# SECURITIES
AND EXCHANGE COMMISSIONWashington,
D.C. 20549

# FORM
10-KSB

# ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002

# Commission File
Number 0-6580

republic logo

(Name of small business
issuer as specified in its charter)

|Nevada                                                         | 87-0285520                           
|-------------------------------------------------------------- | -------------------------------------
|(State or other jurisdiction of
incorporation or organization) | (I.R.S. Employer
 Identification No.)

743
Horizon Court, Suite 333Grand Junction, Colorado 81506
(Address of principal executive offices)(970) 245-5917
(Issuers telephone number, including area code)

# Securities
registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock (Par Value $.10 Per Share)

Check
whether the issuer (1) has filed all reports required to be filed by Section 13
or 15(d) of the Exchange Act during the past 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 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. [   ]

The
issuers revenues for its most recent fiscal year were $18,294.

As
of March 14, 2003 the issuer had 19,334,240 shares of its $0.10 par value Common
Stock issued and outstanding. Based upon the closing sale price of $.12 per
share on March 14, 2003, the aggregate market value of the common stock, the
Registrants only class of voting stock, held by non-affiliates was
$671,000.

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

---

# TABLE
OF CONTENTS

|                                                                         | 
|------------------------------------------------------------------------ | 
|PART I                                                                   | 
|                                                                         | 
|ITEM 1.  BUSINESS                                                        | 
|History and Overview                                                     | 
|Operations                                                               | 
|Competition                                                              | 
|Markets                                                                  | 
|Regulations                                                              | 
|Operational Hazards and Insurance                                        | 
|Business Risks                                                           | 
|Administration                                                           | 
|ITEM 2.  PROPERTIES                                                      | 
|ITEM 3.  LEGAL PROCEEDINGS                                               | 
|ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS             | 
|PART II                                                                  | 
|                                                                         | 
|ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED               | 
|STOCKHOLDER MATTERS                                                      | 
|Stockholders                                                             | 
|Dividends                                                                | 
|Recent Sales of Unregistered Securities                                  | 
|ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS                            | 
|Liquidity and Capital Resources                                          | 
|Acquisition of EnviroWall, Inc.                                          | 
|Summary of Transactions Completed Prior to the EnviroWall Acquisition    | 
|Going Concern and Need for Additional Capital                            | 
|Sale of Oil and Gas Assets                                               | 
|Results of Operations                                                    | 
|Overview                                                                 | 
|Revenue                                                                  | 
|Stock-Based Compensation                                                 | 
|General and Administrative                                               | 
|Controls and Procedures                                                  | 
|Other Matters                                                            | 
|ITEM 7.  FINANCIAL STATEMENTS                                            | 
|ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON                | 
|ACCOUNTING AND FINANCIAL DISCLOSURE                                      | 
|PART III                                                                 | 
|                                                                         | 
|ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL            | 
|PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT               | 
|ITEM 10.  EXECUTIVE COMPENSATION                                         | 
|ITEM 11.  SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS | 
|ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                 | 
|PART IV                                                                  | 
|                                                                         | 
|ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K                               | 
|ITEM 14.  CONTROLS AND PROCEDURES                                        | 

ii

---

# PART
I

ITEM 1
 BUSINESS

HISTORY
AND OVERVIEW

Republic
Resources, Inc. (the Company) was incorporated in the state of
Nevada on September 11, 1968 to engage in the oil and gas acquisition,
development and production business. In 2002, the Company exited the oil and gas
business by selling all of its oil and gas assets to third parties. On June 24,
2002, the Company completed the acquisition of EnviroWall, Inc., a Louisiana
corporation (EnviroWall), that holds the license to several patents
and application technologies to capture, contain, and remediate contaminated
groundwater. These patents and application technologies are collectively known
as the EnviroWall System and have broad applications ranging from
simple containment and control of contaminated groundwater to more complex
designs for groundwater manipulation and treatment.

OPERATIONS

In
that all of the Companys oil and gas assets have been sold, the
Companys future efforts will focus on commercializing the EnviroWall
System. For financial reporting purposes, the Company is considered to be a
development stage enterprise because no revenue has yet been
generated from installation of the EnviroWall System.

COMPETITION

We
expect to face significant competition in our efforts to develop a market for
the EnviroWall System. Most competitors are much larger businesses with national
or international exposure and with greater financial and human resources. No
assurance can be made as to whether the Company will be able to compete
successfully in this business.

MARKETS

The
Companys marketing efforts of the EnviroWall System will target state and
federal agencies as well as certain business enterprises that are required to
contain and/or remediate contaminated groundwater.

REGULATIONS

The
expected operations of EnviroWall will be subject to significant regulation by
federal, state and local authorities. Compliance with these regulations or
requirements that may be imposed by particular contractors will affect the
Companys cost of operation, therefore, its profitability.

OPERATIONAL
HAZARDS AND INSURANCE

Our
operations will be subject to certain hazards specific to environmental
remediation. These hazards can cause personal injury as well as damage to
property. While we maintain insurance to cover our expected operations, our
insurance does not cover all potential risks associated with implementing the
EnviroWall System. The occurrence of a significant uninsured event could have a
material adverse effect on our financial condition and results of operations.
Moreover, no assurance can be given that we will be able to obtain and maintain
adequate insurance in the future.

BUSINESS
RISKS

The
Company is subject to the following risk factors:

Republic
presently has no revenue from ongoing operations.

Republic
sold all of its producing oil and gas properties effective January 1, 2002.
Accordingly, future cash flow will be limited to revenue, if any, generated by
EnviroWall. While we believe that the business opportunity presented by
EnviroWall is significant, we can give no assurance regarding the speed with
which EnviroWall can grow its business and generate revenue and positive cash
flow. Similarly, we cannot presently give any assurance as to the future
profitability of EnviroWall.

1

---

The
short operating history of EnviroWall makes the business difficult to evaluate.

Although
EnviroWall was organized several years ago and has completed a limited number of
tests which have confirmed the efficacy of the EnviroWall System, the Company is
a start-up business. As the Company is considered to be a development stage
enterprise, it is subject to many of the risks common to such businesses,
including limitations with respect to personnel, financial and other resources,
and the need to develop operating policies and procedures. We may incur
operating losses until such time as a consistent flow of business revenue is
generated. There can be no assurance that we will achieve positive cash flow and
sustain profitability from our operating activities. In addition, we may be
required to raise capital in the future in which event the present stockholders
of the Company will be diluted.

Long-term
success depends upon our exclusive right to utilize the EnviroWall System.

Louis
B. Breaux is the inventor of the EnviroWall System, which is described in three
existing patents issued at various times in the mid-1990s. EnviroWall
holds an undivided 1% interest in the patents and four other persons hold an
aggregate 10% interest. Mr. Breaux has licensed to EnviroWall, on an exclusive
basis, all rights to commercialize the inventions described in the patents.
EnviroWall will be obligated to pay a royalty on future revenue generated to Mr.
Breaux and the other persons, and to continue to employ Mr. Breaux to December
31, 2005. The obligation to pay royalties will extend until the expiration of
all the patents. We do not have a license directly from the holders of the 10%
undivided interest in the patents; instead we rely upon an exclusive sublicense
of those rights from Mr. Breaux. Should either the license or sublicense be
terminated, EnviroWall would no longer have the exclusive rights to the patents.

Our
corporate charter includes anti-takeover provisions.

The
Articles of Incorporation of Republic presently authorize 505,497 shares of
preferred stock, of which none are issued or outstanding. Our Board of Directors
may issue shares of preferred stock without shareholder approval and set the
rights, preferences and other designations, including voting rights, of those
shares. In addition, our Articles of Incorporation provide for a classified
Board of Directors. Directors of Republic will serve staggered three-year terms
and may only be removed for cause. These provisions may discourage transactions
that otherwise could involve payment of a premium over prevailing market prices
to holders of our common stock. We presently have no plans, arrangements,
commitments or understandings relating to potential future issuances of
preferred stock or common stock.

Our
corporate charter limits director liability.

Our
Articles of Incorporation provide, with certain exceptions, that our directors
shall not be personally liable to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director. These provisions
may discourage stockholders from bringing suit against a director for breach of
fiduciary duty and may reduce the likelihood of derivative litigation brought by
stockholders on behalf of Republic against directors. In addition, the Articles
of Incorporation and our Bylaws provide for mandatory indemnification of
directors and officers to the fullest extent permitted by Nevada law.

It
is unlikely we will pay dividends on common stock.

Republic
has never declared or paid cash dividends on common stock and we do not
anticipate that we will pay dividends until such time as the directors believe a
sufficient level of profitability has been achieved.

The
market price for our common stock is likely to be volatile and the market for
our common stock may not be liquid.

If our
operating results should be below the expectations of investors or analysts in
one or more future periods, it is likely that the price of our common stock
would be materially adversely affected. In addition, the stock market has
experienced significant price and volume fluctuations that have affected market
prices of equity securities of many emerging companies. Trading in our common
stock has historically been sporadic with low volume. The actual sale, or even
the perception of a potential sale, of a material number of our shares of common
stock in the public market could have a material adverse affect on the trading
price.

2

---

ADMINISTRATION

Office
Facilities We rent approximately 1,270 square feet in an office
facility in Gretna, Louisiana at a rate $1,588 per month. The office lease in
Gretna has a term through April 30, 2005.

Employees
 As of December 31, 2002, we had two full-time employees. None are
covered by a collective bargaining agreement. We consider that our relations
with employees are satisfactory.

