond to competitive
pressures or unanticipated requirements. A material shortage of capital will
require us to take drastic steps such as further reducing our level of
operations, disposing of selected assets or seeking an acquisition partner. If
cash is insufficient, we will not be able to continue operations.

RECENT ACCOUNTING PRONOUNCEMENTS

In February 2006, the FASB issued SFAS 155 "Accounting for Certain Hybrid
Financial Instruments, an amendment of FASB Statements No. 133 and In February
2006, the FASB issued SFAS 155 "Accounting for Certain Hybrid Financial
Instruments, an amendment of FASB Statements No. 133 and 140". This Statement
amends FASB Statements No. 133, Accounting for Derivative Instruments and
Hedging Activities, and No. 140, Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities. This Statement resolves
issues addressed in Statement 133 Implementation Issue No. D1, Application of
Statement 133 to Beneficial Interests in Securitized Financial Assets. This
Statement:


                                       15
<PAGE>

a. Permits fair value remeasurement for any hybrid financial instrument that
contains an embedded derivative that otherwise would require bifurcation;

b. Clarifies which interest-only strips and principal-only strips are not
subject to the requirements of Statement 133;

c. Establishes a requirement to evaluate interests in securitized financial
assets to identify interests that are freestanding derivatives or that are
hybrid financial instruments that contain an embedded derivative requiring
bifurcation;

d. Clarifies that concentrations of credit risk in the form of subordination are
not embedded derivatives; and

e. Amends Statement 140 to eliminate the prohibition on a qualifying
special-purpose entity from holding a derivative financial instrument that
pertains to a beneficial interest other than another derivative financial
instrument.

This Statement is effective for all financial instruments acquired or issued
after the beginning of an entity's first fiscal year that begins after September
15, 2006. The fair value election provided for in paragraph 4(c) of this
Statement may also be applied upon adoption of this Statement for hybrid
financial instruments that had been bifurcated under paragraph 12 of Statement
133 prior to the adoption of this Statement. Earlier adoption is permitted as of
the beginning of an entity's fiscal year, provided the entity has not yet issued
financial statements, including financial statements for any interim period for
that fiscal year. Provisions of this Statement may be applied to instruments
that an entity holds at the date of adoption on an instrument-by-instrument
basis. The Company is currently evaluating the impact of SFAS 155.

In February 2006, the FASB decided to move forward with the issuance of a final
FSP FAS 123R-4 Classification of Options and Similar Instruments Issued as
Employee Compensation That Allow for Cash Settlement upon the Occurrence of a
Contingent Event. The guidance in this FSP FAS 123R-4 amends paragraphs 32 and
A229 of FASB Statement No. 123R to incorporate the concept articulated in
footnote 16 of FAS 123R. That is, a cash settlement feature that can be
exercised only upon the occurrence of a contingent event that is outside the
employee's control does not meet the condition in paragraphs 32 and A229 until
it becomes probable that the event will occur. Originally under FAS 123R, a
provision in a share-based payment plan that required an entity to settle
outstanding options in cash upon the occurrence of any contingent event required
classification and accounting for the share based payment as a liability. This
caused an issue under certain awards that require or permit, at the holder's
election, cash settlement of the option or similar instrument upon (a) a change
in control or other liquidity event of the entity or (b) death or disability of
the holder. With this new FSP, these types of cash settlement features will not
require liability accounting so long as the feature can be exercised only upon
the occurrence of a contingent event that is outside the employee's control
(such as an initial public offering) until it becomes probable that event will
occur. The guidance in this FSP shall be applied upon initial adoption of
Statement 123(R). An entity that adopted Statement 123(R) prior to the issuance
of the FSP shall apply the guidance in the FSP in the first reporting period
beginning after February 2006. Early application of FSP FAS 123R-4 is permitted
in periods for which financial statements have not yet been issued. The Company
does not anticipate that this new FSP will have any material impact upon its
financial condition or results of operations.

In June 2006, the FASB ratified the consensus reached by the Emerging Issues Tax
Force in Issue No. 06-3 ("EITF 06-3"), "How Taxes Collected from Customers and
Remitted to Governmental Authorities Should Be Presented in the Income Statement
(That is, Gross versus Net Presentation)." The scope of EITF 06-3 includes any
tax assessed by a governmental authority that is directly imposed on a
revenue-producing activity between a seller and a customer and may include, but
is not limited to, sales, use, value added, and some excise taxes. EITF 06-3
also concluded that the presentation of taxes within its scope on either a gross
(included in revenues and costs) or net (excluded from revenues) basis is an
accounting policy decision subject to appropriate disclosure. EITF 06-3 is
effective for periods beginning after December 15, 2006. The Company currently
presents these taxes on a net basis and has elected not to change its
presentation method.

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.


                                       16
<PAGE>

In September 2006, the SEC issued Staff Accounting Bulletin ("SAB") No. 108,
"Considering the Effects of Prior Year Misstatements when Qualifying
Misstatements in Current Year Financial Statements," which provides interpretive
guidance on the consideration of the effects of prior year misstatements in
quantifying current year misstatements for the purpose of a materiality
assessment. SAB No. 108 is effective for companies with fiscal years ending
after November 15, 2006 and is required to be adopted by the Company in its
fiscal year ending December 30, 2006. The Company is currently assessing the
impact, if any, of the adoption of SAB No. 108.

In September 2006, the FASB issued FASB Staff Position AUG AIR-1 "Accounting for
Planned Major Maintenance Activities", or FSP AUG AIR-1. FSP AUG AIR-1 amends
the guidance on the accounting for planned major maintenance activities;
specifically it precludes the use of the previously acceptable "accrue in
advance" method. FSP AUG AIR-1 is effective for fiscal years beginning after
December 15, 2006. The Company is currently assessing the impact of the adoption
of AUG AIR-1.

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.

Other significant recent accounting pronouncements issued by the FASB (including
its Emerging Issues Task Force ("EITF")), the American Institute of Certified
Public Accountants, and the SEC may be discussed elsewhere in these notes to the
consolidated financial statements. In the opinion of management, significant
recent accounting pronouncements did not or will not have a material effect on
the consolidated financial statements.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements.


ITEM 7.  FINANCIAL STATEMENTS


                     Entech Environmental Technologies, Inc.

                          INDEX TO FINANCIAL STATEMENTS

Reports of Independent  Registered Certified Public Accounting Firm
on Financial Statements..................................................... F-1

Consolidated Balance Sheet as of September 30, 2005......................... F-3

Consolidated Statements of Operations for the years ended September 30,
2005 and 2004............................................................... F-4

Consolidated  Statements  of Deficiency  in  Stockholders'  Equity for
the years ended September 30, 2005 and 2004................................. F-5

Consolidated Statements of Cash Flows for the years ended September 30,
2005 and 2004............................................................... F-6

Notes to Consolidated Financial Statements.................................. F-7


                                       17
<PAGE>


                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 sheets of Entech
Environmental Technologies, Inc. (Company) and subsidiaries as of September 30,
2006 and 2005, and the related consolidated statements of income, stockholders'
equity (deficit), and cash flows for the years 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 audits 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
2005, and the results of their operations and their cash flows for the years
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




                                      F-1
<PAGE>

                   ENTECH ENVIRONMENTAL TECHNOLOGIES, INC.
                         CONSOLIDATED BALANCE SHEET
                                SEPTEMBER 30

<TABLE>
<CAPTION>
                                                                         2006           2005
                                                                    ------------    ------------
<S>                                                                 <C>             <C>
Assets

Current assets:
Cash                                                                $     83,315    $    113,153
Accounts receivable, net allowance for doubtful accounts
  totaling $42,641 and $72,242, respectively                             620,118       1,095,237
Costs and estimated earnings in excess of billings
  on uncompleted contracts                                                71,424          19,652
Inventories                                                              426,854         198,490
Prepaid expenses and other current assets                                 38,460          32,186
                                                                    ------------    ------------
Total current assets                                                   1,240,171       1,458,718

Property and equipment, net                                              384,306         411,836

Other assets                                                              40,092          35,420

                                                                    ------------    ------------
Total assets                                                        $  1,664,569    $  1,905,974
                                                                    ============    ============


LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY:

Current liabilities:
Accounts payable                                                    $    443,186    $    696,477
Accrued interest and other expenses                                      522,952         541,369
Accrued payroll                                                           89,188         181,331
Billings in excess of costs and estimated earnings on
  uncompleted contracts                                                  182,432          92,625
Purchase price payable                                                    36,791            --
Due to affiliated entities                                               793,025         813,025
Current portion of notes payable, net of discount
  totaling $351,729 and $536,333                                       1,099,546         525,679
Current portion of note payable - related party                           27,894          25,756
                                                                    ------------    ------------
Total current liabilities                                              3,195,014       2,876,262

Notes payable, net of current portion                                    115,261            --
Note payable - related party, net of current portion                      92,253         120,147

Commitments and contingencies                                               --              --

Stockholders' deficit:
Preferred stock, $0.001 par value; 10,000,000 shares
  authorized; no shares issued and outstanding                              --              --
Common stock, $0.001 par value; 100,000,000 shares authorized;
  32,530,840 and28,405,825 shares issued and outstanding,
  respectively                                                            32,531          28,406
Additional paid-in capital                                            16,896,511      15,943,420
Common stock subscribed, 3,500 and 4,228,536 shares, respectively            597         136,598
Accumulated deficit                                                  (18,667,598)    (17,198,859)
                                                                    ------------    ------------
Total deficiency in stockholders' deficit                             (1,737,959)     (1,090,435)

                                                                    ------------    ------------
Total liabilities and deficiency in stockholders' deficit           $  1,664,569    $  1,905,974
                                                                    ============    ============

</TABLE>

        See accompanying notes to the consolidated financial statements.

