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**UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 1O-KSB

                        FOR THE YEAR ENDED JUNE 27, 2003

                          COMMISSION FILE No. 000-27629

                  Clean Water Technologies Inc. & Subsidiaries**
                 (Name of Small Business Issuer in its charter)

                                    **Delaware**
           (State or other jurisdiction of incorporation organization)

                                   **23-2426437**
                      (I.R.S. Employer Identification No.)

         **2716 St. Andrews Boulevard, Suite 200, Tarpon Springs, FL 34688**
               (Address of principal executive offices) (Zip Code)

                                 **(727) 942-8938**
                           (Issuer's telephone number)

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 []

As of June 27, 2003 registrant had one class of common stock, of which 7,217,855
shares were outstanding.

                                       1
**TABLE OF CONTENTS**

Part I
Item 1.  Description of Business...............................................2

Item 2.  Plan of Operation.....................................................6

Item 3.  Description of Property...............................................6

Item 4.  Security Ownership of Certain Beneficial
         Owners and Management.................................................7

Item 5.  Directors, Executive Officers, Promoters
         and Control Persons...................................................8

Item 6.  Executive Compensation................................................9

Item 7.  Certain Relationships and Related Transactions........................9

Item 8.  Description of Securities.............................................9

Item 9.  Management's Discussion and Analysis.................................10

Part II
Item 1.  Market Price of and Dividends on the Registrant's
         Common Equity and Other Shareholder Matters..........................11

Item 2.  Legal Proceedings....................................................12

Item 3.  Changes in and Disagreements with Accountants........................12

Item 4.  Recent Sales of Unregistered Securities..............................12

Item 5.  Indemnification of Directors and Officers............................13

Part F/S
Financial Statements..........................................................15

Part III
Item 1.  Index to Exhibits....................................................16

Item 2.  Description of Exhibits..............................................16

Signatures....................................................................17

                                       2

THIS REGISTRATION STATEMENT CONTAINS CERTAIN FORWARD LOOKING STATEMENTS WITHIN
THE MEANING OF THE PRIVATE SECURITIES REFORM ACT OF 1995. THE REGISTRANT INTENDS
THAT SUCH FORWARD LOOKING STATEMENTS BE SUBJECT TO THE SAFE HARBORS CREATED
THEREBY. THESE FORWARD LOOKING STATEMENTS INCLUDE STATEMENTS REGARDING (I) THE
REGISTRANT'S RESEARCH AND DEVELOPMENT PLANS, MARKETING PLANS, CAPITAL AND
OPERATIONS EXPENDITURES, AND RESULTS OF OPERATIONS; (II) POTENTIAL FINANCING
ARRANGEMENTS; (III) POTENTIAL UTILITY AND ACCEPTANCE OF THE REGISTRANT'S
EXISTING AND PROPOSED PRODUCTS; AND (IV) THE NEED FOR, AND AVAILABILITY OF,
ADDITIONAL FINANCING.

THE FORWARD LOOKING STATEMENTS INCLUDED HEREIN ARE BASED ON CURRENT EXPECTATIONS
AND INVOLVE A NUMBER OF RISKS AND UNCERTAINTIES. THESE FORWARD LOOKING
STATEMENTS ARE BASED ON ASSUMPTIONS REGARDING THE REGISTRANT'S BUSINESS AND
TECHNOLOGY WHICH INVOLVE JUDGMENTS WITH RESPECT TO, AMONG OTHER THINGS, FUTURE
SCIENTIFIC, ECONOMIC, REGULATORY AND COMPETITIVE CONDITIONS, AND FUTURE BUSINESS
DECISIONS, ALL OF WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT ACCURATELY AND
MANY OF WHICH ARE BEYOND THE CONTROL OF THE REGISTRANT. ALTHOUGH THE REGISTRANT
BELIEVES THAT THE ASSUMPTIONS UNDERLYING THE FORWARD LOOKING STATEMENTS ARE
REASONABLE, ANY OF THE ASSUMPTIONS COULD PROVE INACCURATE AND, THEREFORE, ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE SET FORTH IN THE FORWARD LOOKING
STATEMENTS. IN LIGHT OF THE SIGNIFICANT UNCERTAINTIES INHERENT IN THE FORWARD
LOOKING INFORMATION CONTAINED HEREIN, THE INCLUSION OF SUCH INFORMATION SHOULD
NOT BE REGARDED AS ANY REPRESENTATION BY THE REGISTRANT OR ANY OTHER PERSON THAT
THE OBJECTIVES OR PLANS OF THE REGISTRANT WILL BE ACHIEVED.

References in this registration statement to "We," "Us," or the "Company" refer
to Clean Water Technologies,Inc., as well as their subsidiaries and predecessors.

                                     PART I

Item 1. Description of Business.

(a)      Business Development.
         We were incorporated as Escalator, Inc. under the General Corporation
         Laws of the State of Delaware on April 17, 1986. On June 3, 1986, Lone
         Pine Resources, Inc. was merged with our Company through a reverse
         merger whereby the shareholders of Lone Pine Resources, Inc. received
         an equal number of shares in Escalator, Inc. Lone Pine Resources, Inc.
         was incorporated under the laws of Utah on June 23, 1983.

         In the past, we conducted operations through our three wholly-owned
         subsidiaries Escalator Securities, Inc. and Escalator Investments,
         Inc., and Frank Communications Corp., all Pennsylvania corporations.
         Escalator Investments, Inc. was incorporated in the State of
         Pennsylvania on August 15, 1984

                                        3

         and conducted financial planning activities through approximately 1992
         as a Registered Investment Advisor under the Investment Advisors Act
         of 1940. Since 1992, Escalator Investments, Inc. has had no
         operations.