ITEM
2  PROPERTIES

At
December 31, 2002, the Company held leases covering 1,020 acres of undeveloped
exploration acreage in the Blanding Basin of San Juan County, Utah. We are
currently attempting to sell this property. No oil and gas reserves have been
established within this acreage and the costs of this acreage are presented on
the balance sheet for financial reporting purposes under the caption
undeveloped acreage.

ITEM
3  LEGAL PROCEEDINGS

We may
from time to time be involved in various claims, lawsuits, or disputes with
third parties. At December 31, 2002, and as of the date of this report, we were
not involved in any litigation which we believe could have a materially adverse
effect on our financial condition or results of operations.

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

We did
not submit any matters to a vote of our Security holders during the fourth
quarter ended December 31, 2002.

# Part
II

ITEM 5
 MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

Our
common stock is traded on the OTC Bulletin Board market under the symbol
RPRS. The following table sets forth the high and low reported
closing prices per share of the Companys common stock for the quarterly
periods indicated, which correspond to the fiscal quarters for financial
reporting purposes.

|               | Common Stock |  
|-------------- | ------------ | -
|
|2001:          |              |  
|First quarter  |              | 2
|Second quarter |              | 2
|Third quarter  |              | 1
|Fourth quarter |              | 0
|2002:          |             
|First quarter  |              | 0
|Second quarter |              | 0
|Third quarter  |              | 0
|Fourth quarter |              | 0

Stockholders
 As of December 31, 2002, we had approximately 1,128 record holders of
our common stock (no preferred stock was issued or outstanding).

Dividends
 We have not paid cash dividends on our common stock in the past and
do not anticipate that we will pay dividends until such time as the directors
believe a sufficient level of profitability has been achieved.

Under
our Articles of Incorporation, as amended (Articles), the Board of
Directors has the power, without further action by the holders of the common
stock, to designate the relative rights and preferences of the Companys
Preferred Stock, when and if issued. Such rights and preferences could include
preferences as to liquidation, redemption and conversion rights, voting rights,
dividends or other preferences, any of which may be dilutive of the interest of
the holders of the common stock. The Board previously designated Series A
Cumulative Convertible Preferred Stock, Series B 5% PIK Cumulative Preferred
Stock and Series C 5% Redeemable Preferred Stock, none of which is outstanding
and all of which have been retired.

3

---

Recent
Sales of Unregistered Securities  The Company did not issue or sell
any securities without registration under the Securities Act of 1933, as amended
(Securities Act), during the quarter ended December 31, 2002, or
through the date of this report.

ITEM
6  MANAGEMENTS DISCUSSION AND ANALYSIS

LIQUIDITY
AND CAPITAL RESOURCES

Acquisition
of EnviroWall, Inc.

On
June 24, 2002, the Company completed the acquisition of EnviroWall, Inc., a
Louisiana corporation (EnviroWall), that holds the license to
several patents and application technologies to capture, contain, and remediate
contaminated groundwater. These patents and application technologies are
collectively known as the EnviroWall System and have broad
applications ranging from simple containment and control of contaminated
groundwater to more complex designs for groundwater manipulation and treatment.

As
consideration for the acquisition of EnviroWall, the Company issued to the sole
stockholder of EnviroWall and persons designated by him, a total of 7,848,000
shares of the Companys common stock. In addition, the Company issued
1,700,000 shares of its common stock in exchange for the cancellation of an
outstanding convertible note issued by EnviroWall and held by David A. Melman, a
director of the Company. Upon completing the transaction, the Company also
issued a total of 255,000 shares of its common stock in exchange for
cancellation of outstanding common stock purchase warrants and options held by
four directors.

The
Company is attempting, and has been since completing the acquisition, to
establish a market for the EnviroWall System, specifically targeting state and
federal agencies as well as certain business enterprises that are required to
contain and/or dispose of contaminated groundwater. However, as of the date of
this report, the Company has been unable to obtain any contracts to install the
EnviroWall System and we can give no assurance any such work will ever be
secured.

Summary
Of Transactions Completed Prior To The EnviroWall Acquisition

Sale
of Substantially All of Our Assets

| | On
April 4, 2002, we completed the sale of substantially all our assets to Harken  Energy
Corporation (Harken) in exchange for: a) 2,645,500 shares of  Harken common
stock; and b) a potential Contingent Payment based on an  evaluation at a later date of
unproved leases conveyed in the sale. The assets  sold to Harken consisted of all our
proved and revenue generating oil and gas  assets along with all of our exploratory
prospects located in Jackson County,  Texas. The unproved assets were not given any
initial value in the transaction  with Harken but are to be evaluated as of December 31,
2003 using a  lookback formula as defined in the Contingent Payment
Agreement. If  warranted, an additional payment of either cash and/or Harken common stock
will  be made in 2004. However, Republic will not be the beneficiary of any future
payment associated with this Contingent Payment in that it was assigned to the  former
holders of our Series C Preferred Stock as consideration for an exchange  of preferred
stock for common stock as discussed below.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Exchange
of Preferred Stock

| | In
connection with the asset sale to Harken, the holders of our Preferred Stock  exchanged
all the outstanding Series C for 3.4 million shares of newly issued  Republic common
stock plus the assignment of the Contingent Payment Agreement.  The Series C Preferred
Stock was exchanged and retired effective February 11,  2002.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Exchange
of Harken Common Stock for Outstanding Debt

| | Effective
April 4, 2002, in connection with the asset sale to Harken, holders representing  over
98% of our outstanding convertible debentures agreed to surrender their  debentures in
exchange for a pro-rata distribution of: a) substantially all the  Harken common stock
received in the asset sale (the Company retained 24,500  shares of the Harken common
stock); and b) 991,425 shares of newly issued  Republic common stock. Convertible
debentures totaling $24,500 remain  outstanding as of the date of this report.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4

---

Going
Concern and Need for Additional Capital

As a
result of the asset sale to Harken, and the preferred stock and debenture
exchanges described above, we have eliminated essentially all of our long-term
debt and continuing dividend obligations. However, attempts to market the
EnviroWall System have not as yet been successful and the Company cannot
determine if significant contracts will be obtained.

The
Company has a negative working capital position and very little liquidity. If we
are unable to raise additional capital, secure a significant contract to either
install the EnviroWall System or provide other earthwork services, or obtain
other financing to sustain future activities, it is unlikely we will be able to
continue as a going concern. Should this be the case, we will attempt to sell
the Company (or its assets) and liquidate.

Sale
of Oil and Gas Assets

The
Company owned interests in three separate oil and gas prospect areas in Utah.
Due to the lack of working capital necessary to fully exploit these assets, the
Company has sold two of these interests. The first prospect, known as the Cactus
Rose Prospect, was sold in August 2002 for $10,600 and the other prospect, known
as the Thompson Canyon prospect, was sold in October 2002 for $68,000. There is
no impact on the companys statement of operations from these transactions
in that the total proceeds received form the sales were credited to the full
cost pool and were approximately equal to the carrying costs of those assets.
The Company is attempting to sell the acreage in the one remaining prospect area
which, for financial statement reporting purposes, has a net carrying value of
approximately $50,000 as of the date of this report.

RESULTS
OF OPERATIONS

Overview

We had
a loss during the year ended December 31, 2002, of $611,632, determined using
purchase accounting as a result of the acquisition of EnviroWall at the end of
the second quarter. In our Form 10-QSB for the quarter ended March 31, 2002, we
showed a net loss of $306,459. The sale of all or our producing oil and gas
properties was completed April 4, 2002 and our first quarter report included oil
and gas operations. However, as a result of the accounting adjustments made in
connection with our acquisition of EnviroWall, our results of operations as
reflected in this report have been changed to reflect reverse merger accounting.

Revenue

We
billed $18,294 during the year ended December 31, 2002, in connection with
performing a Phase II environmental evaluation. The costs associated
with this evaluation totaled $9,956 thereby generating a gross profit for the
period of $8,338.

Stock-Based
Compensation

Upon
closing the EnviroWall acquisition, we issued 1.7 million common shares to a
director of Republic in exchange for a promissary note with a face value of
$250,000 owed by EnviroWall. The exchange also included the accrued interest of
$13,836. A non-cash stock-based compensation charge of $76,174 is included in
the statements of operations in 2002 representing the difference between the
fair value of the common stock issued and the balance of the promissary note and
accrued interest.

Also
at the time of closing the EnviroWall acquisition, we issued 255,000 shares of
common stock to four of our directors in exchange for the cancellation of their
outstanding options and/or warrants to acquire 630,000 Republic shares. This
resulted in a non-cash stock-based compensation charge of $51,000 representing
the fair value of the common stock issued in the transaction.

In
August 2002, the Companys two new directors, Clyde W. Frank, PhD, and
Thomas H. Normile, were each granted 100,000 shares of common stock in
consideration for serving as a director. A non-cash stock-based compensation
charge of $30,000 was recorded during the third quarter of 2002 representing the
fair value of the common stock issued in the transaction.

5

---

General
and Administrative Expenses

The
Companys general and administrative expenses for the year ended December
31, 2002, were $401,129 compared to $33,165 for the same period in 2001. In
October 2002, the Companys Board of Directors initiated steps to reduce
the Companys rate of cash expenditure, including reducing the amount of
the officers compensation, reducing compensation to consultants, deferring
directors monthly cash fees and eliminating other administrative expenses.

