Edgar Filing: INTEGRATED ENVIRONMENTAL TECHNOLOGIES, LTD.

ievm-10q_093009.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2009

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

Commission file number 000-26309

INTEGRATED ENVIRONMENTAL TECHNOLOGIES, LTD.

(Exact name of registrant as specified in its charter)

Nevada	98-0200471
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

4235 Commerce Street
Little River, South Carolina		29566
(Address of principal executive offices)		(Zip Code)

(843) 390-2500

(Registrant’s telephone number, including area code)

Copies of Communications to:

Stoecklein Law Group

Emerald Plaza

402 West Broadway

Suite 690

San Diego, CA 92101

(619) 704-1310

Fax (619) 704-0556

Indicate by check mark whether the registrant (1) 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 x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ¨ No ¨

Indicate by check mark whether the registrant is a large 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 ¨	Accelerated filer ¨

Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No x

The number of shares of Common Stock, $0.001 par value, outstanding on November 13, 2009, was 84,168,467 shares.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

Integrated Environmental Technologies, Ltd.
Condensed Consolidated Balance Sheets


	September 30,			December 31,
	2009			2008
	Unaudited			Audited
Assets
Current Assets:
Cash	$	327,523		$	33,357
Accounts receivable		73,041			22,505
Inventory		139,864			133,043
Prepaid expenses		6,889			36,508

Total current assets		547,317			225,413

Equipment		13,045			13,045
Accumulated depreciation		(11,390	)		(10,523	)

Total building and equipment		1,655			2,522

	$	548,972		$	227,935

Liabilities and Shareholders' Equity (Deficit)
Current liabilities:
Accounts payable	$	155,452		$	172,085
Accrued expenses		173,346			123,750
Notes payable		938,300			98,300
Convertible notes		492,000			501,000

Total current liabilities		1,759,098			895,135


Shareholders' Equity (Deficit)
Common stock 200,000,000 shares authorized
par value $.001, 84,168,467 and 79,058,467 shares issued
and outstanding at September 30, 2009 and December 31, 2008		84,168			79,058
Stock bought not issued, 40,000 shares at September 30, 2009		40			-
Paid-in capital		8,673,858			7,786,789
Retained earnings (deficit)		(9,968,192	)		(8,533,047	)

Total shareholders' equity (deficit)		(1,210,126	)		(667,200	)

Total liabilities and shareholders' equity (deficit)	$	548,972		$	227,935

See notes to condensed consolidated financial statements.

Integrated Environmental Technologies, Ltd.
Condensed Consolidated Statements of Operations
Unaudited


	For The Nine Months Ended September 30,				For The Three Months Ended September 30,
	2009		2008		2009		2008

Sales	$	107,495	$	399,064	$	71,758	$	154,897
Cost of sales		42,120		156,958		24,707		71,439

Gross profit		65,375		242,106		47,051		83,458

Professional and administrative fees		265,601		206,554		103,508		51,407
Salary		454,988		476,027		158,126		156,641
Depreciation and amortization		867		1,579		(748)		439
Office & miscellaneous expense		302,368		293,487		99,065		111,797
Bad debt expense		1,230		37,841		1,200		95

Total operating expenses		1,025,054		1,015,488		361,151		320,379

Loss from operations		(959,679)		(773,382)		(314,100)		(236,921)

Other income (expense):
Finance fees		(377,219)		(44,654)		(198,728)		(17,914)
Interest expense		(98,247)		(206,675)		(34,806)		(76,881)
Total other income (expense)		(475,466)		(251,329)		(233,534)		(94,795)

Net loss	$	(1,435,145)	$	(1,024,711)	$	(547,634)	$	(331,716)


Weighted average shares outstanding		81,757,217		71,250,905		83,198,158		75,086,989
Net loss per share basic and diluted	$	(0.02)	$	(0.01)	$	(0.01)	$	(0.00)

See notes to condensed consolidated financial statements.

Integrated Environmental Technologies, Ltd.
Condensed Consolidated Statements of Cash Flows
Unaudited


	For The Nine Months Ended
	September 30,
	2009			2008
Cash flows from operating activities:
Net loss	$	(1,435,145	)	$	(1,024,711	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization		867			1,579
Accretion of interest on convertible notes		-			149,562
Stock, options and warrants issued for services		377,219			41,072
Changes in operating assets and liabilities:
Accounts receivable		(50,536	)		(21,231	)
Inventory		(6,821	)		47,586
Deposits and prepaids		29,619			(32,264	)
Accounts payable		(16,633	)		(19,687	)
Accrued expenses		49,594			(60,336	)

Cash used in operating activities		(1,051,834	)		(918,430	)

Cash flows from financing activities:
Stock sold		515,000			900,000
Payment on convertible notes		(9,000	)		-
Proceeds from notes payable		840,000			(1,648	)

Cash provided by financing activities		1,346,000			898,352

Decrease in cash		294,166			(20,078	)
Cash beginning of period		33,357			72,334

Cash end of period	$	327,523		$	52,256

Supplemental disclosure of cash flow information:
Cash paid for interest	$	77,545			62,916
Cash paid for income taxes	$	-			-

Non-cash financing activities:

Stock and warrants issued for services	$	377,219			22,654

See notes to condensed consolidated financial statements.

Integrated Environmental Technologies, Ltd.

Notes to Condensed Consolidated Financial Statements

Note 1 – Basis of presentation

The unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and reflect all adjustments which, in the opinion of management, are necessary for a fair presentation. All such adjustments are of a normal recurring nature. The results of operations for the interim period are not necessarily indicative of the results to be expected for a full year. Certain amounts in the prior year statements have been reclassified to conform to the current year presentations. The statements should be read in conjunction with the financial statements and footnotes thereto included in our Form 10-K for the year ended December 31, 2008.

The financial statements include our wholly-owned subsidiary. All significant inter-company transactions and balances have been eliminated.

Note 2 - Going concern

The accompanying condensed consolidated financial statements have been prepared assuming that we will continue as a going concern. Our ability to continue as a going concern is dependent upon attaining profitable operations. We may consider using borrowings and security sales to mitigate the affects of our cash position; however, no assurance can be given that debt or equity financing, if and when required, will be available. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities that might be necessary should we be unable to continue in existence.

Note 3 - Notes payable

Notes payable consisted of the following at September 30, 2009:

Note payable, unsecured, bearing interest at a rate of 10% per annum.	$ 50,000
Note payable, unsecured, non-interest bearing.	25,000
Notes payable, unsecured, with a variable interest rate, and monthly principal and interest payments (see Note 7).	23,300
Note payable, secured by Benchmark Stock Acquisition Agreement, bearing interest at a rate of 12% per annum with a loan fee of $10,000	100,000
Note payable, secured by stock, non-interest bearing with a loan fee of $3,750	50,000
Note payable, secured by Benchmark Stock Acquisition Agreement, bearing interest at a rate of 12% per annum with a loan fee of $750	25,000
Note payable, secured by Benchmark Stock Acquisition Agreement, bearing interest at a rate of 12% per annum	25,000
Note payable, secured by Benchmark Stock Acquisition Agreement, bearing interest at a rate of 12% per annum	40,000
Note payable, secured by Benchmark Stock Acquisition Agreement and “hard and soft” assets as outlined in the agreement, bearing interest at a rate of 12% per annum with a loan fee of $14,750	590,000
Note payable, secured by Benchmark Stock Acquisition Agreement and “hard and soft” assets as outlined in the agreement, bearing interest at a rate of 12% per annum with a loan fee of $250	10,000
	$ 938,300

Integrated Environmental Technologies, Ltd.

Notes to Condensed Consolidated Financial Statements

Note 4 - Convertible notes payable

As of September 30, 2009, we had convertible loans totaling $492,000, which are accruing interest at a rate of 10% per annum payable semi-annually. The company has extended the original maturity date of January 2, 2009, and will continue to accrue interest at a rate of 10% per annum until the notes are paid. The notes are currently in default.

Note 5 – Common stock

On September 25, 2009, we sold 60,000 restricted shares of common stock for $6,000. The shares were issued on September 25, 2009.

On June 20, 2007, the Company entered into a Stock Acquisition Agreement with Benchmark Performance Group, Inc. (“Benchmark”). Pursuant to the agreement, Benchmark agreed to purchase 35,000,000 shares of common stock for a total purchase price of $3,500,000 or $0.10 per share. On June 27, 2007, 5,000,000 shares were issued pursuant to the agreement for cash proceeds of $188,000 and the conversion of $312,000 that was a deposit for equipment to be purchased, for a total of $500,000. On October 31, 2007, an additional 5,000,000 shares were issued pursuant to the agreement. On May 19, 2008, concurrent with the receipt by us of $500,000, the Company issued an additional 5,000,000 shares of our common stock. On August 26, 2008, the Company entered into an addendum to the Stock Acquisition Agreement, by which IET and Benchmark agreed to an acceleration of the fifth installment for a reduced price of $400,000. This amount was received by us on August 27, 2008, and the Company issued 5,000,000 shares of our common stock on September 18, 2008 in consideration of receipt of the expedited fifth installment. On April 30, 2009 we received $500,000 from Benchmark and on May 8, 2009 we issued 5,000,000 shares of our common stock.

On November 16, 2009, we received $1,000,000 as the final payment under the terms of the agreement. The Company will cause to be issued 10,000,000 shares of common stock, and initiate a final registration for the remaining unregistered shares.

Pursuant to the Agreement, Benchmark had the right to maintain an equity position in the Company equal to the equity position it would own upon the issuance of all shares due under the agreement. If at any time during the Anti-Dilution Period, the Company were to issue any shares of common stock which would impair the equity position of Benchmark, then the Company shall have issued a warrant to purchase shares of common stock at an exercise price of $0.10 per share, which would upon exercise, reinstate their equity position. These warrants were exercisable at any time through October 31, 2009.

In addition, Benchmark could acquire additional shares of common stock whereby the purchase would give Benchmark 51% of the Company’s total outstanding equity. Benchmark was able to purchase these additional shares at any time through October 31, 2009, at an exercise price equal to the weighted average per share price of common stock over the 22 trading days prior plus a 15% per share control premium to the date we receive written notice of their desire to make this purchase.

