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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

              |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2008

              |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

            For the transition period from ___________ to ___________

                        Commission file number 000-29196


                           PROFILE TECHNOLOGIES, INC.
                           --------------------------
                 (Name of Small Business Issuer in Its Charter)


                      Delaware                           91-1418002
                      --------                           ----------
           (State or other jurisdiction of            (I.R.S. Employer
           incorporation or organization)            Identification No.)

              2 Park Avenue, Suite 201
                 Manhasset, New York                        11030
                 -------------------                        -----
      (Address of principal executive offices)            (Zip Code)

                                 (516) 365-1909
                                 --------------
                (Issuer's Telephone Number, Including Area Code)


     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 |_|

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

     State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 14,339,260 shares of common
stock as of May 6, 2008.

     Transitional Small Business Disclosure Format (check one): Yes|_| No |X|

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                                TABLE OF CONTENTS

Description                                                          Page Number
--------------------------------------------------------------------------------

PART I.  FINANCIAL INFORMATION

     Item 1.    Financial Statements

         Balance Sheets (Unaudited) -
              At March 31, 2008 and June 30, 2007............................. 3

         Statements of Operations (Unaudited) -
              Three and Nine Months Ended March 31, 2008 and 2007 ............ 4

         Statements of Cash Flows (Unaudited) -
              Nine Months Ended March 31, 2008 and 2007....................... 5

         Notes to Financial Statements (Unaudited)............................ 6

     Item 2.    Management's Discussion and Analysis of Financial Condition
                   or Plan of Operation.......................................15

     Item 3.    Controls and Procedures.......................................16

PART II.  OTHER INFORMATION

     Item 1.    Legal Proceedings.............................................17

     Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds...17

     Item 3.    Defaults Upon Senior Securities...............................17

     Item 4.    Submission of Matters to a Vote of Security Holders...........18

     Item 5.    Other Information.............................................18

     Item 6.    Exhibits......................................................18

SIGNATURES  ..................................................................19

CERTIFICATIONS


                                        2
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                                       PART I -- FINANCIAL INFORMATION

Item 1. Financial Statements.


                                         PROFILE TECHNOLOGIES, INC.
                                               Balance Sheets
                                                (Unaudited)


                                                                                   March 31,       June 30,
                                                                                     2008            2007
                                                                                 ------------    ------------
                                                   Assets

Current assets:
         Cash and cash equivalents                                               $    541,289    $    119,585
         Deferred contract costs                                                          263            --
         Prepaid expenses and other current assets                                     30,631          11,372
                                                                                 ------------    ------------

                 Total current assets                                                 572,183         130,957

Equipment, net of accumulated depreciation of $12,136 and $10,170                       8,222          10,188
Other assets                                                                            1,833           3,504
                                                                                 ------------    ------------

                 Total assets                                                    $    582,238    $    144,649
                                                                                 ============    ============

                                    Liabilities and Stockholders' Deficit

Current Liabilities:
         Accounts payable                                                        $    159,332    $    157,225
         Notes payable to stockholders                                                  7,500           7,500
         Current portion of convertible debt                                           65,000          65,000
         Deferred wages                                                               759,783         739,683
         Accrued professional fees                                                    226,150         210,150
         Accrued interest                                                               1,371           1,558
         Other accrued expenses                                                        12,644          12,644
                                                                                 ------------    ------------

                 Total current liabilities                                          1,231,780       1,193,760

Long-term convertible debt, net of unamortized discount of $41,604 and $59,001          3,396             999

Stockholders' deficit:
         Common stock, $0.001 par value:  35,000,000 shares authorized,
                 14,211,483 and 12,798,706 shares issued and outstanding               14,212          12,799
         Common stock issuable; 122,222 shares                                            122            --
         Additional paid-in capital                                                15,429,290      13,599,061
         Accumulated deficit                                                      (16,096,562)    (14,661,970)
                                                                                 ------------    ------------

                 Total stockholders' deficit                                         (652,938)     (1,050,110)

Commitments, contingencies and subsequent events

                                                                                 ------------    ------------
         Total liabilities and stockholders' deficit                             $    582,238    $    144,649
                                                                                 ============    ============


                              See accompanying notes to financial statements.

                                                    3
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                                             PROFILE TECHNOLOGIES, INC.
                                              Statements of Operations
                                                    (Unaudited)


                                                            Three Months Ended               Nine Months Ended
                                                                 March 31,                       March 31,
                                                           2008            2007            2008            2007
                                                       ------------    ------------    ------------    ------------

Revenue                                                $       --      $       --      $     13,300    $       --
Cost of revenue                                                --              --           (18,834)           --
                                                       ------------    ------------    ------------    ------------
      Gross profit (loss)                                      --              --            (5,534)           --

Operating expenses:
      Research and development                               59,084          66,575         324,264         381,297
      Selling                                                14,118            --            14,118
      General and administrative                            159,022         124,081       1,038,698       1,101,005
      Contract related                                       48,743            --            48,743            --
                                                       ------------    ------------    ------------    ------------

      Total operating expenses                              280,967         190,656       1,425,823       1,482,302
                                                       ------------    ------------    ------------    ------------

      Loss from operations                                 (280,967)       (190,656)     (1,431,357)     (1,482,302)

Gain on sale of fixed assets                                  6,914            --             6,914            --
Interest expense                                             (3,115)        (10,051)        (23,173)        (16,129)
Interest income                                               3,989           1,812          13,024           1,812
                                                       ------------    ------------    ------------    ------------

      Net loss                                         $   (273,179)   $   (198,895)   $ (1,434,592)   $ (1,496,619)
                                                       ============    ============    ============    ============

Basic and diluted net loss per share                   $      (0.02)   $      (0.02)   $      (0.10)   $      (0.12)

Weighted average shares outstanding used to
      calculate basic and diluted net loss per share     14,316,123      12,623,945      13,856,985      12,543,005











                                  See accompanying notes to financial statements.