         Escalator Securities, Inc. was incorporated in the State of
         Pennsylvania on August 22, 1985, and conducted business as a
         registered broker-dealer under the Securities Exchange Act of 1934 and
         the Pennsylvania Securities Act of 1972 until 1997. On December 31,
         1997, Escalator Securities, Inc. was closed by the National
         Association of Securities Dealers. Since this date, Escalator
         Securities, Inc. has had no operations.

         On July of 1990, we acquired Frank Communications Corp., a
         Pennsylvania corporation incorporated on May 30, 1989, which was in
         the business of financial public relations. In consideration of this
         acquisition, we paid $1,000. Frank Communications Corp. has no
         operations.

         On June 30, 1997, we transferred our holdings in Escalator Securities,
         Inc. to Escalator Investments, Inc. pursuant to the terms of an
         Agreement and Plan of Spinoff. The shareholders of Escalator, Inc.
         received all of the outstanding stock of Escalator Investments, Inc.,
         and Escalator Securities, Inc., which then ceased being our
         wholly-owned subsidiaries.

         On April 22, 1998, we changed our name to Nu Electric Corporation. On
         June 30, 1999, we acquired Clean Water Technologies, Inc. (hereinafter
         "Clean Water"), a Florida limited liability company, through an
         agreement and plan of merger whereby all of the outstanding and issued
         shares of Clean Water were exchanged for shares of Nu Electric.
         Pursuant to this agreement, we acquired all of the assets of the
         business of Clean Water. On September 21, 2000, we acquired Zorax,
         Inc. (hereinafter "Zorax"), a Florida corporation, through an
         agreement and plan of merger whereby all of the issued and outstanding
         shares of Zorax were exchanged for shares of Nu Electric. Pursuant to
         this agreement, we acquired all of the assets of Zorax.

         On April 2, 2002, we changed our name to Clean Water Technologies,
         Inc. We have not been a party to any bankruptcy, receivership or
         similar proceeding. We have not been involved in any material
         reclassification, merger, consolidation, or purchase or sale of a
         significant amount of assets not in the ordinary course of business.

(b)      Business of Issuer.
         (1)     Principal products or services and their markets.
                 We currently have no products or services. We plan to focus
                 our efforts on sub-licensing environmentally friendly
                 technology developed by third parties. We received our first
                 royalty payment on January 7, 2002.

                 We have sub-licensed our Clean Water technology to
                 International Water Purification Technologies, LLC. We plan to
                 sub-license our Zorax technology in the future.

                 We plan to obtain royalty fees on the use of the licensed
                 technology. There can be no assurance that, if we obtain
                 licenses to environmentally friendly technologies, we will be
                 able to locate entities with the requisite knowledge and
                 experience to arrange application of such technology. Further,
                 there is no guarantee that if located, we will be able to enter
                 into licensing agreements with favorable terms, if

                                        4

                 at all. If we are unable to acquire rights to technology or
                 sub-license such technology to qualified entities, if
                 obtained, it may have a materially adverse effect on our
                 business and operations.

                 In our acquisition of Clean Water, we acquired a license to
                 a technology related to the removal of arsenic from water
                 ("arsenic technology"). We have sublicensed this arsenic
                 technology to International Water Purification Technologies,
                 LLC. Patent approval for the arsenic technology was received on
                 March 28, 2000 from the U.S. Patent Office.

                 In our acquistion of Zorax, we acquired a license to a
                 technology related to the extraction of cryptosporidium and
                 giardia from water. We have not sub-licensed this technology.
                 A patent has been applied for by the owner of the technology,
                 Johns Hopkins University.

         (2)     Distribution methods of the products or services.
                 We have no products or services to be distributed. As of the
                 date of this annual report, we have no plans for
                 distribution of any products or services that we may develop
                 in the future.

         (3)     Status of any publicly announced new product or service.
                 We currently have no new products or services that have been
                 publicly announced.

         (4)     Competitive business conditions and the small business
                 issuer's competitive position in the industry and methods of
                 competition. In our search for technology and qualified parties
                 to apply such technology, we will compete with entities having
                 significantly greater financial and other resources than that
                 of the company. There can be no assurance that we will be able
                 to compete effectively with such entities. Further, we will
                 compete with our own potential sub-licensees for the location
                 and acquisition of environmentally friendly technologies. Our
                 failure to effectively compete with such entities could have a
                 materially adverse effect on our business and operations.

         (5)     Sources and availability of raw materials and the names of
                 principal suppliers.
                 We have no arrangements for raw materials or suppliers.

         (6)     Dependence on one or a few major customers.
                 We have no customers.

         (7)     Intellectual Property.
                 Through our acquisition of Clean Water, we acquired an
                 exclusive license for a process to remove arsenic from
                 drinking water. More specifically, the technology is a method
                 of removing arsenic species from an aqueous liquid using
                 modified zeolite materials. This agreement is for a period of
                 the longer of twenty years or the patent expiration. Although
                 we are the exclusive licensee of this the owners of the
                 technology are permitted by the agreement to infringe upon our

                                        5

                 exclusive rights in the case of our insolvency, bankruptcy,
                 dissolution, breach or similar occurrence. In addition, we are
                 required to carry product liability insurance coverage in an
                 amount sufficient to cover claims arising from the use of the
                 Clean Water technology.