Integrated Environmental Technologies, Ltd.

Notes to Condensed Consolidated Financial Statements

Note 6 – Options and warrants

A summary of stock options and warrants is as follows:

	Options	Average Price	Warrants	Average Price
Outstanding 1/1/09	1,075,000	$ 0.11	700,000	$ 0.11
Granted		-	11,417,914	0.10
Cancelled	-	-	(208,332)	0.18
Exercised	-	-	-	-
Outstanding 9/30/09	1,075,000	$ 0.11	11,909,582	$ 0.10

In the quarter ended March 31, 2009, we granted 2,688,332 warrants in connection with our borrowings. The value of the warrants as calculated using the Black-Scholes model was $128,621 using the following weighted average assumptions: Strike Price $0.10; Stock Price $0.06; Volatility 156%; Term 2.6 years; Dividend Yield 0%; Interest Rate 1.48%. We expensed as loan costs $60,489 in the period ended March 31, 2009. On May 19, 2009 and May 20, 2009, 34,722 and 173,610 of these warrants, respectively, were cancelled. We expensed $128,621 as loan costs for these warrants.

In the quarter ended June 30, 2009, we granted 1,989,582 warrants in connection with our borrowings. The value of the warrants as calculated using the Black-Scholes model was $99,735 using the following weighted average assumptions: Strike Price $0.11; Stock Price $0.06; Volatility 159%; Term 2.85 years; Dividend Yield 0%; Interest Rate 1.55%. We expensed $99,735 as loan costs for these warrants.

In the quarter ended September 30, 2009, we granted 6,590,000 warrants in connection with our borrowings. The value of the warrants as calculated using the Black-Scholes model was $290,805 using the following weighted average assumptions: Strike Price $0.10; Stock Price $0.05; Volatility 158%; Term 4.84 years; Dividend Yield 0%; Interest Rate 1.50%. We expensed a total of $148,864 in the quarter ended September 30, 2009 as loan costs for these warrants, and will expense as loan cost $141,941 in the quarter ending December 31, 2009.

Note 7 – Related-party transactions

We have a consulting agreement with a shareholder requiring payments of $2,500 per month. Additionally, we entered into a consulting agreement which expired February 26, 2009 with a shareholder for compensation of $5,000 per month. On March 13, 2009, the Company entered a consulting agreement with another shareholder for a term of two months for $2,500 per month, to be paid in full upon completion of the agreement. As of September 30, we recorded $37,500 in consulting fee expense.

We have employment agreements with two of our executives whereby we have agreed to annual compensation in the amount of $240,000. As of September 30, 2009, the future minimum payments are as follows:

Integrated Environmental Technologies, Ltd.

Notes to Condensed Consolidated Financial Statements

Related-party compensation requirements
2009		60,000
2010		240,000
2011		240,000
Total	$	540,000

On August 17, 2006, the Company received an unsecured loan of $25,000 from a shareholder at a variable interest rate. As of September 30, 2009, the remaining principal balance of the note is $23,300.

On February 26, 2009, the Company borrowed $37,500 from a shareholder at an annual interest rate of 6%. The loan and interest were paid on May 6, 2009.

On March 13, 2009, the Company borrowed $30,000 from a shareholder at an annual interest rate of 15%, with a total interest payment of not less than 5% of the loan amount. In addition, the Company agreed to issue 300,000 warrants exercisable for $0.10 per share of restricted common stock, expiring December 31, 2011. The loan and interest were paid on May 11, 2009.

Note 8 – Commitments and Contingencies

On August 22, 2006, we entered into a supply agreement with Aquastel, Inc., wherein Aquastel agreed to supply us with C-50 and C-100 cells. This agreement was amended by addendum on September 13, 2006 to grant IET U.S. exclusivity on these cells. The term of the agreement was 3 years, terminating on August 22, 2009. On April 17, 2009, we decided to terminate our August 22, 2006 Supply Agreement with Aquastel, and have notified Aquastel of this fact. Our decision was based on several factors, but serious consideration was given to receiving notification from Aquastel of its intent to relocate its electrolytic cell manufacturing operations outside of the U.S., hence causing IET to re-evaluate its dependency upon an outside source for electrolytic cells.

Throughout our history in this business, IET has been working on improvements to electrolytic cell technology, in particular, as specific components for our proprietary EcaFlo® equipment system. To that effect, we filed a provisional patent application with the U.S. Patent and Trademark Office on May 6, 2009 for our EcaFlo®-specific cell. Further development of EcaFlo® system components will be on-going to improve the efficiency and reliability of our EcaFlo® equipment system.

On June 20, 2007, in connection with the Stock Acquisition Agreement with Benchmark, we entered into an Exclusive License and Distribution Agreement, wherein we granted the exclusive, world-wide right, license and authority to market, manufacture, sell and distribute EcaFlo® equipment and solutions for use in Oilfield Applications to Benchmark Energy Products. The agreement provides for special pricing of equipment to Benchmark and per gallon technology fees, paid to IET on the EcaFlo® fluids sold by Benchmark, for a five-year period consistent with the license period.

Integrated Environmental Technologies, Ltd.

Notes to Condensed Consolidated Financial Statements

Benchmark and the Company have extended the deadline for fixing the minimum technology fees payable to the Company under the Exclusive License and Distribution Agreement while a major pumping services company, which has expressed an interest in obtaining some level of exclusivity, completes its laboratory analysis and field testing of Excelyte®. The testing has been completed, and the results are being analyzed.

Note 9 – Subsequent events

On October 7, 2009, we sold 30,000 restricted shares of common stock for $3,000. The shares have not been issued as of the date of this filing.

On November 12, 2009, we finalized a license agreement with a Geneva, Switzerland holding company, Atlas Developpement, S.A. (“Atlas”), wherein we granted the exclusive right, license and authority to market, sell and distribute EcaFlo® equipment and solutions for use in all markets except oil and gas in the country of France. The agreement provides for per liter technology fees, paid to IET on the EcaFlo® fluids sold by Atlas, for a period consistent with the license period. The initial term of the agreement is one year. We further agreed to allow an extension of this agreement in three-year exclusive terms, provided that Atlas makes minimum purchase requirements or technology fee payments as outlined in the agreement.

On November 16, 2009, in connection with our June 20, 2007 Stock Acquisition Agreement with Benchmark, we received the seventh and final installment of $1,000,000. The shares have not been issued as of the date of this filing.

FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may”, “could”, “estimate”, “intend”, “continue”, “believe”, “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement. Additionally, the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 most likely do not apply to our forward-looking statements as a result of being a penny stock issuer. You should, however, consult further disclosures we make in future filing of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:

o	our current lack of working capital;

o	implementation of our business plan within the oil and gas industry with Benchmark;

o	increased competitive pressures from existing competitors and new entrants;

o	increases in interest rates or our cost of borrowing or a default under any material debt agreements;

o	the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require our management to make estimates about matters that are inherently uncertain;

o	substantial dilution to our stockholders as the result of the issuance of our common stock in exchange for debt and/or equity financing;

o	deterioration in general or regional economic conditions;

o	adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;

o	changes in U.S. GAAP or in the legal, regulatory and legislative environments in the markets in which we operate;

o	loss of customers or sales weakness;

o	excessive product failure and related warranty expenses;

o	inability to achieve future sales levels or other operating results;

o	the unavailability of funds for capital expenditures and/or general working capital; and

o	operational inefficiencies in distribution or other systems.

For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see “Item 1A. Risk Factors” in this document and in our Annual Report on Form 10-K for the year ended December 31, 2008.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this quarterly report. References in the following discussion and throughout this quarterly report to “we”, “our”, “us”, “IET”, “the Company”, and similar terms refer to Integrated Environmental Technologies, Ltd. and its 100%-owned subsidiary, IET, Inc., unless otherwise expressly stated or the context otherwise requires.

OVERVIEW AND OUTLOOK

Integrated Environmental Technologies, Ltd. is a manufacturing company that designs and builds equipment incorporating innovative technologies which are focused on the enhancement of the environment and the health, safety, and well-being of current and future generations. Our wholly-owned subsidiary, I.E.T., Inc., designs, manufactures, markets, sells, and installs proprietary EcaFlo® equipment, featuring electro-chemical activation (ECA) technology, in the United States and throughout the world.

We have evolved from a development-stage company to an income-generating original equipment manufacturing company. We have focused our attentions on several critical issues:

·	Developing our ability to construct EcaFlo® equipment efficiently and cost-effectively;

·	Developing and enhancing our testing protocol with researchers at Coastal Carolina University, and independent companies and laboratories;

·	Identifying and obtaining required and beneficial federal and private regulatory certifications, registrations, and approvals;

·	Executing our business plan for oilfield applications and pursuing additional opportunities with Benchmark;

·	Raising equity capital;

·	Researching market application areas and identifying and establishing distributorship agreements;

·	Utilizing laboratory data and sales strategies to enter new markets;

·	Continuing to develop and maintain relationships with university and independent

·	laboratories for research assistance on EcaFlo® applications; and

·	Furthering the process of building a brand identity and sales track record through the appearance at various trade and professional shows and conferences.

We have incurred losses since inception. For the fiscal year ended December 31, 2008, we had a net loss of $1,535,712 as compared to a net loss of $1,950,182 for the fiscal year ended December 31, 2007. For the three and nine months ended September 30, 2009, we had a net loss of $547,634 and $1,435,145 as compared to a net loss of $331,716 and $1,024,711 for the three and nine months ended September 30, 2008. Our ability to proceed with our plan of operation has continuously been a function of our ability to increase revenues and raise sufficient capital to continue our operations.

Management intends to continue to closely monitor the costs associated with the production of EcaFlo® devices in an attempt to minimize capital shortages. As we continue to expand operational activities and execute our business plan for oilfield operations with our industry partner and licensee, Benchmark Energy Products, we anticipate experiencing positive cash flows from operations in future quarters. Debt borrowings may be considered from time to time if needed.