                                                         4
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                                                  PROFILE TECHNOLOGIES, INC.
                                                   Statements of Cash Flows
                                                         (Unaudited)

                                                                                                      Nine Months Ended
                                                                                                          March 31,
                                                                                                     2008           2007
                                                                                                 -----------    -----------

Cash flows from operating activities:
        Net loss                                                                                 $(1,434,592)   $(1,496,619)
        Adjustments to reconcile net loss to net cash used in operating activities:
               Depreciation and amortization                                                           1,966          4,272
               Gain on sale of fixed assets                                                           (6,914)          --
               Accreted discount on convertible debt                                                   2,595            560
               Amortization of convertible debt discount included in interest expense                 14,802          7,365
               Amortization of debt issuance costs                                                       120            480
               Equity issued for services to consultants                                              83,600        192,950
               Equity issued for services to employees and board of directors                        520,313        685,300
               Changes in operating assets and liabilities:
                    Deferred contract costs                                                             (263)          --
                    Prepaid expenses and other current assets                                        (19,259)          (772)
                    Other assets                                                                       1,551         (1,634)
                    Accounts payable                                                                   2,107        (23,532)
                    Deferred wages                                                                    20,100         24,609
                    Accrued professional fees                                                         16,000         15,000
                    Accrued interest                                                                    (187)          (588)
                                                                                                 -----------    -----------
                    Net cash used in operating activities                                           (798,061)      (592,609)

Cash flows from investing activities:
        Proceeds from sale of fixed assets                                                             6,914           --
                                                                                                 -----------    -----------
                    Net cash provided by investing activities                                          6,914           --

Cash flows from financing activities:
        Common stock issuance costs                                                                 (129,150)          --
        Proceeds from issuance of common stock                                                     1,291,501           --
        Proceeds from exercise of stock options and warrants                                          50,500         61,333
                                                                                                 -----------    -----------
                    Net cash provided by financing activities                                      1,212,851         61,333
                                                                                                 -----------    -----------

                    Increase (decrease) in cash                                                      421,704       (531,276)

Cash at beginning of period                                                                          119,585        852,468
                                                                                                 -----------    -----------

Cash at end of period                                                                            $   541,289    $   321,192
                                                                                                 ===========    ===========

Supplemental disclosure of cash flow information:
        Cash paid for interest                                                                   $     4,439    $     6,339
        Convertible debt and related accrued interest converted into 30,000 and 100,000 shares
               of common stock during the nine months ended March 31, 2008 and 2007              $    15,000    $    50,000



                                        See accompanying notes to financial statements.

                                                               5
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                            PROFILE TECHNOLOGIES, INC
                                 March 31, 2008
                    Notes to Financial Statements (Unaudited)

Note 1: Description of Business

     Profile Technologies, Inc. (the "Company"), was incorporated in 1986 and
commenced operations in fiscal year 1988. The Company is in the business of
providing pipeline inspection services to locate corrosion and other anomalies
that require assessment to verify pipeline integrity. The Company has developed
a patented, non-destructive and non-invasive, high speed scanning process that
uses electromagnetic waves to remotely inspect buried, cased and insulated
pipelines for corrosion and other anomalies. The Company's services are
available to owners and operators of natural gas and oil pipelines, power plants
and refineries, utilities, and other facilities with cased or insulated pipe.
The Company is actively marketing its inspection services for cased and
insulated pipelines. In conjunction with providing inspection services, the
Company continues research and development of the application of its patented
technology to inspect pipelines internally as well as those pipelines that are
directly buried.

Note 2: Liquidity

     The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. The Company incurred cumulative losses
of $16,096,562 through March 31, 2008, and had negative working capital of
$659,597 as of March 31, 2008. Additionally, the Company has expended a
significant amount of cash in developing its technology and patented processes.
These conditions raise substantial doubt about the Company's ability to continue
as a going concern. Management recognizes that in order to meet the Company's
capital requirements, and continue to operate, additional financing, including
seeking industry-partner investment through joint ventures or other possible
arrangements, will be necessary. The Company is evaluating alternative sources
of financing to improve its cash position and is undertaking efforts to raise
capital. If the Company is unable to raise additional capital or secure revenue
contracts and generate positive cash flow, it is unlikely that the Company will
be able to continue as a going concern. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

Note 3: Summary of Significant Accounting Policies

     Basis of Presentation

     The unaudited interim financial statements and related notes of the Company
have been prepared pursuant to the instructions to Form 10-QSB. Accordingly,
certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been omitted pursuant to such instructions.
The preparation of financial statements requires the Company to make estimates
and judgments that affect the reported amounts of assets, liabilities, revenues,
and expenses. On an on-going basis, the Company evaluates its estimates,
including contract revenue recognition and impairment of long-lived assets.
Actual results and outcomes may differ materially from these estimates and
assumptions.

     The financial statements and related notes should be read in conjunction
with the audited financial statements and notes thereto included in the
Company's annual report on Form 10-KSB for the year ended June 30, 2007. The
information furnished reflects, in the opinion of management, all adjustments,
consisting of only normal recurring items, necessary for fair presentation of
the results of the interim periods presented. Interim results are not
necessarily indicative of results for a full year.

     Cash and cash equivalents

     Cash and cash equivalents includes highly liquid investments with original
maturities of three months or less. On occasion, the Company has amounts
deposited with financial institutions in excess of federally insured limits.

                                       6
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     Fair Value of Financial Instruments

     The Company has the following financial instruments: cash, accounts
payable, notes payable to stockholders, and convertible debt. The carrying value
of these instruments, other than the convertible debt, approximates fair value
based on their liquidity. The fair value of the convertible debt was determined
as the excess of the proceeds over the fair value of the warrants.

     Deferred Financing Fees

     The Company records costs incurred related to debt financings as deferred
financing fees and amortizes, on a straight-line basis, the costs incurred over
the life of the related debt. The amortization is recognized as interest in the
financial statements. Upon conversion into equity or extinguishment of the
related debt, the Company recognizes any unamortized portion of the deferred
financing fees as interest expense.

     Deferred Contract Costs

     The Company defers costs that are incurred related to future contracts only
if the costs can be directly associated with a specific anticipated contract and
if their recoverability from that contract is probable. The Company evaluates
evidence of recoverability by reviewing signed contracts, written communication,
approved proposals and historical customer relationships in determining the
probability of obtaining a revenue generating contract. If there is uncertainty
surrounding the attainment of a contract, all expenses incurred related to the
contract are expensed as incurred. Upon execution of an anticipated contract,
deferred contract costs are expensed as cost of revenue using the percentage of
completion method of accounting. See "Contract Revenue Recognition" below.

     Contract Revenue Recognition

     The Company recognizes revenue from service contracts using the percentage
of completion method of accounting. Contract revenues earned are measured using
either the percentage of contract costs incurred to date to total estimated
contract costs or, when the contract is based on measurable units of completion,
revenue is based on the completion of such units. This method is used because
management considers total cost or measurable units of completion to be the best
available measure of progress on contracts. Because of the inherent
uncertainties in estimating costs, it is at least reasonably possible that the
estimates used may change in the near term.

     Anticipated losses on contracts, if any, are charged to earnings as soon as
such losses can be estimated. Changes in estimated profits on contracts are
recognized during the period in which the change in estimate is known.

     Cost of revenue includes contract costs incurred to date as well as any
idle time incurred by personnel scheduled to work on customer contracts.

