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, 1999

       [ ]     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 Ident. No.)
incorporation or organization)

10 Exchange Place, Suite 507
Salt Lake City, Utah                                                84111
----------------------------------------                         ---------
(Address of principal executive offices)                         (Zip Code)

                                 (801) 322-5410
                 ----------------------------------------------
                (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 September 27, 1999, 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 $780,162.

         As of September 27, 1999, the Issuer had outstanding  17,943,299 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 and 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 used rubber from 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, 1999
and at the end of the year its current liabilities  exceeded its total assets by
approximately  $877,000. 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 did not result in any sales
during fiscal 1999, and they may not result in any sales during fiscal 2000. 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.  In 1998,  the Company  substantially  completed  the
engineering  and design of the OTR Tire  Disintegrator  System,  but has not yet
constructed a commercially  operating  system.  As discussed  below, the Company
granted an option to a third  party to acquire a license to utilize the OTR Tire
Disintegrator  System  in a  stated  territory.  The  option  holder  may not be
successful in obtaining financing for the project.

         Commercially available tire shredders,  including shredders made by the
Company,  are designed to process standard automobile and truck 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

                                       2
<PAGE>

equipment, etc. cannot be processed directly by these shredders.  Although these
tires,  which may weigh from 400 pounds to 9 tons apiece, 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.

         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.

         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 and Patent No.
5,590,838  which expires January 7, 2014. An additional  patent  improvement has
been filed and is currently pending in the United States.  The additional patent
improvement  was  granted  in  Canada  on July 6, 1999 as  Canadian  Patent  No.
2,178,326 and will expire March 23, 2015.

         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.

         On April 28,  1997,  the Company  granted  Giant Tire  Recyclers,  Inc.
("Giant")  a Nevada  corporation,  an option to acquire a license to use the OTR
Tire  Disintegrator  System.  The price of the  option was  $150,000.  Giant may
exercise the option at any time.  In April,  1999 the Company and Giant  amended
the option to provide that the option will expire if not  exercised by April 29,
2000, plus applicable notice and grace periods.

         The option,  as amended,  gives  Giant the  opportunity  to purchase an
exclusive license to use the Company's OTR Tire  Disintegrator  System system in
the states of Arizona,  New Mexico and Nevada for a license  fee of  $1,315,000,
less option payments prior to the time of exercise. The license fee includes two
OTR Tire  Disintegrator  System  machines  and tools and  equipment  suitable

                                       3
<PAGE>

to operate a truck tire repair  business.  If the option is not  exercised,  the
agreement  provides  that  amounts paid for the option are  non-refundable.  The
Company  cannot  predict  whether  Giant will  exercise the option.  The Company
believes Giant may require substantial additional financing in order to exercise
the option.

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 one U.S. and one Canadian  patent.  U.S. patent
number 4927088  expires May 22, 2007.  Canadian  patent number  1137949  expires
December 21, 1999.

         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.

         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

                                       4
<PAGE>

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 believes 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
intends to continue this practice.

         There are several machine shops located near the Company's offices with
the required  manufacturing  and  production  capabilities  to produce  multiple
shredders on a timely basis.

         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 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 Company  entered into an agreement
to sell one such plant in 1996, but the buyer defaulted.  As of the date of this
report, the Company has not sold any crumb rubber plants.

                                       5
<PAGE>

         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.

         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.

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

                                       6
<PAGE>

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.

         The Company is proposing to establish  used tire  processing  and sales
joint  ventures  with  purchasers  of tire  shredders or OTR Tire  Disintegrator
Systems,  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 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.
Such plants may be built by the Company  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.

         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.

         The Company  received  permits to construct the Rialto power plant from
the South Coast Air  Quality  Management  District,  which  determined  that the
project met all existing applicable pollution  requirements.  Based on this, the
Company  believes  that a plant could be  engineered  to meet current  pollution
requirements. Although environmental permits were issued for the construction of
the Rialto project,  litigation with private citizens regarding  compliance with
California  environmental laws delayed completion of the projects for years. The
Company and it's joint venture partner determined that continuing the litigation
until the legal  authorization  to use the  permits  which had been  issued  was
finally  affirmed  by the courts  would not be  economically  feasible,  and the
project was  abandoned.  There can be no  assurance  that plants  planned by the
Company in the future will not become similarly embroiled in litigation.

                                       7
<PAGE>

Pyrolysis

         In  addition  to the  direct  use of  tires as fuel,  the  Company  has
developed and patented the Garb-Oil Processes for pyrolytic reduction of tires.

         The Garb-Oil processes are in summary form as follows:  Scrap tires are
first  shredded  into  approximately  three  inch size  pieces  with a  shredder
developed  by GMC,  then heated in an oxygen free  environment  (processed  in a
Garb-Oil  Pyrolytic  Furnace) to reduce the shredded  particles into hydrocarbon
gases  and  char.  Part of the  hydrocarbon  gas is  condensed  to  recover  oil
by-products.  The  remaining  gases  (ethane,  methane,  butane and propane) are
stored for use as fuel in the pyrolytic system.  The char is crushed to liberate
the metal for magnetic  recovery to be sold to the steel industry as scrap.  The
crushed  char can be used as a  carbon  additive  to  manufacture  solid  rubber
products or used as additive in the polymer industries or as low grade activated
carbon.

         During  1981 a  demonstration-test  facility  was  built  in  Mountlake
Terrace,  Washington.  This test facility was used to test various  construction
materials that would be used in full size commercial  plants.  The test facility
was later moved to Huntington, West Virginia. Although the test facility reduces
tires  by  pyrolysis  as  designed,  there  is no  guarantee  that a  full-scale
production  facility will ever be built or, if built, that it will operate on an
economically and technically sound basis. The Company in 1981 licensed the pilot
plant,  but terminated the license and during Fiscal 1992 the entire  receivable
plus  accrued  interest  thereon  was  written  off to  bad  debt  expense.  The
demonstration  plant is being  stored in  Huntington,  West  Virginia  while the
Company attempts to find a purchaser for the plant.

         The Company has not commercially  exploited the pyrolysis technology to
date and does not believe that the pyrolysis  technology is financially feasible
without heavy subsidies from governmental sources or other entities.

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 and 2014.
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.

         The Company owns the following unexpired patents in connection with the
Garb-Oil Pyrolysis Process:

United States Patents:
-------------------------                                              Expires
                                                                       -------
         Pyrolysis Process          Patent No. 4,402,791               09/30/00
         Patent

         A foreign patent has also been granted in Canada.