                 In consideration for this exclusive license, Clean Water paid
                 eight-hundred ninety three thousand (893,000) shares of their
                 common stock as the initial license fee for this technology.
                 Further, we must pay two percent (2%) of revenues earned from
                 the use of this technology. This percentage is subject to the
                 following minimum royalty schedule:

                       First 24 months                                 $0
                       End of year three                               $5,000
                       End of year four                                $6,000
                       End of year five                                $7,200
                       End of year six                                 $8,640
                       End of year seven and each year thereafter      $10,368

                 As of the date of this registration statement, we currently
                 have no trademarks, franchises, concessions or labor contracts.

                 Through our acquisition of Zorax, we acquired an exclusive
                 license for a process to extract cryptosporidium and giardia
                 from water. This agreement is for a period up to the patent
                 expiration. In consideration for this license, Zorax paid an
                 advance fee of $15,000, and agreed to pay royalties of two
                 point five percent (2.5%) of revenues annually, subject to the
                 following minimum royalty schedule:

                         3rd anniversary                $3,000
                         4th anniversary                $3,500
                         5th anniversary                $4,000
                         6th anniversary                $4,500
                         7th anniversary
                             and each anniversary
                             thereafter until the
                             end of patent life.        $5,000

         (8)     Need for any government approval of principal products or
                 services. We are not in need of governmental approval, as we
                 have no products or services.

         (9)     Effect of existing or probable governmental regulations on the
                 business. Although we have no operations which are currently
                 affected by governmental regulation, we feel that the
                 following may be of importance, if we attempt to utilize our
                 license for the technology to remove arsenic from water.

                 Environmental Protection Agency ("EPA") established the current
                 maximum contaminant level (MCL) for arsenic, 50 micrograms per
                 liter (ug/L) or parts per billion (ppb), in 1975. This drinking
                 water standard is based on the standard set by the Public Health
                 Service in 1943.

                 In 1996, Congress established certain requirements the EPA
                 must meet in designating a new standard for arsenic. These
                 requirements have shaped the agency's strategic approach. The
                 EPA will use peer-reviewed health effects research to meet the
                 statutory deadlines, along with studies of treatment,
                 analytical methods, occurrence, and cost-benefits, and will
                 identify affordable small system technologies. Results of
                 focused long-term arsenic research efforts

                                        6

                 will be considered in future reviews of the MCL, which will be
                 evaluated at least every 6 years, as appropriate, as required
                 by the 1996 amendments.

                 New standards on arsenic have been finalized by the EPA. The
                 allowable parts per billion (ppb) level has been lowered to 10
                 ppb, from the previous 50 ppb. These standards will dictate
                 the parameters within which our company may be able to proceed
                 in developing an area of operations.

                 Further, if we are able to acquire other environmentally
                 friendly technologies in the future, of which there can be no
                 assurance, we will likely be affected by regulations similar
                 to those discussed above. Our failure to develop awareness on
                 all regulations relating to technologies, which we may seek to
                 acquire, could result in obsolescence of licenses obtained by
                 us. Such obsolescence could have a materially adverse effect
                 on our business and operations.

         (10)    Research and Development in the last two fiscal years. As of
                 the date of this registration statement, no amount has been
                 spent on research and development.

         (11)    Costs and effects of compliance with environmental laws. We
                 anticipate that the nature of our business will surround
                 compliance with environmental laws. We plan to acquire
                 technology based on compliance with the environmental law
                 standards. Since these standards will likely change regularly
                 in the future, we will incur expenses in seeking technology
                 which compliments such standards. Our failure to acquire
                 technologies, which comply with environmental law regulations,
                 could have a materially adverse effect on our operations.

         (12)    Number of total employees and number of full time employees.
                 We currently have two total and full-time employees. There
                 are no employment or collective bargaining agreements in
                 place.

**Item 2. Plan of Operation.**

We are currently unable to satisfy our cash requirements without the financial
support of our management. We anticipate that we will meet our cash requirements
for the foreseeable future through financial support of our management.
Eventually, we may seek to raise additional funds. We have not yet determined if
or how we plan to obtain these additional funds.

We plan to acquire existing technology, which has already been fully developed.
Consequently, we do not anticipate significant research and development expenses
over the next twelve months. We do not expect to purchase or sell any plant and
significant equipment or make any significant changes in the number of employees
over the next twelve months.

**Item 3. Description of Property.**

Our offices are located at 2716 St. Andrews Blvd. Suite 200 Tarpon Springs, Fl.
34688. The space is owned by the Scalas. Clean Water pays $500/month under an
informal rental agreement. We do not own any significant real or personal
property.

                                        7
**Item 4. Security Ownership of Certain Beneficial Owners and Management.**

(a)      Security Ownership of Certain Beneficial
Owners

Title of    Name & Address of          Amount & Nature       Percent
Class       Beneficial Owner               of Ownership          of Class
--------------------------------------------------------------------------------

Common      Howard A. & Laurie C. Scala    3,517,800 Joint Tenancy       48.7%
            2716 St. Andrews Blvd.
            Suite 200
            Tarpon Springs, FL 34688

Common      Howard A. Scala / IRA              8,330 Direct              .001%
            2716 St. Andrews Blvd.
            Suite 200
            Tarpon Springs, FL 34688

Common      Howard A. Scala                    6,000 Direct              .001%
            c/f Matthew G. Scala
            2716 St. Andrews Blvd.
            Suite 200
            Tarpon Springs, FL 34688

Common      Utek Corporation                 980,778 Direct             13.6%
            202 South Wheeler Street
            Plant City, Florida 33566

(b)      Security Ownership of Management

Title of    Name & Address of              Amount & Nature           Percent
Class       Beneficial Owner                   of Ownership              of Class
--------------------------------------------------------------------------------

Common      Howard A. & Laurie C. Scala    3,517,800 Joint Tenancy      48.7%
            2716 St. Andrews Blvd.
            Suite 200
            Tarpon Springs, FL 34688

Common      Howard A. Scala / IRA              8,330 Direct             .001%
            2716 St. Andrews Blvd.
            Suite 200
            Tarpon Springs, FL 34688

                                        8

Common      Howard A. Scala                    6,000 Direct            .001%
            c/f Matthew G. Scala
            2716 St. Andrews Blvd.
            Suite 200
            Tarpon Springs, FL 34688
--------------------------------------------------------------------------------
TOTAL       Howard A. & Laurie C. Scala    3,532,130 shares            48.9%

(c)      Changes in Control.
         There are currently no arrangements which may result in a change of
         control of the Company.

