U.S. Securities and Exchange Commission

Washington D.C. 20549



Form 10-QSB



(Mark one)



[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES

EXCHANGE ACT OF 1934



For the quarterly period ended March 31, 2002



[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES

EXCHANGE ACT OF 1934



For the transition period from ______ to ______





Commission file number: 000-28679



MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(Name of Small Business Issuer in Its Charter)



Delaware                              Applied For

(State or Other Jurisdiction of           (IRS Employer

Incorporation or Organization)             Identification No.)



TNO Environmental Technology Valley

Laan van Westenenk 501

7334 DT Apeldoorn, The Netherlands

(Address of Principal Executive Offices)



011 31 55 534 7040

(Company's Telephone Number, Including Area Code)



APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE

PRECEDING FIVE YEARS



Check whether  the registrant filed  all documents and  reports required  to be

filed by Section l2, 13 or 15(d) of the Exchange Act after the  distribution of

securities under a plan confirmed by a court. Yes [ ] No [X]



APPLICABLE ONLY TO CORPORATE ISSUERS



State  the number of  shares outstanding  of each of  the issuer's  classes  of

common equity, as of the latest practicable date:



Common Stock - .0001 par value 7,320,055 issued

Series A Preferred - .0001 par value 535,985 issued



Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]



















<page> 1

---

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

Form 10-QSB

For the quarterly period ended March 31, 2002



TABLE OF CONTENTS



PAGE



Part I - FINANCIAL INFORMATION                                       3



Item 1 - Financial Statements                                        3



Accountants Review Report                                         5



Balance Sheet......................................................6



Statements of Operation............................................7



Statement of Shareholders Equity                                  8



Statements of Cash Flow...........................................12



Notes to Financial Statements.....................................14



Item 2 - Management's Discussion and Analysis of Financial

Condition and Results of Operations........................27



PART II  OTHER INFORMATION.........................................29



SIGNATURES..........................................................30































































<page> 2

---

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

Form 10-QSB

For the quarterly period ended March 31, 2002



PART I - FINANCIAL INFORMATION



Item I - Financial Statements



The Board of Directors of Management of Environmental Solutions  and Technology

Corp.  (MEST) as currently constituted, serves as the committee which  performs

and functions as the audit committee on behalf of the Company.  The Company has

provided  interim  financial  statements prepared by the Company's accountants,

Arenthals Grant Thornton, which have been reviewed by the Company's independent

public accountant utilizing Professional Standards of Procedures for conducting

such reviews in accordance with  generally accepted auditing standards.  Please

refer to the interim financial statements  provided  in  accordance with 17 CFR

{section}228.310(b).













MANAGEMENT OF ENVIRONMENTAL

SOLUTIONS & TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED FINANCIAL STATEMENTS



MARCH 31, 2002

















WILLIAMS & WEBSTER, P.S.

CERTIFIED PUBLIC ACCOUNTANTS

BANK OF AMERICA FINANCIAL CENTER

W 601 RIVERSIDE, SUITE 1940

SPOKANE, WA 99201

(509) 838-5111







































<page> 3

---

MANAGEMENT OF ENVIRONMENTAL

SOLUTIONS & TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)



TABLE OF CONTENTS







ACCOUNTANT'S REVIEW REPORT                                               1





FINANCIAL STATEMENTS



Consolidated Balance Sheets                                         2



Consolidated Statements of Operations and Comprehensive Loss        3



Consolidated Statement of Stockholders' Equity                      4



Consolidated Statements of Cash Flows                               5





NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                           6







































































<page> 4

---







To the Board of Directors

Management of Environmental

Solutions & Technology Corp.

Apeldoorn, The Netherlands





ACCOUNTANT'S REVIEW REPORT





We  have  reviewed the accompanying consolidated balance sheet of Management of

Environmental  Solutions & Technology Corp. (a development stage company) as of

March 31, 2002 and  the  related  consolidated  statements  of  operations  and

comprehensive  loss,  stockholders'  equity and cash flows for the three months

ended March 31, 2002, for the three months  ended  March  31, 2001, and for the

period from December 10, 1997 (inception) to March 31, 2002.   These  financial

statements are the responsibility of the Company's management.



We  conducted  our  review  in  accordance  with  standards  established by the

American  Institute  of  Certified  Public  Accountants.  A review  of  interim

financial information consists principally of applying analytical procedures to

financial data and making inquiries of persons  responsible  for  financial and

accounting  matters.   It  is  substantially  less  in  scope than an audit  in

accordance with auditing standards generally accepted in  the  United States of

America, the objective of which is the expression of an opinion  regarding  the

financial  statements taken as a whole.  Accordingly, we do not express such an

opinion.



Based on our review, we are not aware of any material modifications that should

be made to the  accompanying  financial  statements  in order for them to be in

conformity with accounting principles generally accepted  in  the United States

of America.



The financial statements for the year ended December 31, 2001 were  audited  by

us  and  we expressed an unqualified opinion on them in our report dated August

29, 2002.  We have not performed any auditing procedures since that date.



As discussed in Note 2, the Company has been in the development stage since its

inception  on  December  10, 1997 and has had recurring losses and no revenues.

The Company's decision is  to  perfect  its  technological  application  before

entering the market.  Realization of a major portion of the assets is dependent

upon  the  Company's  ability to meet its future financing requirements and the

success of future operations.   These factors raise substantial doubt about the

Company's ability to continue as a going concern.  Management's plans regarding

those matters are described in Note 2.  The financial statements do not include

any adjustments that might result from the outcome of this uncertainty.



/s/ Williams & Webster, P.S.



Williams & Webster, P.S.

Certified Public Accountants

Spokane, Washington

August 30, 2002













<page> 5

---

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(A Development Stage Company)

CONSOLIDATED BALANCE SHEET





March 31,

2002      December 31,

(Unaudited)      2001

------------  ------------

ASSETS

CURRENT ASSETS

Cash                                               $    13,383   $   203,652

Tax funds receivable                                    34,979        29,867

Receivables, related parties                           172,952           -

Other receivables                                          437         5,126

Prepaid expenses                                         2,836         2,836

------------  ------------

Total Current Assets                                 224,587       241,481

------------  ------------



PROPERTY AND EQUIPMENT (net of depreciation)               2,267         3,201

------------  ------------

TOTAL ASSETS                                     $   226,854   $   244,682

============  ============



LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable                                   $    65,471   $    38,979

Accrued expenses                                         8,183         6,988

Deferred costs                                           6,934           -

Bank over draft                                            -           6,708

------------  ------------

Total Current Liabilities                             80,588        52,675

------------  ------------

Preferred stock - Series A;

$0.0001 par value, 5,000,000 shares

authorized, 535,985 issued and

outstanding, aggregate liquidation

preference of $2,143,940                                  53            53



Common stock; $0.0001 par value,

30,000,000 shares authorized,

7,320,055 shares issued and outstanding                  732           732



Additional paid-in capital                           3,221,643     3,221,643

Stock options                                        3,000,568     3,000,568

Deficit accumulated during the development stage    (5,800,682)   (5,747,917)

Accumulated other comprehensive loss                  (276,048)     (283,072)

------------  ------------

146,266       192,007

------------  ------------

TOTAL LIABILITIES AND STOCKHOLDERS EQUITY       $   226,854   $   244,682

============  ============













See accompanying notes and accountants review report.



