UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

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

                  For the fiscal years ended DECEMBER 31, 2002


                         Commission file number 33-31067

                             Itec Environmental Group, Inc
         ----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

           DELAWARE                                  31-1705310
           --------                                  ----------
   (State or other jurisdiction            (IRS Employer Identification No.)
      of incorporation)

                693 Hi Tech Parkway Suite 3, Oakdale, California 95361
                -------------------------------------------------
                    (Address of principal executive offices)

                                 (209) 848-3900
                                 --------------
                         (Registrant's telephone number)

Securities registered under Section 12(b) of the Exchange Act: NONE.

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

                          COMMON STOCK, $0.001 PAR VALUE.


Check whether the Registrant  (1) has filed all reports  required to be filed by
Section 13 or 15(d) of the Exchange  Act 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  pursuant 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 Registrants's revenues for its most recent fiscal year: $24,000

As of December 31, 2002, 41,997,068 shares of common stock were outstanding, and
the  aggregate   market  value  of  the  shares  held  by   non-affiliates   was
approximately $2,315,000.

Documents incorporated by reference:  NONE

Transitional Small Business Disclosure Format:  Yes  [   ]    No       [X]

<PAGE>




         This Report on Form 10-KSB contains  information  concerning the issuer
relating to the fiscal year ended  December  31, 2002,  except  where  otherwise
indicated.


                             Itec Environmental Group, Inc
                          Annual Report on Form 10-KSB
                                Table of Contents

PART I

ITEM 1.  DESCRIPTION OF BUSINESS .........................................   3
ITEM 2.  DESCRIPTION OF PROPERTY .........................................  14
ITEM 3.  LEGAL PROCEEDINGS ...............................................  14
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS .............  14

PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS ........  14
ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION .......  16
ITEM 7.  FINANCIAL STATEMENTS ............................................  18
ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                    AND FINANCIAL DISCLOSURE .............................  18

PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
                    COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.. ..  19
ITEM 10. EXECUTIVE COMPENSATION ..........................................  21
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT...  22
ITEM 12. CERTAIN BUSINESS RELATIONSHIPS AND RELATED TRANSACTIONS .........  23
ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K..  23
ITEM 14. CONTROLS AND PROCEDURES .........................................  25

SIGNATURES ...............................................................  26
CERTIFICATIONS ...........................................................  27


                                       2
<PAGE>


                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

Special Note Regarding Forward-Looking Statements

         Certain  statements  in this Annual  Report on Form 10-KSB  (this "Form
10-KSB"), including statements under "Item 1. Description of Business," "Item 3.
Legal   Proceedings"  and  "Item  6.  Management's   Discussion  and  Analysis",
constitute "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1934, as amended, and the Private Securities Litigation Reform
Act of 1995 (collectively,  the "Reform Act").  Certain but not necessarily all,
of  such   forward-looking   statements   can  be   identified  by  the  use  of
forward-looking  terminology  such  as  "believes",  "expects",  "may",  "will",
"should",  or "anticipates" or the negative thereof or other variations  thereon
or comparable terminology,  or by discussions of strategy that involve risks and
uncertainties.  Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or  achievements  of  Itec  Environmental Group, Inc. (f/k/a Beechport  Capital
Corp.)  or  its  wholly-owned subsidiary,  Environmental Recycling  Services of
America, Inc., a California  corporation ("ERSA) (collectively  "the  Company",
"we" or "us") to be materially different from any future  results, performance
or  achievements expressed  or implied  by  such  forward-looking  statements.
References in this Form 10-KSB,  unless another date is stated, are to December
31, 2002.

BACKGROUND

         Itec  Environmental  Group,  Inc (f/k/a  Beechport  Capital Corp.) (the
"Company") was  incorporated  under the laws of the State of Colorado on January
24, 1989 under the name  Coalmont,  Inc.  The name of the Company was changed to
MCC Holdings,  Inc. on August 14, 1992,  and changed again to Beechport  Capital
Corp.  on January 10, 1996.  The Company was  originally  formed for the primary
purpose  of  seeking  out  acquisitions  of  properties,  businesses  or  merger
candidates,  without  limitation as to the nature of the business  operations or
geographic area of the acquisition candidate. From inception through the date of
completion  of  its  initial  public  offering  of  securities,   the  Company's
activities were directed toward the acquisition of operating capital.

         The Company sold 10,000 Units (each "Unit"  consisting  of common stock
and Class A and Class B  Warrants)  at $10.00  per  Unit,  for net  proceeds  of
$50,054 in a public  offering  which closed on March 20,  1991.  The Class A and
Class B Warrants were exercisable at $4.40 and $6.60 per share, respectively.
The Warrants expired on September 25, 1998.

         On June 5, 1992,  the  Company  issued  6,500,000  shares of its common
stock  to the  holders  of all of the  outstanding  common  stock  of a  leasing
company, to which it also loaned $50,000. During the period from June 6, 1992 to
December 31, 1993 the Company was under the management of the leasing  company's
officers,  which  expended all of the cash of the Company and failed to file the
required  periodic  reports  with the  Securities  and Exchange  Commission.  On
December 31,  1993,  pursuant to a mutual  unwinding  agreement,  the  6,500,000
shares  of common  stock  were  returned  and  canceled.  The  $50,000  loan was
written-off  and the stock of the leasing  company was  returned to its original
officers and directors.

                                       3
<PAGE>

     During June 1992 the Company  effected a one for four  hundred and forty (1
for 440) reverse split of the Company's outstanding common stock. On December 6,
1995, the Company  effected a two for one forward split of the Company's  common
stock.  On August 20, 1999 the Company  effected a 1.35 for one forward split of
the Company's  common stock.  All  financial  information  and share data in the
remainder of this Report gives retroactive effect to these stock splits.

     Effective June 30, 1998 the Company issued  1,080,000  shares of its common
stock for all of the issued and outstanding  stock of Marketplace 2000, Inc., an
Ohio  corporation  which had no business.  In connection  with this  transaction
Lawrence Schmelzer was elected President of the Company.

     Effective May 11, 2001, the Company acquired a controlling interest in ITec
pursuant  to a Share  Exchange  Agreement  dated May 4, 2001 by and  between the
Company and Itec. The Company thereafter acquired all the issued and outstanding
shares of common stock of Itec in exchange  for a total of  6,651,987  shares of
the Company's restricted common stock (the "Share Exchange").

     Itec was  incorporated  in March  2000 to  develop  and  commercialize  new
technologies that are economically and  environmentally  sound. Itec's objective
is to become a dominant  worldwide  supplier of equipment  for recycling oil and
agricultural  chemical  containers  and related  systems.  Itec has  developed a
cleaning system utilizing liquid carbon dioxide for cleaning recyclable plastic,
oil  and  pesticide  containers  called  the  ECO2TMEnvironmental   System  (the
"System").

     In  October  of  2002  the  Company  changed  its  corporate  name  to Itec
Environmental Group, Inc and its domicile to the State of Delaware.

     The Company's  offices are located at 693 Hi Tech Parkway Suite 3, Oakdale,
California 95361 and its telephone number is (209) 848-3900.

     Unless the context indicates otherwise all references herein to the Company
include Itec  Environmental  Group,Inc.  (f/k/a Beechport Capital Corp.) and its
wholly-owned subsidiary Environmental Recycling Services of America, Inc.

DESCRIPTION OF BUSINESS

         The Company  operates  through a European office in Naples,  Italy, and
through   alliances  and   partnerships   with  government   organizations   and
environmental groups.

     Itec  has  developed  a  new  cost-effective,   environmentally   sensitive
technology, the System for cleaning plastic contaminated by substances that make
most types of plastic ineligible for traditional recycling programs.  The System
consists  of a washing  chamber,  storage  tank,  distilling  unit,  compressor,
refrigeration  unit and various pumps and  compressors.  Each system can process
between  500 to  1,000  pounds  of  plastic  per  hour  depending  on the  model
purchased.  Used oil containers (typically the one quart size sold to consumers)
were the first  focus of this new  technology;  however,  additional  scientific
testing  results now indicate that the technology can be profitably  employed to
recycle all plastics regardless of the contaminant.

                                       4
<PAGE>

     As of December 31, 2002 ITec had arranged with two Cool Clean Technologies,
Inc ("Cool Clean") a leader in the utilization of CO2 technology, to manufacture
the System.  As of December 31, 2002 Cool Clean has manufactured four Systems at
Cool Clean's facility in Burnsville,  Minnesota.  The four prototype systems are
referred to as  Generation  One ("Gen  1")system.  Additionally,  Cool Clean has
manufactured  one  Generation  Two ("Gen  2")system  in Europe  and the  Company
deliver the Gen 2 to Italy in January of 2003.  The Company has relocated two of
the Gen 1's Systems to Oakdale,  California and expects to establish a recycling
facility  where the Gen 1's can be both  operated to generate  income as well as
demonstrate the process for prospective purchasers.

     The Company's  principal  source of revenues will be sales of the System by
Itec. Itec will also provide additional  services to purchasers of the System in
exchange for  recurring  fees.  These  services will  include:  extended  System
warranty upgrades,  technical support and trouble-shooting,  training for System
operators,  consulting for material  feedstock and products sales,  and software
upgrades  that  will  allow  the  System  to clean  other  contaminated  plastic
materials. The Company will also require purchasers of Systems to enter into ten
year maintenance  agreements  providing for fees of $25,000 per year, payable in
equal monthly installments, for telephonic monitoring of the System and software
upgrades.

     With the advent of the global environmental  movement,  waste treatment and
remediation  are now worldwide.  Itec's goal is to become a leader in the market
for systems that can clean and make  recyclable  certain  contaminated  plastics
that are  currently  not  recycled.  The System has  demonstrated  an ability to
produce clean,  100% recyclable  High-Density  Polyethylene  ("HDPE") flake from
used motor-oil  containers and other HDPE  containers used to transport used oil
and to  recover  the  residual  oil  attached  to the  plastic,  with  no  waste
by-products.

     In addition to recycling used motor oil containers,  laboratory  tests have
proven four additional usages for our technology. They are:

     o    Pesticide Containers of HDPE (High-Density Polyethylene)

     o    Mixed HDPE Color Containers (Detergent, Shampoo & Clorox Containers)

     o    Natural HDPE Containers (Milk & Water Containers)

     o    Polyethylene Terephthalate (PET) (Soft Drink Containers)

     Although originally developed for environmental usages, when applied to the
above materials the TM System has been shown to remove all contaminants,  odors,
dirt and labels from the plastic, thereby producing clean marketable flake which
can be reused to produce end-products.


TECHNOLOGY

     Some years ago, the American  aerospace  industry developed a supercritical
fluid technology to clean high-tech metals and composite materials.  This method
was then adapted to become the System,  which offers the ability to  effectively
clean plastics.

                                       5
<PAGE>

     The principal  technology  underlying the System was developed by Honeywell
International,  Inc.  ("Honeywell")  and the U.S.  Department of Energy ("DOE").
ITec signed a five-year license agreement (with an additional  five-year license
extension) with Honeywell and the DOE in June 2000.

     The Company's technology has been recognized as a significant environmental
breakthrough and is expected to increase the percentage of plastic diverted from
waste  streams  to  recycling  and  reuse.  Honeywell  FM&T and DOE  received  a
Governor's  Award  from the  Missouri  Chamber  of  Commerce  in 2000 for  their
breakthrough innovation in recycling technology.

     The  Company  believes  that its  technology  is  unique  and  superior  to
alternative  plastic  cleaning  systems  in  several  respects,   including  the
percentage  of  purity  achieved  and the  elimination  of  secondary  costs for
wastewater cleanup associated with other cleaning technologies.

