UNITED STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-K








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





For the
fiscal year ended December 31, 2009





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





For the
transition period from July 1, 2009 to December 31, 2009.








Commission
File No. 0-14859





GARB OIL & POWER
      CORPORATION(Exact
      name of registrant as specified in its charter)Utah
            87-0296694(State
      or other jurisdiction of
            (I.R.S.
      Employer Identification. No.)incorporation
      or organization)1588
      South Main Street, Suite 200Salt Lake City,
      Utah  84115(Address
      of principal executive offices) (Zip Code)Registrant’s
      Telephone Number: (801) 832-9865Securities
      registered pursuant to Section 12(b) of the Act:Title
      of each class
            Name
      of each exchange on which registeredNoneSecurities
      registered pursuant to Section 12(g) of the Act:Common stock (No par
  value)








Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes [  ] No[X]





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes [  ] No[X]





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.  Yes [X] No[  ]





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405) during
the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files).   Yes [X] No
[  ]





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K. [  ]





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act:





Large
      accelerated filer o
            Accelerated
      filer oNon-accelerated
      filer o
            (Do
      not check if a smaller
            Smaller
      reporting company xreporting
      company)











Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act.)  Yes [  ] No[X]





The
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked price of such common equity, as of December
31, 2009 was approximately $3,170,000 and as of June 30, 2009 was approximately
$471,707.





The
number of shares outstanding of the Registrant’s common stock, no par value, as
of April 13, 2010 was 79,300,000





i








Table
      of ContentsItem
            
            
            PagePart
      I1
            
            Description
      of
      Business
            11A
            
            Risk
      Factors
            51B
            
            Unresolved
      Staff
      Comments
            82
            
            Properties
            83
            
            Legal
      Proceedings
            84
            
            [Removed
      and
      Reserved]
            85
            
            Market
      for Registrant’s Common Equity, Related Shareholder
Mattersand
      Issuer Purchases of Equity
      Securities
            96
            
            Selected
      Financial
      Data
            107
            
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operation
            107A
            
            Quantitative
      and Qualitative Disclosures about Market
      Risk
            158
            
            Financial
      Statements and Supplementary
      Data
            15Part
      IIConsolidated
      Financial
      Statements
            F-1Table
      of
      Contents
            F-2Report
      of Independent Registered Public Accounting Firm
            F-3Consolidated
      Balance
      Sheets
            F-4Consolidated
      Statements of
      Operations
            F-6Consolidated
      Statements of Stockholders’ Equity
      (Deficit)
            F-7Consolidated
      Statements of Cash
      Flows
            F-8Notes
      to the Consolidated Financial
      Statements
            F-99
            
            Changes
      in Accountants and Disagreements with Accountants on Accounting and
      Financial Disclosure
            169A
            
            Controls
      and
      Procedures
            169B
            
            Other
      Information
            17Part
      III10
            
            Directors,
      Executive Officers and Corporate
      Governance
            1811
            
            Executive
      Compensation
            2012
            
            Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
            2013
            
            Certain
      Relationships and Related Transactions, and Director
      Independence
            2214
            
            Principal
      Accountant Fees and
      Services
            2415
            
            Exhibits,
      Financial Statement
      Schedules
            24Signatures
            26





ii








PART
I





CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS





This
Annual Report on Form 10-K (this “Annual Report”), including the
“Management’s Discussion and Analysis of Financial Condition and Results of
Operation” section in Item 7 of this report, and other materials
accompanying this Annual Report contain forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934 (the
“Exchange Act”) and Section 27A of the Securities Act of 1933 (the
“Securities Act”). These statements relate to our, and in some cases our
customers’ or partners’, future plans, objectives, expectations, intentions and
financial performance and the assumptions that underlie these
statements.





You
can identify these and other forward-looking statements by the use of words such
as “may,” “will,” “could,” “would,” “should,” “expects,” “plans,” “anticipates,”
“estimates,” “intends,” “potential,” “projected,” “continue,” or the negative of
such terms, or other comparable terminology. Forward-looking statements also
include the assumptions underlying or relating to any of the foregoing
statements.





These
statements are based on current expectations and assumptions regarding future
events and business performance and involve known and unknown risks,
uncertainties and other factors that may cause industry trends or our actual
results, level of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these statements. These factors include
those set forth in the following discussion and within Part I, Item 1A
“Risk Factors” of this Annual Report and elsewhere within this
report.





Although
we believe that expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. We will not and assume no obligation to update any of the
forward-looking statements after the date of this Annual Report to conform these
statements to actual results or changes in our expectations, except as required
by law. You should not place undue reliance on these forward-looking statements,
which apply only as of the date of this Annual Report. You should carefully
review the risk factors described in other documents that we file from time to
time with the U.S. Securities and Exchange Commission, or the
SEC.





In
this Annual Report, references to “Garb,” the “Company,” “we,” “us,” “our” (and
words of similar import) refer to Garb Oil & Power Corporation, a Utah
corporation, and such references also include our wholly-owned subsidiary,
Resource Protection Systems GmbH, our subsidiaries Newview S.L. and eWaste USA,
Inc. and any other subsidiary of the Company, unless specific reference is made
to a particular company or a subsidiary of a company.





1.  DESCRIPTION OF
BUSINESS





General





Garb Oil
& Power Corporation (“Garb”) is a fast-growing provider of high-quality
equipment to the waste processing and recycling industries.  Garb
supplies enabling technologies that allow its clients to push their waste
processing and recycling goals forward. Whether the need is for single machines
or an entire plant, Garb provides fresh, profitable ideas and comprehensive
value-added providing for a high rate of return on investment.





Garb is a
corporation incorporated in the State of Utah in 1972 under the name Autumn Day,
Inc.  The Company changed its name in 1978 to Energy Corporation
International and again in 1981 to Garb-Oil Corporation of America, which marked
the start of company’s development stage in the energy and recycling industries.
The Company’s development stage activities consisted of raising capital,
purchasing property and developing technology related to waste-to-energy
electricity production, pyrolysis (extraction of oil, carbon, and steel from
used tires), recovery of used rubber from large off-the-road tires and repair
and sale of used truck tires.  In 1985 the Company changed its name to
Garb Oil & Power Corporation.  Garb exited its development stage
June 30, 2004.





Recent
Acquisitions





Resource
Protection Systems GmbH





On
October 19, 2009, we entered into a Stock Purchase Agreement (the “RPS
Agreement”) to purchase all of the outstanding shares of Resource Protection
Systems GmbH (“RPS”), a green-technologies company based in Germany specializing
in waste processing and recycling (the “RPS Acquisition”).  We closed
the RPS Acquisition on October 27, 2009.  As consideration, the
Company paid the shareholders of RPS an aggregate of 27,829,291 shares of the
Company’s common stock and options to purchase 100,000,000 shares of the
Company’s common stock with a term of five years and an exercise price equal to
one-tenth of the closing ask price for ten trading days prior to the exercise of
the option.  The RPS Acquisition is considered to be capital
transactions in substance, rather than a business combination. That is, the RPS
Acquisition is equivalent to the acquisition by RPS of
Garb.  Accordingly, the RPS Acquisition was accounted for as a change
in capital structure, identical to that of a reverse acquisition. See “Item 7 –
Management’s Discussion and Analysis of Financial Condition and Results of
Operations, Critical Accounting Policies” and “Note 1 – Organization and Summary
of Significant Accounting Principles” to our consolidated financial
statements.