                                       8
<PAGE>

         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 expires 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  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,  1999,  1998,  and 1997,  the
Company has not expended any funds on research and development activities.

Environmental Regulation

         UTTI does not believe that its  activities  result in any  discharge or
pollutants in the air, water or soil.

                                       9
<PAGE>

         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 will comply with such regulations. The Company's Rialto Power Corporation
("RPC")  subsidiary was engaged in litigation from 1987 until abandonment of the
project  in  1989  to  determine   whether  RPC  complied   with  all  necessary
requirements  to obtain  environmental  permits  which had been  issued  for the
construction of its plant. Although on all issues in which a final determination
was rendered,  RPC was found to have satisfied all such  requirements  which the
courts and administrative agencies determined must be complied with, there is no
assurance that the undecided  issues would have been resolved in RPC's favor, or
that the decisions would not have been overturned on further appeal,  if RPC had
attempted to continue the project.

ITEM 2.  DESCRIPTION OF PROPERTY

         The  Company's  executive  offices  have  been  located  at Suite  507,
Newhouse Office Building,  #10 Exchange Place, Salt Lake City, Utah for the past
twenty one years.  The  offices  occupy  approximately  1400  square  feet.  The
premises are being leased from SCM Land Company,  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. During the year
ended June 30, 1999, the Company and UTTI paid approximately $18,000 in rent.

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, 1999.


                                     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 3GARB. On
September 27, 1999, 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,  1999,  1998 and 1997,  the
stock was only sporadically  traded. The following table sets forth the range of
high and low representative bid quotations for the periods indicated as reported
by Wilson-Davis, Inc., a market-maker in the Company's stock.

                                       10
<PAGE>

            Period
         (Fiscal Year)                               High              Low
         -------------                               ----              ---
         1997

         1st Quarter                                 .25               .1875
         2nd Quarter                                 .25               .1875
         3rd Quarter                                 .31               .25
         4th Quarter                                 .4375             .1875

         1998

         1st Quarter                                 .2188             .1875
         2nd Quarter                                 .2188             .0938
         3rd Quarter                                 .14               .10
         4th Quarter                                 .52               .11

         1999

         1st Quarter                                 .18               .17
         2nd Quarter                                 .09               .08
         3rd Quarter                                 .14               .13
         4th Quarter                                 .13               .11

         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.

Recent Sales of Unregistered Securities

         During the third  quarter of the year ended June 30, 1999,  the Company
issued 900,000 common shares for total consideration of $60,000. The shares were
sold  to six  current  shareholders  who  represented  they  were  sophisticated
investors.  No underwriting  commissions or similar fees were paid in connection
with the sale. The Company believes the sale was exempt from registration  under
the Securities Act of 1933 pursuant to Section 4(2).

                                       11
<PAGE>

         During the fourth  quarter of the year ended June 30, 1998, the Company
did not issue any securities  without  registration  under the Securities Act of
1933.


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, 1999 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, 1999 the Company had 775,000 of these shares  remaining  with a fair
value of $290,625.  These shares could be  liquidated  and utilized for settling
various Company obligations.  Management is pursuing other 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  of Garbalizer  shredders in
establishing  used tire 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.  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 John Brewer or other shareholders of the Company.

         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.  Operating expenses for the Company have been paid in part
from short-term unsecured notes from shareholders.  At June 30, 1999 the Company
had a deficit  in  working  capital  (current  liabilities  in excess of current
assets) of $890,470.  The working capital deficit at June 30, 1998 was $652,937.
The decrease in working  capital was caused by the continued  accrual of salary,
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.

                                       12
<PAGE>

         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. UTTI is obligated to its minority owner in the principal amount of
$165,000. Such loan is now due on demand. The Company also made advances to UTTI
to pay its operating expenses during its start-up phase.

         During the year ended June 30, 1999 the Company received  proceeds from
the sale of RecycleNet  common stock.  The proceeds  include $50,000 of cash for
the sale of 166,668  shares and $52,560 for 120,000 shares given to an employee,
lawyers and a consultant for various  services  rendered.  During the year ended
June 30,  1999,  the  Company  recorded  no revenue  from the sale of tires from
inventory by UTTI  compared to tire sales of $4,625 in fiscal 1998 and $9,685 in
fiscal  1997.  In fiscal  1997,  the Company  also  recorded  $30,519 of revenue
representing  forfeiture of a  non-refundable  earnest money upon termination of
the ART  agreement.  The funds that the Company  received from Giant towards its
option during the fiscal year was treated as deferred revenue. Since the sale of
tires or  forfeiture  of earnest  moneys are not  considered to be the Company's
principal  business,  the Company is still  considered to be in the  development
stage.

         The  Company  incurred  a loss  from  operations  before  other  income
(expense)  and  extraordinary  items  during  the year  ended  June 30,  1999 of
$194,275  compared to losses of $163,251  and  $140,810 for the years ended June
30, 1998 and 1997, respectively.  Total expenses for 1999 were $194,275 compared
to $172,876 in 1998 and  $181,104 in 1997.  Salaries  and wages were $76,073 for
1999  compared to $77,934 for 1998 and $93,815 for 1997.  Rental  expenses  were
$14,716 in 1999,  $27,636 in 1998 and $22,308 in 1997.  Rental expense decreased
in 1999 due to UTTI giving up their lease on its facility in March 1999.  Rental
expense  increased in 1998 as a result of UTTI's  facility and  increased use of
the offices  shared with GMC. UTTI incurred  $13,460 of direct costs of sales in
1998 and $7,496 in 1997.  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,  1999 was  $123,519  compared  to
$217,439  in 1998 and  $177,298  in 1997.  The 1998 net loss  includes a $30,233
charge for the write down of shredder  blades and gears held in inventory.  On a
per share  basis,  the net loss for the year  ended  June 30,  1999 was  ($0.01)
compared to ($0.01) in 1998 and 1997.  Operating losses are expected to continue
until such time,  if ever, as the Company  receives  revenues from the sale of a
crumb rubber plant, 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, 1999,  the Company had a net increase in
cash of $7,935.  The  non-refundable  option  payment  from Giant,  increases in
accounts payable and accrued salaries,  and reduction in tire inventory were the
primary

                                       13
<PAGE>

sources of cash for  operations for the year.  The sale of  RecycleNet's  common
shares and the sale of the Company's  own common stock were the primary  sources
of cash from financing and investing activities.  Such financing sources may not
be  available  on an ongoing  basis if the  Company  does not begin to  generate
revenue.