     The Company records revenue from claims and change orders upon customer
approval of revisions to the contract. Contract costs include all direct
material and labor costs and those indirect costs related to contract
performance, such as indirect labor, supplies, tools and repairs, and
depreciation costs. Selling, general, and administrative costs are charged to
expense as incurred. Service contracts generally extend no more than six months.

     Research and Development

     Research and development costs are expensed when incurred. During the three
months ended March 31, 2008 and 2007, the Company incurred $59,084 and $66,575
on research and development activities. During the nine months ended March 31,
2008 and 2007, the Company incurred $324,264 and $381,297 on research and
development activities.

     Equipment

     Equipment is stated at cost and is depreciated using the straight-line
method over estimated useful lives of three to seven years. Contract related
assets are used for inspecting pipelines for corrosion. Contract related assets
are depreciated based on the number of pipelines that the Company anticipates
inspecting over the estimated useful life of the asset, not to exceed three
years.

                                       7
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     Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of

     The Company reviews long-lived assets, such as equipment and intangibles,
for impairment at least annually or whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison of the
carrying amount of an asset to estimated undiscounted future cash flows expected
to be generated by the asset. If the carrying amount of an asset exceeds its
estimated future cash flows, an impairment charge is recognized by the amount by
which the carrying amount of the asset exceeds the fair value of the asset.

     Valuation of Warrants and Options

     The Company estimates the value of warrants and option grants using a
Black-Scholes pricing model based on management assumptions regarding the
warrant and option lives, expected volatility, and risk free interest rates.

     Use of Estimates

     The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

     Recently Issued Accounting Standards Not Yet Adopted

     In September 2006, the FASB issued Statement No. 157, Fair Value
Measurements ("Statement No. 157"). Statement No. 157 prescribes a definition of
the term "fair value", establishes a framework for measuring fair value and
expands disclosure about fair value measurements. In February 2008, the FASB
issued FASB Staff Position ("FSP") FSP FAS 157-2, Effective Date of FASB
Statement No. 157, which defers the effective date of Statement No. 157 to
fiscal years beginning after November 15, 2008 and interim periods within those
fiscal years, for nonfinancial assets and nonfinancial liabilities that are not
recognized or disclosed at fair value on a recurring basis (at least annually).
The Company does not expect the application of Statement No. 157 to have a
material effect on the Financial Statements.

     In February 2007, the FASB issued FASB Statement No. 159, The Fair Value
Option for Financial Assets and Financial Liabilities ("Statement No. 159").
Statement No. 159 permits an instrument by instrument election to account for
selected financial assets and liabilities at fair value. Statement No. 159 is
effective for fiscal years beginning after November 15, 2007. The Company does
not expect the application of Statement No. 159 to have a material effect on the
Financial Statements.

     On December 21, 2007, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 110 ("SAB 110") to permit entities, under certain
circumstances, the continued use of the "simplified" method, in developing
estimates of expected term of "plain-vanilla" share options in accordance with
Statement No. 123R Share-Based Payment. SAB 110 amended SAB 107 to permit the
use of the "simplified" method beyond December 31, 2007. On July 1, 2007, the
Company revised its methodology for estimating the expected term of its
"plain-vanilla" stock options and implemented the simplified method, as
permitted by SAB 107. This change in estimate did not have a material effect on
the Company's Financial Statements.

     Vendor Concentration

     Consultant Scientist Fees

     The Company relies on the expertise of two consultant scientists to
facilitate the development and testing of the Company's hardware and software.
These scientists are also instrumental in compiling and interpreting the data
captured during the use of the hardware and software. The loss of the
specialized knowledge provided by the scientists could have an adverse effect on
the ability of the Company to successfully market its hardware and software.
During the three and nine months ended March 31, 2008, the Company incurred cash
fees payable to the scientists of $60,733 and $219,160. During the three and
nine months ended March 31, 2007, the Company incurred cash fees payable to the
scientists of $62,003 and $193,992.

                                       8
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     As partial compensation for services rendered, on November 16, 2007, the
Company granted the scientists stock options to purchase a total of 50,000
shares of common stock at an exercise price of $1.20 per share, expiring
November 15, 2012. The 50,000 stock options had a fair value at the date of
grant of $38,000, which is included in research and development expense in the
Company's Statements of Operations for the nine months ended March 31, 2008.

     As partial compensation for services rendered, on November 13, 2006, the
Company granted the scientists stock options to purchase a total of 100,000
shares of common stock at an exercise price of $0.86 per share, expiring
November 12, 2016. The 100,000 stock options had a fair value at the date of
grant of $77,000, which is included in research and development expense in the
Company's Statements of Operations for the nine months ended March 31, 2007.

     As partial compensation for services rendered, on July 13, 2006, the
Company granted one of the scientists a stock option to purchase 100,000 shares
of common stock at an exercise price of $1.05 per share, expiring July 12, 2011.
The 100,000 stock options had a fair value at the date of grant of $89,000,
which is included in research and development expenses in the Company's
Statements of Operations for the nine months ended March 31, 2007.

     Total cash and equity compensation expense incurred for settlement of
services rendered by the scientists totaled $60,733 and $257,160 for the three
and nine months ended March 31, 2008. Total cash and equity compensation expense
incurred for settlement of services rendered by the scientists totaled $62,003
and $359,992 for the three and nine months ended March 31, 2007.

     As of March 31, 2008, the Company owed the consultant scientists a total of
$86,546, which is included in accounts payable at March 31, 2008.

Note 4: Stock Based Compensation

     On January 1, 2006, the Company adopted the fair value recognition
provisions of SFAS No. 123R Share-Based Payment ("SFAS 123R"), Prior to January
1, 2006, the Company accounted for stock-based awards under the recognition and
measurement principles of APB Opinion No. 25, Accounting for Stock Issued to
Employees ("APB 25"), and related Interpretations, as permitted by SFAS 123. In
accordance with APB 25, no compensation expense was required to be recognized
for stock options granted that had an exercise price equal to or greater than
the fair market value of the underlying common stock on the date of grant.

     The Company adopted SFAS 123R using the modified-prospective application
method, which requires measurement of compensation cost for all stock-based
awards at fair value on the date of grant and recognition of compensation over
the requisite service period. The Company grants stock options that are either
fully vested upon grant or have a four-year vesting period (defined by SFAS 123R
as the requisite service period), and no performance or service conditions,
other than continued employment. Stock compensation cost related to options that
are fully vested upon grant is recognized immediately. Stock compensation cost
related to options that have a vesting period is amortized ratably over the
requisite service period.