RPS is a
corporation organized under the laws of Germany engaged in the business of
recycling and salvage. RPS is the holder of waste processing and recycling
technology, know-how and client base that we believe are important to the future
success of our business, including processes and procedures to manufacture
rubber talc, a fine powder and is used in various products.  We
purchased RPS to acquire these assets.  The RPS Acquisition effected
the transfer of this technology, know-how and client base from RPS to
Garb.  Garb believes its technology portfolio now contains a leading
line-up of equipment in the waste processing and recycling
industries.





Newview
S.L.





On
January 15, 2010, RPS acquired 80% of the outstanding equity of Newview S.L., a
company organized under the laws of Spain (“Newview”) from Igor Plahuta (the
“Newview Acquisition”).  In January 2009, Mr. Plahuta sold 20% of the
outstanding equity of Newview to Artech Recyclingtechnik GmbH
(“Artech”).  This transfer to Artech is in the process of being
unwound and the 20% ownership previously transferred to Artech will be returned
to Mr. Plahuta and immediately transferred to Garb.  We anticipate
receiving the remaining 20% by year-end 2010.  The total maximum
consideration that may be paid to Mr. Plahuta for the Newview Acquisition is
€600,000 ($820,000), including cancellation of indebtedness owed by Mr. Plahuta
to RPS of €300,000 ($410,000), cash up to €150,000 ($205,000) from the sale of a
47% participation in Sistema Proteccion Recursos, a company organized under the
laws of Spain (“SPR”) when RPS consummates such sale and receives payment
therefor, and cash up to €150,000 ($205,000) from profits of RPS based on a
percent of gross sales of RPS during a certain period.  Mr. Plahuta
currently is the Managing Director of Newview.





We
purchased Newview to acquire certain patents and other technology we believe
help complete our e-waste processing business and processes.  Newview
has no material operations.  RPS has been involved in the recycling
industry and specifically in the rubber and e-waste industry for over 6 years,
providing solutions, technology, machines and consultancy to a variety of
customers in Europe, Middle East, Africa and Russia.  This technology
has now become integrated into Garb’s sales network in North, Central and South
America, complementing the established RPS network in Europe, the Middle East,
Africa and Russia. Garb plans to further expand its sales network in Asia
Pacific in the near future.





On
October 19, 2009 we entered an Addendum No. 1 to the RPS Agreement, pursuant to
which, among other things, Garb consented to the Newview
Acquisition.





We
anticipate the technology acquired in the RPS Acquisition and the Newview
Acquisition will become the base for building Garb’s own plants over the next 10
years.





Recent
Developments





On March
24, 2010, the Company, along with SRI, Steel Valley Design Inc., LMW Holding
Company Inc., Odyssey Environmental LLC, Robert D. Carcelli, Inc., Liberian
Holding Corporation, Inc., and Three C’s Distributing, Inc. formed eWaste USA,
Inc., a Delaware corporation, (“eWaste”) with the intent of building, owning and
managing ten e-scrap (e-waste) plants on the East Coast of the United States
totaling $135,000,000.  Garb owns 51% of eWaste and John Rossi is the
Chairman and Chief Executive Officer of eWaste.




On March
18, 2010, the Company received and accepted purchase orders to design, install
and sell its first e-waste recycling plant to Soil Remediation Inc. (“SRI”) of
Lowellville, Ohio for $13,492,000 (the “SRI Plant”). Building of the plant is
expected to start by September 20, 2010, with commissioning planned by December
15, 2010.  Proceeds from the sale of the SRI Plant are paid on certain
milestones and benchmarks during the life of the project.  Sale of the
SRI Plant is subject to the buyer’s timely payment of milestone
payments.







On April
10, 2010, the Company received and accepted purchase orders to design, install
and sell another e-waste recycling plant to La Stella Maris Inc. of Virginia for
$13,492,000 (the “La Stelle Maris Plant”). Building of the La Stella Maris Plant
is expected to start by November 30, 2010, with commissioning planned by March
15, 2011.  Proceeds from the sale of the La Stelle Maris Plant are
paid on certain milestones and benchmarks during the life of the
project.  Sale of the La Stella Maris Plant is subject to the buyer’s
timely payment of milestone payments.





Garb
Plants and Products





Garb’s
family of products includes a wide range of innovative and proven products,
systems and peripherals—all designed to be built with precision and to the
finest quality. Garb is committed to long-term solutions and this commitment is
reflected in every product produced and every service provided. Engineering
quality, longevity, strength, reliability, quick return on investment and low
cost of ownership is built into every single machine, processing line and
complete plant that Garb designs, produces and installs.





Garb and
its subsidiaries are striving to be international leaders in their fields and to
be recognized as a partner of choice for major waste processing companies
worldwide. Garb and its subsidiaries have more than 15 years experience in
designing, operating, erecting and commissioning recycle plants, with several
large recycling plants delivered in many countries. From scrap metal to e-scrap
to tires, there is nothing that Garb’s 60-330KW (440hp) machines cannot shred.
All of Garb’s products are designed for high throughput rates, operating with
high torque, solid construction and sophisticated protection systems that
protect against damage from unwanted materials. Above all, Garb machines are
designed for optimal uptime and performance.





Through
Garb’s European subsidiaries, RPS and Newview, we believe Garb has acquired the
necessary technology to make Garb the leading company in the world for the
attainment of the ClosedCycleTM principal; which is: “Taking a product at the end
of its life cycle, disintegrate it in its various components and reutilize each
of the components to create another new or similar product, leaving no
waste.”  Garb believes that in order to satisfy the high demands
placed on world resources it is necessary to continue to invest in research and
development, primarily concentrating on transforming waste products into
reusable raw materials. Garb’s machine and factory engineering expertise in
refining and product finishing allows it to develop into new market areas and
provide high value-added products in Fine Rubber Powder, Thermoplastics
Elastomers, E-waste derivable products, gas, electricity, retreads, new tires,
car recycling and precious metals.





Our
Industry





The
industry in which Garb is operating is still in its maturing stages.
Technological developments, the economic climate and the growing global
awareness of waste as a possible raw material resource, are beginning to change
the recycling industry, placing demands on the industry for new products and for
new solutions that apply the ClosedCycle principal. It is Garb’s belief that
with the increasing maturation of the industry Garb’s role will grow. With its
knowledge of solutions, its comprehensive product portfolio, its experience and,
above all, with people who understand the industry, Garb will translate its
clients’ needs and its own requirements into profitable solutions that will
provide the Company with a competitive advantage in the market.





Our
Markets





Waste-to-Energy:Waste-to-energy is considered a renewable resource because its fuel
source, garbage, is sustainable and non-depletable. According to the U.S.
Environmental Protection Agency, waste-to-energy is a “clean, reliable,
renewable source of energy.” In addition, fifteen U.S. states all recognize
waste-to-energy power as renewable.





