UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



FORM 10-KSB



(X)  Annual Report  Under Section  13 or  15(d) of the Securities  Exchange Act

of 1934.  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001

( )  Transitional Report Under 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)



Securities  registered under Section 12(g) of the Securities and Exchange Act of

1934:  NONE



Securities  registered under Section 12(g) of the Securities and Exchange Act of

1934:



Title  of each class:                                   Name of each Exchange on

Which  registered

Common Stock        -  .0001 par value 7,322,030 issued           None

Series A Preferred  -  .0001 par value 535,985 issued             None



Check whether issuer (1) filed all reports required to be filed by Section 13 or

15(d)  of the Exchange Act during the past 12 months and (2) has been subject to

such  filing  requirements  for  the  past  90  days.  Yes  ( )    No (X)



Check  if  there  is  no  disclosure  of delinquent filers in response to 405 of

Regulation  S-B  is  not  contained  in  this  form,  and  no disclosure will be

contained,  to  the  best  of  registrant's  knowledge,  in  definitive proxy or

information statements incorporated by reference in Part III of this Form 10-KSB

or  any  amendment  to  this  Form  KSB.  [  ]



State  issuer's  revenue  for  the  most  recent  fiscal  year:  Zero



State the aggregate market value of the voting and non-voting common equity held

by  non-affiliates computed by reference to the price at which the common equity

was  sold, or average bid and ask price of such common equity a of the specified

date  within  the  past  60  days:  Market  Value  $0.125.



State  the number of shares outstanding of each of the issuers classes of common

equity,  as  of  the  latest  practicable  date:  Common Stock - .0001 par value

7,322,030  issued;  Series  A  Preferred  -  .0001  par  value  535,985  issued.



Documents  incorporated  by  reference:  None

Transitional  small  business  disclosure  format: Yes  ( )    No (X)

<page>  1

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

FORM 10-KSB

For the year ended December 31, 2001



TABLE  OF  CONTENTS



PART  I                                                               PAGE



ITEM  1.     DESCRIPTION  OF  BUSINESS                                      3

ITEM  2.     DESCRIPTION  OF  PROPERTY                                      5

ITEM  3.     LEGAL  PROCEEDINGS                                             6

ITEM  4.     SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS    6



PART  II



ITEM  5.     MARKET  FOR  REGISTRANT'S  COMMON  EQUITY  AND  RELATED

STOCKHOLDER  MATTERS                                           6



ITEM  6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND  RESULTS  OF  OPERATION                                    7



ITEM  7.     FINANCIAL  STATEMENTS                                          8



ITEM  8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING

AND  FINANCIAL  DISCLOSURE                                     31





PART  III





ITEM  9.     DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT       31



ITEM  10.    EXECUTIVE  COMPENSATION                                        33



ITEM  11.    SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS

AND  MANAGEMENT                                                36



ITEM  12.    CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS             37



PART  IV





ITEM  13.    EXHIBITS AND REPORTS ON  FORM  8-K                             38



SIGNATURES                                                                  39



































<page>  2

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

FORM 10-KSB

For the year ended December 31, 2001



Part I

--------



Item  I  -  Description  of  Business

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



FORM  AND  YEAR  OF  ORGANIZATION



Management  of Environmental Solutions and Technology Corp. (MEST) was formed as

a Delaware corporation on December 18, 1997 with 30,000,000 shares of authorized

common stock at .0001 par value and 5,000,000 shares of preferred stock at .0001

par  value.  The  Company  as  of  December  31, 2001 has issued and outstanding

7,324,055 shares of its common stock and 535,985 Series A Preferred shares.  The

Company  has  not  declared  bankruptcy,  entered  into voluntary or involuntary

receivership  or  any  type  of  similar  proceeding.  Further,  it  has made no

material  reclassification,  consolidation  or  purchase  or sale of significant

amount of assets not in the ordinary course of business during the calendar year

2001.



BUSINESS  OF  MEST



MEST  was  organized  for  purposes  of  commercializing  a  unique   dewatering

technology  developed  by  The  Netherlands  Organization for Applied Scientific

Research  (TNO).  This  unique and proprietary process utilizes zeolite compound

to  engage  and  dehydrate  manure,  sludge,  bio-solids, plant, animal and fish

waste.



The Company's initial mission was to raise sufficient capital to finance further

research  and  development  conducted  at  TNO  to determine whether the zeolite

dewatering  process  had  practical  application  and  could  be commercialized.

Through  a  collaborative  effort between MEST and TNO, a definitive process has

been  designed,  engineered  and tested which incorporates a zeolite dehydration

system  and  recuperation  system  for the zeolite drying compound.  The Company

management  believes  that  it  is  technically  feasible to utilize the zeolite

dewatering  technology  in  a  commercial format.  Collaborative testing between

MEST  and TNO has also yielded production costing information sufficient to lead

management  to  conclude that commercial scale zeolite dewatering devices should

be designed and built.  The Company continues to utilize the MEST pilot plant at

the  TNO  facility  in Apeldoorn, The Netherlands to process materials which the

Company  considers  candidates  for  commercially  feasible  dehydration.



MEST's  principal  objectives  during calendar year 2001 were to demonstrate the

functionality  of  the pilot plant; test various materials and determine whether

the  zeolite  dewatering process was amendable to such materials; and to provide

reliable  estimates for processing costs so that the Company can determine which

dehydratable  materials  may  be  most  readily  commercialized.



Based  upon  the  results  of  the collaborative TNO research and market product

research  by  the Company, the Company has determined to enter into the feed and

animal  nutrition  industry  converting organic waste materials into value added

and  end  products  directed  at  livestock,   fish,  pet  food  and  fertilizer

industries.  Management  believes  that  this market is somewhat stable and that

end products can be sold into the global commodities markets at varying rates of

profitability  depending  upon the quality of the dewatered product.  Management

believes  that  the  zeolite  dewatering   technology  will  emphasize   quality

dehydration  due  to  its  low temperature process.  Management further believes

that  dehydrated organic waste materials derived through zeolite dewatering will

be  particularly  marketable  based  upon  these  criteria:

<page>  3

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

FORM 10-KSB

For the year ended December 31, 2001



1.  Precise  and  reproducible  final  moisture  content;

2.  Pasteurization  of  the  final  end  product;

3.  Reduced  loss of functional properties or degradation of final product;

4.  Low  final  product  moisture content is needed to increase shelf life;

5.  Low  atmospheric  emissions.



The Company anticipates the commercialization of its products by converting fish

waste  to  fish meal, yeast or hops waste to livestock feed or rapeseed waste to

livestock  feed.  The  commodities  markets  for quality dehydrated materials as

described  above  are readily accessible in the United States and globally.  The

Company anticipates its distribution method to be geographically linked with the

location of the zeolite dewatering devices.  Distribution will initiate from the

dehydration  facility.



