SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

            [x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                     For the fiscal year ended June 30, 2002

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                         Commission file number 0-14859

                          GARB OIL & POWER CORPORATION
               --------------------------------------------------
              (Exact name of small business issuer in its charter)

           Utah                                          87-0296694
-------------------------------            -------------------------------------
(State of other jurisdiction of            (I.R.S. Employer Identification. No.)
incorporation or organization)

1588 South Main Street, Suite 200
Salt Lake City, Utah                                        84115
----------------------------------------                  ---------
(Address of principal executive offices)                  (Zip Code)

                                 (801) 832-9865
                 ----------------------------------------------
                (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
                                                            (No par value)

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

                                 YES [X] NO [ ]

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B 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. [ ]

         State Issuer's revenues for its most recent fiscal year: None.

         As of June 30, 2002 the aggregate value of the voting stock held by
non-affiliates of the Issuer, computed by reference to the average of the bid
and ask price on such date was $314,399.

         As of June 30,2002 the Issuer had outstanding 20,000,000 shares of
common stock (no par value).

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

<PAGE>

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

         Garb Oil & Power Corporation (the "Company") is in the business of
developing and marketing processes which will recover crumb rubber or other
recyclable rubber, oil by-products, commercially marketable char and steel from
scrap tires, a system and process to recover, repair and market truck tires of
all sizes, market new tires imported for sale through Distributors and market
processes which will utilize scrap tires and/or municipal waste to generate
steam for the production of electricity. During 1999, the Company acquired
certain assets from its sister corporation Garbalizer Machinery Corporation,
including the rights to manufacture and sell Garbalizer tire shredders. The
Company has designed a system that in its opinion is capable of recovering
rubber from used large, off-the-road (OTR) tires. The Company has the rights to
act as the non-United States agent for a third party's unproven technology for
the remediation of radioactive wastes and exclusive rights to build its plants
in the United States and abroad. The Company is in the development stage.

         The Company received no revenues in the fiscal year ended June 30, 2002
and at the end of the year its current liabilities exceeded its total assets by
approximately $1,368,923. The Company continues, as it has done in recent years,
to actively pursue sales of its OTR Tire Disintegrator System, Garbalizer tire
shredders and crumb rubber plants. These activities resulted in a signed sale
agreement meant for tires in fiscal 2002, which were delivered in July 2002. The
Company has limited financial resources, and it may not be able to continue in
business if it does not receive significant additional cash from operations or
financing activities. The Company cannot give assurances that its plans to
generate cash will be successful.

         The Company's predecessor, Garb-Oil Corporation, was incorporated and
commenced business on September 11, 1972, under the laws of the State of Utah.
The Company changed its name to Garb Oil & Power Corporation in 1985.

OTR Tire Processing System

         The Company has designed a system known as the OTR Tire Disintegrator
System which it believes will be capable of recovering used rubber from large,
off-the-road (OTR) tires. The Company has substantially completed the
engineering and design of the OTR Tire Disintegrator System, but to date has not
constructed a commercially operating system. Currently the company is in
discussions with a company,(INTERPIPE)located in the Ukraine, who has indicated
an interest in completing the development of the OTR Tire Processing System for
marketing in Eastern Europe. If an agreement is reached the Company would retain
marketing rights for North America where the process would be marketed by the
Company.

         Although such discussions are underway there is no assurance that the
discussions will result in an Agreement between the two companies or that the
process would be successful if constructed by INTERPIPE.

         Commercially available tire shredders, including shredders made by the
Company, are designed to process standard automobile, truck tires and some OTR
tires, which may include semi-trailer or over-the-road tires. Tires used in a
variety of off the road equipment, such as graders, bulldozers, mining
equipment, etc. cannot be processed directly by these shredders. Although these
tires, which may weigh from 400 pounds to 9 tons each, are less numerous than
standard tires, the Company estimates that over 2,600,000 tons of OTR tires of
all sizes require disposal in the United States each year.

         Current methods of disposal include land filling and surface disposal,
which are accepted only due to the lack of a viable alternative. Most states
have passed laws prohibiting land filling or storage of whole tires.

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<PAGE>

         The OTR Tire Disintegrator System uses mechanical means to remove the
exterior rubber from OTR tire carcasses without shredding. After removal of
non-rubber components, primary shredding and wire separation, the resulting
particles are then processed into crumb rubber during secondary processing. The
shredded particles could also be used as fuel or safely disposed of in a
landfill, although the Company believes that the rubber particles will be of
such high quality that landfill disposal or use as fuel will be unnecessary or
desirable.

         The Company has prepared what it believes to be the final design of the
OTR Tire Disintegrator System and has analyzed its expected performance. When
the first OTR Tire Disintegrator System is built, it is expected that only
slight modifications to the design could be required to maximize performance. It
is also possible, although the Company does not anticipate this, that the OTR
Tire Disintegrator System will not perform as planned when built.

         The Company has received United States Patent No. 5,299,748 on the OTR
Tire Disintegrator System design which expires April 5, 2011,Patent No.
5,590,838 which expires January 7, 2014 and patent number 6,015,105 which
expires January 18, 2018. An additional patent improvement has been filed and is
currently pending in the United States. The pending patent improvement was
granted in Canada on July 6, 1999 as Canadian Patent No. 2,178,326 which expires
March 23, 2015 and an additional patent is pending.

         The Company announced the availability of the OTR Tire Disintegrator
System in July, 1992. Although the Company has received and continues to receive
numerous inquiries from potential buyers or users of the OTR Tire Disintegrator
System, it has not built or sold an OTR Tire Disintegrator System. The Company's
original intent was to retain ownership of the OTR Tire Disintegrator System,
allowing its use by persons who purchase an exclusive territory from the Company
and who agree to pay the Company a share of any profits earned. However, the
Company has decided to modify its requirements to allow others to purchase and
use the technology and machinery on a license and royalty based upon gross
sales.

Shredding Systems

         On March 19, 1999 the Company acquired a patented shredding system from
its sister company, Garbalizer Machinery Corporation ("GMC"). See "Certain
Relationships and Related Transactions". This system became available when GMC
merged with a Canadian Internet company, changed its name to RecycleNet, Inc.
and ceased its shredder business.

         The Company acquired from GMC all of its then existing assets,
including the Garbalizer name and logo, patents, machinery designs and contract
rights in exchange for assumption of all then existing indebtedness of GMC in
the approximate amount of $500,000.

         The system known as the "Garbalizer Shredder" has a thirty-year history
of shredding automobile and truck tires in the United States, Canada and Europe.
During this period of time, GMC acquired fourteen U.S., and six foreign patents
all of which have expired except U.S. patent number 4927088 which expires on May
22, 2007.

         The Garbalizer Shredder employs a cutting method rather than the impact
method embodied in hammer mills and grinders. This cutting method consists of a
rotatable shaft or pair of shafts, supported by bearings, upon which are fixed a
series of blade holders at 120(Degree) or 180(Degree) intervals around the
shaft. The blade holders to which blades are attached are positioned along the
length of the shaft so that their tips form a helix which tends to position the
tires for cutting.

         Spacers to which no cutting blades are attached are located between
each blade holder mounted on the rotatable shaft so that the rotating blades and
the spacers form the cutting mechanism of the Garbalizer Shredder when co-acting
with stationary blade holders.

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<PAGE>

         The shredding mechanism for all of the electric-driven models is
protected by fluid couplings, torque limiting couplings and overload relays in
the electrical control system. If non-shreddable material is encountered within
the Garbalizer Shredders, the torque limiting or fluid coupling and relays stop
the machines and protect the Garbalizer Shredders from serious damage. The
rotatable shaft or shafts are driven by an electric motor or diesel electric
system through a system of gear reducers. The diesel electric-driven mobile
Garbalizer Shredder is protected from non-shreddable items by similar couplings
and overload relays that stop the Garbalizer Shredder if it becomes overloaded
or jammed. If this happens on any of the Garbalizer Shredders, it is simple to
reverse the rotor and remove from the Garbalizer Shredder the item or items that
jammed or stopped the machine. This and several additional unique and beneficial
features of the Garbalizer Shredder reduces the time and effort required for
maintenance.

         In operation, material to be shredded is placed on a conveyor and
carried to the top of the hopper where it falls by gravity upon the rotating
blade or blades or can be fed directly into the cutters by a patented controlled
feeding system. The rotating blades position the material and cut it as it is
forced between the stationary blades. The shredded material is then transported
away from the machine by conveyor to be used as tire derived fuel (TDF), crumb
rubber production or other processes that use shredded tires.

         The Garbalizer Shredders are offered in mobile and stationary models of
various capacities.

         The Company believes that acquisition of the Garbalizer Shredder system
and related marketable items from GMC will benefit the Company by allowing it to
quote complete recycling systems more economically and efficiently.

         There are a number of companies that sell competitive products. The
Company believes that the design of the Garbalizer Shredders is equivalent or
superior to competitive designs. Some of the competitors are larger and better
financed than the Company, and the Company believe certain competitors may have
a competitive advantage on the sale of stand-alone shredders with respect to
marketing prowess, financing terms, cost and perceived customer support.

         Historically, GMC had determined that it could manufacture the
Garbalizer Shredders more economically on a contract basis with local machine
shops in lieu of its own manufacturing facilities and personnel. The company has
now discovered that the shredders can be built much more economically outside of
the United States and would give the company better advantage to compete with
larger and better financed competitors. The Company has investigated this
potential and decided that future shredders should be constructed outside of the
United States to give the Company more flexibility in marketing.

         During the third quarter of 2001 the Company began a new marketing
strategy to market its products. The Company began, and is still continuing to
establish distributorships in the United States and Internationally. As of June
30, 2001 the Company has established Distributorships in New Jersey with
National Recycling Corporation that covers a three state area, New Jersey, New
York and Delaware. A Distributorship has been established in Virginia with
Minority Tire Reclamation, Inc. that covers Virginia, North Carolina and
Maryland. The Company will continue searching for dependable Companies to
establish Distributorships throughout all of North America. Internationally the
Company has concluded an Agreement with Micron SA of Odessa, Ukraine to
manufacture and market its Shredders and other Technology throughout Eastern and
Western Europe. All Machines and Equipment for the European Market will be
manufactured by Micron on a licensed basis and marketed jointly by Garb-Oil and
Micron throughout the European market area. The Company has concluded a
Distributorship with Representaciones Internacionales of Guadalajara, Mexico for
all of South and Central America.

                                       4
<PAGE>

         All machines, Equipment and Technology for the South and Central
America Distributorship will be manufactured in Mexico on a license basis with
the marketing being done jointly by Garb-Oil and Representaciones
Internacionales. It is anticipated and planned that all items sold by Garb-Oil
Distributorships in the United States and Canada will be manufactured in Mexico.
The Company has concluded a Distributorship with The Princeton Group of
Alhambra, CA for all of Asia. Machines, Equipment and Technology for the Asian
market area will be manufactured in China. Certain Technology and Machinery
owned by the Chinese Manufacturer for crumb rubber processing will be
manufactured in China and purchased by Garb-Oil to be sold in all of the
marketing areas inside and outside of the Asian market area. Because of the
NAFTA Agreement and other International Agreements currently existing, the
Company is now able to establish these Distributorship agreements and
contractually protect its technology and proprietary rights. These Agreements
give the Company access to less expensive manufacturing and technology, which
Management believes will make the Company more competitive and generate sales on
a worldwide basis. As of June 30, 2002 the company management has determined
that the company should take advantage of the benefits of such manufacturing and
marketing in future Company operations.