**Item 5. Directors and Executive Officers, Promoters and Control Persons.**

(a)      Officers and Directors.
         The following chart sets forth information on our officers and
         directors:

Name               Age  Title(s)                       Term of Office
--------------------------------------------------------------------------------
Laurie C. Scala    49   President,Secretary/Treasurer,
                        & Director                      July 1, 1998 to present
Howard A.Scala     51   Vice President & Director       July 1, 1998 to present

         Our Bylaws require that we have a minimum of one director. Directors
         are elected at our annual meeting to be held on the second Monday of
         each September or at a time as soon thereafter as is convenient, at a
         time to be fixed by the Board of Directors. Directors shall serve until
         their successors are duly elected or appointed. A vacancy on the Board
         of Directors may be filled by a majority vote of the remaining
         directors.

         Our Bylaws provide for a minimum of the following officers: President,
         Treasurer and Secretary. These officers are to be elected by the Board
         of Directors at the first Board meeting following the annual meeting.
         Other officers may be appointed by the Board at any time, and the Board
         may fill any vacancies.

         Laurie C. Scala is a graduate of Douglas College in Communications
         (B.A. 1975). She began her brokerage career as a registered
         representative of Merrill Lynch, Pierce, Fenner & Smith, Inc. in 1976.
         In 1980, she became a Vice President of Herzfeld & Stern, Inc. In 1982,
         Mrs. Scala assumed a position as Vice President of Thomson McKinnon
         Securities, Inc. In 1984, she left her former position to work at a
         partnership formed with her husband, Howard Scala, providing financial
         planning and brokerage services. Since its formation in 1986, Mrs.
         Scala has worked for the Company. She holds no other directorships in
         any reporting companies.

         Howard A. Scala is a graduate of Syracuse University School of
         Management in Marketing (B.S. 1973). He began his brokerage career as a
         registered representative of Merrill Lynch, Pierce, Fenner & Smith,
         Inc. in 1976. In 1980, he became a Vice President of Herzfeld & Stern,
         Inc. In 1982, Mr. Scala assumed a position as Vice President of Thomson
         McKinnon Securities, Inc. In 1984, he left his former position to work
         at a partnership formed with his wife, Laurie Scala, providing
         financial planning and brokerage services. Since its formation

                                        9

         in 1986, Mr. Scala has worked for the Company. He holds no other
         directorships in any reporting companies.

(b       Identify Significant Employees.
         We have no persons, not mentioned above, who are expected to make a
         significant contribution to our business.

(c)      Family relationships.
         Laurie and Howard Scala are husband and wife.

(d)      Involvement in certain legal proceedings. As of December 31, 1997,
         the registration of Escalator Securities, Inc. as a broker-dealer from
         the National Association of Securities Dealers, was revoked, and Howard
         Scala was barred as a broker.

         Other than the aforementioned, we have had no events that occurred
         during the past five years, including bankruptcies, criminal
         convictions or proceedings, court orders or judgments, that are
         material to an evaluation of the ability or integrity of any director,
         person nominated to become a director, executive officer, promoter or
         control person of our Company.

**Item 6. Executive Compensation.**

------------------ ------ ------ ----- ------------ ------------- ----------- ------ ------
Name and Principal Year   Salary Bonus Other Annual Restricted     Securities  LTIP   Other
Position                    ($)   ($)  Compensation Stock Award(s) Underlying  Payouts ($)
                                            ($)         ($)        Options (#)  ($)
------------------ ------ ------ ----- ------------ ------------- ----------- ------ ------
Laurie & Howard
Scala,              1996      0     0          0           0             0        0      0
President & Vice    1997      0     0          0           0             0        0      0
President           1998      0     0          0    $187,500             0        0      0
respectively        1999      0     0          0    $234,375             0        0      0
                    2000      0     0          0           0             0        0      0
                    2001      0     0          0    $200,000             0        0      0
                    2002      0     0          0     $75,000             0        0      0
----------------- ------- ------ ----- ------------ ------------- ----------- ------ ------

**Item 7. Certain Relationships and Related Transactions.**

There have been no transactions during the last two years, or proposed
transactions, to which we were or are a party, in which any of our directors,
executive officers, nominees for such positions, security holders or the
families of such people had a material interest. We are not a subsidiary of any
other company.

**Item 8. Description of Securities.**

Common Stock.
In General. We are authorized to issue 50,000,000 shares of common stock with a
par value of $0.001 each, of which 7,217,855 common shares were outstanding
as of June 27, 2003. All of the issued and outstanding common stock is
fully paid and non-assessable.

Voting. Each share of our common stock entitles the holder thereof to one vote
per share in the election of directors and in all other matters upon which
stockholders are entitled to vote. The holders of shares of common stock do not
have cumulative voting rights, which means that the

                                       10

holders of more than 50% of the outstanding shares voting for the election of
directors can elect all of the directors to be elected, if they so choose. In
such event, the holders of the remaining shares will not be able to elect any of
our directors. As of the date of this registration statement, Howard and Laurie
Scala are the beneficial owners of 3,532,130 voting shares or approximately
48.9% of our outstanding voting stock.