Americans
generated about 250 million tons of trash suitable for the production of
waste-to-energy. A single Garb waste-to-energy plant will consume more than 900
tons of trash each day helping to solve this ever-growing waste problem while
generating much-needed clean energy.





Municipal
waste consists of products that are combusted directly to produce heat and/or
power and comprises waste produced by the residential, commercial and public
services sectors that are collected by local authorities for disposal in a
central location.





The
technology and processes in a Garb waste-to-energy plant turns garbage into
energy using materials that range in size from the size of a pea to the size of
a tree limb. The fuel can be wet or dry, and it varies greatly in energy
content.










E-Waste:There are wide
variations in the energy used to recover metals from the earth’s crust. For
example, copper and other precious metals ranks near the middle for energy
required for extraction; this is higher than iron, zinc or lead, but is at
considerable advantage to aluminum, titanium and magnesium, which require much
larger quantities of energy to break down the ore into metallic
form.





For all
metals, the recycling of scrap is considerably more energy and cost efficient
than extraction from ores, and these precious metals have a high recycling
rate—higher than other ores like iron, zinc or lead. E-waste is the material of
choice when recovering high-value precious metals from consumer
goods.





Copper,
gold and palladium’s recycle value is so great that premium-grade scrap normally
has at least 95% of the value of primary metal from newly mined ore. The
inescapable conclusion is that precious metals will continue their life of
usefulness many times over into the future through our new generation recycling
and processing technology.





According
to the U.S. Environmental Protection Agency, Americans generate 3.5 million tons
of e-waste a year and currently only 15% of which is recycled. Considering the
high value of the many resources derived from e-waste refinement and recycling,
this market has just begun to be tapped.





Rubber Waste:Over 11,000,000
million tons of old rubber, of which 6,000,000 tons are old rubber tires, have
been accumulating in America every year. Producing one pound of recycled rubber
versus one pound of new rubber requires only 29% of the energy. Rubber cannot be
re-melted and so other methods are necessary to reduce or use the mountains of
old tires that have accumulated over the years.





The
technology necessary to reduce and crumb tires is well developed. Large
quantities of rubber granulate and powders are currently available on the
American and European markets.





Up to
now, only inadequate use has been made to exploit the specific characteristics
of the recycled rubber powder when making rubber products. The Garb technology
and patented knowhow has developed a new material, called NanoRubberTM. This
super fine powder can be blended with natural rubber and used in many industries
including retreading or tires.





We at
Garb have a clear distinction between Crumb Production and Powder Production,
which gives us two opportunities. Firstly to install pure powder lines behind
existing high quality crumb production lines, secondly this provides a high
demand for technical rubber in the technical rubber industry. For example, the
waste from seal production is between 10%-15% on average, this means that the
10%-15% of raw rubber that is wasted can be directly transformed to powder and
returned to the master batch supplier to be compounded.





Patents,
Trademarks and Proprietary Data





The
Company has received one United States patent on the OTR Tire Disintegrator
System design (patent number 6,015,105). The patent expires in 2018. One patent
has been issued to Garb in Canada that expires in 2015. Additional patents are
pending in the United States and Canada.





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





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





Hydropulper
      & Classifier for Tar Sand Application
            Patent
      No. 3,814,336Improvement
      Patents for Tar Sands
            Patent
      No. 4,361,476





Process





The
Company plans to exploit these patents if and when the board of directors of the
Company (the “Board”) 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 and CEO, John Rossi, its Executive Vice President, Matthew
G. Shepard, Chief Technical Officer, Igor Plahuta, and Chief Operations Officer,
Alan Fleming each devote 40 hours, or more, per week to the Company’s business,
as well as one additional engineer. All additional work is performed on a
sub-contract basis.





Additional
personnel will be required when the Company expands its business or enters into
agreements for construction of waste-to-energy plants, waste-rubber plants or
e-scrap 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 years ended December 31, 2009 and 2008, the Company has not expended any
funds on research and development activities. Garb plans to grow its R&D
budget to 8% of its revenue by 2015.





Environmental
Regulation





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





Any power
plants built by the Company in the future utilizing tires as fuel will be
required to comply with state and federal regulations regarding the discharge of
pollutants into the atmosphere. The Company believes that the plants can comply
with such regulations without material impact on the Company.


Available
Information


We file
annual reports on Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K, proxy statements and other reports required pursuant
to Sections 13(a) and 15(d) of the Exchange Act.
 
 We make
available free of charge through our investor relations Web site, www.ir-site.com/garb/sec.asp,
our annual reports on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K, proxy statements and all amendments to those
reports filed or furnished pursuant to Sections 13(a) and 15(d) of the
Exchange Act, as soon as reasonably practicable after such material is
electronically filed or furnished with the SEC. These reports may also be
obtained without charge by contacting Investor Relations, Garb Oil & Power
Corporation, 1588 South Main Street, Suite 200, Salt Lake City, Utah 84115,
phone: 801-931-5578, e-mail: info@garbmail.com. Our
Internet Web site and the information contained therein or incorporated therein
are not intended to be incorporated into this Annual Report on Form 10-K.
In addition, the public may read and copy any materials we file or furnish with
the SEC at the SEC’s Public Reference Room at 100 F Street, N.E.,
Washington, D.C. 20549 or may obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330. Moreover, the SEC
maintains an Internet site that contains reports, proxy and information
statements, and other information regarding reports that we file or furnish
electronically with them at http://www.sec.gov.





1A.  RISK
FACTORS.





History of net
losses.





We have a
history of incurring losses. We may not be able to achieve or maintain
profitability and we may continue to incur significant losses in the future. In
addition, we expect to continue to increase operating expenses as we implement
initiatives to continue to grow our business. If our revenues do not increase to
offset these expected increases in costs and operating expenses, we will not be
profitable. Accordingly, we cannot assure you that we will be able to achieve or
maintain profitability in the future.








Current
economic downturn.





The
current economic downturn and uncertainty in the financial markets in the United
States and internationally may adversely affect our business and our financial
results. If economies in the United States and internationally remain unstable
or weaken, or if businesses or consumers perceive that these economic conditions
may continue or weaken, we may experience declines in the sales. As a result, we
cannot predict what impact the current economic downturn and uncertainty of the
financial markets will have on our business, but expect that such events may
have an adverse effect on our business and our financial results in the current
quarter and future periods.





Reliance on our
key employees.





Our
success and future growth depends to a significant degree on the skills and
continued services of our management team. Our future success also depends on
our ability to attract and retain and motivate highly skilled technical,
managerial, marketing and customer service personnel, including members of our
management team. Our employees work for us on an at-will basis, however, the
laws of some of the international jurisdictions where we may have employees in
the future may require us to make statutory severance payments in the event of
termination of employment. We plan to hire additional personnel in all areas of
our business, both domestically and internationally. We may be unable to
successfully attract or retain qualified personnel. Our inability to retain and
attract the necessary personnel could adversely affect our
business.





Changes in
financial accounting standards.