CONTROLS
AND PROCEDURES

The
Companys chief executive officer (who is also the principal accounting
officer) evaluated the Companys disclosure controls and procedures on
March 14, 2003. Based on this evaluation, the chief executive officer concluded
that the disclosure controls and procedures are effective in connection with the
Companys filing of its annual report on Form 10-KSB for the year ended
December 31, 2002. Subsequent to March 14, 2003, through the date of this filing
of Form 10-KSB, there have been no significant changes in the Companys
internal controls or in other factors that could significantly affect these
controls, including any significant deficiencies or material weaknesses of
internal controls that would require corrective action.

OTHER
MATTERS

Disclosure
Regarding Forward-Looking Statements

This
report on Form 10-KSB includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
Securities Act), and Section 21E of the Securities Exchange Act of
1934, as amended (the Exchange Act). All statements other than
statements of historical facts included in this report, including, without
limitation, statements under Managements Discussion and Analysis of
Financial Condition and Results of Operations regarding our financial
position, reserve quantities, plans and objectives of the Companys
management for future operations and capital expenditures are forward-looking
statements and the assumptions upon which such forward-looking statements are
based are believed to be reasonable. We can give no assurance that such
expectations and assumptions will prove to be correct. Additionally, any
statements contained in this report regarding forward-looking statements are
subject to various known and unknown risks, uncertainties and contingencies,
many of which are beyond our control. Such risks and uncertainties may cause
actual results, performance, achievements or expectations to differ materially
from the anticipated results, performance, achievements or expectations. All
written and oral forward-looking statements attributable to our Company or
persons acting on our behalf subsequent to the date of this report are expressly
qualified in their entirety by this disclosure.

ITEM
7  FINANCIAL STATEMENTS

# INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS

| | Page
| | ----

|                                                                                             | 
|-------------------------------------------------------------------------------------------- | 
|Independent Auditors Report                                                                 | 
|Consolidated Balance Sheet - December 31, 2002                                               | 
|Consolidated Statements of Operations - For the Years Ended December 31,                     | 
|2002 and 2001, and for the period January 1, 2001 through December 31, 2002                  | 
|Consolidated Statements of Stockholders Equity (Deficit) - For the Years Ended December 31, | 
|2002 and 2001                                                                                | 
|Consolidated Statements of Cash Flows - For the Years Ended December 31,                     | 
|2002 and 2001, and for the period January 1, 2001 through December 31, 2002                  | 
|Notes to Consolidated Financial Statements                                                   | 

6

---

# INDEPENDENT
AUDITORS REPORT

Board
of DirectorsRepublic Resources, Inc.Grand Junction, Colorado

We
have audited the accompanying consolidated balance sheet of Republic Resources,
Inc. and subsidiaries (a development stage company) as of December 31, 2002, and
the related consolidated statements of operations, stockholders equity
(deficit) and cash flows for the years ended December 31, 2002 and 2001, and for
the period January 1, 2001 through December 31, 2002. These financial statements
are the responsibility of the Companys management. Our responsibility is
to express an opinion on these financial statements based on our audits.

We
conducted our audits in accordance with auditing standards generally accepted in
the United States of America. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Republic Resources, Inc. and
subsidiaries (a development stage company) as of December 31, 2002, and the
results of their operations and their cash flows for the years ended December
31, 2002 and 2001, and for the period January 1, 2001 through December 31, 2002,
in conformity with accounting principles generally accepted in the United States
of America.

The
accompanying financial statements have been prepared assuming the Company will
continue as a going concern, which contemplates the realization of assets and
the liquidation of liabilities in the normal course of business. As discussed in
Note 1 to the financial statements, the Company is a development statge company
and has not generated any revenue from its planned operations. In addition, the
Company has a working capital deficit and very little liquidity at December 31,
2002. These facts raise substantial doubt about the Companys ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from this uncertainty.

/s/ HEIN
+ ASSOCIATES LLP

Phoenix,
ArizonaFebruary 4, 2003

7

---

# Republic
Resources, Inc.(A Development Stage Company)CONSOLIDATED
BALANCE SHEET(unaudited)

|                                                                       | December 31,2002
|---------------------------------------------------------------------- | ----------------
|                                                                       |                 
|ASSETS                                                                 |                 
|                                                                       |                 
|CURRENT ASSETS:                                                        |                 
|Cash and equivalents                                                   |                 
|Accounts receivable, net of allowance for doubtful accounts of $7,584  |                 
|                                                                       |                 
|Total current assets                                                   |                 
|                                                                       |                 
|UNEVALUATED OIL AND GAS PROPERTIES, at cost (full cost method)         |                 
|PROPERTY AND EQUIPMENT:                                                |                 
|EnviroWall installation equipment                                      |                 
|Office equipment                                                       |                 
|Less accumulated depreciation                                          |                 
|                                                                       |                 
|Net property and equipment                                             |                 
|                                                                       |                 
|OTHER ASSETS:                                                          |                 
|EnviroWall Patents, net of accumulated amortization of $1,137          |                 
|Deposits and other                                                     |                 
|                                                                       |                 
|Total other assets                                                     |                 
|                                                                       |                 
|TOTAL ASSETS                                                           |                 
|                                                                       |                 
|                                                                       |                 
|LIABILITIES AND STOCKHOLDERS EQUITY                                   |                 
|                                                                       |                 
|CURRENT LIABILITIES:                                                   |                 
|Convertible debentures                                                 |                 
|Accounts payable                                                       |                 
|Accrued expense                                                        |                 
|                                                                       |                 
|Total current liabilities                                              |                 
|                                                                       |                 
|LONG-TERM LIABILITIES:                                                 |                 
|Due to persons affiliated with predecessor company                     |                 
|                                                                       |                 
|COMMITMENTS AND CONTINGENCIES: (note 5)                                |                 
|STOCKHOLDERS' EQUITY:                                                  |                 
|Undesignated Preferred Stock, par value $0.01 per share,               |                 
|505,497 shares authorized                                              |                 
|Common Stock, par value $0.10 per share, 30 million shares authorized, |                 
|19,334,240 shares issued and outstanding                               |                 
|Additional paid-in capital                                             |                 
|Accumulated deficit prior to entering the development stage            |                 
|Accumulated deficit during the development stage                       |                 
|                                                                       |                 
|Total Stockholders' Equity                                             |                 
|                                                                       |                 
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                             |                 
|                                                                       |                 
|                                                                       |                 

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

8

---

# Republic
Resources, Inc.(A Development Stage Company)CONSOLIDATED
STATEMENTS OF OPERATIONS(unaudited)

|                                    | For theYear EndedDecember 31,2002 | For theYear EndedDecember 31,2001 | From Jan 1, 2001throughDec 31,2002
|----------------------------------- | --------------------------------- | --------------------------------- | ----------------------------------
|REVENUE:                            |                                   |                                   |                                   
|Site evaluation                     |                                   | $        18,294                   |                                   
|Costs of evaluation                 |                                   | (9,956                            | )                                 
|                                    |                                   |                                   |                                   
|Gross profit                        |                                   | 8,338                             |                                   
|                                    |                                   |                                   |                                   
|OTHER OPERATING COSTS               |                                  
|AND EXPENSES:                       |                                  
|General and administrative          |                                   | 401,129                           |                                   
|Stock based compensation            |                                   | 157,174                           |                                   
|Louisiana franchise taxes           |                                   | 18,398                            |                                   
|Depreciation and amortization       |                                   | 13,348                            |                                   
|Interest expense                    |                                   | 33,194                            |                                   
|                                    |                                   |                                   |                                   
|Total costs and expenses            |                                   | 623,243                           |                                   
|                                    |                                   |                                   |                                   
|LOSS FROM OPERATIONS                |                                   | (614,905                          | )                                 
|OTHER INCOME:                       |                                  
|Gain on sale of assets              |                                   | 45                                |                                   
|Interest and other income           |                                   | 3,228                             |                                   
|                                    |                                   |                                   |                                   
|Total other income                  |                                   | 3,273                             |                                   
|                                    |                                   |                                   |                                   
|NET LOSS                            |                                   | $    (611,632                     | )                                 
|                                    |                                   |                                   |                                   
|                                    |                                   |                                   |                                   
|BASIC AND DILUTED:                  |                                  
|Loss Per Share                      |                                   | $         (0.05                   | )                                 
|Weighted Average Shares Outstanding |                                   | 13,460,156                        |                                   