     In  addition,  compared  to existing  technology  the System  provides  the
following advantages:

     o    Contaminated  plastic  cleaned  with the  System  has a  significantly
          higher reusable end-use than conventionally  cleaned plastic.  Plastic
          cleaned  with  the  System  is  processed  free  from  odors  and 99%+
          contaminant-free.  Conventional  methods have a much lower cleanliness
          threshold and do not deodorize. Once processed,  these plastics have a
          much lower end-use.

     o    Plastic flake cleaned with the System sells for  significantly  higher
          prices   than   conventionally   cleaned   plastics.    Odorless   and
          contaminant-free  plastic flake yield higher prices and  significantly
          larger profit margins.

     o    Plastic recyclers have the ability to recycle oil-contaminated plastic
          and conventionally  contaminated  plastic without wastewater  effluent
          discharge. Costs involving water-treatment are high using conventional
          cleaning methods,  whereas with our system they are non-existent.  The
          System does not use water.

     o    No permits are required for effluent  wastewater  discharge  since the
          System uses no water.

     o    Energy costs operating the System are significantly lower than current
          plastic  cleaning  systems.  Our System  costs for energy are nearly 2
          cents ($0.02 cents USD) less per pound than currently used  processes,
          yielding significantly larger profit margins.

     o    Direct  processing  costs for  recycling  plastics are reduced by over
          50%.

     o    Both residual oil and plastic are  recovered  without  creating  waste
          by-products which contaminate the environment.

     o    Odors associated with residual oil,  pesticides and mixed HDPE plastic
          are   eliminated.   Current   cleaning   technology  does  not  remove
          contaminant odor from recycled plastic.

                                       6
<PAGE>

     o    An   economical   solution  is  provided  to  pressing   environmental
          protection and pollution  prevention  problems associated with plastic
          motor oil container recovery.

     o    A closed-loop  system is formed which continually reuses low-cost CO2,
          has low electricity costs and zero environmental impact.

     o    The System can be operated and maintained  with only two  semi-skilled
          workers.

An Ideal Solvent

     Carbon dioxide (CO2) is produced by photosynthesis  and constitutes .04% of
the air we breathe. CO2 is also a by-product of other industrial processes, such
as fermentation from  distilleries.  As a gas under atmospheric  conditions when
liquefied  represents  an ideal  solvent  with  characteristics  that  cannot be
matched  by any other  solvent,  conventional  or  otherwise.  It is  non-toxic,
non-flammable, non-hazardous waste producing, non-ozone-depleting, odorless, and
cannot spill into the soil or  groundwater  since it becomes a gas if it escapes
from the  System.  Since the CO2 that is used in this  process is already in the
air and is recaptured for reuse in the machines, no new CO2 is produced or added
to the atmosphere over the life of the cleaning cycle.  Commercially CO2 is used
for, among many other things, carbonating beverages, decaffeinating coffee beans
and preserving foods.

     From a performance standpoint,  the System has distinct advantages as well.
Its viscosity (the ability to flow) and surface tension (wetting capability) are
orders of magnitude better than any other solvent, thus enabling the penetration
of contaminates  and the removal of finer particles of dirt or oil in 20 minutes
or less,  nearly as fast as  conventional  processes.  The greatest  benefits to
using the System are its  ability to  thoroughly  clean and  deodorize  plastic,
thereby yielding significantly higher retail prices for a clean flake.

CO2 - Safe to Handle

     CO2 does  not  show the  toxic  or  flammable  properties  associated  with
traditional  plastic-cleaning solvents or methods. Risks connected with CO2 vary
with the  different  states of the compound.  Gaseous CO2 may cause  suffocation
when found in large  concentrations in closed areas. Solid or liquid CO2 or cold
CO2 gas  (dry  ice),  as well as  cooled  equipment  may  cause  frost  burns if
unprotected  skin is exposed to the CO2 or the cooled  equipment.  The equipment
used in the  Company's  CO2 process is designed to handle and  mitigate any such
danger.  It works as a closed  system  where the used  liquid  CO2 is  filtered,
distilled, recycled and reused.

ENVIRONMENTAL REGULATIONS: PERMISSIONS AND SAFETY RESTRICTIONS

     The  operation  of a  plastics-recycling  business  is  subject  to various
regulations  which differ depending on the solvent used, the laws of the country
as well as local  regulations.  Carbon  dioxide  generally  is  subject  to less
regulation than other solvents.


                                       7
<PAGE>

     Permissions required to install and operate CO2 plastics-cleaning equipment
are dependent upon both building department permits (local building authorities)
and CO2 storage  permission  (storing gas requires a permit in some  countries).
ITec's OEM  manufacturer  is  responsible  for seeing that the  machines and CO2
storage vessels are  manufactured in accordance with national and  international
safety standards.

MARKET OVERVIEW

Market Distinctions - Europe/Canada versus United States

         Europe/Canada:  Legislation  is in place  prohibiting  oil-contaminated
products from  placement  into  landfills.  Available  land for new landfills is
extremely limited. Government subsidized programs exist for the recycling of all
plastics.  In Canada,  ITec is using the AUOMA  collection  model to develop the
collection model for use in the United States.

         United States: Legislation is in place prohibiting used-oil products in
landfills  in  many  states,  but  may  not  be  strictly  enforced.  Government
subsidized  programs for  recycling  of all  plastics are limited.  New landfill
space is becoming limited in the smaller  Northern States but remains  available
in the larger states.

         Estimates  indicate  Europe and Canada are 15 years ahead of the United
States  legislatively,   environmentally  and  structurally  relating  to  waste
recycling  and  collection  efforts.  As a result,  ITec has  chosen  Europe for
marketing  and  sales of its  initial  systems.  Europe  has  nearly  run out of
landfills and the collective efforts to recycle all forms of waste, is prevalent
in all European  nations.  The entire  continent is politically  active in their
legislative efforts and recycling initiatives.

         In contrast,  the United  States  plastic  recycling  and oil recycling
programs have been modestly implemented and accepted in most areas for pollution
prevention.  There are very few  formalized  collection  programs  for motor oil
containers  other than in  portions  of South  Carolina.  The U.S.  practice  of
dumping motor oil containers  into landfills or disposing of them  improperly is
no longer tolerated in Europe.

         In order to facilitate its early  marketing  direction ITec  determined
that it would need a  representative  to handle  inquiries  and further  develop
markets in Europe.  The Company  secured the services of CESMET,  a company with
over 15 years experience in the Italian and European markets.  CESMET,  together
with other consultant companies,  develops industrial projects involving plastic
recycling and collection for governments and the European Union.

         Although this System was originally developed for environmental usages,
when  applied  to the above  areas,  the  System  has been  shown to remove  all
contaminants, odors, dirt and labels from the plastic producing clean marketable
flake which can be reused to produce end-products.  With this increase in usage,
the worldwide market for Systems increases geometrically. Ultimately, the System
could become a primary recycling system.

                                       8
<PAGE>


MARKETING AND SALES

         The basis for Itec's sales  strategy is to focus on the  industries and
countries  most  likely to  benefit  from the  Company's  technology.  Potential
customers are basically divided into two distinct segments - private  enterprise
plastic recyclers and government sponsored plastic recyclers.

         To date the following companies and governments have expressed interest
in the Company's  technology.  Those companies include:  Exxon/Mobil (for system
installations in: Russia, Finland, Tajikistan,  Uzbekistan, Ukraine, Yugoslavia,
Macedonia,  Moldavia, Serbia, Bosnia, Greece, Poland, Turkey and Hungary), Shell
Oil, AMEX,  Ravisz from Hungary and Polis LTD. from Bulgaria,  CSAV from Hungary
and  Politenke  (Italy  and  Germany).   Those  countries  whose   environmental
ministries have expressed interest are: Italy, Bulgaria, Hungary and Russia.

         Purchase  Order  Contracts  of Sale have been signed for ten Systems in
Italy.  As of December 2002, the Company  anticipates  selling 50 Systems during
the next 24 months.

COMPANY WEBSITES

         The current website for the Company is located at www.iteceg.com.

LICENSING AND PATENTS

         Itec's  technology is under license from Honeywell  International  Inc.
("Honeywell"),  and the U.S.  Department  of Energy.  Honeywell has the right to
grant a license to utilize the technology to one other entity,  but has not done
so. Currently, there are no other licensees of this technology.

MANUFACTURING

         Itec expects to enter into an Original Equipment  Manufacturer  ("OEM")
Agreement with Cool Clean to manufacture Systems to Itec's  specifications.  The
Company is advised that Cool Clean will arrange for manufacturing to take place
at the facilities of Chart Industries, Inc in Burnsville, Minnesota (for Systems
to be delivered in the United  States) and the Czech Republic (for Systems to be
delivered in Europe).

EMPLOYEES

         As of December 31, 2002 the Company employed six persons  including its
President, Chief Financial Officer and two Vice Presidents.




                                       9
<PAGE>

                                  RISK FACTORS

         In addition to the other  information in this Report on Form 10-KSB the
following risk factors should be considered  carefully in evaluating the Company
and its business.

         1.   Limited Capital

         The Company has limited  capital and there can be no assurance  that it
will be able to raise the capital  needed to carry on its business.  The Company
has incurred,  and may continue to incur,  operating  losses for the foreseeable
future and is  currently  subject to a "going  concern"  opinion by its  outside
auditor.  The Company's  working  capital needs will depend upon various factors
including but not limited to the acceptability of the System in the marketplace,
and the ability of the Company's suppliers to manufacture and deliver the System
as well as other factors.  Even if the Company achieves  profitability there can
be no assurance that it can sustain or increase  profitability on a quarterly or
annual basis. The Company's  failure to meet and realize its objectives may have
a material  adverse effect on the Company's  business,  financial  condition and
results of operations.

         2.   September 11, 2001 Terrorist Attack

         As a result  of the  terrorist  attacks  in New  York,  Washington  and
Pennsylvania on September 11, 2001,  significant financial and political changes
have taken place in the United States and in the world.  These changes will have
an effect  upon the  Company  and the  future  activities  contemplated  by this
Report.  Many of the  Company's  plans  were made  prior to  September  11th and
without regard to the events which took place on that date. As a result,  future
developments  concerning  the Company and its ability to act in accordance  with
the plans and  expectations  set forth in this Report are subject to significant
uncertainty.

         3.   Going Concern

         Henry  Schiffer,  CPA, An Accountancy  Corporation,  in his independent
auditor's report, has expressed  "substantial doubt" as to the Company's ability
to continue as a going concern based on  significant  operating  losses that the
Company has incurred.  The Company's  consolidated  financial  statements do not
include any adjustments that might result from the outcome of that  uncertainty.
The going concern  qualification is also described in note 2 of the notes to the
consolidated financial statements.

         4.   Non-Exclusive License

         The Company has licensed its technology from Honeywell,  Inc. Honeywell
is free to license the  technology  to one other person or entity on terms which
it may deem  appropriate.  The person or entity  licensing  the  technology  may
develop  systems or technologies  which compete with the Company's  System which
may place the Company at a competitive disadvantage.



                                       10
<PAGE>

         5.   Limited Sales, Marketing and Distribution Capabilities

         The Company has limited sales, marketing and distribution expertise and
capabilities.  Establishing  and maintaining  sales,  marketing and distribution
expertise and capabilities may require significant  expenses including additions
to personnel.  There can be no assurance  that the Company will have  sufficient
capital  resources  necessary to expand its sales,  marketing  and  distribution
expertise and capabilities,  and that even if such resources are available, that
the  Company  will be  successful  in doing  so.  The  Company  has  targeted  a
significant  portion  of  its  marketing  efforts  outside  the  United  States,
primarily  in  Europe.  If the  Company  is unable  to  establish  and  maintain
significant  sales,  marketing and  distribution  efforts  either  internally or
through  arrangements  with third  parties,  the Company's  business,  financial
condition and results of operations may be materially adversely effected.