         The Garbalizer Shredder takes approximately four to five months to
construct. It is manufactured and assembled from stock alloy steel, gear
reducers, drive units and motors. Any heavy equipment machine shop with standard
machine technology can manufacture the shaft, blade holders, blades, spacers,
hopper, structural frame and supports for the Garbalizer Shredder from standard
alloy steel stock. The gear reducer, bearings, electric motor and related drive
components are standard items available from several suppliers. The completed
components are assembled into major units for shipping to the installation site
by sea, truck or railroad flat car. At the site, the major units can be field
assembled with local construction or rigging workers who need have no previous
experience with the Garbalizer Shredder. Location of the manufacturing
facilities in close geographical proximity to the installation sites of
potential customers, is not considered by management to be a significant factor.

Crumb Rubber Plants

         The Company markets plants and equipment to process scrap passenger car
and light truck tires into crumb rubber. The Company is marketing such plants
worldwide on a "turn-key" basis. The equipment for such plants will include
third party equipment, equipment made to the Company's specifications, shredders
and other items provided by the Company. The new marketing strategy currently
being established by the Company has made available crumb rubber technology
which heretofore was not available to the Company.

         If the Company is successful in selling a crumb rubber plant, it will
be exposed to the risks of process engineering and equipment manufacturing
concerns, including potential contract, warranty and liability claims. The
Company has limited experience in engineering for or constructing crumb rubber
plants. The Company relies on third parties including engineers and
sub-contractors for the supply of a majority of the equipment in the plant and
the actual assembly and construction labor.

Trenergy Radioactive Waste Technology

         On May 11, 1998, the Company entered into a Project Development and
Construction Agreement with Trenergy Inc. ("Trenergy"). Pursuant to the Trenergy
Agreement, the Company has been engaged to provide consulting and analysis
regarding the potential commercial application of Trenergy's unproven claimed
technology to neutralize and remediate radioactive waste.

         Trenergy has reported to the Company that the Trenergy technology has
the potential of neutralizing radioactive waste. The Company has not verified
Trenergy's claims. If true, Trenergy's technology would involve a substantial
departure from current methodology and currently accepted scientific principles.
Trenergy has informed the Company that it has applied for a patent on the
Trenergy technology. Filing of a patent application does not indicate that any
third party has verified the validity of the technology.

                                       5
<PAGE>

         The Trenergy Agreement is for a five-year term with renewal provisions
and gives the Company the right to build all systems and plants for Trenergy on
a cost plus basis which cannot exceed similar costs for similar projects. The
Company is designated as Trenergy's exclusive agent to exploit the Trenergy
technology outside of the United States with the exception of the Republic of
Belarus, Ukraine, Romania, Macedonia, Greece and Hungary. Trenergy and the
Company intend to equally share license revenues from potential licenses of the
Trenergy technology in the Company's territory; provided that Trenergy may
negotiate the Company's compensation for licenses where Trenergy had initial
discussions with the licensee. No licenses for the Trenergy technology have been
granted as of the date of this report and it is possible such licenses may not
be granted in the future.

         Trenergy may not be able to establish the scientific validity or
commercial viability of the Trenergy technology. Neither Trenergy nor the
Company have the resources necessary to develop or evaluate the Trenergy
technology without infusion of substantial capital or the joint venturing with
third parties. Neither Trenergy nor the Company have any such arrangements in
place. The Company plans to use management time and financial resources pursuing
possible transactions with the Trenergy technology for which the Company may
receive no revenue. During the years 1998,1999 and 2000 Trenergy has continued
research on the process but at June 30, 2001 had not completed the "hot test"
which would further prove if the process could be viable. As of June 30, 2002
the "hot test"had not been completed by Trenergy and no date has been given the
Company as to when such test would be completed.

UTTI Tire Repair and Resale Business

         The Company's efforts have historically focused on reducing the
environmental problems of disposing of used tires by creating fuel, power or
useful by-products from the tires. Although such efforts have not resulted in
commercial operations, the Company's management has gained extensive knowledge
of the used tire distribution and disposal business through such efforts. On May
20, 1994 the Company formed Utah Truck Tires, Inc. ("UTTI") as a majority owned
subsidiary to exploit the perceived demand for repaired and retreaded commercial
truck tires. Although UTTI did demonstrate that there was a demand for these
used tires, UTTI incurred operating losses due principally to overhead costs and
high carcass costs. The Company believes that the repair and resale business
could be commercially viable if operated in conjunction with a recycling plant,
where overhead costs can be shared with other operations and usable carcasses
obtained at relatively low cost. In 1996, UTTI ceased active operations and as
of June 30, 2002 both the Company and UTTI have decided that future operations
for UTTI probably would not be re-started

         The Company is proposing to establish used tire processing and sales
joint ventures with purchasers of tire shredders or OTR Tire Disintegrator
Systems in the United States, to date the Company does not have any agreements
to establish such joint ventures. As with any start-up operation, there is
substantial uncertainty regarding its ability to operate at a profit.

         The Company owns 55% of UTTI, which interest it received in exchange
for guaranteeing the loan for startup capital, its expertise and other
intangible capital contributions. The remaining 45% of UTTI is owned by an
investor who loaned $165,000 of seed capital to UTTI and who is an officer and
director of UTTI.

Co-generation and Electrical Power Generation

         Since 1982, the Company has been involved in planning and preparation
for plants generating electricity or process steam to be fueled by scrap tires.
The Company may build such plants alone or in joint venture with others. During
the past fiscal year, the Company has concentrated its efforts on other aspects
of its business and has held only very preliminary discussions regarding the
possibility of construction of such plants. To date the Company has not built a
plant. However, with the current and projected acute energy shortage, management
now believes that this technology is timely and has an improved potential for
development.

                                       6
<PAGE>

         The design, which the Company developed for these plants calls for
scrap tires to be shredded into hand sized pieces. The shredded tires are then
burned in a fluidized bed combustor to produce steam, which may be used for the
generation of electricity or may be used as process steam in nearby industrial
plants.

Pyrolysis

         The pyrolysis patents granted the Company has expired and the Company
has decided at this time no further research would be warranted. The Company
concluded that although the process worked the markets for such plants are
financially unfeasible at this time.

Patents, Trademarks and Proprietary Data

         The Company has received two United States patents on the OTR Tire
Disintegrator System design. The patents expire in the year 2011,2014 and 2018.
One patent has been issued in Canada that expires in 2015. Additional patents
are pending in the United States and Canada.

         The Company does not hold patents on the plant and process to be used
in connection with its proposed electricity, co-generation plants or nuclear
remediation.

         In connection with the Garbalizer Shredder design, the Company owns
United States patent number 4,927,088 that expires May 22, 2007 and Canadian
patent number 1,137,949 that expired December 21, 1999.

         In addition to the above patents, the Company has the following patents
which relate to Tar Sand development:

         Hydropulper & Classifier for Tar       Patent No. 3,814,336
         Sand Application

         Improvement Patents for Tar Sands      Patents No. 4,361,476
         Process

         The Company plans to exploit these patents if and when the board of
directors of the Company determines that the financing and timing is
appropriate. It is not expected that such exploitation will occur in the
foreseeable future and accordingly the patents have not been considered
important to the Company's immediate future.

Employees

         The Company's president, John C. Brewer, it's Chief Engineer and
Secretary each devote 40 hours, or more, per week to the Company's business. All
additional work is performed on a sub-contract basis. UTTI currently has no
employees and has no plans to hire employees in the foreseeable future.

         Additional personnel will be required when the Company expands its
business or enters into agreements for construction of power plants, crumb
rubber and OTR plants. The Company does not anticipate problems in finding
suitable additional personnel.

         The Company believes its relationship with its employees to be good.

         The Company is not a party to any collective bargaining agreement.

Research and Development

         During the fiscal years ended June 30, 2002 and 2001, the Company has
not expended any funds on research and development activities.

Environmental Regulation

         Neither the Company nor UTTI believe that any of its activities result
in harmful discharge of pollutants in the air, water or soil.

         Any power plants built by the Company in the future utilizing tires as
fuel will be required to comply with state and federal regulations regarding the
discharge of pollutants into the atmosphere. The Company believes that the
plants can comply with such regulations.

                                       7
<PAGE>

ITEM 2. DESCRIPTION OF PROPERTY

         The Company's executive offices are located at 1588 South Main Street
on a lease basis, which extends through November 2004 with an option for an
additional 5 years renewal. The offices consist of approximately 1400 square
feet. The premises are being leased from Utah Automobile Dealers Association, an
unrelated third party, on a monthly basis. UTTI leases space in Salt Lake City
from a third party to store its equipment and inventory pursuant to a
month-to-month lease.

ITEM 3.  LEGAL PROCEEDINGS

         Not Applicable.

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

         No shareholder meetings were held during the fourth quarter of the year
ended June 30, 2002.


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

         The Company's common stock is traded in the over-the-counter market.
The representative bid and asked quotations are posted on the National
Association of Securities Dealers OTC Bulletin Board under the symbol GARB. On
August 2, 2002 there were approximately 568 holders of record of the common
stock of the Company and the Company believes there were approximately 1,000
beneficial owners. During the years ended June 30, 2002 and 2001, the stock was
only sporadically traded. The following table sets forth the range of high and
low representative bid quotations for the periods indicated.

           Period
         (Fiscal Year)                               High              Low
         -------------                               ----              ---
            2001
         1st Quarter                                 .14               .075
         2nd Quarter                                 .10               .05
         3rd Quarter                                 .07               .04
         4th Quarter                                 .15               .04

            2002
         1st Quarter                                 .13               .05
         2nd Quarter                                 .07               .035
         3rd Quarter                                 .08               .025
         4th Quarter                                 .08               .06

         The foregoing over-the-counter quotations are inter-dealer quotations
without retail mark-ups, mark-downs or commissions and may not represent actual
transactions.

Dividends

         No cash dividends have been paid by the Company in the past, and
dividends are not contemplated in the foreseeable future. Utah law currently
prohibits the payment of dividends since the Company's liabilities exceed its
assets. Dividends will be dependent directly upon the earnings of the Company,
financial needs, and other similar unpredictable factors. For the foreseeable
future, it is anticipated that any earnings that may be generated from the
operations of the Company will be used to finance the operations of the Company
and dividends will not be declared for shareholders. The Company is not subject
to any contractual restrictions on the payment of dividends.

                                       8
<PAGE>

Sales of Unregistered Securities

         During the fiscal year ended June 30, 2002 no sales of unregistered
securities were made by the Company.

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

         The Company is considered to be in the development stage. Therefore
management cannot say with certainty when significant revenues will be received
from the Company's business.

         The auditor's report accompanying the Company's financial statements
for the year ended June 30, 2002 contains the following statement: "As discussed
in Note 1 to the financial statements, the Company's operating losses since
inception and the deficit accumulated during the development stage raise
substantial doubt about their ability to continue as a going concern. The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty."

         As discussed further in Item 12, in exchange for the Company's
assumption of GMC's net liabilities, Garbalizer Corporation of America
transferred 1,061,668 shares of RecycleNet, Inc. common stock to the Company. As
of June 30, 2002 the Company had none of these shares remaining.