A change
in accounting standards or practices can have a significant effect on our
reported results and may even affect our reporting of transactions completed
before the change is effective. New accounting pronouncements and varying
interpretations of accounting pronouncements have occurred and are likely to
occur in the future. Changes to existing rules or the questioning of current
practices may adversely affect our reported financial results or the way we
conduct our business.





Conflicts
of interest between our management and the Company.





Conflicts
of interest create the risk that management may have an incentive to act
adversely to the interests of the Company. A conflict of interest may arise
between the Company’s management’s personal pecuniary interest and their
fiduciary duty to our stockholders.





Limited
internal controls.





We
currently have five directors and four of these directors are also officers of
the company, so we rely on computer and manual systems without independent
officers and employees to implement full, formal, internal control systems.
Accordingly, we do not have separate personnel that provide dual signatures on
checks, separate accounts receivable and cash receipts, accounts payable and
check writing, or other functions that frequently are divided among several
individuals as a method of reducing the likelihood of improper activity. This
reliance on a few individuals and the lack of comprehensive internal control
systems may impair our ability to detect and prevent internal waste and
fraud.





Inadequate
disclosure controls and procedures.





The
Company does not have adequate personnel to review of day-to-day financial
transactions, review of financial statement disclosures, or record, process,
summarize and report within the time periods specified in SEC rules and forms
for the period covered by this Report on Form 10-K. To remediate the control
deficiencies, one of several specific additional steps is that the Company plan
to undertake to employ a fulltime CFO to implement adequate systems of
accounting and financial statement disclosure controls to comply with the
requirements of the SEC and implement internal processes and controls for all
day-to-day financial transactions.  Our efforts to comply with
disclosure controls and procedures are likely to continue to result in increased
expenses and the commitment of significant financial and personnel
resources.  We
can give no assurance that in the future such efforts will be
successful.









Need
for additional capital.





We will
need additional funds to cover expenditures in the completion, publications and
marketing of our products. We will fund any additional amounts required for such
expenditures through additional debt or equity financing, which may dilute the
economic interest of existing stockholders, and any new equity securities we
issue could have rights, preferences and privileges superior to those of holders
of our common stock. Our Board can approve the sale of additional equity
securities from our authorized share capital without stockholder
consent.





Inability
to obtain additional financing.





There can
be no assurance that any proceeds we receive from additional debt or equity
financing will satisfy our capital needs. There is no assurance that additional
financing will be available when needed on terms favorable to us or at all. The
unavailability of adequate financing on acceptable terms could have a material
adverse effect on our financial condition and on our continued
operation.





Control
of Company by officers and directors.





As of
December 31, 2009, John Rossi, Igor Plahuta, Bill Anderson and Matthew Shepard
and John Brewer collectively owned 80.37% of all issued and outstanding common
shares of the Company.  Accordingly, by virtue of their ownership of
shares, the stockholders referred to above acting together may effectively have
the ability to influence significant corporate actions, even if other
shareholders oppose them. Such actions include the election of our directors and
the approval or disapproval of fundamental corporate transactions, including
mergers, the sale of all or substantially all of our assets, liquidation, and
the adoption or amendment of provisions in our articles of incorporation and
bylaws. Such actions could delay or prevent a change in our control. See
“Security Ownership of Certain Beneficial Owners and Management.”





Importance
of predicting market preferences and accurately target buyers.





The
waste-to-energy, e-waste recycling and rubber-waste recycling industries have
only, until recently, been minor industries in the United
States.  Over the past year there has been a steady increase in
interest in these technologies and Federal and local governments have also given
greater emphasis on these technologies.  Because of this, there are
several major companies currently positioning themselves to capture market share
in these emerging industries.  Although we believe Garb’s technologies
are among the best in these industries, if we fail to predict market
preferences, accurately target buyers, and properly market our technologies then
sales will suffer.  Furthermore, the successful development of new
technologies and products will require us to anticipate the needs and
preferences of the market and forecast market trends accurately. Consumer
preferences tend to follow technological advances, which advances may also come
from competitors. The development of products and application for these products
requires high levels of innovation and a great understanding of industry and
governmental standards and engineering practices.  This process can be
lengthy and costly. To remain competitive, we must continue to develop
enhancements of our existing character base successfully. We cannot assure you
that future products will be introduced or, if introduced, will be successful.
The failure to enhance and extend our existing products or to develop and
introduce products that achieve and sustain market acceptance and produce
acceptable margins would harm our business and operating results.





Infringement
of third party intellectual property rights.





In the
course of our business, we may periodically receive claims of infringement or
otherwise become aware of potentially relevant copyrights, trademarks or other
intellectual property rights held by other parties. Upon receipt of this type of
communication, we will evaluate the validity and applicability of allegations of
infringement of intellectual property rights to determine whether we must
negotiate licenses or cross-licenses to incorporate or use the proprietary
copyrights or trademarks or other proprietary matters in or on our products. Any
dispute or litigation regarding copyrights, trademarks or other intellectual
property rights, regardless of its outcome, may be costly and time-consuming,
and may divert our management and key personnel from our business operations. If
we, our potential distributors or our manufacturers are adjudged to be
infringing the intellectual property rights of any third party, we or they may
be required to obtain a license to use those rights, which may not be obtainable
on reasonable terms, if at all. And, we may incur costs in revising certain
products so as to not infringe on others rights. We also may be subject to
significant damages or injunctions against the development and sale of some or
all of our products or against the use of a trademark in the sale of some or all
of our products. We do not have insurance to cover any such claim of this type
and may not have sufficient resources to defend an infringement
action.









Affect
of officer and director indemnification.





The
officers and directors of the Company are entitled to certain indemnification
protections under Utah law.  If our directors or officers become
exposed to liabilities triggering those indemnification obligations, we could be
exposed to unreimbursable costs, including legal fees. Extended or protracted
litigation subject to indemnification could have a material adverse effect on
our cash flow.





Volatile
stock price.





The
market price of our common stock will likely fluctuate significantly in response
to a number of factors, some of which are beyond our control.  These
factors include, but are not limited to, variations in our quarterly operating
results; changes in financial estimates of our revenues and operating results by
securities analysts; changes in market valuations; announcements by us of
significant contracts, acquisitions, strategic partnerships, joint ventures or
capital commitments; additions or departures of key personnel; future sales of
our common stock; stock market price and volume fluctuations attributable to
inconsistent trading volume levels of our stock; commencement of or involvement
in litigation.





Authorization
of Preferred Stock.





Our
Articles of Incorporation authorize the issuance of up to 152,200,001 shares of
preferred stock with rights, preferences and privileges senior in many respects
to the Company’s common stock. Our Board is empowered, without stockholder
approval, to issue preferred stock with liquidation, conversion, voting,
anti-dilution or other rights which could adversely affect the voting power,
economic interests or other rights of the holders of the common stock. The
preferred stock could be utilized, under certain circumstances, as a method of
discouraging, delaying or preventing a change in control of the
Company.





Audit
compliance costs.