         6. The Company is Dependent on Limited Number of Manufacturing Sources.

         Through the end of its fiscal year ended  December 31, 2002 the Company
relied  upon  arrangements  with Cool Clean to  manufacture  the  System.  As of
December 31, 2002 four  prototype  Systems had been produced by Cool Clean.  The
Company is now reliant upon Cool Clean, a private company managed by current and
former  executives of Chart,  to produce the System and expects its first system
to be  produced  in  July,  2002.  If Cool  Clean  is  unable  or  unwilling  to
manufacture the Company's System or if the Company's specifications with respect
to the  System  are not met,  the  Company  will be forced  to seek out  another
supplier. There can be no assurance that an alternate supplier will be available
on terms acceptable to the Company, if at all.

         7.   Certain Factors That May Affect Future Results

         In addition to other  information  in this Annual Report on Form 10-KSB
the Company is subject to a number of other risk factors.

         8.   Availability of Additional Sources of Financing and Capital

         The Company must raise  equity or other  sources of capital in order to
maintain  its  operations  and there can be no  assurance  that  capital will be
available on acceptable terms if at all.

         9.   Foreign Operations

         The  Company's  initial  sales  of  Systems  are  anticipated  to be to
customers  located in Italy,  Hungary and  Bulgaria.  Although  payments for the
Company's  products are  denominated in dollars,  adverse  economic or political
conditions  in Italy,  or other  countries  where the Company  hopes to sell its
products  could  adversely  affect the business and  financial  prospects of the
Company.

         10. The Company Will Require Additional Capital to Market and Advertise
its Products.

         The marketing  and  advertising  of the  Company's  products and future
products  will require the  expenditures  of  significant  capital.  The Company
expects to incur  operating  losses for the  foreseeable  future.  The Company's


                                       11
<PAGE>

actual working  capital needs will depend upon many factors  including,  but not
limited to the progress and success of the Company's marketing and sales efforts
and  commercial  acceptance  of the Company's  product.  The Company may seek to
obtain  additional  capital  through  private or public  debt or equity from the
financings.  If the Company  raises  additional  funds  through the  issuance of
equity,  equity  related or debt  securities,  such  securities may have rights,
preferences or privileges senior to those of the rights of the common stock. The
sale of  additional  equity  or  convertible  debt  securities  could  result in
additional dilution to existing shareholders.  In addition, the issuance of debt
securities  could increase the risk or perceived risk to the Company.  There can
be no assurance that any  additional  financing will be available to the Company
on acceptable terms if at all.

         11.  Protection of Proprietary Technology

         The  Company  expects  to make most of its  sales  outside  the  United
States.  There can be no assurance  that the Company or Honeywell,  Inc. will be
able to protect the  technology  which the Company has licensed from  Honeywell,
Inc.

         12.  Competing Technologies

         The Company may be subject to competing technologies which may prove to
be superior  to the  Company's  technology  or may  provide  financial  or other
benefits.

         13.  Demand for Plastic Flake May Decrease

         The demand for and market  price of plastic  flake may  decrease to the
point where it is not economically viable to utilize the Company's System.

         14.  Competition

         The Company may face competition from other companies which are larger,
better financed and which have greater assets and resources than the Company.

         15.  The Company is Dependent on Key Personnel

         The  Company  is  dependent  in  significant  part  upon the  continued
services  of  its  President  and  Vice  President.   Their   unavailability  or
unwillingness to serve would have a serious adverse effect upon the Company.

         16.  The Company's Business is Subject to Regulatory Oversight

         The  recycling   industry  in  general  and  the  Company's  System  in
particular   are  subject  to   regulatory   oversight  by  local  and  national
authorities. Purchasers of the Company's Systems will be required to comply with
a variety of statutes and ordinances.  Accordingly,  the  attractiveness  of the
Company's System to purchasers may be adversely effected.


                                       12
<PAGE>

Risks Related to the Common Stock

         The Company does not intend to pay dividends and shareholders will only
be able to receive funds from the sale of their common stock.

         1.   The Company's Common Stock is Thinly Traded

         The  trading   volume  of  the  Company's   common  stock  is  limited.
Accordingly,  there may not be a large number of potential  purchasers  ready to
buy shares when a shareholder  desires to sell.  There are also a limited number
of  shareholders  of the Company  including  shares held in street  names and by
clearing brokers in single accounts.

         2.  The  Company's  Common  Stock  is  Quoted  on the  Over-The-Counter
Bulletin  Board;  The Company is not  Required  to Meet or Maintain  any Listing
Standards  for its Common  Stock to be Quoted on the  Over-The-Counter  Bulletin
Board.

         The Company's common stock is currently quoted on the  Over-The-Counter
Bulletin  Board  under the symbol  "ITCV".  The  Bulletin  Board is a  regulated
quotation  service operated by the National  Association of Securities  Dealers,
Inc.  ("NASD")  and  displays  real time  quotes,  last sale  prices  and volume
information in  over-the-counter  equity securities such as the Company's common
stock. The Bulletin Board is a quotation  medium for subscribing  members of the
NASD, not an issuer listing service,  and should not be confused with the Nasdaq
Stock  MarketSM.  There is no assurance  that the Bulletin  Board will provide a
liquidity for the purchase and sale of the Company's common stock.

         3.   The Company's Common Stock may be Subject to the Penny Stock Rules

         Since  the  Company's  common  stock  is not  listed  on  any  national
securities  exchange  or the  Nasdaq  Stock  Market  and the  price at which the
Company expects the common stock to be quoted for the foreseeable  future may be
below $5.00,  it is possible that resales of the Company's  common stock will be
subject  to the  requirements  of the penny  stock  rules.  The  Securities  and
Exchange Commission has adopted rules that regulate  broker-dealer  practices in
connection  with  transactions  in "Penny  Stocks".  Penny Stocks  generally are
equity  securities with a price of less than $5.00 (other than securities listed
on certain national securities  exchanges or quoted on the Nasdaq Stock Market).
The Penny Stock rules require a  broker-dealer  to deliver a  standardized  risk
disclosure  document  prepared by the  Commission,  to provide the customer with
current bid and offer  quotations for the Penny Stock.  The  compensation of the
broker-dealer  and its  sales  person in the  transaction  and  monthly  account
statements  showing the market value of each Penny Stock held in the  customer's
account,  to make a  special  written  determination  of the  Penny  Stock  is a
suitable  investment  for the purchaser and to receive the  purchaser's  written
agreement to the transaction.  These disclosure requirements may have the effect
of reducing the level of trading activity in the market. As the Company's common
stock will likely be subject to the Penny  Stock  rules,  investors  may find it
more difficult to sell the Company's common stock.


                                       13
<PAGE>

         4.   Potential Adverse Effect of Issuance of Preferred Stock

         The Company's Certificate of Incorporation allows the issuance of up to
10,000,000  shares of preferred stock without further  shareholder  approval and
upon such terms and conditions and with such rights, preferences, privileges and
restrictions as the Board of Directors may determine.  The rights of the holders
of common stock will be subject to and may be  adversely  affected by the rights
of holders of any preferred stock that may be issued in the future.

         5.   Recent Issuance of Common Stock at Below Market Prices

         In December 2001 the Company agreed to issue up to 5,000,000  shares of
common stock in an offering to be conducted outside the United States. As of
December  31, 2002 an  aggregate  of  5,016,508  shares of common stock had been
issued with the Company  receiving net proceeds of $1,194,000 or $.24 per share.
In July 2002 the Company agreed to issue up to 7,500,000  shares of common stock
in an offering to be  conducted  outside the United  States.  As of December 31,
2002 an aggregate  of  7,033,242  shares of common stock had been issued and the
Company had received net proceeds of $327,000 or $.05 per share.  As of December
31, 2002 the bid price for the Company's common stock was approximately $.06 per
share.


ITEM 2.  DESCRIPTION OF PROPERTY

         The Company  leases its offices  from a  non-affiliated  party under an
agreement expiring in April 2004 at a rental of $900 per month.


ITEM 3.  LEGAL PROCEEDINGS

         In early 2003 the Company filed a lawsuit  against  Fedegari  Autoklavi
A.G. for fraud,  breach of contract and unfair  business  practices.  This legal
proceeding was filed in California Superior Court for Stanislaus County.


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

         No matters  were  submitted  to a vote of security  holders  during the
fourth quarter of the fiscal year ended December 31, 2002.


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         (a) MARKET INFORMATION.  The Company's common stock is currently traded
in the  over-the-counter  market,  and prices for the common stock are quoted on
the OTC Electronic  Bulletin Board ("OTCBB") under the symbol ITCV.  There is no
assurance  that the  OTCBB  can or will  provide  sufficient  liquidity  for the
purchase and sale of the Company's common stock.

                                       14
<PAGE>

                  The  following  table sets forth the high and low  closing bid
prices of the Company's common stock for the period indicated,  as obtained from
the NASD. The stock is principally owned or controlled by Officers and Directors
of the Company,  and the bid prices  reported may not be indicative of the value
of the common  stock.  The volume of trading in the  Company's  common stock has
been minimal.  These  over-the-counter  market quotations  reflect  inter-dealer
prices without retail markup,  markdown or commissions  and may not  necessarily
represent actual transactions.

             QUARTER ENDED                     HIGH BID       LOW BID
             -------------                     --------       -------
             December 31, 2002                  $ .28          $ .02
             September 30, 2002                 $ .48          $ .05
             June 30, 2002                      $ .61          $ .24
             March 31, 2002                     $1.01          $ .60

             December 31, 2001                  $ .60          $ .16
             September 30, 2001                 $1.39          $ .28
             June 30, 2001                      $2.05          $ .16
             March 31, 2001                     $1.25          $ .19

         (b) APPROXIMATE NUMBER OF HOLDERS OF COMMON STOCK. The number of record
holders of the Company's  common stock at December 31, 2002,  was  approximately
1,400.  This  includes   shareholders  who  hold  stock  in  their  accounts  at
broker/dealers or at clearing houses.

         (c)  DIVIDENDS.  No dividends have been declared or paid by the Company
since inception.