There  are  numerous  conventional methods of dehydrating food, waste and manure

products.  However,  the Company is unaware of any competitor which utilizes the

zeolite  dewatering  process  in  applicaations  contemplated  by  the  Company.

Consequently,  the  Company  fully intends to utilize its protective status as a

patented  technology  in  order  to  gain  market  acceptance and proliferation.



The machinery and equipment required for the zeolite dewatering process involves

conventional  prcessing  equipment  with  few  exceptions.  The  Company will be

required  to  provide  and fabricate certain specialized equipment involving the

zeolite to substrate combination and segregation devices.  Raw materials for the

process  such  as zeolite and electricity are abundant and the suppliers will be

selected  based  upon  the  location  of  the MEST equipment, price and service.



The  Company  derives it proprietary rights to the zeolite dewatering technology

through  MSTec  B.V.  MSTec  B.V.  is  owned  50% by the Company and 50% by TNO.

MSTec applied for a patent "Method and Apparatus for Processing Watery Substance

with  Zeolite" in The Netherlands on July 10, 1998.  That patent was filed as an

international  patent on July 12, 1999 under patent number PCT/NL/99/00443.  The

patent  is  currently  pending  internationally  but  has  already   passed  the

international  preliminary  examinations   as  of  April  18,  2000.  Management

believes  that  it  will achieve its international patent status during calendar

year  2002.



With  respect  to  the  Company's  need  for  governmental approval of principal

products  or  services,  the  Company  defers  to  its  discussion  of potential

government  regulation  in its amended disclosure filed 11/15/01 in Item I.  The

Company  anticipates  upon  location  of its zeolite dewatering devices that the

Company  will  be  required  to  comply  with  any local, state or federal waste

processing  standards  as  well as air quality standards for emissions which may

occur  as  a  result  of  the  dehydration or reprocessing of zeolite particles.

Management  does not anticipate complex approval processes with any governmental

agency.



The  practical affect of governmental regulations on handling of waste products,

packaging  of  dewatered materials and air emissions are not fully known at this

time.  For  an  expanded  discussion  regarding  potential probable governmental

regulation,  please  refer  to  an expanded discussion in the amended Form 10-SB

filed 11/15/01.  Remarkably, the Company's byproduct of the dewatering system is

dust  or pelletized dehydrated material suitable for sale and commercial feed or

fertilizer  markets.  The zeolite dewatering process emits only minor quantities

of  heat  and  relatively  innocuous  gases.  The Company anticipates no serious

obstacles  by  local  state  or federal regulations.  As the Company has already





<page>  4

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

FORM 10-KSB

For the year ended December 31, 2001



designed  cleanliness  into  the   dehydration  system,  cost  and   effects  of

governmental  and  environmental  compliance  has already been considered in the

design  of  the  product  and  therefore  should not be incremental cost factor.



During calendar year 2001, the total full time employees of the Company consists

of  one,  the  President  of the Company.  Other services and support are either

contracted  or  part  time.



REPORTS  TO  SECURITY  HOLDERS



The  Company  is  not required to deliver annual reports to its security holders

but  voluntary  makes available through e-mail, facsimile or hard copy this Form

10K-SB  which  includes  audited  financial  statements.



The  Company files quarterly and annual reports with the Securities and Exchange

Commission in accordance with Section 13 or 15(d) of the Securities and Exchange

Act of 1934.  Quarterly reports consist of disclosures and financial information

required  under  Form  10-QSB.  As  the  Company  is a small business, quarterly

reports  are  reviewed by its auditors.  Annual reports filed by the Company are

filed  pursuant  to  Form  10-KSB  and  its  financial  reports  are  audited.



The  public  may  read and copy any materials which it files with the Securities

and  Exchange  Commission  at  the  Securities  and Exchange Commission's public

reference  room  at  450 5th Street N.W., Washington D.C. 20549.  The public may

attain  information on the operation of the public reference room by calling the

SEC at 1-800-SEC-0330.  As the Company is an electronic filer, the SEC maintains

an  Internet  site  that  contains reports, proxy and information statements and

other  information regarding issuers that file electronically with the SEC.  The

SEC's Internet address is http://www.sec.gov.  Interested shareholders may reach

the Company at the following internet address info@mest-corp or at the Company's

business  office  as  indicated  on  the  front  page  of  this  form  10-KSB.



Item  II  -  Description  of  Property

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



MEST  owns  through  MSTec  B.V.  rights  to the patent method and apparatus for

processing  watering   substance  with  zeolite   (PCT/NL/99/00443)   with   the

internationally  filing  date of July 12, 1999.  MEST has been granted the right

to  fully commercialize manure, sludge and bio-solids by virtue of the licensing

agreement  with  its  subsidiary  MSTec  B.V.



The  Company  owns  through MEST BV, the Companys wholly owned subsidiary,  the

pilot  plant  which  is  currently  located  at Laan van Westenenk  501, 7334 DT

Apeldoorn, The Netherlands. The pilot plant consists of materials transportation

devices, conveyers, augers, mixers, the zeolite mixing device,  a  segregator, a

torbid  reactor,  pelletizer,  mechanical  linkage  and conveyance  systems  and

supporting  hardware.



MEST  owns  the  technical  engineering  packet  developed by TNO which contains

specifications  and  parameters  for  the design of the pilot zeolite dewatering

device  and  devices  of  larger  capacities.



The Company currently leases an office and processing center at the TNO facility

for  the  sum  of  $2,000.00  per  month  which lease expires in June 2006.  The

Company  has no desire or expectation to move its facility.  There is no current

plan  of  the  Company  to  revise  or develop further the pilot plant except to

perform  alterations  and  adjustments  which  will enhance the longevity of the

machinery  or  prepare  the  machinery  for  particular  applications.

<page>  5

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

FORM 10-KSB

For the year ended December 31, 2001



The  Company maintains a general liability insurance in the amount of $1,200,000

which  covers  the  Company's  personnel and  certain business liabilities.  The

Company  also   maintains   property  casualty   insurance  in  the   amount  of

$1,500,000.00.  Both  policies  are  with  AMEV  Schadiverzekering  N.V. and are

effective  from  December  31,  2001  to  December  31,  2002.



