United States Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-QSB
                                   -----------

(Mark One)
   [X]   QUARTERLY  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2002.

   [ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
         ACT OF 1934 For the transition period from ____________ to ___________

                        Commission file number : 0-30738

               Environmental Oil Processing Technology Corporation
               ---------------------------------------------------
                 (Exact name of business issuer in its charter)

         Utah                                    82-0520055
--------------------------------------------------------------------------------
State or other jurisdiction of                   (I.R.S. Employer
incorporation or organization)                   Identification No.)

 2801 Brandt Avenue, Nampa, Idaho                           83687
-------------------------------------------------------------------------------
(Address of principal executive offices)                 (Zip Code)

Issuer's telephone number:   (208)-463-0063         Fax:     (208) 463-7601
--------------------------------------------------------------------------------
                                (Former Address)

The  number of  shares of common  stock  outstanding  as of March 31,  2002,  is
72,192,380.

       Transitional Small Business Disclosure Format. Yes      No   X
                                                          ----     ----

                                       1
<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1.           Financial Statements.

         The following financial statements are filed as part of this report:

         The  Consolidated  Financial  Statements  of the  Company for the three
months ended March 31, 2002 and 2001.

         The accompanying  consolidated  financial statements have been prepared
by the Company  without  audit.  In the opinion of management,  all  adjustments
which include only normal recurring  adjustments necessary to present fairly the
financial  position,  results of operations and cash flows at March 31, 2002 and
2001 and for all periods presented have been made.

         Certain  information  and  footnote  disclosures  normally  included in
consolidated financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested that these
condensed  consolidated  financial  statements be read in  conjunction  with the
financial  statements and notes thereto  included in the Company's  December 31,
2001, audited consolidated  financial statements.  The results of operations for
the periods ended March 31, 2002 and 2001 are not necessarily  indicative of the
operating results for the full years.

                                       2
<PAGE>

Item 2.           Management's Discussion and Plan of Operation:

         Results of Operations:

         During  the  first  three  months  of  2002  the  Company  focused  its
activities on developing its used oil refineries.  The Company presently has two
refinery  projects  i.e. the pilot plant in Nampa,  Idaho,  and the Reno Project
presently in  development  which will be operated by a wholly  owned  subsidiary
EOPT Refining of Nevada, Inc.

         The Nampa plant became  operational  in the second quarter of 2001 with
the production of diesel,  naphtha and asphalt residuum,  all of which were sold
to local  wholesalers.  During  the last few  months  the plant  has been  under
improvement  modification  which  includes  a newly  engineered  and  fabricated
refining column.  The  modifications  are expected to be completed and the plant
operating by the end of May, 2002. The  modifications  are engineered to improve
the quality and quantity of production of petroleum products.  When the modified
plant is operating  Management  anticipates having a positive cash flow from the
Nampa operations.

         The Reno Project consists of completing land development on 20 acres of
land which was originally  purchased for used oil refining  plants to be located
on 15 acres and a co-generation  plant for electricity on the remaining 5 acres.
The site  preparation is essentially  completed and the  engineering  and design
work for two refining  plants is in advanced  stages.  Engineering  for the Reno
project  is being  completed  by PC&E of St.  Louis,  a  subsidiary  of  Emerson
(formerly  Emerson  Electric)  and Redd  Engineering  of Salt Lake  City,  Utah.
Approximately  $30,000,000  is needed to construct,  locate and start up the two
plants which could be  operating  by the second  quarter of 2003 if financing is
soon obtained. The remaining 5 acres of the development is "fully permitted" for
the  production  of  electricity  and is  currently  for sale for in  excess  of
$20,000,000 with several interested parties.


                                       3
<PAGE>


         During the second  quarter of 2001 the Company  acquired  the assets of
Artesian Oil Recovery,  Inc. in Oakland  California for the sum of $485,000,  to
provide oil for the Reno Project. Pending completion of the Reno refineries, the
oil is being trucked to the Nampa refinery.