An
immediate and specific risk relates to the our ability to achieve and maintain
effective internal controls in accordance with Section 404 of the Sarbanes-Oxley
Act the failure of which could lead to loss of investor confidence in our
reported financial information. Pursuant to Section 404 of the Sarbanes-Oxley
Act of 2002, we will be required to furnish a report by our management on our
internal control over financial reporting. If we cannot provide reliable
financial reports or prevent fraud, then our business and operating results
could be harmed, investors could lose confidence in our reported financial
information, and the trading price of our stock could drop significantly. In
order to achieve compliance with Section 404 of the Act, we will need to engage
in a process to document and evaluate our internal control over financial
reporting, which will be both costly and challenging. In this regard, management
will need to dedicate internal resources, engage outside consultants and adopt a
detailed work plan.





1B.
UNRESOLVED STAFF COMMENT





Not
Applicable.





2.
PROPERTIES





The
Company’s executive offices are located at 1588 South Main Street, Salt Lake
City, Utah 84115 under a month-to-month lease. The offices consist of
approximately 2,400 square feet.





3
.. LEGAL PROCEEDINGS





Not
Applicable.





4.
(REMOVED AND RESERVED)





Not
Applicable.









PART
II





5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES





The
Company’s common stock is traded in the over-the-counter market. The
representative bid and asked quotations are posted on the National Association
of Securities Dealers OTC Bulletin Board under the symbol GARB. On September 29,
2009 there were approximately 641 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 December 31, 2009 (transitional), June 30, 2009 and June 30,
2008, the stock was only sporadically traded but volume rose slightly the last
two quarters of the calendar year with 276,520 shares traded in the third
quarter and 3,550,143 shares traded in the fourth quarter. The following table
sets forth the range of high and low representative bid quotations for the
periods indicated.








(Fiscal
      Year)
            
            High
            
            Low(Period)20081st
      Quarter
            $
            .04
            $
            .022nd
      Quarter
            
            .03
            
            .023rd
      Quarter
            
            .03
            
            .024th
      Quarter
            
            .04
            
            .0220091st
      Quarter
            
            .03
            
            .012nd
      Quarter
            
            .02
            
            .003rd
      Quarter
            
            .05
            
            .004th
      Quarter
            
            .01
            
            .012009
      Transition (Calendar Year)3rd
      Quarter
            
            .01
            
            .014th
      Quarter
            
            .05
            
            .01





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.





Compensation
Plans





The
Company has no equity compensation plans under which equity securities of the
Company are authorized for issuance.





Sales
of Unregistered Securities





The table
below sets forth all issuances of unregistered securities during the years ended
December 31, 2009, December 31, 2008 and December 31, 2007, including the name
of the purchaser, the number of shares, price per share, class and series of
security sold, form of consideration paid and date of the
issuance.  No shares of unregistered securities were sold in fiscal
year ended December 31, 2007.












Purchaser
            Shares
            Price
      Per Share
            Consideration
            Date
            Class/SeriesJohn
      C. Brewer
            23,046,611
            @
      $.0150
            Satisfaction
      of indebtedness
            7/8/2009
            CommonRMT
      Trust
            225,000
            @
      $.0044
            Cash
            7/8/2009
            CommonWright
      Enterprises
            1,000,000
            @
      $.0037
            Cash
            10/17/2009
            CommonJoseph
      Wright
            1,000,000
            @
      $.0035
            Cash
            10/17/2009
            CommonJohn
      Rossi
            13,914,645.5
            @
      $.0247
            Shares
      of RPS pursuant to the RPS Acquisition
            11/4/2009
            CommonIgor
      Plahuta
            13,914,645.5
            @
      $.0200
            Shares
      of RPS pursuant to the RPS Acquisition
            11/4/2009
            CommonWallace
      Boyack
            500,000
            @
      $.0100
            Satisfaction
      of indebtedness
            11/4/2009
            CommonJohn
      Rossi
            1,750,000
            @
      $.0096
            Cash
            12/7/2009
            CommonWright
      Enterprises
            1,000,000
            @
      $.0150
            Cash
            10/30/2008
            Common





No
underwriters were used in the sale of any unregistered shares of the Company in
the past three years ending December 31, 2009.  All unregistered
shares of the Company sold in the past three years ending December 31, 2009 were
issued to accredited investors in reliance to the private placement exemption
from registration under Section 4(2) of the Securities Act and Rule 506 under
the Securities Act.





6.
SELECTED FINANCIAL DATA





Not
Applicable.





7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS





The
following Management’s Discussion and Analysis of Financial Condition and
Results of Operations should be read in conjunction with our Consolidated
Financial Statements and related Notes included in Part II. Item 8 of
this Annual Report. This discussion contains forward-looking statements based on
current expectations that involve risks and uncertainties, such as our plans,
objectives, expectations and intentions, as set forth under “Cautionary Note
Regarding Forward-Looking Statements.” Our actual results and the timing of
events could differ materially from those anticipated in these forward-looking
statements as a result of various factors, including those set forth in the
following discussion and in Part I. Item 1A “Risk Factors” and
elsewhere in this Annual Report. Unless otherwise indicated, all references to a
year reflect our fiscal year that ended on December 31, 2009.





Management
of the Company is pursuing avenues of generating cash or revenues during the
next twelve months. The Company is pursuing sales of its waste-to-energy,
waste-rubber and e-scrap plants on which the Company would earn a commission.
The Company is also attempting to interest purchasers, or potential purchasers,
of Garb shredders and plants in establishing joint ventures. The Company also
continues to pursue financing to build, commission and operate its own waste
refinement and recycling plants. Management also believes that with the new
line-up of next-regeneration machines, industry expertise, website and marketing
strategies that are now implemented, the potential for machinery and plant sales
has increased.





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.
Current funding has come from operations and sales and the Company is currently
in negotiations with several investment sources for equity investment in the
Company, which if successful, will satisfy long-term operations and capital
expenditures. There are no guarantees that such negotiations will be
successful.





Operating
expenses for the Company have been paid in part from short-term unsecured notes
from shareholders. At December 31, 2009 the Company had a deficit in working
capital (current liabilities in excess of current assets) of $5,363,689. The
working capital deficit at December 31, 2008 was $154,774. The decrease in
working capital was caused by the continued accrual of salary, interest and
other accounts payable for expenses, which the Company was unable to pay in
cash, and the RPS Acquisition.









Other
than its short-term office leases and loans payable to affiliates and
non-related parties, the Company and its subsidiaries are not subject to any
material commitments or capital expenditures.





When
shredding machines are sold the company requires that 50% of the total selling
price be deposited with the Company as protection against cancellation of the
sales contract. The Company has access to these funds and uses them to cover
part of the manufacturing costs of the shredder. The Company is also required to
give a deposit to the manufacturer of the shredder, at the time the Company
contracts with the manufacturer to build a machine. When the machine is finished
and delivered to the buyer, it is completed and tested prior to delivery. At the
time of shipment the buyer is required to pay the balance due on the sales
contract. Because of the successful history of the Company’s machine
performance, the deposit requirement has not presented a problem in sales. For
one year the buyer has a warranty to cover performance of the
machine.





During
the years ending December 31, 2009 and 2008, the Company received revenue from
sales of $45,330 and $305,826, respectively.