The  Company  received  a request  to inspect  records served  on MEST  Corp. by

shareholder Ingrid  Ford  through  her lawyer, David Moule of  Moule and  Frank,

259 Fifth  Avenue East, Eugene Oregon 97401.  The request asked  for Articles of

Incorporation, Bylaws, Annual Reports, meetings and  minutes, SEC filings, lists

Of  all   shareholders  and  list   by  year  of  all  officers  and  directors.

Additionally there has been a request  to list by year management, personnel and

their employment agreements  and  compensation.  There is  also a  request for a

list of all persons and companies who have sold stock in and  on behalf of MEST,

request includes the location of  all corporate  offices  and bank  accounts for

MEST  and  all  accountings  prepared  by  Spicer  Jeffreys and  Company and  by

Aranthals en Partners. The Company plans to honor this request and is  preparing

the approximate materials.



Item  III  -  Legal  Proceedings

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

MEST  is  not  currently  a  party  to  any legal proceeding nor is its tangible

personal property or intangible property subject to any known proceeding, claim,

litigation  or  challenge.



MEST  is  not  currently informed or aware of any pending proceeding or claim by

any  governmental  authority  in  the  United  States  or  elsewhere.



Item  IV  -  Submission  of  Matters  to  Vote  of  Security  Holders

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

MEST did not convene a special or regular meeting of its shareholders during the

fourth  quarter  of the Company's fiscal year which corresponds to calendar year

2001.  As  there  was  no  annual  or special meeting, no change was made to the

directorship  of  the  Company.  There  were no proxies solicited nor were votes

taken.



Part  II



Item  V  -  Market  Information

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

Principal market where the Company's common equity is traded is the pink sheets.

Management  believes  that there is no significant trading activity in the stock

and  therefore  no  substantial market for the Company's share exists.  However,

the  Company's common stock is quoted as a pink sheet stock.  The Company is not

listed,  applied  for  nor  is the Company a member of a national exchange.  The

high  and  low  sales prices of the stock for each quarter during calendar years

2000  and  2001  appear  below:



Time  Period                                   High               Low

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

1st  Qtr/00                                   $4.00               $2.00

2nd  Qtr/00                                   No  Trades

3rd  Qtr/00                                   No  Trades

4th  Qtr/00                                   $1.00               $0.0625

1st  Qtr/01                                   $1.0468

2nd  Qtr/01                                   No  Trades

3rd  Qtr/01                                   No  Trades

4th  Qtr/01                                   $0.125              $0.125

<page>  6

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

FORM 10-KSB

For the year ended December 31, 2001



The  source  of the foregoing information can be obtained on www.pinksheets.com.

Enter  MESO  in  the  box  requiring  the entry of the Company's trading symbol,

locate the historical quote and data information as provided by Pink Sheets LLC.

The  quotations  reflect inter-dealer prices without retail markup, markdown, or

commission  and  may  not  represent actual transactions.  While the information

provided  by  management  reflects  stock prices for the relevant periods shown,

management  believes that the limited number of transactions involving purchases

and  sales  of  the  Company's  common equity does not constitute an established

public  trading  market.



During  calendar  year 2001 which is the period covered by this Form 10-KSB, the

Company  has not sold, issued or distributed any equity securities and therefore

does  not  provide  the information required by 17 CFR Sec. 228.701.  Within the

past  three  years  however, the Company has issued exempted securities which it

has  fully  described  in  Part  II, Item IV of the Amended Form 10-SB which was

filed  November  15,  2001.  That  description  includes  the type of securities

offered  on the exempted offerings and the amount of security sold, the proceeds

to  the  Company  and an accounting for all monies utilized by the Company up to

June  30,  2001.   No  other  company stock has been issued after June 30, 2001.



Item  VI  -  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 recently concluded preliminary testing of the Company's proprietary

dewatering  device.  Utilizing  the  Zeolite  Dewatering  System  has   provided

meaningful  insight   into  actual   production  constraints   and   operations.

Management  will  concentrate  on developing conveyors and airlock valves in the

torbid  reactor  which  do  not  harm  the Zeolite.  This additional research is

anticipated  to  cost  less  than  $20,000.00.



MARKETING  PLAN



Management  has  engaged  in  the exercise of identifying financially productive

applications  for  the Company's proprietary dewatering device.  The Company has

tested  various  bio-solids  and sludges in the past to determine the ability of

the  Company's proprietary dewatering process to handle certain materials.  This

kind  of  research  is  ongoing  and  the  Company  actively  solicits different

varieties  of bio-waste which may have value added in its dehydrated state.  The

Company  plans  to  utilize this information to develop a more precise marketing

plan  which will concentrate on processes which offer financial return and which

are  amenable  to  the  current  status  of  MEST's  dewatering  technology.



In  that  regard,  the  Company  has plans to assemble pilot plants in locations

which  provide  constant  sources  of  biological  waste.  In  order  to address

processing requirements when the Company has finally identified site and product

specific  waste stream processing, Management has deemed it necessary to solicit

bids  from  potential  manufacturers  in  Europe and in the United States.  As a

preliminary  matter,  the Company estimates that a production facility will cost

between $500,000.00  and  $700,000.00 U.S.D. to fabricate a dewatering device in

limited quantities.  Specific  engineering  figures  will  be  required in order

for the Company  to  more  accurately  develop  cost  estimates  for  processing

bio-solids,



<page>  7

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

FORM 10-KSB

For the year ended December 31, 2001



sludges  or  biological waste materials.  The Company has previously engaged TNO

to determine processing costs on the Company's pilot plan.  The Company believes

that it has certain useful information regarding the dewatering processing costs

in  a test format, more precise information should be developed by the financing

production  and  employment  of  functional  dewatering  plants.



The  Company  has  pursued  an  opportunity  to  locate  and  operate  a Zeolite

dewatering  facility  in  Cordova, Alaska for purposes of processing fish waste.

The  Company  intends  to fully explore fish waste processing and make decisions

regarding  the  Company's  initial production application.  The issue is whether

the  Company  should sell dewatering devices to third parties and derive profits

from  the  sale  of  equipment  and  machinery.  The Company is entertaining the

prospect  of  royalty  or production based fees.  Management has also considered

retaining all vestiges of ownership in the Zeolite dewatering systems and derive

profits  from  processing  bio-solids  or  biological  waste  products.