         The settlement of the litigation involving the separation of subsidiary
PDI was completed in March of 2002. Among other matters,  the Company  recovered
and  canceled  4,000,000  shares of its common stock from the owners of PDI. The
canceled  shares were valued based on the net assets in excess of liabilities of
PDI.  The gain on the  disposal of PDI of  $294,746  recoups the loss on the net
assets in excess of  liabilities  previously  recognized  in the  period  ending
September 30, 2001. Accordingly,  the financial statements have been restated to
reflect the discontinued PDI operations.

         Operations  in the  first  quarter  of 2002  resulted  in  consolidated
revenues  of  $317,565  compared  to  $198,036  in the  first  quarter  of 2001.
Consolidated  revenues  increased  by 60% over the first  quarter  of 2001.  The
Company had costs of sales of $102,795  during the three  months ended March 31,
2002,  compared to $49,100 for the same period of 2001.  These costs are for the
used  oil  purchased,  processed  and  sold at the  Nampa,  Idaho  and  Artesian
facilities.  EOPT's  gross  margin was 68% of sales in 2002  compared  to 75% in
2001. The decrease in the margin was due to the higher cost of shipping the used
oil to Idaho in 2002.

             Selling and  general  administrative  expense for the three  months
ended March 31, 2002, was $574,843 compared to $574,986 for the same period last
year. The Company has stabilized these operating  costs. The Company's  business
is labor  intensive and its largest  expense is payroll.  Included in consulting
expense for the three months ended March 31, 2001,  is  $9,372,000  which is the
value of 1,200,000  shares of common stock issued for services to a  consultant.
during January 2001.  Without the value of the shares issued to the  consultant,
consulting  expense for the first three  months of 2001 would have been  $15,213
compared  to $10,500  for the same three  months of 2002.  The  Company has also
stabilized its consulting costs.

         The Company's net loss from  operations in the three months ended March
31,  2002,  was  $465,440  compared  to  $9,833,387  in the same period of 2001.
Excluding the value of the shares issued to the  consultant in January 2001, the
Company's  loss for the first  quarter  of 2001 would  have been  $461,387.  The
Company  expects its loss to decline in the second  quarter of 2002 with the new
refining column at its operations in Nampa and the continued  growth of Artesian
Oil Recovery in Oakland California. .

         Liquidity and Capital Resources.

         The  Company  entered  into a funding  agreement  with a trust  fund to
borrow  $10,500,000 for the  development and expansion of the Company  business.
Some of these funds were used in  designing  and  engineering  the  refining and
production  facility in the Reno Project.  Some of the loan funds have been used
to purchase the real property for the Reno Project,  and the  permitting of some
of the property for electrical  production.  Through March 31, 2002, the Company
has  incurred  $6,455,957  for the cost of the Reno Project  including  $170,932
expended in the first  quarter of 2002.  The terms of the funding  required  the


                                       4
<PAGE>

Company to repay the full  amount  borrowed in one year from the date funds were
first received subject to the lender's option to extend the loan. The lender has
verbally agreed to extend the loan for an additional six months to September 23,
2002.

         The Company used cash in its  operations  of $628,642  during the three
months ended March 31, 2002,  compared to using cash in  operations  of $221,144
for the  corresponding  period in the prior year. The difference of $407,498 was
primarily due to the Company  allowing its accounts payable and accrued expenses
to increase by $68,396 in 2001 while paying off $236,224 of accounts payable and
accrued expenses in 2002.

         The Company's accounts receivable decreased by $9,313 from December 31,
2001, to March 31, 2002,  compared to an increase of $34,392 for the same period
of 2001.  The  increase  in 2001 was the result of the  Company's  expanded  oil
gathering business with the purchase of Artesian Oil Recovery.  The decrease for
2002 was due to better collection efforts by the Company's sales personnel.

         The  Company  has  accumulated  used oil for  processing  in the  Nampa
facility  therefore  inventory levels increased by $34,844 in 2002 compared to a
decrease of $5,237 in the same period of 2001.

         The Company paid $25,892 of debt to banks in 2002  compared to $148,863
in 2001. The Company also repaid  related  parties cash of $223,500 in 2001. The
Company  did not borrow  any funds in the first  quarter of 2002 as it had ample
cash  reserves.  The  Company  did  borrow  $84,990  from  related  parties  and
$1,629,278  from unrelated  parties during the same periods of 2001. The Company
repaid  $210,000 of related party debt in 2002 through the issuance of 2,333,333
shares of its common stock.  It also issued 500,000  shares to  consultants  for
accrued services of $175,000.