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

9

---

# Republic
Resources, Inc.CONSOLIDATED
STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)For
the Years Ended December 31, 2001 and 2002

|                                     | Series CRedeemablePreferred Stock      Shares            Amount | Common Stock      Shares            Amount | AdditionalPaid-InCapital | Accumulated DeficitPrior to/During Development Stage    Prior to                  During | Total   Stockholders    Equity |            |  |            
|------------------------------------ | --------------------------------------------------------------- | ------------------------------------------ | ------------------------ | ---------------------------------------------------------------------------------------- | ------------------------------- | ---------- |  | -----------
|BALANCES, December 31, 2000          |                                                                 | 99,503                                     |                          | $ 4,975,150                                                                              |                                 | 1,924,398  |  | $   192,440
|Preferred Stock Dividends            |                                                                 | --                                         |                          | --                                                                                       |                                 | --         |  | --         
|Exercise of stock options and        |                                                                
|warrants                             |                                                                 | --                                         |                          | --                                                                                       |                                 | 1,015,417  |  | 101,541    
|Net Loss                             |                                                                 | --                                         |                          | --                                                                                       |                                 | --         |  | --         
|                                     |                                                                 |                                            |                          |                                                                                          |                                 |            |  |            
|BALANCES, December 31, 2001          |                                                                 | 99,503                                     |                          | 4,975,150                                                                                |                                 | 2,939,815  |  | 293,981    
|Exchange of Preferred Stock and      |                                                                
|accrued dividends for Common         |                                                                
|Stock                                |                                                                 | (99,503                                    | )                        | (4,975,150                                                                               | )                               | 3,400,000  |  | 340,000    
|Issuance of Common Stock in          |                                                                
|connection with asset sale and       |                                                                
|convertible debt exchange            |                                                                 | --                                         |                          | --                                                                                       |                                 | 991,425    |  | 99,143     
|Issuance of Common Stock in          |                                                                
|connection with EnviroWall           |                                                                
|acquisition                          |                                                                 | --                                         |                          | --                                                                                       |                                 | 7,848,000  |  | 784,800    
|Issuance of Common Stock to a        |                                                                
|Director in connection with the      |                                                                
|EnviroWall acquisition               |                                                                 | --                                         |                          | --                                                                                       |                                 | 1,700,000  |  | 170,000    
|Issuance of Common Stock to          |                                                                
|Officers & Directors in exchange     |                                                                
|for canceling options/ warrants      |                                                                 | --                                         |                          | --                                                                                       |                                 | 255,000    |  | 25,500     
|Issuance of Common Stock in          |                                                                
|Private Placement @ $.25/share       |                                                                 | --                                         |                          | --                                                                                       |                                 | 2,000,000  |  | 200,000    
|Offering costs for Private Placement |                                                                 | --                                         |                          | --                                                                                       |                                 | --         |  | --         
|Effect of accounting for EnviroWall  |                                                                
|acquisition as a reverse merger    |                                                                 | --                                         |                          | --                                                                                       |                                 | --         |  | --         
|Issuance of Common Stock to new      |                                                                
|EnviroWall Directors                 |                                                                 | --                                         |                          | --                                                                                       |                                 | 200,000    |  | 20,000     
|Net Loss                             |                                                                 | --                                         |                          | --                                                                                       |                                 | --         |  | --         
|                                     |                                                                 |                                            |                          |                                                                                          |                                 |            |  |            
|BALANCES, December 31, 2002          |                                                                 | --                                         |                          | $                --                                                                      |                                 | 19,334,240 |  | $1,933,424 
|                                     |                                                                 |                                            |                          |                                                                                          |                                 |            |  |            
|                                     |                                                                 |                                            |                          |                                                                                          |                                 |            |  |            

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

10

---

# Republic
Resources, Inc.(A Development Stage Company)CONSOLIDATED
STATEMENTS OF CASH FLOWS(unaudited)

|                                                      | For Year EndedDecember 31,2002 | For Year EndedDecember 31,2001 | From Jan 1, 2001throughDec 31,2002
|----------------------------------------------------- | ------------------------------ | ------------------------------ | ----------------------------------
|CASH FLOWS FROM OPERATING ACTIVITIES:                 |                                |                                |                                   
|Net loss                                              |                                | $(611,632                      | )                                 
|Adjustments to reconcile net loss to net cash         |                               
|used in operating activities:                         |                               
|Stock based compensation                              |                                | 157,174                        |                                   
|Gain on sale of assets                                |                                | (45                            | )                                 
|Depreciation and amortization                         |                                | 13,348                         |                                   
|Changes in operating assets and liabilities:          |                               
|(Increase) decrease in:                               |                               
|Accounts receivable                                   |                                | 35,714                         |                                   
|Prepaid expenses and other                            |                                | 15,085                         |                                   
|Increase (decrease) in:                               |                               
|Accounts payable                                      |                                | 61,881                         |                                   
|Accrued expenses                                      |                                | (114,864                       | )                                 
|                                                      |                                |                                |                                   
|Net cash used in operating activities                 |                                | (443,339                       | )                                 
|                                                      |                                |                                |                                   
|CASH FLOWS FROM INVESTING ACTIVITIES:                 |                               
|Proceeds from sale of assets                          |                                | 80,900                         |                                   
|Purchase of office equipment                          |                                | (24,400                        | )                                 
|Purchase of patent interest and equipment             |                                | --                             |                                   
|                                                      |                                |                                |                                   
|Net cash provided by (used in) investing activities   |                                | 56,500                         |                                   
|                                                      |                                |                                |                                   
|CASH FLOWS FROM FINANCING ACTIVITIES:                 |                               
|Proceeds from note payable                            |                                | --                             |                                   
|Proceeds from the sale of common stock                |                                | 500,000                        |                                   
|Offering costs                                        |                                | (14,193                        | )                                 
|Payments on account to an affiliated entity           |                                | (15,000                        | )                                 
|Payment of note payable                               |                                | (25,000                        | )                                 
|Net cash remaining prior to acquisition of EnviroWall |                                | 42,401                         |                                   
|                                                      |                                |                                |                                   
|Net cash provided by financing activities             |                                | 488,208                        |                                   
|                                                      |                                |                                |                                   
|NET INCREASE IN CASH AND EQUIVALENTS                  |                                | 101,369                        |                                   
|CASH AND EQUIVALENTS, beginning of period             |                                | 19,453                         |                                   
|                                                      |                                |                                |                                   
|CASH AND EQUIVALENTS, end of period                   |                                | $ 120,822                      |                                   
|                                                      |                                |                                |                                   
|                                                      |                                |                                |                                   
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW                  |                               
|INFORMATION:                                          |                               
|Cash paid for interest                                |                                | $     1,608                    |                                   
|                                                      |                                |                                |                                   
|                                                      |                                |                                |                                   
|Cash paid for income taxes                            |                                | $          --                  |                                   
|                                                      |                                |                                |                                   
|                                                      |                                |                                |                                   
|SUPPLEMENTAL DISCLOSURE OF NON-CASH                   |                               
|FINANCING ACTIVITIES:                                 |                               
|Conversion of note payable and accrued interest       |                               
|into common stock                                     |                                | $ 263,836                      |                                   
|                                                      |                                |                                |                                   
|                                                      |                                |                                |                                   

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

11

---

# Republic
Resources, Inc.NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

| | Nature
of Operations  Effective January 1, 2002, the Company sold
substantially all of it oil and gas assets which included all of its revenue
generating assets. On June 24, 2002, the Company completed the acquisition of
EnviroWall, Inc., a Louisiana corporation (EnviroWall), that holds
the license to several patents and application technologies to capture, contain,
and remediate contaminated groundwater. These patents and application
technologies are collectively known as the EnviroWall System and
have broad applications ranging from simple containment and control of
contaminated groundwater to more complex designs for groundwater manipulation
and treatment.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As
consideration for the acquisition of EnviroWall, the Company issued to the sole
stockholder of EnviroWall and persons designated by him, a total of 7,848,000
shares of the Companys common stock. In addition, the Company issued
1,700,000 shares of its common stock in exchange for the cancellation of an
outstanding convertible note of EnviroWall held by David A. Melman, a director
of the Company. Upon completing the transaction, the Company also issued a total
of 255,000 shares of its common stock in exchange for cancellation of
outstanding common stock purchase warrants and options held by four directors.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | EnviroWall
was incorporated in February 1994, to act as a holding company for Barrier
Member Containment Corporation (BMC). BMC was originally formed in
1990 to conduct the research and development for what is now referred to as the
EnviroWall System. To provide working capital for operations, EnviroWall
initially had borrowed $590,000 in June 1994 from Morgan Franklin Fund, Ltd.
(MFF), a venture capital group. Cash flow from operations did not
support servicing the entire debt and the Company defaulted on the note early in
1996 when it had an outstanding principal balance of $290,000. MFF promptly
foreclosed on the collateral, which consisted of substantially all of the assets
of both BMC and EnviroWall, including a 1% interest in the all the patents
protecting the EnviroWall System.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Once
the EnviroWall System was sufficiently developed, EnviroWall was formed and BMC
became the operating entity to conduct installations of the EnviroWall System.
At that time EnviroWall was not considered a development stage enterprise for
financial statement reporting purposes, because: a) its planned operations had
already begun; and b) revenue had been and was expected to continue to be
generated from the installation of EnviroWall System.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | EnviroWall
essentially lay dormant after MFFs foreclose until late in 2001 when it
was able to borrow $250,000 from a director of Republic and attempt to
reestablish its business. EnviroWall used $200,000 of these funds to repurchase
all the assets seized by MFF in the 1996 foreclosure. For financial statement
reporting purposes, this purchase price was allocated as follows: Equipment
 $150,000; Patents  $50,000. Such factors as the original cost of
the assets and their current estimated replacement cost were considered in
making the allocation.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | For
financial statement reporting purposes, EnviroWall has been considered a
development stage company from the time it came out of dormancy in 2001. The
acquisition is being accounted for as a reverse merger for financial
statement reporting purposes since, among other things, the shares issued in
connection with the transaction represent a majority of the outstanding common
stock. In accounting for a reverse merger, the financial statement presentation
is as if EnviroWall had acquired the Company under the purchase accounting
rules. Accordingly, the results of operations and cash flows for the periods
presented represent the activity of EnviroWall only prior to June 24, 2002, and
those of the consolidated entity thereafter. The results of operations and cash
flows of the Company prior to the acquisition were eliminated upon completing
the acquisition. Because of the common stock and preferred stock transactions,
which occurred prior to the reverse merger, the Company has presented the
Statement of Stockholders Equity following the legal form of the
transactions, instead of presenting it using reverse merger accounting.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Going
Concern  The Company is currently attempting to establish a
market for the EnviroWall System, specifically targeting state and federal
agencies as well as certain business enterprises that are required to contain
and/or dispose of contaminated groundwater. The Company intends to devote
substantially all future efforts to commercialize the EnviroWall System. While
we believe that the business opportunity presented by EnviroWall is significant,
we can give no assurance regarding the speed with which the EnviroWall business
can grow its business and generate revenue and positive cash flow. Similarly, we
cannot presently give any assurance as to the
future profitability of EnviroWall. These circumstances, which are compounded by
the working capital deficit at December 31, 2002, a lack of liquidity, and the
inability thus far to generate any contracts for installation of the EnviroWall
System create substantial doubt as to the Companys ability to continue as
a going concern.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12