FINANCIAL  REQUIREMENTS



In  the  event the Company does not manufacture or contract for the further

development  and production of a Zeolite dewatering device, management estimates

that current Company funding will last until September or October, 2002.  As the

Company  anticipates  continuing  operations  and  the development of up to five

production  quality  devices,  then  the  Company  will need to raise additional

capital  to accomplish that purpose.  The Company estimates that it will require

approximately  $5,000,000.00  to  administer  the  engineering  project  and  to

construct  the  dewatering  devices  in accordance with the Company's plans.  In

that  regard,  the  Company intends to provide information to the Securities and

Exchange  Commission  sufficient  to clear the comment phase and then to proceed

with  a fully registered public offering to raise the $5,000,000.00 required for

the  Company's  plan  of  operations.



In order to implement the plans as outlined above, management anticipates hiring

an operations manager close to the location where the dewatering devices will be

manufactured.  Prior  to the delivery and installation of the dewatering devices

to  the  operating  locations, management will hire a team of no more than three

operators for each dewatering system or it will subcontract the plant operations

to  a third party.  The Company will budget in its operating expenses sufficient

funding  for either subcontracting services or for employee services to maintain

plant  operations.  The  time  period between engagement of the subcontractor to

build the devices and delivery is anticipated to be 4 to 6 months.  Commencement

of fabrication will depend on the Company's ability to raise additional capital.



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  and   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.



Item  VII  -  Financial  Statements

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

The  Company  has provided and filed an audited balance sheet as of December 31,

2001 and an audited statement of income, cash flows and changes in stockholders'

equity  for  the   same  time  period.   For  additional   historical  financial

information, please refer to the annual audits provided in the Company's Amended

Form 10-SB filing November 15, 2001 which includes audits for years ending 1998,

1999  and  2000.

<page>  8

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

FORM 10-KSB

For the year ended December 31, 2001

















MANAGEMENT OF ENVIRONMENTAL

SOLUTIONS & TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED FINANCIAL STATEMENTS



DECEMBER 31, 2001

















WILLIAMS & WEBSTER PS

CERTIFIED PUBLIC ACCOUNTANTS

BANK OF AMERICA FINANCIAL CENTER

601 W. RIVERSIDE, SUITE 1940

SPOKANE, WA 99201

(509) 838-5111















MANAGEMENT OF ENVIRONMENTAL

SOLUTIONS & TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)



TABLE OF CONTENTS







INDEPENDENT AUDITOR'S REPORT                                        1



CONSOLIDATED 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 CONSOLIDATED FINANCIAL STATEMENTS                          6







<PAGE>  9















Board of Directors

Management of Environmental Solutions & Technology Corp.

Apeldoorn,

The Netherlands



INDEPENDENT AUDITOR'S REPORT



We  have  audited the accompanying consolidated balance sheets of Management of

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

December  31,  2001  and  2000  and  the  related  consolidated  statements  of

operations and comprehensive loss, stockholders' equity, and cash flows for the

years then ended  and  for  the  period  from  December 10, 1997 (inception) to

December   31,  2001.   These  consolidated  financial   statements   are   the

responsibility  of  the Company's management.  Our responsibility is to express

an opinion on these consolidated financial statements based on our audits.



We conducted our audits  in  accordance  with  accounting  standards  generally

accepted in the United States of America.  Those standards require that we plan

and  perform  the  audit  to  obtain  reasonable  assurance  about  whether the

financial  statements  are  free  of  material misstatement.  An audit includes

examining, on a test basis, evidence supporting  the amounts and disclosures in

the  financial  statements.  An audit also includes  assessing  the  accounting

principles used and  significant  estimates  made  by  management,  as  well as

evaluating  the overall financial statement presentation.  We believe that  our

audits provide a reasonable basis for our opinion.



In our opinion, the consolidated financial statements referred to above present

fairly, in all  material  respects,  the  financial  position  of Management of

Environmental Solutions & Technology Corp. at December 31, 2001  and  2000, and

the results of its operations and comprehensive loss, stockholders' equity  and

its  cash  flows  for the years then ended and for the period from December 10,

1997 (inception) to  December 31, 2001, in conformity with accounting standards

generally accepted in the United States of America.



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 29, 2002











<page> 10

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(A Development Stage Company)

CONSOLIDATED BALANCE SHEET





2001          2000

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

ASSETS

CURRENT ASSETS

Cash                                               $   203,652   $   666,746

Tax refunds receivable                                  29,867        44,157

Due from shareholders or related parties                   -         158,441

Other receivables                                        5,126           -

Prepaid expenses                                         2,836        19,274

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

Total Current Assets                                 241,481       888,618

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



Property and equipment (net of depreciation)               3,201         7,182

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

TOTAL ASSETS                                         $   244,682   $   895,800

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



LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable                                   $    38,979   $    63,048

Loans, related parties                                     -         109,090

Accrued expenses                                         6,988        12,738

Bank overdraft                                           6,708           -

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

Total Current Liabilities                             52,675       184,876

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



COMMITMENTS AND CONTINGENCIES                                -             -



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 -

authorized 30,000,000 shares; 7,324,055

and 7,320,055 shares issued and outstanding,

respectively                                             732           732

Additional paid-in capital                           3,221,643     3,149,176

Stock options                                        3,000,568     2,274,650

Deficit accumulated during the development stage    (5,747,917)   (4,530,690)

Accumulated other comprehensive income (loss)         (283,072)     (182,997)

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

Total Stockholders Equity                           192,007       710,924

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



TOTAL LIABILITIES AND STOCKHOLDERS EQUITY           $   244,682   $   895,800

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













The accompanying notes are an integral part of these financial statements.



<page>  11

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATION AND COMPREHENSIVE LOSS





<TABLE>

<CAPTION>

Period from

December 17,

1997

Years Ended             (Inception)

December 31,                 to

------------------------------   December 31,

2001             2000        2001

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

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

REVENUES                                      $         -     $         -     $         -



OPERATING EXPENSES

General and administrative                      1,111,153       1,008,030       4,345,465

Research and development                           72,980          63,782         608,357

Depreciation                                        3,980           4,177          10,691

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

Total Operating Expenses                      1,188,113       1,075,989       4,964,513

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



LOSS FROM OPERATIONS                             (1,188,113)     (1,075,989)     (4,964,513)



OTHER INCOME (EXPENSES)

Interest income                                    60,746          75,446         170,229

Net loss from joint venture                       (88,121)       (394,772)       (951,101)

Interest expense                                   (1,739)            -            (2,532)

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

Total Other Income (Expenses)                   (29,114)       (319,326)       (783,404)



LOSS BEFORE EXTRAORDINARY ITEM AND INCOME

TAXES                                          (1,217,227)     (1,395,315)     (5,747,917)



Income taxes                                          -               -               -

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



NET LOSS                                         (1,217,227)     (1,395,315)     (5,747,917)



OTHER COMPREHENSIVE LOSS

Foreign currency translation loss                (100,075)        (97,293)       (283,072)

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



COMPREHENSIVE (LOSS)                          $  (1,317,302)  $  (1,492,608)  $  (6,030,989)

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



LOSS PER COMMON SHARE, BASIC AND DILUTED      $       (0.18)  $       (0.20)

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



WEIGHTED AVERAGE NUMBER OF COMMON SHARES

OUTSTANDING, BASIC AND DILUTED                  7,322,030       7,320,055

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

</TABLE>



















The accompanying notes are an integral part of these financial statements.