         The Company has recorded a gain from  discontinued  operations in 2002,
in the amount of $294,746  related to the PDI  separation  which is the value of
the Company's 4,000,000 shares of common stock recovered. The Company had a loss
of $24,837 for the same period of 2001 from the operations of PDI.

         The Company is seeking  funding for the  completion of the Reno Project
and to meet its operating  costs. The Company is also  investigating,  reviewing
and  considering  additional  used oil  gathering  facilities as well as seeking
financing to acquire the same. No financing  agreements  have been formalized as
of this time and there is no assurance  that such funds will be  available  when
needed or if available will be under terms acceptable to the Company.

Forward Looking Statements.

         The  foregoing   paragraphs  in  this  MD&A  concerning  the  activity,
operations and plans of the Company, and particularly the planned development of
the Reno Project and the future of the "permitted  property" are forward-looking
statements as well as any other  statements  that are not historical in context.
The statements  provided are based on information  available to management as of
the date hereof,  and the Company assumes no obligation to revise or update such
forward-  looking  statements.  Readers are cautioned that such  forward-looking
statements  involve risk and  uncertainties  that may cause the Company's actual
results to differ materially from such forward- looking statements.


                                       5
<PAGE>

                           PART II - OTHER INFORMATION

Item 1.           Legal Proceedings.

         On September 24, 2001,  EOPT filed a complaint  against LM Alternative,
Inc. ("LMA") in the United States District Curt, Central District of California,
Eastern Division, Case No. EDCV 01-0699 VAP (SGLx). EOPT seeks a money judgement
against  LMA.  EOPT  anticipates  that in addition  to filing an Answer  denying
EOPT's claims,  LMA will file a Counterclaim  seeking money damages against EOPT
for breach of contract. The case arises as a result of orders placed by EOPT for
electrical  generators,  and the alleged default by LMA. The parties have agreed
on a moratorium in which each party will dismiss its action without prejudice to
attempt to resolve their  differences.  Either party may refile its case against
the other on 30 days written notice.

Item 2.           Changes in Securities.

         (a)      None
         (b)      None

         (c)      The following  common stock was sold by the registrant  during
                  the first quarter of 2002:

                 (i)      On March 4, 2002,  registrant issued 2,333,333 shares
                           of its  common  stock to N. Tod  Tripple at $0.09 per
                           share  (market  value) in payment  of its  promissory
                           note to Mr. Tripple in the amount of $210,000.
                  (ii)     On March 1, 2002, registrant issued 535,714 shares of
                           common  stock at $0.35 per  share.  The  shares  were
                           issued in payment of $187,500 in services rendered by
                           Alrus  Consulting,  a Nevada LLC, during 2001. Of the
                           shares  issued  500,000  were in  exercise  of  stock
                           options at $0.35 per share.

                  (iii)    During the first quarter  registrant  issued  103,217
                           shares  of  its  common  stock  to  9  different  oil
                           collectors  for used oil purchased by  registrant.  .
                           The shares  were  issued at the  market  value on the
                           dates the oil was purchased  which ranged from $0.091
                           to $0.173 per share.

Item 3.           Defaults Upon Senior Securities.            None

Item 4.           Submission of Matters to a Vote of Security Holders.    None

Item 5.           Other Information.

         In 2001  EOPT  received  the last of the  required  Federal  and  State
permits and approvals for construction and operation of an electrical production
facility on 5 acres of the Reno Project.  These  permits are the Federal  Energy
Regulatory  Commission's  ("FERC")  authorization to sell energy at market based
rates, the Nevada Public Utility Commission Utility  Environmental  Planning Act
Permit, the State of Nevada Department of Conservation and Natural Resources Air
Quality  operating  Permit,  and the Storey County Special Use Permit.  EVOP has
decided to not pursue the  production  of  electricity  at this time on the Reno
Project,  and is presently  negotiating for the sale of the applicable 5 acres..


                                       6
<PAGE>

The EOPT property is near the entrance to the Tahoe-Reno  Industrial Center, one
of the largest industrial zoned developments in the United States.

