**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      1O-KSB**

**FOR      THE YEAR ENDED JUNE 24, 2005**

**COMMISSION      FILE No. 000-27629**

**Clean      Water Technologies Inc. **

**Delaware**

**23-2426437**

**2716      St. Andrews Boulevard, Suite 200, Tarpon Springs, FL 34688**

**(727)      942-8938**

|                                                                                                             |   |
|------------------------------------------------------------------------------------------------------------------|--------|
| 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 |   |

|   | 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 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,                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 4, 2005, we eliminated our Zorax                subsidiary. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | On                April 2, 2002, we changed our name to Clean Water Technologies, 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. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 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                PurificationTechnologies, LLC. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------|

|   | 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, thereis no guarantee that if located, we will                be able                to enter into licensing agreements with favorable terms, if 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. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 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. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 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. |
|-----------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | We                have no customers. |
|--------|--------------------------------------|

|   | 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 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. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|     (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 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. |
|------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | We                currently have two total and full-time employees. There are no employment                or collective bargaining agreements in place. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Title                of****Class**** ** | **Name                & Address of****Beneficial                Owner**** ** | **Amount                & Nature****of                Ownership**** ** | **Percent****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                                                       | 960,779                Direct                                                   | 13.3%                                            |
|                                           | 202                South Wheeler Street                                               |                                                                            |                                             |
|                                           | Plant                City, Florida 33566                                              |                                                                            |                                             |

| **Title                of****Class**** ** | **Name                & Address of****Beneficial                Owner**** ** | **Amount                & Nature****of                Ownership**** ** | **Percent****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                                               |                                                                            |                                             |
|                                           |                                                                                  |                                                                            |                                             |
| TOTAL                                          | Howard                A. & Laurie C. Scala                                        | 3,532,130                shares                                                 | 48.9%                                            |

|   | There                are currently no arrangements which may result in a change of control                of                the Company. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------|

|   | The                following chart sets forth information on our officers and directors: |
|--------|------------------------------------------------------------------------------------------|

| **Name**** **             | **Age**** ** | **Title(s)**** **                       | **Term                of Office**** ** |
|--------------------------------|-------------------|----------------------------------------------|---------------------------------------------|
| Laurie                C. Scala | 51                | President,Secretary/Treasurer,               | July                1, 1998 to present      |
|                           |              | &                Director                |                                        |
| Howard                A. Scala | 53           | 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 in 1986, Mr. Scala has worked for the Company. He holds                no                other directorships in any reporting companies. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | We                have no persons, not mentioned above, who are expected to make a                significant contribution to our business. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | 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. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Name                and Principal****Position**** ** | **Year**** ** | **Salary****($)**** ** | **Bonus****($)**** ** | **Other                Annual****Compensation****($)**** ** | **Restricted****Stock                Award(s)****($)**** ** | **Securities****Underlying****Options                (#)**** ** | **LTIP****Payouts****($)**** ** | **Other****($)**** ** |
|-------------------------------------------------------------|--------------------|-----------------------------|----------------------------|------------------------------------------------------------------|------------------------------------------------------------------|----------------------------------------------------------------------|--------------------------------------|----------------------------|
| Laurie                & Howard Scala,                   | 1997               | 0                      | 0                     | 0                                                           | 0                                                           | 0                                                               | 0                               | 0                     |
| President                & Vice                         | 1998               | 0                      | 0                     | 0                                                           | $187,500                                                         | 0                                                               | 0                               | 0                     |
| President                                                   | 1999               | 0                      | 0                     | 0                                                           | $234,375                                                         | 0                                                               | 0                               | 0                     |
| respectively                                                | 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                     |
|                                                        | 2003               | 0                      | 0                     | 0                                                           | 0                                                                | 0                                                               | 0                               | 0                     |
|                                                        | 2004               | 0                      | 0                     | 0                                                           | 0                                                           | 0                                                               | 0                               | 0                     |