On June 20, 2007, we executed a Stock Acquisition Agreement with Benchmark Performance Group, Inc. (“Benchmark”). Pursuant to the Stock Acquisition Agreement, Benchmark agreed to purchase 35,000,000 shares of our common stock for a total purchase price of $3,500,000 (“Purchase Price”) or $0.10 per share. The purchase price was paid in seven (7) installments over a period of 30 months. On August 26, 2008, we executed an addendum to the investment agreement and contract with Benchmark, wherein we agreed that as a result of an economic down-turn, it was in the best interest of the Company and Benchmark to make the fifth installment payment early and prior to October 31, 2008 as previously agreed in the original investment agreement. As consideration for the acceleration of the fifth installment, we reduced the payment amount to $400,000 from $500,000. As of November 16, 2009, we have received seven installments for a total of $3,400,000.

In connection with the Stock Acquisition Agreement, we entered into an Exclusive License and Distribution Agreement with Benchmark, wherein we granted the exclusive, world-wide right, license and authority to market, manufacture, sell and distribute EcaFlo® equipment and solutions for use in Oilfield Applications to Benchmark.

On August 18, 2008, we received our product registration for EcaFlo® Anolyte from the United States Environmental Protection Agency (“EPA”). This registration process has been completed in order to make important marketing and efficacy claims about our EcaFlo® Anolyte product and its ability to be used as a high-level (hospital) disinfection/antimicrobial product. Additionally, other business models are now allowed because this registration permits the distribution of EcaFlo® Anolyte by container, as well as for use on-site where produced. The US EPA has conducted thorough investigations of the scientific data relative to EcaFlo® Anolyte, as well as requiring a full battery of independent, yet Company-sponsored, lab testing which was performed by fully-certified, EPA-approved labs. Based on the results of this extensive research, we have been granted our registration of EcaFlo® Anolyte. This product is a highly effective, “green” biocide that may be used for hard-surface disinfection for many applications, including medical, dental, veterinary, schools, gyms and sports equipment; bacteria control for food safety; oil and gas; water treatment; and infection control.

On September 10, 2008, we issued a press release announcing that we are targeting staph and other infections in schools, by continuing to sell EcaFlo® equipment to a leading North Carolina-based supplier of janitorial and sanitation products and solutions primarily involved in supplying state, county and local governments with disinfecting and sanitizing products.

On September 24, 2008, we issued another press release announcing the sale of additional EcaFlo® equipment to two new customers representing interests in new market areas. One company is promoting the use of EcaFlo® equipment and solutions in the agricultural industry, for use in livestock area surface disinfection. The other company plans to use the EcaFlo® equipment to produce solutions to effectively treat biofilm build-up and various other agricultural applications, such as veterinary clinics and dairy processing facilities that require thorough and dependable hard-surface disinfection.

On November 17, 2008, we issued a press release announcing that University General Hospital (UGH) is the first in the nation to utilize Excelyte® (Benchmark’s name for EcaFlo® Anolyte) as a primary disinfectant. IET and UGH, through an exclusive industry arrangement with Benchmark, signed a comprehensive agreement to evaluate the disinfecting capabilities of Excelyte® along with the disinfecting products currently in use in selected areas of the hospital, with the anticipation that Excelyte® will ultimately replace all other disinfectants in all areas of the hospital.

Recent Developments

On April 16, 2009, we issued a press release to formally introduce Benchmark Research & Technologies, Inc. Excelyte® as a registered, “green,” microbiocide product under IET’s U.S. Environmental Protection Agency product registration for EcaFlo® Anolyte. A copy of the press release was attached as Exhibit 99.4 in our first quarter report on Form 10-Q filed on May 15, 2009.

On April 21, 2009, we issued a press release announcing the registration of EcaFlo® Anolyte (trademark Excelyte®) with the National Science Foundation as a “D2” antimicrobial – an “antimicrobial agent not requiring rinse(ing)”. A copy of the press release was attached as Exhibit 99.5 in our first quarter report on Form 10-Q filed on May 15, 2009.

On April 28, 2009, we issued a press release announcing that the U.S. EPA has approved EcaFlo® Anolyte (trademarked Excelyte®), as a registered and effective biocide against MRSA (Methicillin-Resistant Staphylococcus Aureus), a bacterial infection facing the public today. A copy of the press release was attached as Exhibit 99.6 to our first quarter report on Form 10-Q filed on May 15, 2009.

On May 5, 2009, the Houston Rockets issued a press release announcing our partnership with the Houston Rockets, whereby Houston is to be the first national sports market to showcase our revolutionary “green” defensive technology. IET and Benchmark have entered into a sponsorship agreement with the Rockets.

On June 25, 2009, we issued a press release announcing the purchase of the next generation EcaFlo® Excelyte® equipment by Honeywell Technology Solutions, Inc. A copy of the press release was attached as Exhibit 99.7 to our second quarter report on Form 10-Q filed on August 13, 2009.

On September 24, 2009, we issued a press release announcing successful results of EcaFlo® Anolyte (marketed as Excelyte®), against Swine Influenza (H1N1), and completion of testing required by the EPA for inclusion on its master label. A copy of the press release is attached hereto as Exhibit 99.8.

On October 14, 2009, we issued a press release to announce the expansion of our commercial markets to Europe through a license agreement and sale, whereby we entered into our first international license agreement with a Geneva, Switzerland holding company, Atlas Developpement, S.A., for all markets except oil and gas in the country of France. A copy of the press release is attached hereto as Exhibit 99.9.

Results of Operations for the Three and Nine Months Ended September 30, 2009 and 2008

The following table summarizes selected items from the statement of operations at September 30, 2009 compared to September 30, 2008.

SALES AND COST OF SALES:

	Three Months Ended September 30,		Increase/(Decrease)		Nine Months Ended September 30,		Increase/(Decrease)
	2009	2008	$	%	2009	2008	$	%

Sales	$71,758	$154,897	$(83,139)	(54%)	$107,495	$399,064	$(291,569)	(73%)

Cost of Sales	24,707	71,439	(46,732)	(65%)	42,120	156,958	(114,838)	(73%)

Gross Profit	47,051	83,458	(36,407)	(44%)	65,375	242,106	(176,731)	(73%)

Gross Profit Percentage of Sales	66%	54%	--	12%	61%	61%	--	0%

Sales

Our sales for the three and nine months ended September 30, 2009 were $71,758 and $107,495 compared to sales of $154,897 and $399,064 in the three and nine months ended September 30, 2008. The decrease in sales was as a result of a delay in finalizing sales due to a change in economic positions for some of our customers, additional waiting periods while regulatory approvals have been sought, and delays while conclusive agreements are being finalized for potential exclusive licensees.

According to our oilfield distributor and industry partner, Benchmark Energy Products, Benchmark continues to market Excelyte® (Benchmark’s product name for EcaFlo® Anolyte), to the oil and gas industry, but the industry, which is resistant to change, continues to use several “old technology” biocides developed during the past 30 years. Benchmark has spent significant time and resources educating the industry about the benefits of Excelyte® versus the older biocides. Testing has confirmed that the biocide most widely used in the industry today is ineffective with current well treatment practices and industry attempts to utilize increasingly poorer quality water. Benchmark has engaged a highly regarded oil and gas industry biotechnology laboratory as an independent “expert” to help Benchmark mount a “turnaround” in industry thinking concerning the dynamic required for biocides to be effective with current well stimulation practices. The findings reported by this laboratory have validated that Excelyte® outperforms all other biocides currently in use by the oil and gas industry, with the added benefit of being the first totally “green” biocide.

Benchmark and the Company have extended the deadline for fixing the minimum technology fees payable to the Company under the Exclusive License and Distribution Agreement while a major pumping services company, which has completed its laboratory and field testing of Excelyte® and expressed a high interest in obtaining some level of exclusivity on the product, analyzes the results of this testing and develops and implements conclusive business plans.

During the period of time that oil and gas industry sales continue to be developed, our industry partner, Benchmark, has been dedicating time and extensive money to third-party research. Additionally, they have been focused on market development work, and sales in different markets, such as the professional sports and hospital, hard-surface disinfection markets. Benchmark management and key personnel – the “Excelyte® Team” – have brought many and varied opportunities to the table for IET. Benchmark and the Company work hand-in-hand to advance the markets for EcaFlo® solutions (or “Excelyte®”) and will continue to do so.

Cost of sales / Gross profit percentage of sales

Our cost of sales for the three and nine months ended September 30, 2009 was $24,707 and $42,120, a decrease of $46,732, or 65% from $71,439 for the three months ended September 30, 2008 and a decrease of $114,838, or 73% from $156,958 for the nine months ended September 30, 2008. The decrease in our cost of sales is as a result of a period of market development due to pending regulatory approvals, registration and certifications required for sales to occur. We are continuing to update and upgrade our product line and we closely monitor the cost of all of our products. We believe the cost of sales will increase slightly less as a percentage of sales when we have additional sales.

As of the nine months ended September 30, 2009, gross profit margins increased by 12% from the prior year as a result of a larger percentage of overall sales being EcaFlo® equipment sales, since our pricing structure allows for more profit on equipment sales than on replacement parts and laboratory testing supplies.

EXPENSES:

	Three Months Ended September 30,		Increase/(Decrease)		Nine Months Ended September 30,		Increase/(Decrease)
	2009	2008	$	%	2009	2008	$	%
Expenses:
Professional and administrative fees	$103,508	$51,407	$52,101	101%	$265,601	$206,554	$59,047	29%
Salary	158,126	156,641	1,485	1%	454,988	476,027	(21,039)	4%
Depreciation and amortization	(748)	439	(1,187)	(270%)	867	1,579	(712)	(45%)
Office and miscellaneous expense	99,065	111,797	(12,732)	(11%)	302,368	293,487	8,881	3%
Bad debt expense	1,200	95	1,105	1,163%	1,230	37,841	(36,611)	(97%)
Total Expenses	361,151	320,379	40,772	13%	1,025,054	1,015,488	9,566	1%

(Loss) from operations	(314,100)	(236,921)	(77,179)	(33%)	(959,679)	(773,382)	(186,297)	24%

Other income (expense):
Finance fees	(198,728)	(17,914)	(180,814)	(1,009%)	(377,219)	(44,654)	(332,565)	(745%)
Interest expense	(34,806)	(76,881)	42,075	55%	(98,247)	(206,675)	108,428	52%
Total other income (expense)	(233,534)	(94,795)	(138,739)	(146%)	(475,466)	(251,329)	(224,137)	(89%)

Net (loss)	$(547,634)	$(331,716)	$(215,918)	(65%)	$(1,435,145)	$(1,024,711)	$(410,434)	(40%)

Professional and Administrative Fees

Professional and administrative fees for the three and nine months ended September 30, 2009 were $103,508 and $265,601, an increase of $52,101, or 101%, from $51,407 for the three months ended September 30, 2008 and an increase of $59,047, or 29%, from $206,554 for the nine months ended September 30, 2008. The increase in professional and administrative fees was the result of utilizing the services of financial consultants to assist us in developing plans for financings and the improvement of share value. Whenever possible, we are trying to reduce outside consultants, but we will still need some assistance for areas of our business in which we do not have sufficient in-house expertise.