Dividends. Each share of common stock entitles the holder thereof to receive
cash dividends as the Board of Directors may declare from funds legally
available therefor. However, we have only declared one dividend to date and do
not intend to declare any dividend on our common stock in the foreseeable
future.

Rights. There are no preemptive rights with respect to the common stock. Upon
liquidation, dissolution or winding up of the affairs of the Company, and after
payment of creditors, the assets legally available for distribution will be
divided ratably on a share-for-share basis among the holders of the outstanding
shares of common stock.

Preferred Stock.
We are not authorized to issue any preferred stock at this time.

**Item 9. Management's Discussion and Analysis**

The company has generated revenues of $11,000 in the last two fiscal years. In
the past year, we experienced a loss of $87,491. Management cannot say with
certainty when significant revenue will be received from the company's business.

We are dependent on financial support from the management of the company to meet
our cash requirements. While the company hopes to raise money through the sale
of securities in a public or private offering during the next fiscal year, there
is no guarantee that we will do so.

After acquiring Clean Water Technologies, we signed an agreement with Element
33, LLC to act as our exclusive sublicensee. We subsequently signed a new
exclusive agreement with International Water Purification Technologies, LLC
("IWPT"). Pursuant to the contract, the company is entitled to a royalty of 5%
of the gross revenue transacted by IWPT along with a minimum royalty payment of
at least $7200, up to a maximum of $10,368. IWPT has ambitious plans to exploit
our arsenic technology and is in the process of going public to raise money to
support their marketing effort. Our initial royalties commenced with a $5,000
payment in January, 2002.

We signed a letter of intent to acquire Zorax, Inc. on May 1, 2000. After
performing due diligence on the company, we agreed to issue 600,000 shares of
restricted common stock to acquire Zorax, on September 21, 2000. We continue to
explore the acquisition of environmentally friendly technologies.

                                       11

                                     PART II

Item 1.  Market Price of and Dividends on the Registrant's Common Equity and
         Related Stockholder Matters.

(a)      Market information.
         Our common stock is traded on the Over the Counter Bulletin
         Board ("OTCBB") under the symbol CWTI. The following bid quotations
         have been reported for the period beginning January 1, 2001 and ended
         June 30, 2003:

                                                         Bid Quotations
                                                         --------------
         Period                                       High             Low
         ------                                       ----             ----

         Quarter Ended:
         March 31, 2001                            $1 5/16            $7/16
         June 30, 2001                              $1 3/4             $3/8

         September 30,2001                             .71              .43
         December 31,2001                              .58              .31
         March 31,2002                                 .55              .38
         June 30,2002                                  .45              .08
         September 30, 2002                            .26              .05
         December 31, 2002                             .30              .06
         March 31, 2003                                .15              .07
         June 30, 2003                                 .10              .08

         Such quotations reflect inter-dealer prices, without retail mark-up,
         mark-down or commission. Such quotes are not necessarily representative
         of actual transactions or of the value of our securities, and are in
         all likelihood not based upon any recognized criteria of securities
         valuation as used in the investment banking community.

         The Company has been advised that approximately eight member firms
         of the NASD are currently acting as market makers for the common stock.
         There is no assurance that an active trading market will develop which
         will provide liquidity for the Company's existing shareholders or for
         persons who may acquire common stock through the exercise of warrants.

                                       12

(b)      Holders.
         As of June 27, 2003, there were approximately 1,192 holders of
         record of our 7,217,855 shares of common stock outstanding. Of these
         shares, 4,917,479 are restricted securities within the meaning of Rule
         144(a)(3) promulgated under the Securities Act of 1933, as amended,
         because such shares were issued and sold by the Company in private
         transactions not involving a public offering. Certain of the shares of
         common stock are held in "street" name and may, therefore, be held by
         several beneficial owners. Our transfer agent is Fidelity Transfer
         Company located at 1800 South West Temple, Suite 301, Box 53, Salt Lake
         City, UT 84115.

         No prediction can be made as to the effect, if any, that future sales
         of shares of common stock or the availability of common stock for
         future sale will have on the market price of the common stock
         prevailing from time-to-time. Sales of substantial amounts of common
         stock on the public market could adversely affect the prevailing market
         price of the common stock.

(c)      Dividends.
         We have not paid a cash dividend on our common stock in the past two
         years. The payment of dividends may be made at the discretion of our
         Board of Directors and will depend upon, among other things, our
         operations, our capital requirements and our overall financial
         condition. As of the date of this registration statement, we have no
         intention to declare dividends.

**Item 2. Legal Proceedings.**

The Company is not the subject of any legal proceedings at this time.

**Item 3. Changes in and Disagreements with Accountants.**

In September, 2002, we retained our current accountants, Baumann, Raymondo &
Company PA. Our previous accountants, Acquavella, Chiarelli, Shuster &
Company, resigned from the position in the same month.

The change was not due to any unfavorable report or disagreement. We believe
that since our new accounting firm is local, we will receive better service.

**Item 4. Recent Sales of Unregistered Securities.**

On January 13, 1997 we issued 3,000 shares of our common stock as an employee
bonus. This transaction was made in reliance on the exemption from the
registration requirements provided in section 4(2) of the Securities Act of
1933.

On June 30, 1997, we issued 306,000 shares of our common stock in the conversion
of outstanding 10% convertible bonds. This transaction was made in reliance on
the exemption from the registration requirements provided in section 4(2) of the
Securities Act of 1933.

On March 2, 1998, we issued 3,000 shares of our common stock as an employee
bonus. In addition, we issued 500,000 shares to Howard and Laurie Scala as
compensation for services.