<page> 6

---

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATION AND COMPREHENSIVE LOSS





Period from

December 17,

1997

Three Months Ended     (Inception)

March 31,              to

--------------------------   March 31,

2002          2001         2002

(Unaudited)   (Unaudited)  (Unaudited)

------------  ------------  ------------



REVENUES                               $       -     $       -    $       -

------------  ------------  ------------



OPERATING EXPENSES

General and administrative                74,730         3,341     4,420,195

Research and development                     -          60,889       608,357

Depreciation                                 827           983        11,518

------------  ------------  ------------

Total Operating Expenses                75,557        65,213     5,040,070

------------  ------------  ------------



LOSS FROM OPERATIONS                       (75,557)      (65,213)   (5,040,070)



OTHER INCOME (EXPENSES)

Interest income                            4,518        10,678       174,747

Net gain (loss) from joint venture        18,479           -        (932,622)

Interest expense                            (205)          -          (2,737)

------------  ------------  ------------

Total Other Income (Expenses)           22,792        10,678      (760,612)

------------  ------------  ------------



LOSS BEFORE INCOME TAXES                   (52,765)      (54,535)   (5,800,682)



INCOME TAXES                                   -             -             -

------------  ------------  ------------



NET LOSS                                   (52,765)      (54,535)   (5,800,682)

OTHER COMPREHENSIVE INCOME (LOSS)

Foreign currency translation

gain (loss)                              7,024       (78,096)     (276,048)

------------  ------------  ------------



COMPREHENSIVE LOSS                     $   (45,741)  $  (132,631)  $(6,076,730)

============  ============  ============



LOSS PER COMMON SHARE,

BASIC AND DILUTED                    $     (0.01)  $     (0.02)

============  ============



WEIGHTED AVERAGE NUMBER OF

COMMON SHARES OUTSTANDING,

BASIC AND DILUTED                      7,324,055     7,320,055

============  ============





See accompanying notes and accountants review report.



<page> 7

---

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY



<TABLE>

<CAPTION>

Accumulated     Accumulated

Preferred  Stock                 Common  Stock                                             Deficit          Other

------------------------------  ------------------------------     Additional                      During       Comprehensive      Total

Number of                     Number of                          Paid-in       Stock        Development        Income       Stockholders'

Shares        Amount          Shares           Amount           Capital       Options         Stage           (Loss)          Equity

--------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------


                <c>             <c>             <c>             <c>             <c>             <c>             <c>             <c>             <c>

Inception,

Dec. 10, 1997              -     $         -               -     $         -     $         -     $         -     $         -     $        -      $       -

Issuance of common

stock for cash on

Dec. 11, 1007 for

$1.00 per share             -               -             5,000               1           5,009             -               -              -            5,010

Issuance of common

stock to acquire

STB corp. on Dec.

26, 1997 at $1.00

per share                   -               -               175             -               175             -               -              -              175

Net loss for year

ended Dec. 31, 1997         -               -               -               -               -               -           (46,869)           -          (46,869)

--------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------

Balance,

Dec. 31, 1997               -               -             5,175               1           5,184             -           (46,869)           -          (41,684)

--------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------

Issuance of common

stock as follows:

For cash on March

10, 1998 at $.017

per share                   -               -         5,394,880             539         899,911             -               -              -          900,450

To acquire

subsidiary on

April 9, 1998 at

$0.01 per share             -               -         1,920,000             192          19,808             -               -              -           20,000

Issuance of

preferred stock

for cash:

December 1998 at

$3.73 per share          23,900               2             -               -            89,246             -               -              -           89,248

Issuance of stock

options for

compensation on

Aug. 31, 1998 at

$2.62 per option            -               -               -               -               -          865,938              -              -          865,938

Net loss for year

ended Dec. 31, 1998         -               -               -               -               -              -         (1,263,080)        15,284     (1,278,364)

--------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------

Balance,

Dec. 31, 1998            23,900               2       7,320,055             732       1,014,149        865,938       (1,325,233)        15,284        570,872

--------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------

</table>











See accompanying notes and accountants review report.

<page> 8

---

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY



<TABLE>

<CAPTION>

Accumulated     Accumulated

Preferred  Stock                 Common  Stock                                             Deficit          Other

------------------------------  ------------------------------     Additional                      During       Comprehensive      Total

Number of                     Number of                          Paid-in       Stock        Development        Income       Stockholders'

Shares        Amount          Shares           Amount           Capital       Options         Stage           (Loss)          Equity

--------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------


                <c>             <c>             <c>             <c>             <c>             <c>             <c>             <c>             <c>

Balance carry-forward

Dec. 31, 1998            23,900               2       7,320,055             732       1,014,149        865,938       (1,325,233)        15,284        570,872

--------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------

Issuance of

preferred stock

for cash:

Jan. 1999 at

$3.92 per share          23,350               2             -               -            91,644            -                -             -            91,646

Feb. 1999 at

$3.96 per share          48,050               4             -               -           190,196            -                -             -           190,200

Mar. 1999 at

$3.90 per share          10,300               1             -               -            40,199            -                -             -            40,200

April 1999 at

$4.00 per share          11,300               1             -               -            45,199            -                -             -            45,200

May 1999 at

$3.85 per share          12,640               1             -               -            48,684            -                -             -            48,685

June 1999 at

$4.01 per share          82,900               8             -               -           332,237            -                -             -           332,245

July 1999 at

$4.00 per share          88,700               9             -               -           354,941            -                -             -           354,950

Aug. 1999 at

$4.02 per share          25,770               3             -               -           103,494            -                -             -           103,497

Sept. 1999 at

$3.43 per share          26,500               3             -               -            90,997            -                -             -            91,000

Oct. 1999 at

$4.22 per share           6,200               1             -               -            26,174            -                -             -            26,175

Nov. 1999 at

$4.05 per share          40,725               4             -               -           165,086            -                -             -           165,090

Dec. 1999 at

$4.14 per share          27,150               3             -               -           112,517            -                -             -           112,520

--------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------

Total preferred

stock issued 1999       403,585              40             -               -         1,601,368            -                -             -         1,601,408

Issuance of stock

options for

compensation on

Aug. 31, 1999 at

$3.59 per share             -               -              -                -               -          717,900              -             -           717,900

Net loss for year

ended Dec. 31, 1999         -               -              -                -               -              -         (1,810,142)     (100,988)     (1,911,130)

--------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------

Balance,

Dec. 31, 1999           427,485              42      7,320,055              732       2,615,517      1,583,838       (3,135,375)      (85,704)        979,050

--------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------

</table>









See accompanying notes and accountants review report.