                                       F-2
<PAGE>

                     ENTECH ENVIRONMENTAL TECHNOLOGIES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                                  For the years ended September 30
                                                                -------------------------------------
                                                                     2006                  2005
                                                                ----------------      ---------------
<S>                                                             <C>                  <C>
Revenues, net of returns and allowances                             $ 4,595,962          $ 5,098,774
Cost of goods sold                                                    2,639,675            2,897,083
                                                                ----------------      ---------------
Gross profit                                                          1,956,287            2,201,691

Operating expenses:
Selling, general, and administrative expenses                         1,823,102            2,281,963
Depreciation and amortization                                           105,314               58,794

      Total operating expenses                                        1,928,416            2,340,757
                                                                ----------------      ---------------

Loss from operations                                                     27,872             (139,066)

Other income (expense):                                                     --                   --
Gain on settlement                                                       37,935
Goodwill impairment                                                     (21,532)                 --
Loss on sale of fixed assets                                             (7,334)                 --
Amortization of note discount                                          (689,127)            (525,680)
Liquidated damages                                                     (500,606)            (370,511)
Interest expense                                                       (131,160)            (114,052)
                                                                ----------------      ---------------
Loss before provision for income taxes
and discontinued operations                                          (1,283,952)          (1,149,308)

Provision for income taxes                                                  --                   --
                                                                ----------------      ---------------
Loss from continuing operations                                      (1,283,952)          (1,149,308)

Loss from discontinued operations, net of income taxes                 (184,787)             (81,952)
                                                                ----------------      ---------------
Net loss                                                           $ (1,468,739)        $ (1,231,260)
                                                                ================      ===============

Net loss per share - basic and fully diluted                            $ (0.05)             $ (0.05)
                                                                ================      ===============


Net loss per share - continuing operations                              $ (0.04)             $ (0.05)
                                                                ================      ===============

Net loss per share - discontinued operations                            $ (0.01)             $ (0.00)
                                                                ================      ===============

Basic and diluted weighted average
number of shares outstanding                                         32,312,591           24,154,031
                                                                ================      ===============
</TABLE>

        See accompanying notes to the consolidated financial statements.


                                       F-3
<PAGE>


                     ENTECH ENVIRONMENTAL TECHNOLOGIES, INC.
                 STATEMENT OF DEFICIENCY IN STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED SEPTEMBER 30, 2005 AND 2006


<TABLE>
<CAPTION>
                                                                                  Common Stock                     Deficiency In
                                          Common Stock           Additional Paid      Subscribed,     Accumulated     Stockholders'
                                   --------------------------
                                      Shares        Amount         In Capital         Not issued        Deficit          Equity
                                   -------------  -----------  -------------------  --------------- ---------------  --------------
<S>                                <C>           <C>          <C>                   <C>             <C>              <C>
Balances at September 30, 2004       14,450,832     $ 14,451         $ 11,489,614      $ 3,436,258    $(15,967,599)   $ (1,027,276)
Shares issued to a service
  provider at  $0.65 per share           75,000           75                4,800                -               -           4,875
Shares issued to former emplyee
  at $0.06 per share                  1,500,000        1,500               88,500                -               -          90,000
Shares issued in June to
  investors in previous private
  placement offering as an
  adjustment to terms                    16,667           17                  (17)               -               -               -
Shares issued in legal settlement       500,000          500              397,625                -                         398,125
Shares issued for conversion of
  note and interest payable to
  a related party                       800,000          800               59,200                -               -          60,000
Shares issued as incentive
  compensation                          200,000          200               14,800                -               -          15,000
Issuance of previously subscribed
  shares                             10,863,326       10,863            3,388,798       (3,399,661)              -               -
Shares subscribed, not issued
  at $0.025 per share to
  investors. 4,000,036 shares                 -            -                    -          100,001               -         100,001
Value of warrants issued with
  convertible note                            -            -              353,053                -               -         353,053
Value of beneficial conversion
  feature of convertible note                 -            -              147,047                -               -         147,047
Loss from continuing operations               -            -                    -                -      (1,149,308)     (1,149,308)
Loss from discontinued operations             -            -                    -                          (81,952)        (81,952)
                                   -------------  -----------  -------------------  --------------- ---------------  --------------
Balances at September 30, 2005       28,405,825       28,406           15,943,420          136,598     (17,198,859)     (1,090,435)

                                                                                     Common Stock                     Deficiency In
                                          Common Stock           Additional Paid      Subscribed,     Accumulated     Stockholders'
                                   --------------------------
                                      Shares        Amount         In Capital         Not issued        Deficit          Equity
                                   -------------  -----------  -------------------  --------------- ---------------  --------------


Issuance of previously
  subscribed shares                   4,225,015        4,225              131,776         (136,001)              -               -
Shares issued in legal settlement     1,000,000        1,000               89,000                -               -          90,000
Shares issued to a service
  provider at $0.05 per share           100,000          100                4,900                -               -           5,000
 Net shares cancelled per
  agreement with former employee     (1,200,000)      (1,200)               1,200                -               -               -
Value of beneficial conversion
  feature of convertible notes                -            -              504,523                -               -         504,523

Waiver of liquidation damages                 -            -              221,692                -               -         221,692
Loss from continuing operations               -            -                    -                -      (1,283,952)     (1,283,952)
Loss from discontinued operations             -            -                    -                -        (184,787)       (184,787)

                                   -------------  -----------  -------------------  --------------- ---------------  --------------
                                     32,530,840     $ 32,531         $ 16,896,511            $ 597    $(18,667,598)   $ (1,737,959)
                                   =============  ===========  ===================  =============== ===============  ==============

</TABLE>

        See accompanying notes to the consolidated financial statements.

                                      F-4
<PAGE>

                     ENTECH ENVIRONMENTAL TECHNOLOGIES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                      For the years ended September 30,
                                                                    ---------------------------------------
                                                                        2006                    2005
                                                                    --------------         ----------------
<S>                                                                 <C>                    <C>
Net loss from continuing operations                                  $ (1,468,739)            $ (1,231,260)
Add back: Net loss from discontinued operations, net of taxes            (184,787)                 (87,192)
                                                                    --------------         ----------------
Net loss from continuing operations                                    (1,283,952)              (1,144,068)

Cash flows from continuing operating activities: Adjustments to reconcile net
  loss to net cash provided by (used in) operating activities:
   Depreciation and amortization                                          105,314                   58,794
   Loss on sale of property and equipment                                   7,334                        -
   Common stock issued for services                                         5,000                  109,875
   Settlement of accounts payable                                         (37,935)                       -
   Goodwill impairment                                                     21,532                        -
   Amortization of note discount                                          490,143                  525,679
   Reserve for bad debts                                                  (29,601)                  60,988
   Inventory reserve                                                     (250,118)                       -
Changes in:
   Accounts receivable                                                    546,435                 (841,313)
   Due to affiliated entities                                             (20,000)                  23,573
   Inventory                                                               49,430                  (78,516)
   Construction in progress                                                38,035                  170,496
   Other assets                                                           (32,478)                  (9,271)
   Accounts payable and accrued expenses                                  427,091                  723,024
                                                                    --------------         ----------------
Net cash provided by  (used in) continuing operating activities            36,230                 (400,739)

Cash flows from investing activities:
   Proceeds from sale of property and equipment                             5,500                        -
   Purchases of property and equipment                                   (100,685)                 (43,628)
                                                                    --------------         ----------------
   Net cash used in investing activities                                  (95,185)                 (43,628)

Cash flows from financing activities:
   Proceeds from notes payable                                            183,724                  491,200
   Cash received from subscription of common stock                              -                  100,001
   Principal payments on notes payable                                     89,505                   (4,097)
                                                                    --------------         ----------------
   Net cash provided by financing activities                              273,229                  587,104

Net cash used in discontinued operations from continuing operations      (244,112)                (187,677)
                                                                    --------------         ----------------
Net increase (decrease) in cash                                           (29,839)                 (44,940)

Cash at beginning of period                                               113,153                  158,093
                                                                    --------------         ----------------
Cash at end of period                                                    $ 83,315                $ 113,153
                                                                    ==============         ================
                                      F-5
<PAGE>

Supplemental Disclosures of Cash Flow Information :

Cash paid during the period for interest                                 $ 10,742                  $ 6,652
                                                                    ==============         ================

Cash paid during the period for income taxes                                  $ -                      $ -
                                                                    ==============         ================

Common stock issued to consultants for services                           $ 5,000                  $ 4,875
                                                                    ==============         ================

Common stock issued to convert note payable and interest                      $ -                 $ 60,000
                                                                    ==============         ================

Common stock issued for accounts payable
                                                                        $ 127,935                      $ -
                                                                    ==============         ================
Common stock issued in satisfaction of amounts
owed to former management                                                     $ -                 $ 90,000
                                                                    ==============         ================

Common stock issued for legal settlement                                      $ -                $ 398,125
                                                                    ==============         ================

Common stock issued as incentive compensation
to management                                                                 $ -                 $ 15,000
                                                                    ==============         ================

16,667 additional shares of common stock
issued to investors in previous private placement                             $ -                     $ 17
                                                                    ==============         ================

Value of warrants issued with convertible note payable                   $ 80,000                $ 353,053
                                                                    ==============         ================

Beneficial conversion feature of convertible note payable               $ 424,523                $ 147,047
                                                                    ==============         ================
</TABLE>

        See accompanying notes to the consolidated financial statements.

                                      F-6
<PAGE>


                    ENTECH ENVIRONMENTAL TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          SEPTEMBER 30, 2006 AND 2005


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, provides
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 accompanying financial statements include the accounts of the Company and
its wholly-owned subsidiary, H.B. Covey, Inc., a California corporation ("H.B.
Covey"). All significant intercompany transactions and balances have been
eliminated in the consolidated financial statements.

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        $   3,238,483
   Cash 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        $   1,855,626
   Note payable                                           1,000,000
                                                      --------------
   Total 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                                           1,000,000
                                                      --------------
   Total consideration paid / goodwill                $     954,911
                                                      ==============




                                      F-7
<PAGE>

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                              $         315
   Liabilities assumed in excess of assets                   22,263
   Cash paid                                                275,000
                                                      --------------
   Total consideration paid / organization costs      $     297,578
                                                      ==============


Discontinued Operations
-----------------------

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 (see Note 8).

In June 2006, the Company 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 discontinued
operations for the years ended September 30, 2006 was $184,787 and $81,952,
respectively.