<page>  12

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>  13

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>  14

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>  15

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

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

</table>





































See accompanying notes and accountants review report.

<page>  16

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(A Development Stage Company)

CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>

<CAPTION>

Period from

December 17,

1997

Years Ended              (Inception)

December 31,                 to

------------------------------   December 31,

2001             2000        2001

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

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

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss                                    $  (1,217,227)  $  (1,395,315)  $  (5,747,917)

Adjustments to reconcile net loss to

net cash used in operating activities:

Depreciation                                      3,980           4,177          10,691

Options granted as compensation                 725,918         767,900       3,077,656

(Increase) decrease in assets:

Tax refunds receivable                           14,290         (10,575)        (29,867)

Other receivables                                (5,126)          2,247          (5,126)

Prepaid expenses                                 16,438          (3,338)         (2,836)

Increase (decrease) in liabilities:

Accrued liabilities                              (5,750)         12,738           6,988

Accounts payable                                (24,069)       (481,123)         33,794

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

Net cash used in operating activities              (491,546)     (1,103,289)     (2,656,617)

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



CASH FLOWS FROM INVESTING ACTIVITIES:

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

Loans provided to shareholders                        -               -          (933,303)

Payments on loans to shareholders                 112,218         774,862         887,080

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

Net cash provided by (used in) investing

activities                                        112,218         774,862         (60,116)

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



CASH FLOWS FROM FINANCING ACTIVITIES:

Overdrafts payable                                  6,708             -             6,708

Proceeds from related party loans                  25,921             -           145,391

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

Proceeds from sales of common stock                 9,600             -           915,060

Proceeds from sales of preferred stock                -           456,582       2,147,238

Cash acquired with subsidiary                         -               -            20,000

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

Net cash provided by (used in) financing

activities                                         42,229         446,192       3,224,007

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



Foreign currency translation (loss)                (125,995)        (97,108)       (308,622)

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

Net increase (decrease) in cash                    (463,094)         20,657         198,652



Cash at beginning of year                           666,746         646,089           5,000

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

Cash at end of year                           $     203,652   $     666,746   $     203,652

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

</table>











See accompanying notes and accountants review report.



<page>  17

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(A Development Stage Company)

CONSOLIDATED STATEMENT OF CASH FLOWS





<TABLE>

<CAPTION>

Period from

December 17,

1997

Years Ended              (Inception)

December 31,                 to

------------------------------   December 31,

2001             2000        2001

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

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

SUPPLEMENTAL CASH FLOW DISCLOSURES:

Interest paid                               $       1,544   $         -     $     2,337

Income taxes paid                           $         -     $         -     $       -



NON-CASH INVESTING AND FINANCING

TRANSACTIONS:

Stock options granted for compensation      $     725,918   $     767,900   $   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>  18

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001





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>  19

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001



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 December

31, 2001 and 2000.



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.



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.















<page>  20

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001





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.



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.



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.























<page>  21

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001



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 December 31, 2001, the Company  had net deferred tax assets of approximately

$590,000, 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 December 31, 2001.



At December  31,  2001,  the  Company  has  net operating loss carryforwards of

approximately $2,950,000, which expire in the  years  2017  through  2021.  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.



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 $1,217,227 for the year ended December 31, 2001, has

an accumulated deficit of $5,747,917. These  factors  indicate that the Company

may  be  unable  to  continue in existence.  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. The future of

the  Company  is  dependent  upon  successful  and profitable  operations  from

manufacturing, distributing, and selling its fertilizer products.



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.





























<page>  22

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



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.



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."



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 December 31, 2001.



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-monetary  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.



















<page>  23

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



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 the Netherlands financial  institutions.

These  financial  institutions  are  considered  credit  worthy  and  have  not

experienced any losses on deposits at  December 31, 2001.  The funds are valued

in U.S. dollars and are fully insured.



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 December 31, 2001.



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 December 31, 2001.

































<page>  24

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

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.



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.





NOTE 3 - RELATED PARTY TRANSACTIONS



LOANS FROM RELATED PARTIES

At December 31, 2000, loans from related parties consisted of the following:



2000

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

Maurice Schelvis, (a shareholder of the

Company), unsecured, interest at 5%,

due on demand.                                   $       5,590



Maurice Schelvis, (a shareholder of the

Company), unsecured, interest at 6%,

due on demand.                                         103,500

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

Total                                            $     109,090

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



The Company had no outstanding loans from related parties at December 31, 2001.



















<page>  25

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001



NOTE 3 - RELATED PARTY TRANSACTIONS (CONTINUED)



RECEIVABLE FROM RELATED PARTIES

At December 31, 2000 the following amounts were receivable from shareholders or

related parties:



2000

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

IJ-Beeher                                       $       48,917

Jan Luiken, B.V.                                       109,524

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

$      158,441

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



The Company had no receivables from related parties at December 31, 2001.



OTHER RELATED PARTY TRANSACTIONS

The president of the Company conveyed all outstanding shares of M.E.S.T., 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.



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 December 31, 2001 and 2000 was $3,980 and $4,177, respectively.





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  December  31,  2001 and 2000.   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.





























<page>  26

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001



NOTE 5 - PREFERRED STOCK (CONTINUED)



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  and  7,320,055 shares were issued and outstanding at

December 31, 2001 and 2000, respectively.  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.





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.

























<page>  27

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001



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

(CONTINUED)



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

December  31, 2001 and 2000. 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.  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.



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

of MSTec.