ITEM 7.           FINANCIAL STATEMENTS

            [The remainder of this page was intentionally left blank]

                                       14
<PAGE>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES



                                TABLE OF CONTENTS

                                                                            Page

Report of Independent Certified Public Accountants                           F-1

Financial Statements:

         Consolidated Balance Sheets June 30, 1999
           and 1998                                                          F-3

         Consolidated Statements of Operations for the Years Ended June
           30, 1999,  1998 and 1997 and for the Period From January 14,
           1981 (Date of Inception of the Development Stage) to
           June 30, 1999                                                     F-4

         Consolidated Statements of Comprehensive Income (Loss) for the
            Years Ended June 30, 1999, 1998 and 1997 and for the Period
            From January 14, 1981 (Date of Inception of the Development
            Stage) to June 30, 1999                                          F-5

         Consolidated Statements of Stockholders' Deficit
           for the Period From Inception of the Development
           Stage (January 14, 1981) Through June 30, 1999                    F-6

         Consolidated Statements of Cash Flows for the Years Ended June
           30, 1999,  1998 and 1997 and for the Period From January 14,
           1981 (Date of Inception of the Development Stage) to
           June 30, 1999                                                     F-7

         Notes to Consolidated Financial Statements                          F-9


                                        i
<PAGE>

        HANSEN, BARNETT & MAXWELL
        A Professional Corporation
       CERTIFIED PUBLIC ACCOUNTANTS

                                                         (801) 532-2200
    Member of AICPA Division of Firms                  Fax (801) 532-7944
             Member of SECPS                      345 East Broadway, Suite 200
Member of Summit International Associates        Salt Lake City, Utah 84111-2693




               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


To the Stockholders
Garb Oil and Power Corporation

We have audited the accompanying consolidated balance sheets of Garb Oil & Power
Corporation and  Subsidiaries (a development  stage company) as of June 30, 1999
and 1998, and the related consolidated  statements of operations,  comprehensive
income (loss), stockholders' deficit, and cash flows for each of the three years
in the period  ended June 30,  1999,  and for the period  from  January 14, 1981
(date of  inception of the  development  stage)  through  June 30,  1999.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our  audits.  The  consolidated   financial  statements  of  Garb  Oil  &  Power
Corporation and  Subsidiaries  for the year ended June 30, 1993 and for the four
years in the period  ended June 30, 1993 were  audited by other  auditors  whose
report dated  September  28, 1993,  did not express an opinion on the  financial
statements  for June  30,  1993  and  included  an  explanatory  paragraph  that
described the uncertainty regarding the basis of presentation  discussed in Note
1 to the consolidated financial statements.  Our opinion,  insofar as it relates
to the  amounts  for those  years,  is based  solely on the  report of the other
auditors.

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

In our opinion,  based on our audits and the report of the other  auditors,  the
consolidated  financial  statements  referred to above  present  fairly,  in all
material  respects,  the financial  position of Garb Oil & Power Corporation and
Subsidiaries  as of June 30, 1999 and 1998 and the  results of their  operations
and their cash flows for each of the three  years in the period  ending June 30,
1999 and  cumulative for the period from January 14, 1981 through June 30, 1999,
in conformity with generally accepted accounting principles.

                                   (Continued)

                                      F-1
<PAGE>

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,  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.



                            HANSEN, BARNETT & MAXWELL

Salt Lake City, Utah
September 10, 1999

                                      F-2
<PAGE>
<TABLE>
<CAPTION>

                                   GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                                           (A Development Stage Company)
                                           CONSOLIDATED BALANCE SHEETS
                                              JUNE 30, 1999 AND 1998


                                                                                                    1999              1998
                                                                                         ---------------   ---------------
                                                          ASSETS
Current Assets
<S>                                                                                      <C>               <C>
      Cash                                                                               $        13,889   $         5,954
      Accounts receivable - related party                                                             -            195,474
      Inventory                                                                                   30,232            30,232
      Investment in available-for-sale securities                                                290,625                -
                                                                                         ---------------   ---------------
           Total Current Assets                                                                  334,746           231,660
                                                                                         ---------------   ---------------

Property and Equipment
      Office equipment                                                                             8,115             8,115
      Tools and equipment                                                                         30,099            30,099
      Building improvements                                                                        4,747             4,747
                                                                                         ---------------   ---------------
           Total Property and Equipment                                                           42,961            42,961
      Less:  Accumulated depreciation                                                            (31,876)          (25,837)
                                                                                         ----------------  ---------------
           Net Property and Equipment                                                             11,085            17,124
                                                                                         ---------------   ---------------

Other Assets
      Deposits                                                                                        -              1,000
      Patents - net of accumulated amortization at June 30,
        1999 and 1998 of $12,728 and $11,796, respectively                                         2,158             3,090
                                                                                         ---------------   ---------------
           Total Other Assets                                                                      2,158             4,090
                                                                                         ---------------   ---------------

Total Assets                                                                             $       347,989   $       252,874
                                                                                         ===============   ===============

                                           LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
      Accounts payable                                                                   $        73,998   $        58,113
      Deferred revenue                                                                           150,000           150,000
      Accrued payroll                                                                            360,000           312,000
      Accrued interest                                                                           162,594            81,450
      Accrued expenses                                                                             3,769             1,321
      Notes payable - related parties                                                            474,855           281,713
                                                                                         ---------------   ---------------
           Total Current Liabilities                                                           1,225,216           884,597
                                                                                         ---------------   ---------------

Stockholders' Deficit
      Common stock - 20,000,000 shares authorized;
        no par value; 17,933,299 and 17,028,299 shares issued at
        June 30, 1999 and 1998, respectively                                                   2,331,458         2,744,068
      Unrealized gain on available-for-sales securities                                          290,625                -
      Accumulated deficit - prior to development stage                                           (27,178)          (27,178)
      Deficit accumulated during the development stage                                        (3,472,132)       (3,348,613)
                                                                                         ----------------  ---------------
           Total Stockholders' Deficit                                                          (877,227)         (631,723)
                                                                                         ----------------  ---------------

Total Liabilities and Stockholders' Deficit                                              $       347,989   $       252,874
                                                                                         ===============   ===============
</TABLE>