---

# Republic
Resources, Inc.NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

| | Principles
of Consolidation  The accompanying financial statements
include the accounts of the Company and its wholly-owned subsidiaries. All
material inter-company transactions and accounts have been eliminated in
consolidation.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Cash
and Equivalents  The Company considers all highly liquid
investments purchased with an original maturity of three months or less to be
cash equivalents.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Undeveloped
Oil and Gas Properties  The Companys only oil and gas
property at December 31, 2002, consist of approximately 1,020 acres in
undeveloped exploration acreage in the Blanding Basin of San Juan County, Utah.
We are currently attempting to sell this property. No oil and gas reserves have
been established within this acreage and the corresponding costs are presented
on the balance sheet for financial reporting purposes under the caption
undeveloped acreage. The amount reflected on the balance sheet
consists of lease acquisition costs and does not include any internally
capitalized costs. The Company currently believes the carrying costs do not
exceed fair market value.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | EnviroWall
Installation Equipment  The EnviroWall Installation
Equipment is stated at cost and consists of specialized trench Guide
Boxes that provide structural support to stabilize the trench walls during
the installation process of the EnviroWall System. These guide boxes will be
depreciated on a straight-line basis over their estimated useful life, currently
estimated at ten years. Depreciation expense related to the installation
equipment amounted to $7,500 during the year ended December 31, 2002. No
depreciation was recognized in the 2001 financial statements in that EnviroWall
had been dormant during that period.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
costs of normal maintenance and repairs will be charged to operating expenses as
incurred. Material expenditures which increase the life of an asset will be
capitalized and depreciated over the estimated remaining useful life of the
asset. The cost of assets sold, or otherwise disposed of, and the related
accumulated depreciation or amortization will be removed from the accounts, and
any gains or losses will be reflected in current operations.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Office
Equipment -The office equipment is stated at cost. Depreciation
for these assets is calculated using the straight-line method over two years
which represents the estimated useful lives of the corresponding assets.
Depreciation expense related to the office equipment amounted to $3,592 during
the year ended December 31, 2002. No depreciation was recognized in the 2001
financial statements for the office equipment in that EnviroWall had no such
assets in that year.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
costs of normal maintenance and repairs are charged to operating expenses as
incurred. Material expenditures which increase the life of an asset are
capitalized and depreciated over the estimated remaining useful life of the
asset. The cost of assets sold, or otherwise disposed of, and the related
accumulated depreciation or amortization are removed from the accounts, and any
gains or losses are reflected in current operations.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Patents
 The Patents are stated at cost and are being amortized over the remaining
life of the patent. The following is a listing of the U.S. Patents and Patent
Applications that EnviroWall originally obtained while developing the EnviroWall
System:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Patent    | Title | Issued                                                      
|--------- | ----- | ------------------------------------------------------------
|5,106,233 |       | Hazardous Waste Containment System                          
|5,240,348 |       | Method of Hazardous Containment System                      
|5,259,705 |       | Guide Box Assembly System for In Ground Barrier Installation
|5,360,293 |       | In Ground Barrier Member Interlocking Joint and Seal System 
|5,354,149 |       | In Ground Barrier System with Pass Through                  
|5,551,807 |       | In Ground Barrier System, Dispenser Box                     

13

---

# Republic
Resources, Inc.

# NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

| | All
of the above patents had expired during the period of dormancy because the
maintenance fees had not been paid in a timely manner. However, three patents,
numbered 5,106,233, numbered 5,259,705, and numbered 5,551,807 were reinstated
after petitions to Accept Unintentionally Delayed Payment of Maintenance Fee in
an Expired Patent were filed with the Patent Office in December, 2001. The
maintenance of the other three patents is no longer considered necessary to
protect the technology and therefore the Company does not anticipate filing for
their reinstatement.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company owns a 1% undivided interest in the above patents (which was purchased
from MFF in December 2001) and has entered into: 1) an Exclusive Patent License
Agreement for the sole shareholders 89% interest in the licensed patents
identified above, and 2) an Exclusive Patent Sub-License Agreement for the sole
shareholders 10% of the licensed patents, as granted by an agreement
between the Companys sole shareholder and an owner group. The license and
sub-license agreements allow the company to manufacture, use, sell and otherwise
practice the licensed technology.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
costs of the patents are being accounted for in accordance with Financial
Accounting Standards No. 142, entitled Goodwill and Other Intangible
Assets (SFAS 142). Amortization expense for the patents
amounts to $2,256 during the year ended December 31, 2002. No amortization was
recognized in the 2001 financial statements since EnviroWall had essential been
dormant for most of that period.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Accounting
Estimates  The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that effect 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. The actual results could differ from those estimates.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Companys financial statements are based on a number of significant
estimates including the allowance for doubtful accounts, assumptions effecting
the fair value of stock options and warrants, the impairment, depreciation and
amortization of long-lived assets and other factors. Future events may
significantly alter the estimates currently being used.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Income
Taxes  Deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The effect
on previously recorded deferred tax assets and liabilities resulting from a
change in tax rates is recognized in earnings in the period in which the change
is enacted.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Revenue
Recognition  For long-term contracts for the installation
of the EnviroWall System, the Company will follow the percentage of completion
method for revenue recognition. Revenue will be recognized on short-term
contracts upon completion and acceptance of the system. Consulting revenue is
recognized as services are provided.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Net
(Loss) Per Common Share -Net (loss) per common share is presented
in accordance with the provisions of Statement of Financial Accounting Standards
(SFAS) No. 128, Earnings Per Share, which requires disclosure
of basic and diluted earnings per share (EPS). Basic EPS excludes
dilution for potential common shares and is computed by dividing the net loss
applicable to common shareholders by the weighted average number of common
shares outstanding for the period. Diluted EPS reflects the potential dilution
that could occur if securities or other contracts to issue common stock were
exercised or converted into common stock.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Stock-Based
Compensation  For employees, the Company accounts for
stock-based compensation using the intrinsic value method prescribed in
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. Accordingly, compensation
cost for stock options granted to employees is measured as the excess, if any,
of the quoted market price of the Companys common stock at the measurement
date (generally, the date of grant) over the amount an employee must pay to
acquire the stock.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14

---

# Republic
Resources, Inc.NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

| | For
non-employees, the Company accounts for stock-based compensation as
prescribed by SFAS No. 123 titled Accounting for Stock-Based Compensation.
This pronouncement requires that all options, warrants and similar instruments
which are granted to non-employees for goods and services be recorded at fair
value on the measurement date and pro forma information be provided as to the
fair value effects of transactions with employees. Fair value is generally
determined under an option pricing model using the criteria set forth in SFAS
No. 123. The measurement date is generally the earlier of: a) the date in which
the performance of the goods or services is fully committed; or b) the date in
which the performance is substantially complete.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Hedging
Activities- In June 1998, the Financial Accounting Standards
Board (FASB) issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities. SFAS No. 133 establishes accounting
and reporting standards requiring that derivative instruments (including certain
derivative instruments embedded in other contracts), as defined, be recorded in
the balance sheet as either an asset or liability measured at fair value, and
requires that changes in fair value be recognized currently in earnings unless
specific hedge accounting criteria are met. Special accounting for qualifying
hedges allows unrealized gains and losses to be deferred in other comprehensive
income for the effective portion of the hedge) until such time as the hedged
transaction occurs, and requires that a company formally document, designate,
and assess the effectiveness of derivative instruments that receive hedge
accounting treatment. The Company currently does not engage in any activities
that would be covered by SFAS 133.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | New
Accounting Pronouncements- In April 2002, the FASB approved for
issuance Statement of Financial Accounting Standards No. 145,
Rescission of FASB Statements No. 4, 44 and 64, Amendment of SFAS 13,
and Technical Corrections(SFAS 145). SFAS 145
rescinds previous accounting guidance, which required all gains and losses from
extinguishment of debt be classified as an extraordinary item. Under SFAS 145
classification of debt extinguishment depends on the facts and circumstances of
the transaction. SFAS 145 is effective for fiscal years beginning after May 15,
2002 and adoption is not expected to have a material effect on the
Companys financial position or results of its operations.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
July 2002, the FASB issued Statements of Financial Accounting Standards No. 146,
Accounting for Costs Associated with Exit or Disposal
Activities(SFAS 146). SFAS 146 requires companies to recognize costs
associated with exit or disposal activities when they are incurred rather than
at the date of a commitment to an exit or disposal plan. Examples of costs
covered by SFAS 146 include lease termination costs and certain employee
severance costs that are associated with a restructuring, discontinued
operation, plant closing, or other exit or disposal activity. SFAS 146 is to be
applied prospectively to exit or disposal activities initiated after December
31, 2002. The adoption of SFAS 146 is not expected to have a material effect on
the Companys financial position or results of its operations.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
August 2002, the FASB issued Statements of Financial Accounting Standards No.
147, Acquisitions of Certain Financial Institutions(SFAS 147). SFAS 147 requires financial institutions to follow the guidance
in SFAS 141 and SFAS 142 for business combinations and goodwill and intangible
assets, as opposed to the previously applied accounting literature. This
statement also amends SFAS 144 to include in its scope long-term customer
relationship intangible assets of financial institutions. The provisions of SFAS
147 do not apply to the Company.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
December 2002, the FASB issued Statements of Financial Accounting Standards No.
148, Accounting for Stock-Based Compensation  Transition
and Disclosure  An Amendment of FASB Statement 123(SFAS 123).
For entities that change their accounting for stock-based compensation from the
intrinsic method to the fair value method under SFAS 123, the fair value method
is to be applied prospectively to those awards granted after the beginning of
the period of adoption (the prospective method). The amendment permits two
additional transition methods for adoption of the fair value method. In addition
to the prospective method, the entity can choose to either (i) restate all
periods presented (retroactive restatement method or (ii) recognize compensation
cost from the beginning of the fiscal year of adoption as if the fair value
method had been used to account for awards (modified prospective method). For
fiscal years beginning December 15, 2003, the prospective method will no longer
be allowed. The Company currently accounts for stock-based compensation using
the intrinsic value method as proscribed by Accounting Principles Board Opinion
No. 25, Accounting for Stock Issued to Employees and plans
on continuing using this method to account for stock options, therefore, it does
not intend to adopt the transition requirements as specified in SFAS 148. The
Company has adopted the new SFAS 148 disclosure requirements in
these financial statements.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

