SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C.  20549


____________________




FORM
10-Q




(Mark
One)





x
              QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
quarterly period ended September 30, 2008





o
            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:  000-30156


____________________





ENTHEOS
TECHNOLOGIES, INC. AND SUBSIDIARIES


(Exact
name of registrant as specified in its charter)





Nevada
                98-0170247(State
      or other jurisdiction of incorporation)
                (I.R.S.
      Employer Identification No.)Suite
      1000-888 3rd Street S/W Calgary, Alberta
                T2P
      5C5(Address
      of principal executive offices)
                (Zip
      Code)








403-444-6418
 (Registrant’s
telephone number, including area code)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by




Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 T   No
o.




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.





Large
      accelerated filer  o
              Accelerated
      filer oNon-accelerated
      filer    o
      (Do not check if a smaller reporting company)
              Smaller
      reporting company T







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




Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date: 63,075,122 shares of Common Stock, par
value $0.00001, were outstanding on November 13, 2008.













TABLEOF CONTENTS








ENTHEOS
TECHNOLOGIES, INC.


FORM
10-Q, QUARTER ENDED SEPTEMBER 30, 2008








PART
      I    FINANCIAL INFORMATIONItem
      1.
                  Financial StatementsInterim Unaudited Consolidated Balance
    Sheets
                  3Interim Unaudited Consolidated Statements of
      Operations
                  4Interim Unaudited Consolidated Statement of Stockholders’
      Equity
                  5Interim Unaudited Consolidated Statements of Cash
      Flows
                  6Notes to Interim Consolidated Financial
      Statements
                  7Item
      2.
                  Management's Discussion and Analysis of Financial Condition and
      Results of Operations
                  12Item
      4.
                  Controls and Procedures
                  14PART
      II   OTHER INFORMATIONItem
      1.
                  Legal Proceedings
                  15Item
      2.
                  Unregistered Sales of Equity Securities and Use of
      Proceeds
                  15Item
      3.
                  Defaults Upon Senior Securities
                  15Item
      4.
                  Submission of Matters to a Vote of Security
      Holders
                  15Item
      5.
                  Other Information
                  15Item
      6.
                  Exhibits
                  15Signatures
                  16




Table of Contents




ENTHEOSTECHNOLOGIES, INC. AND SUBSIDIARIESCONSOLIDATED
      BALANCE SHEETSSeptember
      30, 2008 and December 31, 2007(Unaudited)September
      30,
                      
                      
                      December
      31,(Expressed
      in U. S. Dollars)
                      
                      2008
                      
                      
                      2007ASSETSCurrent
      assetsCash
                      
                      $
                      2,859,798
                      
                      
                      $
                      46,306Prepaid
      expenses
                      
                      
                      720
                      
                      
                      
                      -Total
      current assets
                      
                      
                      2,860,518
                      
                      
                      
                      46,306Oil
      and gas properties - net, proven wells (Note 4)
                      
                      
                      279,565
                      
                      
                      
                      -Total
      assets
                      
                      $
                      3,140,083
                      
                      
                      $
                      46,306LIABILITIESCurrent
      liabilitiesAccounts
      payable and accrued liabilities
                      
                      $
                      9,643
                      
                      
                      $
                      1,300Accounts
      payable - related parties (Note 5)
                      
                      
                      -
                      
                      
                      
                      23,812Total
      liabilities
                      
                      
                      9,643
                      
                      
                      
                      25,112STOCKHOLDERS'
      EQUITYStockholders'
      EquityPreferred
      stock:$0.0001 par value: Authorized: 10,000,000 shares Issued and
      outstanding: nil
                      
                      
                      -
                      
                      
                      
                      -Common
      stock: $0.00001 par value; Authorized: 200,000,000 shares Issued and
      outstanding:  63,075,122 shares (2007:
    56,625,122)
                      
                      
                      631
                      
                      
                      
                      566Additional
      paid-in capital
                      
                      
                      7,091,028
                      
                      
                      
                      3,838,516Accumulated
      deficit
                      
                      
                      (3,961,219
                      )
                      
                      
                      (3,817,888
                      )Total
      stockholders' equity
                      
                      
                      3,130,440
                      
                      
                      
                      21,194Total
      liabilities and stockholders' equity
                      
                      $
                      3,140,083
                      
                      
                      $
                      46,306




(The
accompanying notes are an integral part of these consolidated financial
statements)




3
 Table of Contents




ENTHEOSTECHNOLOGIES, INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF OPERATIONSfor
      the three and nine months ended September 30, 2008 and
2007(Unaudited)Three
      months ended September 30,
                              
                              
                              Nine
      months ended September 30,(Expressed
      in U. S. Dollars)
                              
                              2008
                              
                              
                              2007
                              
                              
                              2008
                              
                              
                              2007Revenue
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -ExpensesImpairment
      of oil and natural gas properties
                              
                              
                              53,800
                              
                              
                              
                              -
                              
                              
                              
                              53,800
                              
                              
                              
                              -Management
      and Directors fees - related party (Note 5)
                              
                              
                              12,266
                              
                              
                              
                              -
                              
                              
                              
                              13,766
                              
                              
                              
                              -Consulting
      fee
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              4,250
                              
                              
                              
                              -Professional
      fees - accounting and legal
                              
                              
                              30,726
                              
                              
                              