         (d) RECENT SALES OF UNREGISTERED SECURITIES. Pursuant to a Regulation S
Stock Purchase Agreement dated, December 20, 2001 (the "Agreement"), between the
Company and Starz Investments Limited, a Belize  international  Business company
("Starz"),  the Company  agreed to sell and Starz agreed to use its best efforts
to purchase up to 5,000,000  shares of the Company's common stock, at a purchase
price equal to 35% of the bid price of the Company's shares as quoted on the OTC
Bulletin Board for the five consecutive  trading days immediately  preceding the
date of a purchase  order  received by the  Company.  As of December 31, 2002 an
aggregate of 5,016,508  shares had been purchased under the Agreement by foreign
designees of Starz and the Company had received  net proceeds of  $1,194,000  or
$.24 per share.  Pursuant to a similar  Regulation  S Stock  Purchase  Agreement
dated, July 26, 2002 the ("Second Agreement") between the Company and Starz. The
Company  agreed to sell and Starz  agreed to use its best efforts to purchase up
to 7,500,000  shares of the Company's common stock, at a purchase price equal to
35% of the bid price of the Company's shares as quoted on the OTC Bulletin Board
for the  five  consecutive  trading  days  immediately  preceding  the date of a
purchase order received by the Company.  As of December 31, 2002 an aggregate of
7,033,242  shares  had been  purchased  under the  Second  Agreement  by foreign
designees of Starz and the Company had received net proceeds of $327,000 or $.05
per share.  Under the terms of these Agreements,  Starz has the right to require
the Company to include the shares in any  registration  statement  under the Act
filed by the  Company  after a period of one year from the date of  purchase  of
such shares.  All costs in connection with such  registration  are to be paid by
the  Company.  The  Company  claims the  exemption  from  registration  of these


                                       15
<PAGE>

transactions  afforded  by  Regulation  S under the Act in that all sales of the
shares  were  made in  "off-shore  transactions"  to  persons  who are not  U.S.
persons.  No "directed selling efforts" were engaged in by either the Company or
Starz and Starz made other  representations  and entered  into other  agreements
consistent with the provisions of Regulation S.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

         Itec Environmental Group, Inc. (the "Company")(f/k/a  Beechport Capital
Corp.) was organized as a Colorado  corporation  on January 24, 1989. On May 29,
2001,  the Company filed a current  report on Form 8-K to report that  effective
May 4, 2001, the Company  entered into a share exchange  agreement with ITec, to
acquire  all the  issued  and  outstanding  shares  of  common  stock of ITec in
exchange for  6,651,987  shares of the  Company's  common  stock.  This business
combination  resulted in the shareholders of ITec owning  approximately 66.5% of
the issued and  outstanding  shares of the  Company's  common stock  (10,000,000
shares were  outstanding  upon completion of the  transaction),  and the Company
holding 100% of the issued and  outstanding  shares of ITec's common  stock.  In
September of 2002 the Company  filed a notice on Schedule 14A changing it's name
to Itec  Environmental  Group,  Inc.  and  moving the  domicile  to the State of
Delaware.

         Itec uses patented  technology and proprietary  equipment to design and
sell worldwide oil and agricultural  chemical container  recycling equipment and
related systems.  ITec's initial  marketing of the technology is concentrated in
California and Italy.

         Itec licenses environmental  technology using a carbon dioxide cleaning
process from Honeywell  International,  Inc. This new environmental  technology,
the System,  is believed by  management to be the only  pollution  reduction and
recycling  system on the market  today that  allows  for the 100%  recycling  of
plastic motor oil containers and the residual oil left inside each container. By
using  the  carbon  dioxide   cleaning   process,   the  Company  can  focus  on
environmental  protection and environmental safety by creating no chemical waste
disposal in the oil recycling and plastic recycling process.

         As of  December  31,  2002  the  Company  had  revenue  of  $24,000,  a
stockholders  deficit of $2,536,147 an  accumulated  deficit of $6,755,518 and a
working capital deficit of $850,418.

         The Company  during first quarter 2003 expects to complete the permit
process and final  requirements  for a 2 year lease of a 7,000 + sq ft. building
for operations  and  processing in  California.  By first quarter 2003 two pilot
Systems  are  expected  to  be  installed  at  this  location  for  testing  and
evaluation.

         Contracts  are in place for all needed raw  product  and the Company is
seeking  additional  sources of product  for future  growth.  The  Company has a
contract to sell all plastic flake produced.


                                       16
<PAGE>

Strategic Alliance Agreements

         Itec has engaged in a series of discussions for the purpose of entering
into manufacturing, technology and sales alliances. Such discussions are ongoing
and  the  Company   anticipates  that  these   negotiations  will  lead  to  the
consummation of several critical  contracts,  agreements and/or alliances in the
foreseeable  future that will provide the Company with the ability to accelerate
the sales/delivery cycle through calendar year 2003 and thereafter.

         Orders for ten Systems to be delivered in Italy were signed in 2002 and
orders for ten additional Systems were signed for delivery to start in the first
quarter of 2003.  Financing for all Systems will be secured through  IG-Sviluppo
Italia s.p.a., the Treasury Agency of Italy.

         There are pending  orders for six mobile/portable Systems for  delivery
during calendar year 2004.

         The Company entered into a  manufacturing/licensing  agreement in third
quarter 2001 with a U.S. based equipment  manufacturer  capable of producing the
System on time and on budget. This manufacturer also has a facility in the Czech
Republic capable of producing all European Systems.  This will allow the Company
to assure that all Systems  will be of the same  specifications,  standards  and
quality,  resulting in reduced  costs per System with the highest  quality.  The
arrangement with an Italian manufacturer was cancelled in fourth quarter 2001.

The Company has entered into  negotiations with certain vendors and note holders
who are due approximately $850,000 and has offered equity securities in payment.
The Company  expects a majority  of the  vendors  and  holders to convert  their
claims to equity securities in the first quarter of 2003. However, no assurances
can be given in this regard.

         The  Company has engaged  consultants  to assist in raising  additional
equity for debt reduction and working capital needs. During the second and third
quarter 2003 the Company  expects to issue an  additional  10,000,000  shares of
common stock in conjunction with its efforts to raise capital.

Significant Accounting Policies and Estimates

         Management's Discussion and Analysis of Financial Condition and Results
of Operations discusses the Company's consolidated  financial statements,  which
have been prepared in accordance with accounting  principles  generally accepted
in the United States of America.  The preparation of these financial  statements
requires  management to make estimates and assumptions  that affect the reported
amounts of assets and  liabilities  at the date of the financial  statements and
the reported amounts of revenues and expenses during the reporting period. On an
on-going  basis,  management  evaluates its estimates and  judgments,  including
those related to reserves and intangible assets.  Management bases its estimates
and  judgments on historical  experiences  and on various other factors that are
believed to be reasonable under the circumstances, the results of which form the
basis for making  judgments  about the carrying value of assets and  liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.  The most significant
accounting  estimates  inherent in the  preparation  of the Company's  financial


                                       17
<PAGE>

statements  include  estimates as to the  appropriate  carrying value of certain
assets and  liabilities  which are not  readily  apparent  from  other  sources,
primarily  allowance for doubtful accounts recovery of intangible assets.  These
accounting  policies are described at relevant  sections in this  discussion and
analysis and in the notes to the consolidated  financial  statements included in
our Annual Report on Form l0-KSB for the fiscal year ended December 31, 2002.

         Forward looking statements

         This report  contains  certain  forward-looking  statements  within the
meaning of Section 27A of the  Securities  Act of 1933, as amended,  and Section
21E of the  Securities  Exchange  Act of  1934,  as  amended.  Stockholders  are
cautioned that all  forward-looking  statements  involve risks and  uncertainty,
including  without  limitation,  our ability to expand our customer  base,  make
strategic acquisitions,  general market conditions, and competition and pricing.
Although we believe the assumptions  underlying the  forward-looking  statements
contained herein are reasonable, any of the assumptions could be inaccurate, and
therefore,  there  can  be no  assurance  that  the  forward-looking  statements
contained in the report will prove to be accurate.


ITEM 7.  FINANCIAL STATEMENTS

         The  financial  statements  are set  forth on pages  F-1  through  F-15
hereto.


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

         There  have  been  no   disagreements   between  the  Company  and  its
independent  accountants on any matter of accounting  principles or practices or
financial statement disclosure since the Company's inception.

         As of February 5, 2002 Schumacher & Associates,  Inc.  Certified Public
Accountants,  ("Schumacher")  ceased  to be the  independent  auditors  for  the
Company.  Such firm's reports on the financial statements of the Company for the
past two years did not contain an adverse opinion or a disclaimer of opinion nor
were such  reports  qualified  or  modified  as to  uncertainty,  audit scope or
accounting principals. The decision to change accountants was recommended by the
Board of  Directors  of the Company  (the Company not having an audit or similar
committee) and was made solely  because of the Board's  decision to relocate the
principal operations of the Company to California.

         During the  Company's two most recent fiscal years and through the date
of  termination  there were no  disagreements  with  Schumacher on any matter of
accounting  principals or practices,  financial statement disclosure or auditing
scope or procedure, which disagreements,  if not resolved to the satisfaction of
Schumacher would have caused  Schumacher to make reference to the subject matter
of such disagreements in connection with its reports.

         During  the  Company's  two most  recent  fiscal  years and  subsequent
thereto the Company was not advised by Schumacher of any matters  required to be
disclosed under this item.

                                       18
<PAGE>

         On  February  5,  2002 the  Company  engaged  Henry  Schiffer,  C.P.A.,
Accounting  Corporation  ("Schiffer")  to audit the financial  statements of the
Company for the year ended  December 31, 2001 and 2002. At no time prior thereto
had the Company consulted Schiffer regarding any accounting matters.


                                    PART III

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

         (a) The Directors and Executive  Officers of the Company as of December
31,2002 were as follows:

              NAME                    AGE            POSITION
              ----                    ---            --------
       Gary M. De Laurentiis          58             President and Director

       Andrea G. Videtta              45             Vice President Foreign
                                                      Operations and Director

       Lisa Ann Marie Fitzpatrick     37             Vice President Sales and
                                                      Director

       John R. Murray                 65             Director

       Michael E. Hofmann             52             Chief Financial Officer


         Gary  M.  De  Laurentiis,  Chairman  and  CEO  - Mr.  DeLaurentiis  has
substantial  business  management  and  operating  experience  in  the  plastics
recycling  industry.  He  previously  served as President  of Fixcor  Industries
International and its wholly-owned subsidiary,  Pallet Technology.  In this role
he supervised the  construction of and managed  operations of plastic  recycling
and pallet  manufacturing  operations  in Ohio and Florida.  Mr. De  Laurentiis'
background  includes the  founding and  executive  management  of  manufacturing
companies  engaged  in  electronics,  recycling  and  plastics  molding.  He has
supervised the  construction  of two recycling  plants in China and one plant in
Mexico, all funded through government grants.

         Andrea G.  Videtta,  Vice  President  and  Director  - Mr.  Videtta  is
currently the Director of the Center for Economic and  Territorial  Modification
("CESMET") in Naples, Italy. CESMET is a private company working with government
and  industry  in  city  planning,   economic   development  and   environmental
protection.  Over  the past 10  years,  he has  completed  many  management  and
research  assignments focused on the regional development of Southern Italy. Mr.
Videtta has also published books and articles on regional economic  development.
A native  of Naples he holds a Degree in  Architecture  from the  University  of
Naples and is fluent in Italian, Russian and English.

       Lisa Ann Marie Fitzpatrick, Vice President and Director - Ms. Fitzpatrick
is the former project manager for Fixcor Recovery  Systems where she managed the
program of seeking and  administering  government  grants.  In addition  she has
served as the  Administrative  Manager of Pallet Technology where she supervised
customer  service,  order-entry and inventory  control.  Ms.  Fitzpatrick is the
daughter of Mr. De Laurentiis.

                                       19
<PAGE>

         John R. Murray,  Director - Mr.  Murray has over 40 years of experience
in the Business and  Operations  Management of the  Engineering,  Manufacturing,
Construction and Data Processing  industries.  In addition, as a Consultant,  he
has been  associated  with Mr.  DeLaurentiis  in the Planning and Development of
Plastic Recycling and Plastic Manufacturing facilities in the USA and Africa. He
has also served in a consultant capacity to the President of a large volume Foam
Plastic  manufacturer for a period of ten years. He has an extensive  background
in the  development  and funding of both  domestic and foreign  operations  that
require  Federal  and  Foreign  government  participation.  He will  serve  as a
Director of the company, and function as a Special Assistant to Mr. DeLaurentiis
for the  development of Eastern  operations for the company,  as well as for the
African continent.