15

---

# Republic
Resources, Inc.NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

2. DEBT
FINANCING ARRANGEMENTS:

As
of December 31, 2002, the Company has two notes payable totaling $24,500 that
are due in April 2003. The notes bear interest at 11% per annum and are
convertible into the Companys common stock at $30.00 per share.

3. DEBT DUE
TO RELATED PARTY:

The
Company has a note due to a company affiliated with its president with a
remaining balance of $135,000 at December 31, 2002. The note bears interest at
eight (8) percent and is due on December 31, 2004.

4. INCOME
TAXES:

Deferred
tax assets (there are no deferred tax liabilities) as of December 31, 2002 are
comprised of the following:

|                                                | 2002
|----------------------------------------------- | ----
|Long-term Assets:                               |     
|The effect of net operating loss carry-forwards |     
|                                                |     
|Total                                           |     
|Less valuation allowance                        |     
|                                                |     
|Net long-term asset                             |     
|                                                |     
|                                                |     

During
the year ended December 31, 2002, the Company increased the valuation allowance
by approximately $228,000, primarily due to an increase in the net operating
loss carry-forwards which are not likely to be realizable. The Company has
provided a valuation allowance for the net operating loss and credit
carry-forwards because the Company does not believe it is more likely than not
to realize them.

At
December 31, 2002, the Company had net operating loss carry-forwards for income
tax purposes of approximately $640,000, which expire primarily in 2026 and 2027.
No tax assets are reflected for historical Republic Resources net operating
losses because they are subject to limitations under IRS Sections 382 and 384.

5.
COMMITMENTS AND CONTINGENCIES:

| | Employment
Agreement  The Company has an employment agreement with
Louis B. Breaux, EnviroWalls President, that provides for, among other
things, an annual salary of $100,000 and a royalty of up to two percent based on
a sliding scale of any revenue generated from the EnviroWall System. The
contract is for a period of 42 months and ends on December 31, 2005. The royalty
will be payable to Mr. Breaux for the life of the patents currently associated
with the EnviroWall System regardless of the status of his employment with the
Company.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Profit
Sharing Plan  Until September 30, 2002, the Company had an
established 401(k) profit sharing plan (the Plan) that covered all
employees with six months of service who elected to participate in the Plan. The
Plan provided that the employees could elect to contribute up to 15% of their
salary to the Plan. All of the Companys contributions were discretionary
and amounted to $509 for the year ended December 31, 2002. The plan was
terminated on September 30, 2002.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Environmental
 The Company has been subject to extensive federal, state and local
environmental laws and regulations, and as such, potential liability exists for
oil and gas properties that were plugged and abandoned prior to the EnviroWall
acquisition which were not associated with any sale to a third party. The extent
of such liability, if any, is unknown at this time. Environmental expenditures
are expensed or capitalized depending on their future economic benefit.
Expenditures that relate to an existing condition caused by past operations and
that have no future economic benefits are expensed.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Contingencies
 The Company may from time to time be involved in various claims, lawsuits
and disputes with third parties. The Company is not currently involved in any
such incidental litigation which it believes could have a materially adverse
effect on its financial conditions or results of operations.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

16

---

# Republic
Resources, Inc.NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

6.PREFERRED STOCK:

| | As
of December 31, 2002, the Company has the authority to issue up to 505,497
shares of Preferred Stock, which may be issued in such series and with such
preferences as determined by the Board of Directors. No shares of Preferred
stock were issued or outstanding at December 31, 2002.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7.STOCK-BASED COMPENSATION:

| | Stock
Option Plans  The Companys shareholders from
time-to-time have approved various stock option plans that permit the issuance
of incentive and non-statutory options and provide for a minimum exercise price
equal to 100% of the fair market value of the Companys common stock on the
date of grant. The maximum term of options granted under the plan is 10 years
and options granted to employees expire three months after the termination of
employment. No options may be exercised during the first six months of the
option term. No options may be granted after 10 years from the adoption date of
each plan. There has been no activity under these option plans since the
Companys reverse merger with EnviroWall, and there are no options issued
and outstanding under the plans at December 31, 2002.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Warrants
and Non-Qualified Stock Options  The Company has also
granted warrants and non-qualified options which are summarized as follows for
the period since the Companys reverse merger with EnviroWall:
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                   | 2002 |          
|---------------------------------- | ---- | ---------
|
|Outstanding, beginning of year     |      | --       
|Warrants assumed at reverse merger |      | 1,623,163
|Expired                            |      | (64,780  
|Cancelled                          |      | (800,000 
|                                   |      |          
|Outstanding, end of year           |      | 758,383  
|                                   |      |          
|                                   |      |          

If
not previously exercised, the warrants and non-qualified options will expire in
2003.

| | Pro
Forma Stock-Based Compensation Disclosures  Because no
stock options have been issued since the date of the reverse merger, there is no
compensation expense recorded for stock options, nor is there any proforma
expense disclosure required under SFAS 123.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8.FINANCIAL INSTRUMENTS

Statement
of Financial Accounting Standards No. 107 requires entities to disclose the fair
value of certain financial instruments in their financial statements.
Accordingly, at December 31, 2002, managements best estimate is that the
carrying amount of cash, receivables, notes payable to unaffiliated parties,
accounts payable, and accrued expenses approximates fair value due to the short
maturity of these instruments. The Company cannot reasonably estimate the fair
value of the note payable to a related party.

9.SIGNIFICANT CONCENTRATIONS:

At
December 31, 2002, substantially all of the Companys cash and temporary
cash investments were held at a single financial institution. The Company does
not maintain insurance to cover the risk that cash and temporary investments
with a single financial institution may be in excess of amounts insured by
federal deposit insurance.

10.SUBSEQUENT EVENTS

By
letter dated February 10, 2003, Thomas H. Normile, a director of the Company
since August 2002, informed the Company that he was resigning from the Board of
Directors effective February 15, 2003. His resignation letter advised the
Company that his other business endeavors required the dedication of all his
professional time and efforts. The shares of common stock granted to him by the
Company on August 14, 2002 were returned.

17

---

# PART
II (Continued)

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

This
item is not applicable to the Registrant.

# PART
III

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

DIRECTORS
AND EXECUTIVE OFFICERS

The
following table sets forth the names and ages of the directors and executive
officers of the Company as of December 31, 2002, the principal offices and
positions with the Company held by each person and the date such person became a
director or executive officer of the Company. The executive officers of the
Company are elected annually by the Board of Directors. The Board of Directors
is divided into three approximately equal classes. The directors serve
three-year terms and until their successors are elected. Each year the
stockholders elect one class of directors. The executive officers serve terms of
one year or until their death, resignation or removal by the Board of Directors.
There are no family relationships between any of the directors and executive
officers. In addition, there was no arrangement or understanding between any
executive officer and any other person pursuant to which any person was selected
as an executive officer.

The
directors and executive officers of the Company are as follows:

| | Name | Age                 | Position | Served asDirector Since
| | ---- | ------------------- | -------- | -----------------------
| |      | David A. Melman     |          | 60                     
| |      | Louis B. Breaux     |          | 65                     
| |      | Clyde W. Frank, PhD |          | 63                     
| |      | Thomas H. Normile   |          | 72                     

The Company
currently has four vacant seats on its board, including the seat vacated by
Thomas H. Normile on February 15, 2003. The Company anticipates these board
position will be filled by appointment of the other directors when willing and
qualified candidates can be found.

The
Companys Board of Directors held 13 meetings during 2002. Ten of these
were actual meetings at which all the directors attended. The other three
meetings were held by unanimous written consent.

The
Board of Directors does not have an audit committee. However, the entire board
reviews the Companys quarterly and annual financial statements and meets
with the Companys independent auditors to review the results of the annual
audit and address any accounting matters or questions raised by the auditors.

The
Board of Directors does not have a compensation committee. The entire board
periodically reviews the compensation of the Companys officers and
administers the award of options under all the Companys stock option
plans.