The consolidated financial statements include the accounts of the Company, and
its wholly-owned subsidiary, H.B. Covey, Inc. The balance sheets of CPI and
Advanced Fuel have 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, 2006 and September 30, 2005.

Going Concern
-------------

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, 2006 and 2005, the
Company incurred losses from continuing operations of $1.28 million and $1.15
million, respectively. As of September 30, 2006, the Company has negative
working capital of $1,215,818, an accumulated deficit of $18,667,598, current
portion of notes payable of $1,127,440 after full amortization of the note
discount, and accounts payable and accrued expenses of $1,092,117.

                                      F-8
<PAGE>

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 8. 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, 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 the
continued development, marketing and selling of its services, and through
additional debt or equity investment in the Company. The accompanying financial
statements do not contain any adjustments related to this uncertainty.

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.

Revenue Recognition
-------------------

CONSTRUCTION CONTRACTS

The Company recognizes revenues from fixed-price and modified fixed-price
construction contracts on the percentage-of-completion method, measured by the
percentage of cost incurred to date to estimated total cost for each contract.
That method is used because management considers total cost to be the best
available measure of progress on the contracts. Because of inherent
uncertainties in estimating costs, it is at least reasonably possible that the
estimates used will change within the near term.

Contract costs include all direct material and labor costs and those indirect
costs related to contract performance. Selling, general, and administrative
costs are charged to expense as incurred. Provisions for estimated losses on
uncompleted contracts are made in the period in which such losses are
determined. Changes in job performance, job conditions, and estimated
profitability may result in revisions to costs and income, which are recognized
in the period in which the revisions are determined. Changes in estimated job
profitability resulting from job performance, job conditions, contract penalty
provisions, claims, change orders, and settlements, are accounted for as changes
in estimates in the current period.

The asset, "Costs and estimated earnings in excess of billings on uncompleted
contracts," represents revenues recognized in excess of amounts billed. The
liability, "Billings in excess of costs and estimated earnings on uncompleted
contracts," represents billings in excess of revenues recognized.

REPAIR AND INSTALLATION SERVICES

The Company recognizes revenue from repair and installation services, in
accordance with SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in
Financial Statements" ("SAB 101"). SAB 101 requires that four basic criteria
must be met before revenue can be recognized: (1) persuasive evidence of an
arrangement exists; (2) delivery has occurred or services have been rendered;
(3) the selling price is fixed and determinable; and (4) collectibility is
reasonably assured. Determination of criteria (3) and (4) are based on
management's judgments regarding the fixed nature of the selling prices of the
products delivered/services rendered and the collectibility of those amounts.
Provisions for discounts and rebates to customers, estimated returns and
allowances, and other adjustments are provided for in the same period the
related sales are recorded. The Company defers any revenue for which the product
has not been delivered or services have not been rendered or is subject to
refund until such time that the Company and the customer jointly determine that
the product has been delivered or services have been rendered or no refund will
be required.

                                      F-9
<PAGE>

On December 17, 2003, the SEC staff released Staff Accounting Bulletin (SAB) No.
104, Revenue Recognition. The staff updated and revised the existing revenue
recognition in Topic 13, Revenue Recognition, to make its interpretive guidance
consistent with current accounting guidance, principally EITF Issue No. 00-21,
"Revenue Arrangements with Multiple Deliverables". Also, SAB 104 incorporates
portions of the Revenue Recognition in Financial Statements - Frequently Asked
Questions and Answers document that the SEC staff considered relevant and
rescinds the remainder. The company's revenue recognition policies are
consistent with this guidance.

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. The Company periodically reviews its trade receivables in
determining its allowance for doubtful accounts. The allowance for doubtful
accounts is $42,641 and $72,247 as of September 30, 2006 and 2005, respectively.

Accounts Receivable
-------------------

Accounts receivable are recorded when invoices are issued and are presented in
the balance sheet net of the allowance for doubtful accounts. Receivables are
written off when they are determined to be uncollectible. The allowance for
doubtful accounts is estimated based on the Company's historical losses, the
existing economic conditions in the industry, and the financial stability of its
customers.

Inventory
---------

Substantially all of the inventories are either general merchandise or finished
goods. Inventories are stated at the lower of cost or market. For determining
the value of inventories, cost methods that reasonably approximate the first-in,
first-out ("FIFO") method are used.


                                      F-10
<PAGE>

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 years
   Tools and equipment                        Five years
   Office furniture and equipment             Three years
   Leasehold 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, 2006 and 2005.

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, 2006 and 2005
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.

In March 2005, the SEC released Staff Accounting Bulletin No. 107, "Share-Based
Payment" ("SAB 107"), which provides interpretive guidance related to the
interaction between SFAS 123(R) and certain SEC rules and regulations. It also
provides the SEC staff's views regarding valuation of share-based payment
arrangements. In April 2005, the SEC amended the compliance dates for SFAS
123(R), to allow companies to implement the standard at the beginning of their
next fiscal year, instead of the next reporting period beginning after June 15,
2005. Management is currently evaluating the impact SAB 107 will have on the
financial statements.

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.

                                      F-11
<PAGE>

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 2006 and 2005, 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.

Segment Information
-------------------

Statement of Financial Accounting Standards No. 131, "Disclosures about Segments
of an Enterprise and Related Information" ("SFAS 131") establishes standards for
reporting information regarding operating segments in annual financial
statements and requires selected information for those segments to be presented
in interim financial reports issued to stockholders. SFAS 131 also establishes
standards for related disclosures about products and services and geographic
areas. Operating segments are identified as components of an enterprise about
which separate discrete financial information is available for evaluation by the
chief operating decision maker, or decision-making group, in making decisions
how to allocate resources and assess performance. Beginning in October 2004, the
Company operated in three segments: Construction Services; Maintenance Services,
and Consumer Services. Beginning in December 2005, the Company added a new
division called Testing Services. Beginning June 2006, the Company closed its
Consumer Services division and merged the Testing Services division into the
Maintenance Services division. The Company's Other segment includes primarily
general and administrative expenses. See Note 15.

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 2006, the FASB issued SFAS 155 "Accounting for Certain Hybrid
Financial Instruments, an amendment of FASB Statements No. 133 and In February
2006, the FASB issued SFAS 155 "Accounting for Certain Hybrid Financial
Instruments, an amendment of FASB Statements No. 133 and 140". This Statement
amends FASB Statements No. 133, Accounting for Derivative Instruments and
Hedging Activities, and No. 140, Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities. This Statement resolves
issues addressed in Statement 133 Implementation Issue No. D1, Application of
Statement 133 to Beneficial Interests in Securitized Financial Assets. This
Statement:

a. Permits fair value remeasurement for any hybrid financial instrument that
contains an embedded derivative that otherwise would require bifurcation;

b. Clarifies which interest-only strips and principal-only strips are not
subject to the requirements of Statement 133;

c. Establishes a requirement to evaluate interests in securitized financial
assets to identify interests that are freestanding derivatives or that are
hybrid financial instruments that contain an embedded derivative requiring
bifurcation;

d. Clarifies that concentrations of credit risk in the form of subordination are
not embedded derivatives; and

e. Amends Statement 140 to eliminate the prohibition on a qualifying
special-purpose entity from holding a derivative financial instrument that
pertains to a beneficial interest other than another derivative financial
instrument.

                                      F-12
<PAGE>

This Statement is effective for all financial instruments acquired or issued
after the beginning of an entity's first fiscal year that begins after September
15, 2006. The fair value election provided for in paragraph 4(c) of this
Statement may also be applied upon adoption of this Statement for hybrid
financial instruments that had been bifurcated under paragraph 12 of Statement
133 prior to the adoption of this Statement. Earlier adoption is permitted as of
the beginning of an entity's fiscal year, provided the entity has not yet issued
financial statements, including financial statements for any interim period for
that fiscal year. Provisions of this Statement may be applied to instruments
that an entity holds at the date of adoption on an instrument-by-instrument
basis. The Company is currently evaluating the impact of SFAS 155.

In February 2006, the FASB decided to move forward with the issuance of a final
FSP FAS 123R-4 Classification of Options and Similar Instruments Issued as
Employee Compensation That Allow for Cash Settlement upon the Occurrence of a
Contingent Event. The guidance in this FSP FAS 123R-4 amends paragraphs 32 and
A229 of FASB Statement No. 123R to incorporate the concept articulated in
footnote 16 of FAS 123R. That is, a cash settlement feature that can be
exercised only upon the occurrence of a contingent event that is outside the
employee's control does not meet the condition in paragraphs 32 and A229 until
it becomes probable that the event will occur. Originally under FAS 123R, a
provision in a share-based payment plan that required an entity to settle
outstanding options in cash upon the occurrence of any contingent event required
classification and accounting for the share based payment as a liability. This
caused an issue under certain awards that require or permit, at the holder's
election, cash settlement of the option or similar instrument upon (a) a change
in control or other liquidity event of the entity or (b) death or disability of
the holder. With this new FSP, these types of cash settlement features will not
require liability accounting so long as the feature can be exercised only upon
the occurrence of a contingent event that is outside the employee's control
(such as an initial public offering) until it becomes probable that event will
occur. The guidance in this FSP shall be applied upon initial adoption of
Statement 123(R). An entity that adopted Statement 123(R) prior to the issuance
of the FSP shall apply the guidance in the FSP in the first reporting period
beginning after February 2006. Early application of FSP FAS 123R-4 is permitted
in periods for which financial statements have not yet been issued. The Company
does not anticipate that this new FSP will have any material impact upon its
financial condition or results of operations.

In June 2005, the EITF reached a consensus on Issue 05-6, "Determining the
Amortization Period for Leasehold Improvements," which requires that leasehold
improvements acquired in a business combination or purchased subsequent to the
inception of a lease be amortized over the lesser of the useful life of the
assets or a term that includes renewals that are reasonably assured at the date
of the business combination or purchase. EITF 05-6 is effective for periods
beginning after June 29, 2005. Earlier application is permitted in periods for
which financial statements have not been issued. The adoption of this Issue did
not have an impact on the Company's financial statements.