     The fair value of stock options is based on the price of a share of the
Company's common stock on the date of grant. In determining fair value of stock
options, the Company uses the Black-Scholes option pricing model that employs
the following key weighted average assumptions:

                                                                  Three Months Ended      Nine Months Ended
                                                                       March 31,               March 31,
                                                                 --------------------   ---------------------
                                                                   2008       2007         2008       2007
                                                                 ---------  ---------   ---------  ----------

Risk-free interest rate                                              1.86%    *N/A          3.53%       4.67%
Volatility                                                         128.74%    *N/A        145.50%     172.81%
Expected dividend yield                                                 0%    *N/A             0%          0%
Expected life                                                    3.8 years    *N/A      4.5 years   4.6 years
Weighted average Black-Scholes value of options granted              $0.90    *N/A          $1.03       $0.81
     *N/A There were no grants during the three months ended March 31, 2007.

                                       9
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     The risk-free interest rate is based on the U.S. Treasury yield curve in
effect at the time of grant. The Company does not anticipate declaring dividends
in the foreseeable future. Volatility is calculated based on the historical
weekly closing stock prices for the same period as the expected life of the
option. As permitted by SAB 107, the Company uses the "simplified" method for
determining the expected term of its "plain vanilla" stock options. SFAS 123R
also requires that the Company recognize compensation expense for only the
portion of stock options that are expected to vest. Therefore, the Company
applies an estimated forfeiture rate that is derived from historical employee
termination data and adjusted for expected future employee turnover rates. To
date, the Company has not experienced any forfeitures. If the actual number of
forfeitures differs from those estimated by the Company, additional adjustments
to compensation expense may be required in future periods. The Company's stock
price volatility, option lives and expected forfeiture rates involve
management's best estimates at the time of such determination, all of which
impact the fair value of the option calculated under the Black-Scholes
methodology and, ultimately, the expense that will be recognized over the life
of the option.

     The following table sets forth the share-based compensation cost resulting
from stock option grants that was recorded in the Company's Statements of
Operations for the three and nine months ended March 31, 2008 and 2007:

                               Three Months Ended      Nine Months Ended
                                    March 31,               March 31,
                             ----------------------   -------------------
                               2008         2007        2008       2007
                             --------   -----------   --------   --------


General and administrative   $   --     $      --     $527,100   $365,750

Research and development        5,563          --       76,813    166,000
                             --------   -----------   --------   --------
     Total                   $  5,563   $      --     $603,913   $531,750
                             ========   ===========   ========   ========


     A summary of the Company's year-to-date stock option activity and related
information follows:

                                                                          Weighted
                                                          Weighted         Average
                                                          Average         Remaining     Aggregate
                                                          Exercise       Contractual    Intrinsic
                                          Options           Price            Term          Value
                                          ----------     -----------     -----------    ---------
Outstanding at June 30, 2007               3,180,000     $      1.14
     Grants                                  665,000            1.23
     Expirations                            (30,000)            8.50
                                          ----------
Outstanding at March 31, 2008              3,815,000     $      1.10       6.6 years    $  161,350
                                          ==========

Exercisable at March 31, 2008              3,715,000     $      1.10       6.7 years    $  161,350
                                          ==========

Available for grant at March 31, 2008      2,100,000
                                          ==========


     The aggregate intrinsic value of the table above represents the total
pretax intrinsic value for all "in-the-money" options (i.e., the difference
between the Company's closing stock price on the last trading day of its third
quarter of 2008 and the exercise price, multiplied by the number of shares) that
would have been received by the option holders had all option holders exercised
their options on March 31, 2008. This amount changes based on the fair market
value of the Company's stock.

                                       10
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     As of March 31, 2008, the Company had approximately $78,000 of total
unrecognized compensation cost related to unvested stock options, which is
expected to be recognized over a weighted average period of 3.52 years.

Note 5: Net Loss Per Share

     Basic net loss per share is computed by dividing the net loss by the
weighted average number of common shares outstanding during the period. Diluted
net loss per share is computed by dividing the net loss by the weighted average
number of common and dilutive common equivalent shares outstanding during the
period. As the Company had a net loss attributable to common stockholders in
each of the periods presented, basic and diluted net loss per share are the
same.

     Excluded from the computation of diluted net loss per share for the three
and nine months ended March 31, 2008, because their effect would be
antidilutive, are stock options and warrants to acquire 11,966,028 shares of
common stock with a weighted-average exercise price of $0.86 per share. Also
excluded from the computation of diluted net loss per share for the three and
nine months ended March 31, 2008 are 220,000 shares of common stock that may be
issued if investors exercise their conversion right under the Debentures related
to the 2003 Offering as discussed in Note 7 "Convertible Debt" because their
effect would be antidilutive.

     Excluded from the computation of diluted net loss per share for the three
and nine months ended December March 31, 2007, because their effect would be
antidilutive, are stock options and warrants to acquire 12,426,417 shares of
common stock with a weighted-average exercise price of $0.99 per share. Also
excluded from the computation of diluted net loss per share for the three and
nine months ended March 31, 2007 are 250,000 shares of common stock that may be
issued if investors exercise their conversion right under the Debentures related
to the 2003 Offering as discussed in Note 7 "Convertible Debt" because their
effect would be antidilutive.

     For the three and nine months ended March 31, 2008 and 2007, additional
potential dilutive securities that were excluded from the diluted net loss per
share computation are the exchange rights discussed in Note 8 "Deferred Wages
and Accrued Professional Fees" that could result in options to acquire up to
223,000 shares of common stock with an exercise price of $1.00 per share at
March 31, 2008 and 2007.

     For purposes of earnings per share computations, shares of common stock
that are issuable at the end of a reporting period are included as outstanding.

Note 6: Related Parties

     Notes Payable - Stockholders

     In April 2002, the Company issued a non-interest bearing bridge note
payable to an officer of the Company in the amount of $7,500. The note is
payable in full when the Company determines it has sufficient working capital to
do so. On September 29, 2002, the officer who was owed the $7,500 died.

Note 7: Convertible Debt

     On June 19, 2003, the Board of Directors approved the offering (the "2003
Offering") of $1,000,000 in convertible debentures (the "Debentures"). The
Debentures are convertible into that number of shares of the Company's common
stock equal to the amount of the converted indebtedness divided by $0.50 per
share. The Debentures bear interest at a rate of 5% per annum, payable
quarterly. Delinquent interest payments bear interest at a rate of 12% per
annum. The Company is required to redeem each Debenture on the 5th anniversary
of the date of the Debenture. The Company may, in its discretion, redeem any
Debenture at any time prior to the mandatory redemption date of the Debenture by
providing no less than 60 days' prior written notice to the holder of the
Debenture. Certain events of default will result in the Debentures being
redeemable by the Company upon demand of the holder.