         Statements  in  this  report  that  are  not  strictly  historical  are
forward-looking   statements.  The  Company  makes  these  statements  based  on
information  available  to it as of the date of this  report  and it  assumes no
responsibility to update or revise such forward-looking statements.  Editors and
investors are cautioned that such  forward-looking  statements  involve risk and
uncertainties  that may cause the Company's actual results to differ  materially
from such forward- looking statements.

Item 6.           Exhibits and Reports on form 8-K.

                  (a)      No exhibits.

                  (b) Form 8-K filed  March 19,  2002,  reported  that the civil
action  filed by the  former  owners of the  Corporation's  subsidiary,  Project
Development Industries,  L.L.C. ("PDI") against the Corporation was dismissed on
March  12,  2002 and that  the  parties  entered  into a  Separation  Agreement,
Settlement  Agreement and Mutual  Release  dated March 4, 2002.  Pursuant to the
Settlement  Agreement,  PDI will no longer be a subsidiary of the Registrant and
ownership of PDI will be returned to the former  owners of PDI. A press  release
attached  to the Form 8K as an  exhibit  described  the  salient  details of the
settlement. .

                                       7
<PAGE>

                                   SIGNATURES

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

               Environmental Oil Processing Technology Corporation
                                  (Registrant)


 Date:    May 13, 2002          By    /s/ N. Tod Tripple
                                      -------------------------------------
                                          N. Tod Tripple, President and CEO


                                     8

<PAGE>

                          ENVIRONMENTAL OIL PROCESSING
                             TECHNOLOGY CORPORATION
                                AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                      March 31, 2002 and December 31, 2001

                                      F-1
<PAGE>

<TABLE>
<CAPTION>

               ENVIRONMENTAL OIL PROCESSING TECHNOLOGY CORPORATION
                                AND SUBSIDIARIES
                           Consolidated Balance Sheets

                                     ASSETS
                                     ------
                                                                March 31,     December 31,
                                                                  2002           2001
                                                              ------------    ------------
                                                             (Unaudited)       (Restated)

<S>                                                          <C>             <C>
CURRENT ASSETS
   Cash                                                      $    251,333    $  1,076,799
   Trade accounts receivable, less allowance for
    doubtful accounts of $10,000 and $10,000, respectively        119,972         129,285
   Inventories                                                    243,778         190,943
   Other current assets                                            44,987          48,358
                                                             ------------    ------------
     Total Current Assets                                         660,070       1,445,385
                                                             ------------    ------------
PROPERTY, PLANT AND EQUIPMENT                                   3,832,195       3,878,670
   Less accumulated depreciation                                 (262,960)       (237,193)
                                                             ------------    ------------
     Property, Plant and Equipment, Net                         3,569,235       3,641,477
                                                             ------------    ------------
OTHER ASSETS
   Construction in progress                                     6,455,957       6,238,550
   Deposits                                                            40              40
   Intangible assets, net                                         378,200         394,800
   Unamortized debt issue costs                                      --            52,500
                                                             ------------    ------------
     Total Other Assets                                         6,834,197       6,685,890
                                                             ------------    ------------
     TOTAL ASSETS                                            $ 11,063,502    $ 11,772,752
                                                             ============    ============
</TABLE>

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

                                      F-2

<PAGE>



               ENVIRONMENTAL OIL PROCESSING TECHNOLOGY CORPORATION
                                AND SUBSIDIARIES
                     Consolidated Balance Sheets (Continued)

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                 ----------------------------------------------

                                                    March 31,      December 31,
                                                      2002            2001
                                                   ------------    ------------
                                                   (Unaudited)     (Restated)
CURRENT LIABILITIES

   Accounts payable                                $    149,630    $    694,176
   Accrued expenses                                   1,356,903       1,236,081
   Notes payable - related parties                         --           210,000
   Notes payable                                     10,500,000      10,525,892
                                                   ------------    ------------

     Total Current Liabilities                       12,006,533      12,666,149
                                                   ------------    ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT)

   Common stock, no par value; 200,000,000
    shares authorized; 72,192,380 and 73,220,116
    shares issued and outstanding, respectively      23,370,733      23,249,988
   Accumulated deficit                              (24,313,764)    (24,143,385)
                                                   ------------    ------------