                              1,014
                              
                              
                              
                              48,418
                              
                              
                              
                              6,395Rent
                              
                              
                              1,832
                              
                              
                              
                              1,983
                              
                              
                              
                              6,029
                              
                              
                              
                              5,670General
      and administrative
                              
                              
                              3,939
                              
                              
                              
                              302
                              
                              
                              
                              7,537
                              
                              
                              
                              5,364Office
      supplies
                              
                              
                              159
                              
                              
                              
                              1,703
                              
                              
                              
                              525
                              
                              
                              
                              2,910Investor
      relations
                              
                              
                              7,000
                              
                              
                              
                              -
                              
                              
                              
                              7,000
                              
                              
                              
                              -Travel
                              
                              
                              8,007
                              
                              
                              
                              -
                              
                              
                              
                              8,007
                              
                              
                              
                              -117,729
                              
                              
                              
                              5,002
                              
                              
                              
                              149,332
                              
                              
                              
                              20,339Operating
      Loss
                              
                              
                              (117,729
                              )
                              
                              
                              (5,002
                              )
                              
                              
                              (149,332
                              )
                              
                              
                              (20,339
                              )Other
      income (expense)Interest,
      bank charges and foreign exchange
                              
                              
                              (35
                              )
                              
                              
                              (131
                              )
                              
                              
                              (318
                              )
                              
                              
                              (247
                              )Interest
      income
                              
                              
                              5,967
                              
                              
                              
                              706
                              
                              
                              
                              6,319
                              
                              
                              
                              2,4005,932
                              
                              
                              
                              575
                              
                              
                              
                              6,001
                              
                              
                              
                              2,153Net
      loss available to common shareholders
                              
                              $
                              (111,797
                              )
                              
                              $
                              (4,427
                              )
                              
                              $
                              (143,331
                              )
                              
                              $
                              (18,186
                              )Loss per common share - basic and
      diluted
                              
                              $
                              (0
                              )
                              
                              $
                              (0
                              )
                              
                              $
                              (0
                              )
                              
                              $
                              (0
                              )Weighted average number of common shares
      outstanding - basic and diluted
                              
                              
                              61,112,079
                              
                              
                              
                              96,625,122
                              
                              
                              
                              58,131,691
                              
                              
                              
                              96,625,122




(The
accompanying notes are an integral part of these consolidated financial
statements)




4
 Table of Contents




ENTHEOSTECHNOLOGIES, INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENT OF STOCKHOLDERS' EQUITYfor
      the nine months ended September 30, 2008 and year ended December 31,
      2007(Unaudited)Accumulated
      other
                          
                          
                          TotalCommon Stock
                          
                          
                          Additional
                          
                          
                          Accumulated
                          
                          
                          Comprehensive
                          
                          
                          comprehensive
                          
                          
                          Stockholder's(Expressed
      in U. S. Dollars)
                          
                          Shares
                          
                          
                          Amount
                          
                          
                          paid-in
      capital
                          
                          
                          earnings
      (deficit)
                          
                          
                          income
      (loss)
                          
                          
                          income
                          
                          
                          EquityBalance,
      December 31, 2006
                          
                          
                          96,625,122
                          
                          
                          $
                          966
                          
                          
                          $
                          3,838,116
                          
                          
                          $
                          (3,793,206
                          )
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          45,876Cancellation
      of common shares at $0.0033 per share
                          
                          
                          (40,000,000
                          )
                          
                          
                          (400
                          )
                          
                          
                          400
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          -Components
      of comprehensive income-
      Loss, year ended December 31, 2007
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (24,682
                          )
                          
                          
                          (24,682
                          )
                          
                          
                          -
                          
                          
                          
                          (24,682
                          )Total
      comprehensive loss
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          (24,682
                          )Balance,
      December 31, 2007
                          
                          
                          56,625,122
                          
                          
                          
                          566
                          
                          
                          
                          3,838,516
                          
                          
                          
                          (3,817,888
                          )
                          
                          
                          
                          
                          
                          
                          -
                          
                          
                          
                          21,194Units
      issued for cash and legal services at $0.50 per share in July
      2008
                          
                          
                          6,450,000
                          
                          
                          
                          65
                          
                          
                          
                          3,224,935
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          3,225,000Stock
      based compensation expense
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          2,766
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          2,766Settlement
      of related party payables
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          24,811
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          24,811Components
      of comprehensive income-
      Loss, nine months ended September 30, 2008
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (143,331
                          )
                          
                          
                          (143,331
                          )
                          
                          
                          -
                          
                          
                          
                          (143,331
                          )Total
      comprehensive loss
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          $
                          (143,331
                          )Balance,
      September 30, 2008
                          
                          
                          63,075,122
                          
                          
                          $
                          631
                          
                          
                          $
                          7,091,028
                          
                          
                          $
                          (3,961,219
                          )
                          
                          
                          
                          
                          
                          $
                          -
                          
                          
                          $
                          3,130,440




(The
accompanying notes are an integral part of these consolidated financial
statements)




5
 Table of Contents




ENTHEOSTECHNOLOGIES, INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF CASH FLOWSfor
      the nine months ended September 30, 2008 and 2007(Unaudited)(Expressed
      in U. S. Dollars)
                                            
