SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  Form 10-KSB

                                  June 30,2004
                 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                    FOR THE FISCAL YEAR ENDED JUNE 30, 2001

                       RECYCLING CENTERS OF AMERICA, INC.
          (Name of Small Business Issuer as specified in its Charter)

                Colorado                             84-0703717
         (State of Incorporation)                (IRS Employer ID No.)

                      23832 Rockfield Boulevard, Suite 275
                         Lake Forest, California 92630
                    (Address of Principal Executive Offices)


                                 (949) 609-0590
                        (Registrant's Telephone Number)

Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X   No______.

Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure
will be contained, to the best of the 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 10-KSB. [   ].

State issuers's revenues for its most recent fiscal year: $367,219

State the aggregate market value of the voting stock held by non-
affiliates computed by reference to the price at which stock was sold, or the
average bid and asked prices of such stock, as of a specified date within the
past 60 days:  As of June 30, 2001, $4,341,179 (based on 7,316,713 shares held
by non-affiliates and computed by reference to the average closing bid and
asked prices of the Common Stock).

Securities registered pursuant to Section 12(b) of the Act:     None


Securities to be registered pursuant to Section 11(g) of the Act:
25,492,620 Common shares $0.01 Par Value

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

             REDCLAMATION CONSULTING AND APPLICATIONS, INC.
             (Formerly known as Recycling Centers of America, Inc.)

                               TABLE OF CONTENTS

                             Report on Form 10-QSB
                                 For year ended
                                 June 30, 2004


                                                                      Page

PART I  .............................................................. 2

ITEM 1  DESCRIPTION OF BUSINESS ...................................... 2

ITEM 2  DESCRIPTION OF PROPERTY ...................................... 8

ITEM 3  LEGAL PROCEEDINGS ............................................ 9

ITEM 4  SUBMISSION OF MATTERS TO A VOTE OF SECURITY
                HOLDERS .............................................. 9

PART II .............................................................. 9

ITEM 5  MARKET OF COMMON EQUITY AND RELATED STOCK-
                HOLDER MATTERS ....................................... 9

ITEM 6  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
                CONDITION AND RESULTSN OF OPERATIONS .................11

ITEM 7  FINANCIAL STATEMENTS .................................F-3 - F-17

ITEM 8  CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON
                ACCOUNTING AND FINANCIAL DISCLOSURE ..................13

PART III .............................................................14

ITEM 9  MANAGEMENT OF THE COMPANY; COMPLIANCE WITH
                SECTION 16(a) ........................................14

ITEM 10 EXECUTIVE COMPENSATION .......................................15

ITEM 11 SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND
                MANAGEMENT ...........................................17

ITEM 12 CERTAIN RELATION SHIPS AND RELATED TRANSACTIONS ..............18

ITEM 13 EXHIBITS AND REPORTS ON FORM 8-K .............................21

ITEM 14 CONTROLS AND PROCEDURES.......................................22

SIGNATURES ...........................................................22


<PAGE>2


PART I

ITEM 1: DESCRIPTION OF BUSINESS

I.      INTRODUCTION

Reclamation Consulting and Applications, Inc., a Colorado corporation (refered
to herein as "We" or the "Company" or the "Registrant" specializes in the
production and sales of the AlderoxTM line of products including Alderox TM
ASA-12TM, DCR TM, KR-7 TM, TSR TM,and ASA Cleaners.

Reclamation Consulting and Applications, Inc. is a Colorado corporation,
originally formed in 1976 under the name Vac-Tec Systems, Inc. and reorganized
as a public shell corporation without significant assets in early 1997, after we
ceased operations in the glass vacuum coating business.

II.     BUSINESS

Our primary business at this date is the production and sale of our AlderoxTM
line of products including ASA-12TM, DCR TM, KR-7 TM, TSR TM, and ASA Cleaners.
ASA-12TM is an asphalt release agent and DCR TM is a drag chain lubricant that
were both developed by the Company in reponse to the asphalt industry's need for
effective, economical and environmentally friendly products.  KR7TM is a
concrete release agent also developed by the Company in reponse to the this
industry's same needs.  TSRTM was specifically designed as an environmentally
friendly product for the oil sands industry to reduce the build-up of clay, lime
and mud on the undercarriages and sides of transport vehicles and equipment.

(a)     Products and Services

(i)     AlderoxTM ASA-12TM, DCRTM, KR-7TM, TSRTM and ASA Cleaners. The Company
manufactures, sells and services the AlderoxTM line of products throughout the
United States through North American Systems, Inc. and throughout Canada by
Canadian Release Agents, Inc.  AlderoxTM ASA-12TM is a ready-to-use product that
allows asphalt to slide easily from truck beds.  AlderoxTM DCRTM is a ready-to-
use lubricant used to reduce start-up amps and eliminates power spiking while
ensuring that highely polymerized asphalt mixes do not build-up on drag chains
or slats.  AlderoxTM KR7TM is a ready-to-use product that allows concrete to
easily release from concrete molds and forms.

(ii)    We have obtained government approval for all of Canada for both
AlderoxTM ASA-12TM and KR-7TM and have been approved as the national standard
for both products, which now carry the Canadian Environmental Choice EcoLogo. We
will be applying for national standard EcoLogo status for TSRTM and DCRTM in the
future.  We are not aware of any Canadian government approvals necessary for the
sale of TSRTM, DCRTM, or ASA Cleaners. In the United States, we have obtained
approval from the Connecticut, Utah, Georgia, Washington, Colorado and Oklahoma
Departments of Transportation for government use of ASA-12TM within those
States. There are no government approvals required for the sale of the AlderoxTM
line of products in California, Florida, Hawaii, New Jersey, Pennsylvania, West
Virginia, Arizona or Oregon.  We have applied for approval of AlderoxTM ASA-12TM
in Texas, New York, Nevada and Wyoming.  The Company is currently in the process
of applying for approvals within other States.  We are not aware of any United
States government approvals necessary prior to the sales of AlderoxTM KR7TM,
DCRTM, or ASA Cleaners.

<page>3

Management believes the advantages of the AlderoxTM line of products over its
competitors are as follows:

-       100% biodegradable
-       Completely non-hazardous
-       Easily applied
-       Zero negative impact to equipment or asphalt/concrete
-       Exclusive filming technology

(iii)   AlderoxTM ASA-12TM, DCRTM, KR7TM, TSRTM and ASA Cleaners were designed
for use in the asphalt, concrete and oil sands industries. The products are
manufactured by North American Systems, Inc. and the formulations are
proprietary to Reclamation Consulting and Applications, Inc. We have applied for
both national and international patents and are Patent Pending on both ASA-12TM
and KR-7TM. At this time, the ingredients and formulas of all other AlderoxTM
products are Proprietary Trade Secrets of the Company.  North American Systems,
Inc. is under agreement with Reclamation Consulting And Applications, Inc. for
the manufacturing of all AlderoxTM products in the United States at their Salt
Lake City, Utah manufacturing facility.

(b)     Marketing & Sales

Our marketing program includes the development of international markets and
support of existing distributors, including North American Systems, Inc.
throughout the United States and Canadian Release Agents, Inc. throughout
Canada.  This support includes;

the development of compliance data, sales materials, product demonstrations and
sales leads.  Compliance Data is performance data we generated from on-site
pilot testing.  This data specifically shows the characteristics of asphalt
release from trucks prior to applying AlderoxTM ASA-12TM and after applying
AlderoxTM ASA-12TM in comparison with other competitive products currently used
by our potential customers.  We utilize, and have under contract, North American
Systems, Inc., nationwide for all marketing, sales, manufacturing and service of
our AlderoxTM line of products.  Reclamation Consulting & Applications, Inc is
also under agreement with Canadian Release Agents, Inc. for the marketing, sales
and service of our AlderoxTM line of products throughout Canada.