On November 20,2001 we issued 1,000,000 shares of our common stock as
compensation for services rendered. This transaction was made in reliance on the
exemption from the registration requirements provided in section4(2) of the
Securities Act of 1933.

On December 27,2001, we issued 3,000 shares of our common stock as an employee
bonus. This transaction was make in reliance on the exemption from the
registration requirements provided in section 4(2) of the Securities Act of
1933.

                                       13

rendered on the same date. These transactions were made in reliance on the
exemption from the registration requirements provided in section 4(2) of the
Securities Act of 1933.

On February 17, 1999, we issued 2,000 shares of our common stock as an employee
bonus. This transaction was made in reliance on the exemption from the
registration requirements provided in section 4(2) of the Securities Act of
1933.

On June 17, 1999 we issued 1,000,000 shares of our common stock as compensation
for services rendered. This transaction was made in reliance on the exemption
from the registration requirements provided in section 4(2) of the Securities
Act of 1933.

On June 30, 1999, we issued 893,000 shares of our common stock pursuant to the
Agreement and Plan of Merger with Clean Water.

On December 30, 1999, we issued 2,000 shares of our common stock as an employee
bonus. This transaction was made in reliance on the exemption from the
registration requirements provided in section 4(2) of the Securities Act of
1933.

On September 29, 2000, we issued 600,000 shares of our common stock pursuant to
the Agreement and Plan of Merger with Zorax.

On December 19, 2000, we issued 2000 shares of our common stock as an employee
bonus. This transaction was made in reliance on the exemption from the
registration requirements provided in section 4(2) of the Securities Act of
1933.

On November 20, 2001, we issued 1,000,000 shares of our common stock as
compensation for services rendered. This transaction was made in reliance on
the exemption from registration requirements provided in section 4(2) of the
Securities Act of 1933.

On December 27, 2001, we issued 3,000 shares of our common stock as an employee
bonus. This transaction was made in reliance on the exemption from the
registration requirements provided in Section 4(2) of the Securities Act of
1933.

On December 19, 2002, we issued 1,500,000 shares of our common stock as
compensation for services rendered. This transaction was made in reliance on the
exemption from the registration requirements provided in Section 4(2) of the
Securities Act of 1933.

**Item 5. Indemnification of Directors and Officers.**

Our Amended and Restated Certificate of Incorporation eliminates the liability
of our directors, officers, and trustees to the fullest extent permitted by
Section 145 of the Delaware General Corporation Law ("DCGL"), as the same may be
amended from time to time.

Section 145(a) of the DGCL provides that a Delaware corporation may indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.

Section 145(b) of the DGCL provides that a Delaware corporation may indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to the extent that
the Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to be indemnified for such expenses which the court shall
deem proper.

                                       14

Section 145 of the DGCL further provides that to the extent a director or
officer of a corporation has been successful on the merits or otherwise in the
defense of any action, suit or proceeding referred to in subsections (a) and (b)
of Section 145, or in the defense of any claim, issue, or matter therein, he
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith; that indemnification and
advancement of expenses provided by, or granted pursuant to Section 145 shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any bylaw,
agreement, vote of stockholders or disinterested directors or otherwise, both as
to his official capacity and as to action in another capacity while holding such
office; that indemnification and advancement of expenses provided by, or granted
pursuant to, Section 145 shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director or officer and
shall inure to the benefit of the heirs, executors and administrators of such a
person; and that the corporation shall have the power to purchase and maintain
insurance on behalf of any person who is or was a director or officer of the
corporation against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability under
such Section 145.

                                       15

**CLEAN WATER TECHNOLOGIES, INC. & SUBSIDIARIES
                        CONSOLIDATED FINANCIAL STATEMENTS

                                TABLE OF CONTENTS**

                                                                            Page

Independent Auditor's Report                                                 F-1

Consolidated Financial Statements:

  Balance Sheets.............................................................F-2

  Statements of Operations...................................................F-3

  Statements of Stockholder's Equity.........................................F-4

  Statements of Cash Flows...................................................F-5

  Notes to Financial Statements..........................................F-6-F-9

**INDEPENDENT AUDITOR'S REPORT**

To the Board of Directors and Stockholders
Clean Water Technologies, Inc. and Subsidiaries

We have audited the balance sheet of Clean Water Technologies, Inc. and
Subsidiaries as of June 27, 2003, and the related statements of operations,
stockholder's equity, and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements of Clean Water Technologies, Inc. and
Subsidiaries as of June 28, 2002, were audited by other auditors whose report
dated August 6, 2002, expressed an unqualified opinion on those statements.

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

In our opinion, the 2003 financial statements referred to above present fairly,
in all material respects, the financial position of Clean Water Technologies,
Inc. and Subsidiaries as of June 27, 2003, and the results of its operations and
its cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.

/s/Baumann Raymondo & Company PA
September 15, 2003

                                      F-1
**CLEAN WATER TECHNOLOGIES, INC. & SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS**

                                                  Fifty-two         Fifty-two
           ASSETS                                Weeks Ended       Weeks Ended
                                                June 27, 2003     June 28, 2002
                                                -------------     -------------
    Cash                                         $    6,068        $   10,616
    Deposits                                            925               925
    Property and equipment (net)                          -             3,158
    License agreement                                15,000            15,000
                                                -------------     -------------
                                                 $   21,993        $   29,699
                                                =============     =============

          LIABILITIES AND STOCKHOLDERS' EQUITY

    Due to officers                              $  17,760         $   15,000
    Accrued expenses and other liabilities               -              7,700
    Royalty fees payable                             3,600              3,875
                                                -------------     -------------
           Total liabilities                        21,360             26,575
                                                -------------     -------------
         STOCKHOLDERS' EQUITY