                                            2008
                                            
                                            
                                            2007Cash
      flows from (used in) operating activitiesNet
      loss
                                            
                                            $
                                            (143,331
                                            )
                                            
                                            $
                                            (18,186
                                            )Impairment
      of oil and natural gas properties
                                            
                                            
                                            53,800
                                            
                                            
                                            
                                            -Stock-based
      compensation
                                            
                                            
                                            2,766
                                            
                                            
                                            
                                            -Stock
      issued for legal services
                                            
                                            
                                            25,000
                                            
                                            
                                            
                                            -Change
      in non-cash working capital item:
                                            
                                            
                                            -
                                            
                                            
                                            
                                            -Decrease
      in accounts receivable - related parties
                                            
                                            
                                            -
                                            
                                            
                                            
                                            84,088Increase
      in prepaid assets
                                            
                                            
                                            (720
                                            )Increase
      (Decrease) in accounts payable & accrued payable
                                            
                                            
                                            9,342
                                            
                                            
                                            
                                            (8,564
                                            )Net
      cash flows provided by (used in) operating activities
                                            
                                            
                                            (53,143
                                            )
                                            
                                            
                                            57,338Cash
      flows from investing activitiesAcquisition
      of oil and gas properties
                                            
                                            
                                            (333,365
                                            )
                                            
                                            
                                            -Net
      cash used in investing activities
                                            
                                            
                                            (333,365
                                            )
                                            
                                            
                                            -Cash
      flows from financing activitiesProceeds
      from issuance of common stock, net
                                            
                                            
                                            3,200,000
                                            
                                            
                                            
                                            -Net
      cash provided by financing activities
                                            
                                            
                                            3,200,000
                                            
                                            
                                            
                                            -Increase
      in cash
                                            
                                            
                                            2,813,492
                                            
                                            
                                            
                                            57,338Cash, beginning of period
                                            
                                            
                                            46,306
                                            
                                            
                                            
                                            178Cash, end of period
                                            
                                            $
                                            2,859,798
                                            
                                            
                                            $
                                            57,516Supplemental
      disclosure of cash flow information:Interest
      paid in cash
                                            
                                            $
                                            -
                                            
                                            
                                            $
                                            -Income
      tax paid in cash
                                            
                                            $
                                            -
                                            
                                            
                                            $
                                            -Settlement
      of related party payables
                                            
                                            $
                                            24,811
                                            
                                            
                                            $
                                            -




(The
accompanying notes are an integral part of these consolidated financial
statements)




6
 Table of Contents





ENTHEOSTECHNOLOGIES, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


NINE
MONTHS ENDED SEPTEMBER 30, 2008





(Expressed
in US Dollars)





Note
1. Organization and Nature of Operations




Entheos
Technologies, Inc. (“the Company”) is a small independent oil and gas production
company with a focus on non-operating, small working interest participation
in producing and the re-development/ recompletion of oil and gas wells. In
September 2008, the Company acquired a 21.75% working interest (16.3125% net
revenue interest) in the Cooke #6 well located at the Cooke Ranch field in La
Salle County, Texas which has been producing oil and gas from the Escondido
formation since 2007. In September 2008, the Company acquired a 20.00% working
interest (15.00% net revenue interest) in Onnie Ray #1 Well in Lee County, Texas
and the Stahl #1 Well in Fayette County, Texas which were subsequently
re-entered and are producing gas from the Austin Chalk formation and a 20.00%
working interest (15.00% net revenue interest) in the Haile #1 Well in Frio
County, Texas which is currently scheduled for re-entry operations.




Incorporated
under the laws of the State of Nevada, the Company has an authorized capital of
200,000,000 shares of $0.00001 par value common stock, of which 63,075,122
shares are outstanding and 10,000,000 shares of $0.0001 par value preferred
stock, of which none are outstanding.




From 2002
until September 2008, through our wholly-owned subsidiary Email Solutions, Inc.,
the Company served as an Application Service Provider (“ASP”) providing
reliable, real time, high volume outsourced email and search engine optimization
services. Due to the limited success of the ASP business, management decided
that it was in the best interest to abandon the Application Service Provider
business and focus on identifying undervalued oil and gas opportunities for
acquisition, development and exploration. The assets and liabilities, the
results of operations and cash flows related to the ASP business were not
classified as discontinued operations as the amounts were not
significant.




The
Company has incurred net operating losses since inception. The Company faces
different types of risks, including under capitalization and uncertainty of
funding sources, high initial expenditure levels, uncertain revenue streams, and
difficulties in managing growth. The Company’s recurring losses raise
substantial doubt about its ability to continue as a going concern. The
Company’s consolidated financial statements do not reflect any adjustments that
may result from the outcome of this uncertainty. The Company expects to incur
losses from its business operations and will require additional funding during
2011. The future of the Company hereafter will depend in large part on the
Company’s ability to successfully raise capital from external sources to pay for
planned expenditures and to fund operations.





To meet
these objectives, the Company completed a private placement for gross proceeds
of $3,200,000 on July 28, 2008. Management believes that its current and future
plans enable it to continue operations through December 31, 2009. These
financial statements do not give effect to any adjustments which would be
necessary should the Company be unable to continue as a going concern and
therefore be required to realize its assets and discharge its liabilities in
other than the normal course of business and at amounts different from those
reflected in the accompanying financial statements.