Salary Expenses

Salary expenses for the three and nine months ended September 30, 2009 were $158,126 and $454,988, an increase of $1,485, or 1%, from $156,641 for the three months ended September 30, 2008 and a decrease of $21,039, or 4%, from $476,027 for the nine months ended September 30, 2008. The increase in salary expenses for the three months ended September 30, 2009 was the result of increases in individual employees’ pay during this time. The decrease in salary expenses for the nine months ended September 30, 2009 was the result of reducing our engineering staff, while accomplishing the production necessary for meeting the Company’s sales of equipment. We expect salary expense to increase in the future as the Company grows and as sales volume increases. We may need to continue issuing stock and stock options in exchange for services and adequate personnel compensation.

Depreciation and Amortization Expenses

Depreciation and amortization expenses for the three and nine months ended September 30, 2009 were $(748) and $867, a decrease of $1,187 from $439 for the three months ended September 30, 2008 and a decrease of $712 from $1,579 for the nine months ended September 30, 2008. The decrease in depreciation expenses was the result of the reclassification of some office equipment, and the full depreciable value of some of the equipment having been reached.

Office and Miscellaneous Expenses

Office and miscellaneous expenses for the three and nine months ended September 30, 2009 were $99,065 and $302,368, a decrease of $12,732, or 11%, from $111,797 for the three months ended September 30, 2008 and an increase of $8,881, or 3%, from $293,487 for the nine months ended September 30, 2008. The decrease in office and miscellaneous expenses for the three months ended September 30, 2009 was the result of having well-stocked our office. The increase in office and miscellaneous expenses for the nine months ended September 30, 2009 was as a result of an increase in the costs associated with these expenses.

Bad Debt Expenses

Bad debt expenses for the three and nine months ended September 30, 2009 were $1,200 and $1,230, an increase of $1,105 from $95 for the three months ended September 30, 2008, and a decrease of $36,611 for the nine months ended September 30, 2008. The decrease in bad debt expenses for the nine months ended September 30, 2009 was as a result of our customers having paid their debt to us. We have historically had limited write-offs as the result of bad debts. We continually evaluate the creditworthiness of our customers and typically require a deposit of 50% of the total purchase price with each EcaFlo® equipment order. We evaluate the collectability of accounts receivable regularly and it is our policy to record an allowance when the results of the evaluation indicate an increased risk related to the customer's ability to meet their financial obligations.

Loss from Operations

The loss from operations for the three and nine months ended September 30, 2009 were $314,100 and $959,679, an increase of $77,179, or 33%, from $236,921 for the three months ended September 30, 2008 and an increase of $186,297, or 24%, from $773,382 for the nine months ended September 30, 2008. The increase in the loss from operations was the result of a delay in finalizing sales due to a change in economic positions for some of our customers, additional waiting periods while regulatory approvals have been sought, and delays while conclusive agreements are being finalized for potential exclusive licensees, all of which have hindered our ability to increase sales.

Finance Fees

Finance fees for the three and nine months ended September 30, 2009 were $198,728 and $377,219, an increase of $180,814 from $17,914 for the three months ended September 30, 2008 and an increase of $332,565 from $44,654 for the nine months ended September 30, 2008. The increase in finance fees in the three and nine months ended September 30, 2009 was due to an increase in warrants issued in connection with temporary working capital loans.

Interest Expense

Interest expense for the three and nine months ended September 30, 2009 was $34,806 and $98,247, a decrease of $42,075, or 55%, from $76,881 for the three months ended September 30, 2008 and a decrease of $108,428, or 52%, from $206,675 for the nine months ended September 30, 2008. The decrease in interest expense was as a result of having paid off several loans with higher interest payments, and utilizing the issuance of warrants to obtain loans with lower interest rates.

Net (Loss)

Our net loss for the three and nine months ended September 30, 2009 was $547,634 and $1,435,145, an increase of $215,918, or 65%, from $331,716 for the three months ended September 30, 2008 and an increase of $410,434, or 40%, from $1,024,711 for the nine months ended September 30, 2008. We continue to have a net loss and believe the loss will be reduced and profitability will be attained in future quarters as the sales of our products increase.

Operation Plan

The technology that drives our short-term and long-term plans is electro-chemical activation (ECA), which is the center point of our EcaFlo® systems. Our plan of operation focuses on continuing the process of commercialization of EcaFlo® equipment and EcaFlo® solutions, known as EcaFlo® Anolyte (“Excelyte®”) and EcaFlo® Catholyte.

Our direct attention continues to be focused on providing our EcaFlo® devices to the markets at-hand: the oil and gas industry, food safety and agricultural applications, storm-water treatment, water and wastewater treatment, and other hard surface sanitation opportunities such as our recent entry into the professional sports market. In many cases, clinical and laboratory testing and research have now moved to field trials by end-users. Anticipated positive results in field testing should result in increased sales in future quarters. As a new “green” product, regulatory constraints continue to provide unforeseen challenges, which we address and overcome systematically.

Liquidity and Capital Resources

The following table summarizes total current assets, total current liabilities and working capital at September 30, 2009 compared to December 31, 2008.

	September 30, 2009	December 31, 2008	Increase / (Decrease)
	September 30, 2009	December 31, 2008	$	%

Current Assets	$547,317	$225,413	$321,904	143%

Current Liabilities	1,759,098	895,135	863,963	97%

Working Capital (deficit)	$(1,211,781)	$(669,722)	$542,061	81%

Liquidity is a measure of a company’s ability to meet potential cash requirements. We have historically met our capital requirements through the issuance of stock, by borrowings, and through sales-generated revenue. In the future, we anticipate we will be able to provide the necessary liquidity we need by the revenues generated from the sales of our products. We will continue to consider financing opportunities with strategic industry partners outside of the oil and gas industry.

As of September 30, 2009, we continue to use traditional and/or debt financing, in addition to sales-generated revenue, to provide the capital we need to run the business. In the future, we need to generate enough revenues from the sales of our products in order for us to not have to sell additional stock or obtain additional loans.

On June 20, 2007, we entered into an investment agreement and contract with Benchmark Performance Group, Inc. The contract provides for an equity investment of $3,500,000 over a period of 30 months in 7 installments and for technology fees paid to IET per gallon of EcaFlo® fluids sold by Benchmark within the oil and gas industry. On August 26, 2008, we executed an addendum to the investment agreement and contract with Benchmark, wherein we agreed that as a result of an economic down-turn, it was in the best interest of the Company and Benchmark to make the fifth installment payment early and prior to October 31, 2008 as previously agreed in the original investment agreement. As consideration for the acceleration of the fifth installment, we reduced the payment amount to $400,000 from $500,000. As of November 16, 2009, we have received seven installments for a total of $3,400,000. A copy of the addendum was attached as exhibit 10.21 to our quarterly report filed on November 13, 2008.

Financing. On August 17, 2006, we received an unsecured loan of $25,000 from a shareholder at a variable interest rate. Pursuant to the note agreement, the Company agreed to issue 100,000 shares of common stock as a loan fee. On April 3, 2007, the shares were issued. As of September 30, 2009, the remaining principal balance of the note is $23,300.

On January 7, 2009, we borrowed $25,000 from an individual at an annual interest rate of 6%, which was due by May 15, 2009. In the event that the principal amount and interest were not repaid by May 15, 2009, we agreed to an increase in the interest rate to 12% per annum, and a penalty of $212.50 per month until the balance was paid in full. In consideration for the loan, we agreed to issue 250,000 warrants exercisable for $0.10 per share and 34,722 warrants exercisable for $0.18 per share, expiring on December 31, 2011. In addition, the Lender was granted the right to convert either one-half or the entire note (including interest) to restricted shares of the Company’s common stock at $0.10 per share for additional consideration of 93,750 warrants exercisable at $0.20 per share for conversion of the entire note, or 46,875 warrants exercisable at $0.20 per share for conversion of one-half of the note. These warrants would be effective on the conversion date and would expire on December 31, 2011. As additional consideration for the loan, we agreed to issue options for 25,000 shares per year for three years at a 10% discount to market price as determined by a prior ten-day trading average. On May 15, 2009, we paid $12,500 and all interest to date, and on May 19, 2009, we entered into an addendum to the promissory note, whereby we agreed to extend the due date for the $12,500 remaining principal balance until July 15, 2009, at an annual interest rate of 6%. In the event that the principal amount and interest were not repaid by July 15, 2009, we agreed to an increase in the interest rate to 12% per annum, and a penalty of $212.50 per month until the balance was paid in full. In consideration for this extension, we agreed to cancel the 34,722 $0.18 warrants issued under the original promissory note, and to issue 81,597 warrants exercisable for $0.15 per share, expiring on December 31, 2011. In addition, the Lender was granted the right to convert the entire note (including interest) to restricted shares of the Company’s common stock at $0.10 per share. The note and interest were repaid on August 17, 2009.