    Common stock - par value $.001
      Authorized 50,000,000 shares -
       issued and outstanding 7,217,855
       and  5,717,855 respectively                  63,043             61,543
    Additional paid in capital                     894,671            811,171
    Accumulated deficit                           (957,081)          (869,590)
                                                -------------     -------------
           Total stockholders' equity                  633              3,124
                                                -------------     -------------
                                                 $  21,993         $   29,699
                                                =============     =============

                       Read independent auditors' report.
   The accompanying notes are an integral part of these financial statements.
                                      F-2

**CLEAN WATER TECHNOLOGIES, INC. & SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF OPERATIONS**

                                             Fifty-two              Fifty-two
                                            Weeks Ended            Weeks Ended
                                           June 27, 2003          June 28, 2002
                                          ---------------       ---------------
Revenue                                    $     6,000           $     5,000
                                          ---------------       ---------------
Operating Expenses:

    Accounting and legal                         1,250                13,428
    Royalty fees                                 6,225                 6,125
    Consulting fees                              1,122                 6,354
    Rent                                         6,000                 1,500
    Depreciation                                 3,158                 3,160
    Telephone and utilities                      1,032                 1,973
    Taxes, licenses and filing fees               (296)                4,092
    Salaries expense                            75,000                     -
                                          ---------------       ---------------
    Total operating expenses                    93,491                35,132
                                          ---------------       ---------------

    Net income (loss)                      $   (87,491)          $   (30,132)
                                          ===============       ===============
    Net income (loss) per common share
    basic and fully diluted                $      (.01)                  nil
                                          ===============       ===============

    Weighted average number of shares

    Basic                                    6,601,188             5,327,491
                                          ===============       ===============
    Fully diluted                            6,601,188             5,327,491
                                          ===============       ===============

                       Read independent auditors' report.
   The accompanying notes are an integral part of these financial statements.
                                       F-3

**CLEAN WATER TECHNOLOGIES, INC. & SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY**

                                 C o m m o n   S t o c k
                                 -----------------------
                                                         Additional
                                 Number of      Par       Paid-In     Retained
                                  Shares       Value      Capital      Deficit
                               ------------ ---------- ------------ ------------

Balance - June 29, 2001         4,714,855   $  61,543  $   778,158   $ (839,458)

Issuance of additional shares   1,003,000          -        33,013           -

Net(loss)                              -           -            -       (30,132)
                               ------------ ---------- ------------ ------------
Balance - Balance June 28, 2002 5,717,855      61,543      811,171   $ (869,590)

Issuance of stock for services  1,500,000       1,500       73,500           -

Shareholder loan converted to
paid in capital                        -           -        10,000           -

Net(loss)                              -           -            -       (87,491)
                               ------------ ---------- ------------ ------------
Balance - June 27, 2003         7,217,855   $  63,043  $   894,671   $ (957,081)
                               ============ ========== ============ ============

                       Read independent auditors' report.
   The accompanying notes are an integral part of these financial statements.
                                       F-4

**CLEAN WATER TECHNOLOGIES, INC. & SUBSIDIARIES

                     CONSOLIDATED STATEMENT OF CASH FLOWS**

                                                    Fifty-two         Fifty-two
                                                   Weeks Ended       Weeks Ended
                                                  June 27,2003      June 28, 2002
                                                  -------------    -------------
Cash flows from operating activities:

    Net (loss)                                     $  (87,491)      $  (30,132)
    Adjustment to reconcile net loss to
      net cash (used) in operations:
      Issuance of stock for services                   75,000
         Depreciation and amortization                  3,158            3,160
    Decrease in accounts payable and
      accrued expenses                                 (4,940)          (6,000)
    Decrease in royalty fees payable                     (275)          (1,875)
                                                  -------------    -------------
Net cash (used)in operating activities                (15,548)         (34,847)
                                                  -------------    -------------
Cash flows provided by financing activities:

    Decrease in due to officer                         10,000           33,013
                                                  -------------    -------------
Net increase (decrease) in cash                        (4,548)          (1,834)

Cash - beginning                                       10,616           12,450
                                                  -------------    -------------
Cash - ending                                      $    6,068       $   10,616
                                                  =============    =============

                       Read independent auditors' report.
   The accompanying notes are an integral part of these financial statements.
                                       F-5

**CLEAN WATER TECHNOLOGIES, INC. & SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS**

1.       Organization and Nature of Business:

Escalator, Inc. was incorporated under the General Corporation laws
of the state of Delaware on April 17, 1986. On April 22, 1998, a
certificate of amendment was filed to change the name of the Company
to Nu Electric Corporation. On April 2, 2002 the Company filed for
another amendment to change its name to Clean Water Technologies, Inc.
the "Company").The Company is a publicly traded Company which trades under
the symbol CWTI.

2.       Summary of Significant Accounting Policies:

a.     Principals of Consolidation:
-----------------------------------
The consolidated financial statements include the accounts of Clean Water
Technologies, Inc. and its wholly-owned subsidiaries of Clean Water
Technologies, and Zorax Inc. All significant intercompany transactions and
balances have been eliminated.

b.     Property, Equipment, Depreciation and Amortization:
----------------------------------------------------------
Property and equipment are stated at cost. Depreciation and amortization are
provided using the straight-line and declining balance method over the estimated
useful lives of the assets.

c.    Income/(Loss) Per Common Share:
-------------------------------------
The income or loss per common share is based on the weighted average number of
shares outstanding.

d.     Statement of Cash Flows:
-------------------------------
For purposes of the statement of cash flows, the Company considers all highly
liquid accounts with a maturity of three months or less as cash equivalents.

e.     Concentrations of Credit Risk:
-------------------------------------
Financial instruments which potentially subject the Company to concentrations of
credit risk consist of cash and cash equivalents. The company places its
temporary cash investments with a quality, high credit financial institution. At
times, such investments, along with the Company's cash balances with this
institution, exceeded the current insured amount under the Federal Deposit
Insurance Corporation.