The
Company derived a loss from operations before other income (expense) during the
years ended December 31, 2009 and 2008 of $503,840 and $197,914, respectively.
Total expenses for 2009 were $549,170 compared to $346,015 in 2008. Salaries,
wages, commissions and consulting fees were $423,542 in 2009 compared to
$177,096 in 2008. Rental expenses were $4,500 in 2009 and $0 in 2008. Total
expenses increased primarily because of increases in salaries and wages. If more
of the Company’s plans for revenue producing activities come to fruition,
expenses will rise accordingly.





Inflation
and changing prices have not had a material impact on the Company net sales,
revenues or on income from continuing operations.





Liquidity and Capital
Resources





As of
December 31, 2009, we had $0 in cash and total liabilities of
$5,990,707.  Additionally, our current liabilities exceeded our
current assets by over $5,000,000, we have incurred substantial losses in this
and prior fiscal years, and we have recorded negative cash flows from operations
in this and prior fiscal years.  Net loss for the year ended December
31, 2009 was $613,568 compared to a net loss of $175,377 in 2008. On a per share
basis, the net loss for the year ended December 31, 2009 was $0.02 compared to
net loss of $0.01 in 2008.  Operating losses are expected to continue
until such time, if ever, as the Company receives sufficient revenues from the
sale of shredders, plants, or other operations. There is no assurance that the
Company will ever be profitable. The ongoing losses have created substantial
pressure on the Company’s liquidity and our management cannot provide any
assurance that the Company’s current finances will enable us to implement our
plans and satisfy our estimated financial needs over the next 12
months.  We are actively seeking additional sources of financing to
fund our operations for the foreseeable future.




On
January 28, 2010, the Company issued 50,000 shares of the Company’s common stock
to LeRoy Jackson for aggregate gross proceeds of $5,000 in an unregistered sale
of securities.
 
 On March
11, 2010, the Company entered into a Securities Purchase Agreement pursuant to
which, among other things, the Company borrowed $50,000 by issuing an
unregistered convertible debenture note to Asher Enterprises, Inc. (the “Asher
Note”).  The Asher Note is due September 11, 2010, carries an interest
rate of 8% per annum and is convertible into shares of common stock during the
loan period at a “Variable Conversion Price.”
 
 On March
18, 2010, the Company received and accepted purchase orders to design, install
and sell the SRI Plant for $13,492,000. Building of the plant is expected to
start by September 20, 2010, with commissioning planned by December 15,
2010.  Proceeds from the sale of the SRI Plant are paid on certain
milestones and benchmarks during the life of the project.  Sale of the
SRI Plant is subject to the buyer’s timely payment of milestone
payments.
 
 On April
10, 2010, the Company received and accepted purchase orders to design, install
and sell the La Stelle Maris Plant for $13,492,000. Building of the La Stella
Maris Plant is expected to start by November 30, 2010, with commissioning
planned by March 15, 2011.  Proceeds from the sale of the La Stelle
Maris Plant are paid on certain milestones and benchmarks during the life of the
project.  Sale of the La Stelle Maris Plant is subject to the buyer’s
timely payment of milestone payments.












During
the year ended December 31, 2009, the Company had no change in cash. The primary
sources of cash were from additional loans from financing
activities.





For the
fiscal year ended December 31, 2009, the Company’s Net Cash Provided (Used) in
Operating Activities was $(114,388) compared to $105,935 for the comparable
period in 2008.  The decrease in Net Cash Used in Operating Activities
between the two periods resulted from an increase in net losses, a decrease in
intercompany accounts receivables and an increase in accounts payable and
accrued expenses.





For the
fiscal year ended December 31, 2009, the Company’s Net Cash Provided by
Investing Activities was $21,470 compared to $0 for the comparable period in
2008.  The increase in Net Cash Used in Investing Activities between
the two periods resulted from an increase in proceeds from sale of property and
equipment.





For the
fiscal year ended December 31, 2009, Net Cash Provided (Used) by Financing
Activities was $92,918 for the year ended December 31, 2009 compared to
$(147,765) for the comparable period in 2008.  The increase in Net
Cash Provided (Used) by Financing Activities was due to a decrease in proceeds
from notes payable - related party, an increase in payments on notes payable -
related party, and an increase in proceeds from issuance of stock.





Critical
Accounting Policies and Estimates





We
believe the following critical accounting policies affect our more significant
judgments and estimates used in the preparation of our consolidated financial
statements.





Organization.The
consolidated financial statements for the year ended December 31, 2009 include
our accounts and those of our wholly-owned subsidiary, RPS which was acquired on
October 27, 2009 in an exchange of stock, and another wholly-owned subsidiary,
Rialto Power Corporation (which was dissolved by the State of California), and
its 55% owned subsidiary, Utah Truck Tire, Inc. (also dissolved), which are
collectively referred to as the Company.  We acquired all of the
issued and outstanding shares of common stock of RPS, a company engaged in the
business of recycling and salvage. We purchased the shares from John Rossi and
Igor Plahuta. Each owned 12,500 shares of common stock of RPS and the 25,000
shares constituted all of RPS's issued and outstanding shares. There are no
relationships other than those related to the transaction between Mr. Rossi and
Mr. Plahuta and the Company or any of its affiliates, directors, and officers.
To acquire the 25,000 shares the Company issued a total of 27,829,291 shares of
its common stock, and granted common stock options to acquire 100,000,000 shares
of common stock for a term of five years at a price(s) to be determined based on
one-tenth of the closing ask price for ten trading days prior to the exercise of
the option. The terms resulted from negotiations between the Company and Mr.
Rossi and Mr. Plahuta.





Subsequent
to the RPS Acquisition, RPS became a wholly owned subsidiary of
Garb.  Under generally accepted accounting principles, the acquisition
by Garb of RPS is considered to be capital transactions in substance, rather
than a business combination. That is, the Acquisition is equivalent to the
acquisition by RPS of Garb. As the Acquisition was a capital transaction, and
not a business combination, there is no assigned goodwill or other intangible
asset resulting from the Acquisition. This transaction is reflected as a
recapitalization, and is accounted for as a change in capital
structure.  Accordingly, the accounting for the Acquisition is
identical to that resulting from a reverse acquisition. Under reverse
acquisition accounting, the comparative historical financial statements of Garb,
as the legal acquirer, are those of the accounting acquirer, RPS.  The
accompanying financial statements reflect the recapitalization of the
stockholders’ equity as if the transactions occurred as of the beginning of the
first period presented.  Thus, the 27,829,291 shares of common stock
issued to the former RPS stockholders are deemed to be outstanding for all
periods reported prior to the date of the reverse acquisition.





The
company has recorded the granting of the 100,000,000 stock options as the
$3,150,000 liability on the balance sheet labeled common stock options payable,
because the options do not become effective or exercisable until the authorized
capital of the Company is increased to not less than 220,000,000 shares of
common stock.





Prior to
the Acquisition our fiscal year end was June 30th, but our fiscal year end has
subsequently been changed to December 31st.