In June 2006, the FASB ratified the consensus reached by the Emerging Issues Tax
Force in Issue No. 06-3 ("EITF 06-3"), "How Taxes Collected from Customers and
Remitted to Governmental Authorities Should Be Presented in the Income Statement
(That is, Gross versus Net Presentation)." The scope of EITF 06-3 includes any
tax assessed by a governmental authority that is directly imposed on a
revenue-producing activity between a seller and a customer and may include, but
is not limited to, sales, use, value added, and some excise taxes. EITF 06-3
also concluded that the presentation of taxes within its scope on either a gross
(included in revenues and costs) or net (excluded from revenues) basis is an
accounting policy decision subject to appropriate disclosure. EITF 06-3 is
effective for periods beginning after December 15, 2006. The Company currently
presents these taxes on a net basis and has elected not to change its
presentation method.

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.

In September 2006, the SEC issued Staff Accounting Bulletin ("SAB") No. 108,
"Considering the Effects of Prior Year Misstatements when Qualifying
Misstatements in Current Year Financial Statements," which provides interpretive
guidance on the consideration of the effects of prior year misstatements in
quantifying current year misstatements for the purpose of a materiality
assessment. SAB No. 108 is effective for companies with fiscal years ending
after November 15, 2006 and is required to be adopted by the Company in its
fiscal year ending December 30, 2006. The Company is currently assessing the
impact, if any, of the adoption of SAB No. 108.

                                      F-13
<PAGE>

In September 2006, the FASB issued FASB Staff Position AUG AIR-1 "Accounting for
Planned Major Maintenance Activities", or FSP AUG AIR-1. FSP AUG AIR-1 amends
the guidance on the accounting for planned major maintenance activities;
specifically it precludes the use of the previously acceptable "accrue in
advance" method. FSP AUG AIR-1 is effective for fiscal years beginning after
December 15, 2006. The Company is currently assessing the impact of the adoption
of AUG AIR-1.

Other significant recent accounting pronouncements issued by the FASB (including
its Emerging Issues Task Force ("EITF")), the American Institute of Certified
Public Accountants, and the SEC may be discussed elsewhere in these notes to the
consolidated financial statements. In the opinion of management, significant
recent accounting pronouncements did not or will not have a material effect on
the consolidated financial statements.


NOTE 4 - ACCOUNTS RECEIVABLE

Accounts receivable at September 30 consist of the followings:

<TABLE>
<CAPTION>
                                                           2006               2005
                                                      --------------     --------------
   <S>                                                <C>                <C>
   Construction contract billings                     $     268,975      $     715,921
   Testing                                                    4,798                  -
   Maintenance billings                                     303,872            286,183
   Consumer billings                                         85,114            165,375
                                                      --------------     --------------
                                                            662,759          1,167,479
   Less allowance for uncollectible amounts                 (42,641)           (72,242)
                                                      --------------     --------------
                                                      $     620,118      $   1,095,237
                                                      ==============     ==============
</TABLE>


NOTE 5 - UNCOMPLETED CONSTRUCTION CONTRACTS



The summary of activity on uncompleted construction contracts as of September 30
is as follows:

<TABLE>
<CAPTION>

                                                           2006               2005
                                                      --------------     --------------
   <S>                                                <C>                <C>
   Estimated earnings                                 $   1,312,030      $     951,252
   Less billings to date                                 (1,240,606)          (931,600)
                                                      --------------     --------------
   Costs and estimated earnings in excess of billings        71,424             19,652
   Less billings in excess of costs and estimated
   earnings                                                (182,432)           (92,625)
                                                      --------------     --------------
                                                      $    (111,008)     $     (72,973)
                                                      ==============     ==============
</TABLE>



                                      F-14
<PAGE>


NOTE 6 - PROPERTY AND EQUIPMENT

Major classes of property and equipment at September 30 consist of the
followings:

<TABLE>
<CAPTION>

                                                           2006               2005
                                                      --------------     --------------
   <S>                                                <C>                <C>
   Transportation equipment                           $     683,194      $     654,172
   Tools and equipment                                      163,545            149,038
   Office furniture and equipment                           241,724            216,386
   Leasehold improvements                                   150,000            150,000
                                                      --------------     --------------
                                                          1,238,463          1,169,596

   Less accumulated depreciation and amortization          (854,157)          (757,760)
                                                      --------------     --------------
   Net property and equipment                         $     384,306      $     411,836
                                                      ==============     ==============
</TABLE>


Depreciation expense totaled $115,381, of which $10,067 was from discontinued
operations for the year ended September 30, 2006 and $58,794 for the year ended
September 30, 2005.

Acquisition of Assets
---------------------

On December 9, 2005, the Company entered into an Asset Purchase and Sale
Agreement with Pacific Coast Testing to acquire the assets of this fuel system
testing company for $125,000. No liabilities were assumed as part of the
transaction. The Company paid $75,000 of the purchase price at closing, and the
remaining $50,000 was payable in May 2006. The final payment is subject to
downward adjustment for issues that may arise subsequent to the transaction.

The assets acquired were valued at their fair market value, resulting in the
recording of goodwill totaling $21,532, which was subsequently expensed (see
Note 7). Following is a breakdown of the purchase price allocation:


                                             Amount
                                          --------------

   Vehicles                               $      57,455
   Equipment                                     37,590

   Inventory                                      8,423
   Goodwill (see Note 6)                         21,532
                                          --------------
                                                125,000

                                          --------------
   Purchase price                         $     411,836
                                          ==============



Burr Northrop, the Company's President, advanced funds to the Company for the
initial $75,000 purchase price payment, and the Company recorded this as an
advance from related party. As noted below, the Company entered into a Note
Purchase Agreement to finance the repayment of the advance, and the advance was
repaid in January 2006. The advance and $500 of interest were paid to Mr.
Northrop in January 2006.


NOTE 7 - IMPAIRMENT OF GOODWILL

The Company adopted Statement of Financial Accounting Standards No. 142
"Goodwill and Other Intangible Assets" ("SFAS No. 142") effective August 1,
2002. SFAS No. 142 addresses how intangible assets that are acquired
individually or with a group of other assets should be accounted for in
financial statements upon their acquisition. This statement requires goodwill
amortization to cease and for goodwill to be periodically reviewed for
impairment.

Under SFAS No. 142, goodwill impairment occurs if the net book value of a
reporting unit exceeds its estimated fair value. The test completed in the
second and third quarter of 2004 indicated that the recorded book value of the
goodwill exceeded its fair value, as determined by discounted cash flows. The
decrease in fair value is a result of:

                                      F-15
<PAGE>

o    significant operating losses during the past nine months

o    unanticipated decline in revenues and profitability

o    loss of key personnel

As a result of these events and circumstances, Company management believed that
the fair value of the goodwill (CPI - $3,238,483; AFFS - $2,855,626; and HB
Covey - $954,911; see Note 1) had been reduced below its carrying value. As a
result, management performed an evaluation of the tangible and intangible assets
for purposes of determining the implied fair value of goodwill at September 30,
2004. Upon completion of the assessment, management recorded a non-cash
impairment charge of $(7,049,020) net of tax, or $(0.70) per share during the
year ended September 30, 2004, to reduce the carrying value of goodwill to its
estimated value of zero at September 30, 2004. Considerable management judgment
is necessary to estimate fair value. Accordingly, actual results could vary
significantly from managements' estimates.

The Company merged the Testing Services division, acquired as part of the Asset
Purchase and Sale Agreement with Pacific Coast Testing, with the Maintenance
Services division and recorded a goodwill impairment charge of $21,532, which
was the amount of goodwill recorded at acquisition.

NOTE 8 - 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, 2006 and 2005, the
Company had liabilities to the affilIated entities totaling $54,000 and
$813,000, respectively.

NOTE 9 - NOTE PURCHASE AGREEMENT 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 is due on September 30, 2006. 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 recorded liquidated damages of $384,070 for the
year ended September 30, 2006.

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, and 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 recorded liquidated
damages of $27,090 for the year ended September 30, 2006.


                                      F-16
<PAGE>

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 January 26, 2008, 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
recorded liquidated damages of $64,118 for the year ended September 30, 2006.

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 20, 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
recorded liquidated damages of $25,328 for the year ended September 30, 2006.

The Company recorded liquidated damages of $370,511 for all notes payable for
the year ended September 30, 2005.

In October, 2006 the Company executed a Note purchase Agreement to convert
$848,313 of accrued liquidated damages into a note payable. The note bears
interest at 8%, is due on October 17, 2008, and is convertible into
approximately 34 million shares of common stock based on a conversion rate of
one common share for every $.025 of note payable. The shares underlying the
convertible note have registration rights. . The registration rights agreement
provides for liquidated damages equal to 36% of the note principal in the event
that a registration statement to register the underlying shares is not declared
effective. The Company filed a registration statement to register the shares
underlying the convertible note payable on June 8, 2006. The registration
statement has not been declared effective by the Securities and Exchange
Commission, and the Company will incur liquidated damages until the registration
statement is declared effective.

In December 2006, the Company executed a Note purchase Agreement to borrow
$15,000 pursuant to a secured convertible note or convertible note. The note
bears interest at 8%, is due on December 11, 2008, and is convertible into
approximately 600,000 shares of common stock based on a conversion rate of one
common share for every $.025 of note payable and the Company issued warrants to
purchase 225,000 common shares to the note holder. The shares underlying the
convertible note have registration rights. . The registration rights agreement
provides for liquidated damages equal to 36% of the note principal in the event
that a registration statement to register the underlying shares is not declared
effective. The Company filed a registration statement to register the shares
underlying the convertible note payable on June 8, 2006. The registration
statement has not been declared effective by the Securities and Exchange
Commission, and the Company will incur liquidated damages until the registration
statement is declared effective.

The notes referenced above are secured by the Company's assets, and the Company
would lose all of its assets in the event of a default under the terms on the
note agreements. 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
4.99% of the outstanding common shares on the conversion or exercise date.

                                      F-17
<PAGE>

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.

Borrowings under the Note Purchase Agreement and the related discounts are as
follows as of September 30:

<TABLE>
<CAPTION>


                                                           2006               2005
                                                      --------------     --------------
   <S>                                                <C>                <C>
   Note proceeds                                      $   1,566,535      $   1,062,012
   Discount for value assigned to Note Warrants            (821,944)          (741,944)
   Discount for value assigned to Beneficial
   Conversion Feature                                      (744,591)          (320,068)
   Amortization of discounts                              1,214,806            525,680
                                                      --------------     --------------
   Net carrying value of notes payable                $   1,214,807      $     525,680
                                                      ==============     ==============
</TABLE>


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.