     Total Stockholders' Equity (Deficit)              (943,031)       (893,397)
                                                   ------------    ------------

     TOTAL LIABILITIES AND STOCKHOLDERS'
     EQUITY (DEFICIT)                              $ 11,063,502    $ 11,772,752
                                                   ============    ============

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

                                      F-3
<PAGE>


<TABLE>
<CAPTION>

               ENVIRONMENTAL OIL PROCESSING TECHNOLOGY CORPORATION
                                AND SUBSIDIARIES
                      Consolidated Statements of Operations
                                   (Unaudited)


                                                                 For the
                                                            Three Months Ended
                                                                 March 31,
                                                      ----------------------------
                                                           2002           2001
                                                      ------------    ------------
<S>                                                   <C>             <C>
NET SALES                                             $    317,565    $    198,036
COST OF GOODS SOLD                                         102,795          49,100
                                                      ------------    ------------
GROSS MARGIN                                               214,770         148,936
                                                      ------------    ------------
OPERATING EXPENSES
   Amortization of debt issue cost                          52,500            --
   Consulting                                               10,500       9,387,213
   Depreciation and amortization                            42,367          20,124
   Selling, general and administrative                     574,843         574,986
                                                      ------------    ------------
     Total Operating Expenses                              680,210       9,982,323
                                                      ------------    ------------
LOSS FROM OPERATIONS                                      (465,440)     (9,833,387)
                                                      ------------    ------------
OTHER INCOME (EXPENSE)
   Interest expense                                         (1,189)        (25,518)
   Interest income                                           1,504           2,536
                                                      ------------    ------------
     Total Other Income (Expense)                              315         (22,982)
                                                       ------------    ------------
INCOME TAX EXPENSE                                            --              --
                                                      ------------    ------------
LOSS FROM CONTINUING OPERATIONS                           (465,125)     (9,856,369)
INCOME (LOSS) FROM DISCONTINUED OPERATIONS (Note 4)        294,746         (24,837)
                                                      ------------    ------------
NET LOSS                                              $   (170,379)   $ (9,881,206)
                                                      ============    ============
BASIC INCOME (LOSS) PER COMMON SHARE
   Loss from continuing operations                    $      (0.01)   $      (0.14)
   Income from discontinued operations                        0.01           (0.00)
                                                      ------------    ------------
     Basic income (loss) per share                    $      (0.00)   $      (0.14)
                                                      ============    ============
WEIGHTED AVERAGE SHARES OUTSTANDING                     73,561,874      73,170,116
                                                      ============    ============
</TABLE>

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

                                      F-4
<PAGE>

<TABLE>
<CAPTION>

               ENVIRONMENTAL OIL PROCESSING TECHNOLOGY CORPORATION
                                AND SUBSIDIARIES
            Consolidated Statements of Stockholders' Equity (Deficit)


                                                                                                     Total
                                                         Common Stock            Accumulated      Stockholders'
                                                   Shares            Amount        Deficit       Equity (Deficit)
                                                 ------------    ------------    ------------    ------------
<S>                                                <C>           <C>             <C>             <C>
Balance, December 31, 2000                         72,020,116    $ 12,943,211    $ (9,255,116)   $  3,688,095
Common stock issued for services                    1,200,000       9,372,000            --         9,372,000
Stock options issued to employees below
   market value                                          --           561,400            --           561,400
Stock options issued to nonemployees
   below market value (restated)                         --           373,377            --           373,377
Net loss for the year ended
   December 31, 2001                                     --              --       (14,888,269)    (14,888,269)
                                                 ------------    ------------    ------------    ------------
Balance, December 31, 2001 (restated)              73,220,116      23,249,988     (24,143,385)       (893,397)
Common stock issued for inventory (unaudited)         103,217          17,991            --            17,991
Common stock issued for options exercised
   (unaudited)                                        500,000         175,000            --           175,000
Conversion of accounts payable to common stock
   (unaudited)                                         35,714          12,500            --            12,500
Common stock issued for conversion
   of debt (unaudited)                              2,333,333         210,000            --           210,000
Cancellation of shares returned in settlement
   agreement by Project Development Industries
   (unaudited)                                     (4,000,000)       (294,746)           --          (294,746)
Net loss for the three months ended
   March 31, 2002 (unaudited)                            --              --          (170,379)       (170,379)
                                                 ------------    ------------    ------------    ------------
Balance, March 31, 2002 (unaudited)                72,192,380    $ 23,370,733    $(24,313,764)   $   (943,031)
                                                 ============    ============    ============    ============
</TABLE>