         Michael E. Hofmann, CFO - Mr. Hofmann joined ITec in January of 2002 as
CFO. He was  formerly  the CFO of  eBioCare.com  a Silicon  Valley  startup that
provided  management  and services for various  chronic  conditions  using a Web
based  platform for back office,  order entry and  accounting  services.  It was
successfully  sold to a New York State based  NASDAQ firm in mid 2001.  Prior to
eBioCare,  Mr.  Hofmann had over 20 years of accounting  and finance  experience
from startups to Fortune 500 firms in a variety of processing, manufacturing and
service companies,  both domestic and international.  Additionally,  Mr. Hofmann
has traveled  extensively in Eastern  Europe and Asia on various  government and
NGO  assignments  for USAID and their  contractors.  Mr.  Hofmann  attended  San
Francisco State College majoring in Engineering.


         (c) Compliance with Section 16(a) of the Exchange Act.

                  Section  16(a) of the  Securities  Exchange  Act of  1934,  as
amended,  requires the Company's officers and directors and persons who own more
than  10% of a  registered  class of the  Company's  equity  securities  to file
reports of  ownership on Form 3 and changes in ownership on Form 4 or 5 with the
Securities and Exchange Commission (the "SEC"). Such officers, directors and 10%
shareholders  are also  required  by SEC rules to  furnish to the  Company  with
copies of all Section 16(a) reports they file.

                  Based  solely  on its  review of the  Company's  files and its
review of the EDGAR filing system maintained by the SEC, the Company believes
that during the fiscal year ended  December 31, 2002 16(a)  filing  requirements
applicable to its officers, directors and 10% shareholders were complied with.


                                       20
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

<TABLE>
<CAPTION>
                           Summary Compensation Table

                                    Annual Compensation       Long-term Compensation
                                --------------------------  --------------------------------
                                                    Other   Restricted   Securities   LTIP      All
                        Fiscal     Salary    Bonus  Annual  Stock       Underlying   Payouts  Other
Name                     Year        $       $      Comp.                Options(#)    $     Compensation
------------------     ---------  ---------  ---    ----   ----------  -----------  -------- ------------
<S>                    <C>        <C>        <C>    <C>    <C>         <C>          <C>      <C>
Gary M. DeLaurentiis   2002       $140,000   $ -    $ -                1,000,000             $ -
CEO

Lisa Fitspatrick       2002       $ 52,500     -      -                   -                    -
V.P.

Michael E. Hofmann     2002         72,000     -      -                   -                    -
CFO
</TABLE>


         The Company has no employment agreements with its officers.  During the
fiscal year ended December 31, 2002, Gary M. De Laurentiis was paid $140,100.
Andrea G. Videtta was paid $0.00,  Lisa A.  Fitzpatrick  was paid  $52,500.  and
Michael E, Hofmann was paid  $72,000 The  officers and  directors of the Company
are reimbursed for expenses paid or incurred by them on behalf of the Company.

         The Company has no retirement,  pension, profit sharing or insurance or
medical reimbursement plans covering its officers and directors.

Incentive Stock Option Plan

         The Company has adopted an  incentive  stock  option plan (the  "Plan")
under which options granted are intended to qualify as "incentive stock options"
under  Section  422A of the  Internal  Revenue  Code of 1986,  as  amended  (the
"Code").  Pursuant  to the Plan,  options  to  purchase  up to 45,455  shares of
Company's  common stock may be granted to employees of the Company.  The Plan is
administered by the Board of Directors which is empowered to determine the terms
and  conditions of each option  subject to the  limitation of the exercise price
cannot be less than market  value of the common stock on the date of grant (110%
of the market  value in the case of options  granted to an employee who owns 10%
or more of the Company's outstanding common stock) and no option can have a term
in excess of 10 years (5 years in the case of options  granted to employees  who
own 10% or more of the Company's common stock). As of the date hereof no options
have been granted under the Plan.

         On May 28, 2001 the Company  adopted the Beechport  Capital Corp.  2001
Stock Plan (the "2001 Plan") which covers the issuance of up to 1,000,000 shares
of common  stock either  directly or pursuant to options to eligible  employees,
directors,  officers of and consultants and advisors to the Company. The purpose
of the  2001  Plan is to  promote  the  best  interest  of the  Company  and its

                                       21
<PAGE>

stockholders by providing a means of non-cash  remuneration to selected eligible
participants.  The shares  covered  under the 2001 Plan have been  registered on
Form S-8 under the Act.  Between  June and  August  2001 the  Company  issued an
aggregate  of  842,000  registered  shares  under the 2001 Plan to 6 persons  as
compensation  for  services.  On September 12, 2001 the 2001 Plan was amended to
increase the issuance to 2,100,000 shares.

         On May 1, 2002 the Company  adopted the Beechport  Capital  Corp.  2002
Stock Plan (the "2002 Plan") which covers the issuance of up to 2,000,000 shares
of common  stock either  directly or pursuant to options to eligible  employees,
directors,  officers of and consultants and advisors to the Company. The purpose
of the  2002  Plan is to  promote  the  best  interest  of the  Company  and its
stockholders by providing a means of non-cash  remuneration to selected eligible
participants.  The shares  covered  under the 2002 Plan have been  registered on
Form S-8 under the Act. On October 29, 2002 the 2002 Plan was amended to
increase the issuance to 6,000,000 shares. During calendar year 2002 the Company
issued an  aggregate  of  5,500,000  registered  shares under the 2002 Plan to 5
persons as compensation for services.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The  following  table sets  forth,  as of  December  31, 2002 the stock
ownership of each person known by the Company to be the  beneficial  owner of 5%
or more of the  Company's  common  stock,  each  director  individually  and all
directors  and  officers  of the  Company  as a  group  based  upon a  total  of
41,997,068 outstanding shares as of such date.

  Name and Address                     Amount and Nature of         Percentage
of Beneficial Owner                     Beneficial Owner            of Class
-------------------                    --------------------         ----------
Gary M. De Laurentiis                      2,354,803 (1)               5.6%
14699 Holman Mountain Road
Jamestown, California  95327

Andrea G. Videtta                            592,027                   1.4%
Vico Lungo Trinita degli Spagnoli 18a
80134 Napoli, Italy

Lisa Ann Marie Fitzpatrick                   465,639 (1)               1.1%
12933 150th Court North
Jupiter, Florida  33478

John R. Murray                                     0                   0.0%
7 Maxson Ave.
Locust, NJ 07760

Michael E. Hofmann                                 0                   0.0%
13330 Valley Home Rd
Valley Home, Ca 95361

All Directors and Officers                 3,412,469                   8.1%
as a Group (5 persons)

---------------
(1) Mr. De Laurentiis is the father of Ms. Fitzpatrick and disclaims  beneficial
ownership of all shares held by her.

                                       22
<PAGE>


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Pursuant to an  agreement  effective  April 25, 2000  between  Itec and
Glenwood Marketing Association,  Inc. ("GMA") (the "GMA Agreement"),  GMA made a
loan to the Company of $1,100,000.  From the $1,100,000  loan ITec agreed to pay
$200,000 of fees to GMA.  The loan bears  interest at 10% per annum,  payable in
monthly interest only payments for 36 months.  Itec agreed to amend its Articles
of Incorporation to allow the issuance of preemptive and preferential  rights to
GMA to purchase shares pursuant to approval of the Board of Directors. Itec also
agrees to  promulgate a  resolution  of the Board to convey to GMA 20% of Itec's
issued and outstanding common stock and to vest GMA with preferential  rights to
acquire  additional shares at no cost to GMA when additional shares were issued,
so as to  maintain  GMA's  stock  ownership  position  at 20% of the  issued and
outstanding common stock of ITec. Pursuant to the GMA Agreement,  GMA's interest
shall not be diluted except that this provision  shall not apply if Itec's stock
becomes  publicly  traded.  Itec  further  agreed to pay GMA a $20,000 per month
consulting  fee for a period of 24 months to allow GMA to appoint  one member of
Itec's Board of Directors and to grant GMA the right of first refusal on leasing
of all  machines  build by the  manufacturer  of the  equipment  related  to the
License  Agreement.  According  to the terms of the GMA  Agreement,  Itec was to
become  publicly traded within 12 months of the loan agreement at which time all
the  officers  and  directors  of ITec would agree to a two year lockup of their
stock.  GMA agreed to convert the loan to preferred  stock upon Itec  becoming a
public  company.  The preferred  stock was to contain  provisions for redemption
suitable  to both  parties.  Itec  also  agreed  that at least  two of the Board
members  would  approve  verbally  expenditures  of more  than  $5,000.  The GMA
Agreement  also  contains a covenant to indemnify  GMA with respect to losses it
may incur in connection with the conduct of its business with Itec.

         On July 5, 2000, ITec's Board of Directors approved and authorized Itec
to loan up to $250,000 to Gary M. De Laurentiis, President and a director of the
Company. The loan is unsecured,  with interest only payable for 10 years and the
total principal due at the end of that period. As of December 31, 2002 principal
in the amount of $236,973 had been advanced by the Company and interest had been
waived.

ITEM 13.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(1)       Exhibits:

       Exhibit
        Number                          Description
       -------                          -----------
         2.1      Share Exchange Agreement dated May 4, 2001 by and between the
                  Company and Itec International Technologies, Inc.
                  (Incorporated by reference to Exhibit 2.1 of the Registrant's
                  Current Report on Form 8-K dated May 29, 2001 and filed May
                  29, 2001.)

         3.1      Articles of Incorporation (Incorporated by reference to
                  Registrant's Form S-18 Registration Statement, File
                  No. 33-31067.)

                                       23
<PAGE>

         3.2      Bylaws (Incorporated by reference to Registrant's Form S-18
                  Registration Statement, File No. 33-31067)

         10.1     Beechport Capital Corp. 2001 Stock Plan dated May 28, 2001
                  (Incorporated by reference to Registrant's Form S-8
                  Registration Statement, File No. 333-62520.)

         10.2     Regulation S Stock Purchase Agreement dated December 20,
                  2001 (Incorporated by reference to Registrant's Annual Report
                  on Form 10-KSB for year ended December 31, 2001

         10.3     Beechport Capital Corp. 2002 Stock Plan dated May 1, 2002
                  (Incorporated by reference to Registrant's Form S-8
                  Registration Statement, File No. 333-87776)

         10.4     Beechport Capital Corp. 2002 Stock Plan dated October 29, 2002
                  (Incorporated by reference to Registrant's Form S-8
                  Registration Statement, File No. 333-100946




(2)       Financial Statements filed herein

          Accountant's Report                                              F-2

          Financial Statements

            Balance Sheets -Assets,                                        F-3
              Liabilities and Stockholders' Equity                         F-4

            Statements of Operations           `                           F-5

            Statements of Stockholders' Equity                             F-6

            Statements of Cash Flows                                       F-7

            Notes to Consolidated Financial Statements                     F-8

(3)       Reports on Form 8-K

          No reports were filed during the quarter ended December 31, 2002.


                                       24
<PAGE>

ITEM 14.  CONTROLS AND PROCEDURES

         We maintain a comprehensive  set of disclosure  controls and procedures
(as defined in Rules 13a-14(c) and 15d-14(c)  under the Securities  Exchange Act
of  1934  ("Exchange  Act")  and  internal  controls  designed  to  ensure  that
information  required to be disclosed  in our filings  under the Exchange Act is
recorded,  processed,  summarized  and reported  accurately  and within the time
periods  specified  in the  SEC's  rules and  forms.  As of Feb.  28,  2003 (the
"Evaluation Date"), an evaluation was carried out under the supervision and with
the  participation of our management,  including our Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and operation of our
disclosure  controls  and  procedures.  Based  upon that  evaluation,  the Chief
Executive  Officer  and  Chief  Financial  Officer  concluded  that,  as of  the
Evaluation  Date,  the design and  operation  of these  disclosure  controls and
procedures were effective to provide reasonable  assurance of the achievement of
the objectives described above.