NOTE 10 - NOTES PAYABLE TO RELATED PARTIES

The Company has an outstanding note payable of $120,147 to Burr D. Northrop, the
Company's President, at September 30, 2006. The Company issued the note in
August 2005 as payment for tenant improvements to the leased facility. Mr.
Northrop is the landlord of the leased property. The note bears interest at 8%,
and provides for monthly payments of $3,041 through July 2010.

The Company converted a $50,000 note payable and $10,000 of interest payable to
a related party into common stock through the issuance of 800,000 shares of
common stock in August 2005.

NOTE 11 - CAPITAL STOCK

Issued and outstanding
----------------------

The Company is authorized to issue 10,000,000 shares of preferred stock, with a
par value of $0.001 per share. As of September 30, 2005, the Company had not
issued any preferred stock. The Company is authorized to issue 100,000,000
shares of common stock, with a par value of $0.001 per share. As of September
30, 2006 and 20005, the Company has 32,530,840 and 28,405,825 shares of common
stock issued and outstanding. As discussed below, the Company has 3,500 and
4,228,536 shares subscribed for future issuance as of September 30, 2006 and
2005, respectively.

In December 2003, the Company acquired through a Share Exchange Agreement, all
of the issued and outstanding stock of CPI Development Inc. and Advanced Fuel
Filtration Systems, Inc. and H.B. Covey, Inc. The total shares acquired of
67,824 were canceled subsequent to the acquisition. The Company also canceled
500 shares of treasury stock for $1,250,000 relating to CPI Development Inc.

During the year ended September 30, 2004, the Company completed a Capital Stock
Exchange Agreement ("Agreement") with Cyber Public Relations, Inc., an inactive
publicly registered shell corporation with no significant assets or operations.
Effective with the Agreement, all except 315,000 out of total 2,199,000 shares
of common stock were canceled and, in exchange, 8,550,000 shares of Cyber's
restricted common stock were issued. Also, the Company issued 500,000 shares to
the employees in relation to the acquisition.

During the year ended September 30, 2005, the Company issued 75,000 shares to a
service provider, and recorded expense of $4,875. The fair market value of the
shares issued did not materially differ from the value of the services rendered.

During the year ended September 30, 2005, the Company issued 1,500,000 shares of
common stock to a former officer and director pursuant to the reorganization
discussed in Note 1, and recorded $90,000 of expense related to the transaction.
The fair market value of the shares issued did not materially differ from the
value of the services rendered. The Company may be obligated to issue another
1,000,000 shares to the same person pursuant to the reorganization agreement,
and the Company recorded $60,000 of expense related to the transaction, and
accrued this amount as a liability. The Company is disputing the issuance of the
additional 1,000,000 shares.

                                      F-18
<PAGE>

During the year ended September 30, 2005, the Company issued 16,667 shares of
common stock to an investor in an earlier sale of common stock as a goodwill
restructuring of the terms of the previous sale. The Company charged the amount
of $17 to additional paid-in capital.

During the year ended September 30, 2005, the Company entered into an agreement
with an individual to settle claims against one of the affiliated entities
totaling $398,125. The Company issued 500,000 shares of common stock and the
$398,125 was recorded as a reduction in the amount due to affiliated entities.

During the year ended September 30, 2005, the Company issued 800,000 shares of
common stock to satisfy a $50,000 note payable and $10,000 of interest payable
to a related party. The Company also issued 200,000 shares at $.075, the market
value on the date of issuance, to the same related party as incentive
compensation, and recorded compensation expense of $15,000 related to the
issuance.

During the year ended September 30, 2005, the Company issued 10,863,326 shares
of common stock that were subscribed in 2004.

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.

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, 2006, the Company has outstanding convertible notes that are
convertible into 62.7 million common shares and has outstanding warrants that
are exercisable for 24.4 million common shares. Conversion of the convertible
notes and exercise of the warrants for 19.9 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
4.99% of the outstanding common shares on the conversion or exercise date.

The Company did not grant any stock options during the years ended September 30,
2006 or 2005.

Shares subscribed, not issued
-----------------------------

During the year ended September 30, 2005, the Company subscribed 4,000,036
shares of common stock at $.025 per share to investors in a private placement.
All subscribed shares had been issued as of September 30, 2006.

Following is a summary of the subscribed share activity:

<TABLE>
<CAPTION>


Common Stock Subscribed, Not Issued (Shares)
--------------------------------------------
                                                                Incentive
                                                   Cash       Compensation      Services        Other          Total
                                                -----------    -----------    -----------    -----------    -----------
<S>                                             <C>            <C>            <C>            <C>            <C>
Balance at September 30, 2004                          --        6,400,000      1,580,869      3,110,957     11,091,826
Shares subscribed                                 4,000,036           --             --             --        4,000,036
Issuance of subscribed shares                          --       (6,400,000)    (1,352,369)    (3,110,957)   (10,863,326)
                                                -----------    -----------    -----------    -----------    -----------

Balance at September 30, 2005                     4,000,036           --          228,500           --        4,228,536
Issuance of subscribed shares                    (4,000,036)          --         (225,000)          --       (4,225,036)
                                                -----------    -----------    -----------    -----------    -----------

Balance at September 30, 2006                          --             --            3,500           --            3,500
                                                ===========    ===========    ===========    ===========    ===========

</TABLE>

                                      F-19
<PAGE>



NOTE 11 - WARRANTS TO PURCHASE COMMON STOCK

The Company granted warrants in 2006 and 2005 in connection with capital
formation efforts under the Note Purchase Agreement (see Note 8). The value
attributed to the warrants has been credited to additional paid-in capital. The
Company did not grant any stock options during the years ended September 30,
2005 or 2004.

Transactions involving warrants are summarized below:


                                                                 Weighted
                                             Warrants             average
                                            outstanding         exercise price
                                         ------------------    ---------------
Balance at September 30, 2004                16,854,055           $ 1.25

Granted                                       7,501,500             0.15
Exercised                                          --
Cancelled                                          --
                                         ------------------

Balance at September 30, 2005                24,355,555           $ 0.91
                                         ==================

Granted                                            --
Exercised                                          --
Cancelled                                    (7,150,000)
                                         ------------------

Balance at September 30, 2006                17,205,555           $ 0.31
                                         ==================





The following is a further breakdown of the warrants outstanding as of September
30, 2006:

<TABLE>
<CAPTION>

                                                            Weighted average                  Weighted average
    Exercise                Number outstanding and        remaining contractual                exercise price
     prices                    exercisable                    life (years)                outstanding and exercisable
---------------------    ---------------------------    ------------------------    ---------------------------------
<S>                     <C>                             <C>                        <C>
 $         0.15                      15,930,180                  3.05                         $        0.15
           1.10                         475,375                  2.33                                  1.10
           2.50                         400,000                  0.38                                  2.50
           3.00                         400,000                  0.38                                  3.00
                         ---------------------------
                                     17,205,555                  2.91                         $        0.31
                         ===========================
</TABLE>

The following is a further breakdown of the warrants outstanding as of September
30, 2005:

<TABLE>
<CAPTION>
                                                            Weighted average                  Weighted average
    Exercise                Number outstanding and        remaining contractual                exercise price
     prices                    exercisable                    life (years)                outstanding and exercisable
---------------------    ---------------------------    ------------------------    ---------------------------------
<S>                     <C>                             <C>                        <C>
 $         0.15                      15,930,180                  4.00                         $        0.15
           1.00                       3,150,000                  4.05                                  1.00
           1.10                         475,375                  3.33                                  1.10
           2.00                       2,000,000                  3.33                                  2.00
           2.50                         400,000                  1.38                                  2.50
           3.00                         400,000                  1.38                                  3.00
           4.00                       1,000,000                  3.33                                  4.00
           6.00                       1,000,000                  3.32                                  6.00

                         ---------------------------
                                     24,355,555                  3.74                         $        0.91
                         ===========================
</TABLE>

                                      F-20
<PAGE>


NOTE 12 - 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:



                                                       2006              2005
                                                    ---------         ---------
Current:

  Federal                                           $    --           $    --
  State                                                  --                --

Deferred:

  Federal                                             364,000            13,000
  State                                                93,000            51,000

Change in valuation allowance                        (522,000)          (65,000)
                                                    ---------         ---------


Total                                               $    --           $    --
                                                    =========         =========


Components of deferred tax asset (liability) as of September 30 were as follows:



                                                     2006              2005
                                                  -----------       -----------
Deferred tax liabilities current:                 $      --         $      --


Beneficial conversion feature                        (293,000)         (126,000)
Accrued interest                                     (322,000)         (291,000)
                                                  -----------       -----------

Deferred tax asset non-current:

Net operating loss carryovers                     $ 6,352,000       $ 5,697,000
                                                  -----------       -----------
Valuation allowance                                (5,737,000)       (5,280,000)
                                                  -----------       -----------
Net deferred tax asset                            $      --         $      --
                                                  ===========       ===========


For income tax reporting purposes, the Company's aggregate unused federal net
operating losses approximate $16.3 milliion which expire through 2026, subject
to limitations of Section 382 of the Internal Revenue Code, as amended.

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            2005
                                                       -------         -------
Statutory 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%
                                                       =======         =======


                                      F-21
<PAGE>


NOTE 13 - COMMITMENTS AND CONTINGENCIES



Leases
------

The Company leases 8,000 square feet of warehouse and office space in Chino,
California from Burr D. Northrop, the Company's President. The monthly rental
rate is $6,500, and the lease provides for 3% annual increases in rent beginning
in August, 2007. The lease term is for five years, and expires in July, 2010.

The Company leased a storage yard near the warehouse and office space in Chino.
The monthly rent under the lease was $1,000 per month. This lease was terminated
in June, 2006.