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

                                      F-3
<PAGE>
<TABLE>
<CAPTION>

                                       GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                                               (A Development Stage Company)
                                           CONSOLIDATED STATEMENTS OF OPERATIONS
                               FOR THE YEARS ENDED JUNE 30, 1999, 1998 AND 1997 AND FOR THE
                             PERIOD FROM JANUARY 14, 1981 (INCEPTION OF THE DEVELOPMENT STAGE)
                                                     TO JUNE 30, 1999
                                                                                                               For the
                                                                                                             Period From
                                                                                                           January 14, 1981
                                                                                                           (Inception of the
                                                                                                              Development
                                                                                                               Stage) To
                                                                1999              1998              1997     June 30, 1999
                                                     ---------------   ---------------   ---------------   ---------------
Revenues
<S>                                                  <C>               <C>               <C>               <C>
    Tire sales                                       $            -    $         4,625   $         9,685   $       117,932
    Equipment sales                                               -                 -                 -            595,723
    Other revenues                                                -              5,000            30,519           402,333
                                                     ---------------   ---------------   ---------------   ---------------
          Total Revenues                                          -              9,625            40,204         1,115,988

Expenses
    Cost of sales                                                 -             13,460             7,496            60,020
    Cost of equipment                                             -                 -                 -            473,837
    Bad debt                                                      -                 -                 -            266,750
    Salary and wages                                          76,073            77,934            93,815         1,400,532
    Sales commissions                                             -              2,750             3,000            27,785
    Office                                                     5,142             7,955             7,160           146,084
    Rent                                                      14,716            27,636            22,308           216,635
    Telephone                                                  1,545             3,957             5,161           102,015
    Professional fees                                         69,737            17,313            16,933           452,704
    Finders' fee                                                  -                 -                 -            145,000
    Insurance                                                  1,705             5,052             5,293            82,509
    Taxes and licenses                                         6,548             3,305             5,651           104,661
    Travel                                                     5,721             3,416             1,750           217,310
    Promotion and entertainment                                   -                 -                 -             14,053
    Testing                                                       -                 -                 -             27,073
    Advertising                                                5,133               200                -            144,547
    Amortization                                                 932               932               932            52,102
    Depreciation                                               6,039             7,377             9,157            55,591
    Consulting fee                                                -                 -                 -             19,737
    Stockholders' meetings                                        -                 -                 -                670
    Parking                                                      440               990               660            11,214
    Subcontractors                                                -                 -                 -             40,138
    Auto expense                                                  -                 -                 -              4,417
    Repairs and maintenance                                       -                116                -              3,982
    Other                                                        544               483             1,698            15,609
                                                     ---------------   ---------------   ---------------   ---------------
          Total Expenses                                     194,275           172,876           181,014         4,084,975

Loss From Operations Before Other Income
  (Expense) and Extraordinary Item                          (194,275)         (163,251)         (140,810)       (2,968,987)
                                                     ----------------  ---------------   ---------------   ----------------

Other Income (Expense)
    Write off and abandonment of assets                           -            (30,233)               -           (431,690)
    Gain on sale of assets                                   102,560             4,709                -            107,924
    Interest income                                               -                 -                 -            147,810
    Interest expense                                         (31,804)          (28,664)          (36,488)         (216,360)
    Minority interest in losses of subsidiary                     -                 -                 -              5,383
                                                     ---------------   ---------------   ---------------   ---------------
          Total Other Income (Expense)                        70,756           (54,188)          (36,488)         (386,933)

Loss From Operations Before Extraordinary
  Item                                                      (123,519)         (217,439)         (177,298)       (3,355,920)

Extraordinary Item - Loss on Extinguishment
  of Debt                                                         -                 -                 -           (116,212)
                                                     ---------------   ---------------   ---------------   ---------------

Net Loss                                             $      (123,519)  $      (217,439)  $      (177,298)  $    (3,472,132)
                                                     ================  ===============   ===============   ================

Basic and Diluted Loss Per Share
    Operations                                       $         (0.01)  $         (0.01)  $         (0.01)  $         (0.23)
    Extraordinary item                                            -                 -                 -              (0.01)
                                                     ---------------   ---------------   ---------------   ----------------

Basic and Diluted Net Loss Per Share                 $         (0.01)  $         (0.01)  $         (0.01)  $         (0.24)
                                                     ================  ===============   ===============   ================

Weighted Average Number of Shares
  Outstanding                                             17,411,573        17,028,299        16,793,146        14,767,279
                                                     ===============   ===============   ===============   ===============
</TABLE>

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

                                      F-4
<PAGE>
<TABLE>
<CAPTION>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
             CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
          FOR THE YEARS ENDED JUNE 30, 1999, 1998 AND 1997 AND FOR THE
        PERIOD FROM JANUARY 14, 1981 (INCEPTION OF THE DEVELOPMENT STAGE)
                                TO JUNE 30, 1999

                                                                                                                    For the
                                                                                                                  Period From
                                                                                                                January 14, 1981
                                                                                                                (Inception of the
                                                                                                                   Development
                                                                                                                    Stage) To
                                                                     1999              1998              1997     June 30, 1999
                                                           --------------    --------------   ---------------   ---------------
<S>                                                        <C>               <C>              <C>               <C>
Net Loss                                                   $     (123,519)   $     (217,439)  $      (177,298)  $    (3,472,132)
                                                           --------------    --------------   ---------------   ---------------

Other Comprehensive Income
      Unrealized gain on investment in securities                 290,625               --                --            290,625
                                                           --------------    --------------   ---------------   ---------------

         Other Comprehensive Income                               290,625               --                --            290,625
                                                           --------------    --------------   ---------------   ---------------

Comprehensive Income (Loss)                                $      167,106    $     (217,439)  $      (177,298)  $    (3,181,507)
                                                           ==============    ==============   ===============   ===============
</TABLE>

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

                                      F-5
<PAGE>
<TABLE>
<CAPTION>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
             FOR THE PERIOD FROM INCEPTION OF THE DEVELOPMENT STAGE
                    (JANUARY 14, 1981) THROUGH JUNE 30, 1999