|   | 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, 2003 and ended June 30, 2005: |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                              | **Bid                Quotations** |
|-----------------------------------|-----------------------------------|
| **Period**                        | **High**                          | **Low** |
| Quarter                Ended:     |                              |   |
| March                31, 2003     | .15                               | .07 |
| June                30, 2003      | .10                               | .08 |
| September                30, 2003 | .35                               | .10 |
| December                31, 2003  | .26                               | .13 |
| March                31, 2004     | .46                               | .14 |
| June                30, 2004      | .31                               | .15 |
| September                30, 2004 | .20                               | .15 |
| December                31, 2004  | .17                               | .07 |
| March                31, 2005     | .13                               | .07 |
| June                30, 2005      | .10                               | .07 |

|   | 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. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | As                of June 24, 2005, there were approximately 1,200 holders of record                of our                7,217,855 shares of common stock outstanding. Of these shares, 4,834,314                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. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 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. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**CLEAN      WATER TECHNOLOGIES, INC. **

**CONSOLIDATED      FINANCIAL STATEMENTS**

|                                              | 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**

**CLEAN      WATER TECHNOLOGIES, INC.**

|                                                |   | Fifty-two                    |       | Fifty-two                    |   |
|-----------------------------------------------------|--------|------------------------------|------------|------------------------------|--------|
| ASSETS                                              |   | Weeks                Ended   |       | Weeks                Ended   |   |
|                                                |   | June                24, 2005 |       | June                25, 2004 |   |
|                                                |   |                         |       |                         |   |
| Cash                                                |   | $                            | 5,952      |                         | $      | 12,120 |   |
| Deposits                                            |   |                         | 925        |                         |   | 925 |   |
| License                agreement                    |   |                         | -          |                         |   | 15,000 |   |
|                                                |   | $                            | 6,877      |                         | $      | 28,045 |   |
|                                                |   |                         |       |                         |   |   |   |
| LIABILITIES                AND STOCKHOLDERS' EQUITY |   |                         |       |                         |   |   |   |
|                                                |   |                         |       |                         |   |   |   |
| Due                to officers                      |   | $                            | 34,150     |                         | $      | 25,621 |   |
| Royalty                fees payable                 |   |                         | 1,125      |                         |   | 1,125 |   |
| Total                liabilities                    |   |                         | 35,275     |                         |   | 26,746  |   |
|                                                |   |                         |       |                         |   |   |   |
| STOCKHOLDERS'                EQUITY                 |   |                         |       |                         |   |   |   |
|                                                |   |                         |       |                         |   |   |   |
| Common                stock - par value $.001       |   |                         |       |                         |   |   |   |
| Authorized                50,000,000 shares -       |   |                         |       |                         |   |   |   |
| issued                and outstanding 7,217,855     |   |                         | 63,043     |                         |   | 63,043 |   |
| Additional                paid in capital           |   |                         | 1,021,016  |                         |   | 971,016 |   |
| Accumulated                deficit                  |   |                         | (1,112,457 | )                            |   | (1,032,760 | ) |
|                                                |   |                         |       |                         |   |   |   |
| Total                stockholders' equity           |   |                         | (28,398    | )                            |   | 1,299 |   |
|                                                |   |                         |       |                         |   |   |   |
|                                                |   | $                            | 6,877      |                         | $      | 28,045 |   |