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

                                      F-5
<PAGE>

<TABLE>
<CAPTION>

               ENVIRONMENTAL OIL PROCESSING TECHNOLOGY CORPORATION
                                AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows

                                   (Unaudited)

                                                          For the Three Months Ended
                                                                   March 31,
                                                          --------------------------
                                                            2002            2001
                                                          -----------    -----------

<S>                                                       <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                               $  (170,379)   $(9,881,206)
   Adjustments to reconcile net loss to net cash
    used by operating activities:
     Amortization of debt issue costs                          52,500           --
     Depreciation and amortization                             42,367        112,068
     Common stock issued for services                            --        9,477,000
     Gain on disposal of subsidiary                          (294,746)          --
   Changes in operating assets and liabilities:
     Accounts receivable                                        9,313        (34,392)
     Inventories                                              (34,844)         5,237
     Other assets                                               3,371         31,753
     Accounts payable and accrued expenses                   (236,224)        68,396
                                                          -----------    -----------
       Net Cash Provided (Used) by Operating Activities      (628,642)      (221,144)
                                                          -----------    -----------
CASH FLOWS USED IN INVESTING ACTIVITIES
   Construction in progress                                  (170,932)    (1,151,468)
   Capital expenditures                                          --           (1,949)
                                                          -----------    -----------
       Net Cash (Used) by Investing Activities               (170,932)    (1,153,417)
                                                          -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES
   Borrowings from notes payable - related parties               --           84,990
   Payments on notes payable - related parties                   --         (223,500)
   Proceeds from notes payable                                   --        1,629,278
   Payments on notes payable                                  (25,892)      (148,863)
                                                          -----------    -----------
       Net Cash Provided by Financing Activities              (25,892)     1,341,905
                                                          -----------    -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS                    (825,466)       (32,656)
CASH AND EQUIVALENTS, BEGINNING OF PERIOD                   1,076,799        273,215
                                                          -----------    -----------
CASH AND EQUIVALENTS, END OF PERIOD                       $   251,333    $   240,559
                                                          ===========    ===========
</TABLE>

                 The accompanying notes are an integral part of
                    these consolidated financial statements.
                                      F-6
<PAGE>


               ENVIRONMENTAL OIL PROCESSING TECHNOLOGY CORPORATION
                                AND SUBSIDIARIES
                Consolidated Statements of Cash Flows (Continued)
                                   (Unaudited)

                                                  For the Three Months Ended
                                                          March 31,
                                              ---------------------------------
                                                2002                      2001
                                              ------                     ------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
 INFORMATION:

Cash paid for interest                       $ 1,189                    $44,799
Cash paid for taxes                          $  --                      $  --

SUPPLEMENTAL DISCLOSURE OF NON-CASH
 FINANCING ACTIVITIES:

Year ended December 31, 2001:

   The Company entered into a $210,000 promissory note for debt issue costs paid
   on behalf of the Company by the President of the Company.

Three Months ended March 31, 2002:

   The Company issued 2,333,333 shares of its common stock for conversion of the
   $210,000 promissory note to the President of the Company.

   The  Company  issued  35,714  shares of its common  stock for  conversion  of
   accounts  payable and 500,000 shares of its common stock for accounts payable
   applied to exercise of stock options to its consultants on the Reno Project.

   The Company  issued 103,217 shares of its common stock for used oil collected
from various companies.

                 The accompanying notes are an integral part of
                    these consolidated financial statements.
                                      F-7
<PAGE>


               ENVIRONMENTAL OIL PROCESSING TECHNOLOGY CORPORATION
                                AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                      March 31, 2002 and December 31, 2001

NOTE 1 -      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

              The  accompanying  consolidated  financial  statements  have  been
              prepared  by  the  Company   without  audit.  In  the  opinion  of
              management,  all adjustments  which include only normal  recurring
              adjustments  necessary to present  fairly the financial  position,
              results of  operations  and cash flows at March 31,  2002 and 2001
              and for all periods presented have been made.