                                                                                                        Deficit
                                                                           Unrealized                 Accumulated  Treasury Stock
                                                        Common Stock        Gain on                   During the    Number
                                                    Number                 Investment    Accumulated  Development    of
                                                  of 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-$2.94 per share                        82,000     240,889         -            -             -          -        -
  Stock issued to satisfy related party liabilities:
    November 1993-$.20 per share                     64,310      12,882         -            -             -          -        -
    December 1993-$.14 per share                     87,000      12,200         -            -             -          -        -
    November 1994-$.21 per share                     25,000       5,342         -            -             -          -        -
  Stock issued for services:
    May 1981-$1.60 per share                          5,000       8,000         -            -             -          -        -
    May 1983-$1.50 per share                         50,000      75,000         -            -             -          -        -
    August 1992-$.15 per share                       25,000       3,750         -            -             -          -        -
    December 1992-$.15 per share                      4,000         600         -            -             -          -        -
    November 1994-$.21 per share                      4,000         855         -            -             -          -        -
    January 1995-$.21 per share                      76,167      16,276         -            -             -          -        -
    February 1995-$.21 per share                     10,000       2,137         -            -             -          -        -
  Stock issued for cash:
    March 1981-$.70 per share                        10,000       7,000         -            -             -          -        -
    April 1981-$.41 per share                       192,834      80,000         -            -             -          -        -
    June 1981-$1.31 per share                        27,518      35,945         -            -             -          -        -
    March 1983-$.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-$1.00 per share                  200,000     200,000         -            -             -          -        -
    November 1984-$.95 per share                    105,470     100,000         -            -             -          -        -
    April 1986-$1.27 per share                      770,000     980,000         -            -             -          -        -
    May 1992-$0.24 per share                        208,334      50,000         -            -             -          -        -
    December 1992-$.15 per share                     50,000       7,500         -            -             -          -        -
    February 1993-$.15 per share                    100,000      15,000         -            -             -          -        -
    March 1993-$.15 per share                       100,000      15,000         -            -             -          -        -
    May 1993-$.15 per share                         100,000      15,000         -            -             -          -        -
    June 1993-$.25 per share                        100,000      25,000         -            -             -          -        -
    August 1993-$.20 per share                      100,000      20,000         -            -             -          -        -
    October 1993-$.07 to $.15 per share             250,000      25,000         -            -             -          -        -
    November 1993-$.25 per share                     20,000       5,000         -            -             -          -        -
    December 1993-$.15 to $.20 per share            180,000      32,500         -            -             -          -        -
    January 1994-$.25 per share                      20,000       5,000         -            -             -          -        -
    February 1995-$.20 per share                     50,000      10,000         -            -             -          -        -
    March 1995-$.20 to $.22 per share               263,000      56,500         -            -             -          -        -
    May 1995-$.25 per share                          20,000       5,000         -            -             -          -        -
    June 1995-$.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)      -        -
  Stock issued for services:
    September 1995-$.13 per share                    20,000       2,684         -            -             -          -        -
  Stock issued for cash:
    July 1995-$.25 per share                         40,000      10,000         -            -             -          -        -
    December 1995-$.10 per share                    250,000      25,000         -            -             -          -        -
    May 1996-$.12 to $.25 per share                  90,000      16,000         -            -             -          -        -
  Net loss                                             -           -            -            -         (124,871)      -        -
                                                -----------  ----------    ---------     --------   -----------    -------  -------
Balance, June 30, 1996                           16,641,966   2,686,119         -         (27,178)   (2,953,876)      -        -
</TABLE>

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

                                      F-6
<PAGE>
<TABLE>
<CAPTION>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
             FOR THE PERIOD FROM INCEPTION OF THE DEVELOPMENT STAGE
                    (JANUARY 14, 1981) THROUGH JUNE 30, 1999

                                                                                                  Deficit
                                                                    Unrealized                  Accumulated      Treasury Stock
                                                  Common Stock       Gain on                    During the    Number
                                              Number                Investment     Accumulated  Development     of
                                           of Shares       Amount  In Securities     Deficit       Stage      Shares    Amount
                                           ---------    ---------  -------------   -----------  -----------   ------    ------
<S>                                       <C>           <C>         <C>            <C>        <C>             <C>      <C>
Balance, June 30, 1996                    16,641,966    2,686,119         -          (27,178)   (2,953,876)      -         -
  Stock issued for services:
    May 1997-$.15 per share                   86,333       12,949         -             -             -          -         -
  Stock issued for cash:
    January 1997-$.15 per share              300,000       45,000         -             -             -          -         -
  Net loss                                      -            -            -             -         (177,298)      -         -
                                       -------------  -----------  -----------   -----------  ------------  ---------  --------

Balance, June 30, 1997                    17,028,299    2,744,068         -          (27,178)   (3,131,174)      -         -
    Net loss                                    -            -            -             -         (217,439)      -         -
                                       -------------  -----------  -----------   ----------   ------------  ---------  --------

Balance, June 30, 1998                    17,028,299    2,744,068         -          (27,178)   (3,348,613)      -         -
  Stock issued for services:
    October 1998-$.09 per share                5,000          450         -             -             -          -         -
  Stock issued for cash
    January-1999-$.05 to $.10 per share      770,000       47,000         -             -             -          -         -
    February-1999-$.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                                      -            -            -             -         (123,519)      -         -
                                       -------------  -----------  -----------   -----------  ------------  ---------  --------

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

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

                                      F-7
<PAGE>
<TABLE>
<CAPTION>

                                       GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                                               (A Development Stage Company)
                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                               FOR THE YEARS ENDED JUNE 30, 1999, 1998 AND 1997 AND FOR THE
                         PERIOD FROM JANUARY 14, 1981 (DATE OF INCEPTION OF THE DEVELOPMENT STAGE)
                                                     TO JUNE 30, 1999
                                                                                                                For the
                                                                                                             Period From
                                                                                                           January 14, 1981
                                                                                                           (Inception of the
                                                                                                              Development
                                                                                                               Stage) To
                                                                   1999            1998             1997     June 30, 1999
                                                          -------------    ------------    -------------    --------------
Cash Flows From Operating Activities
<S>                                                       <C>              <C>             <C>              <C>
    Net loss                                              $    (123,519)   $   (217,439)   $    (177,298)   $   (3,472,132)
    Adjustments to reconcile net cash provided
     by (used in) operating activities:
       Depreciation and amortization                              6,971           8,309           10,089           107,693
       Bad debt expense                                              -               -                -            266,750
       Gain on sale of asset                                         -           (4,709)              -             (5,364)
       Gain on sale of available-for-sale securities           (102,560)             -                -           (102,560)
       Write off and abandonment of assets                           -           30,233               -            431,690
       Loss on extinguishment of debt                                -               -                -            116,212
       Stock issued for services and interest                       450              -            12,949           122,701
       Available for sale securities issued for services         52,560              -                -             52,560
       Changes in current assets and liabilities:
          Accrued interest receivable                                -               -                -            (24,250)
          Accounts receivable                                    11,645              -                -             11,645
          Accounts receivable - related party and
           other receivables                                         -               -             1,257          (150,344)
          Contract receivable                                        -               -                -           (242,500)
          Income tax refund receivable                               -               -                -                537
          Inventory                                                  -           13,460            6,880            62,494
          Accounts payable                                        8,371         (14,473)          10,157            66,380
          Deferred revenue                                           -           75,000           22,481           128,000
          Advances payable - related party                           -               -                -           (120,106)
          Accrued expenses                                       (3,076)          1,321               -             (1,755)
          Accrued payroll                                        48,000          48,000           48,000           360,000
          Accrued interest payable                               22,239          59,609           19,800           353,257
          Other current liabilities                                  -               -                65           240,954
                                                          -------------    ------------    -------------    --------------
       Net Cash  Used In  Operating Activities                  (78,919)           (689)         (45,620)       (1,798,138)