<page> 9

---

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

<TABLE>

<CAPTION>

Accumulated     Accumulated

Preferred  Stock                 Common  Stock                                             Deficit          Other

------------------------------  ------------------------------     Additional                      During       Comprehensive      Total

Number of                     Number of                          Paid-in       Stock        Development        Income       Stockholders'

Shares        Amount          Shares           Amount           Capital       Options         Stage           (Loss)          Equity

--------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------


                <c>             <c>             <c>             <c>             <c>             <c>             <c>             <c>             <c>

Balance carry-forward

Dec. 31, 1999           427,485              42       7,320,055             732       2,615,517       1,583,838     (3,135,375)       (85,704)         979,050

--------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------

Issuance of

preferred stock

for cash:

Jan. 2000 at

$4.08 per share           8,300               1             -              -            33,891              -              -              -             33,892

Feb. 2000 at

$4.34 per share          23,750               2             -              -           103,054              -              -              -            103,056

Mar. 2000 at

$4.37 per share           4,500               1             -              -            19,645              -              -              -             19,646

April 2000 at

$4.16 per share          61,700               5             -              -           256,425              -              -              -            256,430

May 2000 at

$4.30 per share           5,250               1             -              -            22,598              -              -              -             22,599

June 2000 at

$4.19 per share           5,000               1             -              -            20,958              -              -              -             20,959

--------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------

Total preferred

stock issued: 2000      108,500              11             -              -           456,571              -              -              -            456,582

Issuance of stock

options for

compensation on

Aug. 31, 2000 at

$3.84 per share             -               -              -               -               -            767,900            -              -            767,900

Expiration of

stock options on

July 31, 2000               -               -              -               -            77,088          (77,088)           -              -                -

Net loss,

Dec. 31, 2000               -               -              -               -               -                -       (1,395,315)       (97,293)      (1,492,608)

--------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------

Balance,

Dec. 31, 2000           535,985              53      7,320,055             732       3,149,176        2,274,650     (4,530,690)      (182,997)         710,924

--------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------

</table>























See accompanying notes and accountants review report.

<page> 10

---

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY



<TABLE>

<CAPTION>

Accumulated     Accumulated

Preferred  Stock                 Common  Stock                                             Deficit          Other

------------------------------  ------------------------------     Additional                      During       Comprehensive      Total

Number of                     Number of                          Paid-in       Stock        Development        Income       Stockholders'

Shares        Amount          Shares           Amount           Capital       Options         Stage           (Loss)          Equity

--------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------


                <c>             <c>             <c>             <c>             <c>             <c>             <c>             <c>             <c>

Balance carry-forward

Dec. 31, 2000           535,985              53      7,320,055             732       3,149,176        2,274,650     (4,530,690)      (182,997)         710,924

--------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------



Forgiveness of

debt by officer             -               -              -               -            62,867              -              -              -             62,867

Issuance of common

stock for cash at

$2.40 per share

on Dec. 6, 2001,

net of $2,400

financing cost              -               -            4,000             -              9,600            -              -               -              9,600

Issuance of stock

options for

compensation on

Dec. 31, 2001 at

$3.63 per option            -               -              -               -               -            725,918            -             -             725,918

Net loss for year

ended Dec. 31, 2001         -               -              -               -               -                -       (1,217,227)      (100,075)      (1,317,302)

--------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------

Balance,

Dec. 31, 2001           535,985              53       7,324,055             732       3,221,643       3,000,568     (5,747,917)       (283,072)        192,007

--------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------



Net loss for

period ended

March 31, 2002              -               -               -               -               -               -          (52,765)          7,024         (45,741)

--------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------  --------------

Balance,

March 31, 2002

(Unaudited)             535,985   $          53       7,324,055   $         732   $   3,221,643   $   3,000,568   $ (5,800,682)   $    (276,048)  $    146,266

==============  ==============  ==============  ==============  ==============  ==============  ==============  ==============  =============

</table>























See accompanying notes and accountants review report.

<page> 11

---

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(A Development Stage Company)

CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>

<CAPTION>

Period from

December 17,

1997

Three Months Ended          (Inception)

March 31,                  to

------------------------------    March 31,

2002            2001          2002

(Unaudited)      (Unaudited)   (Unaudited)

--------------  --------------  --------------

<S>                                               <C>             <C>             <C>

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss                                        $     (52,765)   $     (54,535)  $ (5,800,682)

Adjustments to reconcile net loss to net cash

used in operating activities:

Depreciation                                            827              983         11,518

Options granted as compensation                         -                -        3,077,656

(Increase) decrease in assets:

Tax funds receivable                                 (5,112)          23,875        (34,979)

Other receivables                                     4,689           (1,988)          (437)

Prepaid expenses                                        -             19,274         (2,836)

Increase (decrease) in liabilities:

Accrued liabilities                                   1,195            2,091          8,183

Accounts payable                                     26,492            7,233         60,286

Deferred cost                                         6,934              -            6,934

--------------  --------------  --------------



Net cash used in operating activities                   (17,740)         (3,067)     (2,674,357)

--------------  --------------  --------------



CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment                        -               -           (13,893)

Loans to shareholders                                (172,952)            -        (1,106,255)

Payments on loans to shareholders                         -            15,105         887,080

--------------  --------------  --------------



Net cash provided (used) by investing activities       (172,952)         15,105        (233,068)

--------------  --------------  --------------



CASH FLOWS FROM FINANCING ACTIVITIES:

Overdrafts payable                                     (6,708)            -               -

Proceeds from related party loans                         -               -           145,391

Payments on related party loans                           -               -           (10,390)

Proceeds from sales of common stock                       -               -           915,060

Proceeds from sales of preferred stock                    -               -         2,147,238

Cash acquired with subsidiary                             -               -            20,000

--------------  --------------  --------------

Net cash provided by (used in) financing

activities                                             (6,708)            -         3,217,299

--------------  --------------  --------------



Foreign currency translation gain (loss)                  7,131         (78,096)       (301,491)



Net increase (decrease) in cash                        (190,269)        (66,058)          8,383

--------------  --------------  --------------



Cash, beginning of period                               203,652         666,746           5,000

--------------  --------------  --------------



Cash, end of period                               $      13,383   $     600,688   $      13,383

==============  ==============  ==============

</table>

See accompanying notes and accountants review report.



<page> 12

---

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(A Development Stage Company)

CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>

<CAPTION>

Period from

December 17,

1997

Three Months Ended          (Inception)

March 31,                  to

------------------------------    March 31,

2002            2001          2002

(Unaudited)      (Unaudited)   (Unaudited)

--------------  --------------  --------------

<S>                                               <C>             <C>             <C>



SUPPLEMENTAL CASH FLOW DISCLOSURES:

Interest paid                                   $         395   $          -     $      2,732

Income taxes paid                               $         -     $          -     $        -



NON-CASH INVESTING AND FINANCING

TRANSACTIONS:

Stock options granted for compensation          $         -     $          -     $  3,077,656

Stock issued for acquisitions                   $         -     $          -     $     20,175

Notes payable, related party netted

with notes receivable related party           $         -     $       46,233   $    46,233

Forgiveness of debt by officer                  $         -     $       62,867   $    62,867

</TABLE>





































































See accompanying notes and accountants review report.