**CLEAN      WATER TECHNOLOGIES, INC.**

|                                              |   | Fifty-two                    |      | Fifty-two                    |   |
|---------------------------------------------------|--------|------------------------------|-----------|------------------------------|--------|
|                                              |   | Weeks                Ended   |      | Weeks                Ended   |   |
|                                              |   | June                24, 2005 |      | June                25, 2004 |   |
|                                              |   |                         |      |                         |   |
| Revenue                                           |   | $                            | -         |                         | $      | 7,200 |   |
|                                              |   |                         |      |                         |   |   |   |
| Operating                Expenses:                |   |                         |      |                         |   |   |   |
|                                              |   |                         |      |                         |   |   |   |
| Accounting                and legal               |   |                         | 4,570     |                         |   | 6,457 |   |
| Dues                and Subscriptions             |   |                         | 290       |                         |   | - |   |
| Patent                Expenses                    |   |                         | 4,452     |                         |   | - |   |
| Royalty                fees                       |   |                         | -         |                         |   | 6,292 |   |
| Consulting                fees                    |   |                         | 1,612     |                         |   | 594 |   |
| Transfer                                          |   |                         | 500       |                         |   | - |   |
| Rent                                              |   |                         | 1,500     |                         |   | 6,000 |   |
| Legal                Fees                         |   |                         | 728       |                         |   | - |   |
| Depreciation                                      |   |                         | -         |                         |   | - |   |
| Telephone                and utilities            |   |                         | 737       |                         |   | 809 |   |
| Taxes,                licenses and filing fees    |   |                         | 308       |                         |   | 2,727 |   |
| Salaries                expense                   |   |                         | 50,000    |                         |   | 60,000 |   |
| Write                off of license agreement     |   |                         | 15,000    |                         |   | - |   |
|                                              |   |                         |      |                         |   |   |   |
| Total                operating expenses           |   |                         | 79,697    |                         |   | 82,879 |   |
|                                              |   |                         |      |                         |   |   |   |
| Net                income (loss)                  |   | $                            | (79,697   | )                            | $      | (75,679 | ) |
|                                              |   |                         |      |                         |   |   |   |
| Net                income (loss) per common share |   |                         |      |                         |   |   |   |
| basic                and fully diluted            |   | $                            | (.01      | )                            |   | (.01 | ) |
|                                              |   |                         |      |                         |   |   |   |
| Weighted                average number of shares  |   |                         |      |                         |   |   |   |
|                                              |   |                         |      |                         |   |   |   |
| Basic                                             |   |                         | 7,217,855 |                         |   | 7,217,855 |   |
|                                              |   |                         |      |                         |   |   |   |
| Fully                diluted                      |   |                         | 7,217,855 |                         |   | 7,217,855 |   |

**CLEAN      WATER TECHNOLOGIES, INC.**

|                                           |   | C                o                m m o n S t o c k |      |   |   |       |   |
|------------------------------------------------|--------|-----------------------------------------------------|-----------|--------|--------|------------|--------|
|                                           |   |                                                |      |   |   | Additional |   |   |   |
|                                           |   | Number                of                            |      | Par    |   | Paid-In    |   | Retained |   |
|                                           |   | Shares                                              |      | Value  |   | Capital    |   | Deficit |   |
|                                           |   |                                                |      |   |   |       |   |   |   |
| 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                - Balance June 27, 2003 |   |                                                | 7,217,855 |   |   | 63,043     |   |   | 894,671 |   | $ | (957,081 | ) |
|                                           |   |                                                |      |   |   |       |   |   |   |   |   |   |   |
| Officer                donated services        |   |                                                | -         |   |   | -          |   |   | 60,000 |   |   | - |   |
|                                           |   |                                                |      |   |   |       |   |   |   |   |   |   |   |
| Shareholder                loan converted to   |   |                                                |      |   |   |       |   |   |   |   |   |   |   |
| paid                in capital                 |   |                                                | -         |   |   | -          |   |   | 16,345 |   |   | - |   |
| Net                (loss)                      |   |                                                | -         |   |   | -          |   |   | - |   |   | (75,678 | ) |
|                                           |   |                                                |      |   |   |       |   |   |   |   |   |   |   |
| Balance                - June 25, 2004         |   |                                                | 7,217,855 |   |   | 63,043     |   |   | 971,016 |   |   | (1,032,760 | ) |
|                                           |   |                                                |      |   |   |       |   |   |   |   |   |   |   |
| Officer                donated services        |   |                                                | -         |   |   | -          |   |   | 50,000 |   |   | - |   |
|                                           |   |                                                |      |   |   |       |   |   |   |   |   |   |   |
| Shareholder                loan converted to   |   |                                                |      |   |   |       |   |   |   |   |   |   |   |
| paid                in capital                 |   |                                                | -         |   |   | -          |   |   | - |   |   | - |   |
|                                           |   |                                                |      |   |   |       |   |   |   |   |   |   |   |
| Net                (loss)                      |   |                                                | -         |   |   | -          |   |   | - |   |   | (79,697 | ) |
|                                           |   |                                                |      |   |   |       |   |   |   |   |   |   |   |
| Balance                - June 24, 2005         |   |                                                | 7,217,855 |   | $      | 63,043     |   | $ | 1,021,016 |   | $ | (1,112,457 | ) |