(c)     Competition

We compete with over 60 other companies who have competing products.  Primarily,
our competition are considerably smaller than RCAI and with less financial
resources who operate on a strictly regional basis.  However, there are some
companies who are larger, with greater financial resources and larger
organizations.

Competition in this industry focuses on price, quality, features, performance,
specialization, expertise, reliabilty, technology, customer relationships,
marketing, advertising, sales, publicity, distribution, serving particular
market niches, and appealing to particiular consumers.

<page>4

(d)     Raw Materials

Our products are produced by North American Systems, Inc. using 100% natural
ingredients.  The formulas used in our AlderoxTM line of products are
proprietary and exculsive to the Company.  One of the raw materials for the
product is difficult to obtain. This raw material is purchased by the Company
under contract from a sole service supplier.

(e)     Dependence on a Few Customers

There are 2 single customers who currently dominate our business. These
customers are North American Systems, Inc., the sole distributor of our
AlderoxTM line of products in the United States and Canadian Release Agents,
Inc., the sole distributor of our AlderoxTM line of products in Canada.

(f)     Patents, Trademarks, Licenses, etc.

(i)     Trade Secrets, Patents and Trademarks

We have two (2) domestic Patents Pending, two (2) international Patents Pending,
two (2) Trade Secrets and five (5) Trademarks.  Our Patents Pending are for
AlderoxTM ASA-12TM and ALderoxTM KR-7TM.  Our Trade Secrets are for the
ingredients and production methods of our proprietary products AlderoxTM DCRTM
and TSRTM.  Our Trademarks are AlderoxTM, KR7TM , ASA-12TM, DCRTM and TSRTM.

(g)     Government Regulation

There are certain government regulations through State aprovals for asphalt
release agents on a State by State basis.   Each State has their own approval
process, with some being more stringent than others.  This process is designed
to assure the States that the products that are approved meet certain
environmental regulations.  Our customers are responsible for compliance with
these regulations and we have not assumed any responsibility for compliance as a
provider of products to our customers.  Not all of the individual States require
approval.  We are not aware of any government regulations that are required
prior to product sale and use of concrete release agents such as AlderoxTM
KR7TM, drag chain lubricants such as AlderoxTM DCRTM , non-stick undercoatings
and coatings, such as AlderoxTM TSRTM or cleaners, such as our ASA Cleaners.

(h)     After Market Sales Responsibility

Reclamation Consulting and Applications, Inc. warrants to its customers that the
AlderoxTM line of products will preform to their specifications.

(i)     Research and Development

The technology and products sold by us are in the early stages of market
acceptance.  As a result, in order to accomplish a sale, a customer will
typically require a significant research and development effort, in the form of
testing and trials.  These costs are funded in part by us, and expensed as a
sales expense.

<page>5

In addition, management believes there may be additional undiscoverd
applications for the AlderoxTM  line of products.  The Company is currently
exploring additional markets.

(j)     Employees

We have four full-time employees, including three located in California, and one
located in Connecticut.

ITEM 2.         DESCRIPTION OF PROPERTY

        We own no real property or personal property.

Facilities

        Our corporate offices are located at 23832 Rockfield Blvd., Suite 275,
        Lake Forest, CA 92630.  We are under a three-year lease agreement for
        the 876 square feet offices ending April 2005  Our monthly lease
        payments are $1,919.

        North American Systems, Inc.'s manufacturing warehouse is located at
        3558 South 900 West, Salt Lake City, UT 84104.  We are under a five-year
        lease for this 12,020 square feet warehouse ending June 2007.  Our
        monthly lease payments are $5289.70.  Through our Distribution Agreement
        with North American Systems, Inc. and as long as NAS occupies the Salt
        Lake City warehouse, they will pay the monthly lease payment directly to
        the landlord while the agreement is in affect between RCAI and NAS.

ITEM 3.  LEGAL PROCEEDINGS

        A former employee sued the Company for a breach of contract claim
        arising from an employment agreement entered into between the ex-
        employee and the Company on April 7, 2003. The original complaint was
        filed on Feb. 5, 2004 and asserts the following causes of action: breach
        of contract, breach of covenant of good faith and fair dealing, and
        fraud. The plaintiff is demanding compensatory and punitive damages as
        well as attorneys' fees and costs.

The Company filed its Cross-Complaint on April 15, 2004 alleging breach of
contract, negligence, intentional misrepresentation, rescission, and declaratory
relief. An amended Cross-Complaint was filed July 6, 2004.

The amount of potential loss is $19,000 on the case. The company has accrued
this amount in the accompanying financial statement.

The Company settled a lawsuit with two former employees during the year ended
June 30, 2004. The former employees had alleged that the Company and its officer
were liable to them for losses suffered by the former employees due to breach of
employment contract. Per the settlement agreement, the Company agreed to pay to
the former employees in a total amount of $128,000 in exchange of 200,000 shares
of the Company's common stock. The payments will be paid in combined monthly
installment of $14,333. Per the settlement agreement, these settlements shall
pay off before December 31, 2004. The Company has recorded $128,000 as accrued
expense in the accompanying financial statements. The Company has paid $71,109
through June 30, 2004.

<page>6

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY SHAREHOLDERS

                Nothing to report.

Part II


ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's Common Stock trades over-the-counter on the Bulletin Board under
the trading symbol "RCAA".  The closing sales price as of Jun 30, 2004, was
$0.38 per share.

Set forth below is the high and low bid information for the Company's Common
Stock for each full quarterly period within the four most recent fiscal years.

                        High    Low     High    Low
Period                  Bid     Bid     Ask     Ask
---------------------  -----   -----   -----   -----
4th Quarter 2003/2004   0.50    0.33    0.55    0.39
3rd Quarter 2003/2004   0.73    0.44    0.77    0.47
2nd Quarter 2003/2004   0.82    0.60    0.85    0.62
1st Quarter 2003/2004   0.83    0.44    0.85    0.53

4th Quarter 2002/2003   0.80    0.30    0.85    0.35
3rd Quarter 2002/2003   0.36    0.13    0.45    0.19
2nd Quarter 2002/2003   0.40    0.12    0.50    0.17
1st Quarter 2002/2003   0.38    0.20    0.45    0.27

4th Quarter 2001/2002   0.30    0.22    0.49    0.35
3rd Quarter 2001/2002   0.55    0.28    0.83    0.55
2nd Quarter 2001/2002   0.42    0.36    0.55    0.43
1st Quarter 2001/2002   0.51    0.37    0.63    0.52

4th Quarter 2000/2001   1.03    0.50    1.56    1.06
3rd Quarter 2000/2001   1.4375  0.75    1.5625  1.00
2nd Quarter 2000/2001   0.58    0.27    0.79    0.35
1st Quarter 2000/2001   0.80    0.51    1.00    0.75





ITEM 6.         MANAGEMENT DISCUSSION AND ANALYSIS JUNE 30, 2004 AND 2003

Twelve Month Statement of Operations

The Company has incurred net losses for twelve months ended June 30, 2004 of
$2,272,770 as compared to a net loss of $1,698,498 for the twelve months ended
June 30, 2003.  The losses for the twelve months ended June 30, 2004 and 2003
can be attributed in part to significant costs incurred in the introduction of
the Company's AlderoxTM line of products to the marketplace. Management is
optimistic that sales of its proprietary AlderoxTM line of products will
continue to lead towards contracts which will begin to generate significant
revenues to cover the Company's operating expenses.