<page> 13

---

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS

& TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2002



NOTE 1 - ORGANIZATION AND HISTORY



Management  of Environmental Solutions & Technology Corp. was formed to develop

a proprietary technology for drying and treating animal manure and sludge to be

used as fertilizer.   The  "Company"  ("MEST")  was incorporated in Colorado on

December  10, 1997, followed by reorganization as  a  Delaware  corporation  on

December 18, 1997.



On December  26, 1997, the Company obtained all of the outstanding common stock

of STB Corporation,  a  shell corporation domiciled in Colorado, by issuing 175

shares of the Company's common stock.  Because STB Corporation had no assets or

operations, the Company recorded  the  transaction at the initial deemed valued

of the stock conveyed ($175), which was consistent with the deemed value of the

Company's stock issued in its immediately  precedent  initial  transaction.  In

the  year  subsequent  to the acquisition, STB Corporation was administratively

dissolved.



On April 9, 1998, the Company  issued  1,920,000  shares of its common stock to

its president in exchange for all of the issued and outstanding shares of MEST,

B.V.,  a Netherlands corporation, owned by the Company's  president.   Although

MEST, B.V.  had  no recorded assets at the time of the transaction, the Company

recorded the acquisition  at a nominal value of $0.01 per share.  The aggregate

acquisition cost of $20,000,  originally  assigned  to  intangible  assets, was

substantially written off by the end of 1998.  Currently, MEST, B.V. is used to

conduct  the  Company's  business  in the Netherlands.  MEST, B.V. was acquired

because it had certain data and technical information that the Company plans to

use in its business.



The Netherlands Organization for Applied  Scientific  Research ("TNO"), staffed

by   5,000  professionals,  is  one  of  Europe's  leading  contract   research

organizations.   Using proprietary technology developed by TNO, the Company and

TNO formed a corporation  known as Manure and Sludge Technology, B.V. ("MSTec")

for the purpose of developing  a  process  for  use  on a commercial basis that

would economically refine manure and sludge into pellets,  which  could be sold

as organic fertilizer and other products.  MSTec, a Netherlands corporation, is

owned 50 percent by the Company and 50 percent by TNO.



The Company's year end is December 31.



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



This  summary  of  significant  accounting  policies is presented to assist  in

understanding the financial statements.  The financial statements and notes are

representations of the Company's management,  which  is  responsible  for their

integrity  and  objectivity.   These  accounting policies conform to accounting

principles generally accepted in the United  States  of  America, and have been

consistently applied in the preparation of the financial statements.



















<page> 14

---

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS

& TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2002



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Accounting Method



The  Company's  financial statements are prepared using the  accrual  basis  of

accounting in accordance  with  accounting principles generally accepted in the

United States of America.



Development Stage Activities



The Company has been in the development  stage  since its formation in December

of 1997, and has not yet realized any revenues from its planned operations.  It

is  engaged  in  the  business  of   manufacturing, distributing,  and  selling

fertilizer products.



Use of Estimates



The process of preparing financial statements  in  conformity  with  accounting

principles generally accepted in the United States of America, requires the use

of  estimates  and  assumptions regarding certain types of assets, liabilities,

revenues,  and  expenses.    Such   estimates  primarily  relate  to  unsettled

transactions  and  events  as  of  the  date   of   the  financial  statements.

Accordingly, upon settlement, actual results may differ from estimated amounts.



Cash and Cash Equivalents



The Company considers all highly liquid investments with  a  maturity  of three

months or less when purchased to be cash equivalents.



Fair Value of Financial Instruments



The carrying amounts for cash, accrued expenses and payables, and loans payable

approximate their fair value.  MEST's notes payable approximate the fair  value

of  such  instruments  based  upon management's best estimate of interest rates

that would be available to MEST  for  a  similar financial arrangement at March

31, 2002 and December 31, 2001.



Research and Development



Research and development expenses are charged  to  operations  as incurred. The

cost  of  intellectual  property  purchased  from  others  that  is immediately

marketable  or that has an alternative future use is capitalized as  intangible

assets.  The  Company  periodically  reviews  its  capitalized  patent costs to

assess  recoverability  based  on  the  projected undiscounted cash flows  from

operations. Impairments are recognized in  operating  results  when a permanent

diminution in value occurs.



The  Company  constructed  a  testing  facility  during 1999 in Apeldoorn,  The

Netherlands at a cost of approximately $450,000.   These costs were expensed as

research and development during the year ended December 31, 1999.













<page> 15

---

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS

& TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2002



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Derivative Instruments



The  Financial  Accounting  Standards  Board  issued  Statement   of  Financial

Accounting  Standards  ("SFAS") No. 133, "Accounting for Derivative Instruments

and Hedging Activities," as amended by SFAS No. 137, "Accounting for Derivative

Instruments and Hedging Activities - Deferral of the Effective Date of FASB No.

133", and SFAS No. 138,  "Accounting  for  Certain  Derivative  Instruments and

Certain Hedging Activities", which is effective for the Company as  of  January

1,  2001.   This  standard  establishes  accounting and reporting standards for

derivative instruments, including certain  derivative  instruments  embedded in

other  contracts,  and  for  hedging  activities.   It  requires that an entity

recognize all derivatives as either assets or liabilities  in  the consolidated

balance sheets and measure those instruments at fair value.



If certain conditions are met, a derivative may be specifically designated as a

hedge,  the  objective  of  which  is  to  match  the  timing  of gain or  loss

recognition on the hedging derivative with the recognition of (i)  the  changes

in the fair value of the hedged asset or liability that are attributable to the

hedged  risk  or (ii) the earnings effect of the hedged forecasted transaction.

For a derivative  not  designated  as a hedging instrument, the gain or loss is

recognized in income in the period of change.



From November 1, 1999 to February 17,  2000,  the  Company entered into a small

number of foreign currency purchases for cash management purposes.  The results

of these short-term transactions, which generated an  aggregate  loss of $7,124

in  1999  and  an  aggregate  gain  of  $4,262  in  2000, are included in Other

Comprehensive  Income  (Loss)  as  an element of foreign  currency  translation

earnings.  The Company engaged in no  similar foreign currency purchases either

prior to or subsequent to the aforementioned time frame.



Compensated Absences



Currently,  the  Company  has  no employees;  therefore,  no  policy  regarding

compensated absences has been established.  The Company will establish a policy

to recognize the costs of compensated absences at the point in time that it has

employees.



Advertising Expenses



Advertising  expenses  consist primarily  of  costs  incurred  in  the  design,

development, and printing  of  Company literature and marketing materials.  The

Company expenses all advertising expenditures as incurred.

























<page> 16

---

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS

& TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2002



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Provision for Taxes



Income  taxes  are provided based  upon  the  liability  method  of  accounting

pursuant to SFAS  No.  109 "Accounting for Income Taxes."  Under this approach,

deferred income taxes are  recorded  to  reflect the tax consequences on future

years of differences between the tax basis  of assets and liabilities and their

financial  reporting  amounts  at  each year-end.   A  valuation  allowance  is

recorded against deferred tax assets if management does not believe the Company

has met the "more likely than not" standard  imposed  by  SFAS No. 109 to allow

recognition of such an asset.