Cash Flows From Investing Activities
    Construction in progress                                         -               -                -         (2,937,790)
    Cash acquired from Garbalizer Machinery                         899              -                -                899
    Net (advances) payments (to)/from related party             (26,479)         (9,430)         (25,607)          (83,609)
    Purchase of treasury stock                                       -               -                -            (10,009)
    Increase (decrease) of other assets                           1,000              -                -         (1,956,733)
    Purchase of property and equipment                               -               -            (1,836)          (60,412)
    Proceeds from sale of available for sale securities          50,000              -                -             50,000
    Proceeds from sales of assets                                    -            8,000               -              9,500
                                                          -------------    ------------    -------------    --------------
       Net Cash Provided By (Used In) Investing Activities       25,420          (1,430)         (27,443)       (4,988,154)

Cash Flows From Financing Activities
    Net proceeds from (payments on) notes
      payable - related party                                     1,434              -            20,000           299,841
    Proceeds from bank loans                                         -               -                -          4,636,647
    Sale of common stock                                         60,000              -            45,000         2,007,217
    Contributions to capital by parent company                       -               -                -            356,402
    Principal payments on bank loans                                 -               -                -           (500,000)
                                                          -------------    ------------    -------------    ---------------
       Net Cash Provided By Financing Activities                 61,434              -            65,000         6,800,107
                                                          -------------    ------------    -------------    --------------

Net Increase (Decrease) In Cash And Cash Equivalents              7,935          (2,119)          (8,063)           13,815

Net Cash and Cash Equivalents At Beginning of Period              5,954           8,073           16,136                74
                                                          -------------    ------------    -------------    --------------

Net Cash and Cash Equivalents At End of Period            $      13,889    $      5,954    $       8,073    $       13,889
                                                          =============    ============    =============    ==============

Supplemental Disclosures of Cash Flow Information -
    Cash paid for interest                                $       9,564    $      3,864    $      16,688    $      104,656
                                                          =============    ============    =============    ==============
</TABLE>

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

                                      F-8
<PAGE>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1--ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

         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  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.

         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.

         Basis  of   Presentation--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,
         1999,  1998, and 1997, the Company has incurred net losses of $123,519,
         $217,439,  and  $177,298,  respectively,  and as of June 30, 1999,  the
         Company's  deficit   accumulated   during  the  development  stage  was
         $3,472,132.  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 sell
         the shares  received in the transaction and use the funds received from
         the sale of the securities to fund current and future operations.

         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.

         Inventory--Inventory  is carried  at the lower of cost or market,  cost
         being  determined  on the  first-in  first-out  basis,  and consists of
         tires, blades and miscellaneous parts and supplies.

                                       F-9
<PAGE>

         Patents--Patents  are  carried at cost and are being  amortized  over a
         17-year life.

         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.

         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.

         Advertising  Costs--The  Company  expenses  all  advertising  costs  as
         incurred.  Advertising expense was $5,133, $200, and $ 0, for the years
         ending June 30, 1999, 1998 and 1997, respectively.

         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.

         Loss Per Share -- Loss per common  share is computed  by  dividing  net
         loss available to common stockholders by the weighted-average number of
         common  shares  outstanding  during the period.  Diluted loss per share
         reflects the potential  dilution  which could occur if all contracts to
         issue  common stock were  exercised  or converted  into common stock or
         resulted in the  issuance of common  stock.  In the  Company's  present
         position,  diluted  loss per share is the same as basic  loss per share
         because there are no potentially issuable common shares.

         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, 1999.  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.

         Reclassification--Certain   previously   reported   amounts  have  been
         reclassified to conform to the June 30, 1999 presentation.

NOTE 2--DISTRIBUTION TO MAJORITY SHAREHOLDER

         In March  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).  The   reorganization   was  accomplished  by  GMC
         transferring  all of its assets and liabilities to the Company,  by GMC
         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.  GCA  retained
         approximately  10% of the common stock of  Recyclenet,  Inc.  after the
         reorganization.  In exchange for the Company's  assumption of GMC's net
         liabilities,  GCA  transferred  1,061,668  shares of  Recyclenet,  Inc.
         common stock  (approximately 2% of the outstanding  common shares after
         the  reorganization)  to  the  Company.   The  assets  and  liabilities
         transferred to the Company, including the Company's receivable from GMC
         which was effectively forgiven, were as follows:

                                      F-10
<PAGE>

            Cash                                                $      899
            Accounts receivable                                     11,645
            Accounts payable                                       (10,584)
            Accrued expenses                                       (61,359)
            Payable to related parties                            (103,215)
            Notes payable                                          (88,493)
                                                                ----------
             Net Liabilities Assumed                              (251,107)
            Receivable from GMC forgiven                        $ (221,953)

            Net Liabilities Assumed and Receivable Forgiven     $ (473,060)
                                                                ==========

         The common shares of Recyclenet,  Inc.  received from GCA were recorded
         at zero which was the historical cost of GCA's  investment in GMC after
         the transfer of GMC's net  liabilities to the Company.  The liabilities
         assumed, net of the assets received, were recorded as a distribution of
         stockholders' equity to GCA and was recorded at the historical carrying
         values of the  assets and  liabilities  to GMC which were also equal to
         their fair values.