2001            2000

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

Current assets                        $    117,858    $    123,809

Property, plant, and equipment                 -               -

Other assets (net)                             -            50,624

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

Total assets                    $    117,858    $    174,433

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

Current liabilities                   $    360,019    $    210,753

Long-term debt - related parties         1,644,041       1,673,640

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

Total liabilities                  2,004,060       1,984,393

Stockholders' equity                    (1,886,202)     (1,709,960)

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

Total liabilities and equity    $    117,858    $    174,433

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

Net sales                             $        -      $        -

Gross profit                          $        -      $        -

Loss from continuing operations       $   (174,242)   $   (789,544)

Net loss                              $   (174,242)   $   (789,544)



















<page>  28

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001



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

(CONTINUED)



JOINT VENTURE ROYALTY AGREEMENT

In  connection  with  the  formation  of the MSTec joint 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

MEST 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

Under the terms of an agreement  dated January 22, 1999, the management of MEST

committed the Company to loan approximately  $800,000 to MSTec in phases during

the  year  1999.   Repayment  was  intended  to  commence  December  31,  1999,

contingent upon MSTec generating an operating profit.  Further, in the event of

MSTec's default or bankruptcy, MEST agreed to subordinate  its  interest in the

loan for the benefit of RABO bank in Apeldoorn, until all other debts  of MSTec

were paid.  Upon payment of debts and obligations of MSTec, the loan from  MEST

would again be eligible for repayment of interest and principle.



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, 2001  with

other lease provisions remaining unchanged.



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

September 30, 2001:



Year Ending:

December 31, 2001                        $  20,500

December 31, 2002                        $  24,000

December 31, 2003                        $  24,000

December 31, 2004                        $  24,000

December 31, 2005                        $  24,000



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 years ended December 31, 2001 and 2000.















<page>  29

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001



NOTE 9 - STOCK OPTIONS (CONTINUED)



Number of       Weighted Average

Shares         Price per Share

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

Outstanding at December 31, 1999        530,000    $         0.50

Granted                               200,000              0.50

Expired                               (30,000)             0.50

Exercised or forfeited                    -                -

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

Outstanding and exercisable at

December 31, 2000                 700,000    $         0.50

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

Weighted average fair value of

options granted during 2000                  $         3.59

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

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

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



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 prices 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 years ended December 31, 2001 and

2000 was $3.63 and $3.59 per option, respectively.



Compensation  cost  charged  to operations was $725,918 and $767,900 during the

years ended December 31, 2001 and 2000, respectively.



NOTE 10 - SUBSEQUENT EVENTS



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.































<page>  30

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

FORM 10-KSB

For the year ended December 31, 2001



Item  VIII  -  Changes  and  Disagreements  with  Accountants and Accounting and

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

Financial  Disclosure

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



Management  of  Environmental  Solutions  and  Technology  Corp.  (MEST  or  the

"Company")  previously  engaged Arenthals en Partners Registered Accountants who

are located at Reimersbeek 2, Post Bus 87081, 1080 JB Amsterdam, The Netherlands

in  order to do audits for the Company for the fiscal years/calendar years 1997,

1998  and 1999.  The financial statements were provided by Arenthals en Partners

to  the  Securities  and Exchange Commission when the Company filed its 10-SB on

December  28,  1999.



Due  to  the  Commission's  presumption  that  a U.S. based corporation would be

audited  by  a  U.S.  firm  familiar  with  U.S.  generally  accepted accounting

principals  and  generally  accepted  auditing   standards  together  with   the

Securities  and  Exchange Act rules and regulations, management deemed it in the

best  interest of the Company to retain a U.S. based auditing firm and certified

public  accountant  which  could perform auditing functions for and on behalf of

the  Company.



Consequently  the  Company   engaged  Williams  &  Webster,   certified   public

accountants  and  business  consultants  who  are  located  at  Bank  of America

Financial  Center,  601  West  Riverside,  Suite  1940, Spokane, Washington, USA

99201-0611 as its auditor.  Williams & Webster P.S. revised the Company's audits

in  response  to  the  Commission's  comments  issued on February 11, 2000.  The

Company  utilized  audits  performed  by  Williams  & Webster and submitted this

accounting  on  October  15,  2001  as  its  amended  10-SB  in  response to the

Commission's  comments.



Arenthals  en  Partners  which  has  now  become  affiliated with Grant Thornton

continues  to serve as the Company's accountants in The Netherlands and provides

accounting  for  the  Company's periodic accounting reporting requirements under

10-QSB  and 10-KSB.  Arenthals accounting is provided to Williams & Webster P.S.

who  performs  the  annual  audits  and quarterly reviews.  The Company cites no

other  reason  other  than  the  need  to  retain  a U.S. based certified public

accountant  qualified  to practice before the Securities and Exchange Commission

as  a  reason  for  its  change  of  auditor.



Part  III

---------



Item  IX  -  Directors,  Executive  Officers,  Promoters  and  Control  Persons

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



The following sets forth certain information concerning the present  management

of  the  Company:

<table>

Name                       Age  Position  with  Company

-------------------------  --  ------------------------------------------------


                        <c>  <c>

Marieke  Oudejans           30  President, Secretary, Director (12/97 to 4/01)

Greg  Schmick               51  President, Secretary, Director (4/01 to present)

Maurice  Schelvis           59  Vice  President

Eugene  M.  Larabie         61  Vice  President

Robert  E.  Johnson         65  Chief  Financial  Officer  and  Vice

President  of  Operations

</table>

<page>  31

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

FORM 10-KSB

For the year ended December 31, 2001



Greg  Schmick  has  been  president  and Secretary the Company since April,

2001.  Mr  Schmick  has been a Director since February of 2000.  Mr. Schmick was

formerly  President  of International Soil Sciences, Inc., an Oregon corporation

engaged  in  the  business of consulting and recycling since 1998.  For the past

few  years  Mr.  Schmick  has  been  engaged  in  the business of consulting for

recycling  operations  in  the  Pacific  Northwest.



Marieke  Oudejans  has  been  was formerly an Officer and  Director of the

Company  from  January 1998 to April 2001.  Since June 1997 Ms. Oudejans as been

the President of M.E.S.T., B.V., a corporation which was acquired by the Company

in April 1998 until April 2001.  Until June 1997 Ms. Oudejans was  an  assistant

vice president for ATT-Unisource, a Company engaged in telecommunications.



Maurice  Schelvis  has been an officer and  director of the Company  since

July 1998. For the past five years Mr. Schelvis has been an officer and director

of  a  real  estate  trading  company.



Eugene M. Larabie has been an Officer of the Company since  February 1998.

Since 1984 Mr.  Larable has been the  president  of Laroth  Engineering  Ltd., a

corporation  providing  consulting  services  to  the  mining  industry.



Robert E. Johnson has been an Officer of the Company since  February  1998.