         Subsequent to the Evaluation Date, there were no significant changes in
internal  controls or other  factors that could  significantly  affect  internal
controls,   including  any   corrective   actions  with  regard  to  significant
deficiencies and material weaknesses.




                                       25
<PAGE>

                                  SIGNATURES

     In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934,  the  Registrant  caused  this  Report to be  signed on its  behalf by the
undersigned, thereunto duly authorized.

                                   Itec Environmental Group, Inc.
                                            (Registrant)


Dated: April 17, 2003             By: /s/ Gary M. De Laurentiis
                                      -------------------------
                                      Gary M. De Laurentiis
                                      Chief Executive Officer


     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report as  amended  has been  signed by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated.

         Signature               Title                         Date

/s/ Gary M. De Laurentiis        Chief Executive Officer   April 17, 2003
-------------------------        and Director
Gary M. De Laurentiis


/S/ Michael E. Hofmann           Chief Financial Officer   April 17, 2003
------------------
Michael E. Hofmann


/s/ Andrea G. Videtta            Director                  April 17, 2003
-------------------------
Andrea G. Videtta


/s/ Lisa Ann Marie Fitzpatrick   Director                  April 17, 2003
------------------------------
Lisa Ann Marie Fitzpatrick


/s/ John R. Murray               Director                  April 17, 2003
-------------------------------
John R. Murray




                                       26
<PAGE>


                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
                       AS ADOPTED PURSUANT TO SECTION 302
                        OF THE SARBANES-OXLEY ACT OF 2002

I, Gary M. De Laurentiis,  Chief Executive Officer of Itec  Environmental  Group
Inc. certify that:

1. I have reviewed this annual report on Form 10-KSB of Itec Environmental Group
Inc.;

2.  Based on my  knowledge,  this  annual  report  does not  contain  any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a) designed such disclosure controls and procedures to ensure that material
     information   relating  to  the  registrant,   including  its  consolidated
     subsidiaries,  is  made  known  to  us by  others  within  those  entities,
     particularly  during  the  period  in which  this  annual  report  is being
     prepared;

     b) evaluated the effectiveness of the registrant's  disclosure controls and
     procedures  as of a date  within 90 days prior to the  filing  date of this
     annual report (the "Evaluation Date"); and

     c) presented in this annual report our conclusions  about the effectiveness
     of the disclosure controls and procedures based on our evaluation as of the
     Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):

     a) all  significant  deficiencies  in the design or  operation  of internal
     controls which could adversely affect the  registrant's  ability to record,
     process,  summarize and report  financial data and have  identified for the
     registrant's auditors any material weaknesses in internal controls; and


     b) any fraud,  whether or not material,  that involves  management or other
     employees  who  have  a  significant  role  in  the  registrant's  internal
     controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
annual report whether there were significant  changes in internal controls or in
other factors that could  significantly  affect internal controls  subsequent to
the date of our most recent  evaluation,  including any corrective  actions with
regard to significant deficiencies and material weaknesses.


/s/ Gary M. De Laurentiis
-------------------------
Gary M. De Laurentiis
Date: April 17, 2002

                                       27
<PAGE>

                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
                       AS ADOPTED PURSUANT TO SECTION 302
                        OF THE SARBANES-OXLEY ACT OF 2002

I, Michael E. Hofmann,  Chief Financial Officer of Itec Environmental Group Inc.
certify that:

1. I have reviewed this annual report on Form 10-KSB of Itec Environmental Group
Inc.;

2.  Based on my  knowledge,  this  annual  report  does not  contain  any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a) designed such disclosure controls and procedures to ensure that material
     information   relating  to  the  registrant,   including  its  consolidated
     subsidiaries,  is  made  known  to  us by  others  within  those  entities,
     particularly  during  the  period  in which  this  annual  report  is being
     prepared;

     b) evaluated the effectiveness of the registrant's  disclosure controls and
     procedures  as of a date  within 90 days prior to the  filing  date of this
     annual report (the "Evaluation Date"); and

     c) presented in this annual report our conclusions  about the effectiveness
     of the disclosure controls and procedures based on our evaluation as of the
     Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):

     a) all  significant  deficiencies  in the design or  operation  of internal
     controls which could adversely affect the  registrant's  ability to record,
     process,  summarize and report  financial data and have  identified for the
     registrant's auditors any material weaknesses in internal controls; and


     b) any fraud,  whether or not material,  that involves  management or other
     employees  who  have  a  significant  role  in  the  registrant's  internal
     controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
annual report whether there were significant  changes in internal controls or in
other factors that could  significantly  affect internal controls  subsequent to
the date of our most recent  evaluation,  including any corrective  actions with
regard to significant deficiencies and material weaknesses.


/s/ Michael E. Hofmann
----------------------
Michael E. Hofmann
Date: April 17, 2002

                                          28
<PAGE>





                  ITEC ENVIRONMENTAL GROUP INC. AND SUBSIDIARY
        -----------------------------------------------------------------
                          (a Development-Stage Company)


                              FINANCIAL STATEMENTS

                      DECEMBER 31, 2002 & DECEMBER 31, 2001



                                                                        Page
                                                                        ----
  Accountant's Report (Henry Schiffer, CPA)                             F-2

  Financial Statements

         Balance Sheets -Assets,                                        F-3
           Liabilities and Stockholders' Equity                         F-4

         Statements of Operations           `                           F-5

         Statements of Stockholders' Equity                             F-6

         Statements of Cash Flows                                       F-7

         Notes to Consolidated Financial Statements                     F-8












                                      F-1
<PAGE>


                REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT




The Shareholders
ITEC ENVIRONMENTAL GROUP INC.
(A Development -Stage Company)

I have audited the accompanying consolidated balance sheet of ITEC ENVIRONMENTAL
GROUP Inc. for the twelve months ending December 31, 2002 and the related
consolidated statements of income and changes in stockholders' equity, and cash
flows for the period ended December 31, 2002. These financial statements are the
responsibility of management. My responsibility is to express an opinion on
these financial statements based on my audit.

I conducted my audit in accordance with generally accepted accounting standards.
In my opinion, the consolidated financial statements referred to above present
fairly, the consolidated financial position of ITEC ENVIRONMENTAL GROUP INC., a
development stage company, for the date indicated above and the results of its
consolidated operations, stockholders' equity and cash flows for the year then
ended in conformity with generally accepted accounting principles consistently
applied.

The accompanying consolidated financial statements have been prepared assuming
that the company will continue as a going concern. As discussed in the Notes to
the consolidated financial statements, the Company has sustained losses from
initial startup costs and has a lack of substantial capital that raises doubt
about its ability to continue as a going concern. The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.



/s/ Henry Schiffer, CPA
----------------------------
Henry Schiffer, CPA
An Accountancy Corporation
Beverly Hills, California
March 28, 2003

                                      F-2
<PAGE>



<TABLE>
<CAPTION>

                  ITEC ENVIRONMENTAL GROUP, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

                                                         DECEMBER 31,    DECEMBER 31,
                                                             2001           2002
                                                       -------------    -------------
<S>                                                    <C>              <C>
               Assets
Current Assets
        Cash and cash equivalents                       $     4,253      $   (11,790)
        Accounts Receivable                                  36,951           51,774
        Inventory                                                            238,466
        Employee Advance                                          0            8,000
                                                       -------------    -------------
                  Total current assets                       41,204          286,450

Fixed Assets
        Furniture and equipment net of
        Depreciation of $3,321-2001, 13,675-2002             11,959          106,189
                                                       -------------    -------------

                  Total fixed assets                         11,959          106,189

Other Assets
        License Fee                                          63,000           50,000
        Note Receivable-President                           236,973          236,973
        Allowance for doubtful notes                                        (186,604)
        Deposits                                                               5,153
        Prepaid Expenses                                                      10,472
        Other-(Misc.)                                         7,565           40,589
                                                       -------------    -------------
                  Total other asets                         307,538          156,583
                                                       -------------    -------------

                  Total Assets                          $   360,701      $   549,222
                                                       =============    =============
</TABLE>



See accompanying notes to financial statements
                                      F-3
<PAGE>

<TABLE>
<CAPTION>
                  ITEC ENVIRONMENTAL GROUP, INC. AND SUBSIDIARY
                     CONSOLIDATED BALANCE SHEETS, Continued

                                                         DECEMBER 31,    DECEMBER 31,
                                                             2001           2002
                                                       -------------    -------------
<S>                                                    <C>              <C>
               Liabilities & Stockholders' (Deficit)

Current Liabilities
        Accounts Payable                                $   524,120      $   782,995
        Accrued Liabilities                                 122,621           72,092
                                                       -------------    -------------
                  Total Current Liabilities                 646,741          855,087

Other Liabilities
        Note Payable G M A                                1,100,000        1,100,000
        Note Payable Italian Investors                      815,230          815,230
        Deferred Revenue                                    129,875          170,000
        Other                                                   -            145,053
                                                       -------------    -------------
                  Total Other Liabilities                 2,045,105        2,230,283
                                                       -------------    -------------
                  Total Liabilities                       2,691,846        3,085,370
                                                       -------------    -------------

Stockholders' (Deficit)
        Preferred Stock, $0.001 par value,                                         0
          10,000,000 shares authorized
        Common Stock, $0.001 par value                        1,000          254,715
          750,000,000 shares authorized
          41,997,068 outstanding at 12/31/02
        Paid In Capital                                   1,111,380        3,517,163
        (Deficit) accumulated during
          Development stage                              (3,634,213)      (6,308,025)
                                                       -------------    -------------
                  Total Stockholders' Deficit            (2,521,833)      (2,536,147)
                                                       -------------    -------------
                  Total Liabilities & Stockholders'
                   Deficit                              $   360,701      $   549,222
                                                       =============    =============
</TABLE>


See accompanying notes to financial statements

                                      F-4

<PAGE>

                  ITEC ENVIRONMENTAL GROUP, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENT OF INCOME
                            AND COMPREHENSIVE INCOME

                                                      12 Months Ended
                                                -----------------------------
                                                 December 31,    December 31,
                                                     2001            2002
                                                -------------   -------------

Revenues                                          $      -       $    24,048
Interest Income                                       (1,322)            -
                                                -------------   -------------
        Total Income                                  (1,322)         24,048

Cost of Goods                                                         16,706

Gross Profit                                          $ 7,342              2

Operating Expenses
    Consulting Fees                                1,416,704         921,350
    Advertising                                            0           1,087
    Auto expense                                           0              44
    Payroll                                          268,867         498,324
    Italian Expenses                                 192,387         118,346
    Professional Fees                                 98,859         213,557
    Research and Development                          60,000          12,740
    Travel & Entertainment                            77,494          80,154
    Engineering                                       53,569         137,563
    Telephone                                         31,816          32,510
    Insurance                                         27,451          13,277
    Rent / Utilities                                  21,939           5,286
    Depreciation                                                       8,082
    Licenses and Permits                                                 503
    Other-(Misc.)                                     60,379          88,276
    Interest Expense                                  74,982         175,471
    Debt Placement Cost                           -                  192,834
    Currency Conversion Net Loss                       5,954             140
        Total Operating Expenses                   2,390,401       2,499,544
                                                -------------   -------------

         Total Net Income (Loss)                 ($2,389,079)    ($2,492,202)
                                                =============   =============


41,997,068 shares outstanding earnings per share                     ($0.059)

Fully dilulated basis 43,997,068 shares outstanding                  ($0.057)