         Management is pursuing avenues of generating cash or revenues during
the next twelve months. The Company is pursuing sales of the crumb rubber plants
on which the Company would earn a commission. The Company is also attempting to
interest purchasers, or potential purchasers, of Garbalizer shredders in
establishing used and new tire marketing joint ventures. The Company continues
to pursue the licensing or leasing of the OTR Tire Disintegrator System. The
Company is exploring the synergies of its businesses - such as offering to joint
venture a UTTI-type operation with the purchaser of a crumb rubber plant.
Management also believes that with the new marketing strategies that are now
implemented the potential for machinery sales has increased. If any of such
possible transactions occur, management believes that the Company would have
sufficient resources to operate for the next twelve months. There is no
assurance that the Company will be able to obtain cash flow from operations or
to obtain additional financing. If these are not available to the Company, the
Company may not be able to continue operations. While management remains hopeful
that one or more transactions will proceed, no assurances can be expressed as to
the Company's continuing viability in the absence of revenues. Substantially all
of the Company's existing liabilities, other than trade payables and deferred
revenue, are owed to the Company's President, John Brewer or other shareholders
of the Company.

         Operating expenses for the Company have been paid in part from
short-term unsecured notes from shareholders. At June 30, 2002 the Company had a
deficit in working capital (current liabilities in excess of current assets) of
$1,403,378. The working capital deficit at June 30, 2001 was $1,081,229. The
decrease in working capital was caused by the continued accrual of salary,
unearned revenue, accounts payable for expenses, which the Company was unable to
pay in cash and additional short-term unsecured notes incurred as part of the
assumption of GMC liabilities.

         Other than its short-term office lease and loans payable to affiliates,
the Company, excluding UTTI, is not subject to any material commitments or
capital expenditures. The start-up costs for UTTI were financed with a loan in
the principal amount of $165,000 from the minority shareholder of UTTI, who is
also an officer and director of UTTI. UTTI is obligated to its minority owner in
the principal amount of $165,000, plus interest. Such loan is now due on demand.
The Company also made advances to UTTI to pay its operating expenses during its
start-up phase.

                                       9
<PAGE>

         During the year ended June 30, 2002 the Company received proceeds from
the sale of RecycleNet common stock. The proceeds include $45,191 of cash for
the sale of 2,210,000 shares during the year ended June 30, 2002.

         The Company incurred a loss from operations before other income
(expense) and extraordinary items during the year ended June 30, 2002 of
$177,996 compared to a loss of $221,453 for the year ended June 30, 2001. Total
expenses for 2002 were $177,996 compared to $221,453 in 2001. Salaries and wages
were $83,308 for 2002 compared to $91,757 for 2001. Rental expenses were $17,065
in 2002 and $14,400 in 2001. If any of the Company's plans for revenue producing
activities come to fruition, expenses will rise accordingly.

         Net loss for the year ended June 30, 2002 was $370,418 compared to a
net gain of $320,573 in 2001. On a per share basis, the net loss for the year
ended June 30, 2002 was ($0.02) compared to net loss of ($0.02) in 2001.
Operating losses are expected to continue until such time, if ever, as the
Company receives revenues from the sale of shredders, crumb rubber plants, the
lease or license of the OTR Tire Disintegrator System, or other operations.
There is no assurance that the Company will ever be profitable.

         UTTI is 55% owned by the Company and operates at a loss. UTTI's losses
have exceeded the equity capital contributed by the minority shareholder.
Therefore, in preparing its consolidated statements of operations, the Company
does not adjust its consolidated net loss by the minority shareholder's interest
in the UTTI loss.

         During the year ended June 30, 2002, the Company had a net increase in
cash of $42,626. The primary sources of cash were from investing activities by
the sale of RecycleNet's common stock, deposit from the sale of tires, and
additional loans from financing activities.

ITEM 7.  FINANCIAL STATEMENTS



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                                       10
<PAGE>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)

                        CONSOLIDATED FINANCIAL STATEMENTS

                                  June 30, 2002


                                 C O N T E N T S



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

Consolidated Balance Sheet .................................................F-3

Consolidated Statements of Operations and Comprehensive Income..............F-5

Consolidated Statements of Stockholders' Equity (Deficit)...................F-7

Consolidated Statements of Cash Flows......................................F-10

Notes to the Consolidated Financial Statements ............................F-12

                                      F-1
<PAGE>

To the Stockholders
Garb Oil and Power Corporation and Subsidiaries
(A Development Stage Company)
Salt Lake City, Utah

We have audited the accompanying consolidated balance sheet of Garb Oil & Power
Corporation and Subsidiaries (a development stage company) as of June 30, 2002,
and the related consolidated statements of operations and comprehensive income
(loss), stockholders' equity (deficit), and cash flows for the years ended June
30, 2002 and 2001 and from inception on January 14, 1981 through June 30, 2002.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits. The financial statements for the
period from inception on January 14, 1981 through June 30, 1999 were audited by
other auditors whose report dated September 10, 1999, expressed an unqualified
opinion on these statements. Our opinion on the statements of operations,
stockholders' equity (deficit) and cash flows for the period January 14, 1981
(inception) through June 30, 2002, insofar as it relates to amounts for prior
periods through June 30, 1999, is based solely on the report of other 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 consolidated
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, based on our audits, the consolidated financial statements
referred to above present fairly, in all material respects, the consolidated
financial position of Garb Oil & Power Corporation and Subsidiaries as of June
30, 2002 and the consolidated results of their operations and their cash flows
for the years ending June 30, 2002 and 2001, in conformity with accounting
principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. The Company is a development
stage enterprise engaged in developing technology related to production of
electricity by burning used rubber, and pyrolysis (extraction of oil, carbon and
steel from used tires). As discussed in Note 1 to the consolidated financial
statements, the Company's operating losses since inception and the deficit
accumulated during the development stage raise substantial doubt about its
ability to continue as a going concern. Management's plans concerning these
matters are also described in Note 1. The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.

/s/ HJ & Associates, LLC

HJ & Associates, LLC
Salt Lake City, Utah
August 19, 2002

                                      F-2
<PAGE>
<TABLE>
<CAPTION>
                          GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                                  (A Development Stage Company)
                                   Consolidated Balance Sheet



                                                ASSETS

                                                                                                       June 30,
                                                                                                         2002
                                                                                                     -----------
<S>                                                                                                  <C>
CURRENT ASSETS

   Cash                                                                                              $    55,800
   Restricted cash                                                                                       103,338
   Prepaid expenses                                                                                        1,250
                                                                                                     -----------
     Total Current Assets                                                                                160,388
                                                                                                     -----------

PROPERTY AND EQUIPMENT

   Engineering drawings                                                                                    2,500
   Office equipment                                                                                       11,658
   Tools and equipment                                                                                    30,099
   Building improvements                                                                                   8,022
   Less:  accumulated depreciation                                                                       (48,056)
                                                                                                     -----------
     Total Property and Equipment                                                                          4,223
                                                                                                     -----------

OTHER ASSETS

   Assets held for resale                                                                                 30,232
   Patents - net of accumulated amortization                                                                  --
                                                                                                     -----------
     Total Other Assets                                                                                   30,232
                                                                                                     -----------
     TOTAL ASSETS                                                                                    $   194,843
                                                                                                     ===========


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

                                                          F-3
<PAGE>
<CAPTION>
                          GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                                  (A Development Stage Company)
                             Consolidated Balance Sheet (Continued)



                         LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

                                                                                                      June 30,
                                                                                                        2002
                                                                                                     -----------
<S>                                                                                                  <C>
CURRENT LIABILITIES

   Accounts payable and accrued expenses                                                             $    51,518
   Deferred revenue (Note 9)                                                                             157,785
   Notes payable - related parties (Note 4)                                                              590,946
   Accrued interest                                                                                      254,573
   Wages payable (Note 6)                                                                                504,000
   Equity Options and Liabilities (Note 10)                                                                4,944
                                                                                                     -----------
     Total Current Liabilities                                                                         1,563,766
                                                                                                     -----------
     Total Liabilities                                                                                 1,563,766
                                                                                                     -----------

STOCKHOLDERS' EQUITY (DEFICIT)

   Common stock; (no par value) 20,000,000 shares
    authorized; 20,000,000 shares outstanding                                                          2,654,811
   Treasury stock; 185,000 shares at cost                                                                (10,455)
   Accumulated deficit - prior to development stage                                                      (27,178)
   Accumulated deficit during the development stage                                                   (3,986,101)
                                                                                                     -----------
     Total Stockholders' Equity (Deficit)                                                             (1,368,923)
                                                                                                     -----------
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                            $   194,843
                                                                                                     ===========

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

                                                         F-4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                          GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                                                  (A Development Stage Company)
                              Consolidated Statements of Operations and Comprehensive Income (Loss)


                                                                                                    From Inception of
                                                                                                   the Development Stage
                                                                         June 30,                 on January 14, For the
                                                              --------------------------------   Years Ended 1981 Through
                                                                  2002                2001           June 30, 2002
                                                              ------------       -------------   ------------------------
<S>                                                           <C>                <C>                 <C>
REVENUES

   Tire sales                                                 $          -       $           -       $     117,932
   Equipment sales                                                       -                   -             595,723
   Other revenues                                                        -                   -             402,333
                                                              ------------       -------------       -------------
     Total Revenues                                                      -                   -           1,115,988
                                                              ------------       -------------       -------------

EXPENSES

   Cost of sales                                                         -                   -              60,020
   Cost of equipment                                                     -                   -             473,837
   Bad debt                                                              -                   -             266,750
   Salary and wages                                                 83,308              91,757           1,678,011
   Sales commissions                                                     -                   -              27,785
   Office                                                            4,146              10,270             168,566
   Rent                                                             17,065              14,400             271,356
   Telephone                                                         3,854               5,018             115,170
   Professional fees                                                18,758              17,478             515,870
   Finders' fee                                                          -                   -             145,000
   Insurance                                                         6,948               6,338             101,447
   Taxes and licenses                                                4,118               4,359             118,499
   Travel                                                            9,794               3,124             234,064
   Promotion and entertainment                                           -                   -              14,053
   Testing                                                               -                   -              27,073
   Advertising                                                      12,945               6,126             164,887
   Amortization                                                        294                 932              54,260
   Depreciation                                                      1,271               7,859              72,021
   Consulting fee                                                        -                   -              19,737
   Stockholders' meetings                                                -                   -                 670
   Parking                                                               -                   -              11,544
   Subcontractors                                                        -                   -              40,138
   Auto expense                                                        592                   -               5,009
   Repairs and maintenance                                             554                   -               4,536
   Other                                                            14,349              53,792              96,672
                                                              ------------       -------------       -------------
     Total Expenses                                           $    177,996       $     221,453       $   4,686,975
                                                              ------------       -------------       -------------



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

                                                               F-5
<PAGE>
<CAPTION>
                                          GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                                                  (A Development Stage Company)
                         Consolidated Statements of Operations and Comprehensive Income (Loss) (Continued)


                                                                                                    From Inception of
                                                                                                   the Development Stage
                                                                         June 30,                 on January 14, For the
                                                              --------------------------------   Years Ended 1981 Through
                                                                  2002                2001           June 30, 2002
                                                              ------------       -------------   ------------------------
<S>                                                           <C>                <C>                 <C>
OPERATING LOSS                                                $   (177,996)      $    (221,453)      $  (3,570,987)
                                                              ------------       -------------       -------------
OTHER INCOME (EXPENSES)