The Company also leased two storage units in Los Angeles County for storing
water heaters and related equipment that we used in the consumer services
division. The combined monthly rent for these two units is $526 per month.
This lease was terminated in June, 2006

Future payouts under the leases for the warehouse, office and storage space are
as follows:

   Year             Amount
------------       --------

   2007            $ 78,400
   2008              80,800
   2009              83,200
   2010              71,000

   2011                --
                   --------
                   $313,400
                   ========


Litigation
----------

The Company was named as a defendant in several legal proceedings in the State
of California alleging breach of contract and various fees in connection with
the activities of our subsidiaries, Christie-Peterson Development, Advanced Fuel
Filtration Systems, Inc., and H.B. Covey, Inc. The plaintiffs seek monetary
damages. CPI and AFFS commenced Chapter 7 bankruptcy proceedings on September
30, 2004.

The proceedings described below are in various stages. While the ultimate effect
of the legal actions described below cannot be predicted with certainty, we
expect that the proceedings against our subsidiaries will not result in
liability to us due to the ongoing bankruptcy of CPI and AFFS.

We do not expect the outcome of these matters to have a material effect on our
financial condition or the results of our operations. The following lawsuits
have been filed against us:

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 ask for damages of
$98,000. The Company believes that it has meritorious defenses to the
plaintiff's claims and intends to vigorously defend itself against the
Plaintiff's claims.

Corona Service Park, et al filed complaint against the Company in the Central
District of California of the United States District Court. The complaint
alleges a breach of contract. The Company believes that it has meritorious
defenses to the plaintiff's claims and intends to vigorously defend itself
against the Plaintiff's claims.

The Company is also subject to other legal proceedings and claims which arise in
the ordinary course of its business. Although occasional adverse decisions or
settlements may occur, the Company believes that the final disposition of such
matters will not have material adverse effect on its financial position, results
of operations or liquidity


                                      F-22
<PAGE>

Other than described above, we are not engaged in any other litigation, and are
unaware of any claims or complaints that could result in future litigation. We
will seek to minimize disputes with our customers but recognize the
inevitability of legal action in today's business environment as an unfortunate
price of conducting business.

Other
-----

Our former chairman and chief executive officer, Steven Rosenthal filed a
complaint against the Company in San Bernardino County Superior Court. The claim
alleges the Company owes $761,539 relating to the termination of his employment
agreement in 2004. As of the date of this report, the Company is disputing Mr.
Rosenthal's claim that our obligations to him under the employment contract are
still in force and effect.

Pursuant to the agreement with Mr. Rosenthal, which was to terminate on November
30, 2006, he was to receive a salary of $360,000 per year, plus bonuses, cost of
living increases, and other benefits. The agreement was renewable. In addition,
Mr. Rosenthal received 1,000,000 shares of our common stock upon execution of
his agreement. The Company has taken the position that the agreement has been
terminated.

NOTE 14 - RELATED PARTY TRANSACTIONS

The Company leases 8,000 square feet of warehouse and office space in Chino,
California from Burr D. Northrop, the Company's President. The monthly rental
rate is $6,500, and the lease provides for 3% annual increases in rent beginning
in August, 2007. The lease term is for five years, and expires in July, 2010.
Total future payments under the lease as of September 30, 2005 total $391,400.
Management believes that these facilities are adequate for current operations.
However, management expects that we could locate other suitable facilities at
comparable rates, should more space be needed.

For the years ended 2006 and 2005, The Company paid Terence Leong, a board
member, or his company an aggregate of $11,000 and $46,000 for consulting
services provided to the Company.

Also, see Note 10, Notes Payable to Related Parties.

NOTE 15 - SEGMENT INFORMATION

Prior to September 30, 2004, the Company operated and reported its business
operations internally in one business segment. With the signing of the contract
with Sears in October 2004 to install hot water heaters and other consumer
products, the Company began reporting its operations internally in three
business segments: Construction Services, Maintenance Services and Consumer
Services. The accounting policies for these reportable segments are the same as
those of the Company as disclosed in Note2.

These segments operate in the United States, and their markets are regional to
the West Coast. During the years ended September 30, 2006 and 2005, we
recognized approximately 55 percent and 45 percent, respectively, of our
consolidated revenue from continuing operations from three significant
customers. While we consider our relationships with the customers to be
satisfactory, given the concentration of our sales to a few key customers, our
continued relationships may be subject to the policies and practices of the
customers. We continue to concentrate our efforts on expanding our customer base
in order to reduce our reliance on our current customers. Intersegment revenues
are not material and are not shown in the following tables.

In September 2004, we formally filed for Chapter 7 bankruptcy protection for two
of our subsidiaries, CPI and Advanced Fuel. All operations for CPI and Advanced
Fuel are reflected as discontinued operations and are not included in the
segment information below.

In June 2006, The Company discontinued its Consumer Services division and the
results of these operations were included in discontinued operations and are not
included in the segment information below. see Note 16.

Construction Services
---------------------

Construction Services specializes in construction of fueling installations for
the retail petroleum industry, commercial and industrial users, municipal
organizations, and major equipment manufacturers. Customers are primarily
located in California. In 2005, construction contracts ranged in value up to
$1.0 million.

                                      F-23
<PAGE>

Maintenance Services
--------------------

Maintenance Services provides services to fueling installations. Services
consist of procedures to ensure the proper maintenance and functioning of the
fueling installations. Customers are primarily located in California.

Other
-----

The Company's other segment includes corporate general and administrative
expenses and interest expense.

The following table provides selected summary financial data by segment:


<TABLE>
<CAPTION>

                                                     For the year ended September 30, 2006
                                              -------------------------------------------------------
                                             Construction   Maintenance       Other      Consolidated
                                              -----------   -----------    -----------    -----------
<S>                                           <C>           <C>            <C>            <C>
Revenues                                      $ 2,180,005   $ 2,415,958    $      --      $ 4,595,962
Cost of sales                                   1,729,932       909,743           --        2,639,675
Gross profit                                      450,073     1,506,215           --        1,956,288
Operating expenses                                430,978       700,417        653,771      1,785,767
Depreciation expense and goodwill
 impairment                                        12,109        53,501         39,705        105,314
Goodwill impairment                                  --         (21,532)          --          (21,532)
Loss on sale of fixed assets                         --          (7,334)          --           (7,334)
Amortization of note discount                        --            --         (689,127)      (689,127)
Liquidated damages                                   --            --         (500,606)      (500,606)
Interest expense                                     --            --         (131,160)      (131,160)
Income tax (expense) benefit                         --            --             --             --
Income (Loss) from operations                       6,986       723,430     (2,014,369)    (1,283,592)
Total assets                                      406,596       820,392        437,850      1,664,568

</TABLE>


<TABLE>
<CAPTION>

                                                     For the year ended September 30, 2005
                                              -------------------------------------------------------
                                             Construction   Maintenance       Other      Consolidated
                                              -----------   -----------    -----------    -----------
<S>                                           <C>           <C>            <C>            <C>


Revenues                                      $ 2,556,708   $ 2,542,066   $      --      $ 5,098,774

Cost of sales                                   1,315,755     1,581,328          --        2,897,083

Gross profit                                    1,240,953       960,738          --        2,201,691
Operating expenses                                365,221       580,012     1,336,730      2,281,963


Depreciation expense and goodwill
impairment                                           --          13,300        45,494         58,794

Goodwill impairment                                  --            --            --             --

Loss on sale of fixed assets                         --            --            --             --

Amortization of note discount                        --            --         525,680        525,680

Liquidated damages                                   --            --         370,511        370,511

Interest expense                                     --            --         114,051        114,051

Income tax (expense) benefit                         --            --            --             --
Income (Loss) from operations                     875,732       367,426    (2,392,466)    (1,149,308)
Additions to long-lived assets                    783,264       755,811       366,899      1,905,974

</TABLE>


                                      F-24
<PAGE>


NOTE 16 - DISCONTINUED OPERATIONS

In June 2006, the Company 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 discontinued
operations for years ended September 30, 2006 and 2005 were $184,787 and
$81,952, respectively.

NOTE 17 - SUBSEQUENT EVENTS

In October, 2006 the Company executed a Note purchase Agreement to convert
$848,313 of accrued liquidated damages into a note payable. The note bears
interest at 8%, is due on October 17, 2008, and is convertible into
approximately 34 million shares of common stock based on a conversion rate of
one common share for every $.025 of note payable. The shares underlying the
convertible note have registration rights. . The registration rights agreement
provides for liquidated damages equal to 36% of the note principal in the event
that a registration statement to register the underlying shares is not declared
effective. The Company filed a registration statement to register the shares
underlying the convertible note payable on June 8, 2006. The registration
statement has not been declared effective by the Securities and Exchange
Commission, and the Company will incur liquidated damages until the registration
statement is declared effective.

In December 2006, the Company executed a Note purchase Agreement to borrow
$15,000 pursuant to a secured convertible note or convertible note. The note
bears interest at 8%, is due on December 11, 2008, and is convertible into
approximately 600,000 shares of common stock based on a conversion rate of one
common share for every $.025 of note payable and the Company issued warrants to
purchase 225,000 common shares to the note holder. The shares underlying the
convertible note have registration rights. . The registration rights agreement
provides for liquidated damages equal to 36% of the note principal in the event
that a registration statement to register the underlying shares is not declared
effective. The Company filed a registration statement to register the shares
underlying the convertible note payable on June 8, 2006. The registration
statement has not been declared effective by the Securities and Exchange
Commission, and the Company will incur liquidated damages until the registration
statement is declared effective.



                                      F-25
<PAGE>



ITEM 8   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

None.

ITEM 8A. 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 on October 25, 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.

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.

ITEM 8B. OTHER INFORMATION

None.

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;COMPLIANCE
         WITH SECTION 16(a) OF THE EXCHANGE ACT


The following table sets forth the name, age, and position of each executive
officer and director who have served during the fiscal year ended September 30,
2006 and the term of office of each director of the Company.



  Name                       Age       Position
 -----                      -----     ----------


 Burr D. Northrop            43         President/Principal Financial Officer/
                                        Principal Accounting Officer/Chairman of
                                        the Board of Directors
 Terence F. Leong            41         Director


                                       18
<PAGE>

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
Board of Directors met three times in fiscal 2005. 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.