Basis of Presentation - Going
Concern.The accompanying consolidated financial statements have been
prepared on a going concern basis, which contemplates the realization of assets
and the satisfaction of liabilities in the ordinary course of
business.  As shown in the consolidated financial statements, during
the years ended December 31, 2009 and 2008, the Company has incurred a net loss
of $613,568 and $175,377, respectively, and as of December 31, 2009, the
Company’s accumulated deficit was $840,172.  These factors, among
others, raise substantial doubt that the Company can 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. Management is pursuing
avenues of generating cash or revenues during the next twelve months. The
Company is pursuing sales of its waste-to-energy, waste-rubber and e-scrap
plants on which the Company would earn a commission. The Company is also
attempting to interest purchasers, or potential purchasers of Garb shredders and
plants, in establishing joint ventures. The Company also continues to pursue
financing to build, commission and operate its own waste refinement and
recycling plants. Management also believes that with the new line-up of
next-generation machines, industry expertise, website and marketing strategies
that are now implemented, the potential for machinery and plant sales has
increased. 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. Current funding has come from operations and sales and the
Company is currently in negotiations with several investment sources for equity
investment in the company, which if successful, will satisfy long-term
operations and capital expenditures.  There are no guarantees that such
negotiations will be successful.





Principles of Consolidation.
The consolidated financial statements include the accounts of Garb and its
subsidiaries.  All significant intercompany accounts and transactions
have been eliminated in consolidation.





Revenue Recognition. Revenue
is recognized when the sales amount is determined, shipment of goods to the
customer has occurred, and collection is reasonably assured. In the past the
Company has engaged in consulting activities but currently has no consulting
contracts, revenue from these activities or expectation for such in the
foreseeable future.





Concentration of Credit and Other
Risks.The Company maintains cash in federally insured bank
accounts.  At times these amounts exceed insured
limits.  The Company does not anticipate any losses from these
deposits. The Company had one and two customers whose sales were greater than
10% for the years ended December 31, 2009 and December 31, 2008, respectively.
Sales to the Company’s one customer whose sales were greater than 10% for the
year ended December 31, 2009 totaled 86% of total revenues in 2009. Sales to the
Company’s two customers whose sales were greater than 10% for the year ended
December 31, 2008 totaled 51% and 34% of total revenues in 2008.The company’s
December 31, 2009 accounts receivable was due entirely from one
customer.  The company’s December 31, 2008 accounts receivable was due
entirely from two customers with one customer representing 56% of the accounts
receivable balance and the other representing 44% of the balance. The loss of
any of these significant customers would have a temporary adverse effect on the
Company’s revenues, which would continue until the Company located new customers
to replace them.





Newly
Issued Accounting Pronouncements





Effective
October 15, 2009, the Company adopted the Financial Accounting Standards Board
(“FASB”) new Accounting Standard Codification (“ASC” or “Codification”) as the
single source of authoritative accounting guidance under the Generally Accepted
Accounting Principles Topic. The ASC does not create new accounting and
reporting guidance, rather it reorganizes U.S. GAAP pronouncements into
approximately 90 topics within a consistent structure. All guidance in the ASC
carries an equal level of authority. Relevant portions of authoritative content,
issued by the U.S. Securities and Exchange Commission (“SEC”) for SEC reporting
entities, have been included in the ASC. After the effective date of the
Codification, all non-grandfathered, non-SEC accounting literature not included
in the ASC was superseded and deemed non-authoritative. Adoption of the
Codification also changed how the U.S. GAAP is referenced in financial
statements.












Effective
June 15, 2009, the Company adopted new guidance to the Subsequent Events - ASC
Topic 855. The Subsequent Events Topic establishes general standards of
accounting for and disclosure of events that occur after the balance sheet date
but before financial statements are issued or are available to be issued. In
particular, the Subsequent Events Topic sets forth the period after the balance
sheet date during which management of an SEC reporting entity should evaluate
events or transactions that may occur for potential recognition or disclosure in
the financial statements, the circumstances under which an entity should
recognize events or transactions occurring after the balance sheet date of its
financial statements, and the disclosures that an entity should make about
events or transactions that occurred after the balance sheet date. Entities are
required to disclose the date through which subsequent events were evaluated as
well as the date the financial statements were issued or available to be issued.
Adoption of this guidance did not have any impact on the financial statements
presented.





In its
2009 financial statements, the Company adopted new guidance to the “Business
Combinations Topic” of the FASB ASC Topic 805, which was originally effective
for fiscal years ending after November 1, 2008. This guidance establishes
principles and requirements for how an acquirer recognizes and measures in its
financial statements the identifiable assets acquired, the liabilities assumed,
and any non-controlling interest in the acquiree, recognizes and measures the
goodwill acquired in the business combination and determines what information to
disclose to enable users of the financial statements to evaluate the nature and
financial effects of the business combination. The adoption of this guidance had
no impact on the financial statements presented.





In April
2009, the FASB issued additional guidance under the “Fair Value Measurements and
Disclosures Topic” of the ASC. This topic relates to determining fair values
when there is no active market or where the price inputs being used represent
distressed sales. This additional guidance requires the entity to (i) evaluate
certain factors to determine whether there has been a significant decrease in
the volume and level of activity for the asset or liability when compared with
normal market activity, (ii) consider whether the preceding indicates that
transactions or quoted prices are not determinative of fair value and, if so,
whether a significant adjustment thereof is necessary to estimate fair value,
and (iii) ignore the intent to hold the asset or liability when estimating fair
value. This additional guidance also provides guidance in determining whether a
transaction is orderly (or not orderly) when there has been a significant
decrease in the volume and level of activity for the asset or liability, based
on the weight of available evidence. The Company adopted this additional
guidance in its 2009 financial statements. The adoption of this additional
guidance did not have any impact on the financial statements
presented.





In April
2009, the FASB issued additional guidance under the “Financial Instruments
Topic” of the ASC. This topic requires disclosure of the carrying amount and the
fair value of all financial instruments for interim and annual financial
statements of SEC-reporting entities (even if the financial instrument is not
recognized in the balance sheet), including the methods and significant
assumptions used to estimate the fair values and any changes in such methods and
assumptions. This topic also requires disclosures in summarized financial
information in interim financial statements. The Company adopted this additional
guidance in its 2009 financial statements. The adoption of this additional
guidance did not have any impact on the financial statements
presented.





In April
2009, the FASB issued additional guidance under the “Investments – Debt and
Equity Securities Topic” of the ASC. This topic requires the entity to consider
(i) whether the entire amortized cost basis of the security will be recovered
(based on the present value of expected cash flows), and (ii) its intent to sell
the security. Based on the factors described in the preceding sentence, this
topic also explains the process for determining the other than temporary
impairment (“OTTI”) to be recognized in “other comprehensive income” (generally,
the impairment charge for other than a credit loss) and in earnings. This topic
does not change existing recognition or measurement guidance related to OTTI of
equity securities.





Certain
transition rules apply to debt securities held at the beginning of the interim
period of adoption when an OTTI was previously recognized. The Company adopted
this additional guidance in its 2009 financial statements. The adoption of this
additional guidance did not have any impact on the financial statements
presented.