<page>7

The revenues for the twelve months ending June 30, 2003 are $261,235 and are
from the sales of AlderoxTM products. The revenues from the twelve months ending
June 30, 2004 are $289,218 and are from the sales of AlderoxTM products.

The Cost of Goods Sold represents sixty four percent (64%) as compared to one
hundred thirteen percent (113%) of sales for the twelve months ending June 30,
2003. The Costs of Goods are not consistent between years as a result of the
varying sources, which created sales revenues in each year.

Operating expenses consist primarily of general and administrative expenses. For
the twelve months ended June 30, 2004 operating expenses totaled $1,774,600 as
compared to $1,823,307 for the twelve months ended June 30, 2003. The decrease
in operating expenses between the years of $48,707 can be primarily attributed
to the Distribution and Manufacturing Agreements with North American Systems,
Inc.  Consulting fees of $0 were attributed to the cost of the raising of
capital to finance operations.

Interest expense and other finance charges decreased from $106,454 for the
twelve months ended June 30, 2003 to $45,622 for the twelve months ending June
30, 2004. The decrease between years can be attributed to the decrease in Notes
payable between years 2003 and 2004.

Liquidity and Capital Resources

As of June 30, 2004 the Company had cash and cash equivalents of $1,043, as
compared to cash and cash equivalents of $300 as of June 30, 2003. At June 30,
2004, the Company had a working capital deficiency (total current liabilities in
excess of total current assets) of $193,375 as compared to a working capital
deficit (total current liabilities in excess of total current assets) of
$1,088,216 as of June 30, 2003.

The principal use of cash for the twelve months ended June 30, 2004 and 2003 was
to fund North American Systems, Inc. The Company received capital of $1,796,433
in the twelve months ended June 30, 2004 from the private sale of common stock
as compared to $279,967 in the twelve months ending June 30, 2003.

The management of the Company is endeavoring to cover operating expenses in
excess of revenues of the Company until adequate sales are generated, through
the private sale of additional shares, but there is no insurance of success in
such placement. Management projects that the Company may become profitable and
will begin to generate sufficient cash flow to meet its monthly operating
expenses sometime during the first quarter of the current fiscal year, but
cannot guarantee this result.  The Company's monthly operating expenses
currently average approximately $35,000.00 per month.  In addition to the
raising of capital through the Private Sale of shares, the Company has secured
an operating line of credit from Canvasback Company Limited in the amount of
$650,000.00.   During the twelve months ending June 30, 2004, the Company raised
$15,000 in convertible notes payable.

<page>8

ITEM 7.         FINANCIAL STATEMENTS

CONTENTS
                                                        PAGE

Independent Auditors' Report ..........................  F-2

Balance Sheets ........................................  F-3

Statement of Operations ...............................  F-4

Statements of Stockholders' Equity (Deficit) ..........  F-5

Statements of Cash Flows ..............................  F-6

Notes to the Financial Statements ................  F-7-F-16

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


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders
Reclamation Consulting and Applications, Inc.

We have audited the accompanying balance sheet of Reclamation Consulting and
Applications, Inc. (formerly, Recycling Centers of America, Inc.) as of June 30,
2004 and the related statements of operations, stockholders' equity, and cash
flows for each of the two years in the period ended June 30, 2004. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audits of these statements in accordance with  the standards of
the Public Company Accounting Oversight Board ( United States) 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 financial statements referred to above present fairly, in
all material respects, the financial position of Reclamation Consulting and
Applications, Inc. as of June 30, 2004, and the results of its operations and
its cash flows for each of the two years in the period ended June 30, 2004, in
conformity with accounting principles generally accepted in the United States of
America.

The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business.  The Company has accumulated deficit of $ 11,112,519 as of June 30,
2004. The Company incurred net losses of $ 2,542,770 and $ 1,698,498 for the
years ended June 30, 2004 and 2003 respectively. These factors as discussed in
Note 15 to the financial statements, raises substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 15.  The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.


KABANI & COMPANY, INC.

CERTIFIED PUBLIC ACCOUNTANTS
Fountain Valley, California
September 2, 2004

<page>F-2


                 RECLAMATION CONSULTING AND APPLICATIONS, INC.
                 (FORMERLY, RECYCLING CENTERS OF AMERICA, INC.)
                                 BALANCE SHEET
                                 JUNE 30, 2004

                                     ASSETS

CURRENT ASSETS:
        Cash & cash equivalents                    $      1,043
        Accounts receivable                             262,844
        Notes recivable, net of allowance of
          doubtful debts of $ 270,000                   547,476
        Employee advances                                16,953
                                                      ----------
                Total current assets                    828,316

PROPERTY AND EQUIPMENT, net                              11,942
                                                      ----------
                                                    $   840,258
                                                      ==========

                     LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
        Accounts payable                            $   193,053
        Accrued expenses                                384,242
        Customer deposit                                  7,542
        Convertible loans                                50,104
                                                     -----------
                Total current liabilities               634,941

LONG TERM LIABILITIES:
        Note payable-related party                      121,763
        Convertible debentures                           55,850
                                                     -----------
                Total liabilities                       812,554

COMMITMENTS

STOCKHOLDERS' DEFICIT
        Common stock, $.01 par value;
          Authorized shares 75,000,000;
          25,492,620 shares issued and outstanding      254,926
        Additional paid in capital                   10,895,296
        Treasury stock                                  (15,000)
        Shares to be issued                               5,000
        Accumulated deficit                         (11,112,519)
                                                    ------------
               Total stockholders' equity                27,704
                                                    -------------
                                                   $    840,258

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

<page>F-3

                 RECLAMATION CONSULTING AND APPLICATIONS, INC.
                 (FORMERLY, RECYCLING CENTERS OF AMERICA, INC.)
                            STATEMENTS OF OPERATIONS
                   FOR THE YEARS ENDED JUNE 30, 2004 AND 2003

                                                   2004              2003
                                                ----------        ----------
Net revenue                                $     289,218     $     261,235

Cost of revenue                                  185,280           295,675
                                               -----------       -----------
Gross loss                                       103,938           (34,440)

Total operating expenses                       2,044,600         1,823,307
                                               -----------       -----------
Loss from operations                          (1,940,662)       (1,857,747)

Non-operating income (expense):
        Interest income                           46,284                 -
        Interest expense                         (45,622)         (106,454)
        Loss on Impairment of inventory             (583)         (127,034)
        Loss on disposal of asset                (22,692)                -
        Gain (loss) on settlement of debts      (578,695)           393,537
                                             -------------     -------------
    Total non-operating income (expense)        (601,308)           160,049

Loss before income tax                        (2,541,970)       (1,697,698)
                                             -------------     -------------
Provision for income tax                             800               800

Net loss                                     $(2,542,770)     $ (1,698,498)
                                             ==============    ==============
Basic and diluted weighted average
  shares outstanding                          21,968,260        16,602,590
                                             ==============    ==============
Basic and diluted net loss per share          $    (0.12)      $     (0.10)
                                             ==============    ==============


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

<Page>F-4


                  RECLAMATION CONSULTING AND APPLICATION, INC.
                    (FORMERLY, RECYCLING CENTERS OF AMERICA,
                 INC.) STATEMENTS OF STOCKHOLDERS' DEFICIT FOR
                     THE YEARS ENDED JUNE 30, 2004 AND 2003

 <table>
<caption>
   
                                             <c>         <c>      <c>         <c>       <c>      <c>           <c>

                                                 Common stock                                                      Total
                                              --------------------    Additional                                stockholders'
                                              Number of                 paid in   Treasury Stock to Accumulated    equity
                                               shares    Amount         capital    stock   be issued  deficit    (deficit)