     Upon the purchase of, and for each $0.50 of the Debenture's principal
amount, the Company issued to each investor a warrant (the "Warrant") to
purchase one (1) share of the Company's common stock at an exercise price of
$0.75 per share. The Warrants are exercisable at any time prior to the 5th
anniversary date of the redemption of the Debenture.

                                       11
<PAGE>

     Warrants issued in connection with the 2003 Offering were recorded based on
their relative fair value as compared to the fair value of the debt at issuance.
The relative fair value of the warrants was recorded as paid-in capital. The
intrinsic value of the Debentures results in a beneficial conversion feature,
recorded as a discount against the Debentures, which reduces the book value of
the convertible debt to not less than zero. The Company amortizes the discount
using the effective interest method over the five-year life of the Debentures.

     During the quarter ended March 31, 2005, the Board of Directors terminated
the 2003 Offering. As of the closing date of the 2003 Offering, the Company had
raised $503,000 from the 2003 Offering.

     During the nine months ended March 31, 2008, one investor exercised his
conversion right and converted his Debenture in the principal amount of $15,000,
pursuant to the terms of the 2003 Offering. Accordingly, the carrying value of
the convertible debt was reclassified as equity upon conversion. Since the
convertible debt instruments include a beneficial conversion feature, the
remaining unamortized discount of $14,802 at the conversion date was recognized
as interest expense during the nine months ended March 31, 2008.

     During the three and nine months ended March 31, 2007, two and three
investors, respectively, exercised their conversion right and converted
Debentures in the combined principal amounts of $25,000 and $50,000,
respectively, pursuant to the terms of the 2003 Offering. Accordingly, the
carrying value of the convertible debt was reclassified as equity upon
conversion. Of the principal amounts of $25,000 and $50,000 converted during the
three and nine months ended March 31, 2007, $7,500 was recorded as long-term
convertible debt on the balance sheet at the time of conversion. Since the
convertible debt instrument included a beneficial conversion feature, the
remaining unamortized discount of $7,365 at the conversion date was recognized
as interest expense during the three and nine months ended March 31, 2007. The
discount related to the remaining principal amounts of $17,500 and $42,500 for
the three and nine months ended March 31, 2007 was previously expensed as
interest expense during the quarter ended June 30, 2004 when the Company was
deemed to be in default with respect to the interest payment terms.

     As of March 31, 2008, accrued interest on the Debentures was $1,371. The
Company recorded interest expense related to the accretion of the discount on
the Debentures and amortization of the convertible debt discount as a result of
the conversions discussed above of $1,294 and $17,397 for the three and nine
months ended March 31, 2008. The Company recorded interest expense related to
the accretion of the discount on the Debentures of $7,604 and $7,925 for the
three and nine months ended March 31, 2007. As of March 31, 2008 the carrying
value of the long-term portion of the Debentures was $3,396, net of unamortized
debt discount of $41,604.

Note 8: Deferred Wages and Accrued Professional Fees

     To reduce cash outflows, certain of the Company's employees, officers,
consultants, and directors have agreed to defer a portion of their salaries and
professional fees until the Company has sufficient resources to pay the amounts
owed or to exchange such amounts into options as described below. At March 31,
2008, the Company has accrued $985,933 related to the deferred payment of
salaries and professional fees of which $759,783 is included under deferred
wages and $226,150 in accrued professional fees. On March 18, 2002, the Board
approved a conversion right on all deferred wages and accrued professional fees
deferred as of March 18, 2002 (the "Conversion Right"). Pursuant to the
Conversion Right, employees, officers, consultants, and directors may elect to
convert $1.00 of fees owed to them as of March 18, 2002 for an option to
purchase two shares of the Company's common stock, at an exercise price of $1.00
per share for a term of five years. Of the total $985,933 deferred salaries and
professional fees, the amount subject to the Conversion Right is $111,500,
resulting in the potential issuance of 223,000 options under the terms mentioned
above. No conversions have occurred to date. At March 18, 2002, there was no
intrinsic value associated with these exchange rights. As such, no additional
compensation cost was recorded.

                                       12
<PAGE>

Note 9: Common Stock

     On June 21, 2007, the Company entered into a private placement offering
(the "2007 Offering") of 1,300,000 shares of common stock at $0.90 per share to
accredited investors. On October 4, 2007, the Board approved an increase in the
offering to 2,000,000 shares of common stock for a total offering price of
$1,800,000. On March 14, 2008, the Board determined that it was in the best
interests of the Company to extend the termination date of the 2007 Offering and
voted to extend the expiration date to May 1, 2008.

     During the three months ended March 31, 2008, the Company raised $120,000
under the terms of the 2007 Offering. Accordingly, the Company issued 133,333
shares of common stock.

     The Company engaged a brokerage firm to help in the fund raising efforts of
the 2007 Offering. Pursuant to the terms of the agreement with the brokerage
firm, the Company pays the brokerage firm a ten percent cash commission on all
funds that the brokerage firm helps raise. Accordingly, during the three months
ended March 31, 2008, the Company incurred cash fees payable to the brokerage
firm of $12,000. As of March 31, 2008, the Company was current with respect to
the amount owed the brokerage firm.

Note 10: Stock Options and Warrants

     Stock Options

     Stock Option Grants

     On November 13, 2007, the Board approved the issuance of stock options,
exercisable for a total of 550,000 shares of common stock pursuant to the 1999
Stock Option Plan to certain directors, officers, employees and four consultants
of the Company. The grant date of the stock options was November 16, 2007 and
they were fully vested upon grant. The stock options granted to directors,
officers, and employees are exercisable until November 15, 2017. The stock
options granted to the consultants are exercisable until November 15, 2012. The
exercise price of the stock options granted to affiliates owning or controlling
more than ten percent of the Company's common stock was $1.32. The exercise
price of the stock options granted to non-affiliates was $1.20. On November 16,
2007, the date of grant, the Company recognized $65,750 as research and
development expense related to the fair value of 75,000 of the stock options and
$506,250 as general and administrative expense related to the fair value of
475,000 of the stock options. The fair value of the stock option grants that
expire on November 15, 2012 was estimated using the Black-Scholes option pricing
model with the following weighted average assumptions: expected volatility of
111%, risk-free interest rate of 3.30%, expected lives of 2.5 years, and a 0%
dividend yield. The fair value of the stock option grants that expire on
November 15, 2017 was estimated using the Black-Scholes option pricing model
with the following weighted average assumptions: expected volatility of 156%,
risk-free interest rate of 3.68%, expected lives of five years, and a 0%
dividend yield.