On January 16, 2009, we borrowed $125,000 from an individual at an annual interest rate of 6%, which was due by May 15, 2009. In the event that the principal amount and interest were not repaid by May 15, 2009, we agreed to an increase in the interest rate to 12% per annum, and a penalty of $1,000 per month until the balance was paid in full. In consideration for the loan, we agreed to issue 1,250,000 warrants exercisable for $0.10 per share and 173,610 warrants exercisable for $0.18 per share, expiring on December 31, 2011. In addition, the Lender was granted the right to convert either one-half or the entire note (including interest) to restricted shares of the Company’s common stock at $0.10 per share for additional consideration of 468,750 warrants exercisable at $0.20 per share for conversion of the entire note, or 234,375 warrants exercisable at $0.20 per share for conversion of one-half of the note. These warrants would be effective on the conversion date and would expire on December 31, 2011. As additional consideration for the loan, we agreed to issue options for 125,000 shares per year for three years at a 10% discount to market price as determined by a prior ten-day trading average. On May 15, 2009, we paid $62,500 and all interest to date and on May 20, 2009, we entered into an addendum to the promissory note, whereby we agreed to extend the due date for the $62,500 remaining principal balance until July 15, 2009, at an annual interest rate of 6%. In the event that the principal amount and interest were not repaid by July 15, 2009, we agreed to an increase in the interest rate to 12% per annum, and a penalty of $1,000 per month until the balance was paid in full. In consideration for this extension, we agreed to cancel the 173,610 $0.18 warrants issued under the original promissory note, and to issue 407,985 warrants exercisable for $0.15 per share, expiring on December 31, 2011. In addition, the Lender was granted the right to convert either one-half or the entire note (including interest) to restricted shares of the Company’s common stock at $0.10 per share. The note and interest were repaid on August 21, 2009.

On June 22, 2009, the Company borrowed $100,000 from an individual at an annual interest rate of 12% plus a loan fee of $10,000. In addition, the Company agreed to issue 1,000,000 warrants exercisable for $0.10 per share of restricted common stock, expiring June 19, 2012. The loan and interest are due November 16, 2009. In the event that the principal and interest are not paid by this date, the Company will incur a penalty of $1,500 per month.

On July 8, 2009, we executed a promissory note with an individual for the principal amount of $25,000 at an annual interest rate of 7% plus a loan fee of $750 due on November 16, 2009. In the event that the principal and interest are not paid by the due date, we will incur a penalty of $1,000 per month. In addition, we agreed to issue 25,000 warrants exercisable for $0.10 per share of restricted common stock, expiring July 6, 2012.

On July 29, 2009, the Company borrowed $25,000 from an individual at an annual interest rate of 12% due on November 16, 2009. In the event that the principal and interest are not paid by the due date, the Company will incur a penalty of $1,000 per month. In addition, the Company agreed to issue 25,000 warrants exercisable for $0.10 per share of restricted common stock, expiring June 30, 2012.

On August 12, 2009, the Company borrowed $40,000 from an individual at an annual interest rate of 12%, due on November 16, 2009. In the event that the principal and interest are not paid by the due date, the Company will incur a penalty of $1,000 per month. In addition, the Company agreed to issue 40,000 warrants exercisable for $0.10 per share of restricted common stock, expiring June 30, 2012.

On August 19, 2009, we borrowed $590,000 from a company at an annual interest rate of 12%, plus a loan fee of $14,750, due on November 16, 2009. In consideration for the loan, we agreed to issue 5,900,000 warrants exercisable for $0.10 per share, expiring on August 14, 2014. The Lender was granted the right to convert the note (including interest) to restricted shares of the Company’s common stock at $0.10 per share for additional consideration of 2,950,000 warrants exercisable at $0.20 per share. These warrants would be effective on the conversion date and would expire on August 14, 2014. In the event that the principal and interest are not paid by the due date, the Company will incur a penalty of $3,000 per month until the balance is paid in full. Furthermore, in the event that the principal and interest are not paid by February 16, 2010, the Lender shall have the right to convert the unpaid portion of the note, including interest, to restricted shares of the Company’s common stock at $0.05 per share, and a pro rata portion of the 5,900,000 warrants will be exercisable at $0.05 per share.

On August 19, 2009, we borrowed $10,000 from a company at an annual interest rate of 12%, plus a loan fee of $250, due on November 16, 2009. In consideration for the loan, we agreed to issue 100,000 warrants exercisable for $0.10 per share, expiring on August 14, 2014. The Lender was granted the right to convert the note (including interest) to restricted shares of the Company’s common stock at $0.10 per share for additional consideration of 50,000 warrants exercisable at $0.20 per share. These warrants would be effective on the conversion date and would expire on August 14, 2014. In the event that the principal and interest are not paid by the due date, the Company will incur a penalty of $3,000 per month until the balance is paid in full. Furthermore, in the event that the principal and interest are not paid by February 16, 2010, the Lender shall have the right to convert the unpaid portion of the note, including interest, to restricted shares of the Company’s common stock at $0.05 per share, and a pro rata portion of the 100,000 warrants will be exercisable at $0.05 per share.

As of September 30, 2009, we had convertible loans totaling $492,000, which are accruing interest at a rate of 10% per annum payable semi-annually. We extended the original maturity date of January 2, 2009, and will continue to accrue interest at a rate of 10% per annum until the notes are paid. The notes are currently in default.

Satisfaction of our cash obligations for the next 12 months.

As of September 30, 2009, our cash balance was $327,523. Our plan for satisfying our cash requirements for the next twelve months is through sales-generated income, additional sales of our common stock, third-party financing, and/or traditional bank financing. We intend to make appropriate plans to insure sources of additional capital in the future to fund growth and expansion, and may consider additional equity or debt financing or credit facilities.

Since inception, we have financed cash flow requirements through debt financing and the issuance of common stock for cash and services. As we continue to expand operational activities, we may continue to experience net negative cash flows from operations, pending receipt of sales or development fees, and will be required to obtain additional financing to fund operations through common stock offerings and debt borrowings, giving consideration to loans and working diligently to move sales ahead to the extent necessary to provide working capital.

We may continue to incur operating losses over the majority or some portion of the next twelve months. Our lack of operating history makes predictions of future operating results difficult to ascertain. Our prospects must be considered in light of the risks, expenses, and difficulties frequently encountered by companies in their early stage of development, particularly companies in new and rapidly evolving technology markets. Such risks include, but are not limited to, an evolving and unpredictable business model and the management of growth. To address these risks we must, among other things, implement and successfully execute our business and marketing strategy, continue to develop and upgrade technology and products, respond to competitive developments, and continue to attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect on our business prospects, financial condition and results of operations.

As a result of our cash requirements and our lack of working capital, although not anticipated, we may continue to issue stock in exchange for loans and/or equity, which may have a substantial dilutive impact on our existing stockholders.

Going Concern

The financial statements included in this filing have been prepared in conformity with generally accepted accounting principles that contemplate the continuance of the Company as a going concern. The Company’s ability to continue as a going concern is dependent on attaining profitable operations. The Company's cash position may be inadequate to pay all of the costs associated with testing, production and marketing of products. Management will consider borrowings and security sales to mitigate the effects of its cash position; however, no assurance can be given that debt or equity financing, if and when required, will be available. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities that might be necessary should the Company be unable to continue existence.

Summary of product and research and development that we have accomplished and that we will continue to perform for the term of our plan.

EcaFlo® Solutions and EcaFlo® Equipment

As a result of positive laboratory test results from the Water Quality Lab at Coastal Carolina University, in combination with internal profit margin comparisons between prototype EcaFlo® devices, we have been able to make decisions regarding market entry with our own specifically designed and engineered devices. Our engineering department has dedicated itself to identifying and making quality improvements to our EcaFlo® systems, the components utilized in our EcaFlo® systems, and the functionality between our EcaFlo® systems and the end use of the fluid solutions produced by our EcaFlo® equipment. Vital testing results have significantly improved our ability to complete our goals and enter our markets with specific EcaFlo® devices with a firm confidence level, in addition to allowing us the opportunity to modify existing EcaFlo® equipment to meet customer demand. Currently we are focusing on on-site trials of our EcaFlo® equipment and assisting customers with the integration of our EcaFlo® equipment into their processes.

Current research initiatives are centered on providing specific water quality regulatory agencies with reports that will serve to quell any question that may arise regarding the potential of negative impact on the environment (i.e.: estuary) associated with the use of EcaFlo® Anolyte and Catholyte solutions. We are finding that, through the use of test data and technical expertise, we are able to better educate environmental regulators and gain their support and endorsement for certain ECA applications within the storm water treatment arena, the petroleum industry, and with food and beverage safety control agencies. At petroleum industry trade shows, our marketing and sales department personnel presented test results showing potential customers that aliquots of petroleum well “frac” waters treated with EcaFlo® device-generated anolyte solution showed bacterial kill in less than 5 minutes. Furthering that data, our approach is to point out that the use of EcaFlo® solutions to obtain these successful results can eliminate the need for voluminous regulatory compliance paperwork and the higher cost associated with the use of traditional biocidal chemicals that are currently used to treat “frac” water.

We are continuing our research to identify opportunities where we can provide our innovative technology in value-added services within the food and beverage production and processing industry, medical and healthcare markets, the hospitality industry, the professional sports market, as well as in homeland defense applications.

We are continuing to work together with Coastal Carolina University, as well as independent laboratories and other universities associated with several of our customers’ specific research requirements, to develop a more comprehensive approach to documenting test results that pertain to the use of EcaFlo® solutions in a plethora of applications.

Further research and development efforts will be implemented with our strategic university partners, going concerns within the oil and gas and food safety industries, and with nationally-accredited research labs. We view research and development as an integral portion of our product development plan and will use the measurable outcomes from research projects as catalysts for market development. The results of this research guide us in determining what to further implement into our EcaFlo® equipment designs.

On May 7, 2008, we announced that as a result of two invitations to showcase our equipment at the Chemical Biological Incident Response Force’s Indian Head Base (Maryland), our EcaFlo® equipment and solutions were accepted to be listed on the United States Department of Homeland Security’s website. In addition, we recently announced a sale to a Federal agency known as DTRA (Defense Threat Reduction Agency) for use in a homeland threat / defense exercise.