See accompanying notes to financial statements

                                      F-5
<PAGE>


<TABLE>
<CAPTION>
                  ITEC ENVIRONMENTAL GROUP, INC. AND SUBSIDIARY
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                     FOR THE PERIOD ENDED DECEMBER 31, 2002


                                   No. of Common     Stock        Additional      Accumulated       Total
                                    Stock Shares     Amount     Paid-In Capital     Deficit
                                  ---------------------------------------------------------------------------

<S>                                   <C>            <C>            <C>            <C>            <C>
Balance at December 31, 2000           6,651,987       1,000              -        (1,209,661)    (1,208,661)

Balance at December 31, 2001          12,692,000     212,608        1,090,460      (3,803,028)    (2,499,960)

Net Loss for the period ended
   December 31, 2002                                                               (2,492,201)    (2,492,201)

Common Stock issued for services
     December 31,  2002                6,200,000       6,200          932,238                        938,438

Common Stock issued for debt
    December 31, 2002                 23,105,068      23,105        1,507,267                      1,530,372

Conversion to $0.001 par stock                        12,802          (12,802)        (12,796)       (12,796)

                                  ===========================================================================
Balance at December 31, 2002          41,997,068     254,715        3,517,163      (6,308,025)    (2,536,147)
                                  ===========================================================================
</TABLE>

See accompanying notes to financial statements


                                      F-6
<PAGE>

                 ITEC ENVIRONMENTAL GROUP, INC. AND SUBSIDIARY
                             STATEMENT OF CASH FLOWS


                                                         12 Months Ended
                                                   ----------------------------
                                                   December 31,    December 31,
                                                       2001            2002
                                                   ------------    ------------
Cash Flows From Operating Activities
    Net Income (Loss)                               $2,389,079      $2,492,201
        Adjustments to reconcile net income               -
        (loss) to net cash (used in)
        provided by operating activities:
        Increase in accounts payable, accrued
        expenses and other
        (Increase) in other assets                   1,161,423      (2,322,466)
                                                  -------------   -------------
    Net cash (used in) provided by operating
     activities                                       1,227,656         169,735
                                                  -------------   -------------

Cash Flows From Investing Activities
    Net cash used in investing activities              (48,761)       (162,387)
                                                  -------------   -------------

Cash Flows From Financing Activities
        Proceeds from notes payable
        Issuance of common stock                                        63,027
        Capital raised                               2,197,780       3,505,672
        Note payable GMA                            (1,100,000)     (1,100,000)
                                                  -------------   -------------

    Net cash (used in) provided by financing
     activities                                      1,097,780       2,468,699
                                                  -------------   -------------
    Net increase in cash                                   -               -

    Net decrease in cash                              (279,824)        (16,044)

    Cash, beginning of period                          284,077           4,253
                                                  -------------   -------------

    Cash, end of period                            $     4,253     $  ( 11,790)
                                                  =============   =============



See accompanying notes to financial statements

                                      F-7



<PAGE>

                  ITEC ENVIRONMENTAL GROUP, INC AND SUBSIDIARY
                          (A Development-Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2002

NOTE 1 - Summary of Significant Accounting Policies:

This summary of significant  accounting  policies of Itec  Environmental  Group,
Inc.  (f/k/a  Beechport  Capital Corp.) and Subsidiary is presented to assist in
understanding the Company's financial  statements and is stated in United States
dollars. The financial statements and notes are representations of the Company's
management  who is  responsible  for  their  integrity  and  objectivity.  These
accounting policies conform to generally accepted  accounting  principles in the
United States of America and have been  consistently  applied in the preparation
of the financial statements.


     (a)  General
          -------

Beechport Capital Corp. ("Beechport") was organized as a Colorado corporation on
January 24, 1989, in order to evaluate,  structure and complete a merger with or
acquisition of, prospects consisting of private companies,  partnerships or sole
proprietorships.

ITEC  Environmental  Group, Inc. ("Itec") was incorporated under the laws of the
State of  Delaware  on March  28,  2000.  Itec was  formed  for the  purpose  of
acquiring certain patented  technology and the development of a worldwide market
for its usage.

At a special September 27, 2002 meeting of the shareholders of Beechport Capital
Corp., the Company authorized changing its name by merging into its wholly-owned
subsidiary  Itec  Environmental  Group,  Inc.  thus changing the domicile of the
Company from Colorado to Delaware.

The  Company's  business  plan is to attempt to build on the  foundation  of the
patented  technology and proprietary  equipment and to form strategic  alliances
and a  management  team to become a worldwide  supplier of oil and  agricultural
chemical  container  recycling  equipment  and related  systems.  The  Company's
initial  marketing  of the  technology  will be  concentrated  in  Italy  but is
intending to market in the future in the United States and other countries.  The
Company has elected to use a stage  development  company since planned principal
operations have not yet commenced.

The  Company's  subsidiary,  Environmental  Recycling  Service of America,  Inc.
("ERSA") was incorporated  under the laws of the State of California on March 6,
2002.  ERSA will process and recycle  plastic  containers  using the ECO2 system
developed and sold by Itec.


Unless the context  indicates  otherwise  all  references  herein to the Company
include Itec Environmental  Group, Inc. its predecessor  Beechport Capital Corp.
and its wholly-owned subsidiary Environmental Recycling Service of America, Inc.

                                      F-8
<PAGE>

NOTE 1 - Summary of Significant Accounting Policies (continued):

     (b)  Per Share Information
          ---------------------

Per share  information is determined using the weighted average number of shares
outstanding.

     (c)  Furniture and Equipment
          -----------------------

Furniture  and  equipment   will  be  carried  at  cost,   net  of   accumulated
depreciation.  Depreciation  will be computed using  straight-line  methods over
estimated useful lives of the assets ranging from three to seven years.

     (d)  Revenue and Expense Recognition
          -------------------------------

As of December 31, 2002, the Company had revenue $24,000. The Company intends to
recognize revenues from sales of equipment upon delivery as per SAB 101.

The  Company  intends  to  contract  with  others for the  manufacturing  of the
equipment.  General and administrative expenses and the costs of advertising are
expensed as incurred.

     (e)  Concentrations
          --------------

Financial  instruments that potentially subject the company to concentrations of
credit  risk  consist   principally  of  temporary  cash  investments  and  cash
equivalents  and trade accounts  receivables.  At December 31, 2002, the Company
had no amounts of cash or cash  equivalents in U.S.  financial  institutions  in
excess of amounts  insured by agencies of the U.S.  Government.  At December 31,
2002 the Company  had trade  receivables  of $51,000  from  domestic  customers.
Future trade receivables are expected to be principally from customers in Italy.
Since initial  anticipated  customers  will be from one geographic  location,  a
concentration  of credit risk could exist due to  potential  changes in economic
activity in that area.  The Company  does not require  collateral  for its trade
accounts receivables.

     (f)  Cash Equivalents
          ----------------

The Company considers all short-term investments in securities that mature in 90
days or less to be cash equivalents

     (g)  Allowance for Doubtful Accounts
          -------------------------------

Based on  collection  experience  of the  Company,  no  allowance  for  doubtful
accounts has been provided.  Historically the Company has never had any material
amounts of  uncollectible  accounts.  Provision for doubtful account at December
31,  2002 is for a  receivable  from an  officer  stockholder  without  adequate
collateral.

                                      F-9

<PAGE>

NOTE 1 - Summary of Significant Accounting Policies (continued):

     (h)  Use of Estimates in the Preparation of Financial Statements
          -----------------------------------------------------------The
preparation  of financial  statements  in  conformity  with  generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.

     (i)  Geographic Area of Operations
          -----------------------------

The Company operates its business principally in Italy. The potential for severe
financial impact can result from negative effects of economic  conditions within
the markets or geographic areas.  Since the Company's business is principally in
one area,  this  concentration  of operations  results in an associated risk and
uncertainty.


Note 2 -  Basis of Presentation - Going Concern

The  accompanying  financial  statements  have been prepared in conformity  with
generally accepted accounting principles, which contemplates continuation of the
Company as a going concern.  However,  the Company has suffered recurring losses
from operations and has a net capital  deficiency that raises  substantial doubt
about the  Company's  ability to  continue  as a going  concern.  Management  is
attempting to raise additional capital.

In view of these matters,  continuing,  as a going concern is dependent upon the
Company's ability to meet its financing requirements,  raise additional capital,
and the success of its future operations or completion of a successful  business
combination.  Management believes that actions planned and presently being taken
to raise  additional  capital  to provide  the  opportunity  for the  Company to
continue as a going concern.


Note 3 - Common Stock

The Articles of Incorporation of Itec authorize a maximum of 750,000,000  shares
of $0.001  par value  common  stock and  10,000,000  shares of $0.001  par value
preferred  stock. At December 31, 2002,  41,997,068  shares of common stock were
issued and outstanding.

On April 1, 2000,  Itec  entered  into  stock  subscription  agreements  for the
issuance of 1,000 shares at $1.00 per share.

                                      F-10
<PAGE>

Note 3 - Common Stock (continued)

On July 3, 2000 Itec's Board of Directors  approved  the Company  entering  into
loan/investment   agreements  with  various  Italian  investors  not  to  exceed
$875,000. The Board also authorized the payment of a 10% commission on the funds
raised by the loan/investment  agreements. The term of the loans as agreed to by
the Board would be three years. Interest would be payable monthly with the total
principal due in three years.  The investors would have the right to participate
in  future  issuances  of common  stock on a pro rata  basis,  except  that this
provision shall not apply prior to a business  combination  transaction in which
the  common  stock of Itec  would  become  publicly  traded,  or if Itec were to
consummate an initial public offering.

On July 15, 2000, the Board also  authorized the issuance of up to 15% of Itec's
common stock to the various Italian  investors.  In lieu of Itec's entering into
loan/investment  agreements  described above, a revised agreement between Itec's
President and the Italian  investors was used which allowed  participants in the
Italian  GPDP Program to make loans at a rate of $5,500 per share of Itec common
stock. Funds thus generated  (approximately  $815,230 at March 31, 2002) were to
be repaid when Itec became a public company. Upon repayment of the advances, the
investors  would retain their stock  ownership.  To comply with various  Italian
regulations, Itec's President personally issued shares of Itec's common stock to
the Italian  investors.  The funds advanced from the investors were deposited in
accounts in ITEC's  President's name and the advances were to Itec's  President.
Due to the substance of the  transaction  over its form, the  transactions  have
been shown as Itec  transactions  with the cash  balances and  advances  payable
recorded on the financial statements.  Itec's President has represented that the
funds received are assets of Itec and Itec has assumed the related obligations.

On May 4, 2001 Beechport  entered into a share  exchange  agreement with Itec to
acquire  all the  issued  and  outstanding  shares  of  common  stock of Itec in
exchange  for  6,651,987  shares of  Beechport's  common  stock.  This  business
combination  resulted in the shareholders of ITEC owning  approximately 66.5% of
the issued and  outstanding  shares of the  Company's  common stock  (10,000,000
shares were  outstanding  upon completion of the  transaction),  and the Company
holding 100% of the issued and outstanding shares of Itec's common stock.

On May 28, 2001,  the Company  adopted the Beechport  Capital  Corp.  2001 Stock
Plan,  which  covers the  issuance of up to  1,000,000  shares of common  stock,
either  directly  or pursuant to  options,  to  eligible  employees,  directors,
officers, consultants and advisors of the Company. The purpose of the plan is to
promote the best interest of the remuneration to selected eligible participants.
On June 7, 2001,  the Company filed a  registration  statement on Form S-8 (File
No. 333-62520) to register the shares covered under the Plan.