   Write-off and abandonment of assets                                   -                   -            (431,690)
   Gain (loss) on sale of assets                                  (147,937)            (56,200)            192,031
   Interest income                                                       -                   -             147,810
   Interest expense                                                (44,488)            (42,920)           (369,746)
   Minority interest in losses of subsidiary                             -                   -               5,383
   Income from expired option                                            -                   -             150,000
                                                              ------------       -------------       -------------
     Total Other Income (Expense)                                 (192,422)            (99,120)           (306,212)
                                                              ------------       -------------       -------------
(LOSS) BEFORE EXTRAORDINARY ITEMS                                 (370,418)           (320,573)         (3,877,199)
                                                              ------------       -------------       -------------
EXTRAORDINARY ITEMS

   Loss on extinguishment of debt                                        -                   -            (116,212)
   Gain on forgiveness of debt                                           -                   -               7,310
                                                              ------------       -------------       -------------
     Total Extraordinary Gain (Loss)                                     -                   -            (108,902)
                                                              ------------       -------------       -------------

NET INCOME (LOSS)                                                 (370,418)           (320,573)         (3,986,101)
                                                              ============       =============       =============

OTHER COMPREHENSIVE INCOME (LOSS)

   Unrealized income (loss) on
    available for sale securities                                        -            (123,469)                  -
                                                              ------------       -------------       -------------

     Total Other Comprehensive
      Income (Loss)                                                      -            (123,469)                  -
                                                              ------------       -------------       -------------

COMPREHENSIVE INCOME (LOSS)                                   $   (370,418)      $    (444,042)      $  (3,986,101)
                                                              ============       =============       =============

BASIC INCOME (LOSS) PER SHARE                                 $      (0.02)      $       (0.02)
                                                              ============       =============

WEIGHTED AVERAGE NUMBER
 OF SHARES OUTSTANDING                                          20,000,000          19,485,825
                                                              ============       =============

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

                                                            F-6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                          GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                                                  (A Development Stage Company)
                                    Consolidated Statements of Stockholders' Equity (Deficit)

                                                                                              Deficit
                                                                Unrealized                  Accumulated
                                          Common Stock           Gain on                     During the       Treasury Stock
                                    -----------------------     Investment    Accumulated   Development   ----------------------
                                      Shares       Amount      in Securities    Deficit        Stage        Shares       Amount
                                    ----------   ----------     ----------    -----------   -----------   ---------   ----------
<S>                                 <C>          <C>            <C>           <C>           <C>           <C>         <C>
Balance, January 14, 1981           12,833,333   $   61,894     $        -    $   (27,178)  $        -    $       -   $        -
Stock issued to satisfy current
 liabilities:
   June 1983 - $2.94 per share          82,000      240,889              -              -             -           -            -
Stock issued to satisfy related
 party liabilities:
   November 1993-$0.20 per share        64,310       12,882              -              -             -           -            -
   December 1993-$0.14 per share        87,000       12,200              -              -             -           -            -
   November 1994-$0.21 per share        25,000        5,342              -              -             -           -            -
Stock issued for services:
   May 1981-$0.20 per share              5,000        8,000              -              -             -           -            -
   May 1983-$1.50 per share             50,000       75,000              -              -             -           -
   August 1992-$0.15 per share          25,000        3,750              -              -             -           -            -
   December 1992-$0.15 per share         4,000          600              -              -             -           -            -
   November 1994-$0.21 per share         4,000          855              -              -             -           -            -
   January 1995-$0.21 per share         76,167       16,276              -              -             -           -            -
   February 1995-$0.21 per share        10,000        2,137              -              -             -           -            -
Stock issued for cash:
   March 1981-$0.70 per share           10,000        7,000              -              -             -           -            -
   April 1981-$0.42 per share          192,834       80,000              -              -             -           -            -
   June 1981-$1.31 per share            27,518       35,945              -              -             -           -            -
   March 1983-$0.75 per share           14,000       10,500              -              -             -           -            -
   April 1983-$1.00 per share           50,000       50,000              -              -             -           -            -
   June 1983-$3.04 per share            30,000       91,272              -              -             -           -            -
   September 1984-$1.00 per share      200,000      200,000              -              -             -           -            -
   November 1984-$0.95 per share       105,470      100,000              -              -             -           -            -
   April 1986-$1.27 per share          770,000      980,000              -              -             -           -            -
   May 1992-$0.234 per share           208,334       50,000              -              -             -           -            -
   December 1992-$0.15 per share        50,000        7,500              -              -             -           -            -
   February 1993-$0.15 per share       100,000       15,000              -              -             -           -            -
   March 1993-$0.15 per share          100,000       15,000              -              -             -           -            -
   May 1993-$0.15 per share            100,000       15,000              -              -             -           -            -
   June 1993-$0.25 per share           100,000       25,000              -              -             -           -            -
   August 1993-$0.20 per share         100,000       20,000              -              -             -           -            -
   October 1993-$0.07 to $0.15
     per share                         250,000       25,000              -              -             -           -            -
   November 1993-$0.25 per share        20,000        5,000              -              -             -           -            -
   December 1993-$0.15 to $0.20
     per share                         180,000       32,500              -              -             -           -            -
   January 1994-$0.25 per share         20,000        5,000              -              -             -           -            -
   February 1995-$0.20 per share        50,000       10,000              -              -             -           -            -
   March 1995-$0.20 to $0.22
     per share                         263,000       56,500              -              -             -           -            -
   May 1995-$0.25 per share             20,000        5,000              -              -             -           -            -
   June 1995-$0.20 per share            25,000        5,000              -              -             -           -            -
   Contributed capital                       -      356,402              -              -             -           -            -
   Purchase of treasury stock                -            -              -              -             -      10,000      (10,009)
   Retirement of treasury stock        (10,000)     (10,009)             -              -             -     (10,000)      10,009

Net loss from January 14, 1981
 through June 30, 1995                       -            -              -              -    (2,829,005)          -            -
                                    ----------   ----------     ----------    -----------   -----------   ---------   ----------

Balance, June 30, 1995              16,241,966   $2,632,435     $        -    $   (27,178)  $(2,829,005)  $       -   $        -
                                    ==========   ==========     ==========    ===========   ===========   =========   ==========


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

                                                             F-7
<PAGE>
<CAPTION>
                                          GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                                                  (A Development Stage Company)
                              Consolidated Statements of Stockholders' Equity (Deficit) (Continued)

                                                                                              Deficit
                                                                Unrealized                  Accumulated
                                          Common Stock           Gain on                     During the       Treasury Stock
                                    -----------------------     Investment    Accumulated   Development   ----------------------
                                      Shares       Amount      in Securities    Deficit        Stage        Shares       Amount
                                    ----------   ----------     ----------    -----------   -----------   ---------   ----------
<S>                                 <C>          <C>            <C>           <C>           <C>           <C>         <C>
Balance, June 30, 1995              16,241,966   $2,632,435     $        -    $   (27,178)  $(2,829,005)  $       -   $        -

Stock issued for services:
  September 1995-$0.13 per share        20,000        2,684              -              -             -           -            -
Stock issued for cash:
   July 1995-$0.25 per share            40,000       10,000              -              -             -           -            -
   December 1995-$0.10 per share       250,000       25,000              -              -             -           -            -
   May 1996-$0.12 to $0.25 per
     share                              90,000       16,000              -              -             -           -            -

Net loss for the period ended
  June 30, 1996                              -            -              -              -      (124,871)          -            -
                                    ----------   ----------     ----------    -----------   -----------   ---------   ----------

Balance, June 30, 1996              16,641,966    2,686,119              -        (27,178)   (2,953,876)          -            -

Stock issued for services:
   May 1997-$0.15 per share             86,333       12,949              -              -             -           -            -
Stock issued for cash:
   January 1997-$0.15 per share        300,000       45,000              -              -             -           -            -

Net loss for the period ended
  June 30, 1997                              -            -              -              -      (177,298)          -            -
                                    ----------   ----------     ----------    -----------   -----------   ---------   ----------

Balance June 30, 1997               17,028,299    2,744,068              -        (27,178)   (3,131,174)          -            -

Net loss for the period ended
  June 30, 1998                              -            -              -              -      (217,439)          -            -
                                    ----------   ----------     ----------    -----------   -----------   ---------   ----------

Balance June 30, 1998               17,028,299    2,744,068              -        (27,178)   (3,348,613)          -            -

Stock issued for services:
   October 1998-$0.09 per share          5,000          450              -              -             -           -            -
Stock issued for cash
   January 1999-$0.05 to $0.10
     per share                         770,000       47,000              -              -             -           -            -
   February 1999-$0.10 per share       130,000       13,000              -              -             -           -            -
Distribution from majority
   shareholder                               -     (473,060)             -              -             -           -            -
Change in unrealized gain on
 investment in securities,
 net of tax                                  -            -        290,625              -             -           -            -

Net loss for the period ended
 June 30, 1999                               -            -              -              -      (123,519)          -            -
                                    ----------   ----------     ----------    -----------   -----------   ---------   ----------

Balance June 30, 1999               17,933,299   $2,331,458     $  290,625    $   (27,178)  $(3,472,132)  $       -   $        -
                                    ----------   ----------     ----------    -----------   -----------   ---------   ----------


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

                                                                F-8
<PAGE>
<CAPTION>
                                          GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                                                  (A Development Stage Company)
                              Consolidated Statements of Stockholders' Equity (Deficit) (Continued)

                                                                                              Deficit
                                                                Unrealized                  Accumulated
                                          Common Stock           Gain on                     During the       Treasury Stock
                                    -----------------------     Investment    Accumulated   Development   ----------------------
                                      Shares       Amount      in Securities    Deficit        Stage        Shares       Amount
                                    ----------   ----------     ----------    -----------   -----------   ---------   ----------
<S>                                 <C>          <C>            <C>           <C>           <C>           <C>         <C>
Balance June 30, 1999               17,933,299   $2,331,458     $  290,625    $   (27,178)  $(3,472,132)  $       -   $        -

Issuance of common stock for
  lost treasury shares at $0.10 per
  share                                 10,000        1,000              -              -             -           -            -

Change in unrealized gain on
  investment in securities,
  net of tax                                 -            -       (207,681)             -             -           -            -

Net income for the period ended
  June 30, 2000                              -            -              -              -       177,022           -            -
                                    ----------   ----------     ----------    -----------   -----------   ---------   ----------

Balance, June 30, 2000              17,943,299    2,332,458         82,944        (27,178)   (3,295,110)          -            -

Issuance of common stock for
   available for sale securities     2,056,701      300,000              -              -             -           -            -

Purchase of treasury stock                   -            -              -              -             -     485,000      (45,858)

Issued treasury stock  for
available for sale securities                -       22,353              -              -             -    (200,000)      19,516

Issued treasury stock  for services          -            -              -              -             -    (100,000)       9,758

Change in unrealized gain on
   investment in securities, net
   of tax                                    -            -       (123,469)             -             -           -            -

Net loss for the period
   ended June 30, 2001                       -            -              -              -      (320,573)          -            -
                                    ----------   ----------     ----------    -----------   -----------   ---------   ----------

Balance, June 30, 2001              20,000,000   $2,654,811     $  (40,525)   $   (27,178)  $(3,615,683)    185,000   $   16,584