**CLEAN      WATER TECHNOLOGIES, INC.**

|                                                        |   | Fifty-two                   |    | Fifty-two                    |   |
|-------------------------------------------------------------|--------|-----------------------------|---------|------------------------------|--------|
|                                                        |   | Weeks                Ended  |    | Weeks                Ended   |   |
|                                                        |   | June                24,2005 |    | June                25, 2004 |   |
|                                                        |   |                        |    |                         |   |
| Cash                flows from operating activities:        |   |                        |    |                         |   |   |   |
|                                                        |   |                        |    |                         |   |   |   |
| Net                (loss)                                   |   | $                           | (79,697 | )                            | $      | (75,678 | ) |
| Adjustment                to reconcile net loss to          |   |                        |    |                         |   |   |   |
| net                cash (used) in operations:               |   |                        |    |                         |   |   |   |
| Decrease                in license agreement                |   |                        | 15,000  |                         |   |   |   |
| Officer                donated services                     |   |                        | 50,000  |                         |   | 60,000 |   |
| Decrease                in royalty fees payable             |   |                        | -       |                         |   | (2,475 | ) |
|                                                        |   |                        |    |                         |   |   |   |
| Net                cash (used) in operating activities      |   |                        | (14,697 | )                            |   | (18,153 | ) |
|                                                        |   |                        |    |                         |   |   |   |
| Cash                flows provided by financing activities: |   |                        |    |                         |   |   |   |
|                                                        |   |                        |    |                         |   |   |   |
| Increase                in due to officer                   |   |                        | 8,529   |                         |   | 24,205 |   |
|                                                        |   |                        |    |                         |   |   |   |
| Net                cash provided by financing activities    |   |                        | 8,529   |                         |   | 24,205 |   |
|                                                        |   |                        |    |                         |   |   |   |
| Net                increase (decrease) in cash              |   |                        | (6,168  | )                            |   | 6,052 |   |
|                                                        |   |                        |    |                         |   |   |   |
| Cash                - beginning                             |   |                        | 12,120  |                         |   | 6,068 |   |
|                                                        |   |                        |    |                         |   |   |   |
| Cash                - ending                                |   | $                           | 5,952   |                         | $      | 12,120 |   |
|                                                        |   |                        |    |                         |   |   |   |

**CLEAN      WATER TECHNOLOGIES, INC.**

**CLEAN      WATER TECHNOLOGIES, INC.**

*Accounting      for Income Taxes*

| Year                Ending | Federal                Net    |
|----------------------------|-------------------------------|
| In                June     | Operating                Loss |
| 2008                       | 33,713                        |
| 2010                       | 13,569                        |
| 2011                       | 121,290                       |
| 2012                       | 24,259                        |
| 2013                       | 22,798                        |
| 2014                       | 12,591                        |
| 2015                       | 7,212                         |
| 2016                       | 87,491                        |
|                       | $                322,923      |

| 2005                (and until termination) | $10,368 |
|---------------------------------------------|---------|

**CLEAN      WATER TECHNOLOGIES, INC.**

|  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* |
|--------|----|-----------------------------------------|

|   | 31 | Certification |
|--------|----|---------------|

|   | 32 | Certification |
|--------|----|---------------|