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:


                                       19
<PAGE>


o    Honest and ethical conduct, including the ethical handling of actual or
     apparent conflicts of interest between personal and professional
     relationships;

o    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;

o    Compliance with applicable governmental laws, rules and regulations;

o    The prompt internal reporting of violations of the code to an appropriate
     person or persons identified in the code; and

o    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, 2006 and 2005. No other officer had compensation of $100,000 or
more for 2006 and 2005.


<TABLE>
<CAPTION>

Summary Compensation Table
--------------------------
                                                Annual compensation                      Long term compensation
                                        ---------------------------------    -------------------------------------------------
                                                                                    Awards                    Payouts
                                                                             -----------------------   -----------------------
                                                                             Restricted    Securities
                                                                Other annual   stock       underlying    LTIP        All other
                                         Salary      Bonus      compensation   awards       options/    payouts    compensation
Name and principal position   Year        ($)         ($)          ($)          ($)          SARs         ($)          ($)
---------------------------- ------    ---------   ---------    ---------    ---------    ---------    ---------    ---------
<S>                          <C>        <C>        <C>          <C>          <C>          <C>          <C>          <C>
Burr D. Northrop (1)          2006      150,010        -            -             -            -           -          12,000
                              2005      150,007      70,000         -             -            -           -          17,568


Kenneth Green (2)             2006      120,000        -            -             -            -           -          9,010
                              2005      119,998        -            -          15,000          -           -          6,300
</TABLE>


(1) Mr. Northrop served as co-president with Mr. Parker until September 28,
2004, at which time Mr. Northrop became president. Annual compensation includes
salary paid to Mr. Northrop. Restricted stock awards include 3,000,000 shares of
our restricted common stock. All other compensation includes a car allowance and
health insurance reimbursements. We recorded a bonus to Mr. Northrop of $70,000
for 2005.

(2) Mr. Green serves as a vice president. Annual compensation includes salary
paid to Mr. Green. Restricted stock awards include 200,000 shares of our
restricted common stock. All other compensation consists of a car allowance.


                                       20
<PAGE>


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. In August, 2005, we executed an employment agreement
with Kenneth Green, our newly appointed Vice President. The employment agreement
with Kenneth Green has a term of three years, with an initial salary of $120,000
per year. In addition, Mr., Green was awarded an initial payment of 200,000
restricted shares of our common stock. There are no changes of control
arrangements, either by means of a compensatory plan, agreement, or otherwise,
involving our current or former executive officers. Our former chairman and
chief executive officer, Steven Rosenthal did not agree to the termination of
his employment agreement with us. As of the date of this report, we are
disputing Mr. Rosenthal's claim that our obligations to him under the employment
contract are still in force and effect.

Pursuant to the agreement with Mr. Rosenthal, which was to terminate on November
30, 2006, he was to receive a salary of $360,000 per year, plus bonuses, cost of
living increases, and other benefits. The agreement was renewable. In addition,
Mr. Rosenthal received 1,000,000 shares of our common stock upon execution of
his agreement. The claim alleges the Company owes $761,539 relating to the
termination of his employment agreement in 2004. As of the date of this report,
we are disputing Mr. Rosenthal's claim that our obligations to him under the
employment contract are still in force and effect.

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, 2005.

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, 2006.

LONG-TERM INCENTIVE PLAN AWARDS TABLE

We do not have any Long-Term Incentive Plans.

COMPENSATION OF DIRECTORS

During 2006, 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 by Florida law. 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.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS.

The following table sets forth, as of September 30, 2006, information concerning
ownership of our securities by:

o    Each person who owns beneficially more than five percent of the outstanding
     shares of our common stock;
o    Each director;
o    Each named executive officer; and
o    All directors and officers as a group.

                                       21
<PAGE>



                                                   Shares beneficially owned (2)
                                                   -----------------------------
Name of beneficial owner (1)                           Number      Percent
-------------------------------------------------    ----------   ----------

Burr 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%

Robert K. Christie (3)                                5,583,333      17.2%
Horizon Capital Investors LP (4)                      2,085,000       6.4%
Douglas L. Parker                                     1,753,265       5.4%

(1) Unless otherwise indicated, the address for each of these stockholders is
c/o Entech Environmental 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 and investment 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 Exchange Commission. As of December 26, 2005, there were issued
and outstanding 32,530,840 shares of our common stock.
(3) Mr. Christie is a former officer and director, and we may be obligated to
issue him an additional 1,000,000 shares pursuant to an agreement we reached
with him in September 2004. We are disputing the issuance of the additional
shares, and have recorded a liability on the balance sheet as of September 30,
2005 related to the potential issuance.
(4) These shares were acquired on December 17, 2004 from Barron Partners LP in a
private transaction.

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 lease our 8,000 square foot warehouse and office space in Chino, California
from Burr D. Northrop, our President. The monthly rental rate is $6,500, and the
lease provides for 3% annual increases in rent beginning in August, 2007. The
lease term is for five years, and expires in July, 2010. Total future payments
under the lease as of September 30, 2006 total $313,400.

We have an outstanding note payable of $120,147 to Burr D. Northrop at September
30, 2006. The Company issued the note in August 2005 as payment for tenant
improvements to the leased facility. As noted above, Mr. Northrop is the
landlord of the leased facility. The note bears interest at 8%, and provides for
monthly payments of $3,041 through July 2010.

We converted a $50,000 note payable and $10,000 of interest payable to Kenneth
Green into common stock through the issuance of 800,000 shares of common stock
in August 2005.

We entered into note purchase agreements with Barron Partners LP in September
2004, and have borrowed a total of $1.1 million under these agreements through
September 30, 2005. The notes issued pursuant to the agreements are convertible
into 42.5 million shares at September 30, 2005. We also issued warrants to
purchase 15.9 million shares at $0.15 per share.

We borrowed an additional $100,000 under note a payable agreement for the year
ended September 30, 2006. We entered in to agreements to convert $404,523 of
accrued liquidating damages to notes payable. These notes are convertible into
an additional 40 million shares as of September 30, 2006.

The Company paid Terence Leong, a board member, or his company an aggregate of
$11,000 and $46,000 for consulting services provided to the Company for 2006 and
2005, respectively.

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:

                                       22
<PAGE>

Any of our directors or officers;

Any person proposed as a nominee for election as a director;

Any person who beneficially owns, directly or indirectly,  shares carrying
more than 10% of the voting rights attached to our  outstanding  shares of
common stock;

Any of our promoters;

Any  relative or spouse of any of the  foregoing  persons who has the same
house as such person.


ITEM 13. EXHIBITS



1.1**        Investment  Banking Agreement with Windstone Capital Partners dated
             October 24, 2003

2.1**        Plan and  Agreement  of  Triangular  Merger  Between  Environmental
             Technologies,  Inc.,  Parr  Sub  One,  Inc.  and  Christie-Peterson
             Development dated December 29, 2003

2.2**        Agreement of Merger between Christie-Petersen  Development and Parr
             Sub One, Inc. filed December 30, 2003

2.3**        Plan and  Agreement  of  Triangular  Merger  Between  Environmental
             Technologies, Inc., Parr Sub Two, Inc. and Advanced Fuel Filtration
             Systems, Inc. dated December 29, 2003

2.4**        Agreement of Merger between Advanced Fuel Filtration, Inc. and Parr
             Sub Two, Inc. filed December 30, 2003

2.5**        Plan and  Agreement  of  Triangular  Merger  Between  Environmental
             Technologies, Inc., Parr Sub Three, Inc. and H.B. Covey, Inc. dated
             December 29, 2003

2.6**        Agreement of Merger  between H.B.  Covey,  Inc. and Parr Sub Three,
             Inc. filed December 30, 2003

3.1.1**      Articles of  Incorporation of Cyber Public  Relations,  Inc., filed
             June 18, 1998

3.1.2**      Amended and  Restated  Articles of  Incorporation  of Cyber  Public
             Relations,  Inc.,  changing the name of the  corporation  to Entech
             Environmental Technologies, Inc., filed March 22, 2004

3.1.3**      Articles of  Incorporation  of Point 2 Point Services,  Inc., filed
             April 5, 2001

3.1.4**      Certificate  of Amendment to Articles of  Incorporation  of Point 2
             Point Services,  Inc., changing the name of the corporation to Parr
             Development, Inc., filed December 31, 2002

3.1.5**      Amended and Restated Articles of Incorporation of Parr Development,
             Inc.,  changing  the  name  of  the  corporation  to  Environmental
             Technologies, Inc., filed November 25, 2003

3.1.6**      Articles of  Incorporation of Parr Sub One, Inc. filed December 19,
             2003

3.1.7**      Articles of  Incorporation of Parr Sub Two, Inc. filed December 19,
             2003

3.1.8**      Articles of  Incorporation  of Parr Sub Three,  Inc. filed December
             19, 2003

3.1.9**      Articles of Incorporation of  Christie-Petersen  Development  filed
             September 15, 1995

3.1.10**     Articles of Incorporation of YLD/Clean Fuels,  Inc. filed September
             18, 1995

3.1.11**     Certificate of Amendment of Articles of  Incorporation of YLD/Clean
             Fuels, Inc.,  changing the name of the corporation to Advanced Fuel
             Filtration, Inc., filed September 27, 1997

                                       23
<PAGE>

3.1.12**     Articles of Incorporation of H.B. Covey, Inc., filed March 19, 1971

3.2.1**      Bylaws of Cyber Public Relations, Inc., adopted July 5, 1998

3.2.2**      Amended Bylaws of Cyber Public Relations, Inc. adopted February 16,
             2004

3.2.3**      Amended and Restated Bylaws of Entech  Environmental  Technologies,
             Inc., adopted April 28, 2004

3.2.4**      Bylaws of Point 2 Point Services, Inc

3.2.5**      Bylaws of Parr Sub One, Inc. , adopted December 29, 2003

3.2.6**      Bylaws of Parr Sub Two, Inc., adopted December 29, 2003

3.2.7**      Bylaws of Parr Sub Three, Inc., adopted December 29, 2003

3.2.8**      Bylaws of Christie-Petersen Development, adopted September 22, 1995

3.2.9**      Bylaws of YLD/Clean Fuels, Inc. dated October 6, 1995

3.2.10**     Bylaws of Entech Environmental Technologies,  Inc. adopted February
             4, 2004