              Certain information and footnote  disclosures normally included in
              consolidated  financial  statements  prepared in  accordance  with
              generally  accepted  accounting  principles have been condensed or
              omitted.  It  is  suggested  that  these  condensed   consolidated
              financial  statements  be read in  conjunction  with the financial
              statements  and notes thereto  included in the Company's  December
              31, 2001 audited consolidated financial statements. The results of
              operations  for the periods  ended March 31, 2002 and 2001 are not
              necessarily  indicative  of the  operating  results  for the  full
              years.

NOTE 2 -      GOING CONCERN

              The Company presently has in the bank approximately  $250,000. The
              Company's negative cash flow from operations  averages $15,000 per
              month.  Therefore  the Company is currently  able to pay its bills
              from its reserves. As oil collection by Artesian continues to grow
              the Company  expects this will increase oil sales.  The Company is
              modifying  its  refining  plant in Nampa,  Idaho and  adding a new
              column that is expected to be completed  in May 2002,  the Company
              expects this to produce positive cash flows from operations by mid
              2002. The Company's  loan in the amount of $10,500,000  was due on
              March 23, 2002.  However,  the Company has  negotiated a six month
              extension  with the note holder and the new due date is  September
              23, 2002. The Company is building two plants in Reno,  Nevada. The
              Company is seeking  financing for the plant. If the financing does
              not become available soon enough then  construction will be slowed
              so that the Company does not become over extended.  However, there
              can be no  assurance  that the Company will be  successful  in its
              plans. Because the Company has experienced substantial losses from
              operations and has a working capital deficit of $11,346,463, there
              is substantial  doubt about the Company's ability to continue as a
              going concern.

NOTE 3 -      MATERIAL EVENTS

              Litigation
              ----------

              On March 4, 2002, the Company entered into a Separation Agreement,
              Settlement  Agreement and Mutual Release with Project  Development
              Industries,  L.L.C.  (PDI) and several  individuals.  During March
              2002, the Company has paid a $155,000 invoice previously  tendered
              by PDI and PDI has  returned 4 million  shares of common stock and
              cancelled  the  $6  million   contingent   promissory   note.  The
              promissory  note was to be paid based upon  earnings  by PDI.  PDI
              recorded a loss for the period from April 1, 1999 to December  31,
              1999  and  EOPT  agreed  to  defer  the   implementation   of  the
              contingency  but the  criteria  for payment of the note were never
              met and the Company never recorded the note as a liability.

                                       F-8
<PAGE>

               ENVIRONMENTAL OIL PROCESSING TECHNOLOGY CORPORATION
                                AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                      March 31, 2002 and December 31, 2001

NOTE 3 -      MATERIAL EVENTS (Continued)

              Truck Lease
              -----------

              During March 2002, the Company  entered into a one-year  operating
              lease for two trucks and related equipment with Oil Transportation
              Company,  Inc.  (OTC),  a company  owned by the  President  of the
              Company and an unrelated  individual.  The monthly lease  payments
              are based on $0.50 per  actual  running  mileage  in a month.  The
              Company has prepaid OTC the amount of $20,000  that is included in
              other current assets as of March 31, 2002.

              Notes Payable
              -------------

              The Company has negotiated an extension on its note payable in the
              amount of  $10,500,000  which was due on March 23,  2002.  The due
              date on the note has been  extended  six months to  September  23,
              2002.