Balance at June 30, 2002                     12,211,523 $122,495  $5,011,575  $(15,000)  $1,050,594  $(6,871,251)  $ (701,587)

Issuance of shares for cash recived in the
 prior year                                     743,594    7,436     290,002        -      (297,438)          -             -

Issuance of shares for service recived in the
 prior year                                     153,125    1,531      42,875        -       (44,406)          -             -

Issuanve of shares for debt settlement        1,875,000   18,750     690,000        -      (708,750)          -             -

Issuance of shares on loan conversion         1,253,369   12,533     330,470        -             -           -       343.003

Issuance of shares for cash                   1,138,440   11,384     207,416        -             -           -       218,800

Issuance of shares for service                1,019,608   10,196     394,014        -             -           -       404,210

Issuance of shares for compensation            425,000     4,250     113,725        -             -           -       117,975

Conversion provision on debenture and notes          -      (379)    236,632        -             -           -       236,253

Cancellation of shares issued to founder      (150,000)   (1,500)      1,500        -             -           -             -

177,918 shares of common stock to be issued
  for cash received                                  -         -           -        -         71,167          -        71,167

Net loss for the year ended June 30, 2003            -         -           -        -             -    (1,698,498) (1,698,498)
                                            ----------- ---------- ---------  -----------   ---------- -----------   -------------
Balance at June 30, 2003                    18,669,659   $186,696 $7,318,209  $(15,000)       71,167  $(8,569,749) $(1,008,677)

Issuance of shares for cash recived in the
 prior year                                    127,918      1,279     49,888         -       (51,167)           -            -

Issuance of shares for service recived in the
 prior year                                     50,000        500     19,500         -       (20,000)           -            -

Issuanve of shares for debt settlement       1,546,131     15,461  1,176,493         -             -            -    1,191,954

Issuance of shares on loan conversion           41,432        414     26,917         -             -            -       27,331

Issuance of shares for cash                  4,279,805     42,798  1,753,635         -             -            -    1,796,433

Issuance of shares for service                 777,675      7,777    519,156         -             -            -      526,933

Option granted for services                          -          -     31,500         -             -            -       31,500

10,000 shares of common stock to be issued
  for service rendered                               -          -          -         -         5,000            -        5,000

Net loss for the year ended June 30, 2004            -          -          -         -             -   (2,542,770)  (2,542,770)
                                            ----------    ------- ----------     --------      -----  ------------  -----------
Balance at June 30, 2004                    25,492,620    254,926 10,895,296     (15,000)      5,000  (11,112,519)      27,704
                                            ==========    ======= ==========     ========      =====  ============      ======

</table>

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

<page>F-5

                 RECLAMATION CONSULTING AND APPLICATIONS, INC.
                 (FORMERLY, RECYCLING CENTERS OF AMERICA, INC.)
                            STATEMENTS OF CASH FLOWS
                   FOR THE YEARS ENDED JUNE 30, 2004 AND 2003
<table>
<caption>

                                                        <c>          <c>
                                                           2004        2003
                                                          ---------   ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
        Net loss                                       $(2,542,770)  $(1,698,498)
        Adjustments to reconcile net loss to
          net cash used in operating activities:
                Depreciation and amortization                5,338        37,504
                Issuance of shares for services
                  and compensation                         526,933       522,185
                Shares to be issued for service              5,000             -
                Loss (gain) on settlement of debts         578,695      (393,537)
                Allowance for doubtful debts               270,000             -
                Impairment of inventory                        583       127,034
                Loss on disposal of asset                   22,692             -
                Option granted for compensation
                  and services                              31,500             -
                Debenture conversion provision                   -       236,253
                Shares to be issued for services                 -             -
                (Increase)/decrease in current assets:
                        Accounts receivable               (224,967)       34,185
                        Notes receivable                  (714,178)            -
                        Inventory                           98,116        11,186
                        Prepaid expenses                    11,476        (3,462)
                        Employee advances                   (6,523)      (10,430)
                        Other assets                         3,285        (3,285)
                Increase/(decrease) in current
                  Liabilities:
                     Accounts payable and accrued Expenses  93,672       142,020
                     Customer deposit                        7,542             -
                                                        -----------     ---------
                Total adjustments                          709,163       699,653
                                                        -----------     ---------
      Net cash used in operating activities             (1,833,607)     (998,845)
                                                        -----------     ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
        Acquisition of equipment                            (1,948)     (140,637)
                                                         ----------    ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
                Proceeds from convertible loans              15,000        90,604
                Repayment of convertible loans              (35,000)            -
                Proceeds from shareholder loans                   -       479,234
                Proceeds from other loans                    83,112       278,302
                Repayment of loans                          (23,246)           -
                Cash received for shares to be issued             -        71,167
                Common stock issuance for cash            1,796,433       218,800
                                                          ---------     ---------
     Net cash provided by financing activities            1,836,299     1,138,107
                                                          ---------     ---------
NET DECREASE IN CASH & CASH EQUIVALENTS                         743       (1,375)

CASH & CASH EQUIVALENTS, BEGINNING BALANCE                      300         1,675
                                                          ---------     ---------
CASH & CASH EQUIVALENTS, ENDING BALANCE              $        1,043           300
                                                          =========     =========

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

</table>

<page>F-6

                 RECLAMATION CONSULTING AND APPLICATIONS, INC.
                 (FORMERLY, RECYCLING CENTERS OF AMERICA, INC.)
                         NOTES TO FINANCIAL STATEMENTS


1.     ORGANIZATIONS AND DESCRIPTION OF BUSINESS

Reclamation Consulting and Applications, Inc. (formerly, Recycling Centers of
America, Inc.) (the "Company") is a Colorado corporation, originally formed in
1976 under the name of Vac-Tech Systems, Inc. The Company changed its name to
Recycling Centers of America on March 26, 1999.  On January 16, 2002, an article
of amendment was filed to change the name of corporation to Reclamation
Consulting and Applications, Inc.

Presently, the Company's  primary business is the production and sale of Alderox
TM line of products including ASA-12TM, DCR TM, KR-7 TM, TSR TM, and ASA
Cleaners. ASA-12 TM is an asphalt release agent, DCR TM is a drag chain
lubricant. KR7TM is a concrete release agent and TSRTM was specifically designed
for the oil sands industry.

During the period ended December 31, 2003, the Company appointed North American
Systems (NAS) as the sole United States distributor of Company's AlderoxTM line
of products.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the Company's significant accounting policies consistently applied
in the preparation of the accompanying financial statements follows:

Cash and cash equivalents

The Company considers all liquid investments with a maturity of three months or
less from the date of purchase that are readily convertible into cash to be cash
equivalents.

Accounts Receivable:

The Company's customer base consists of a geographically dispersed customer's
base. The Company maintains reserves for potential credit losses on accounts
receivable. Management reviews the composition of accounts receivable and
analyzes historical bad debts, customer concentrations, customer credit
worthiness, current economic trends and changes in customer payment patterns to
evaluate the adequacy of these reserves. Reserves are recorded primarily on a
specific identification basis.

Property & Equipment

<page> F-7

Property and equipment is carried at cost. Depreciation of property and
equipment is provided using the straight-line method for substantially all
assets with estimated lives of three to seven years.

Expenditures for maintenance and repairs are charged to expense as incurred.

Income taxes

The Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109 (SFAS 109). Under SFAS 109, deferred income taxes are reported
using the liability method.  Deferred tax assets are recognized for deductible
temporary differences and deferred tax liabilities are recognized for taxable
temporary differences.  Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax bases.  Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets
will not be realized.  Deferred tax assets and liabilities are adjusted for the
effects of changes in tax laws and rates on the date of enactment.