Mr.  Johnson  has been  retired  since 1993.  From 1975 to 1993 Mr.  Johnson was

manager of customer services for the British Columbia Hydro and Power Authority.





































































<page>  32

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

FORM 10-KSB

For the year ended December 31, 2001



Item  X  -  Executive  Compensation

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



The  following  table  sets  forth  in  summary form the  compensation

received by (i) Marieke Oudejans,  the Company's Former President,  (ii) Maurice

Schelvis,  Eugene  Larabie  and Robert Johnson,  the Company's  Vice  Presidents

and  (iii)  Greg Schmick, the Company's current President and Secretary and (iv)

by  each  other  executive  officer  of the Company  who  received  in excess of

$100,000  during  the  fiscal  years  ending  December  31,  1997,  1998,  1999,

2000  and  2001.



<table>

Other Annual   Restricted     Options

Name  and              Fiscal  Salary   Bonus   Compensation   Stock Awards   Granted

Principal  Position     Year    (1)      (2)        (3)            (4)          (5)

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


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

Marieke  Oudejans,       1997      -                                           

President                1998      -               -                        100,000

1999      -       -        -                -        100,000

2000  $87,602             -                        100,000

2001      -       -        -                -        100,000



Maurice  Schelvis,       1997      -               -                            -

Vice  President          1998      -               -                        100,000

1999      -               -                        100,000

2000      -               -                        100,000

2001      -       -        -                -        100,000

Greg Schmick,            2000      -               -                            

President/Secretary      2001  $16,000             -                            -



Eugene Larabie,          1997      -               -                            

Vice President           1998      -               -                            

1999      -               -                            

2000      -               -                            

2001      -               -                            



Robert Johnson,          1997      -       -        -                            

Vice President           1998      -               -                            

1999      -               -                            

2000      -               -                            

2001      -               -                            

</table>



(1) The  dollar  value  of  base  salary  (cash  and  non-cash)  received.



(2) The  dollar  value  of  bonus  (cash  and  non-cash)  received.



(3) Any other annual  compensation not properly  categorized as salary or bonus,

including  perquisites  and other  personal  benefits,  securities  or property.

Amounts  in  the  table  represents  automobile  allowances.



(4) Amounts reflect the value of the shares of the Company's common stock issued

as  compensation  for  services.



(5) The shares of Common  Stock to be received  upon the  exercise of all  stock

options  granted  during  the  year  fiscal  years  shown  in  the  table.









<page>  33

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

FORM 10-KSB

For the year ended December 31, 2001



The table below shows the number of shares of the  Company's  Common Stock

owned by the officers listed above,  and the value of such shares as of June 30,

2001.



Name                          Shares                      Value

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

Marieke  Oudejans           2,260,000                   Unknown  *

Maurice  Schelvis           2,010,000                   Unknown  *



*  The  Company's  common  stock  did  not  begin  to  trade  until  July  1999.

From July, 1999 until June 2001, there  has  not been sufficient trading history

or consistent market from which to base an opinion regarding the value  of  such

shares.



The  following  shows  the  amounts  which the  Company paid to its officers

and  technical  advisor  during  the  year ending December 31, 2001 and the time

which  the  Company's executive officers and technical advisor plan to devote to

the  Company's  business.  The  Company does not have employment agreements with

any  of  its  officers  or  technical  advisor.



<table>

Proposed             Time  to  be  Devoted

Name                         Compensation          To  Company's  Business

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


                          <c>                   <c>

Marieke  Oudejans                       (1)                100% (to 4/01)

Greg Schmick                      2,000/mo(4)              100% (from 4/01)

Maurice  Schelvis                   -0- (2)                 50%

Eugene  Larabie                     -0- (3)                   none

Robert  E.  Johnson                 -0- (3)                   none

Jan  Pranger                        -0-                       none

</table>



(1)  The Companys previous plan to issue 1,100,000 shares of its common  stock

to  Ms.  Oudejans  for  services   rendered  to  April  2001   is  still  under

consideration.  The  Board of  Directors  has made no  decision  regarding  the

proposed  issuance.  Ms. Oudejans was  compensated at  the rate of  $87,602 per

year beginning in 2000 which terminated with her  employment in  April 2001 but

did not draw a salary from the incorporation of the Company to January 1, 2001.

(2)  The  Board of Directors expects to compensate Maurice Schelvis with common

stock  for  services  provided to  the Company in an amount not yet determined.

(3)  The Company plans to issue shares of its common stock, as well as options,

to  this  person  for  services  provided  to  the  Company.

(4)  Mr.  Schmick's  stock  option  package  is  yet  to  be  determined.



The Company's Board of Directors may increase the compensation paid to the

Company's   officers   depending  upon  the  results  of  the  Company's  future

operations.





















<page>  34

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

FORM 10-KSB

For the year ended December 31, 2001



As  of December 31, 2001 the Company had granted options for the purchase

of  the  Company's  common  stock  to  the  following  persons:



<table>

Shares  Subject             Option            Expiration

Name                     To  Option             Exercise Price          Date

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


                    <c>                      <c>               <c>

Marieke  Oudejans        100,000/yr               $0.50            five years from

Date of issue

Maurice  Schelvis        100,000/yr               $0.50            five years from

Date of issue

Frank  J.  Janssen         50,000                 $0.50             July  31,  2003



Afris  Holding  B.V.       50,000                 $0.50             July  31,  2003

</table>



<table>

Value of

Unexercised

Name                 Shares                    No. of Securities     In-The-Money

Acquired      Value       Underlying            Options/

on  Exercise  Realized    Unexercised options/  SARs at FY-end

SARs and FY-end       (dollars)

Exercisable and       Exercisable/

Unexercisable         Unexercisable

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


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

Marieke Oudejans         0             0              400,000         see footnote 1

Maurice Schelvis         0             0              400,000         see footnote 1

Frank J. Janssen         0             0           50,000/50,000      see footnote 1

Afris Holdings BU        0             0           50,000/50,000      see footnote 1

</table>



The  Company  is  unable  to  place a value of exercisable or unexercisable

options  due  to  the  lack  of historical or current market activity.  However,

footnote  9  on  the  Notes  to  Consolidated  Financial Statements  represented

compensation  costs  to operations as follows: 1998 - $865,938; 1999 - $717,900;

2000  -  $767,900;  2001  -  $725,918.00.



Accounting  standards  which consider standards for recognition of stock in

stock  options  for  purposes  of compensating directors, officers, employees or

advisers,  are  found  in Statement of Financial Accounting Standards number 123

(SFAS  123).  In accordance with SFAS 123, the options and/or stock compensation

given  to the individuals mentioned in the last table of item 6 follows: Options

granted  to  Marieke  Oudejans and Maurice Schelvis were deemed compensation for

services  rendered  for  founders  efforts, forbearance from collecting wages or

salaries  and for compensation for loans or monies advanced.  Options to Messrs.