At  March  31, 2002, the Company had net deferred tax assets  of  approximately

$860,000, principally  arising from net operating loss carryforwards for income

tax purposes.  As management  of  the  Company cannot determine that it is more

likely than not that the Company will realize  the  benefit of the net deferred

tax asset, a valuation allowance equal to the net deferred  tax  asset has been

established at March 31, 2002.



At  March  31,  2002,  the  Company  has  net  operating loss carryforwards  of

approximately $5,800,000, which expire in the years  2017  through  2022.   The

Company  recognized  approximately  $3,000,000  of  losses  for the issuance of

common stock options for services, which are not deductible for  tax  purposes,

and are not included in the above calculation of deferred tax asset.



Loss Per Share



Basic  loss  per  share  was  computed by dividing the net loss by the weighted

average number of shares outstanding  during  the  year.   The weighted average

number of shares was calculated by taking the number of shares  outstanding and

weighting  them  by  the  amount  of  time  they were outstanding.  Outstanding

options and convertible preferred stock were not included in the computation of

diluted loss per share because the exercise price of the outstanding options is

higher than the market price of the stock, thereby  causing  the  options to be

antidilutive.



Going Concern



The  accompanying  financial  statements  have been prepared assuming that  the

Company will continue as a going concern.



As shown in the accompanying financial statements, the Company has no revenues,

has incurred a net loss of $52,765 for the  three  months ended March 31, 2002,

has an accumulated deficit of $5,800,682 and has had  no  sales.  The future of

the  Company  is  dependent  upon  successful  and  profitable operations  from

manufacturing,  distributing,  and  selling  its  fertilizer   products.    The

financial   statements   do   not   include  any  adjustments  related  to  the

recoverability  and classification of  recorded  assets,  or  the  amounts  and

classification of  liabilities that might be necessary in the event the Company

cannot continue in existence.











<page> 17

---

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS

& TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2002



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Going Concern (continued)



Management has established plans designed to promote the sales of the Company's

product.  Management  intends  to  seek  additional  capital  from  new  equity

securities offerings that will provide funds needed to increase liquidity, fund

internal growth and fully implement its business plan.



Principles of Consolidation



The  consolidated  financial  statements  include  the accounts of MEST and its

wholly owned subsidiary, MEST, B.V. after elimination  of intercompany accounts

and transactions.  Manure and Sludge Technology, B.V. ("MSTec"),  a  50 percent

owned  corporation,  is  reflected  in  the  financial statements on the equity

method of accounting, and not included in the financial statements as an entity

subject to consolidation.



Accounting for Stock Options Granted to Employees and Nonemployees



Statement of Financial Accounting Standards No.  123,  "Accounting  for  Stock-

Based  Compensation"  ("SFAS  No.  123"),  defines a fair value-based method of

accounting for stock options and other equity  instruments.   The  Company  has

adopted  this  method, which measures compensation costs based on the estimated

fair value of the award and recognizes that cost over the service period.



Interim Financial Statements



The interim financial  statements for the period ended March 31, 2002, included

herein have not been audited,  at the request of the Company.  They reflect all

adjustments, which are, in the opinion  of  management,  necessary  to  present

fairly  the  results  of  operations  for the period.  All such adjustments are

normal  recurring  adjustments.   The results  of  operations  for  the  period

presented is not necessarily indicative  of  the results to be expected for the

full fiscal year.



Impaired Asset Policy



In March 1995, the Financial Accounting Standards  Board  issued  a  statement,

SFAS  No.  121, titled "Accounting for Impairment of Long-lived Assets,"  which

has been replaced  by  SFAS  No. 144, "Accounting for Impairment or Disposal of

Long-Lived Assets."  In complying  with  this standard, the Company reviews its

long-lived  assets  quarterly  to  determine  if   any  events  or  changes  in

circumstances have transpired which indicate that the  carrying  value  of  its

assets  may not be recoverable.  The Company determines impairment by comparing

the undiscounted  future  cash flows estimated to be generated by its assets to

their respective carrying amounts.



The Company does not believe  any  adjustments are needed to the carrying value

of its assets at March 31, 2002.













<page> 18

---

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS

& TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2002



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Comprehensive Income



Effective  January  1,  1998, the Company  adopted  SFAS  No.  130,  "Reporting

Comprehensive Income" (SFAS  130),  which  was  issued  in June 1997.  SFAS 130

establishes rules for the reporting and display of comprehensive income and its

components.   The  effect  of  the  adoption  of SFAS 130 is reflected  in  the

accompanying  financial  statements  and included  under  the  headings  "Other

Comprehensive Loss."



Foreign Currency Translation Gains/Losses



The Company has adopted Financial Accounting  Standard No. 52.  Monetary assets

and liabilities denominated in foreign currencies  are  translated  into United

States dollars at rates of exchange in effect at the balance sheet date.  Gains

or  losses are included in income for the year, except gains or losses  related

to long-term  debt  which are deferred and amortized over the remaining term of

the debt.  Non-montary assets, liabilities and items recorded in income arising

from transactions denominated  in foreign currencies are translated at rates of

exchange in effect at the date of the transaction.



Property and Equipment



Property  and equipment are stated  at  cost.   Depreciation  of  property  and

equipment is  calculated  using  the  straight-line  method  over the estimated

useful lives of the assets, which range from three to ten years.  See Note 4.



Concentration of Credit Risk



The  Company maintains its cash in several Netherlands financial  institutions.

These  financial  institutions  are  considered  credit  worthy  and  have  not

experienced  any losses on deposits at March 31, 2002.  The funds are valued in

U.S. dollars and are fully insured.



Recent Accounting Pronouncements



In April 2002,  the  Financial  Accounting  Standards Board issued Statement of

Financial Accounting Standards No. 145, "Rescission  of FASB Statements No. 44,

and 64, Amendment of FASB Statement No. 13, and Technical  Corrections",  which

updates, clarifies and simplifies existing accounting pronouncements.  FASB No.

4,  which  required  all gains and losses from the extinguishment of debt to be

aggregated and, if material,  classified  as  an  extraordinary  item,  net  of

related  tax  effect was rescinded, as a result, FASB 64, which amended FASB 4,

was rescinded as  it  was  no  longer  necessary.   FASB 145 amended FASB 13 to

eliminate an inconsistency between the required accounting  for  sale-leaseback

transaction  and  the required accounting for certain lease modifications  that

have  economic  effects   that  are  similar  to  sale-leaseback  transactions.

Management has not yet determined the effects of adopting this Statement on the

financial position or results of operations.













<page> 19

---

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS

& TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2002



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Recent Accounting Pronouncements



In October 2001, the Financial  Accounting  Standards Board issued Statement of

Financial  Accounting  Standards No. 144, "Accounting  for  the  Impairment  or

Disposal of Long-Lived Assets"  (SFAS  No.  144).   SFAS 144 replaces SFAS 121,

"Accounting for the Impairment of Long-Lived Assets and  for  Long-Lived Assets

to  Be  Disposed Of."  This new standard establishes a single accounting  model

for long-lived  assets  to  be  disposed  of  by  sale,  including discontinued

operations.  Statement 144 required that these long-lived assets be measured at

the lower of carrying amount or fair value less cost to sell,  whether reported

in  continuing  operations  or  discontinued  operations.   This  statement  is

effective  beginning  for  fiscal  years after December 15, 2001, with  earlier

application encouraged.  The Company adopted SFAS 144 and does not believe that

the adoption will have a material impact  on  the  financial  statements of the

Company at March 31, 2002.