Note
2. Accounting Policies





Presentation of Interim
Information


The
accompanying unaudited interim consolidated financial statements have been
prepared in accordance with Form 10-Q instructions and in the opinion of
management of the Company, include all adjustments (which were normal, recurring
in nature) considered necessary to present fairly the consolidated financial
position as of September 30, 2008 and December 31, 2007, the consolidated
results of operations for the three and nine months ended September 30, 2008 and
2007 and cash flows for the nine months ended September 30, 2008 and 2007. These
results have been determined on the basis of generally accepted accounting
principles and applied consistently with those used in the preparation of the
Company’s 2007 Annual Report on Form 10-KSB.





Certain
information and footnote disclosures normally included in the financial
statements presented in accordance with United States generally accepted
accounting principles have been condensed or omitted.  It is suggested that
the accompanying unaudited interim consolidated financial statements be read in
conjunction with the annual financial statements and notes thereto in the
Company’s 2007 Annual Report on Form 10-KSB.





7
 Table of Contents




Estimates


The more
significant reporting areas impacted by management’s judgments and estimates are
crude oil and natural gas reserve estimation, impairment of assets, and oil and
gas sales revenue accruals. Management’s judgments and estimates in these areas
are based on information available from both internal and external sources,
including engineers, geologists, consultants and historical experience in
similar matters. Actual results could differ from the estimates as additional
information becomes known. The oil and gas sales revenue accrual is particularly
subject to estimates due to the Company’s status as a non-operator on all of its
properties. Production information obtained from well operators is substantially
delayed. This causes the estimation of recent production, used in the oil and
gas revenue accrual, to be subject to some variations.





Full
Cost Method of Accounting


The
Company has elected to utilize the full cost method of accounting for its oil
and gas activities.In accordance with the
full-cost method of accounting, all costs associated with the exploration,
development and acquisition of oil and natural gas properties, including
salaries, benefits and other internal costs directly attributable to these
activities are capitalized.  For the nine month period ending
September 30, 2008 the company recorded $333,365 in capitalized oil and gas
property costs.





The
full-cost method follows guidance provided in SEC Regulation S-X Rule 4-10,
where impairment is determined by the “ceiling test,” whereby to the extent that
such capitalized costs subject to amortization in the full-cost pool (net of
accumulated depletion, depreciation and amortization, prior impairments, and
related tax effects) exceed the present value (using a 10% discount rate) of
estimated future net after-tax cash flows from proved oil and natural gas
reserves, such excess costs are charged to expense.  Once incurred, an
impairment of oil and natural gas properties is not reversible at a later
date.  A ceiling test impairment could result in a significant loss for a
reporting period; however, future depletion expense would be correspondingly
reduced. Impairment of oil and natural gas properties is assessed on a quarterly
basis in conjunction with the Company’s quarterly and annual SEC filings. The
Company performed the ceiling test for the quarter ended September 30, 2008 and
determined that an impairment of $53,800 was required.





Revenue
Recognition


All
revenues are derived from the sale of produced crude oil and natural
gas.  Payment for the revenue, net of related taxes and lease
operating expenses, is received from the operator of the wells approximately 45
days after the month of delivery.  Due to the recent acquisition
of working interest in oil properties, the Company has not received a
revenue and expense summary from the operators. With the lack of this
information or historical operating results, management has no basis for
developing a reasonable estimate.  Accordingly, no revenue or expense
was recognized as of September 30, 2008.  As the Company accumulate
operating result history, management will establish a methodology for
estimations in order to accrue revenue and expenses in the month
earned.





Recent Accounting
Pronouncements





In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (SFAS
157), which defines fair value, establishes a framework for measuring fair
value, and expands disclosures about fair-value measurements required under
other accounting pronouncements. It does not change existing guidance as to
whether or not an instrument is carried at fair value. SFAS 157 is effective for
financial statements issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years. In February 2008, the FASB issued
FASB Staff Position No. FAS 157-1 (FSP FAS 157-1), which excludes SFAS No. 13,
“Accounting for Leases” and certain other accounting pronouncements that address
fair value measurements under SFAS 13, from the scope of SFAS 157. In February
2008, the FASB issued FASB Staff Position No. 157-2 (FSP 157-2), which provides
a one-year delayed application of SFAS 157 for nonfinancial assets and
liabilities, except for items that are recognized or disclosed at fair value in
the financial statements on a recurring basis (at least annually). The Company
is required to adopt SFAS 157 as amended by FSP FAS 157-1 and FSP FAS 157-2 on
January 1, 2009, the beginning of its fiscal year 2009.  The Company
does not expect the application of SFAS No. 157 to have a material effect on the
Company’s consolidated financial statements.





In
October 2008, the FASB issued FASB Staff Position No. FAS 157-3, “Determining
the Fair Value of a Financial Asset in a Market That Is Not Active” (FSP 157-3),
which clarifies the application of SFAS 157 when the market for a financial
asset is inactive. Specifically, FSP 157-3 clarifies how (1) management’s
internal assumptions should be considered in measuring fair value when
observable data are not present, (2) observable market information from an
inactive market should be taken into account, and (3) the use of broker quotes
or pricing services should be considered in assessing the relevance of
observable and unobservable data to measure fair value. The guidance in FSP
157-3 is effective immediately and will apply to the Company upon adoption of
SFAS 157.