The United States Environmental Protection Agency (“EPA”) has conducted thorough investigations of the scientific data relative to EcaFlo® Anolyte product, as well as requiring a full battery of independent, yet Company-sponsored, lab testing which was performed by fully-certified, EPA-approved labs. Based on the results of this extensive research, we were granted our registration of EcaFlo® Anolyte on August 18, 2008. This product is a highly effective, “green” biocide that may be used for hard-surface disinfection for many applications, including medical, dental, veterinary, schools, gyms and sports equipment, bacteria control for food safety, oil and gas, water treatment, and infection control. This registration process has been completed in order to make important marketing and efficacy claims about our EcaFlo® Anolyte product and its ability to be used as a high-level (hospital) disinfection/antimicrobial product. Additionally, other business models are now allowed because this registration permits the distribution of EcaFlo® Anolyte by container, as well as for use onsite where produced. In addition, the EPA, as a result of additional laboratory testing using AOAC protocols, has allowed us to add MRSA-specific claims to our product registration label.

Benchmark, along with a service company, has performed thorough oilfield bacteria testing in a third-party, independent lab and field testing of Excelyte® to ascertain specific comparison data between Excelyte® and traditionally-used oilfield chemicals. The results of this testing have pinpointed specific uses for Excelyte® beyond the use for frac waters, which expand the known oilfield market through additional applications. The results of this extensive testing are being reviewed by key members of a third-party, oil and industry entity.

On May 6, 2009, we filed a provisional patent application with the U.S. Patent and Trademark Office for our EcaFlo®-specific electrolytic cell. Further development of EcaFlo® system components will be on-going to improve the efficiency and reliability of our EcaFlo® equipment system.

Significant changes in the number of employees.

We currently employ 7 full-time, permanent employees. These employees are engaged in management, marketing and sales, engineering, production and administrative services. We continue to anticipate an increase in employees in the next twelve months as we add assembly personnel, shipping and receiving personnel and additional administrative support personnel.

Exclusive License and Distribution Agreement

On June 20, 2007, in connection with the Stock Acquisition Agreement with Benchmark, we entered into an Exclusive License and Distribution Agreement, wherein we granted the exclusive, worldwide right, license, and authority to market, manufacture, sell and distribute EcaFlo® fluids and solutions for use in Oilfield Applications to Benchmark Energy Products. The agreement provides for special pricing of equipment to Benchmark and per-gallon technology fees, paid to IET on the EcaFlo® fluids sold by Benchmark, for a five-year period consistent with the license period.

Benchmark and the Company have extended the deadline for fixing the minimum technology fees payable to the Company under the Exclusive License and Distribution Agreement while a major pumping services company, which has expressed an interest in obtaining some level of exclusivity, completes its analysis of laboratory and field testing of Excelyte®.

Supply Agreement with D2W2, LLC

On June 6, 2008, we entered into a supply agreement with D2W2, LLC, wherein D2W2 agreed to purchase our products (certain electro-chemical activation equipment) for resale. The term of the agreement commenced on June 6, 2008 and will continue for two years and shall automatically renew for a full five-year term provided satisfactory marketing, testing and sales progress is made by D2W2, and, shall continue thereafter, year to year, upon the same terms and conditions, unless either party notifies the other that it wishes to renegotiate or terminate.

Exclusive Distributorship Agreement with Mickey’s Sales & Service

On September 8, 2008, the Company entered into an exclusive distributorship agreement with Mickey’s Sales & Service (“Mickey’s”), wherein IET granted to Mickey’s the exclusive right to purchase, inventory, promote, and resell EcaFlo® products in North Carolina and Virginia. The term of the agreement commenced on September 8, 2008 and will continue for three years renewable annually upon agreement by both parties, based on performance and market applications. In addition, Mickey’s was granted the exclusive rights to purchase, inventory, promote, and resell EcaFlo® products in South Carolina, with a right of first refusal, reviewed by the Company on a case-by-case basis, to respond to leads and accomplish sales.

Exclusive Supply Agreement with Aquastel, Inc.

On August 22, 2006, we entered into a supply agreement with Aquastel, Inc., wherein Aquastel agreed to supply us with C-50 and C-100 cells. On September 13, 2006, this agreement was amended by addendum for exclusivity. The term of the agreement was 3 years, terminating on August 22, 2009.

On April 17, 2009, we decided to terminate our August 22, 2006 Supply Agreement with Aquastel. Our decision was based on several factors, but serious consideration was given to receiving notification from Aquastel of its intent to relocate its electrolytic cell manufacturing operations outside of the U.S., hence causing IET to re-evaluate its dependency upon an outside source for electrolytic cells.

Critical Accounting Policies and Estimates

Our discussion of financial conditions and results of operations is based upon the information reported in our financial statements. The preparation of these statements requires us to make assumptions and estimates that affect the reported amounts of assets, liabilities, revenues and expenses as well as the disclosure of contingent assets and liabilities at the date of our financial statements. We base our assumptions and estimates on historical experience and other sources that we believe to be reasonable at the time. Actual results may vary from our estimates due to changes in circumstances, weather, politics, global economics, mechanical problems, general business conditions and other factors. Our significant estimates are related to the valuation of warrants and options.

Revenue Recognition

We recognize sales revenue when title passes and all significant risks of ownership change, which occurs either upon shipment or delivery based on contractual terms.

Off-Balance Sheet Arrangements.

As of September 30, 2009, we did not have any off-balance sheet arrangements that had or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Concentration of Credit Risk

We sell products to customers in diversified industries and geographical regions. During the years ended December 31, 2008 and 2007, we had three customers, which represented 41%, 16%, and 12% and 52%, 11%, and 7% of sales, respectively. We continually evaluate the creditworthiness of our customers and typically require a deposit of 50% of the total purchase price with each EcaFlo® equipment order.

We evaluate the collectability of accounts receivable regularly and it is our policy to record an allowance when the results of the evaluation indicate an increased risk related to the customer's ability to meet their financial obligations. As of December 31, 2008 and 2007, there was no reserve for bad debts.

Item 4T. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Principal Financial Officer, William E. Prince, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Report. Based on that evaluation, Mr. Prince concluded that our disclosure controls and procedures are effective in timely alerting him to material information relating to us (including our consolidated subsidiaries) required to be included in our periodic SEC filings and in ensuring that information required to be disclosed by us in the reports that we file or submit under the Act is accumulated and communicated to our management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

We are not a party to any material legal proceedings.

Item 1A. Risk Factors.

FACTORS THAT MAY AFFECT OUR RESULTS OF OPERATIONS

We are required to make accounting estimates and judgments in preparing our consolidated financial statements.

In preparing our consolidated financial statements in accordance with accounting principles generally accepted in the United States, we make certain estimates and assumptions that affect the accounting for and recognition of assets, liabilities, revenues and expenses. These estimates and assumptions must be made because certain information that is used in the preparation of our consolidated financial statements is dependent on future events, or cannot be calculated with a high degree of precision from data available. In some cases, these estimates are particularly difficult to determine and we must exercise significant judgment. The estimates and the assumptions having the greatest amount of uncertainty, subjectivity and complexity are related to our accounting for bad debts, returns and allowances, warranty and repair costs, derivatives, and asset impairments. Actual results could differ materially from the estimates and assumptions that we use, which could have a material adverse effect on our financial condition and results of operations.

Our auditor’s report reflects the fact that without realization of additional capital, it would be unlikely for us to continue as a going concern.

As a result of our deficiency in working capital at December 31, 2008 and September 30, 2009, our auditors have included a paragraph in their report regarding substantial doubt about our ability to continue as a going concern. Our plans in this regard are to seek additional funding through sales-generated revenue, future equity private placements with traditional financing firms and/or with an industry partner, or debt facilities.

We have minimal operating history, which raises substantial doubt as to our ability to successfully develop profitable business operations.

We have a limited operating history. However, our management team has extensive experience in project development and managing corporate assets. A highly successful professional who brings more than three decades of business development experience to us from the environmental engineering industry heads our marketing and sales department. The Company’s engineering department is headed by a former member of the military, who has expertise that centers on the primary mechanical and electrical aspects of our technologies. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered in establishing a business in our intended industries. Outside of the high levels of expertise noted above and our concentrated effort to be the leading provider in our industries, there is nothing at this time on which to base an assumption that our business operations will prove to be successful or that we will ever be able to operate profitably.

Our future operating results will depend upon many factors, including:

·	The continuation of our efforts to raise adequate working capital through equity investment, traditional financing, and the generation of sales revenues;

·	The continued success of lab and field testing that supports the development of our EcaFlo® technology product lines;

·	Demand for our EcaFlo® equipment and solutions;

·	The level of our competition;

·	Our ability to maintain key management and technical support staff, and to attract more employees with similar characteristics; and

·	The continuation of our efforts to efficiently develop products to commercialize while maintaining quality and controlling costs.

To achieve profitable operations, we must successfully act on the factors stated above, along with continually developing ways to enhance our production efforts, now that we are commencing production in the EcaFlo® Division.

As we move forward in production stage business operations, even with our good faith efforts, potential investors have a high possibility of losing their investment.

Due to the intrinsic nature of our business, we expect to see growth in competition and the development of new and improved technologies within the realm of electro-chemical activation processes and products. While we will always keep a close eye on technological advancement in these areas, management forecasts are not necessarily indicative of our ability to compete with newer technology, as it may develop. Management forecasts should not be relied upon as an indication of future performance. While management believes its estimates of projected occurrences and events are within the timetable of its business plan, our actual results may differ substantially from those that are currently anticipated.

We will need additional capital in the future to finance our planned growth, which we may not be able to raise or it may only be available on terms unfavorable to us or our stockholders, which may result in our inability to fund our working capital requirements and harm our operational results.

Based on our current proposed plans and assumptions, we anticipate that we will need additional capital to fund our operations. Furthermore, the commercialization expenses of our EcaFlo® Division will be substantial, i.e., in excess of the amount of cash that we currently have. Accordingly, we will have to (i) obtain additional debt or equity financing in order to fund the further development of our products and working capital needs, and/or (ii) enter into a strategic alliance with a larger company to provide our required funding. As a result of our low-priced stock, and our continuous need for additional capital, we may consider issuing significant amounts of our common stock in exchange for either debt or equity. The continued issuance of our common stock could have a substantial dilutive impact on our current stockholders. If we are unable to obtain additional equity or debt financing, we may be forced to terminate operations.

Because our common stock is deemed a low-priced “Penny” stock, an investment in our common stock should be considered high risk and subject to marketability restrictions.