In October 2001, the Financial Accounting Standards Board issued  Statement  of

Financial  Accounting  Standards  No.  143,  "Accounting  for  Asset Retirement

Obligations"  (SFAS No. 143).  SFAS No. 143 establishes guidelines  related  to

the retirement  of tangible long-lived assets of the Company and the associated

retirement costs.   This  statement required that the fair value of a liability

for an asset retirement obligation  be  recognized in the period in which it is

incurred if a reasonable estimate of fair  value  can  be made.  The associated

asset retirement costs are capitalized as part of the carrying  amount  of  the

long-lived assets.  This statement is effective for financial statements issued

for the fiscal years beginning after June 15, 2002 and with earlier application

encouraged.   The  Company  adopted  SFAS No. 143 and does not believe that the

adoption will have a material impact on the financial statements of the Company

at March 31, 2002.



In June 2001, the FASB issued SFAS No.  141,  "Business  Combinations" and SFAS

No. 142, "Goodwill and Other Intangible Assets".  SFAS No. 141 provides for the

elimination  of  the  pooling-of-interest  method  of accounting  for  business

combinations with an acquisition date of July 1, 2001  or  later.  SFAS No. 142

prohibits  the  amortization  of  goodwill  and  other intangible  assets  with

indefinite lives and requires periodic reassessment  of the underlying value of

such  assets  for  impairment.   SFAS  No. 142 is effective  for  fiscal  years

beginning  after December 15, 2001.  An early  adoption  provision  exists  for

companies with  fiscal  years beginning after March 15, 2001.  The Company does

not have assets with indeterminate lives.





























<page> 20

---

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS

& TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2002



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Recent Accounting Pronouncements (continued)



In September 2000, the FASB  issued  SFAS No. 140 "Accounting for Transfers and

Servicing  of  Financial  Assets  with Extinguishment  of  Liabilities."   This

statement  provides  accounting  and  reporting   standard  for  transfers  and

servicing  of  financial  assets  and extinguishment of  liabilities  and  also

provides consistent standards for distinguishing  transfers of financial assets

that are sales from transfers that are secured borrowings.   SFAS  No.  140  is

effective   for   recognition   and  reclassification  of  collateral  and  for

disclosures related to securitization  transactions  and  collateral for fiscal

years  ending  after  December  15,  2000, and is effective for  transfers  and

servicing  of  financial assets and extinguishments  of  liabilities  occurring

after March 31, 2001.  The Company believes that the adoptions of this standard

will not have a  material  effect  on  the  Company's  results of operations or

financial positions.



Reclassification



Certain amounts from prior periods have been reclassified  to  conform  to  the

current  period presentation.  This reclassification has resulted in no changes

to the Company's accumulated deficit or net losses presented.





NOTE 3 - RELATED PARTY TRANSACTIONS



The president  of  the Company conveyed all outstanding shares of MEST, B.V. to

the Company in exchange  for  1,920,000  shares  of common stock of the Company

during the year ended December 31, 1998.



In January 2002, the Company loaned $200,000 to an  officer.   In  April  2002,

$150,000 was repaid and the Company also received a mortgage on real estate  as

collateral for its loan.





NOTE 4 - PLANT, PROPERTY AND EQUIPMENT



Property  and equipment are recorded at cost.  Major additions and improvements

are capitalized.   Minor  replacements,  maintenance  and  repairs  that do not

increase the useful lives of the assets are expensed as incurred.  Depreciation

of  property  and equipment is being calculated using the straight-line  method

over the expected  useful  lives  of  the assets.  Depreciation expense for the

periods ended March 31, 2002 and 2001 was $827 and $983, respectively.

























<page> 21

---

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS

& TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2002



NOTE 5 - PREFERRED STOCK



The  Company  is authorized to issue 5,000,000  shares  of  $0.0001  par  value

preferred stock;  535,985 Series A preferred shares were issued and outstanding

at March 31, 2002 and  December  31,  2001.    Each share of Series A preferred

stock is entitled to a dividend at the rate of $0.30  per share if the board of

directors declares a dividend, although no dividends have  been declared.  Upon

liquidation or dissolution of the Company, each outstanding  share  of Series A

preferred stock is entitled to a distribution of $4.00 per share prior  to  any

distribution  to  common  stock shareholders.  Series A preferred stock is non-

voting, and each share is convertible  into  one  share of the Company's common

stock at any time after June 1, 1999.



During the year ended December 31, 1998, the Company  sold 23,900 shares of its

preferred stock at an average price of $3.73 per share.   During the year ended

December 31, 1999, the Company sold 403,585 shares of its preferred stock at an

average price of $3.93 per share.  During the year ended December 31, 2000, the

Company sold 108,500 shares of its preferred stock at an average price of $4.21

per share.





NOTE 6 - COMMON STOCK



The  Company  is  authorized  to issue 30,000,000 shares of $0.0001  par  value

common stock: 7,324,055 shares  were  issued  and outstanding at March 31, 2002

and  December 31, 2001.  Each holder of common stock  has  one,  non-cumulative

vote per  share  on  all  matters voted upon by the shareholders.  There are no

preemptive rights or other rights of subscription.



During the period ended December  31,  1997, the Company issued 5,000 shares of

its common stock for cash at $1.00 per share and 175 shares of its common stock

valued at $1.00 per share to acquire STB  Corp.   The  stock  was valued at its

fair market value on the date of issuance.



During the year ended December 31, 1998, the Company sold 5,394,880  shares  of

its common stock for cash at $0.17 per share and issued 1,920,000 shares of its

common  stock at $0.01 per share to acquire a subsidiary.  The stock was valued

at the fair market value on the date of issuance.



During the  year  ended December 31, 2001, the Company sold 4,000 shares of its

common stock for cash at $3.00 per share.































<page> 22

---

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS

& TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2002



NOTE 7 - JOINT VENTURE INVESTMENT IN MANURE AND SLUDGE TECHNOLOGY, B.V.



Manure and Sludge Technology,  B.V.  (hereinafter  "MSTec")  is  a  Netherlands

corporation that was formed for the purpose of developing a process for  use on

a commercial basis that would economically dry and pasteurize manure and sludge

into  pellets  that  could  be  sold  as organic fertilizer and other products.

Since its inception, MST has refined its  technological  process  for  use with

other waste products such as bio-solids, fish and food waste, and paper pulp.



MEST  owns  50 percent of the common stock of MSTec, and accounts for MSTec  on

the equity method.   The  other  50 percent of MSTec's common stock is owned by

The  Netherlands  Organization for Applied  Scientific  Research  ("TNO"),  the

largest  single research  facility  in  Europe  employing  over  five  thousand

professionals.