Change in treasury stock                     -            -              -              -             -     (58,500)       6,129

Change in unrealized gain on
  investment in securities,
  net of tax                                 -            -         40,525              -             -           -            -

Net loss for the period
  ended June 30, 2002                        -            -              -              -      (370,418)          -            -
                                    ----------   ----------     ----------    -----------   -----------   ---------   ----------
Balance, June 30, 2002              20,000,000  $ 2,654,811       $(40,525)   $   (27,178)  $(3,986,101)    126,500   $  (10,455)
                                    ==========  ===========     ==========    ===========   ===========   =========   ==========

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

                                                                   F-9
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                                          (A Development Stage Company)
                                      Consolidated Statements of Cash Flows

                                                                                                          From Inception
                                                                                                        of the Development
                                                                                                       Stage on January 14,
                                                                               June 30,                 For the Years Ended
                                                                   -------------------------------         1981 Through
                                                                        2002              2001            June 30, 2002
                                                                   -------------     -------------     ---------------------
<S>                                                                <C>               <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income (loss)                                               $    (370,418)    $    (320,573)       $  (3,986,101)
   Adjustments to reconcile net cash provided by
    (used in) operating activities:
     Depreciation and amortization                                         1,315             8,791              126,031
     Bad debt expense                                                          -                 -              266,750
     Gain on sale of asset                                                     -                 -               (5,364)
     Loss on sale of available-for-sale securities                       147,934            56,200              101,574
     Write-off and abandonment of assets                                       -                 -              431,690
     Loss on extinguishment of debt                                            -                 -              116,212
     Stock issued for services and interest                                    -                 -              122,701
     Treasury stock issued for services                                    9,405             9,758               19,163
     Available for sale securities issued for services                         -                 -               52,560
     Treasury stock expensed                                                   -                 -                1,000
   Changes in current assets and liabilities:
     Accrued interest receivable                                               -                 -              (24,250)
     Accounts receivable                                                       -                 -               11,645
     Accounts receivable - related party                                       -                 -             (150,344)
     Contract receivable                                                       -                 -             (242,500)
     Restricted cash                                                    (103,338)                -             (103,338)
     Income tax refund receivable                                              -                 -                  537
     Inventory                                                                 -                 -               62,494
     Prepaid expenses                                                       (950)             (300)              (1,250)
     Accounts payable                                                     (1,900)          (12,609)              42,935
     Deferred income                                                     157,785                 -              135,785
     Advances payable - related party                                          -                 -             (120,106)
     Accrued expenses                                                        394            (1,700)              (4,550)
     Accrued payroll                                                      48,000            48,000              504,000
     Accrued interest payable                                             36,540            28,019              445,236
     Equity option liability                                               4,944                 -                4,944
     Other current liabilities                                                 -                 -              240,954
                                                                   -------------     -------------        -------------
       Net Cash Provided (Used) by Operating Activities                  (70,289)         (184,414)          (1,951,592)
                                                                   -------------     -------------        -------------
CASH FLOWS FROM INVESTING ACTIVITIES
   Construction in progress                                                    -                 -           (2,937,790)
   Cash acquired from Garbalizer Machinery                                     -                 -                  899
   Net (advances) payments (to)/from related party                             -           (60,603)            (148,526)
   Increase (decrease) of other assets                                         -                 -           (1,956,733)
   Purchase of property and equipment                                          -            (2,500)             (69,730)
   Purchase of treasury stock                                             (3,276)          (45,858)             (59,173)
   Proceeds from sale of available for sale securities                    45,191           272,543              367,734
   Proceeds from sales of assets                                               -                 -                9,500
                                                                   -------------     -------------        -------------

       Net Cash Provided (Used) by Investing Activities            $      41,915     $     163,582        $  (4,793,819)
                                                                   -------------     -------------        -------------


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

                                                             F-10
<PAGE>
<CAPTION>
                                          GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                                                  (A Development Stage Company)
                                        Consolidated Statements of Cash Flows (Continued)

                                                                                                          From Inception
                                                                                                        of the Development
                                                                                                       Stage on January 14,
                                                                               June 30,                 For the Years Ended
                                                                   -------------------------------         1981 Through
                                                                        2002              2001            June 30, 2002
                                                                   -------------     -------------     ---------------------
<S>                                                                <C>               <C>                  <C>
CASH FLOWS FROM FINANCING ACTIVITIES

   Proceeds from notes payable - related party                     $      71,000     $           -        $     300,841
   Proceeds from bank loans                                                    -                 -            4,636,647
   Sale of common stock                                                        -                 -            2,007,217
   Contribution to capital by parent company                                   -                 -              356,402
   Principal payments on bank loans                                            -                 -             (500,000)
                                                                   -------------     -------------        -------------

     Net Cash Provided (Used) by Financing Activities                     71,000                 -            6,801,107
                                                                   -------------     -------------        -------------

NET INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS                                                         42,626           (20,832)              55,726

NET CASH AND CASH EQUIVALENTS AT
 BEGINNING OF PERIOD                                                      13,174            34,006                   74

NET CASH AND CASH EQUIVALENTS AT
 END OF PERIOD                                                     $      55,800     $      13,174        $      55,800
                                                                   =============     =============        =============
SUPPLEMENTAL DISCLOSURE OF CASH
 FLOW INFORMATION:

   Treasury stock issued for available for
     sale securities                                               $                 $      41,869        $      41,869
                                                                   -------------     -------------        -------------
   Common stock issued for available
     for sale securities                                           $                 $     300,000        $     300,000
   Related party payable issued for available
   for sale securities                                                               $     180,000        $     180,000
   Securities issued for debt                                      $           -     $           -        $      70,000
   Cash paid for interest                                          $           -     $      14,187        $     156,745


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

                                                            F-11
</TABLE>
<PAGE>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                             June 30, 2002 and 2001


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

         a. Organization

         Garb Oil & Power  Corporation (Garb Oil) is a majority owned subsidiary
         of  Garbalizer  Corporation  of America  and was dormant at January 13,
         1981. Since January 14, 1981, Garb Oil has been considered to be in the
         development  stage.  Development  stage  activities  have  consisted of
         raising capital,  purchasing property and developing technology related
         to production of electricity  by the burning of used rubber,  pyrolysis
         (extraction of oil, carbon, and steel from used tires), the recovery of
         used rubber from large  off-the-road  tires and repair and sale of used
         truck tires.

         The accompanying consolidated financial statements include Garb Oil and
         its  wholly-owned  subsidiary,  Rialto  Power  Corporation  (which  was
         dissolved by the State of  California),  and its 55% owned  subsidiary,
         Utah  Truck  Tire,  Inc.;  which are  collectively  referred  to as the
         Company.  The  following  is a summary  of the  significant  accounting
         policies.

         b. Use of Estimates

         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires management to make estimates
         and  assumptions  that  affect  the  reported  amounts  of  assets  and
         liabilities  at the date of the financial  statements  and the reported
         amounts of revenues and expenses  during the reporting  period.  Actual
         results could differ from those estimates.

         c. Basis of Presentation - Going Concern

         The accompanying  consolidated  financial statements have been prepared
         on a going concern basis,  which contemplates the realization of assets
         and the satisfaction of liabilities in the ordinary course of business.
         As shown in the  consolidated  financial  statements,  during the years
         ended June 30, 2002 and 2001,  the  Company has  incurred a net loss of
         $370,418  and  $320,573,  respectively,  and as of June  30,  2002  the
         Company's  deficit   accumulated   during  the  development  stage  was
         $3,986,101.  These factors, among others, indicate that the Company may
         be unable to continue as a going  concern  for a  reasonable  period of
         time.  The  consolidated   financial  statements  do  not  include  any
         adjustments  relating  to  the  recoverability  and  classification  of
         recorded asset amounts or the amount and  classification of liabilities
         that might be  necessary  should the Company be unable to continue as a
         going concern.  The Company's ability to continue as a going concern is
         dependent  upon its ability to generate  sufficient  cash flows to meet
         its  obligations on a timely basis, to obtain  additional  financing as
         may be  required,  and  ultimately  to  attain  successful  operations.
         Management is continuing its efforts to obtain the necessary  financing
         as may be  required  to  generate  sufficient  cash  flows  for  future
         operations.  During the year ended June 30, 1999, the Company  received
         RecycleNet  common shares in conjunction  with the  reorganization  and
         sale  of  Garbalizer  Machinery  Corporation.   Management  intends  to
         continue  to sell the shares  received in the  transaction  and use the
         funds  received  from the sale of the  securities  to fund  current and
         future operations.

                                      F-12
<PAGE>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                             June 30, 2002 and 2001


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
         (Continued)

         d. Principles of Consolidation

         The consolidated  financial statements include the accounts of Garb Oil
         and  its  subsidiaries.   All  significant  intercompany  accounts  and
         transactions  have been  eliminated in  consolidation.  The Company has
         recognized  all of the losses of Utah Truck  Tire in its  statement  of
         operations, with no offset to minority interest.

         e. Patents

         Patents  are  carried  at cost and are being  amortized  over a 17-year
         life. At June 30, 2002, the patents have been fully amortized.

         f. Property and Equipment

         Property and equipment is recorded at cost and is depreciated using the
         straight-line  method based on the  expected  lives of the assets which
         range from five to ten years.  Depreciation expense for the years ended
         June 30, 2002 and 2001, was $1,271 and $7,859, respectively.

         The Company records impairment losses when indicators of impairment are
         present and undiscounted  cash flows estimated to be generated by those
         assets are less than the assets' carrying amount.

         g. Advertising Costs

         The Company  expenses all  advertising  costs as incurred.  Advertising
         expense was  $12,945 and $6,126 for the years  ending June 30, 2002 and
         2001, respectively.

         h. Income Taxes

         The Company recognizes the amount of income taxes payable or refundable
         for the current year and recognizes deferred tax assets and liabilities
         for the future tax consequences attributable to differences between the
         financial statement amounts of certain 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 those  temporary  differences  are  expected to be  recovered  or
         settled.  Deferred  tax assets are reduced by a valuation  allowance to
         the extent  that  uncertainty  exists as to whether  the  deferred  tax
         assets will ultimately be realized.

                                      F-13
<PAGE>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                             June 30, 2002 and 2001

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
         (Continued)

         i. Basic Income (Loss) Per Share

         The  following  is  an  illustration  of  the   reconciliation  of  the
         numerators and denominators of the basic loss per share calculation:

                                                        For the Years Ended
                                                     June 30,         June 30,
                                                       2002             2001
                                                  ------------    ------------
         Net income (loss) (numerator)            $   (370,418)   $   (320,573)

         Weighted average shares outstanding
           (denominator)                            20,000,000      19,485,825
                                                  ------------    ------------
         Basic income (loss) per share            $      (0.02)   $      (0.02)
                                                  ============    ============

         j. Financial Instruments

         Cash  equivalents  include highly liquid  short-term  investments  with
         original  maturities of three months or less,  readily  convertible  to
         known amounts of cash.  The amounts  reported as cash and  equivalents,
         receivables, other assets, trade accounts payable, deferred revenue and
         notes  payable to  related  parties  are  considered  to be  reasonable
         approximations of their fair values. The fair value estimates presented
         herein were based on market  information  available to management as of
         June  30,  2002.  The  use  of  different  market   assumptions  and/or
         estimation  methodologies could have a material effect on the estimated
         fair  value  amounts.  The  reported  fair  values  do  not  take  into
         consideration  potential  expenses  that would be incurred in an actual
         settlement.

         k. Concentration of Credit Risk

         The Company maintains cash in federally insured bank accounts. At times
         these amounts  exceed insured  limits.  The Company does not anticipate
         any losses from these deposits.

         l. Newly Issued Accounting Pronouncements

         SFAS  No.'s  141 and  142 - In  June  2001,  the  Financial  Accounting
         Standards  Board  (FASB)  adopted  Statement  of  Financial  Accounting
         Standards  SFAS No. 141,  "Business  Combinations,  " and SFAS No. 142,
         "Goodwill and Other Intangible Assets." SFAS No. 141 is effective as to
         any  business  combination  occurring  after June 30,  2001 and certain
         transition  provisions that affect accounting for business combinations
         prior to June 30, 2001 are  effective  as of the date that SFAS No. 142
         is applied in its entirety, which will be July 1, 2002 for the Company.
         SFAS No. 142 is effective,  generally,  in fiscal years beginning after
         December 15,  2001,  which will be the fiscal year ending June 30, 2002
         for the Company.