In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities, Including an Amendment to FASB No.
115” (SFAS 159). Under SFAS 159, entities may elect to measure specified
financial instruments and warranty and insurance contracts at fair value on a
contract-by-contract basis, with changes in fair value recognized in earnings
each reporting period. The election, called the fair value option, will enable
entities to achieve an offset accounting effect for changes in fair value of
certain related assets and liabilities without having to apply more complex
hedge accounting provisions.  SFAS No. 159 is effective for fiscal
years beginning after November 15, 2007.  The Company did not elect
the fair value option for any of its existing financial assets or financial
liabilities; therefore, this statement did not have a material impact on the
Company’s consolidated financial statements.





8
 Table of Contents





In June
2008, the FASB issued Staff Position EITF 03-06-1, “Determining Whether
Instruments Granted in Share-Based Payment Transactions Are Participating
Securities” (FSP EITF 03-06-1). FSP EITF 03-06-1 provides that unvested
share-based payment awards that contain nonforfeitable rights to dividends or
dividend equivalents (whether paid or unpaid) are participating securities and
shall be included in the computation of earnings per share pursuant to the
two-class method in SFAS No. 128, “Earnings per Share”.   EITF
03-06-1 did not have any impact on the Company’s consolidated financial
statements.





In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements, an Amendment of Accounting Research Bulletin
No 51” (SFAS 160). SFAS 160 establishes accounting and reporting standards for
ownership interests in subsidiaries held by parties other than the parent,
changes in a parent’s ownership of a noncontrolling interest, calculation and
disclosure of the consolidated net income attributable to the parent and the
noncontrolling interest, changes in a parent’s ownership interest while the
parent retains its controlling financial interest and fair value measurement of
any retained noncontrolling equity investment. SFAS 160 is effective for
financial statements issued for fiscal years beginning after December 15, 2008,
and interim periods within those fiscal years. Early adoption is prohibited. The
Company must adopt SFAS 160 on January 1, 2009, the beginning of its fiscal year
2009.  The Company does not expect the application of SFAS No. 160 to
have a material effect on the consolidated financial statements.





In
December 2007, the FASB issued SFAS No. 141R, “Business Combinations” (SFAS
141R), which establishes principles and requirements for the reporting entity in
a business combination, including recognition and measurement in the financial
statements of the identifiable assets acquired, the liabilities assumed, and any
noncontrolling interest in the acquiree. SFAS 141R applies prospectively to
business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after December
15, 2008, and interim periods within those fiscal years. The Company must adopt
SFAS 141R on January 1, 2009, the beginning of its fiscal year
2009.  The Company does not expect the application of SFAS 141R to
have a material effect on the consolidated financial statements.





Note
3. Earnings Per Share





Basic
earnings or loss per common share is based on the weighted average number of
shares outstanding during the period of the financial statements.  Diluted
earnings or loss per share are based on the weighted average number of common
shares outstanding and dilutive common stock equivalents. All share and per
share information are adjusted retroactively to reflect stock splits and changes
in par value, when applicable. All loss per share amounts in the financial
statements are basic loss per share because the inclusion of stock options and
warrants outstanding would be antidilutive. The computation of basic and diluted
loss per share is as follows at September 30, 2008:





Three
      months ended
                            
                            
                            Nine
      months endedSeptember
      30,
                            
                            
                            September
      30,2008
                            
                            
                            2007
                            
                            
                            2008
                            
                            
                            2007Numerator
      - net loss available to common stockholders
                            
                            $
                            (111,797
                            )
                            
                            $
                            (4,427
                            )
                            
                            $
                            (143,331
                            )
                            
                            $
                            (18,186
                            )Denominator
      - weighted average number of common shares outstanding
                            
                            
                            61,112,079
                            
                            
                            
                            96,625,122
                            
                            
                            
                            58,131,691
                            
                            
                            
                            96,625,122Basic
      and diluted loss per common share
                            
                            $
                            (0.00
                            )
                            
                            $
                            (0.00
                            )
                            
                            $
                            (0.00
                            )
                            
                            $
                            (0.00
                            )





Note
4. Oil and Gas Properties





In
September 2008, the Company acquired a 21.75% working interest (16.3125% net
revenue interest) in the Cooke #6 well located at the Cooke Ranch field in La
Salle County, Texas which has been producing oil and gas from the Escondido
formation since 2007. In September 2008, the Company acquired a 20.00% working
interest (15.00% net revenue interest) in Onnie Ray #1 Well in Lee County, Texas
and the Stahl #1 Well in Fayette County, Texas which were subsequently
re-entered and are producing gas from the Austin Chalk formation and a 20.00%
working interest (15.00% net revenue interest) in the Haile #1 Well in Frio
County, Texas which is currently scheduled for re-entry operations.





9
 Table of Contents





Capitalized
costs associated with oil and gas properties as of September 30, 2008 can be
summarized as follows:





Acquisition
      Costs
                          
                          
                          Exploration
      Costs
                          
                          
                          Development
      Costs
                          
                          
                          TotalCooke
      #6
                          
                          $
                          181,535
                          
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          181,535Onnie
      Ray #1
                          
                          
                          37,400
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          37,400Haile
      #1
                          
                          
                          77,015
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          77,015Stahl
      #1
                          
                          
                          37,415
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          37,415333,365
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          333,365Impairment
      of oil properties
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          (53,800
                          )Net
      capitalized costs
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          $
                          279,565




Note
5. Related Party Transactions





Management
fees:  During the three months and nine months ended September 30, 2008,
the Company paid $11,000 (2007: $nil) and $1,500 (2007: $1,500) in management
fees to directors respectively.