Revenue Recognition

The Company recognizes its revenue in accordance with the Securities and
Exchange Commissions ("SEC") Staff Accounting Bulletin No. 104, "Revenue
Recognition in Financial Statements" ("SAB 104"). Revenue is recognized when
merchandise is shipped to a customer.

Using Estimates

In preparing financial statements in conformity with generally accepted
accounting principles, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and
revenues and expenses during the reporting period.  Actual results could differ
from those estimates.

Fair Value of Financial Instruments

Statement of financial accounting standard No. 107, Disclosures about fair value
of financial instruments, requires that the Company disclose estimated fair
values of financial instruments. The carrying amounts reported in the statements
of financial position for current assets and current liabilities qualifying, as
financial instruments are a reasonable estimate of fair value.

Earnings per share

Net loss per share is calculated in accordance with the Statement of financial
accounting standards No. 128 (SFAS No. 128), "Earnings per share". Basic net
loss per share is based upon the weighted average number of common shares
outstanding. Diluted net loss per share is based on the assumption that all
dilutive convertible shares and stock options were converted or exercised.
Dilution is computed by applying the treasury stock method. Under this method,
options and warrants are assumed to be exercised at the beginning of the period
(or at the time of issuance, if later), and as if funds obtained thereby were
used to purchase common stock at the average market price during the period.

<page>F-8

Weighted average number of shares used to compute basic and diluted loss per
share is the same in these financial statements since the effect of dilutive
securities is anti-dilutive.

Stock-based compensation

In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation". SFAS No. 123 prescribes accounting and reporting standards for
all stock-based compensation plans, including employee stock options, restricted
stock, employee stock purchase plans and stock appreciation rights. SFAS No. 123
requires compensation expense to be recorded (i) using the new fair value method
or (ii) using the existing accounting rules prescribed by Accounting Principles
Board Opinion No. 25, "Accounting for stock issued to employees" (APB 25) and
related interpretations with pro forma disclosure of what net income and
earnings per share would have been had the Company adopted the new fair value
method. The company uses the intrinsic value method prescribed by APB25 and has
opted for the disclosure provisions of SFAS No.123.

Issuance of shares for service

The Company accounts for the issuance of equity instruments to acquire goods and
services based on the fair value of the goods and services or the fair value of
the equity instrument at the time of issuance, whichever is more reliably
measurable.

Segment Reporting

Statement of Financial Accounting Standards No. 131 ("SFAS 131"), "Disclosure
About Segments of an Enterprise and Related Information" requires use of the
"management approach" model for segment reporting. The management approach model
is based on the way a company's management organizes segments within the company
for making operating decisions and assessing performance. Reportable segments
are based on products and services, geography, legal structure, management
structure, or any other manner in which management disaggregates a company.
Currently, SFAS 131 has no effect on the Company's financial statements as
substantially all of the Company's operations are conducted in one industry
segment.

Recent Pronouncements

In December 2002, the FASB issued SFAS No. 148 "Accounting for Stock Based
Compensation-Transition and Disclosure".  SFAS No. 148 amends SFAS No. 123,
"Accounting for Stock Based Compensation", to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation.  In addition, this Statement amends the
disclosure requirements of Statement 123 to require prominent disclosures in
both annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used, on reported
results.  The Statement is effective for the Companies' interim reporting period
ending January 31, 2003.

<page>F-9

In compliance with FAS No. 148, the Company has elected to continue to follow
the intrinsic value method in accounting for its stock-based employee
compensation plan as defined by APB No. 25 and has made the applicable
disclosures below.

Had the Company determined employee stock based compensation cost based on a
fair value model at the grant date for its stock options under SFAS 123, the
Company's net earnings per share would have been adjusted to the pro forma
amounts for the year ended June 30, 2004 and 2003, as follows ($ in thousands,
except per share amounts). :

                                                  Year ended June 30,
                                            2004                      2003
                                          --------                  --------
Net loss - as reported                   $  (2,543)                $  (1,698)
Stock-Based employee compensation
  expense included in reported net
  income, net of tax                            31

Total stock-based employee
  compensation expense determined
  under fair-value-based method for all
  rewards, net of tax                          (57)                     (194)
                                          --------                   -------
Pro forma net loss                      $   (2,569)                 $ (1,892)
                                          ========                   =======


Earnings (loss) per share:

Basic, as reported                         $ (0.12)                 $  (0.10)
Diluted, as reported                       $ (0.12)                 $  (0.11)
Basic, pro forma                           $ (0.12)                 $  (0.10)
Diluted, pro forma                         $ (0.12)                 $  (0.11)


On May 15, 2003, the Financial Accounting Standards Board (FASB) issued FASB
Statement No. 150 (FAS 150), Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity. FAS 150 changes the accounting
for certain financial instruments that, under previous guidance, could be
classified as equity or "mezzanine" equity, by now requiring those instruments
to be classified as liabilities (or assets in some circumstances) in the
statement of financial position. Further, FAS 150 requires disclosure regarding
the terms of those instruments and settlement alternatives. FAS 150 affects an
entity's classification of the following freestanding instruments: a)
Mandatorily redeemable instruments b) Financial instruments to repurchase an
entity's own equity instruments c) Financial instruments embodying obligations
that the issuer must or could choose to settle by issuing a variable number of
its shares or other equity instruments based solely on (i) a fixed monetary
amount known at inception or (ii) something other than changes in its own equity
instruments d) FAS 150 does not apply to features embedded in a financial
instrument that is not a derivative in its entirety. The guidance in FAS 150 is
generally effective for all financial instruments entered into or modified after
May 31, 2003, and is otherwise effective at the beginning of the first interim
period beginning after June 15, 2003. For private companies, mandatorily
redeemable financial instruments are subject to the provisions of FAS 150 for
the fiscal period beginning after December 15, 2003. The adoption of SFAS 150
does not have a material effect on the earnings or financial position of the
Company.

<page>F-10

In December 2003, the Financial Accounting Standards Board (FASB) issued a
revised Interpretation No. 46, "Consolidation of Variable Interest Entities"
(FIN 46R). FIN 46R addresses consolidation by business enterprises of variable
interest entities and significantly changes the consolidation application of
consolidation policies to variable interest entities and, thus improves
comparability between enterprises engaged in similar activities when those
activities are conducted through variable interest entities. The Company does
not hold any variable interest entities.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current
period presentation.

3.    ACCOUNTS RECEIVABLE

All accounts receivable are trade related. These receivables are current and no
reserve for uncollectible accounts is deemed necessary.

4.   NOTES RECEIVABLE

The notes receivable comprises of $ 817,476 due from North American Systems Inc.
(NAS), the sole United States distributor of the Company's line of AlderoxTM
products, working in Salt Lake City (SLC) under a revolving loan agreement. The
receivable is for the sale of all the assets of the Company in SLC as well as
other amounts transferred to the distributor at various times during the period
according to the agreement with NAS and is secured by assets of NAS. Part of the
agreement with NAS requires that the Company will provide loans to NAS to be
used towards meeting the working capital requirements until such time when NAS
is able to start paying the amount owed to the Company through sale of the
Company's line of AlderoxTM products. The receivable bears interest at the rate
of 10% per annum. The agreement terminates October 14, 2005.  As of June 30,
2004, the Company has recorded an allowance for doubtful debts of $ 270,000
against the notes receivable.

NSA also owes $ 262,844 in account receivable to the Company.