                                      F-14
<PAGE>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                             June 30, 2002 and 2001

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
         (Continued)

         l. Newly Issued Accounting Pronouncements (Continued)

         SFAS  No.  141  provides   standards   for   accounting   for  business
         combinations.  Among other  things,  it requires that only the purchase
         method  of  accounting  be used  and  that  certain  intangible  assets
         acquired  in a  business  combination  (i.e.  those  that  result  from
         contractual  or other legal rights or are  separable) be recorded as an
         asset apart from goodwill.  The transition  provisions  require that an
         assessment  be  made  of  previous   business   combinations   and,  if
         appropriate,  reclassifications  be made to or form  goodwill to adjust
         the recording of intangible assets such that the criteria for recording
         intangible  assets  apart from  goodwill  is  applied  to the  previous
         business combinations.

         SFAS No. 142 provides, among other things, that goodwill and intangible
         assets with indeterminate lives shall not be amortized.  Goodwill shall
         be assigned to a reporting unit and annually  assessed for  impairment.
         Intangible  assets with determinate lives shall be amortized over their
         estimated useful lives, with the useful lives reassessed  continuously,
         and shall be assessed for  impairment  under the provisions of SFAS No.
         121,  "Accounting  for the  Impairment  of  Long-Lived  Assets  and for
         Long-Lived  Assets to be Disposed  Of."  Goodwill is also  assessed for
         impairment on an interim basis when events and  circumstances  warrant.
         Upon  adoption of SFAS No.  142,  the  Company  will assess  whether an
         impairment loss should be recognized and measured by comparing the fair
         value  of  the  "reporting  unit"  to  the  carrying  value,  including
         goodwill.  If the carrying  value exceeds fair value,  then the Company
         will  compare the implied  fair value of the  goodwill"  (as defined in
         SFAS No. 142) to the caring amount of goodwill.  If the carrying amount
         of goodwill  exceeds the implied fair value,  then the goodwill will be
         adjusted to the implied fair value.

         While the Company has not  completed  the  process of  determining  the
         effect  of these  new  accounting  pronouncements  on its  consolidated
         financial statements,  the Company currently expects that there will be
         no  reclassification  in connection  with the transition  provisions of
         SFAS No.  141  based on  clarifications  of the  transition  provisions
         issued by the FASB in October 2001.  Accordingly,  the Company  expects
         that, after  implementation of SFAS No. 142, all intangible assets will
         be amortizable and the goodwill will not amortizable.

         SFAS No.  143 - On August  16,  2001,  the FASB  issued  SFAS No.  143,
         "Accounting for Asset Retirement  Obligations,'  which is effective for
         fiscal  years   beginning   after  June  15,  2002.  It  requires  that
         obligations  associated  with the  retirement  of a tangible long lived
         asset be recorded as a liability when those  obligations  are incurred,
         with the amount of the liability initially measured at fair value. Upon
         initially recognizing a liability for an accrued retirement obligation,
         an entity must  capitalize  the cost by  recognizing an increase in the
         carrying  amount  of  the  related  long-lived  asset.   Overtime,  the
         liability  is  accredited  to its present  value each  period,  and the
         capitalized  cost is  depreciated  over the useful  life of the related
         asset.  Upon settlement of the liability,  an entity either settles the
         obligation  for its  recorded  amount  or  incurs  a gain or loss  upon
         settlement.  While  the  Company  has  not  completed  the  process  of
         determining  the  effect  of the new  accounting  pronouncement  on its
         consolidated  financial statements,  the Company currently expects that
         the  effect of SFAS No.  143 on the  Company's  consolidated  financial
         statements, when it becomes effective, will not be significant.

                                      F-15
<PAGE>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                             June 30, 2002 and 2001


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
         (Continued)

         l. Newly Issued Accounting Pronouncements (Continued)

         SFAS No. 144 - On October 3, 2001, the Financial  Accounting  Standards
         Board issued SFAS No. 144,  "Accounting  for the Impairment of Disposal
         of  Long-Lived  Assets"  which is effective  for  financial  statements
         issued  for  fiscal  years  beginning  after  December  15,  2001  and,
         generally,  its  provisions are to be applied  prospectively.  SFAS 144
         supercedes  SFAS  Statement  No.  121 (FAS  121),  "Accounting  for the
         Impairment  of  Long-Lived  Assets  and  for  Long-Lived  Assets  to Be
         Disposed  Of." SFAS 144  applies to all  long-lived  assets  (including
         discontinued  operations) and consequently amends Accounting Principles
         Board  Opinion  No.  30 (APB  30),  "Reporting  Results  of  Operations
         Reporting the Effects of Disposal of a Segment of a Business."

         SFAS 144 develops one accounting model (based on the model in SFAS 121)
         for  long-lived  assets that are to be disposed of by sale,  as well as
         addresses the principal  implementation  issues. SFAS 144 requires that
         long-lived assets that are to be disposed of by sale be measured at the
         lower of book value or fair value less cost of sell.  That  requirement
         eliminates the  requirement of APB 30 that  discontinued  operations be
         measured  at net  realizable  value  or  that  entities  include  under
         "discontinued  operations"  in the  financial  statements  amounts  for
         operating losses that have not yet occurred.

         Additionally,  FAS 144 expands the scope of discontinued  operations to
         include all  components  of an entity with  operations  that (1) can be
         distinguished  from the rest of the entity  and (2) will be  eliminated
         from the ongoing operations of the entity in a disposal transaction.

         While the Company has not  completed  the  process of  determining  the
         effect  of  this  new  accounting  pronouncement  on  its  consolidated
         financial statements,  the Company currently expects that the effect of
         SFAS No. 144 on the Company's consolidated  financial statements,  when
         it becomes effective, will not be significant.

NOTE 2 - INVESTMENT IN SECURITIES AND OTHER COMPREHENSIVE INCOME

         The   RecycleNet   shares  owned  by  the  Company  are  classified  as
         available-for-sale and are stated at fair value.

         Proceeds from sales of  securities  and the  resulting  gross  realized
         gains and losses were as follows:

                                                     For the Years Ending
                                                           June 30,
                                                  ---------------------------
                                                       2002            2001
                                                  -----------     -----------
         Proceeds from sales of securities        $    45,191     $   272,543
                                                  ===========     ===========

         Gross realized gains                     $         -     $         -
         Gross realized (losses)                     (107,409)        (56,200)
                                                  -----------     -----------
         Net (Loss) from Sale of Investments      $  (107,409)    $   (56,200)
                                                  ===========     ===========

                                      F-16
<PAGE>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                             June 30, 2002 and 2001


NOTE 2 - INVESTMENT IN SECURITIES AND OTHER COMPREHENSIVE INCOME
         (Continued)

         Other  comprehensive  income is only  relevant for the year ending June
         30, 2002 and for the period from  inception  through  June 30, 2002 and
         consists of the change in net  unrealized  holding  gains and losses on
         securities  classified as available  for sale and their related  income
         tax benefit as follows:
<TABLE>
<CAPTION>
                                                   Before-Tax              Tax                Net-of-Tax
                                                     Amount               Benefit               Amount
                                                  -------------        -----------          --------------
         <S>                                      <C>                  <C>                  <C>
         For the year ended June 30, 2002:

         Unrealized net holding gains             $     (40,525)       $         -          $      (40,525)

         Reclassification adjustment
           for net loss included in
           net loss                                      40,525                  -                  40,525
                                                  -------------        -----------          --------------
              Other comprehensive income          $           -        $         -          $            -
                                                  =============        ===========          ==============

         Cumulative for the period
           January 14, 1981 (date of inception)
           through June 30, 2001:

         Unrealized net holding gains             $     (40,525)       $         -          $      (40,525)
         Reclassification adjustment for
           net losses included in net loss               40,525                  -                  40,525
                                                  -------------        -----------          --------------
              Other comprehensive income          $           -        $         -          $            -
                                                  =============        ===========          ==============
</TABLE>

         A current  provision for income taxes has not been assessed against the
         unrealized  gain on  securities  since the current NOL's of the Company
         would offset these gains

NOTE 3 - UTAH TRUCK TIRE, INC.

         Utah Truck Tire, Inc. was formed May 20, 1994, and on May 24, 1994, the
         Company  was issued 55% (55 shares) of the  outstanding  shares of Utah
         Truck Tire,  Inc. in exchange for the Company's  experience,  expertise
         and reputation in dealing with tire and rubber products.  The remaining
         45% (45 shares) was issued to a director of Utah Truck Tire, Inc. for a
         commitment  to loan Utah Truck Tire,  Inc.  $150,000 (see Note 5). Utah
         Truck Tire, Inc. is currently dormant, having no revenues and incurring
         minimal  expenses  during the years ended June 30, 2002 and 2001.  Utah
         Truck Tire,  Inc.  was  primarily  in the  business of selling  retread
         diesel truck tires.

NOTE 4 - PAYABLE TO RELATED ENTITIES, OFFICERS AND SHAREHOLDERS

         During the year ended June 30, 2002,  notes  payable - related  parties
         increased $71,000.  The change is due to proceeds from additional notes
         payable.  No payments were made on notes payable  during the year ended
         June 30, 2002.

                                      F-17
<PAGE>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                             June 30, 2002 and 2001

NOTE 4 - PAYABLE TO RELATED ENTITIES, OFFICERS AND SHAREHOLDERS
         (Continued)

         During the year ended June 30, 2001,  notes  payable - related  parties
         increased  $119,397.  The change is due to payments on the cash loan to
         John Brewer and a payable  recorded for $180,000 for available for sale
         securities.

         During the period July 1998 through  March 1999 and for the years ended
         June 30, 1998 and 1997, the Company made non-interest  bearing advances
         to Garbalizer Machinery Corporation (GMC), a sister corporation, in the
         amounts of $34,094,  $27,521,  and $34,771,  respectively.  Payments on
         these advances totaled $60,573, $14,091, and $9,164 for the years ended
         June 30,  1999,  1998 and  1997.  In March  1999,  GMC  merged  with an
         unrelated  company and  transferred  all assets and  liabilities to the
         Company which include the above mentioned receivable totaling $221,953.
         The  related  party  receivable/payable  has  been  eliminated  in  the
         accompanying financial statements.