Since our common stock is a penny stock, as defined in Rule 3a51-1 under the Securities Exchange Act, it will be more difficult for investors to liquidate their investment even if and when a market develops for the common stock. Until the trading price of the common stock rises above $5.00 per share, if ever, trading in the common stock is subject to the penny stock rules of the Securities Exchange Act specified in rules 15g-1 through 15g-10. Those rules require broker-dealers, before effecting transactions in any penny stock, to:

· Deliver to the customer, and obtain a written receipt for, a disclosure document;

· Disclose certain price information about the stock;

·	Disclose the amount of compensation received by the broker-dealer or any associated person of the broker-dealer;

·	Send monthly statements to customers with market and price information about the penny stock; and

·	In some circumstances, approve the purchaser’s account under certain standards and deliver written statements to the customer with information specified in the rules.

Consequently, the penny stock rules may restrict the ability or willingness of broker-dealers to sell the common stock and may affect the ability of holders to sell their common stock in the secondary market and the price at which such holders can sell any such securities. These additional procedures could also limit our ability to raise additional capital in the future.

Our stock is thinly traded; as a result you may be unable to sell at or near ask prices or at all if you need to liquidate your shares.

The shares of our common stock have historically been thinly-traded on the OTC Bulletin Board, meaning that the number of persons interested in purchasing our common shares at or near ask prices at any given time may be relatively small or non-existent. This situation is attributable to a number of factors, including the fact that we are a small company which is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven, early-stage company such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give you any assurance that a broader or more active public trading market for our common shares will develop or be sustained, or that current trading levels will be sustained. Due to these conditions, we can give investors no assurance that they will be able to sell their shares at or near ask prices or at all if they need money or otherwise desire to liquidate their shares.

We are subject to significant competition from large, well-funded companies.

The industries we intend to compete in are characterized by intense competition and rapid and significant technological advancements. Many companies, research institutions and universities are working in a number of areas similar to our primary fields of interest to develop new products, some of which may be similar and/or competitive to our products. Furthermore, many companies are engaged in the development of water “purifying” products which may be similar and/or competitive to our products and technology. Most of the companies with which we compete have substantially greater financial, technical, manufacturing, marketing, distribution and other resources than us.

We are highly dependent on William E. Prince, our CEO, president and chairman. The loss of Mr. Prince, whose knowledge, leadership and technical expertise upon which we rely, would harm our ability to execute our business plan.

Our success depends heavily upon the continued contributions of William E. Prince, whose knowledge, leadership and technical expertise would be difficult to replace, and on our ability to retain and attract technical and professional staff. If we were to lose his services, our ability to execute our business plan would be harmed and we may be forced to cease operations until such time as we could hire a suitable replacement for Mr. Prince. We also have other key employees who manage our operations and perform critical engineering and design functions, as well as direct the overall marketing and sales of our products. If we were to lose their services, senior management would be required to expend time and energy to replace and train their replacements. To the extent that we are smaller than our competitors and have fewer resources, we may not be able to attract the sufficient number and quality of staff.

Potential issuance of additional common stock could dilute existing stockholders.

We are authorized to issue up to 200,000,000 shares of common stock. To the extent of such authorization, our board of directors has the ability, without seeking stockholder approval, to issue additional shares of common stock in the future for such consideration as the board of directors may consider sufficient. We may seek additional equity financing, which if sought or obtained may result in additional shares of our common stock being issued.

Pursuant to the Stock Acquisition Agreement with Benchmark, we agreed that throughout the period commencing with the closing date and ending October 31, 2009, Benchmark had the right and ability to maintain an equity position in the Company equal to the equity position it would own upon the issuance of shares to it following payment of the seventh installment if, between the date of closing and the date of such payment and issuance of shares, we were to issue no additional shares of our common stock (approximately 40.61%) to any other party. If we defaulted pursuant to the anti-dilution language in the agreement (considered a “Warrant Right Event”) then we were obligated to issue to Benchmark a warrant entitling it to purchase, at $0.10 per share, such additional number of shares of our common stock as would, upon exercise, make Benchmark the holder of the same total percentage of all our outstanding equity securities as it held prior to the Warrant Right Event. The warrants were exercisable at any time through October 31, 2009.

The issuance of additional common stock in the future will reduce the proportionate ownership and voting power of the common stock held by our existing stockholders.

Our internal controls may be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of management and directors of the Company, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

We have a limited number of personnel that are required to perform various roles and duties as well as be responsible for monitoring and ensuring compliance with our internal control procedures. As a result, our internal controls may be inadequate or ineffective, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public. Investors relying upon this misinformation may make an uninformed investment decision.

If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board, which would limit the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.

Companies trading on the OTC Bulletin Board, such as us, generally must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTC Bulletin Board. More specifically, FINRA has enacted Rule 6530, which determines eligibility of issuers quoted on the OTC Bulletin Board by requiring an issuer to be current in its filings with the Commission. Pursuant to Rule 6530(e), if we file our reports late with the Commission three times in a two-year period or our securities are removed from the OTC Bulletin Board for failure to timely file twice in a two-year period, then we will be ineligible for quotation on the OTC Bulletin Board. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market. As of the date of this filing, we have one late filing reported by FINRA.

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

On July 6, 2009, we sold a total of 500,000 shares of our restricted common stock to 1 accredited investor for a total purchase price of $50,000, all of which was paid in cash. The 500,000 shares have not been issued as of the date of this filing. In consideration of the execution of the subscription agreement, we agreed to issue to the investor 500,000 warrants exercisable for $0.10 per share of our restricted common stock, expiring June 30, 2012. The subscription agreement contains a “put clause”, whereby if the investor so opts, we will repurchase the shares for $53,750 on November 15, 2009. We believe that the issuance and sale of the shares and warrants was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2) and Regulation D Rule 506. The shares and warrants were sold directly by us and did not involve a public offering or general solicitation. The recipient of the shares and warrants was afforded an opportunity for effective access to files and records of the Company that contained the relevant information needed to make their investment decision, including the financial statements and 34 Act reports. We reasonably believed that the recipient, immediately prior to the sale of the shares and warrants, had such knowledge and experience in our financial and business matters that they were capable of evaluating the merits and risks of their investment. The recipient had the opportunity to speak with our management on several occasions prior to its investment decision. There were no commissions paid on the issuance and sale of the shares.

Pursuant to a promissory note executed on July 7, 2009, we agreed to issue warrants to purchase 25,000 shares of our common stock, exercisable for $0.10 per share, expiring on July 6, 2012. We believe that the issuance of the warrants was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2). The recipient of the warrants was afforded an opportunity for effective access to files and records of the Company that contained the relevant information needed to make its investment decision, including the Company’s financial statements and 34 Act reports. We reasonably believe that the recipient, immediately prior to issuing the warrants, had such knowledge and experience in our financial and business matters that it was capable of evaluating the merits and risks of its investment. The recipient had the opportunity to speak with our president and directors on several occasions prior to its investment decision.

On July 29, 2009, pursuant to a promissory note for $25,000, we agreed to issue warrants to purchase 25,000 shares of our common stock, exercisable for $0.10 per share, expiring on June 30, 2012. We believe that the issuance of the warrants was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2). The recipient of the warrants was afforded an opportunity for effective access to files and records of the Company that contained the relevant information needed to make its investment decision, including the Company’s financial statements and 34 Act reports. We reasonably believe that the recipient, immediately prior to issuing the warrants, had such knowledge and experience in our financial and business matters that it was capable of evaluating the merits and risks of its investment. The recipient had the opportunity to speak with our president and directors on several occasions prior to its investment decision.

On August 12, 2009, pursuant to a promissory note for $40,000, we agreed to issue warrants to purchase 40,000 shares of our common stock, exercisable for $0.10 per share, expiring on June 30, 2012. We believe that the issuance of the warrants was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2). The recipient of the warrants was afforded an opportunity for effective access to files and records of the Company that contained the relevant information needed to make its investment decision, including the Company’s financial statements and 34 Act reports. We reasonably believe that the recipient, immediately prior to issuing the warrants, had such knowledge and experience in our financial and business matters that it was capable of evaluating the merits and risks of its investment. The recipient had the opportunity to speak with our president and directors on several occasions prior to its investment decision.

On August 19, 2009, pursuant to a promissory note for $590,000, we agreed to issue warrants to purchase 5,900,000 shares of our common stock, exercisable for $0.10 per share, expiring on August 14, 2014. We believe that the issuance of the warrants was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2). The recipient of the warrants was afforded an opportunity for effective access to files and records of the Company that contained the relevant information needed to make its investment decision, including the Company’s financial statements and 34 Act reports. We reasonably believe that the recipient, immediately prior to issuing the warrants, had such knowledge and experience in our financial and business matters that it was capable of evaluating the merits and risks of its investment. The recipient had the opportunity to speak with our president and directors on several occasions prior to its investment decision.

On August 19, 2009, pursuant to a promissory note for $10,000, we agreed to issue warrants to purchase 100,000 shares of our common stock, exercisable for $0.10 per share, expiring on August 14, 2014. We believe that the issuance of the warrants was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2). The recipient of the warrants was afforded an opportunity for effective access to files and records of the Company that contained the relevant information needed to make its investment decision, including the Company’s financial statements and 34 Act reports. We reasonably believe that the recipient, immediately prior to issuing the warrants, had such knowledge and experience in our financial and business matters that it was capable of evaluating the merits and risks of its investment. The recipient had the opportunity to speak with our president and directors on several occasions prior to its investment decision.

On September 15, 2009, we sold a total of 60,000 shares of our restricted common stock to 1 accredited investor for a total purchase price of $6,000, all of which was paid in cash. The 60,000 shares were issued on September 25, 2009. We believe that the issuance and sale of the shares was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2) and Regulation D Rule 506. The shares were sold directly by us and did not involve a public offering or general solicitation. The recipient of the shares was afforded an opportunity for effective access to files and records of the Company that contained the relevant information needed to make their investment decision, including the financial statements and 34 Act reports. We reasonably believed that the recipient, immediately prior to the sale of the shares, had such knowledge and experience in our financial and business matters that they were capable of evaluating the merits and risks of their investment. The recipient had the opportunity to speak with our management on several occasions prior to its investment decision. There were no commissions paid on the issuance and sale of the shares.