5.    PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at June 30, 2004:


        Computers and office equipment        $   16,140
        Test equipment                             4,916
                                                  ------
                                                  21,056
        Less accumulated depreciation             (9,114)
                                                  -------
        Balance                                $  11,942
                                                  =======

Depreciation expense was $5,338 and $37,504 for the year ended June 30, 2004 and
2003.

<page>F-11

Disposal of fixed assets

During the year, the Company appointed North American Systems (NAS) as the sole
United States distributor of the Company's products ASA-12, KR-7, TSR, DCR and
cleaners. On August 1, 2003 the Company sold all the assets in Salt Lake City to
NAS. The assets transferred had a carrying value of $111,834. The Company
recorded $71,355 as a receivable from NAS and offset the remaining balance of
$40,479 against outstanding debts to NAS.

During the year, the Company disposed off the vehicles and recorded loss of $
22,692 in the accompanying financial statement.

6.   NOTES PAYABLE - RELATED PARTY

Notes payable consisted of the following at June 30, 2004:


Note payable to shareholder
bearing interest rate of 10 %, unsecured,
payable on December 31, 2005                       $27,000

Notes payable to shareholder,
bearing interest rate of 20%, unsecured
payable on December 31, 2005                        28,000

Notes payable to shareholder,
bearing interest rate of 10%, unsecured
payable on December 31, 2005                        28,000

Notes payable bearing interest
rate of 10%, unsecured
payable on December 31, 2005                        38,763
                                                 ---------
                     Total Notes payable        $  121,763
                                                 =========

Interest expense for the year ended June 30, 2004 and June 30, 2003 amounted to
$7,707 and $ 37,239 respectively.

7.   CONVERTIBLE LOANS

The Company has convertible loans outstanding at June 30, 2004 totaling $50,104.
The loans are convertible to stock at the price of $ 0.40 or $ 0.45. The
investor has an option to convert their loan, or any portion, of to the
restricted capital stock of the Company at price per the agreement and receiving
one share, up front at inception of the loan, for each dollar invested. Interest
will accumulate at rate of 10% per annum until conversion date and paid semi
annually over the term of the agreement leaving the initial loan until
expiration of the agreement convertible to Company's restricted capital stock
per the agreement or principal returned with the last interest payment. Loan can
be converted at any time within the 3 year loan period.

<page>F-12

8.   CONVERTIBLE DEBENTURES

The Company, through a 506 D Securities Offerings, solicited investment funds.
The Convertible Debentures bear interest at ten percent (10%) per annum payable
annually and are convertible into restricted common shares of the Company at
$0.40 per share. The Company has the right to change the conversion price of the
debentures. The Debentures are unsecured and are due and payable by December 31,
2005. The Company recorded beneficial conversion feature expense for $ 236,253
during the year ended  June 30, 2003.

9.   COMMITMENTS

The Company conducts its operations utilizing leased facilities and equipment
under non-cancelable operating lease agreements expiring at various dates
through the year 2007. Future minimum lease commitments, excluding property
taxes and insurance are approximately as follows:

Year ending June 30,

2005                    $77,118
2006                     61,386
2007                     57,814
                     ===========
  Total              $  196,318

Rent expenses for all leased facilities and equipment were $ 38,661 and $75,700
for the year ended June 30, 2004 and 2003, respectively.

10.    MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK

The majority of the Sales in the year ended June 30, 2004 and 2003 was made to a
few customers.  At June 30, 2004, the total sales to two major customers was
$321,239 and the receivable balance from these major customers was $262,844. In
fiscal year 2003, the two major customers comprised approximately $187,078 of
the Company's total sale and the receivable balance from these major customers
was $11,939. Management believes that customer acceptance, billing, and
collection policies are adequate to minimize potential risk on trade
receivables.

11.     INCOME TAXES

No provision was made for Federal income tax since the Company has significant
net operating loss carryforwards.  Through June 30, 2004, the Company incurred
net operating losses for tax purposes of approximately $11,100,000.  The net
operating loss carryforwards may be used to reduce taxable income through the
year 2024. The availability of the Company's net operating loss carryforwards
are subject to limitation if there is a 50% or more positive change in the
ownership of the Company's stock. The provision for income taxes consists of the
state minimum tax imposed on corporations.

<page>F-13

Temporary differences which give rise to deferred tax assets and liabilities at
June 30, 2004 comprised of depreciation and amortization and net operating loss
carry forward. The gross deferred tax asset balance as of June 30, 2004 was
approximately $4,440,000.  A 100% valuation allowance has been established
against the deferred tax assets, as the utilization of the loss carrytforwards
cannot reasonably be assured.

The following is a reconciliation of the provision for income taxes at the U.S.
federal income tax rate to the income taxes reflected in the Consolidated
Statements of Operations:

                                                       June 30,   June 30,
                                                        2004        2003
                                                      --------    -------
Tax expense (credit) at statutory rate-federal           (34)%     (34)%
State tax expense net of federal tax                     ( 6)      ( 6)
Permanent differences                                      1         1
Changes in valuation allowance                           (39)      (39)
Tax expense at actual rate                                 -         -


12.      STOCKHOLDERS' EQUITY

Common Stock:

During the year ended June 30, 2004 and 2003, the Company issued stocks at
various times, as described per the following. The stocks were valued at the
average fair market value of the freely trading shares of the Company as quoted
on OTCBB on the date of issuance:

During the fiscal year 2004, the Company issued 4,279,805 shares of common stock
for cash amounting $1,796,433 and 1,546,131 shares of common stock for
settlement of debt amounting $1,191,954 and 41,432 shares of common stock for
conversion of loan amounting $27,331.

The Company issued 777,675 shares of common stock for services in fiscal year
2004 for services amounting $526,933.

The Company issued 127,918 shares in the year ended June 30, 2004 for cash
received in the prior year and issued 50,000 shares in the year ended June 30,
2004 for conversion of loan for prior year.

The Company has 10,000 shares of common stock to be issued for service rendered
valued at $5,000.

During the fiscal year 2003, the Company issued 1,138,440 shares of common stock
for cash amounting $218,800 and 1,253,369 shares of common stock for conversion
of loans amounting $343,003.

<page>F-14

The Company issued 1,019,608 shares of common stock for services in fiscal year
2003 for services amounting $404,210 and 425,000 shares of common stock for
compensation amounting $117,975.

The Company issued 743,594 shares in the year ended June 30, 2003 for cash
received in the prior year and issued 153,125 shares in the year ended June 30,
2003 for service received in the prior year.

The Company issued 1,875,000 shares for debt settlement recorded in the prior
year.

The Company cancelled 150,000 shares for founder's shares.

The Company received cash of $71,167 for 177,918 shares to be issued.

Stock Options:

The number and weighted average exercise prices of options granted by the
Company are as follows:


                                          Options       Outstanding
                                           Number         Weighted
                                             of          Average
                                           Options       Exercise
                                                           Price
                                          ---------     ------------
Outstanding June 30, 2002                 7,555,208        $0.40
Granted during the year                   1,257,500        $0.40
Exercised                                  (125,000)       (0.40)
Expired/forfeited                        (1,290,208)       (0.40)
Outstanding June 30, 2003                 7,397,500        $0.40
Granted during the year                     150,000        $0.40
Exercised                                  (921,250)       $0.40
Expired/forfeited                          (432,500)       $0.40
Outstanding June 30, 2004                 6,193,750        $0.40

Following is a summary of the status of options outstanding at June 30, 2004:

                              Outstanding Options    Exercisable Options
                              -------------------    -------------------
                                         Weighted
                                          Average      Weighted    Weighted
                                         Remaining     Average     Average
                                         Contractual   Exercise    Exercise
Exercise Price       Number       Life      Price       Number       Price
--------------      --------    --------   --------    --------   ---------
$ 0.40               181,250    4 months   $  0.40      181,250    $  0.40
$ 0.40               537,500    6 months   $  0.40      537,500    $  0.40
$ 0.40               450,000   1.5 years   $  0.40      450,000    $  0.40
$ 0.40             4,875,000   2.6 years   $  0.40    4,875,000    $  0.40
$ 0.56               150,000     5 months  $  0.56      150,000    $  0.56

<page>F-15

The Company granted options to various consultants for services rendered. These
options were accounted for using the fair value of the options granted based on
the Black- Scholes option-pricing model. The Company recorded $31,500 during the
year ended June 30, 2004 and $-0- in 2003 as consulting expense.