Accounts
payable – related party:  As of September 1, 2008, the Company settled
all amounts owed a former director and majority shareholder.  The
outstanding management fees of $23,812 (December 31, 2007: $23,812) were
written-off to additional-paid-in-capital.





Rent:
Until August 31, 2008, the Company’s administrative office was located at 1628
West 1st Avenue, Suite 216, Vancouver, British Columbia, Canada, V6J 1G1. This
premise is owned by a private corporation controlled by a former director
and majority shareholder. The Company paid rent of $1,371 (2007: $1,983) and
$5,568 (2007: $5,670) for the three months and nine months ended September 30,
2008. Effective September 1, 2008, the Company closed its administrative office
in Vancouver, British Columbia, Canada, terminating all of its
employees.  There were no severance arrangements with any of the
terminated employees.





All
related party transactions are recorded at the exchange amount established and
agreed to between related parties and are in the normal course of
business.





Note
6. Share Capital





On
December 31, 2007, 40,000,000 common shares owned by Mr. Harmel S. Rayat, a
director and major shareholder of the Company, originally subscribed for at
$0.0033 each were returned to the Company for cancellation and for no
consideration.





On July
28, 2008, the Company completed a $3,200,000 self-directed private
placement.  The Private Placement consisted of the sale of 6,450,000
units at a price of $0.50 per Unit. The Units were offered and sold to a total
of 6 accredited investors. In addition, 50,000 units were issued for
payment of legal services of $25,000. Each unit consisted of one share of the
Company’s common stock, one Series A Warrant to purchase a share of common stock
at $0.60 per share for a period of 18 months from the date of issuance and one
Series B Warrant to purchase a share of common stock at $0.75 per share for a
period of 24 months from the date of issuance.





The
portion of the proceeds from the private placement allocated to the
warrants was $810,852 to Series A warrants and $842,511 to Series B
warrants.





Note
7. Stock Options





On
September 12, 2008, the Company granted options to four directors to purchase up
to 200,000 shares of the Company’s common stock at an exercise price of $1.00
each. The options vest over a 5 year period resulting in 40,000 shares
vesting annually starting from September 12, 2009.





10
 Table of Contents





The fair
value of the 200,000 options granted was estimated at $0.73 each, for a total of
amount of $145,346, by using the Black-Scholes Option Pricing Model with the
following assumptions: dividend yield of 0%, expected volatility of 195.38%,
risk-free interest rates of 2.97%, and expected lives of 5 years.





During
the nine months ended September 30, 2008, compensation expense of $2,766 (2007:
nil) was recognized.  As the Company has had no options outstanding
since December 31, 2007, no stock-based compensation has been recognized until
the grant on September 12, 2008. The Company had $142,581 of total
unrecognized compensation cost related to unvested stock options as of September
30, 2008.





Summary
of employee stock option information for the nine months ended September
30, 2008 and year ended December 31, 2007, is as follows:





Number
      of Options
                                  
                                  
                                  
                                  Weighted
      average exercise priceOptions
      outstanding and exercisable at December 31, 2006
                                  
                                  
                                  7,230,000
                                  
                                  
                                  $
                                  0.01Options
      cancelled
                                  
                                  
                                  (7,230,000
                                  )
                                  
                                  
                                  0.01Options
      outstanding and exercisable at December 31, 2007
                                  
                                  
                                  -Options
      granted
                                  
                                  
                                  200,000
                                  
                                  
                                  
                                  1.00Options
      outstanding at September 30, 2008
                                  
                                  
                                  200,000Exercisable
      at September 30, 2008
                                  
                                  
                                  0





Note
8. Warrants





As of
September 30, 2008 there were 6,450,000 Series A warrants outstanding and
6,450,000 Series B warrants outstanding (Note 6).  Each Series A
Warrant entitles the holder to purchase one share of the common stock at $0.60
per share for a period of 18 months from the date of issuance and each Series B
Warrant entitles the holder to purchase a share of common stock at $0.75 per
share for a period of 24 months from the date of issuance.





The fair
value of the Series A warrants was $810,851 and was estimated using the
Black-Scholes option pricing model with assumptions as follows:





Risk
      free interest rate
                  
                  
                  2.435
                  %Expected
      life
                  
                  1.5
      yearsExpected
      volatility
                  
                  
                  96.15
                  %Dividend
      per share
                  
                  $
                  0.00





The fair
value of the Series B warrants was $842,511 and was estimated using the
Black-Scholes option pricing model with assumptions as follows:





Risk
      free interest rate
                  
                  
                  2.590
                  %Expected
      life
                  
                  2
      yearsExpected
      volatility
                  
                  
                  100.76
                  %Dividend
      per share
                  
                  $
                  0.00





Note
9. Subsequent Events





On
October 31, 2008 the Company purchased an interest in an oil well, Pearce #1, in
Texas, with a 20% non-operator working interest, 15% net revenue interest for
$67,200 with cash on hand.