On September 24, 2009, we sold a total of 40,000 shares of our restricted common stock to 1 accredited investor for a total purchase price of $4,000, all of which was paid in cash. The 40,000 shares have not been issued as of the date of this filing. We believe that the issuance and sale of the shares was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2) and Regulation D Rule 506. The shares were sold directly by us and did not involve a public offering or general solicitation. The recipient of the shares was afforded an opportunity for effective access to files and records of the Company that contained the relevant information needed to make their investment decision, including the financial statements and 34 Act reports. We reasonably believed that the recipient, immediately prior to the sale of the shares, had such knowledge and experience in our financial and business matters that they were capable of evaluating the merits and risks of their investment. The recipient had the opportunity to speak with our management on several occasions prior to its investment decision. There were no commissions paid on the issuance and sale of the shares.

Subsequent Issuances

On October 7, 2009, we sold a total of 30,000 shares of our restricted common stock to 1 accredited investor for a total purchase price of $3,000, all of which was paid in cash. The 30,000 shares have not been issued as of the date of this filing. We believe that the issuance and sale of the shares was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2) and Regulation D Rule 506. The shares were sold directly by us and did not involve a public offering or general solicitation. The recipient of the shares and warrants was afforded an opportunity for effective access to files and records of the Company that contained the relevant information needed to make their investment decision, including the financial statements and 34 Act reports. We reasonably believed that the recipient, immediately prior to the sale of the shares, had such knowledge and experience in our financial and business matters that they were capable of evaluating the merits and risks of their investment. The recipient had the opportunity to speak with our management on several occasions prior to its investment decision. There were no commissions paid on the issuance and sale of the shares.

On November 16, 2009, we sold 10,000,000 shares of our common stock to Benchmark Performance Group, Inc., in exchange for the seventh installment of $1,000,000 pursuant to our Stock Acquisition Agreement dated June 20, 2007. The shares have not been issued as of the date of this filing. We believe that the issuance of the shares was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2). The recipient of the shares was afforded an opportunity for effective access to files and records of the Company that contained the relevant information needed to make its investment decision, including the Company’s financial statements and 34 Act reports. We reasonably believe that the recipient, immediately prior to issuing the shares, had such knowledge and experience in our financial and business matters that it was capable of evaluating the merits and risks of its investment. The recipient had the opportunity to speak with our president and directors on several occasions prior to its investment decision.

Issuer Purchases of Equity Securities

The Company did not repurchase any of its equity securities during the quarter ended September 30, 2009.

Item 3. Defaults Upon Senior Securities.

None.

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

We did not submit any matters to a vote of our security holders during the fourth quarter of 2008 and as of September 30, 2009.

Item 5. Other Information.

Press Releases

Item 6. Exhibits.

Exhibits

Incorporated by reference

Exhibit

number

Exhibit description

Filed

herewith

Form

Period

ending

Exhibit No.

Filing

date

2(a)

Agreement and Plan of Merger between Coronado Explorations Ltd and Naturol, Inc.

8-K

2(a)

10/25/01

2(b)

Amendment No. 1 to the Agreement and Plan of Merger between Coronado Explorations Ltd and Naturol, Inc.

8-K

2(b)

1/25/02

2(c)

Agreement and Plan of Merger and Reincorporation

8-K

2(c)

3/10/08

3(i)(a)

Certificate of Incorporation of Coronado Explorations Ltd. – Dated February 2, 1999

10SB12G

2(a)

6/9/99

3(i)(b)

Amended and Restated Articles of Incorporation of Coronado Explorations Ltd. – Dated May 20, 1999

10SB12G

2(b)

6/9/99

3(i)(c)

Certificate of Amendment of Certificate of Incorporation of Coronado Explorations Ltd. – Dated October 5, 2000

10-KSB

1/31/02

3(i)(c)

4/30/02

3(i)(d)

Articles of Incorporation of Naturol, Inc. – Dated June 9, 2001

10-KSB

1/31/02

3(i)(d)

4/30/02

3(i)(e)

Certificate of Amendment to Articles of Incorporation of I.E.T., Inc.

10-QSB

6/30/04

8/23/04

3(i)(f)

Certificate of Amendment of Certificate of Incorporation of Naturol Holdings Ltd. – Dated May 5, 2004

10-QSB

3/31/04

3(i)

5/14/04

3(i)(g)

Certificate of Merger between Coronado Subsidiary Corp. and Naturol, Inc. – Dated January 14, 2001

8-K

3(i)(g)

1/25/02

3(i)(h)

Articles of Incorporation of Integrated Environmental Technologies, Ltd. – Dated January 11, 2008

8-K

3(i)(h)

3/10/08

3(i)(i)

Articles of Merger of Integrated Environmental Technologies, Ltd., Nevada corporation and Integrated Environmental Technologies, Ltd., Delaware corporation – Dated February 15, 2008 (Nevada)

8-K

3(i)(j)

3/10/08

3(i)(j)

Certificate of Merger of Integrated Environmental Technologies, Ltd., Nevada corporation and Integrated Environmental Technologies, Ltd., Delaware corporation – Dated February 18, 2008 (Delaware)

8-K

3(i)(j)

3/10/08

3(ii)(a)

Bylaws of Coronado Explorations Ltd. – Dated February 9, 2001

8-K

3(ii)(e)

1/25/02

3(ii)(b)

Bylaws of Naturol, Inc. – Dated June 9, 2001

10-KSB

1/31/02

3(ii)(f)

4/30/02

3(ii)(c)

Bylaws of Integrated Environmental Technologies, Ltd., a Nevada corporation – Dated January 11, 2008

8-K

3(ii)(c)

3/10/08

10.1

License Agreement among Integrated Environmental Technologies Ltd., Electro-Chemical Technologies Ltd. and Laboratory of Electrotechnology Ltd. – Dated September 4, 2003

10-QSB

9/30/03

10.8

11/19/03

10.2

Supply Agreement – Dated September 4, 2003

10-QSB

9/30/03

10.9

11/19/03

10.3

Letter Agreement between SPDG Naturol Ltd. and Integrated Environmental Technologies Ltd. – Dated October 14, 2003

10-QSB

9/30/03

10.10

11/19/03

10.4

Collaborative Agreement with Integrated Environmental Technologies Ltd. and Coastal Carolina University – Dated December 11, 2003

8-K

10.2

1/08/04

10.5

Contract of Sale – JMW Investments – Dated January 2, 2004

8-K

10.1

3/1/04

10.6

Consultant and Employee Stock Compensation Plan – Dated January 21, 2004

S-8

10.3

1/22/04

10.7

Letter of Intent with Pentagon Technical Services – Dated June 15, 2004

10-QSB

6/30/04

8/23/04

10.8

Amendment to License and Supply Agreement with Electro-Chemical Technologies

10-QSB

9/30/04

11/12/04

10.9

Consulting Agreement of Joseph Schmidt, dated November 18, 2004.

8-K

10.1

1/07/05

10.10

Letter Amending Joseph Schmidt’s Consulting Agreement.

8-K

10.2

1/07/05

10.11

Consulting Agreement of XXR Consulting, Inc., dated December 8, 2004.

8-K

10.3

1/07/05

10.12

Employment Agreement of William E. Prince, dated January 3, 2005.

8-K

10.4

1/07/05

10.13

Employment Agreement of Marion Sofield – January 3, 2005

8-K

10.5

1/07/05

10.14

Addendum to Marion Sofield’s Employment Agreement – Dated February 28, 2005

10-KSB

12/31/04

10.6

3/30/05

10.15

Employment Agreement of Steve Johnson – Dated February 10, 2005

10-KSB

12/31/04

10.7

3/30/05

10.16

DaVinci-Franklin Fund I, LLC – Dated April 1, 2005

8-K

10.1

4/13/05

10.17

Agreement with Red River Capital Partners dated June 14, 2006

10-QSB

6/30/06

8/14/06

10.18

Stock Acquisition Agreement dated June 20, 2007

8-K

10.1

8/21/07

10.19

Exclusive License and Distribution Agreement dated June 20, 2007

8-K

10.2

8/21/07

10.20

Registration Rights Agreement dated June 21, 2007

8-K

10.3

8/21/07

Letter of Andersen, Andersen & Strong, L.C. regarding change in certifying accountant – Dated April 18, 2002

8-K

4/26/02

Certification pursuant to Section 302 of the Sarbanes-Oxley Act

Certification pursuant to Section 906 of the Sarbanes-Oxley Act

99.1

Press Release dated August 20, 2008 – IET Receives US EPA Product Registration

10-Q

09/30/08

99.1

11/13/08

99.2

Press Release dated September 10, 2008 – IET Targets MRSA (Staph) Infections in Schools with “Green” Biocide

10-Q

09/30/08

99.2

11/13/08

99.3

Press Release dated September 24, 2008 – IET Builds Sales into New Markets

10-Q

09/30/08

99.3

11/13/08

99.4

Press Release dated April 16, 2009 – IET and BRT introduce Excelyte®, a new ‘green’ disinfecting solution.

10-Q

3/31/09

99.4

5/15/09

99.5

Press Release dated April 21, 2009 – IET announces NSF Registration of EcaFlo® Anolyte (Excelyte®)

10-Q

3/31/09

99.5

5/15/09

99.6

Press Release dated April 28, 2009 – IET announces MRSA – Specific EPA Registration of EcaFlo® Excelyte®

10-Q

3/31/09

99.6

5/15/09

99.7

Press Release dated June 25, 2009 – IET announces the purchase EcaFlo® Excelyte® equipment by Honeywell

10-Q

6/30/09

99.7

8/13/09

99.8

Press Release dated September 24, 2009 – IET announces Anolyte (Excelyte®) effective against swine flu (H1N1)

99.9

Press Release dated October 14, 2009 – IET expands commercial markets to Europe through license agreement and sale

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

INTEGRATED ENVIRONMENTAL TECHNOLOGIES, LTD.

(Registrant)

By: /S/ William E. Prince

William E. Prince, Chief Executive Officer

And Principal Financial Officer (On behalf of

the registrant and as principal accounting

officer)

Date: November 16, 2009