     On August 20, 2007, the Board elected Robert C. Geib as the Company's Chief
Operating Officer, effective September 4, 2007. Mr. Geib's annual base salary
was set by the Board at $115,000. In addition, the Board agreed to grant Mr.
Geib, on September 4, 2007 an option to purchase 50,000 shares of the Company's
common stock, under the Company's 1999 Stock Option Plan, and on March 4, 2008
to grant him an additional option to purchase 50,000 shares of common stock. The
exercise price of each grant shall be equal to the closing price of the common
stock on the date of grant, or, if the Company's stock is not traded on the date
of grant, the first day of active trading following each respective grant date.
Each of the two option grants vest 25% on the first anniversary of the grant
date, with the remainder vesting at 25% on each of the three subsequent
anniversaries of the grant date until the options are fully vested. The exercise
prices of the stock options granted on March 4, 2008 and September 4, 2007 were
$1.13 and $1.05. The fair value of the option grant on March 4, 2008 was $45,000
at the time of grant. The fair value was estimated using the Black-Scholes
option pricing model with the following weighted average assumptions: expected
volatility of 129%, risk-free interest rate of 1.86%, expected life of 3.75
years, and a 0% dividend yield. The fair value of the option grant on September
4, 2007 was $44,000 at the time of grant. The fair value was estimated using the
Black-Scholes option pricing model with the following weighted average
assumptions (the original assumptions used were revised during the quarter ended
December 31, 2007 to be consistent with second quarter issuances: expected
volatility of 140% (originally 81%), risk-free interest rate of 4.26%, expected
life of 3.75 years (originally estimated at five years), and a 0% dividend
yield. The Company recognized amortization expense of $5,563 and $11,063, during

                                       13
<PAGE>

the three and nine months ended March 31, 2008, as research and development
expense related to these stock option grants. The effects of revising the
weighted average assumptions for the Black-Scholes valuation for the September
4, 2007 was not material to the Company's financial statements.

     On August 21, 2007, the Board nominated Richard L. Palmer to fill the
vacancy on the Board created as a result of the death of Mr. William Krivsky in
December 2006. Mr. Palmer was subsequently elected by the Stockholders on
September 16, 2007 at the Annual Meeting of Stockholders. On September 12, 2007,
the Board granted Mr. Palmer an option to purchase 15,000 shares of the
Company's common stock, under the Company's 1999 Stock Option Plan. The exercise
price of the stock option was $1.50, the closing price of the common stock on
the date of grant. The stock option was fully vested upon grant and expires on
September 11, 2017. In addition, Mr. Palmer receives $1,000 per month as a
compensation for his services as a Board member. The Company recognized $20,850,
at the time of grant, as board fee expense for the fair value of the option
grant. The fair value of the option grant was estimated using the Black-Scholes
option pricing model with the following weighted average assumptions (the
original assumptions used were revised during the quarter ended December 31,
2007 to be consistent with second quarter issuances: expected volatility of 155%
(originally 80%), risk-free interest rate of 4.11%, expected life of five years,
and a 0% dividend yield. The effects of revising the weighted average
assumptions for the Black-Scholes valuation was not material to the Company's
financial statements.

     On November 13, 2006, the Board approved the issuance of stock options
exercisable for a total of 575,000 shares of common stock pursuant to the 1999
Stock Option Plan to certain directors, officers, employees and four consultants
of the Company. The stock options were fully vested upon grant and are
exercisable until November 12, 2016. The exercise price of the stock options
granted to affiliates owning or controlling more than ten percent of the
Company's common stock was $0.95, which is ten percent over the closing bid
price of the Company's common stock as quoted on the Over the Counter Bulletin
Board on the grant date, November 13, 2006. The exercise price of the stock
options granted to non-affiliates was $0.86. On November 13, 2006, the date of
grant, the Company recognized $77,000 as research and development expense
related to the fair value of 100,000 of the stock options and $365,750 as
general and administrative expense related to the fair value of 475,000 of the
stock options. The fair value of the stock option grants was estimated using the
Black-Scholes option pricing model with the following weighted average
assumptions: expected volatility of 142%, risk-free interest rate of 4.60%,
expected lives of five years, and a 0% dividend yield.

     On July 13, 2006, the Board approved an option grant to a consultant to
purchase 100,000 shares of the Company's common stock at an exercise price of
$1.05 per share. The option was granted in consideration for work the consultant
is performing for the Company and was not granted pursuant to the 1999 Stock
Option Plan. The option was fully vested upon grant and is exercisable until
July 13, 2011. The Company recognized $89,000, at the time of grant, as research
and development expense for the fair value of the option grant. The fair value
of the option grant was estimated using the Black-Scholes option pricing model
with the following weighted average assumptions: expected volatility of 160%,
risk-free interest rate of 5.04%, expected life of five years, and a 0% dividend
yield.

     Warrants

     Warrant Grants

     On November 13, 2006, the Board approved the issuance of warrants
exercisable for a total of 450,000 shares of common stock to certain directors
and officers of the Company. The warrants are fully vested upon grant and are
exercisable until November 12, 2016. The exercise price of the warrants was
$0.86, which was the closing bid price of the Company's common stock as quoted
on the Over the Counter Bulletin Board on the grant date, November 13, 2006.
During the three months ended December 31, 2006, the Company recognized $346,500
as general and administrative expense related to the fair value of the warrants.
The fair value of the warrant grants was estimated using the Black-Scholes
option pricing model with the following weighted average assumptions: expected
volatility of 142%, risk-free interest rate of 4.60%, expected lives of five
years, and a 0% dividend yield.

Note 11: Subsequent Events

     On April 29, 2008, the Board voted to extend the expiration date of the
2007 Offering to June 30, 2008. Subsequent to March 31, 2008, the Company has
raised $5,000 under the terms of the 2007 Offering. Accordingly, the Company
issued 5,555 shares of common stock.

                                       14
<PAGE>

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

Plan of Operation

     In recent years, the Company has focused on the buried pipe market in the
United States. Through its operations, it has identified key changes to its EMW
Inspection Process and has redesigned and improved the equipment hardware. It
has also performed lab and field testing of this new hardware and has developed
computer models to better predict and interpret field conditions.

     On March 27, 2007, the Company was issued a patent by the United States
Patent and Trademark Office. This patent provides significant patent protection
for the improvements made to the Company's EMW technology over the last three
years. These improvements have now been incorporated into new hardware and
software that have been deployed to the field. To date, two field-ready test
sets have been built to utilize the latest improvements.