11
 Table of Contents





Item2. Management's Discussion and Analysis of Financial Condition
and Results of Operations





Forward-Looking
Statements





Except for the historical information
presented in this document, the matters discussed in this Form 10-Q for the
three and nine months ending September 30, 2008, this report contains
forward-looking statements. Such forward-looking statements include statements
regarding, among other things, (a) our projected sales and profitability, (b)
our growth strategies, (c) anticipated trends in our industry, (d) our future
financing plans, and (e) our anticipated needs for working
capital.  Forward-looking statements, which involve assumptions and
describe our future plans, strategies, and expectations, are generally
identifiable by use of the words “may,” “will,” “should,” “expect,”
“anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of
these words or other variations on these words or comparable
terminology.  This information may involve known and unknown risks,
uncertainties, and other factors that may cause our actual results, performance,
or achievements to be materially different from the future results, performance,
or achievements expressed or implied by any forward-looking
statements.  These statements may be found under “Management's
Discussion and Analysis of Financial Condition and Results of
Operations,”  “Business,” “Properties,” as well as in this report
generally.  Actual events or results may differ materially from those
discussed in forward-looking statements as a result of various factors,
including, without limitation, the risks outlined under “Risk Factors” and
matters described in this report generally.  In light of these risks
and uncertainties, there can be no assurance that the forward-looking statements
contained in this filing will in fact occur.





Overview




The
Company is a small independent oil and gas production company with a focus on
participation in producing and the re-development/ recompletion of oil and gas
wells. In September 2008, the Company acquired a 21.75% working interest
(16.3125% net revenue interest) in the Cooke #6 well located at the Cooke Ranch
field in La Salle County, Texas which has been producing oil and gas from the
Escondido formation since 2007. In September 2008, the company acquired a 20.00%
working interest (15.00% net revenue interest) in Onnie Ray #1 Well in Lee
County, Texas and the Stahl #1 Well in Fayette County, Texas which were
subsequently re-entered and are producing gas from the Austin Chalk formation
and a 20.00% working interest (15.00% net revenue interest) in the Haile #1 Well
in Frio County, Texas which is currently scheduled for re-entry operations.




Incorporated
under the laws of the State of Nevada, the Company has an authorized capital of
200,000,000 shares of $0.00001 par value common stock, of which 63,075,122
shares are outstanding and 10,000,000 shares of $0.0001 par value preferred
stock, of which none are outstanding.




From 2002
until September 2008, through our wholly-owned subsidiary Email Solutions, Inc.,
the Company served as an Application Service Provider (“ASP”) providing
reliable, real time, high volume outsourced email and search engine optimization
services. Due to the limited success of our ASP business, management decided
that it was in the best interest of our stockholders to abandon the Application
Service Provider business and focus on identifying undervalued oil and gas
opportunities for acquisition, development and exploration. The assets and
liabilities, the results of operations and cash flows related to the ASP
business were not classified as discontinued operations as the amounts were not
significant.




Critical Accounting
Policies





Preparation
of financial statements in conformity with accounting principles generally
accepted in the United States requires management to make estimates, judgments
and assumptions that affect the reported amounts of assets, liabilities,
revenues and expenses, and the disclosure of contingent assets and liabilities.
However, the accounting principles used by the Company generally do not change
the Company’s reported cash flows or liquidity. Generally, accounting rules do
not involve a selection among alternatives, but involve a selection of the
appropriate policies for applying the basic principles. Interpretation of the
existing rules must be done and judgments made on how the specifics of a given
rule apply to the Company.





The more
significant reporting areas impacted by management’s judgments and estimates are
crude oil and natural gas reserve estimation, impairment of assets, and oil and
gas sales revenue accruals. Management’s judgments and estimates in these areas
are based on information available from both internal and external sources,
including engineers, geologists, consultants and historical experience in
similar matters. Actual results could differ from the estimates as additional
information becomes known. The oil and gas sales revenue accrual is particularly
subject to estimates due to the Company’s status as a non-operator on all of its
properties. Production information obtained from well operators is substantially
delayed. This causes the estimation of recent production, used in the oil and
gas revenue accrual, to be subject to some variations.





12
 Table of Contents





Full Cost
Method of Accounting


The
Company has elected to utilize the full cost method of accounting for its oil
and gas activities.In accordance with the
full-cost method of accounting, all costs associated with the exploration,
development and acquisition of oil and natural gas properties, including
salaries, benefits and other internal costs directly attributable to these
activities are capitalized.  For the nine month period ending
September 30, 2008 the company recorded $333,365 in capitalized oil and gas
property costs.





The
full-cost method follows guidance provided in SEC Regulation S-X Rule 4-10,
where impairment is determined by the “ceiling test,” whereby to the extent that
such capitalized costs subject to amortization in the full-cost pool (net of
accumulated depletion, depreciation and amortization, prior impairments, and
related tax effects) exceed the present value (using a 10% discount rate) of
estimated future net after-tax cash flows from proved oil and natural gas
reserves, such excess costs are charged to expense.  Once incurred, an
impairment of oil and natural gas properties is not reversible at a later
date.  A ceiling test impairment could result in a significant loss for a
reporting period; however, future depletion expense would be correspondingly
reduced. Impairment of oil and natural gas properties is assessed on a quarterly
basis in conjunction with the Company’s quarterly and annual SEC filings. The
Company performed the ceiling test for the quarter ended September 30, 2008 and
determined that no impairment was required.