David
A. Melman,Chairman of the Board of Directors and President of Republic. Since May 2000,
he has been the Chairman and CEO of XCL, Ltd (OTC), a Louisiana based company with
interests in the Peoples Republic of China. From October 1998 to May 2000, Mr. Melman
served as Chief Corporate Officer and Director of Carpatsky Petroleum, Inc., a Canadian
Venture Exchange traded company with oil and gas properties in the Republic of Ukraine.
From June 1997 until October 1998 Mr. Melman was an independent consultant to Cadiz Land
Co. Inc. (NASDAQ) and Saba Oil Company (AMEX). Mr. Melman, an attorney, has been a
member of the boards of directors of oil and gas companies listed on the American Stock
Exchange, the London Stock Exchange, the Canadian Venture Exchange and NASDAQ.

Louis
B. Breaux, President of EnviroWall, Inc. and director of
Republic. He has over forty-five years of experience in the construction
industry, specializing in earthwork and heavy construction, including the
Mississippi River Levee System and Hurricane Protection Projects in Louisiana,
Mississippi and Texas. All of his experience contributed to creating the
EnviroWall System for which five US Patents have been issued for his inventions.

18

---

Clyde
W. Frank, PhD, director of Republic. Dr. Frank is President of
POLUS Technologies, a company that evaluates technologies and their applications
to the environmental, occupational and medical fields and addresses technical,
management and strategic issues for small and medium sized corporations. Prior
to his current position, he served as Deputy Assistant Secretary for the Office
of Science and Technology of the US Department of Energy (DOE). In addition, Dr.
Frank has served as a consultant to the US Environmental Protection Agency. He
has spent 35 years evaluating energy and environmental technologies as a
professor, a Civil Servant, and a principal in the private sector. Dr. Frank
holds a PhD degree in Chemistry.

Thomas
H. Normile,was appointed to the Companys Board of Directors on August 1, 2002.
Currently, Mr. Normile is President and CEO of Cerix, Inc., an environmental company.
Mr. Normile is a retired US Air Force Senior Officer. Mr. Normile has held various
executive management positions, including Executive Vice President of H. J. Wilson Co.,
Inc. and Undersecretary of the Department of Public Safety for the State of Louisiana.
As previously discussed in Subsequent Events, Note 9 to the Financial Statements, Mr.
Normile resigned as a director effective February 15, 2003.

COMPLIANCE
WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

Section
16(a) of the Securities Exchange Act of 1934 requires our officers and
directors, and persons who own more than ten percent of our common stock, to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission (SEC). Officers, directors and greater than ten
percent stockholders are required by SEC regulations to furnish us with copies
of all Section 16(a) forms they file.

The
following disclosure is based solely upon a review of the Forms 3 and 4 and any
amendments thereto furnished to the Company during our fiscal year ended
December 31, 2002, and Forms 5 and amendments thereto furnished to us with
respect to such fiscal year, or written representations that no Forms 5 were
required to be filed by such persons. Our review found no person who was a
director, officer or beneficial owner of more than 10% of the Companys
outstanding common stock during such fiscal year filed any late reports on Forms
3 and 4.

ITEM
10  EXECUTIVE COMPENSATION

Summary
Compensation Table

The
Summary Compensation Table shows certain compensation information for services
rendered in all capacities during each of the last three fiscal years by the
Chief Executive Officer and those executive officers who received salary, bonus
or other compensation in excess of $100,000 (these individuals are collectively
referred to herein as the Named Executive Officers). The following
information for the Named Executive Officers includes the dollar value of base
salaries, bonus awards, the number of stock options granted and certain other
compensation, if any, whether paid or deferred.

# SUMMARY
COMPENSATION TABLE

|                      |  | Annual Compensation | Long-TermCompensation Awards |         |  |            
|--------------------- |  | ------------------- | ---------------------------- | ------- |  | -----------
|
|Patrick J. Duncan (4) |  | 2002                |                              | $68,970 |  | $        --
|President and CFO     |  | 2001                |                              | $97,500 |  | $ 30,000   
|                      |  | 2000                |                              | $97,500 |  | $ 50,000   

|(1) |  | Pursuant
to the terms of his employment agreement, Mr. Duncan received $150,000  in connection
with the change of control resulting from the EnviroWall  acquisition. $125,000 of this
was paid at closing of the acquisition and the  remaining amount was paid in November,
2002 upon Mr. Duncans resignation.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | No
additional amounts have been shown as Other Annual Compensation because the  aggregate
incremental cost to us for personal benefits provided to Mr. Duncan  did not exceed the
lesser of $50,000 or 10% of his annual salary in any given  year.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | Mr.
Duncan received these restricted common shares in exchange for canceling all  of his
outstanding options and warrants (there were 620,000 shares underlying  the warrants and
options).
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) |  | Mr.
Duncan was the president of Republic Resources until the EnviroWall acquisition. He
resigned as an  officer and director of the Company in November, 2002.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------

19

---

|Name and PrincipalPosition | Year | Salary | Bonus | Other     | RestrictedStockAwards | SecuritiesUnderlyingOptions/SARs
|-------------------------- | ---- | ------ | ----- | --------- | --------------------- | --------------------------------
|Louis B. Breaux            |      | 2002   |       | $60,300   |                       | $       --                      
|President  EnviroWall     |      | 2001   |       | $      -- |                       | $       --                      
|                           |      | 2000   |       | N/A       |                       | N/A                             

|(5) |  | No
additional amounts have been shown as Other Annual Compensation because the  aggregate
incremental cost to us for personal benefits provided to Mr. Breaux  did not exceed the
lesser of $50,000 or 10% of his annual salary in any given  year.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Name and PrincipalPosition | Year | Salary | Bonus | Other  | RestrictedStockAwards | SecuritiesUnderlyingOptions/SARs
|-------------------------- | ---- | ------ | ----- | ------ | --------------------- | --------------------------------
|David A. Melman (8)        |      | 2002   |       | $7,250 |                       | $       --                      
|President  Republic       |      | 2001   |       | N/A    |                       | N/A                             
|                           |      | 2000   |       | N/A    |                       | N/A                             

|(6) |  | No
additional amounts have been shown as Other Annual Compensation because the  aggregate
incremental cost to us for personal benefits provided to Mr. Melman  did not exceed the
lesser of $50,000 or 10% of his annual salary in any given  year.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) |  | Mr.
Melman received10,000 restricted common shares in exchange for canceling all of his
outstanding  options issued to him as a director of Republic Resources.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) |  | Mr.
Melman became the President of Republic Resources upon closing of the EnviroWall
acquisition.
|--- |  | -------------------------------------------------------------------------------------------------

Option
Grants in the Last Fiscal Year

There
were no option grants to the Named Executive Officers during the fiscal year
ended December 31, 2002.

Aggregated
Option Exercises in the Last Fiscal Year and the Fiscal Year-End Option Values

There
were no options exercised by any Executive Officer during the year ended
December 31, 2002. In addition, there were no options issued or outstanding to
the Named Executive Officers as of December 31, 2002.

Aggregated
Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values

This
item is not applicable since there were no options exercised by any Executive
Officer during the year ended December 31, 2002, and there were no options
issued or outstanding to the Named Executive Officers as of December 31, 2002.

Employment
Contract

The
Company has an employment agreement with the Louis B. Breaux, EnviroWalls
President, that provides for, among other things, an annual salary of $100,000
and a royalty of up to two percent based on a sliding scale of any revenue
generated from the EnviroWall System. The contract is for a period of 42 months
and ends on December 31, 2005. The royalty will be payable to Mr. Breaux for the
life of the patents currently associated with the EnviroWall System regardless
of the status of his employment with the Company.

Compensation
of Directors

The
Chairman of the Board and Director receives a monthly fee of $1,000. Directors
who are employees or otherwise receive compensation from us do not receive
additional compensation for service as directors. Outside directors received
$500 per month until October 2002 at which time payment of such fees was
deferred in order to reduce cash flow expenditures.

ITEM
11  SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS

The
following table sets forth certain information regarding the beneficial
ownership of the Companys common stock, its only class of outstanding
voting securities as of March 14, 2003, by (i) each of the Companys
directors and officers, and (ii) each person or entity who is known to the
Company to own beneficially more than 5% of the outstanding common stock with
the address of each such person or entity. Beneficial owners listed have sole
voting and investment power with respect to the shares unless otherwise
indicated. On March 14, 2003, there were 19,334,240 shares of our common stock
issued and outstanding.

20

---

# SECURITY
OWNERSHIP OF MANAGEMENT ANDCERTAIN BENEFICIAL OWNERS

|Name of Officer or Director     | Amount and Nature ofBeneficial Ownership(1) | Percent ofClass (1) 
|------------------------------- | ------------------------------------------- | --------------------
|Louis B. Breaux                 |                                             | 7,208,000 Shares    
|David A. Melman                 |                                             | 1,710,000 Shares    
|Clyde W. Frank                  |                                             | 100,000 Shares      
|All Officers and Directors as a |                                            
|group (three persons)           |                                             | 9,018,000 Shares    
|Kayne Anderson, Investment      |                                            
|Management, Inc.                |                                            
|1800 Avenue of the Stars        |                                            
|Second Floor                    |                                             | 3,405,417 Shares (2)
|Century City, CA 90067          |                                            
|State Street, Research and      |                                            
|Management Company              |                                            
|One Financial Center            |                                            
|38th Floor                      |                                             | 2,042,416 Shares (3)
|Boston, MA 02111                |                                            

_________________

|(1) |  | Shares
are owned directly and beneficially unless stated otherwise.
|--- |  | -------------------------------------------------------------------

|(2) |  | Includes
2,680,367 shares and 725,050 shares underlying presently exercisable warrants held by
three entities  which are effectively controlled by Kayne Anderson Investment Management,
Inc., a registered investment  advisor. The entities which beneficially own the shares
and warrants are Arbco Associates, L.P., Kayne  Anderson Non-Tradition Investments, L.P.
and KAIFS, L.P.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | Shares are beneficially owned by two entities, Metropolitan Life Insurance Co.
Separate Account EN, and Bellsouth Master Pension Trust that are controlled by
State Street Research and Management Company, a registered investment advisor.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ITEM
12  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

There
are no relationships or transactions reportable under this item that have not
been disclosed elsewhere in this report.