         Prior to July 1, 1992  through  June 30,  1999,  the  Company  borrowed
         $68,147,  which  includes  $1,434,  $24,403 and $1,438 during the three
         years ending June 30, 1999, 1998 and 1997, from an officer under a note
         payable for various purchases on behalf of the Company.  As part of the
         assumption  of GMC's  liabilities,  the Company  assumed an  additional
         $103,215  payable to this  officer for various  purchases  on behalf of
         GMC. The Company paid all interest charges  (currently at approximately
         9%),  relating to these  purchases.  These payables were due on demand,
         but as of June 30, 2002, no principal payments had been made.

         Prior to June 30, 1996, a shareholder  advanced to the Company  $35,000
         under short-term,  non-interest bearing notes which were due on demand.
         During  the year  ended  June  30,  1997,  an  additional  $10,000  was
         advanced.  During the year ended June 30, 1998,  $5,000 of interest was
         added  to  these   advances.   As  part  of  the  assumption  of  GMC's
         liabilities,  the note was due on demand. During the period ending June
         30, 2000, the Company issued RecycleNet shares to extinguish the note.

         Prior to June 30, 1996, the Company borrowed  $165,000 from an officer.
         Interest accrues at the rate of 12% and the amount is due on demand and
         is unsecured. No payments had been made as of June 30, 2002.

         As part of the assumption of GMC's  liabilities,  the Company assumed a
         $10,000 note payable from a  shareholder.  This note was paid for as of
         June  30,  2000  as  the  Company  issued  the  shareholder  shares  of
         RecycleNet stock.

         As part of the assumption of GMC's  liabilities,  the Company assumed a
         12% note  payable from an  individual  with an  outstanding  balance of
         $68,493.  The note was originally for $150,000 and was due in 1992. The
         Company has not made any principal payments since assuming this note.

         During the year ended June 30, 1995, the Company  borrowed $12,000 from
         a  shareholder  under short term,  non-interest  bearing  notes payable
         which  were due on  demand.  An  additional  $10,000  was loaned to the
         Company  during the year ended June 30, 1997.  During  1998,  the notes
         were converted to a payment on an option agreement.

                                      F-18
<PAGE>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                             June 30, 2002 and 2001

NOTE 5 - INCOME TAXES

         The Company  does not have a current or deferred  provision  for income
         taxes for the years ended June 30, 2002 or 2001. The following presents
         the components of the deferred tax asset for the Company.

                                                              June 30,
                                                     --------------------------
                                                         2002           2001
                                                     -----------    -----------
         Benefit of operating loss carryforwards     $   945,000    $   866,900
         Inventory reserve                                     -              -
         Accrued salaries                               (196,560)      (177,840)
         Accrued interest                                (97,736)       (85,033)
         Depreciation                                      1,342           (374)
         Accrued related parties expenses               (160,269)      (132,575)
         Benefit of capital loss carryforward                  -         21,918
                                                     -----------    -----------
         Total deferred tax assets                       491,777        492,996
         Less: valuation allowance                      (491,777)      (492,996)
                                                     -----------    -----------
         Net Deferred Tax Asset                      $         -    $         -
                                                     ===========    ===========

         The valuation  allowance has decreased $1,219 and $67,711 for the years
         ended  June 30,  2002  and  2001,  respectively.  The  Company  and its
         subsidiaries   have  federal  net  operating  loss   carryforwards   of
         $2,216,000 that expire, if unused, in years 2002 through 2021.

         The  following  is a  reconciliation  of the income tax at the  federal
         statutory  tax rate with the  provision  for income taxes for the years
         ended:

                                                               June 30,
                                                       -----------------------
                                                          2002          2001
                                                       --------      ---------
         Income tax expense (benefit) at statutory
           Rate (34%)                                  $      -      $       -
         Change in deferred tax asset valuation            (200)          (200)
         State tax net of federal benefit                   200            200
         Effect due to change in tax rates                    -              -
         Other                                                -              -
                                                       --------      ---------
                Provision for Income Taxes             $      -      $       -
                                                       ========      =========

NOTE 6 - COMMITMENTS

         During  the  year  ended  June  30,   2001,   the  Company   signed  an
         Confidentiality & Non-Circumvention agreement with Micron Manufacturing
         for the purpose of building  equipment  for Garb Oil to import to North
         America  for  sale  to  the  scrap  tire  processing  industry.  Micron
         Manufacturing will engineer a pilot model of the shredder.

                                      F-19
<PAGE>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                             June 30, 2002 and 2001

NOTE 6 - COMMITMENTS
         (Continued)

         Once the pilot model is complete,  a formal  agreement  will be signed.
         During the fiscal  year 2002  ending June  30,2002  the  commitment  by
         Micron to build  equipment  or perform  research  and  development  was
         cancelled by mutual agreement of the parties

         On April 28,  1997,  the Company  granted  Giant Tire  Recyclers,  Inc.
         (Giant),  a Nevada  corporation,  an option to acquire a license to use
         the Company's OTR disintegrator system. The price of the option was set
         at $150,000 payable as follows:  1) an initial payment of $15,000,  and
         2) the remaining $135,000 was due within ten months of the execution of
         the  agreement.  The  Company  received  $150,000  as of June 30,  1998
         consisting  of $128,000 in cash and assigned  $22,000 as a payment on a
         note  payable to a  shareholder.  Giant may  exercise the option at any
         time.  The  option  was  initially  to  expire  in April  1999,  but an
         extension was granted  through  April 2000.  The above  contract  gives
         Giant the  opportunity  to  purchase  an  exclusive  license to use the
         Company's  OTR  Disintegrator  System for a license fee of  $1,315,000,
         less option  payments  prior to the time of exercise.  The contract has
         since  expired and,  accordingly,  the  $150,000  has been  recorded as
         income.

         The Company executed an employment  agreement with its President on May
         1, 1986. The agreement is of a continuing  nature and specifies no date
         of  termination.  Under the  terms of the  agreement,  the  President's
         salary is $48,000 per year and is  reviewed  by the Board of  Directors
         annually.  As of June 30,  2002,  the  president  is owed  $504,000  of
         accrued salary.

NOTE 7 - OPERATING LEASES

         The Company shares office space with Garbalizer  Corporation of America
         under a lease  agreement on a  month-to-month  basis.  The Company also
         leases facilities on a month-to-month basis. Rental expense relating to
         these operating leases was $17,065 and $14,400 for the years ended June
         30, 2002 and 2001, respectively.


NOTE 8 - SUPPLEMENTAL CASH FLOWS

         During the year ended June 30, 2001,  the Company issued 200,000 shares
         of treasury stock for 669,897 common shares of RecycleNet  Corporation,
         Inc.  valued at  $41,869.  During  the year ended  June 30,  2001,  the
         Company  issued  2,056,701  shares of common  stock for 400,000  common
         shares of RecycleNet Corporation, Inc. valued at $300,000.

         During  the year  ended  June 30,  2001,  the  Company  agreed to trade
         2,000,000  shares  of  common  stock  for  2,000,000  common  shares of
         RecycleNet Corporation,  Inc. The Company received the 2,000,000 common
         shares of  RecycleNet  but has not yet issued the  2,000,000  shares of
         Company common stock. Accordingly, a related party payable was recorded
         in the amount of $180,000 for the value of the shares.

                                      F-20
<PAGE>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                             June 30, 2002 and 2001


NOTE 8 - SUPPLEMENTAL CASH FLOWS
         (Continued)

         During   the  year   ended   June  30,   2000,   the   Company   issued
         available-for-sale  securities  for the  extinguishment  of  $70,000 of
         debt.

         During the year ended June 30,  1999,  the  Company  and The  Company's
         majority  shareholder,  Garbalizer  Corporation of America (GCA),  were
         parties to the reorganization and sale of GCA's subsidiary,  Garbalizer
         Machinery  Corporation  (GMC).  See  Note  2 for a  discussion  of  the
         acquisition.

         During the year  ended June 30,  1998,  the  holders of a $22,000  note
         payable  applied  the  balance as a payment on an option  agreement  it
         purchased from the Company in 1997.

         During the year ended June 30, 1997,  the Company  issued 86,333 shares
         of common stock valued at $12,949 for services rendered.


NOTE 9 - DEFERRED REVENUE

         As of June 30, 2002, the Company had received $159,785 from the sale of
         tires which had not been  delivered.  Because of this,  the Company has
         recorded  deferred revenue of $157,785 which will be recognized in July
         2002.


NOTE 10 - EQUITY LIABILITY

         Effective  June 30, 2002,  the Company  adopted the  provisions of EITF
         00-19, "Accounting for Derivative Financial Instruments Indexed to, and
         Potentially settled in, a Company's Own Stock".

         This issue  provides  that options to purchase  common shares which are
         outstanding  and for which the number of authorized but unissued shares
         is  insufficient  to satisfy the maximum number of shares that could be
         required  upon the  exercise  of such  options,  then the  contract  is
         reclassified  from equity to an asset or  liability.  The effect of the
         application  of this  pronouncement  that  requires  asset or liability
         classification  for those  contracts  that existed as of June 30, 2002,
         would be calculated as of June 30, 2002.

         Concurrent  with the issuance of a $25,000 note payable  related party,
         the Company granted 100,000 options as an inducement to loan the money.
         The  options  were  valued at  $4,944  pursuant  to the  Black  Scholes
         calculation  at June 30, 2002.  This amount is presented as a liability
         because the  Company  has no  authorized  shares  available  should the
         options be exercised.

                                      F-21
<PAGE>

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

         Not applicable except as previously reported.



                                    PART III

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

         The term of office of each director is one (1) year or until his
successor is elected at the Company's annual meeting and qualified. The term of
office for each officer of the Company is at the pleasure of the Board of
Directors. The Board of Directors has no nominating, auditing or compensation
committee.

         The following table sets forth the names, ages, and positions with the
Company of the directors and officers of the Company.

               Name               Age        Position
               ----               ---        --------
         John C. Brewer            80        President, Chairman of the Board of
                                             Directors and Director

         Bill Vee Anderson         51        Vice-President and Director

         Charles Laver             79        Secretary and Director


         John C. Brewer has been the President and a director of the Company
since January, 1981, and from 1972 until January, 1981, was President and a
director of the Company's predecessor Garb-Oil Corporation. Mr. Brewer also
serves as president, chairman of the board of directors and a director of
Garbalizer Corporation of America which is the majority shareholder of the
Company. Mr. Brewer devotes approximately 40 hours per week to the Company as
well as additional time to his other business interests.

         Bill Vee Anderson has been Vice President and a director of the Company
since September 1993. He has been employed by the Company as a design engineer
since February 1990. Prior to joining the Company, Mr. Anderson spent five years
as a design engineer at Sperry Univac. Prior to that, he was a design engineer
with Bell Telephone Laboratories. Mr. Anderson declared personal bankruptcy in
July, 1992 and agreed to a payment plan whereby his creditors have been or will
be paid the full amount of his indebtedness.

         Charles Laver has been the Secretary and a director of the Company
since January, 1981, and from 1972 until January, 1981, was secretary and a
director of Garb-Oil Corporation. Mr. Laver's principal occupation for the last
33 years has been a self-employed certified public accountant. Mr. Laver will
devote such time as may be necessary from time to time as an officer and a
director of the Company including but not limited to regular and special
meetings of the board of directors.