The Company accounts for stock based compensation to employees under APB 25
using the intrinsic value method.

Pro forma information regarding the effect on operations is required by SFAS
123, and has been determined as if the Company had accounted for its employee
stock options under the fair value method of that statement. Pro forma
information using the Black-Scholes method at the date of grant based on the
following assumptions for the year ended June 30, 2004 and 2003 was as follows:

Expected life (years)          1-5 years
Risk-free interest rate      3% and 5.0%
Dividend yield                 0% and 0%
Volatility                  100% and 50%


13.     SUPPLEMENTAL DISCLOSURE OF CASH FLOWS

The Company prepares its statements of cash flows using the indirect method as
defined under the Financial Accounting Standard No. 95.

The Company paid income taxes of $0 and interest of $25,003 during the fiscal
year 2004. The Company paid income taxes of $0 and interest of $15,400 during
the fiscal year 2003.

Supplemental disclosure of non-cash investing and financing activities:

The cash flow statements do not include following non-cash investing and
financing activities:

During the fiscal year 2004, the company issued 1,546,131 shares of common stock
for debt settlement valued $1,191,954 and issued 41,432 shares of common stock
for conversion of loan valued $27,331.

During the fiscal year 2003, the Company issued 1,253,369 shares of common stock
for conversion of loans amounting $343,003.

14. LITIGATION:

A former employee sued the Company for a breach of contract claim arising from
an employment agreement entered into between the ex-employee and the Company on
April 7, 2003. The original complaint was filed on Feb. 5, 2004 and asserts the
following causes of action: breach of contract, breach of covenant of good faith
and fair dealing, and fraud. The plaintiff is demanding compensatory and
punitive damages as well as attorneys' fees and costs.

<page>F-16

The Company filed its Cross-Complaint on April 15, 2004 alleging breach of
contract, negligence, intentional misrepresentation, rescission, and declaratory
relief. An amended Cross-Complaint was filed July 6, 2004.

The amount of potential loss is $19,000 on the case. The company has accrued
this amount in the accompanying financial statement.

The Company settled a lawsuit with two former employees during the year ended
June 30, 2004. The former employees had alleged that the Company and its officer
were liable to them for losses suffered by the former employees due to breach of
employment contract. Per the settlement agreement, the Company agreed to pay to
the former employees in a total amount of $128,000 in exchange of 200,000 shares
of the Company's common stock. The payments will be paid in combined monthly
installment of $14,333. Per the settlement agreement, these settlements shall
pay off before December 31, 2004. The Company has recorded $128,000 as accrued
expense in the accompanying financial statements. The Company has paid $71,109
through June 30, 2004.

15.   GOING CONCERN

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. This basis of accounting contemplates
the recovery of the Company's assets and the satisfaction of its liabilities in
the normal course of business. Through June 30, 2004, the Company had incurred
cumulative losses of $11,112,519 including net losses of $2,542,770 and
$1,698,498 for the fiscal years 2004 and 2003, respectively.

In view of the matters described in the preceding paragraph, recoverability of a
major portion of the recorded asset amounts shown in the accompanying balance
sheet is dependent upon continued operations of the Company, which in turn is
dependent upon the Company's ability to raise additional capital, obtain
financing and to succeed in its future operations.  The financial statements do
not include any adjustments relating to the recoverability and classification of
recorded asset amounts or amounts and classification of liabilities that might
be necessary should the Company be unable to continue as a going concern.

Management has taken the following steps to revise its operating and financial
requirements, which it believes are sufficient to provide the Company with the
ability to continue as a going concern.  Management devoted considerable effort
during the period ended June 30, 2004, towards (i) obtaining additional equity
financing (ii) controlling of salaries and general and administrative expenses
(iii) management of accounts payable and (iv) evaluation of its distribution and
marketing methods.

<page>F-17

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTS
                ON ACCOUNTING AND FINANCIAL DISCLOSURE

        Nothing to report.


PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS,
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.


The names, ages and positions of the directors and executive officers of the
Company as of June 30, 2004, are as follows:

NAME                    AGE     POSITION                SINCE
--------------------------------------------------------------
Michael C. Davies       34     CFO, Vice President   Dec. 1997
                                   and Director

Gordon W. Davies        36      President and        Dec. 1997
                                   Director

Paul J. Petit                      Director         March 2003


The Directors serve until the next annual meeting of shareholders, or until
their successors are elected.


MR. MICHAEL C. DAVIES

From 1988 to 1991 Mr. Davies was the Owner/Manager of Fuel Oil Polishing Company
located in Vancouver, British Columbia, Canada.  Mr. Davies' company was in the
sales, marketing and project management of fuel oils polishing within the
Province of British Columbia.

From 1991 to 1993 he was an Accounts Executive with Innovative Environmental
Services, Ltd. in Vancouver, a company in the business of sales and marketing of
wastewater treatment equipment.

From 1993 to 1994 he was the Marketing Manager for Transenviro, Inc., located in
Irvine, California.  Transenviro is an international supplier of wastewater
treatment equipment and process design engineering.

From 1994 to 1996 Mr. Davies was the Marketing Manager for Babcock King-
Wilkinson, LP, Irvine, California, a wastewater treatment business.

From 1996 to 2000 Mr. Davies has held the positions of Vice President and a
Director for Aquadynamic Technologies, Inc. and Aquatek, Inc., which is a wholly
owned subsidiary of Aquadynamic Technologies.  Aquadynamic Technologies, Inc.
was acquired by Registrant and became Registrant's wholly-owned subsidiary in
November of 1997.

<page>9

From 1996 to 1998 Mr. Davies held the position of Vice President, Sales/Director
for Wil-Flow, Inc., the sole supplier of its patented RGD (Rapid Gravity
Dewatering) wastewater sludge dewatering system.

From 1997 to the present, Mr. Davies has been the Vice President, Chief
Financial Officer and a Director.  Mr. Davies is the brother of Gordon Davies.


MR. GORDON W. DAVIES

From 1991 to 1994 Mr. Davies was an Accounts Executive for Innovative
Environmental Services, Ltd., located in Vancouver, British Columbia, which is a
company in the business of wastewater treatment equipment.

From 1993 to 1993 he held a Sales Manager position at Transenviro,Inc. in
Irvine, California.

From 1994 to 1996, Mr. Davies was the Sales/Marketing & Proposals Manager for
Babcock King-Wilkinson, LP in Irvine, California, and in 1996 he was the acting
CEO for this company.

Babcock King-Wilkinson, LP is in the business of wastewater treatment system
process design/engineering and equipment supply operations on a worldwide basis.

From 1996 to 2000 Mr. Davies has been the President and a Director of
Aquadynamic Technologies, Inc.  He is also a Director of Aquatek,Inc., the
wholly-owned subsidiary of Aquadynamic Technologies, Inc.  Aquatek,Inc. is an
engineering design house and supplier of computer-automated process and motor
control systems for water and wastewater treatment systems.