# PART
IV

ITEM 13
 EXHIBITS AND REPORTS ON FORM 8-K

(a)
Exhibits:

|Exhibit No. | Description and Method of Filing
|----------- | --------------------------------

|3.1 | Articles of Incorporation. Incorporated by reference to Exhibit 3.1 of the
Registrants Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1998.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.2 | Certificate of Amendment to the Articles of Incorporation filed on June 23,
1993. Incorporated by reference to Exhibit 3.2 of the Registrants Annual
Report on Form 10-KSB/A for the fiscal year ended December 31, 1999.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.3 | Certificate of Amendment to the Articles of Incorporation filed on June 29,
1993. Incorporated by reference to Exhibit 3.3 of the Registrants Annual
Report on Form 10-KSB/A for the fiscal year ended December 31, 1999.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

21

---

|3.4 | Plan of Recapitalization. Incorporated by reference to Exhibit 3.4 of the
Registrants Annual Report on Form 10-KSB/A for the fiscal year ended
December 31, 1999.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.5 | Certificate of Amendment to the Articles of Incorporation filed on July 5, 1994.
Incorporated by reference to Exhibit 3.5 of the Registrants Annual Report
on Form 10-KSB/A for the fiscal year ended December 31, 1999.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.6 | Certificate of Amendment to the Articles of Incorporation filed on December 19,
1994. Incorporated by reference to Exhibit 3.4 of the Registrants Annual
Report on Form 10-KSB for the fiscal year ended December 31, 1998.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.7 | Certificate of Amendment to Article IV of the Articles of Incorporation as filed
with the Nevada Secretary of State, increasing the authorized shares of common
stock of Registrant to 40,000,000 shares, $0.10 par value. Incorporated by
reference to Exhibit 3 of the Registrants Current Report on Form 8-K dated
June 11, 1997.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.8 | Certificate of Change in Number of Authorized Shares of Common Stock dated
November 18, 1998. Incorporated by reference to Exhibit 3.8 of the
Registrants Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1998.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.9 | Amended and Restated Articles of Incorporation as filed July 11, 2001.
Incorporated by reference to Exhibit 3.1 to Registrants Current Report on
Form 8-K filed July 11, 2001.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.10 | Certificate of Amended Articles of Incorporation. Incorporated by reference to
Exhibit 3.1 to Registrants Quarterly Report on Form 10-QSB filed on May
15, 2002.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.11 | Bylaws as amended and restated. Incorporated by reference to Exhibit 3.9 of the
Registrants Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1998.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.1 | Certificate of Designation of Series C Redeemable 5% Cumulative Preferred Stock.
Incorporated by reference to Exhibit 10.1 of the Registrants Current
Report on Form 8-K dated November 8, 2000.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.2 | Certificate of Amendment to the Certificate of Designation of Series C
Redeemable 5% Cumulative Preferred Stock. Incorporated by reference to Exhibit
4.1 to Registrants Quarterly Report on Form 10-QSB for quarter ended
September 30, 2001.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.1 | 1993 Stock Option Plan. Incorporated by reference to Exhibit 10.1 of the
Registrants Annual Report on Form 10-KSB/A for the fiscal year ended
December 31, 1999.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.2 | 1994 Employee Stock Option Plan. Incorporated by reference to Exhibit 10.4 of
the Registrants Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1998.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.3 | 1996 Stock Option Plan. Incorporated by reference to 10.6 of the
Registrants Annual Report on Form 10-KSB/A for the fiscal year ended
December 31, 1999.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|10.4 | 1997 Long Term Incentive Option Plan. Incorporated by reference to Exhibit 10.7
of the Registrants Annual Report on Form 10-KSB/A for the fiscal year
ended December 31, 1999.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.5 | Certificate of Designation of Series C Redeemable 5% Cumulative Preferred Stock
of Pease Oil and Gas Company, as filed November 8, 2000. Incorporated by
reference to Exhibit 10.2 of Registrants Current Report on Form 8-K dated
November 8, 2000.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.6 | Preferred Stock Exchange Agreement, dated effective November 1, 2000.
Incorporated by reference to Exhibit 10.3 of Registrants Current Report on
Form 8-K dated November 8, 2000.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

22

---

|10.7 | Preferred Stock Surrender Agreement, dated effective November 1, 2000.
Incorporated by reference to Exhibit 10.4 of Registrants Current Report on
Form 8-K dated November 8, 2000.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.8 | Form of Warrant issued in connection with surrender of Series B Preferred Stock.
Incorporated by reference to Exhibit 10.5 of Registrants Current Report on
Form 8-K dated November 8, 2000.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.9 | Registration Rights Agreement and Preferred Stock Exchange Agreement and
Irrevocable Proxy, dated February 11, 2002. Incorporated by reference to Exhibit
10.24 to Registrants Annual Report on Form 10-KSB for the fiscal year
ended December 31, 2001.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.10 | Purchase and Sale Agreement dated January 31, 2002 with Harken Energy
Corporation. Incorporated by reference to Exhibit 10.1 to Registrants
Current Report on Form 8-K filed April 10, 2002.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.11 | Stock Purchase Agreement dated April 16, 2002. Incorporated by reference to
Exhibit 10.1 to Form 8-K filed July 8, 2002.
|----- | ------------------------------------------------------------------------------------------------------------------------

|10.12 | Amendment to Stock Purchase Agreement dated April 30, 2002. Incorporated by
reference to Exhibit 10.2 to Form 8-K filed July 8, 2002.
|----- | -------------------------------------------------------------------------------------------------------------------------------------

|10.13 | Amendment to Stock Purchase Agreement dated May 20, 2002. Incorporated by
reference to Exhibit 10.3 to Form 8-K filed July 8, 2002.
|----- | -----------------------------------------------------------------------------------------------------------------------------------

|10.14 | Closing Memorandum dated June 24, 2002. Incorporated by reference to Exhibit
10.4 to Form 8-K filed July 8, 2002.
|----- | -----------------------------------------------------------------------------------------------------------------

|10.15 | Form of Debenture Exchange Agreement.  Filed herewith.
|----- | ------------------------------------------------------

|10.16 | Employment Agreement entered into as of May 1, 2002 between EnviroWall, Inc. and
Louis B. Breaux. Filed herewith.
|----- | -----------------------------------------------------------------------------------------------------------------

|21.1 | List of Subsidiary Companies.  Filed herewith.
|---- | ----------------------------------------------

|99.1 | Certification Pursuant To 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 for David A. Melman, the
Companys Principal Executive Officer.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|99.2 | Certification Pursuant To 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 for Louis B. Breaux,
EnviroWalls President.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

(b)
Reports on Form 8-K

We
filed no reports on Form 8-K during the quarter ended December 31, 2002, or
through the date of this report.

ITEM
14  CONTROLS AND PROCEDURES

|(a) |  | Evaluation of Disclosure Controls and Procedures.Our Chief Executive
Officer and Chief Financial Officer have evaluated the effectiveness of our
disclosure controls and procedures (as such term is defined in rules 13a-14(c)
and 15d-14(c) under the Securities Exchange Act of 1934, as amended (the
Exchange Act)) as of date within 90 days prior to the filing date of
this annual reprot (the Evaluation Date). Based on such evaluation,
such officers have concluded that, as of the Evaluation Date, our disclosure
controls and procedures are effective in alerting them on a timely basis to
material information relating to our company (including our consolidated
subsidiaries) required to be included in our reports filed or submitted under
the Exchange Act.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) |  | Changes
in Internal  Controls. Since the Evaluation Date, there have not been any
significant  changes  in our internal controls or in other factors that could
significantly affect such controls.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

23

---

# SIGNATURES

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

| | REPUBLIC RESOURCES, INC.
| | ------------------------

|Date: March 24, 2003 | By: /s/ David A. Melman
              David A. Melman
              Principal Executive
Officer and
              Principal
Accounting Officer
|-------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------

In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.

|Date: March 24, 2003 | By: /s/ David A. Melman
              David A. Melman, Director
|-------------------- | ---------------------------------------------------------------

|Date: March 24, 2003 | By: /s/ Louis B. Breaux
              Louis B. Breaux, Director
|-------------------- | ---------------------------------------------------------------

|Date: March 24, 2003 | By: /s/ Clyde W. Frank
              Clyde W. Frank, PhD., Director
|-------------------- | -------------------------------------------------------------------

24

---

# CERTIFICATION

I, David A.
Melman, Principal Executive Officer of Republic Resources, Inc., certify that:

1.  I have
reviewed this annual report on Form 10-KSB of Republic Resources, 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; and

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. I
am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and we 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 function):

(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. I
have indicated in this annual report whether or not 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.

Date:  March
24, 2003

/s/ David
A. Melman
David A. MelmanPrincipal Executive Officer

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