Revenue
Recognition


All
revenues are derived from the sale of produced crude oil and natural
gas.  Payment for the revenue, net of related taxes and lease
operating expenses, is received from the operator of the wells approximately 45
days after the month of delivery.  Due to our recent acquisition of
working interest in oil properties, we have not received a revenue and expense
summary from the operators. With the lack of this information or historical
operating results, management has no basis for developing a reasonable
estimate.  Accordingly, no revenue or expense was recognized as of
September 30, 2008.  As the Company accumulate operating result
history, management will establish a methodology for estimations in order to
accrue revenue and expenses in the month earned.





Liquidity and Capital
Resources





As
of September 30, 2008, the Company had a cash balance of $2,859,798. The
Company has financed its operations primarily from cash on hand and funds from
the July 28, 2008 private placement.





Net cash
flows used in operating activities was ($53,143) for the nine month period
ending September 30, 2008, compared to net cash provided of $57,338 for the same
period in 2007.





On July
28, 2008, the Company completed a $3,225,000 self-directed private
placement.  The Private Placement consisted of the sale of 6,450,000
units at a price of $0.50 per Unit or $3,225,000 in the aggregate. The Units
were offered and sold to a total of 6 accredited investors.  Each unit
consisted of one share of the Company’s common stock, one Series A Warrant to
purchase a share of common stock at $0.60 per share for a period of 18 months
from the date of issuance and one Series B Warrant to purchase a share of common
stock at $0.75 per share for a period of 24 months from the date of
issuance.





Related Party
Transactions





Management
fees:  During the three months and nine months ended September 30, 2008,
the Company paid $11,000 (2007: $nil) and $1,500 (2007: $1,500) in management
fees to directors respectively.





Accounts
payable – related party:  As of September 1, 2008, the Company settled
all amounts owed a former director and majority shareholder for $23,812
outstanding for management fees (December 31, 2007: $23,812).  The
amount outstanding was written-off to
additional-paid-in-capital.





Rent:
Until August 31, 2008, the Company’s administrative office was located at 1628
West 1st Avenue, Suite 216, Vancouver, British Columbia, Canada, V6J 1G1. This
premise is owned by a private corporation controlled by a former director
and majority shareholder. The Company paid rent of $1,371 (2007: $1,983) and
$5,568 (2007: $5,670) for the three months and nine months ended September 30,
2008. Effective September 1, 2008, the Company closed its administrative office
in Vancouver, British Columbia, Canada, terminating all of its
employees.  There were no severance arrangements with any of the
terminated employees.





13
 Table of Contents





Off Balance Sheet
Arrangements





The
Company has no off-balance sheet arrangements.





Recent Accounting
Pronouncements





See Note
2 to the Consolidated Financial Statements in this Form 10-Q.





ITEM4.
Controls and Procedures





Disclosure controls and
procedures.





Under the
supervision and with the participation of our management, including our chief
executive officer and chief financial officer, we conducted an evaluation of the
effectiveness of the design and operation of our disclosure controls and
procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as of the end of the period covered by this quarterly
report. Based on this evaluation, our chief executive officer and chief
financial officer concluded as of September 30, 2008 that our disclosure
controls and procedures were effective such that the information required to be
disclosed in our United States Securities and Exchange Commission reports is
recorded, processed, summarized and reported within the time periods specified
in SEC rules and forms, and is accumulated and communicated to our management,
including our chief executive officer and chief financial officer, as
appropriate to allow timely decisions regarding required
disclosure.





Internal control over
financial reporting.





There
have been no changes in our internal control over financial reporting that
occurred during the quarter ended September 30, 2008 that have materially
affected or are reasonably likely to materially affect our internal control over
financial reporting.





14
 Table of Contents





PARTII – Other Information





Item
1.   Legal Proceedings





None





Item2.   Unregistered Sales of Equity Securities and
Use of Proceeds





None





Item3.   Defaults Upon Senior
Securities





None





Item4.   Submission of Matters to a Vote of Security
Holders





None





Item5.   Other Information





None





Item6.   Exhibits and Reports on Form
8-K





(a)
Exhibits








31.1
            Certification
      of the Chief Executive Officer pursuant to Rule
  13a-14(a)





31.2
            Certification
      of the Chief Financial Officer pursuant to Rule
  13a-14(a)





32.1
            Certification
      by the Chief Executive Officer pursuant to 18 U.S.C. 1350 as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002





32.2
            Certification
      by the Chief Financial Officer pursuant to 18 U.S.C. 1350 as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002





15
 Table of Contents





SIGNATURES





Pursuant
to the requirements of Sections 13 or 15 (d) of the Securities and Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned,  thereunto duly  authorized on this
14th
day of November, 2008.








Entheos Technologies, Inc.(Registrant)Date
                                  Signature
                                  
                                  TitleNovember
      14, 2008
                                  /s/ Derek Cooper
                                  
                                  Director,  President,
      CEODerek
      CooperNovember
      14, 2008
                                  /s/ Frank Fabio
                                  
                                  Cheif
      Financial Officer and SecretaryFrank
      Fabio







16