     During the next twelve months, the Company intends to focus on obtaining
revenue generating contracts for the inspection of cased and insulated
pipelines. Compared to other inspection methods, the Company believes that its
EMW technology possesses unique capabilities, is flexible in its application and
provides a cost efficient solution to obtaining valuable information about the
condition of the pipeline that is otherwise difficult to obtain. During fiscal
year 2008, the Company has continued its marketing efforts in the refining,
pipeline and utility insulated and cased pipe inspection markets. With respect
to the pipeline and utility market segments, efforts have been particularly
focused on "high consequence areas" as that term is defined in the federal
Department of Transportation's regulations. However, there can be no assurance
that the Company's marketing efforts for the EMW technology in these market
segments will be successful. Failure to obtain revenue generating contracts
could have a serious and material effect on the business and financial condition
of the Company.

     While the Company has, in the past, inspected only for external corrosion
and anomalies, it has filed a patent application covering the adaptation of its
technology for internal pipeline inspections. The Company is in the early stages
of analyzing the market demand and defining the development requirements for the
internal pipeline inspection technology. The Company believes that the
similarity of the internal inspection technology to its insulated and cased
pipeline inspection technology will allow for a shorter development period than
the development of the insulated and cased pipeline inspection technology.
However, significant design, fabrication and testing must be done before the
Company will be able to offer internal pipeline inspection services.

     Capital will be expended to support operations until the Company can
generate sufficient cash flows from operations. In order for the Company to
generate cash flows from operations, the Company must obtain additional revenue
generating contracts. Management is currently directing the Company's activities
towards obtaining service contracts, which, if obtained, will necessitate the
Company attracting, hiring, training and outfitting qualified technicians. If
additional service contracts are obtained, it will also necessitate additional
field test equipment purchases in order to provide the services. The Company
expects that if revenue contracts are secured, working capital requirements will
increase. The Company will incur additional expenses as it hires and trains
field crews and support personnel related to the successful receipt of
commercial contracts. Additionally, the Company anticipates that cash will be
used to meet capital expenditure requirements necessary to develop
infrastructure to support future growth.

     The Company has expended a significant amount of cash in developing its
technology and patented processes. These conditions raise substantial doubt
about the Company's ability to continue as a going concern. The Company has
raised $1,296,501 under its current effect private placement memorandum (see
Note 9, "Common Stock"). However, management recognizes that in order to meet
the Company's capital requirements and continue to operate, it may require
additional financing, perhaps through industry-partner investment or through
joint ventures or other possible arrangements within the next twelve months. The
Company is evaluating alternative sources of financing to improve its cash
position. If the Company is unable to raise additional capital or secure revenue
contracts and generate positive cash flow, it is unlikely that the Company will
be able to continue as a going concern.

                                       15
<PAGE>

Off Balance Sheet Arrangements

     The Company has no off-balance sheet arrangements.

FORWARD-LOOKING STATEMENTS

     This Quarterly Report on Form 10-QSB contains "forward-looking statements."
These forward-looking statements can generally be identified as such because the
context of the statement will include words such as the Company "believes,"
"anticipates," "expects" or words of similar import. Similarly, statements that
describe the Company's projected future results, future plans, objectives or
goals or future conditions or events are also forward looking statements. Actual
results are inherently difficult to predict. Any such forward-looking statements
are subject to the risks and uncertainties that could cause actual results of
operations, financial condition, acquisitions, financing transactions,
operations, expenditures, expansion and other events to differ materially from
those expressed or implied in such forward-looking statements. Any such
forward-looking statements would be subject to a number of assumptions
regarding, among other things, future economic, competitive and market
conditions generally. Such assumptions would be based on facts and conditions as
they exist at the time such statements are made as well as predictions as to
future facts and conditions, the accurate prediction of which may be difficult
and involve the assessment of events beyond the Company's control.

     The forward-looking statements contained in this report are based on
current expectations that involve a number of risks and uncertainties. Such
forward-looking statements are based on assumptions that the Company will obtain
or have access to adequate financing to continue its operations, that the
Company will market and provide products and services on a timely basis, that
there will be no material adverse competitive or technological change with
respect to the Company's business, demand for the Company's products and
services will significantly increase, that the Company will be able to secure
additional fee-for-services or licensing contracts, that the Company's executive
officers will remain employed as such by the Company, that the Company's
forecast accurately anticipate market demand, and that there will be no material
adverse change in the Company's operations, business or governmental regulation
affecting the Company or its customers. The foregoing assumptions are based on
judgments with respect to, among other things, future economic, competitive and
market conditions and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond the Company's
control. Although the Company believes the expectations reflected in the
forward-looking statements are reasonable, the Company cannot guarantee future
results, levels of activity, performance or achievements.

Item 3. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

     The term "disclosure controls and procedures" is defined in Rules 13a-15(e)
     and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the
     "Exchange Act"). This term refers to the controls and procedures of a
     company that are designed to ensure that information required to be
     disclosed by a company in the reports that it files under the Exchange Act
     is recorded, processed, summarized, and reported within the required time
     periods. The Company's Chief Executive Officer and Chief Financial Officer
     has evaluated the effectiveness of the Company's disclosure controls and
     procedures as of the end of the period covered by this report. He has
     concluded that, as of that date, the Company's disclosure controls and
     procedures were effective at ensuring that required information will be
     disclosed on a timely basis in the Company's reports filed under the
     Exchange Act.

                                       16
<PAGE>

(b) Changes in Internal Control over Financial Reporting

     No change in the Company's internal control over financial reporting (as
     defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred
     during the period covered by this report that has materially affected, or
     is reasonably likely to materially affect, the Company's internal control
     over financial reporting.

                          PART II -- OTHER INFORMATION

Item 1. Legal Proceedings.

     The Company is not aware of any legal proceedings contemplated by any
governmental authority or any other party involving the Company or its
properties. As of the date of this report, no director, officer or affiliate is
a party adverse to the Company in any legal proceeding or has an adverse
interest to the Company in any legal proceedings. The Company is not aware of
any other legal proceedings pending or that have been threatened against the
Company or its properties.

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

     Common Stock

     On June 21, 2007, the Company entered into a private placement offering
(the "2007 Offering") of 1,300,000 shares of common stock at $0.90 per share to
accredited investors. On October 4, 2007, the Board approved an increase in the
offering to 2,000,000 shares of common stock for a total offering price of
$1,800,000.

     During the three months ended March 31, 2008, the Company raised $120,000
under the terms of the 2007 Offering. Accordingly, the Company issued 133,333
shares of common stock. The issuance of the common stock is exempt from
registration pursuant to Section 4(2) of the Securities Act and the stock
certificates contained an appropriate legend stating that such securities have
not been registered under the Securities Act and may not be offered or sold
absent registration or an exemption therefrom.