MEST's investment  in  the  joint  venture  is recorded as $0 on MEST's balance

sheet because MSTec's debt and losses exceeds MEST's share of investment in the

joint  venture.  MEST's investment in the joint  venture  totaled  $816,000  at

March 31,  2002  and  December 31, 2001. In forming the joint venture of MSTec,

the Company committed to  an  investment  in  the  form  of  a loan to MSTec of

approximately $800,000, which funds were in fact advanced to MSTec  in 1999 and

2000.   This  loan  is  treated  as  an  equity  investment under the Company's

understanding  of  the  conditions  of the joint venture.   The  investment  is

subject to the terms of the related loan  agreement  dated  January  22,  1999,

where  by the Company agreed in the event of MSTec's bankruptcy or termination,

to forego  repayment  of  the  funds  advanced  until  such  time  as all other

creditors  are  paid  in  full.  At the date of these financial statements,  no

funds advanced by the Company to MSTec have been repaid.



The  joint  venture's primary  asset,  as  the  result  of  the  aforementioned

investment, is  a  worldwide  licensing  agreement  for  the application of the

aforementioned technological process from TNO.



TNO controls the research and activities of the joint venture while M.E.S.T.

Corp.'s participation is investment with rights to products developed by the

joint venture.









































<page> 23

---

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS

& TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2002





NOTE 7 - JOINT VENTURE INVESTMENT IN MANURE AND SLUDGE TECHNOLOGY, B.V.

(CONTINUED)



The following is a summary of the financial position and results  of operations

of MSTec.



March 31, 2002   December 31, 2001

--------------   -----------------

Current assets                          $       2,618    $        117,858

Property, plant, and equipment                    -                   -

Other assets (net)                                -                   -

--------------   -----------------

Total assets                      $       2,618    $        117,858

==============   =================

Current liabilities                     $     256,932    $        360,019

Long-term debt - related parties            1,594,930           1,644,041

Total liabilities                     1,851,862           2,004,060

Stockholders' equity                       (1,849,244)         (1,886,202)

--------------   -----------------

Total liabilities and equity      $       2,618    $        117,858

==============   =================



Net sales                                $         -      $            -

Gross profit                             $         -      $            -

Income (Loss) from continuing operations $      36,958    $       (176,242)

Net income (loss)                        $      36,958    $       (176,242)



Joint Venture Royalty Agreement



In  connection  with  the  formation  of the MSTec joing venture, a sub-license

agreement was executed wherein MEST agreed  to pay to MSTec "sub-license" fees,

which are effectively royalty fees, for manure conversion factories constructed

by MEST over a period of fifteen years.  The  fifteen-year  period  begins when

M.E.S.T.  constructs  its  first  such factory.  Royalty fees due to MSTec  are

computed on a sliding scale, based  upon actual factory construction costs, and

range from 15% to 10%.  At the date of  these  financial statements, no royalty

fees were owed under the aforementioned agreement.





NOTE 8 - COMMITMENTS AND CONTINGENCIES



Subordinated Loan Agreement



In forming the joint venture of MSTec, the Company  committed  to loan to MSTec

approximately $800,000, which funds were in fact advanced to MSTec  in 1999 and

2000.



Under  the  terms  of  the  related loan agreement dated January 22, 1999,  the

Company agreed in the event of  MSTec's  bankruptcy  or  termination, to forego

repayment of its loan until such time as all other creditors were paid in full.



At the date of these financial statements, no funds advanced  by the Company to

MSTec have been repaid.





<page> 24

---

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS

& TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2002



NOTE 8 - COMMITMENTS AND CONTINGENCIES (CONTINUED)



Office Lease



The  Company  leases office space in Apeldoorn under a written agreement  which

provides for lease  payments  of  approximately  $2,000  per month through June

2006.  Formerly the Company leased office space in Amsterdam  under  a  written

agreement which ran from July 1999 through January 2002 and provided for  lease

payments  of  approximately $1,500 per month.  In 2001, the lease agreement was

renegotiated and  the  lease  expiration date was changed to July 31, 2002 with

other lease provisions remaining unchanged.



Future minimum rental commitments  under  the operating lease are as follows at

March 31, 2002:



Year Ending:

December 31, 2002              $  24,000

December 31, 2003              $  24,000

December 31, 2004              $  24,000

December 31, 2005              $  24,000

December 31, 2006              $  12,000



NOTE 9 - STOCK OPTIONS



The Company has granted its officers options  to  purchase  a  total of 900,000

shares of the Company's common stock at an exercise price of $0.50  per  share.

Following  is a summary of the status of these performance-based options during

the periods ended March 31, 2002 and December 31, 2001.



Number of     Weighted Average

Shares        Price per Share

------------  ----------------

Outstanding at December 31, 2000          700,000          $0.50

Granted                                 200,000           0.50

Exercised, expired or forfeited             -               -

------------  ----------------

Outstanding and exercisable at

December 31, 2001                   900,000          $0.50

============  ================

Weighted average fair value of

options granted during 2001                          $3.63

================

Outstanding at December 31, 2001          900,000          $0.50

Granted                                     -               -

Exercised, expired or forfeited             -               -

------------  ----------------

Outstanding and exercisable at

March 31, 2002                      900,000          $0.50

============  ================















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MANAGEMENT OF ENVIRONMENTAL SOLUTIONS

& TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2002



NOTE 9 - STOCK OPTIONS (CONTINUED)



The Company  estimated the fair value of each stock option at the grant date by

using the Black-Scholes  option  pricing  model  with  the  following weighted-

average  assumptions  used:   Dividend yield of zero percent; strike  price  of

$0.50; expected volatility of 24.83%;  risk-free  interest  rate of six percent

and expected lives of five years.  The weighted average fair  value  at date of

grant  for options granted to officers in the year ended December 31, 2001  was

$3.63 per  option.  Compensation cost charged to operations was $725,918 during

the year ended December 31, 2001.



NOTE 10 - SUBSEQUENT EVENTS



In January 2002,  the  Company  loaned  $200,000 to an officer.  In April 2002,

subsequent to the date of these financial  statements,  $150,000 was repaid and

the Company also received a mortgage on real estate as collateral for its loan.















































































<page> 26

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MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

Form 10-QSB

For the quarterly period ended March 31, 2002



Item II - Managements Discussion and Analysis or Plan of Operation



The Company provides the information required by 17 CFR §228.303(a) and provides a discussion regarding the Companys plan of operation for the next 12 months.



Summary of Product Research



The Company has an ongoing research project with the Companys partner, Netherlands Organization for Applied Scientific Research (TNO).  The purpose of the research and development is to better preserve the zeolite through the drying, segregating and reconditioning process.  The zeolite dewatering system necessarily includes mechanical conveyance, mixing, desegregation and a thermal regeneration process which necessarily places zeolite in contact with mechanical conveyance devices, processing materials, segregation screens and the torbid reactor.  The Company is attempting to minimize the gravity of mechanical contact in order to preserve the zeolite material.



As the Company proceeds forward to product production quality dewatering devices, the Company anticipates certain mechanical engineer exercises designed to maximize reliability of the dewatering system.  The Company expects that the majority of technical improvements and recommendations will come necessarily through the contracting of the fabrication of initial MEST zeolite dewatering devices.  Management expects that the dewatering process will undergo certain design changes which lend the zeolite dewatering process to commercial application and constant use.