From 1996 to 1998 Mr. Davies was the General Manager of Wil-Flow, Inc.

From 1997 to the present, Mr. Davies has held the position of President and a
Director for us.  Gordon Davies is the brother of Michael Davies.


MR. PAUL J. PETIT

Born and educated in London, England, Mr. Petit is a

Graduate of the City and Guilds in Mechanical Engineering.  Mr. Petit is now
based in Toronto, Ontario, Canada and brings over 35 years of experience to the
Company.

Specializing in international business management and acquisitions, Mr. Petit is
the founder of Sherwood Data Security, Inc., a specialized data
management/storage company serving Canada's major corporations and financial
institutions.  After nine years of building and developing this company, Mr.
Petit orchestrated the sale of SDSI to Brambles PTY of Australia in 1996 after
which, he was retained as President of their new division.

<page>10

Section 16(a) Beneficial Ownership Reporting Compliance

The Company has received no filings under Section 16(a) of the Securities
Exchange Act of 1934, and is unable to determine if forms were filed on a
delinquent basis or are missing.



ITEM 10.        EXECUTIVE COMPENSATION

Director Compensation

The following table reflects compensation paid or accrued during the indicated
fiscal years, which end on June 30th of the indicated year with respect to
compensation paid or accrued by Reclamation Consulting And Applications, Inc.


<table>
<caption>

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

                           SUMMARY COMPENSATION TABLE
-----------------------------------------------------------------------------------------
        Annual Compensation                             Long Term Compensation
-----------------------------------------------------------------------------------------
                                                                                   All
                                        Annual  Restricted  Securities              Other
Name &                                  Compen  Stock       Underlying   LTP       Compen
Principal                               sation  Award(s)    Options/     Payouts   sation
Position  Year    Salary($)   Bonus($)    ($)     ($)        SARs(#)      ($)       ($)
--------  ----    -------     -------  --------  ----------  ----------   -------   ------
          2004    135,200                     0
          2003    135,200                     0                                 0       0
Gordon    2002    135,200                     0    150,000     950,000          0       0
Davies    2001     93,000                     0                      0          0       0
Pres      2000     81,000                     0                      0          0       0
          1999     60,000    60,000           0                750,000          0       0
          1998     60,000                     0                      0          0       0
          2004    135,200                     0                      0          0       0
          2003    135,200                     0                      0          0       0

Michael
Davies    2002    135,200                     0    150,000     950,000          0       0
CFO       2001     93,000                     0                      0          0       0
          2000     81,000                     0                      0          0       0
          1999     60,000    60,000           0                750,000          0       0
          1998     60,000                     0                      0          0       0

Paul Petit
Director  2003                                      50.000     250,000

</table>

<page>11

The Company's two principal officers, Gordon Davies, Chief Executive Officer,
President and a Director, and Michael Davies, Chief Financial Officer, Vice
President and a Director, entered into new Employment Agreements, commencing
June 30, 2004, and having a five year term. There are no changes in the new
contracts other than the extension of the term from 3 years to 5 years.  The
Employment Agreements are identical, and provide for a base salary of $135,200
for the first year.  If the Company realizes a minimum net profit for its 12
months ended June 30, 2005 of $250,000 or more, base compensation increases by
20% effective as of the beginning of the second twelve months of the Contract.
If the Company realizes a net profit of at least $250,000 over the 12 months
ended June 30, 2006, June 30 2007, June 30 2008 and June 30 2009 the base
compensation increases by an additional 20% over the preceding year's
compensation.

In addition, the Employment Agreements provide for bonuses on a sliding scale
based on the Company realizing net profits each fiscal year.  A bonus equal to
10% of the base salary will be paid in any fiscal year in which net profits
equal or exceed $250,000.  This percentage increases on a sliding scale as net

profits in any fiscal year over the three year contract term increase above
$500,000, with a bonus equal to 100% of base salary to be paid if the Company in
any fiscal year realizes a net income of $2,500,000 or more.

In addition, the Employment Contract grants each employee 1,500,000 options to
acquire the Company's common stock.  These options are all pre-existing options
granted under previous contracts with each employee. All the stock option have
vested under the following terms for each employee, 500,000 shares vest on
January 15, 2002, 500,000 shares vest on January 15, 2003, and 500,000 shares
vest on January 15, 2004.  The option exercise price is $.40 per share.

These Agreements have non-compete provisions and various other provisions,
including a death disability benefit of 3 months' pay plus 3 months' benefits.
Copies of each of these Employment Agreements with each executive officer are
attached hereto as Exhibits and by this reference incorporated herein.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial
ownership of the common stock (including common stock acquirable within 60 days
pursuant to options, warrants, conversion privileges or other rights) of the
company as of June 30, 2004 (i) by each of the Company's directors and executive
officers, (ii) all executive officers and directors as a group, and (iii) all
persons known by the Company to own beneficially more than 5% of the common
stock.  All persons listed have sole voting and investment power over the
indicated shares unless otherwise indicated.

Name                                              Shares

Michael Davies                                  2,025,807
Gordon Davies                                   2,017,400
Kurt Baum                                       3,859,341
Canvasback Company Limited                      4,003,924
                                               ----------
All Officers and Directors                     11,906,472
As a Group                                     ==========

<page>12

The address for Mr. Michael Davies is 23832 Rockfield Blvd. Suite 275 Lake
Forest, CA 92630

The address for Mr. Gordon Davies is 23832 Rockfield Blvd. Suite 275 Lake
Forest, CA 92630

The address for Mr. Kurt Baum is 680 S. Avon Avenue, Azusa, CA 91702

The address for Canvasback Company Limited is Hannah & Waver House The Valley,
Anguilla, BWI


ITEM 12.        CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Nothing to Report


ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

Exhibit No.   Description
----------    -----------
10.01.        Management contract for Mr. Gordon Davies

10.02.        Management contract for Mr. Michael Davies

10.03.        Agreement with North American Systems, Inc.

10.04.        Agreement with Canadian Release Agents, Inc.

10.05         Revolving Loan Agreement North American Systems, Inc.

10.06         Security Agreement North American Systems, Inc.

31.1          Rule 13a-14(a)/15d-14(a) Certifications.

31.2          Rule 13a-14(a)/15d-14(a) Certifications.

32.1          Section 1350 Certifications.

32.2          Section 1350 Certifications

ITEM 14 CONTROLS AND PROCEDURES.

(a)     Within 90 days prior to the filing date of this report, with the
participation of the Company's management, the Company's President and Chief
Executive Officer and Vice President - Finance and Chief Financial Officer,
evaluated the effectiveness of the Company's disclosure controls and procedures
in accordance with Rule 13a-14 of the Securities Exchange Act of 1934 (the
"Exchange Act"). Based upon that evaluation, the President and Chief Executive
Officer and Vice President - Finance and Chief Financial Officer concluded that
the Company's disclosure controls and procedures are effective in providing
reasonable assurance that information required to be disclosed by the Company in
reports that it files under the Exchange Act is recorded, processed, summarized
and reported within the time period specified in the Commission's rules and
procedures.

(b)     Changes in Internal Controls. There were no significant changes in the
Company's internal controls or in other factors that could significantly affect
these controls subsequent to the date of the evaluation.


SIGNATURES


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

 Reclamation Consulting and Applications, Inc.


 /s/ Michael Davies, Secretary
 --------------------------
     Michael Davies, Secretary

/s/  Gordon Davies, President
--------------------
     Gordon Davies, President

 Date: October 01, 2004