In June and  September  of 2001  the  Board  authorized  the  issuance  of up to
2,100,000  shares  under S-8 filings for  services  performed  for the  Company.
1,992,000  shares were issued in early July. The Company's  stock was trading in
the range of $0.50 to $0.90  with a five-day  average  of $0.72 per  share.  The
discount allowed was set at 25% resulting in a valuation of $0.54 per share. One
hundred  thousand shares were issued in late September 2001. The Company's stock
was  trading in the range of $0.28 to $0.43 with a five-day  average of $0.36 pr
share. The discount allowed was set at 25% resulting in a valuation of $0.27 per
share.

                                      F-11
<PAGE>

Note 3 - Common Stock (continued)

In December 2001 the Company agreed to issue up to 5,000,000  shares of
common stock in an offering to be  conducted  outside the United  States.  As of
December  31, 2002 an  aggregate  of  5,016,508  shares of common stock had been
issued with the Company  receiving net proceeds of $1,194,000 or $.24 per share.
In July 2002 the Company agreed to issue up to 7,500,000  shares of common stock
in an offering to be  conducted  outside the United  States.  As of December 31,
2002 an aggregate  of  7,033,242  shares of common stock had been issued and the
Company had received net proceeds of $327,000 or $.05 per share.  As of December
31, 2002 the bid price for the Company's common stock was approximately $.06 per
share.


Note 4 - Notes Payable

Itec entered into an agreement with Glenwood Marketing  Associates,  Inc., (GMA)
effective April 25, 2000 whereby GMA agreed to lend $1,100,000 to Itec. From the
$1,100,000 loan Itec agreed to pay $200,000 of capital formation fees to GMA.

The loan  bears  interest  at 10% per annum  payable in  monthly  interest  only
payments for the 36-month term of the loan. Itec agreed to amend its articles of
incorporation so as to allow the issuance of a preemptive and preferential right
to purchase shares pursuant to Board of Director approval. The Company agreed to
promulgate a Board  resolution to convey to GMA 20% of the Company's  issued and
outstanding common stock and further that Board shall vest GMA with preferential
rights to acquire  additional  shares, at no cost to GMA, when additional shares
are issued,  so as to  maintain  GMA's  stock  ownership  position at 20% of the
issued and outstanding common stock. GMA's interest shall be non-diluted, except
that this  provision  shall  not apply if the  Company's  common  stock  becomes
publicly traded.

The Company agreed,  pursuant to this agreement,  to pay GMA a $20,000 per month
consulting  fee for 24  months,  to  allow  GMA to  appoint  one  member  of the
Company's  Board and to grant GMA a first  right of  refusal  on  leasing of all
machines  built by the  manufacturer  of the  equipment  related to the  license
agreement.

According to the terms of the agreement, the Company will become publicly traded
within  twelve  months of the loan  agreement at which time all the officers and
directors  of the  Company  will  agree to a two year  lock up of their  Company
stock,  GMA agreed to convert the debt to preferred  stock upon Itec  becoming a
public  company.  The preferred  stock will contain  provisions  for  redemption
suitable  to both  parties.  The  Company  also  agreed that at least two of the
Company's Board members would approve  verbally any Company  expenditure of more
than $5,000.

The Company has also conveyed a covenant, so long as GMA acts in accordance with
the terms of the  agreement,  to hold GMA harmless  from any and all claims that
may accrue  and to  indemnify  and hold GMA  harmless  from any and all  losses,
claims,  liabilities and expenses,  including reasonable costs of investigation,
counsel  fees and  disbursements,  which may be imposed  upon or incurred by GMA
with the conduct of its own business with the Company.

                                      F-12
<PAGE>

Note 5 - Leases

Effective  April 2001 the  Company  entered  into a lease  agreement  for office
facilities in  California.  Under terms of the lease,  the Company agreed to pay
monthly lease payments of $900 for 36 months.


Future minimum rentals under this operating sub-lease are as follows:

                    Year Ending December 31,
                            2003                             10,800
                            2004                              3,600
                                                       ------------
                            Total                      $     17,100
                                                       ============

Note 6 - Technology License

Effective  June 30, 2000,  the Company  entered into a five-year  patent license
agreement with Honeywell  International,  Inc.  (Honeywell)  whereby the Company
obtained a  non-exclusive,  nontransferable  worldwide  license to practice  the
methods  and to  make,  use,  and  sell,  the  products  and/or  covered  by the
proprietary  rights  limited to the field of use of  separating  and  recovering
motor  oil from  high  density  polyethylene  plastic.  Under  the  terms of the
agreement the Company agreed to pay a $50,000 non-refundable initial license fee
and an additional  minimum annual royalty  commencing upon delivery of the first
equipment  to an Itec  customer,  of the  greater  of $50,000 or 5% of the gross
sales of all products  sold and services sold in the United States and 3% of the
products or services sold in countries other than the United States. The initial
license fee of $50,000 is not  creditable  toward the minimum annual royalty and
was payable in three equal installments. The first was due upon the execution of
the contract,  the second on December 1, 2001 and the third on April 1, 2001. At
March 31, 2002, $33,333 was accrued as a liability.

On April 25, 2001, Honeywell revised the payment schedule to reflect the updated
delivery  schedule so that the previous  December 1, 2001 payment is now due May
30, 2001 and the final  payment due March 31, 2003.  As of March 31,  2002,  the
$16,667  paid and the  additional  $33,333  accrued have been  accounted  for as
prepaid  expenses based upon the revised  agreement  whereby these amounts apply
only  upon  shipment  of the  first  equipment  systems.  The  amounts  are  not
refundable   and  will  be  expensed  upon  shipment.   This   agreement   shall
automatically renew for additional one-year periods after the end of the initial
five-year  term unless  written notice is given by either party of its intent to
terminate the agreement.  Honeywell may terminate this agreement in the event of
bankruptcy  or  insolvency  of the  Company,  an  assignment  for the benefit of
creditors of the Company,  the nationalization of the industry which encompasses
any  products or services,  any  suspension  of payments  under the terms of the
agreement  by  government   regulation,   the  Company's   failure  to  commence
manufacture of the agreement,  a substantial  change in ownership of the Company
(whether  resulting  from  merger,  acquisition,  consolidation  or  otherwise),
another company or person acquiring control of the Company,  or the existence of
a state of war between the United States and any country where the Company has a
license to manufacture products of services. In addition, if either party to the
agreement  defaults for any reason in any of the obligations  under the terms of
the agreement, the other party will have the right to terminate the agreement by
giving at least 60 days written notice.

                                      F-13
<PAGE>

Note 6 - Technology License (continued)

There are no rights to  sub-license  granted under the terms of this  agreement.
The Company has agreed to invest in the commercial development of the technology
and market for the product by committing resources at minimum in accordance with
various requirements as set forth in the commercialization  plan provided by the
Company for consideration to Honeywell when the Company applied for the license.
The terms of the agreement  require the Company to observe all applicable United
States and foreign  laws,  regulations,  rules,  and decrees with respect to the
transfer  of the  proprietary  rights  and  related  technical  data to  foreign
countries  and failure to conform to such laws,  regulations,  rules and decrees
may result in criminal liability.

The $50,000 license fee is recorded as a prepaid expense and will be recorded as
an intangible asset when production  begins.  The intangible asset cost is being
amortized  over  the  five-year  initial  term  of the  license  agreement  on a
straight-line  basis.  Management's  policy with respect to  long-lived  assets,
including  intangible assets, is to periodically review the carrying amounts, at
least  annually,  to determine if there is any impairment in the carrying value.
As of December 31, 2002,  management believes that there is no impairment in the
carrying value of any of its long-lived assets.


Note 7 -  Exclusive Supply Contract

On August 30,  2000 the  Company  entered  into an  exclusive  five-year  supply
contract   with  Fedegari  Autoklavi  A.G.  (Fedegari),  an  Italian   equipment
manufacturer.  Under the terms of the agreement, the Company and Fedegari agreed
that Fedegari would be the exclusive supplier of the equipment used to implement
the  technology  licensed  from  Honeywell  and  that the  Company  would be the
exclusive  buyer of this equipment  supplied by Fedegari.  The Company agreed to
pay Fedegari a $50,000  design fee, of which $25,000 was paid as of December 31,
2000 with the remaining  $25,000  payable upon  completion of the prototype.  In
addition,  the  Company  has agreed to pay  Fedegari  $150,000  for the  initial
prototype  model of the  equipment.  As of March 31, 2002, the prototype had not
been completed but the company has advanced $60,000 of the $150,000.  Therefore,
no liability has been provided for in the accompanying  financial statements.  A
material commitment exists with respect to this matter.

Future prices of the equipment, according to the terms of the contract, shall be
agreed upon by the parties  each year during the delivery  schedule  preparation
process,  with all future increases or decreases mutually agreed upon based upon
market factors,  such as equipment and material  costs,  competition and related
matters.   The  exclusive   provisions   are  subject  to  various   performance
requirements.  According to contract,  the five-year  term will be  subsequently
renewed for  successive  periods as  mutually  agreed by the  parties,  unless a
request of  termination  is sent by one party to the other not less than  twelve
months  prior to the current  expiration  date.  If the Company  terminates  the
contract  without  twelve  months  prior  notice and it decides  not to continue
marketing the technology  system, the Company agreed to allow Fedegari the right
to take over the rights to manufacture and sell the system independently.

                                      F-14
<PAGE>

Note 7 -  Exclusive Supply Contract (continued)

Since the  Honeywell  license  is  non-transferable  this  provision  may not be
binding and may be a misrepresentation in the contract. Contingencies exist with
respect to this matter,  the ultimate  resolution  of which cannot  presently be
determined.

According to the terms of the  contract,  the contract  shall be governed by the
laws of Switzerland, without reference to principles of conflict of laws, except
that the United  Nations  Convention  on  Contracts  for Sale of Goods shall not
apply.  Both parties have agreed that the exclusive  jurisdiction over any legal
action  arising out of or in connection  with the contract shall only be brought
in the International Court in Geneva, Switzerland.


Note 8 -  Receivable Related Party

On July 5, 2001 the Company's  Board of Directors  approved and  authorized  the
Company  to  make a loan of  $250,000  to the  Company's  President.  The  loan,
according to the minutes of the Board  meeting,  is interest  only for ten years
with the total  principal due at the end of ten years.  Interest has been waived
in the years ended  December 31, 2000,  2001 and 2002 by the board of directors.
As of December 31, 2002, $236,973 was advanced on the loan. On April 5, 2001 the
company  advanced  Intermode (an Italian  company)  $36,951 in  connection  with
product development.


Note 9 - Agreement

The Company has  entered  into an  agreement  with Cesmet  Laboratories  SRL, an
Italian  company for a cooperative  effort in development of the General Plastic
Development Program (GPDP) and the oversight of Itec's Italian  operations.  The
fees for this agreement are on a time and expense basis billed monthly.


Note 10 - SUBSIDIARY

On April 11, 2001, Itec formed a wholly owned  subsidiary and incorporated it as
a Delaware corporation known as EC02 Environmental Systems. The only activity to
date was the registration of a trademark for EC02.


NOTE 11 - Subsequent Events

In early 2003 the Company filed a lawsuit  against  Fedegari  Autoklavi A.G. for
fraud, breach of contract and unfair business  practices.  This legal proceeding
was filed in California Superior Court for Stanislaus County.

In January 2003 Itec leased a 6,900 square ft. industrial building to set up the
ECO2  cleaning  system.   This  location  will  serve  as  both  a  testing  and
demonstration site. Itec moved its corporate office to this location in February
2003.

                                           F-15