NOTE 3--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. At June 30, 1999, the
         available-for-sale securities consisted of the following:

                                  Gross              Gross         Estimated
                                Unrealized         Unrealized         Fair
                         Cost      Gains             Losses           Value
                         ----      -----             ------           -----
         Common Stock   $   -     $ 290,625         $   -          $ 290,625

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

                                                        For the Years
                                                        Ending June 30,
                                                        1999             1998
                                                ------------     ------------

         Proceeds from Sales of Securities      $    102,560     $        --
                                                ============     ============
         Gross realized gains                   $    102,560     $        --
         Gross realized losses                           --               --
                                                ------------     ------------
         Net Gain from Sale of Investments      $    102,560     $        --
                                                ============     ============

         Proceeds from sales of securities includes $50,000 of cash proceeds for
         the sale of 166,668  shares and $52,560 for 120,000  shares given to an
         employee,  lawyers and a consultant for various services rendered.  The
         shares given for services  rendered had a fair value of $0.44 per share
         which was the market value of the stock on the day granted.

         Other  comprehensive  income is only  relevant for the year ending June
         30, 1999 and for the period from  inception  through  June 30, 1999 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, 1999
         Unrealized net holding gains                 $    393,185       $         -      $    393,185
         Reclassification adjustment for net gains
           included in net income                         (102,560)                -          (102,560)
                                                      ------------       ------------     ------------

               Other Comprehensive Income             $    290,625       $                $    290,625
                                                      ============       ============     ============
</TABLE>

                                      F-11
<PAGE>
<TABLE>
<CAPTION>

                                                        Before-Tax           Tax           Net-of-Tax
                                                           Amount            Benefit          Amount
                                                           ------            -------          ------
<S>                                                   <C>                <C>              <C>
         Cumulative For the Period January
           14, 1981 (Date of Inception) Through
           June 30, 1999
         Unrealized net holding gains                 $    393,185       $         -      $    393,185
         Reclassification adjustment for net gains
           included in net income                         (102,560)                -          (102,560)
                                                      ------------       ------------     ------------

               Other Comprehensive Income             $    290,625       $                $    290,625
                                                      ============       ============     ============
</TABLE>

         A  provision  for  income  taxes  has not  been  assessed  against  the
         unrealized  gain on  securities  because  of the  current  NOL's of the
         Company.  Any gain on the sale of the securities will be offset against
         these NOL's.

NOTE 4--UTAH TRUCK TIRE, INC.

         Utah Truck Tire,  Inc. was formed May 20, 1994, and on May 24, 1994 the
         Company was issued 55 percent (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 percent (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 is  currently  dormant  having no revenues and
         incurring  minimal  expenses  during the years  ended June 30, 1999 and
         1998.  Utah Truck Tire,  Inc. was  primarily in the business of selling
         retread diesel truck tires.

NOTE 5--PAYABLE TO RELATED ENTITIES, OFFICERS AND SHAREHOLDERS

         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.  As discussed in Note 2, 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, 1999, 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
         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.

         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, 1999.

                                      F-12
<PAGE>

         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, 1999,

         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 as discussed in Note
         7.

NOTE 6--INCOME TAXES

         The  Company did not have a current or  deferred  provision  for income
         taxes for the years ended June 30, 1999,  1998 or 1997.  The  following
         presents the components of the deferred tax asset for the Company:

                                                               June 30,
                                                            1999           1998
                                                    ------------   ------------

         Benefit of operating loss carryforwards    $    831,230   $    943,652
         Inventory reserve                                11,790             -
         Accrued salaries                                 93,600         74,880
         Accrued interest                                 41,438         33,716
         Depreciation                                      2,086          2,023
                                                    ------------   ------------

         Total Deferred Tax Assets                       980,144      1,054,271
         Less:  Valuation Allowance                     (980,144)    (1,054,271)
                                                    ------------   ------------

         Net Deferred Tax Asset                     $         -    $         -
                                                    ============   ============

         The valuation  allowance has decreased  $74,127 and increased  $280,656
         for the years ended June 30, 1999 and 1998, respectively.  The decrease
         in valuation  during 1999 is due to the expiration of federal and state
         NOL's offset by the tax losses  incurred  during 1999.  The Company and
         its  subsidiaries  have federal net  operating  loss  carryforwards  of
         $2,411,594 that expire, if unused, in years 2000 through 2019.

         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:
<TABLE>
<CAPTION>

                                                                                         June 30,
                                                                              1999           1998            1997
                                                                      ------------   ------------   -------------

<S>                                                                   <C>            <C>            <C>
         Income tax benefit at statutory rate (34%)                   $    (41,997)  $    (73,929)  $     (60,281)
         Change in deferred tax asset valuation                             46,084        280,656          60,281
         State tax net of federal benefit                                   (4,076)        (7,175)             -
         Effect due to change in tax rates                                      -        (199,518)             -
         Other                                                                 (11)           (34)             -
                                                                      ------------   ------------   -------------

                  Provision for Income Taxes                          $          -   $         -    $          -
                                                                      ============   ============   =============
</TABLE>

                                      F-13
<PAGE>

NOTE 7--COMMITMENTS

         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.

         On May 23, 1996, the Company  entered into two agreements  with Alberta
         Recovery  Technologies  Ltd.  whereby the Company agreed to manufacture
         and install  equipment.  An initial  non-refundable  earnest payment of
         $30,519 was paid and was included as deferred revenue at June 30, 1996.
         This  agreement  was  terminated  in  1998  for  failure  to  meet  the
         provisions of the agreement,  the $30,519  non-refundable  down payment
         classified as deferred  revenue was transferred to other revenue during
         the period ended June 30, 1998.

         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.

NOTE 8--CONTRACT RECEIVABLE

         In August 1988,  the Company sold to an unrelated  corporation  a plant
         and technology related to the extraction of oil by-products, steel, and
         resulting gases from scrap tires in exchange for a contract  receivable
         in the amount of  $242,500.  The contract  bore  interest at 8% and, as
         extended on September 1, 1991,  was due in full on March 1, 1992. As no
         payments  were  received by the Company  since the contract was entered
         into in August  1988,  the  contract  receivable  and  related  accrued
         interest receivable of $24,250 were written off as uncollectible during
         the year ended June 30, 1992. The Company is attempting to locate other
         parties  who may be  interested  in  purchasing  the plant and  related
         technology.  No value was assigned to such plant and related technology
         as of June 30, 1999 and 1998 due to the  uncertainty of the realization
         of any significant value.