Plan of Operation



Managements investigation into financially productive applications for the zeolite dewatering technology has lead management to pursue converting organic waste materials into livestock, fish and pet food products.  The Company has elected to pursue applying its dewatering technology to this area because there is an abundant supply of waste biosolids available for processing and management believes that there is a standing commodities market for such dehydrated biosolid materials.



The zeolite dewatering technology is particularly suited to livestock, fish and pet food products for the following reasons.  The zeolite drying technology can control and reproduce final moisture content of the processed biosolids.  Pasteurization is the natural result of processing.  Zeolite drying controls the heat and therefore does not degrade the final dehydrated product.  Zeolite dewatering is thorough and produces low product moisture which increases shelf life.  Finally, the zeolite process is efficient, inexpensive and creates low emissions.



The Company has identified its objectives to convert fish waste to fish meal, beer yeast waste to livestock feed and grain mash from methanol plants to livestock feed.  It has also identified the conversion and dehydration of human waste as a cost savings measure from municipalities.  Organic waste shift from sewage processing transports roughly 80% water content to land fills.  The zeolite dewatering device can dry biosolids to 5% water content which makes the biosolid less expensive to transport and amenable to other applications such as fuel or fertilizers.



The Company is actively pursuing a design/build relationship with an engineering company and manufacturing entity in the United States with capabilities of taking the TNO dewatering process designs and converting the designs to a commercial device.  The Company is currently negotiating broad aspects of the contractual relationship to define with certainty the parties objectives and financial requirements.  The shareholders will be apprized of further progress in that regard.  This Company still anticipates production costs for a single production facility between $500,000.00 and $700,000.00 U.S. for limited quantity production.  The Company has plans to construct five production facilities for installation in Mexico, Oregon and Alaska.

<page> 27

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MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

Form 10-QSB

For the quarterly period ended March 31, 2002



Financial Requirements



The financial requirements have not changed since the third quarter 2001 projections.  The Company has estimated that it will need approximately $5,000,000.00 in order to fabricate, transport, install and commence operations for five zeolite dewatering devices.  Management plans to obtain the necessary funding to build the dewatering devices by making a fully registered public offering in the near future.



Finances of the company derive from two exempted offerings of MEST common shares and Preferred Series A.  The company has not earned income by virtue of sales of goods or services.  The payment of employees, expenses, subcontractors and Company obligations has been made from capital raised by the sale of equity shares.  The Company anticipates the need to raise additional capital through public or private offerings and does not expect to earn revenues until late 2003.



The Company currently has sufficient finances for operations through September 2002.  The Company does not have sufficient finances to assemble and perform the due diligence, legal and accounting work requisite for representation to the Securities and Exchange Commission and public investors.











































































<page> 28

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MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

Form 10-QSB

For the quarterly period ended March 31, 2002



PART II - OTHER INFORMATION



Item I - Legal Proceedings



Management is not aware of any claims, legal proceedings, litigation or complaints against the Company during the calendar months January, February and March of 2002.  Accordingly the Company provides no information regarding such claims or litigation as required by Item 103 of Regulation S-B.



Item II - Changes in Securities and Use of Proceeds



There has been no change in any instrument defining the rights of any holders of any class of registered securities and accordingly no discussion is provided regarding such changes or modifications to the rights of any affected shareholders.  The Company has not issued any class of securities, registered or otherwise, which limit or affect the securities already outstanding.



The Company has not sold, issued or distributed any equity securities during the period covered by this report and consequently does not provide the information required by 17 CFR §228.701.  The Company incorporates by reference all of Part II Item 4 of the Amended Form 10-SB filed 10/15/01 to describe unregistered offerings, funds raised by the sale of the Companys Common and Preferred Stock and the use of proceeds.



Item III - Defaults upon Senior Securities



a.  Management is unaware of any material default in the payment of principal interest a sinking or purchase fund installment or any other material default regarding any indebtedness of the Company which amounts to 5% of the total assets.



b.  Management is not aware of any material arrearage in the payment of dividends as the Board of Directors has not declared any dividends payable for reasons that the Company has not generated profits from which to make dividend payments.





Item IV - Submission of Matters to a Vote of Security Holders



For the period in question, first calendar quarter, January through March 2002 there were no matters submitted to security holders.  No special or annual meeting was convened.  Consequently the Company provides no details regarding solicitation of proxies as a result of any such meeting or the subject matter and results for such meetings.



Item V - Other Information



The Company received on February 12th and February 27th additional comments from the Securities and Exchange Commission concerning the Companys Amended Form 10-SB.  The Company continues its amendment process in order to resolve all questions and inquiries by the Securities and Exchange Commission.  As of the date that this Form 10-QSB pertaining to the first quarter of 2002 was filed, all comments tendered by the Securities and Exchange Commission have been answered.  The Company awaits further comments by the Securities and Exchange Commission and will continue to amend its Form 10-SB until all legal and accounting issues have been resolved.















<page> 29

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MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

Form 10-QSB

For the quarterly period ended March 31, 2002



Item VI - Exhibits and Reports



Pursuant to 17 CFR §228.601(b)(21) subsidiaries of MEST are MEST B.V., a wholly owned subsidiary, and MSTec B.V., a subsidiary owned 50% by The Netherlands Organization for Applied Scientific Research (TNO) and 50% by MEST, both of which are incorporated and organized in Amsterdam, The Netherlands.  Both entities do business under their full corporate names.



(a)  Exhibits required by Item 601



(2)      Plan of Acquisition, reorganization, arrangement,

liquidation or succession.                                        (2)

(3)(i)   Articles of Incorporation                                         (2)

(3)(ii)  Bylaws.                                                           (2)

(4)      Instruments defining the rights of security holders,

including indentures.                                             (2)

(9)      Voting trust agreements.                                          (1)

(10)     Material contracts.                                               (2)

(11)     Statement re:  computation of per share earnings.                 (1)

(13)     Annual or quarterly reports, Form 10Q                             (2)

(16)     Letter re:  change in certifying accountant.                      (1)

(18)     Letter re:  change in accounting principles .                     (1)

(20)     Other documents or statements to security holders.                (1)

(21)     Subsidiaries of the Registrant.                                   (2)

(22)     Published report regarding matters submitted

to vote of security holders.                                      (1)

(23)     Consents of Experts and counsel.                                  (1)

(24)     Power of Attorney.                                                (1)

(27)     Financial Data Schedule (no longer required)                      (1)

(99)     Additional Exhibits.                                              (1)



(1) No disclosure necessary

(2) Incorporated by reference to previous filing



(b)  Reports  on  Form  8-K:



The company filed no Form(s) 8K  during the last quarter  of the period covered

by this report.



SIGNATURES



In accordance with the  requirements of the  Security Exchange  Act of 1934, the

Registrant has caused this report to be signed on its behalf by the undersigned,

duly authorized.





MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(Registrant)



By: /s/ Greg Schmick

----------------------------

Greg Schmick, President



Date:  October 10, 2002

----------------------------





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