     Stock Options

     Stock Option Grants

     On March 4, 2008, pursuant to an employment agreement, the Board granted
Robert C. Geib, the Company's Chief Operating Officer, an option to purchase
50,000 shares of the Company's common stock, under the Company's 1999 Stock
Option Plan. The exercise price was $1.13, the closing price of the common stock
on the first day of active trading following the grant date. The stock option
vests 25% on the first anniversary of the grant date, with the remainder vesting
at 25% on each of the three subsequent anniversaries of the grant date until the
option is fully vested. The fair value of the stock option grant on March 4,
2008 was $45,000. The fair value was estimated using the Black-Scholes option
pricing model with the following weighted average assumptions: expected
volatility of 129%, risk-free interest rate of 1.86%, expected life of 3.75
years, and a 0% dividend yield. The common stock underlying the stock option is
exempt from registration pursuant to Section 4(2) of the Securities Act and the
stock option certificate contained an appropriate legend stating that such
securities have not been registered under the Securities Act and may not be
offered or sold absent registration or an exemption therefrom.

Item 3. Defaults Upon Senior Securities.

     None.




                                       17
<PAGE>

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

     None.

Item 5. Other Information.

     None.

Item 6. Exhibits.

     The following exhibits are filed with or incorporated by reference into
this report:

     Exhibit No.    Description of Exhibit
     -----------    ----------------------

     Exhibit 3.1    Articles of Incorporation (incorporated by reference to
                    Exhibit 3.1 to the Company's Registration Statement on Form
                    SB-2 filed with the Commission on May 10, 1996).

     Exhibit 3.2    Bylaws of the Company (incorporated by reference to Exhibit
                    3.3 to the Company's Registration Statement on Form SB-2
                    filed with the Commission on May 10, 1996).

     Exhibit 3.3    Amendment to Certificate of Incorporation (incorporated by
                    reference to Exhibit A to the Company's Definitive Proxy
                    Statement filed with the Commission on October 28, 2002).

     Exhibit 3.4    Amendment to Certificate of Incorporation (incorporated by
                    reference to Appendix A to the Company's Preliminary Proxy
                    Statement filed with the Commission on September 13, 2006).

     Exhibit 10.1   Royalty Agreement (incorporated by reference to Exhibit 10.1
                    to the Company's Registration Statement on Form SB-2 filed
                    with the Commission on May 10, 1996).

     Exhibit 10.2   Assignment of Patent Rights (incorporated by reference to
                    Exhibit 10.2 to the Company's Registration Statement on Form
                    SB-2 filed with the Commission on May 10, 1996).

     Exhibit 10.3   1999 Stock Option Plan (incorporated by reference to Exhibit
                    10.9 to the Company's Annual Report on Form 10-KSB filed
                    with the Commission on October 12, 2004).

     Exhibit 10.4   First Amendment to the 1999 Stock Option Plan (incorporated
                    by reference to Appendix B to the Company's Preliminary
                    Proxy Statement filed with the Commission on September 13,
                    2006).

     Exhibit 10.5   Amendment to Lease dated February 8, 2008 by and between the
                    Company and Long Island Property Management LP. *

     Exhibit 10.6   Consulting Agreement dated April 11, 2007, by and between
                    the Company and R.F. Lafferty. (incorporated by reference to
                    Exhibit 10.9 to the Company's Quarterly Report on Form
                    10-QSB filed with the Commission on May 9, 2007).

     Exhibit 31.1   Rule 13a-14(a)/15d-14(a) Certification of Henry E. Gemino,
                    as Chief Executive Officer and Chief Financial Officer of
                    the Company. *

     Exhibit 32.1   Certification under Section 906 of the Sarbanes-Oxley Act of
                    2002 by Henry E. Gemino, as Chief Executive Officer and
                    Chief Financial Officer of the Company. *

----------
*Filed herewith.

                                       18
<PAGE>



                                   SIGNATURES


     In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                           PROFILE TECHNOLOGIES, INC.
                                           --------------------------
                                           (Registrant)


Date: May 15, 2008                         /s/ Henry E. Gemino
                                           ----------------------------
                                           Henry E. Gemino
                                           Chief Executive Officer and
                                           Chief Financial Officer











                                       19
<PAGE>

                                  EXHIBIT INDEX


     Exhibit No.    Description of Exhibit
     -----------    ----------------------

     Exhibit 3.1    Articles of Incorporation (incorporated by reference to
                    Exhibit 3.1 to the Company's Registration Statement on Form
                    SB-2 filed with the Commission on May 10, 1996).

     Exhibit 3.2    Bylaws of the Company (incorporated by reference to Exhibit
                    3.3 to the Company's Registration Statement on Form SB-2
                    filed with the Commission on May 10, 1996).

     Exhibit 3.3    Amendment to Certificate of Incorporation (incorporated by
                    reference to Exhibit A to the Company's Definitive Proxy
                    Statement filed with the Commission on October 28, 2002).

     Exhibit 3.4    Amendment to Certificate of Incorporation (incorporated by
                    reference to Appendix A to the Company's Preliminary Proxy
                    Statement filed with the Commission on September 13, 2006).

     Exhibit 10.1   Royalty Agreement (incorporated by reference to Exhibit 10.1
                    to the Company's Registration Statement on Form SB-2 filed
                    with the Commission on May 10, 1996).

     Exhibit 10.2   Assignment of Patent Rights (incorporated by reference to
                    Exhibit 10.2 to the Company's Registration Statement on Form
                    SB-2 filed with the Commission on May 10, 1996).

     Exhibit 10.3   1999 Stock Option Plan (incorporated by reference to Exhibit
                    10.9 to the Company's Annual Report on Form 10-KSB filed
                    with the Commission on October 12, 2004).

     Exhibit 10.4   First Amendment to the 1999 Stock Option Plan (incorporated
                    by reference to Appendix B to the Company's Preliminary
                    Proxy Statement filed with the Commission on September 13,
                    2006).

     Exhibit 10.5   Amendment to Lease dated February 8, 2008 by and between the
                    Company and Long Island Property Management LP. *

     Exhibit 10.6   Consulting Agreement dated April 11, 2007, by and between
                    the Company and R.F. Lafferty. (incorporated by reference to
                    Exhibit 10.9 to the Company's Quarterly Report on Form
                    10-QSB filed with the Commission on May 9, 2007).

     Exhibit 31.1   Rule 13a-14(a)/15d-14(a) Certification of Henry E. Gemino,
                    as Chief Executive Officer and Chief Financial Officer of
                    the Company. *

     Exhibit 32.1   Certification under Section 906 of the Sarbanes-Oxley Act of
                    2002 by Henry E. Gemino, as Chief Executive Officer and
                    Chief Financial Officer of the Company. *

----------
*Filed herewith.