NOTE 9--INVESTMENT IN RIALTO POWER CORPORATION

         The Company  entered  into a joint  venture  with DITT,  S.A., a French
         Corporation   (DITT),   on  December  2,  1985,   for  the  purpose  of
         constructing a 35-megawatt  electrical generating plant fueled by scrap
         tires (the  project).  The  Company  received  50 percent of the common
         stock of Rialto Power Corporation  (Rialto),  a corporation  formed for
         the purpose of the joint  venture,  in exchange for equipment and other
         assets.  The  remaining  50 percent  of the common  stock of Rialto was
         issued to DITT in  consideration  of an arrangement  whereby DITT would
         arrange and guarantee a $4,000,000 line of credit from a bank to Rialto
         and construct a power plant.

         Rialto had drawn the entire line of credit as of May 1987 at which time
         the joint venture agreement was terminated. Pursuant to the termination
         of the  agreement,  DITT  transferred  to Garb Oil all of its  stock in
         Rialto  making  Garb Oil the sole  shareholder  of Rialto.  The line of
         credit  was  called  by the bank  and,  under  the terms of the line of
         credit,  DITT, as guarantor,  paid the bank. As consideration  for this
         payment,  Rialto executed a note payable at 10% to DITT  collateralized
         by all of the assets of Rialto. The note was due on December 31, 1988.

                                      F-14
<PAGE>

         In November 1989, Rialto agreed to convey the collateralized  assets to
         DITT in satisfaction  of the note and related  interest  payable.  Such
         assets represented substantially all costs of the project. The carrying
         value  of  the  related  assets  and  liabilities  at the  date  of the
         conveyance were as follows:

            Land                                             $       1,384,126
            Construction in progress                                 2,937,790
            Other assets                                               140,633
                                                             -----------------

            Total assets conveyed                                    4,462,549
            Less note and related interest payable                   4,346,337

            Loss Recognized on Extinguishment of Debt        $         116,212
                                                             =================

         Due to the ongoing legal actions  regarding certain permits issued with
         respect to the Rialto project and the adverse effect of related delays,
         the  Company  could  not  proceed  with  any  further  construction  or
         development of the project.  The State of California  dissolved  Rialto
         Power  Company.  The  Company  may  pursue  the  construction  of other
         waste-to-energy  projects  in areas  believed  to have  more  favorable
         regulatory environments.  The Company does not have any firm agreements
         for the construction of such additional plants.

NOTE 10--OPERATING LEASES

         The Company shares office space with Garbalizer  Machinery  Corporation
         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 $14,716,  $27,636, and $22,308 for the years
         ended June 30, 1999, 1998, and 1997, respectively.

NOTE 11--SUPPLEMENTAL CASH FLOWS

         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.

                                      F-15
<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              77        President, Chairman of
                                               the Board of Directors
                                               and Director

         Bill Vee Anderson           48        Vice-President, Director

         Charles Laver               76        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 was the majority  shareholder  of the
Company.  Until  March,  1999 Mr.  Brewer  was a  director  of,  and  Garbalizer
Corporation  of America was the  majority  shareholder  of, GMC  Corporation,  a
public non-reporting 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

                                       15
<PAGE>

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
30 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.

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, 1999 all Section
16(a) filing requirements applicable to its officers, directors and greater than
ten-percent beneficial owners were complied with except as follows:

         John C. Brewer filed a Form 4 on October 12, 1999 reporting a change in
         the number of shares of the Company indirectly owned by him. The Form 4
         should have been filed on April 12, 1999.

         Charles Laver filed a Form 4 on October 12, 1999  reporting a change in
         the number of shares of the Company indirectly owned by him. The Form 4
         should have been filed on April 12, 1999.

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,  1999.
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.

                                       16
<PAGE>

                           SUMMARY COMPENSATION TABLE

                                                         Annual Compensation
Name and Principal Position      Fiscal Year                 Salary ($)
---------------------------      -----------                 ----------
John C. Brewer                      1999                        $48,000
President and CEO                   1998                         48,000
                                    1997                         48,000


         No person received any form of non-cash  compensation  from the Company
in the  fiscal  year  ended  June  30,  1999  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 September 27, 1999 (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.

Name and Address                                  Amount      Percent of Class

Garbalizer Corporation                          8,131,590            45.3%
of America (Note 1)
Newhouse Office Building, Suite 507
Salt Lake City, Utah

Ralph C. Alexander                                933,343             5.2%
152 Hall Street
Spartanburg, South Carolina

A/S Parkveien 55                                1,050,000             5.9%
c/o Hoegh Invest A/S (Note 2)
P.O. Box 2416 Solli
0202 Oslo 2, Norway

                                       17
<PAGE>


John C. Brewer (Note 3)                         8,131,590            45.3%
Newhouse Office Building, Suite 507
Salt Lake City, Utah

Charles Laver (Note 4)                          8,152,336            45.4%
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                               8,158,336            45.5%
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 8,131,590 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 8,131,590  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.

                                       18
<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, 1999,

         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

                                       19
<PAGE>

$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.

         The  Company's  president  is entitled to an annual  salary of $48,000.
During 1993 through 1999,  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, 1999,  the balance of accrued  salary to the president was $360,000.
This is in addition to the $68,147 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, 1999, no principal payments had been made.


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 Sheets - June 30, 1999 and 1998.

              Consolidated  Statements  of  Operations - For the Years Ended
              June 30, 1999,  1998, 1997 and for the Period from January 14,
              1981 (Date of Inception of the Development  Stage) to June 30,
              1999

              Consolidated  Statements  of  Stockholders'  Equity  - For the
              Period from  Inception of the  Development  Stage (January 14,
              1981) through June 30, 1999

              Consolidated Statements of Cash Flows For the Years Ended June
              30, 1999,  1998, 1997 and for the Period from January 14, 1981
              (Date of Inception of the Development Stage) to June 30, 1999

         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.

                                       20
<PAGE>
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 herewith
                  Giant Tire Recyclers, Inc.

 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

 27        27     Financial Data Schedule     Filed herewith

                                       21
<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 12th day of October, 1999


         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:    October 12, 1999      /s/ John C. Brewer
                                                 ------------------------------
                                                 John C. Brewer, President

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


                  Date:    October 12, 1999      /s/ Charles Laver
                                                 ------------------------------
                                                 Charles Laver, Treasurer

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


                  Date:    October 12, 1999      /s/ John C. Brewer
                                                 ------------------------------
                                                 John C. Brewer, Director


                  Date:    October 12, 1999      /s/ Charles Laver
                                                 ------------------------------
                                                 Charles Laver, Director


                  Date:    October 12, 1999      /s/ Bill Vee Anderson
                                                 ------------------------------
                                                 Bill Vee Anderson, Director


                                       22