NOTE 4 -      DISCONTINUED OPERATIONS

              On September 14, 2001, Project Development Industries,  LLC (PDI),
              the Company's  wholly-owned  subsidiary,  and several  individuals
              filed a complaint in a federal district court against the Company.
              In March  2002,  the  Company  and PDI  reached  an  agreement  of
              separation,  settlement  and  mutual  release.  Both  PDI  and the
              Company  agreed and  consented  to  separate  PDI from the Company
              completely and to rescind the original  share  purchase  agreement
              subject to the terms and conditions of the settlement. The Company
              has accounted for the  operations of PDI as  discontinued  and has
              used PDI's  financial  statements as of June 30, 2001. At June 30,
              2001, PDI had net assets in excess of liabilities of $294,746.  An
              allowance  has been  established  for the net  assets in excess of
              liabilities  of PDI,  thus,  the value of the net assets of PDI at
              December  31,  2001 was $-0-.  During  March  2002,  PDI  returned
              4,000,000  shares of the  Company's  common  stock  which was then
              cancelled by the Company.  The cancelled  shares were valued based
              on the net assets in excess of liabilities of PDI. The gain on the
              disposal  of PDI  recoups  the loss on the net assets in excess of
              liabilities  previously  recognized in the period ended  September
              30, 2001.  The  following  is a summary of loss from  discontinued
              operations  resulting  from  the  litigation  between  PDI and the
              Company for the three  months  ended March 31, 2002 and 2001.  The
              consolidated financial statements have been retroactively restated
              to reflect this event.

                                      F-9
<PAGE>

               ENVIRONMENTAL OIL PROCESSING TECHNOLOGY CORPORATION
                                AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                      March 31, 2002 and December 31, 2001

NOTE 4 -      DISCONTINUED OPERATIONS (Continued)


                                                     For the Three Months Ended
                                                             March 31,
                                                      ---------------------
                                                        2002        2001
                                                      ---------   ---------
                                                     (Unaudited) (Unaudited)

NET SALES                                             $    --     $ 610,859

COST OF SALES                                              --          --
                                                      ---------   ---------

GROSS MARGIN                                               --       610,859

OPERATING EXPENSES

  Consulting                                               --        14,053
  Depreciation and amortization                            --        91,944
  Selling, general and administrative                      --       510,419
                                                      ---------   ---------

    Total Other Income (Expense)                           --       616,416
                                                      ---------   ---------

LOSS FROM OPERATIONS                                       --        (5,557)

OTHER INCOME (EXPENSE)

  Interest expense                                         --       (19,281)
  Interest income                                          --             1
  Gain on disposal of subsidiary                        294,746        --
  Loss on impairment of goodwill                           --          --
  Loss on impairment of net assets in excess
   of liabilities of Project Development Industries        --          --
                                                      ---------   ---------

    Total Other Income (Expense)                        294,746     (19,280)
                                                      ---------   ---------

INCOME TAX EXPENSE                                         --          --
                                                      ---------   ---------

INCOME (LOSS) FROM DISCONTINUED
 OPERATIONS                                           $ 294,746   $ (24,837)
                                                      =========   =========
                                      F-10

<PAGE>


               ENVIRONMENTAL OIL PROCESSING TECHNOLOGY CORPORATION
                                AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                      March 31, 2002 and December 31, 2001

NOTE 5 -       CORRECTION OF CERTAIN ERRORS

               The Company  has  restated  its  December  31, 2001  consolidated
               financial  statements  to reflect  adjustments  made to  properly
               record a  liability  and  capitalize  related  amounts  for stock
               options  granted  below  market  value  as part  of a  consulting
               agreement.  This  consulting  agreement was not considered in the
               December 31, 2001 financial  statements  previously issued by the
               Company.   The  Company   granted   500,000   stock   options  to
               nonemployees as part of this consulting agreement and as a result
               of applying SFAS 123, "Accounting for Stock-Based  Compensation",
               the  Company  has  capitalized  an  additional  $73,038  for  the
               Company's   Reno  Project.   These   adjustments   increased  the
               previously reported construction in progress at December 31, 2001
               by $260,538, increased accounts payable by $187,500 and increased
               common stock by $73,038.  These  adjustments had no effect on the
               net loss and accumulated  deficit for the year ended December 31,
               2001. A summary of the changes is as follows:

<TABLE>
<CAPTION>

                                                        Originally           As
                                                         Reported         Restated         Difference
                                                     ---------------  ----------------- -----------------

<S>                                                  <C>               <C>              <C>
               Construction in progress              $     5,978,012   $     6,238,550  $     260,538
               Accounts payable                              506,676           694,176        187,500
               Common stock (no par)                      23,176,950        23,249,988         73,038
               Stockholders' equity (deficit)               (966,435)         (893,397)        73,038
               Net loss                                  (14,888,269)      (14,888,269)             -
               Loss per share                                  (0.20)            (0.20)             -
</TABLE>
                                      F-11