                                       11
<PAGE>

         Compliance With Section 16(a)

         Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file with
the Securities and Exchange Commission initial reports of ownership and reports
of changes in ownership of Common Stock and other equity securities of the
Company. Officers, directors and greater than ten-percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.

         To the  Company's  knowledge,  based  solely on review of the copies of
such reports furnished to the Company and written  representations that no other
reports  were  required,  during the fiscal year ended June 30, 2001 all Section
16(a) filing requirements applicable to its officers, directors and greater than
ten-percent beneficial owners were complied with.

ITEM 10. EXECUTIVE COMPENSATION

         There is shown below information concerning the compensation of the
Company's chief executive officer for the fiscal year ended June 30, 2002.
Compensation for the other highly compensated executive officers is not required
nor presented as no such executive officer's salary and bonus exceeded $100,000.

                           SUMMARY COMPENSATION TABLE


                                                         Annual Compensation
Name and Principal Position      Fiscal Year                 Salary ($)
---------------------------      -----------                 ----------
John C. Brewer                      2002                        $48,000
President and CEO                   2001                         48,000


         No person received any form of non-cash compensation from the Company
in the fiscal year ended June 30, 2002 or currently receives any such
compensation. The Company does provide medical insurance to Mr. Brewer.

         During the current fiscal year, the Company is paying and it is
anticipated that the Company will continue to pay a salary to Mr. Brewer of
$48,000 per annum for 40 hours per week of Mr. Brewer's time. The Company has an
employment agreement with Mr. Brewer. All or substantially all of such
compensation is currently being accrued rather than paid in cash.

         Other than as set forth above the Company has no employment agreement
with any of its officers or directors and has no retirement, profit sharing,
pension or insurance plans covering them.

         The Company issued no options during the fiscal year, and none were
outstanding.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain information with respect to the
beneficial ownership of the Company's common stock as of June 30, 2002 (i) each
person known by the Company to own more than five percent (5%) of the Company's
outstanding stock, (ii) each director of the Company and (iii) all officers and
directors as a group.

                                       12
<PAGE>

Name and Address                                  Amount      Percent of Class
----------------                                  ------      ----------------

Garbalizer Corporation                          10,388,291           51.9%
of America (Note 1)
Newhouse Office Building, Suite 507
Salt Lake City, Utah

Ralph C. Alexander                                 943,343            4.7%
152 Hall Street
Spartanburg, South Carolina

A/S Parkveien 55                                 1,050,000            5.2%
c/o Hoegh Invest A/S (Note 2)
P.O. Box 2416 Solli
0202 Oslo 2, Norway

John C. Brewer (Note 3)                         10,388,291           51.9%
Newhouse Office Building, Suite 507
Salt Lake City, Utah

Charles Laver (Note 4)                          10,409,037           52.0%
Newhouse Office Building, Suite 507
Salt Lake City, Utah

Bill Anderson                                        6,000             *
Newhouse Office Building, Suite 507
Salt Lake City, Utah

All directors and                               10,415,037           52.0%
officers as a group
(3 individuals)

* less than 1%
----------------------------
(1)      John C. Brewer beneficially owns 98% of the outstanding common stock of
         Garbalizer Corporation of America ("GCA").

(2)      In September, 1988 A/S Parkveien 55 filed a Schedule 13D stating its
         beneficial ownership of 1,800,000 shares owned of record and
         beneficially by it. The Schedule 13D also indicates that an additional
         478,000 shares (3.3% of the class) were beneficially owned by two
         Norwegian corporations having common control or ownership with A/S
         Parkveien 55. During a prior fiscal year, 1,500,000 shares held of
         record by A/S Parkveien 55 at the time of the Schedule 13D filing were
         transferred of record to Christiana Bank, Oslo, Norway and neither A/S
         Parkveien 55 nor the other corporations listed on the Schedule 13D
         currently own shares of record. A/S Parkveien 55 did not inform the
         Company of a change in beneficial ownership as result of such change in
         record ownership and the table therefore reflects beneficial ownership
         stated in the Schedule 13D as adjusted for subsequent sales by
         Christiana Bank.

(3)      Consists of 10,388,291 shares held by GCA in which Mr. Brewer may be
         deemed to share beneficial ownership as a result of his position as a
         director and principal shareholder of GCA.

(4)      Consists of 10,388,291 shares held by GCA in which Mr. Laver may be
         deemed to share beneficial ownership as a result of his position as a
         director of GCA, and 20,746 shares owned of record by Mr. Laver.

         The Company is unaware of any arrangements which may result in a change
in control of the Company.

                                       13
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         On March 19, 1999 the Company acquired all rights to the Garbalizer
Shredder and related assets from GMC in exchange for assumption of liabilities.
In connection with the sale, GMC was reorganized into RecycleNet, Inc. The
reorganization was accomplished by GMC transferring all of its assets and
liabilities to the Company, by merging with RecycleNet, Inc. in exchange for
approximately 90% of its common stock being issued to the former RecycleNet,
Inc. shareholders, and by GMC changing its name to RecycleNet Inc. Prior to the
change in control, Garbalizer Corporation of America owned a majority of the GMC
shares and the board of directors of the Company was the same as the board of
directors of GMC. Garbalizer Corporation of America retained approximately 10%
of the common stock of RecycleNet, Inc. after the reorganization. Although the
persons acquiring control of GMC are not affiliated with the Company, the terms
of the sale of assets to the Company were not determined at arms length. The
Company assumed $473,060 more in liabilities than assets on the acquisition,
which was accounted for as a distribution from Garbalizer Corporation of America
to the Company. In exchange for the Company's assumption of GMC's net
liabilities, Garbalizer Corporation of America transferred 1,061,668 shares of
RecycleNet, Inc. common stock to the Company. The common shares of RecycleNet,
Inc. received from Garbalizer Corporation of America were recorded with a zero
basis which was the historical cost of Garbalizer Corporation of America's
investment in GMC.

         During the period July 1998 through March 1999 and for the years ended
June 30, 1998 and 1997, the Company made non-interest bearing advances to GMC in
the amounts of $34,094, $27,521, and $34,771, respectively. Payments on these
advances totaled $60,573, $14,091, and $9,164 for the years ended June 30, 1999,
1998 and 1997. As discussed above, in March 1999 GMC merged with an unrelated
Company and transferred all assets and liabilities to the Company, which include
the above mentioned receivable totaling $221,953.

         Prior to June 30, 1996, a shareholder advanced to the Company $35,000
under short-term, non-interest bearing notes which were due on demand. During
the year ended June 30, 1997 an additional $10,000 was advanced. During the year
ended June 30, 1998, $5,000 of interest was added to these advances. As part of
the assumption of GMC's liabilities, the Company assumed an additional $10,000
short-term, non-interest bearing note which was due on demand. As of June 30,
1999 a total of $60,000 was owed to this shareholder with no principal payments
being made as of June 30, 1999.

         As part of the assumption of GMC's liabilities, the Company assumed a
$10,000 note payable from a shareholder. This note bears interest at 12% and is
due on demand. No principal payments had been made as of June 30, 2001.

         As part of the assumption of GMC's liabilities, the Company assumed a
12% note payable from an individual with an outstanding balance of $68,493. The
note was originally for $150,000 and was due in 1992. The Company has not made
any principal payments since assuming this note.

         The Company's president is entitled to an annual salary of $48,000.
During 1993 through 2002, substantially all of such salary was accrued rather
than paid in cash. Such accrued wages are unsecured and do not bear interest. As
of June 30, 2002, the balance of accrued salary to the president was $504,000.
This is in addition to the $122,453 owed to the Company's president for advances
to the Company. As part of the assumption of GMC's liabilities, the Company
assumed an additional $103,215 payable to this officer for various purchases on
behalf of GMC. The Company paid all interest charges (currently at approximately
9%) relating to these purchases. These payables were due on demand; however, as
of June 30, 2002, no principal payments had been made.

                                       14
<PAGE>

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

         a. The following financial statements and schedules are filed herewith.

                  Garb Oil & Power Corporation

                  Consolidated Balance Sheet - June 30, 2002.

                  Consolidated Statements of Operations and Comprehensive Income
                  (Loss) - For the Years Ended June 30, 2001 and 2002 and for
                  the Period from January 14, 1981 (Date of Inception of the
                  Development Stage) to June 30, 2002.

                  Consolidated Statements of Stockholders' Equity - For the
                  Period from Inception of the Development Stage (January 14,
                  1981) through June 30, 2002.

                  Consolidated Statements of Cash Flows For the Years Ended June
                  30, 2002 and 2001 and for the Period from January 14, 1981
                  (Date of Inception of the Development Stage) to June 30, 2002.

         b. During the fourth quarter of the year reported upon the Company
filed no Form 8-K.

         c. The following exhibits are filed herewith or incorporated herein by
reference. The SEC No. refers to the Exhibit Table in Item 601 of Regulation
S-B.


Section Exhibit
  No.      No.    Description                 Location
-------  -------  -------------------------   -------------------------------
  3        3.1    Articles of Incorporation   Exhibit 3.1 of Registration
                  (as amended)                Statement on  Form 10, File No.
                                              0-14859

  3        3.2    By-Laws                     Exhibit 3.2 of Registration
                                              Statement on Form 10, File No.
                                              0-14859

 10       10.1    Employment Agreement with   Exhibit 10.5 of Registration
                  John Brewer                 Statement on Form 10, File No.
                                              0-14859

 10       10.2    Agreement with Giant Tire   Exhibit 10.4 of Form 10-KSB for
                  Recyclers, Inc.             June 30, 1997

 10       10.3    Project Development and     Exhibit 10.1 of Form 8-K dated
                  Construction Agreement      May 11, 1998
                  with Trenergy, Inc.

 10       10.4    Extension Agreement with    Filed EX 10-4 of Form 10-KSB for
                  Giant Tire Recyclers, Inc.  June 30, 2001

 10       10.5    Agreement between           Filed herewith
                  Garbalizer Machinery
                  Corporation and the
                  Company

 21       21.1    List of Subsidiaries        Exhibit 21.1 of Form 10-KSB for
                                              June 30, 1995

 99       99.1    Certification pursuant to   Filed herewith
                  18 U.S.C. Section 1350 as
                  adopted pursuant to
                  Section 906 of the
                  Sarbanes-Oxley Act OF 2002

                                       15
<PAGE>

                                   SIGNATURES

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

                                          GARB OIL & POWER CORPORATION


                                          By: /s/ John C. Brewer
                                              ---------------------------
                                              John C. Brewer, President

         DATED this 20th. Day of September, 2002

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

         1. By its principal executive officer.


                  Date:   September 20th. 2002     /s/ John C. Brewer
                                                 ----------------------------
                                                 John C. Brewer, President

         2. And by its principal financial officer and principal accounting
officer.


                  Date:    September 20th. 2002      /s/ Charles Laver
                                                 ----------------------------
                                                 Charles Laver, Treasurer

         3. And by a majority of its Board of Directors.


                  Date:    September 20th. 2002    /s/ John C. Brewer
                                                 ----------------------------
                                                 John C. Brewer, Director


                  Date:    September 20th. 2002      /s/ Charles Laver
                                                 ----------------------------
                                                 Charles Laver, Director


                  Date:    September 20th. 2002      /s/ Bill Vee Anderson
                                                 ----------------------------
                                                 Bill Vee Anderson, Director

                                       16