                     Read independent auditors' report.
                                       F-6

**CLEAN WATER TECHNOLOGIES, INC. & SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS**

2.    Summary of Significant Accounting Policies (Continued)

f.  Use of Estimates in Preparation of Financial Statements:
------------------------------------------------------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make certain estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

g.   Advertising Costs:
-----------------------
The Company expenses the production costs of advertising the first time the
advertising takes place.

3.    Income Taxes:

The Company records its federal and state tax liabilities in accordance with
Financial Accounting Standards Board Statement No. 109 "Accounting for Income
Taxes". Income taxes are provided for the tax effects of transactions reported
in the financial statements and consist of tax currently due and deferred taxes.
Deferred taxes are recorded for temporary differences in the recognition of
income and expenses between tax and financial accounting, using current tax
rates. Deferred assets and liabilities represent the future tax consequences of
those differences, which will either be taxable or deductible when the assets
and liabilities are recovered or settled.
For income tax reporting, the Company and its subsidiaries have net operating
loss carry forwards, available to reduce future Federal income taxes. If not
used, the carry forwards will expire as follows:

                         Year Ending                 Federal Net
                           In June                 Operating Loss
                        -------------             ----------------
                            2004                       183,000
                            2005                       160,000
                            2008                        33,713
                            2010                        13,569
                            2011                       121,290
                            2012                        24,259
                            2013                        22,798
                            2014                        12,591
                            2015                         7,212
                            2016                        87,491

                                                  ----------------
                                                     $ 665,923
                                                  ================

                       Read independent auditors' report.
                                       F-7

**CLEAN WATER TECHNOLOGIES, INC. & SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS**

4.    Business Combinations:

      On June 30, 1999, Clean Water Technologies, Inc. & Subsidiaries, a
      Delaware Corporation entered into a merger agreement with Clean Water
      Technologies, Inc., (CWT) a Florida Corporation. The merger was
      accounted for by the pooling of interests method, where all of the
      shares of outstanding common stock was exchanged for 893,000 shares of
      common stock of Clean Water Technologies, Inc. & Subsidiaries. CWT had
      no assets, liabilities or income of any kind, character or description
      at the time of the merger, and accordingly there was no effect on the
      revenues and earnings reported. CWT holds a license for a technology
      developed at USF (University of South Florida) to remove arsenic from
      drinking water. In October 1999 the Company granted GSA Resources,
      Inc. an exclusive sublicense to use and market the technology to remove
      arsenic from drinking water. This license was subsequently transferred to
      International Water Purification Technologies, LLC (IWPT) in July 2003.

      Minimum royalty payments under this agreement are as follows:

                            2003                             $7,200
                            2004                              8,640
                            2005 (and until termination)     10,368

      On September 21, 2000 the Company merged with Zorax, Inc. the owner
      of an exclusive worldwide license to manufacture and market a
      proprietary process technology that improves the extraction of
      cryptosporidium and giardia from drinking water.  A U.S. patent has been
      filed by Johns Hopkins University, the owner of the technology.  Zorax,
      Inc. has no assets or liabilities other than as relates to its license
      of the technology and research agreement with Johns Hopkins University.
      The Company acquired Zorax, Inc. by way of tax free merger whereby the
      Company issued 600,000 shares of its common stock in exchange for all
      outstanding shares of Zorax, Inc.

      As a result of the merger the Company acquired the license agreement
      which had a book value of $15,000.

      The Company shall pay to Johns Hopkins University earned royalties of
      two and one half percent (2.5%) of net sales annually payable on a
      quarterly basis until March 30, 2017.

      Minimum royalty payments under this agreement are as follows:

                     March 30, 2004                             4,000
                               2005                             4,500
                               2006 (and until termination)     5,000

                       Read independent auditors' report.
                                       F-8

**CLEAN WATER TECHNOLOGIES, INC. & SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS**

5.       Related Party Transactions:

         The Company rents office space from the officers of the Company
         under an informal lease agreement that requires monthly rent of
         $500. The Company incurred rent expense of $6,000 for the year
         ended June 27, 2003.

         The Company issued 1,500,000 shares of its $.001 par value common
         stock to the officers of the Company for services rendered in
         fiscal 2003. The value of the management services rendered was
         estimated at $75,000.

         The Company is indebted to the officers in the amount of $17,760
         at June 27,2003. The indebtedness is not evidenced by a formal
         promissory note.

                       Read independent auditors' report.
                                       F-9

                                  **EXHIBIT INDEX

EXHBIT #                   ITEM**

2.1                     Acquisition of Escalator, Inc.*

2.2                     Lone Pine Resources, Inc. Merger*

2.3                     Agreement and Plan of Spinoff*

2.4                     Acquisition of Clean Water Technologies, Inc.*

2.5                     Acquisition of Zorax, Inc.*

3.1                     Articles of Incorporation*

3.2                     Bylaws*

4                       Share Certificate*

10                      Sublicense Agreement GSA*

21                      Subsidiaries of the Registrant*

27                      Financial Data Schedule*

32                      Certification

* Previously filed.

                                       16

                                   SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.

Clean Water Technologies, Inc.

/s/ Laurie C. Scala
---------------------------
By: Laurie C. Scala, President
Date: September 22, 2003

                                       17
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