Larabie  and  Johnson  were compensation for more limited activities benefitting

the  Company.  Afris Holdings, Inc. received stock options pursuant to a request

by  Richard Van Bremmell who acted as general manager in 1998-1999 as part  of a

salary  compensation  package.  Larabie  and Johnson were each given options for

15,000  shares  as  part  of  a  salary  compensation  package.

















<page>  35

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

FORM 10-KSB

For the year ended December 31, 2001



Item  XI  -  Security  Ownership  of  Certain  Beneficial  Owners and Management

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



SECURITY  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS.



The following  table sets forth  the  number  of and  percentage of  outstanding

shares of common stock beneficially owned  by the  Company's shareholders owning

more than 5% of the Company's  common stock as of December 31, 2001. The company

has only one class of common shares and one class of Series A Preferred Shares.



<table>

Shares of

Name  and  Address                 Common Stock (1)         Percent of Class

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


                               <c>                       <c>

Marieke  Oudejans                     2,260,000  (2)                29.44%

#68 Willem Van Weldamme LAAN

P.C.  1082  KW

Amsterdam,  The  Netherlands



Maurice  Schelvis                     2,010,000  (2)                26.19%

Stadhouderskade  142

1074  BA  Amsterdam

The  Netherlands



Beneficial holders                    4,270,000                     55.63%

as a Group (2 persons)

</table>



(1) Does not include  shares  issuable  upon the exercise of options held by the

certain  officers.  See  "Management  -  Transactions  with  Affiliates".



SECURITY  OWNERSHIP  OF CURRENT MANAGEMENT.



The following  table sets forth the number and  percentage of outstanding shares

of common stock beneficially owned  by  the  Company's  officers  and  directors

as of December 31, 2001.  The company has only one class of common shares.











































<page>  36

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

FORM 10-KSB

For the year ended December 31, 2001



<table>

Shares of

Name  and  Address                     Common Stock (1)          Percent of Class

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


                                    <c>                       <c>

Greg Schmick President, Director                   -0-                    0.00%

TO Environmental Technology Valley

Laan van Westenenk 501

7334 DT Apeldoorn, The Netherlands



Maurice  Schelvis                           2,010,000  (2)                26.19%

Vice President, Director

Stadhouderskade  142

1074  BA  Amsterdam

The  Netherlands



Eugene  M.  Larabie, Director                      -0-                     0.00%

507-595  Howe  St.

Vancouver,  British  Columbia

Canada  V6C  2T5



Robert  E.  Johnson, Director                      -0-                     0.00%

L1901-1600  Beach  Avenue

Vancouver,  British  Columbia

Canada  V6G  7Y6



All  Officers  and  Directors               2,010,000                     26.19%

as  a  Group  (4  persons)

</table>



(1) Does not include  shares  issuable  upon the exercise of options held by the

certain  officers.  See  "Management  -  Transactions  with  Affiliates".



Item  XII  -  Certain  Relationships  and  Related  Transactions

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



The Company has issued  shares of its common  stock to the  persons,  in the

amounts,  and  for  the  consideration  set  forth  below:



<table>

Number

Name                 Date         of  Shares         Consideration

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


                     <c>           <c>                <c>

Marieke  Oudejans         4-9-98         1,920,000       All of the issued

and  out-standing

shares of M.E.S.T., B.V.

Marieke  Oudejans         4-08-98        2,100,000       $25 and founders services

Maurice  Schelvis         3-10-98          250,000       $25 and founders services

</table>



An  accounting  of  the  loans  made  by  the Company's principals, Marieke

Oudejans  and  Maurice  Schelvis,  appear in four related party transactions and

Note  10  "Subsequent  Events"  which are attached to the consolidated financial

statements  for  years  ending December  31, 2001.   Please refer to the Amended

Form 10-SB  filed  November  15,  2001.  The  loans,  forgiveness  of  debt  and

reconciliation  occurred May 15, 2001 and explanations have  been made as a part

of the audited accounting.

<page>  37

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

FORM 10-KSB

For the year ended December 31, 2001



In March 1999 Marieke Oudejans transferred 1,760,000 of her shares of the

Company's  common  stock  to  Maurice  Schelvis  in  a private transaction.  See

Securities  Ownership  of  Certain  Beneficial  Owners,  above.



M.E.S.T.,  B.V.,  a  Dutch company,  had  issued previously 2,000 shares of

its  common stock to Marieke  Oudejans  which  represented all of the issued and

outstanding  stock  of  M.E.S.T.,  B.V.  At  the  time  of  the  April  9,  1998

transaction,  no  attempt  was  made  by M.E.S.T., B.V. to obtain an independent

business  appraisal  or accounting opinion regarding the value of M.E.S.T., B.V.

M.E.S.T.,  B.V.'s assets consisted of  rights  and  duties it procured by virtue

of  the  Licensing  Agreement  between  TNO,  MSTec,  B.V.  and  M.E.S.T.,  B.V.

with  its  attendant  rights,   duties  and  liabilities.   The  value   of  the

proprietary  dewatering  system  was not the subject of  an independent business

valuation  or  independent audit.  Consequently, there were  no  representations

made  to  shareholders,  officers  or  directors of the Company  in  regards  to

the  sale/acquisition  of  M.E.S.T.,  B.V.  shares.



Item  XIII  -  EXHIBITS AND REPORTS  ON FORM 8-K



(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                             (1)

(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.                            (attached)

(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) These items have either been omitted or are not applicable

(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.



















<page>  38

MANAGEMENT OF ENVIRONMENTAL SOLUTIONS & TECHNOLOGY CORP.

FORM 10-KSB

For the year ended December 31, 2001



SIGNATURES



In  accordance  with  Section  13  or  15(d) of the Exchange Act, the registrant

caused this report to be signed on its behalf by the undersigned, thereunto duly

authorized.



Management of Environmental solutions and Technology, Corp.

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

(Registrant)



/s/ Greg Schmick

By:-------------------------

Greg Schmick, President



Date: September 11, 2002

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



In  accordance  with  the Exchange Act, this report has been signed below by the

following  persons  on behalf of the registrant and in the capacities and on the

dates  indicated.





/s/ Greg Schmick

By:-------------------------

Greg Schmick, President



Date: September 19, 2002

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





This  report shall be furnished to security  holders after this report has been

filed  with  the  Securities  and  Exchange  Commission  on  this  Form.

















































<page>  39