3.2.11**     Restated Bylaws of H.B. Covey, Inc. adopted April 1, 1999

3.3.1**      Charter of the Audit  Committee  of the Board of Directors of Cyber
             Public Relations, Inc., adopted January 29, 2004

3.3.2**      Charter of the Compensation  Committee of the Board of Directors of
             Cyber Public Relations, Inc., adopted January 29, 2004

4.1**        Registration  Rights Agreement with Barron  Partners,  LP regarding
             registration of shares, dated January 23, 2004

4.2**        Registration   Rights  Agreement  with  Wood  Capital   Associates,
             regarding registration of shares, dated January 23, 2004

4.3**        Registration  Rights Agreement with Patricia L. Fiorese,  regarding
             registration of shares, dated January 23, 2004

4.4**        Registration   Rights  Agreement  with  Vance  Luedtke,   regarding
             registration of shares, dated January 23, 2004

4.5**        Registration  Rights  Agreement  with  Diane  C.  Burge,  regarding
             registration of shares, dated January 23, 2004

4.6**        Registration   Rights  Agreement  with  Clayton  Chase,   regarding
             registration of shares, dated January 23, 2004

4.7**        Registration Rights Agreement with James W. Moldermaker,  regarding
             registration of shares, dated January 23, 2004

4.8**        Registration  Rights  Agreement  with  J.  Kevin  Wood,   regarding
             registration of shares, dated January 23, 2004

4.9**        Registration  Rights  Agreement  with  Thomas  Sheridan,  regarding
             registration of shares, dated January 23, 2004

4.10**       Registration  Rights Agreement with San Diego Torrey Hills Capital,
             regarding registration of shares, dated January 23, 2004

4.11**       Registration  Rights  Agreement  with Norman E.  Clarke,  regarding
             registration of shares, dated January 23, 2004

4.12**       Registration  Rights  Agreement  with  Steven R.  Green,  regarding
             registration of shares, dated January 23, 2004

10.1**       Robert K. Christie Employment Agreement, dated December 15, 2003

10.2**       Steven D. Rosenthal Employment Agreement, dated December 15, 2003

10.3**       Douglas L. Parker Employment Agreement, dated December 15, 2003

                                       24
<PAGE>

10.4**       James R. Christ Employment Agreement, dated December 31, 2003

10.5**       Stock Pledge Agreement between Robert K. Christie and Environmental
             Technologies, Inc. dated December 29, 2003

10.6**       Stock Purchase Escrow Agreement between Barron Partners,  LP, Cyber
             Public Relations,  Inc. and Harbour,  Smith, Harris &Merritt,  P.C.
             dated January 21, 2004

10.7**       Capital Stock  Exchange  Agreement  between the  Registrant and the
             Stockholders of Environmental Technologies, Inc., dated January 21,
             2004

10.8**       Stock Purchase Agreement between Environmental  Technologies,  Inc.
             and Barron Partners, LP dated January 14, 2004

10.9**       Amendment  to  Stock  Purchase   Agreement  between   Environmental
             Technologies, Inc. and Barron Partners, LP dated January 21, 2004

10.10**      Lease Agreement, effective October 1, 1999

10.11**      Lease Agreement, effective September 1, 2001

10.12**      Lease Agreement, effective November 15, 2002

10.13**      Amendment No. 2 to Lease, effective July 31, 2003

10.14**      First Amendment to Lease, effective September 3, 2003

10.15**      Cyber Public  Relations,  Inc. A Warrant for the Purchase of Common
             Stock

10.16**      Cyber Public  Relations,  Inc. B Warrant for the Purchase of Common
             Stock

10.17**      Cyber Public  Relations,  Inc. C Warrant for the Purchase of Common
             Stock

10.18**      Cyber Public  Relations,  Inc. D Warrant for the Purchase of Common
             Stock

10.19**      Cyber Public  Relations,  Inc. E Warrant for the Purchase of Common
             Stock

10.20**      Cyber  Public  Relations,  Inc.  Warrant for the Purchase of Common
             Stock, Wood Capital Associates

10.21**      Cyber  Public  Relations,  Inc.  Warrant for the Purchase of Common
             Stock, Patricia L. Fiorese

10.22**      Cyber  Public  Relations,  Inc.  Warrant for the Purchase of Common
             Stock, Vance Luedtke

10.23**      Entech Environmental Technologies, Inc. Warrant for the Purchase of
             Common Stock, Diane C. Burge

10.24**      Entech Environmental Technologies, Inc. Warrant for the Purchase of
             Common Stock, Clayton Chase

10.25**      Entech Environmental Technologies, Inc. Warrant for the Purchase of
             Common Stock, James W. Moldermaker

10.26**      Entech Environmental Technologies, Inc. Warrant for the Purchase of
             Common Stock, J. Kevin Wood

10.27**      Entech Environmental Technologies, Inc. Warrant for the Purchase of
             Common Stock, Thomas Sheridan

10.28**      Entech Environmental Technologies, Inc. Warrant for the Purchase of
             Common Stock, San Diego Torrey Hills Capital

10.29**      Entech Environmental Technologies, Inc. Warrant for the Purchase of
             Common Stock, Norman E. Clarke

10.30**      Entech Environmental Technologies, Inc. Warrant for the Purchase of
             Common Stock, Steven R. Green

10.31**      Settlement Agreement with Norman T. Reynolds, Esq., dated September
             23, 2004

                                       25
<PAGE>

10.32**      Settlement Agreement with Stonegate Securities, dated September 21,
             2004

10.33**      Settlement Agreement with Russell Bedford Stefanou Mirchandani LLP,
             dated September 21, 2004

10.34**      Settlement  Agreement with Birch Advisors Ltd. dated  September 30,
             2004

10.35**      Settlement Agreement with Gerald Foster dated September 30, 2004

10.36**      Secured Convertible Note between Entech Environmental Technologies,
             Inc. and Barron Partners, L.P. dated September 30, 2004

10.37**      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, 2004

10.39**      Registration  Rights Agreement with Barron  Partners,  LP regarding
             registration of shares, dated September 30, 2004

10.40**      Entech Environmental Technologies, Inc. Warrant for the Purchase of
             Common Stock for Barron Partners, LP

10.41**      Escrow Agreement between Entech Environmental  Technologies,  Inc.,
             Robert K. Christie and Norman T. Reynolds dated September 29, 2004

10.42**      Warrant  Cancellation  from Barron Partners,  L. P. dated September
             30, 2004

10.43**      Settlement  Agreement  with San Diego  Torrey Hills  Capital,  Inc.
             dated September 1, 2004

10.44**      Settlement  Agreement with Donald G. St. Clair, CPA dated September
             30, 2004

10.45**      Termination of Investment Banking Agreement dated September 1, 2004

10.46**      Note Purchase Agreement between Environmental Technologies, Inc.
             and Barron Partners, LP dated December 30, 2005.

10.47**      Registration Rights Agreement with Barron Partners, LP regarding
             registration of shares, dated December 30, 2005.

10.48**      Secured Convertible Note between Entech Environmental Technologies,
             Inc. and Barron Partners, L.P. dated December 30, 2005.

10.49**      Entech Environmental Technologies, Inc. Warrant for the Purchase of
             Common Stock, Barron Partners, LP.

10.50*       Secured Convertible Note between Entech Environmental Technologies,
             Inc. and Barron Partners, L.P. dated October 17, 2006.

10.51*       Secured Convertible Note between Entech Environmental Technologies,
             Inc. and Barron Partners, L.P. dated December 11, 2006.

10.52*       Registration Rights Agreement with Barron Partners, LP regarding
             registration of shares, dated December 11, 2006.

21.1**       Subsidiaries

23.1*        Consent of Independent Auditors

31.1*        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 adopted pursuant 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 adopted pursuant to .906 of the
             Sarbanes-Oxley Act of 2002.
----------
* Filed herewith.
**  Previously  Filed

                                       26
<PAGE>

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Year ended 2006:
---------------

AUDIT FEES

As of September 30, 2006, Mendoza Berger & Company, LLP ("Mendoza") had
completed its billings for all services related to the audit of our annual
financial statements for 2006. Through the date of this report, Mendoza had
billed us approximately $30,000 for audit and review services for the year ended
September 30, 2006.

AUDIT-RELATED FEES

The aggregate fees billed for assurance and related services that are reasonably
related to the performance of the audit or review of our financial statements
for 2006 were $0.

ALL OTHER FEES

There were no other fees billed by Russell Bedford Stefanou Mirchandani LP
("RBSM") for professional services rendered, other than as stated under the
captions Audit Fees and Audit-Related Fees for 2005. Mendoza billed us
approximately $12,000 for services related SEC comments regarding filing of Form
SB-2.

Year ended 2005:
---------------

AUDIT FEES

The aggregate fees billed for professional services rendered by RBSM for the
audit and review of our annual financial statements for 2005 were approximately
$30,000 prior to being replaced by ("Mendoza").

The aggregate fees billed by Mendoza for services related to the audit of our
annual financial statements for 2005 were approximately $28,000.

AUDIT-RELATED FEES

The aggregate fees billed by RBSM and Mendoza for assurance and related services
that are reasonably related to the performance of the audit or review of our
financial statements for 2005 were $0.

ALL OTHER FEES

There were no other fees billed by RBSM or Mendoza for professional services
rendered, other than as stated under the captions Audit Fees and Audit-Related
Fees for 2005.

AUDITOR INDEPENDENCE

Our Board of Directors considers that the work done for us in the year ended
September 30, 2005 by RBSM is compatible with maintaining RBSM's. Our Board of
Directors considers that the work done for us related to the audit for the years
ended September 30, 2006 and 2005 by Mendoza is compatible with maintaining
Mendoza's independence.

AUDITOR'S TIME ON TASK

All of the work expended by RBSM and Mendoza on our September 30, 2006 and 2005
audit was attributed to work performed by their full-time, permanent employees.



                                       27
<PAGE>


                                   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 16, 2007
--------------------
Burr D. Northrop




                                       28