In
December 2007, the FASB issued guidance as codified in ASC 810-10, Consolidation
— Non-controlling Interests (previously SFAS No. 160, Non-controlling Interests
in Consolidated Financial Statements — Amendments of ARB No. 51). ASC 810-10
states that accounting and reporting for minority interests will be
recharacterized as non-controlling interests and classified as a component of
equity. ASC 810-10 also establishes reporting requirements that provide
sufficient disclosures that clearly identify and distinguish between the
interests of the parent and the interests of the noncontrolling owners. SFAS No.
160 was effective for fiscal years beginning after December 15, 2008, which for
the Company is its fiscal ending December 31, 2009.












In March
2008, the FASB issued guidance as codified in ASC 815-10, Derivatives and
Hedging (previously SFAS No. 161, Disclosures about Derivative Instruments and
Hedging Activities — an Amendment of FASB Statement No. 133). ASC 815-10
requires entities with derivative instruments to disclose information that
should enable financial-statement users to understand how and why the entity
uses derivative instruments, how derivative instruments and related hedged items
are accounted for under ASC 815-10 and how derivative instruments and related
hedged items affect an entity’s financial position, financial performance and
cash. ASC 815-10 was effective for fiscal years and interim periods beginning
after November 15, 2008, which includes its financial statements for the 2009
fiscal year.





In June
2008, the FASB issued FASB ASC 815-40, “Derivatives and Hedging,” that provides
guidance on how to determine if certain instruments (or embedded features) are
considered indexed to a company’s own stock, including instruments similar to
warrants to purchase the company’s stock. FASB ASC 815-40 requires companies to
use a two-step approach to evaluate an instrument’s contingent exercise
provisions and settlement provisions in determining whether the instrument is
considered to be indexed to its own stock and therefore exempt from the
application of FASB ASC 815. Although FASB ASC 815-40 was effective for fiscal
years beginning after December 15, 2008, any outstanding instrument at the date
of adoption will require a retrospective application of the accounting through a
cumulative effect adjustment to retained earnings upon adoption. This
pronouncement had no effect upon the Company’s 2009 financial
statements.





The FASB
recently amended its guidance surrounding an entity’s analysis to determine
whether any of its variable interests constitute controlling financial interests
in a variable interest entity. This analysis identifies the primary beneficiary
of a variable interest entity as the enterprise that has both of the following
characteristics: (a) the power to direct the activities of a variable interest
entity that most significantly impact the entity’s economic performance; and (b)
the obligation to absorb losses of the entity that could potentially be
significant to the variable interest entity or the right to receive benefits
from the entity that could potentially be significant to the variable interest
entity. Additionally, an enterprise is required to assess whether it has an
implicit financial responsibility to ensure that a variable interest entity
operates as designed when determining whether it has the power to direct the
activities of the variable interest entity that most significantly impact the
entity’s economic performance. The amended guidance also requires ongoing
reassessments of whether an enterprise is the primary beneficiary of a variable
interest entity. The amended guidance is effective for the first annual
reporting period that begins after November 15, 2009. The Company will
re-evaluate any interests in variable interest entities for the period beginning
on January 1, 2010 to determine that the entities are reflected properly in the
financial statements as investments or consolidated entities. The Company does
not expect the adoption of this guidance to have a material impact on either its
financial position or results of operations for the fiscal year ending December
31, 2010.





7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





Not
applicable





8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA





[The
remainder of this page was intentionally left blank]















GARB
OIL & POWER CORPORATION AND SUBSIDIARIES





CONSOLIDATED
FINANCIAL STATEMENTS





December
31, 2009 and 2008











F -
1

















C
      O N T E N T SReport
      of Independent Registered Public Accounting Firm
            F-3Consolidated
      Balance Sheets
            F-4Consolidated
      Statements of Operations
            F-6Consolidated
      Statements of Stockholders’ Equity (Deficit)
            F-7Consolidated
      Statements of Cash Flows
            F-8Notes
      to the Consolidated Financial Statements
            F-9








F -
2











Report
of Independent Registered Public Accounting Firm





To the
Board of Directors and Shareholders


Garb Oil
& Power Corporation and Subsidiaries


Salt Lake
City, Utah





We have
audited the consolidated balance sheets of Garb Oil & Power Corporation and
Subsidiaries as of December 31, 2009 and 2008, and the related consolidated
statements of operations, stockholders’ equity (deficit) and cash flows for the
two years then ended.  These consolidated financial statements are the
responsibility of the Company’s management.  Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.





We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  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 provide a reasonable basis
for our opinion.





In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Garb Oil & Power
Corporation and Subsidiaries as of December 31, 2009 and 2008 and the results of
their operations and their cash flows for the two years then ended, in
conformity with U.S. generally accepted accounting principles.





We were
not engaged to examine management’s assertion about the effectiveness of Garb
Oil & Power Corporation and Subsidiaries’ internal control over financial
reporting as of December 31, 2009 and 2008 and, accordingly, we do not express
an opinion thereon.





The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern.  As discussed in Note 1
to the consolidated financial statements, the Company’s continual net losses and
large accumulated deficit, among other issues, raise substantial doubt about its
ability to continue as a going concern.  Management’s plans concerning
these matters are also described in Note 1.  The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.





/s/ HJ
& Associates, LLC





HJ &
Associates, LLC


Salt Lake
City, Utah


April 22,
2010




F -
3








GARB
OIL & POWER CORPORATION AND SUBSIDIARIES


Consolidated
Balance Sheets








ASSETSDecember
      31,
            
            December
      31,2009
            
            2008CURRENT
      ASSETSAccounts
      receivable, net
            $
            8,239
            
            $
            36,352Due
      from related parties
            
            600,509
            
            
            55,408Prepaid
      expenses
            
            1,026
            
            
            274Total
      Current Assets
            
            609,774
            
            
            92,034PROPERTY
      AND EQUIPMENTProperty
      and equipment
            
            32,375
            
            
            66,150Less:  accumulated
      depreciation and amortization
            
            (26,441)
            
            
            (27,781)Total
      Property and Equipment
            
            5,934
            
            
            38,369OTHER
      ASSETSLong-term
      loan to related party
            
            -
            
            
            416,118Investments
            
            1
            
            
            1Deposits
            
            300
            
            
            -Total
      Other Assets
            
            301
            
            
            416,119TOTAL
      ASSETS
            $
            616,009
            
            $
            546,522











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





F -
4





GARB
OIL & POWER CORPORATION AND SUBSIDIARIES


Consolidated
Balance Sheets (Continued)











LIABILITIES AND STOCKHOLDERS’ EQUITY
      (DEFICIT)December
      31,
            
            December
      31,2009
            
            2008CURRENT
      LIABILITIESBank
      overdrafts
            $
            70,903
            
            $
            69,955Accounts
      payable and accrued expenses
            
            173,072
            
            
            63,719Notes
      payable
            
            570,979
            
            
            -Notes
      payable - related parties
            
            465,819
            
            
            -Accrued
      interest
            
            842,393
            
            
            -Accrued
      interest- related parties
            
            124,055
            
            
            -Wages
      payable and other accrued liabilities
            
            455,182
            
            
            -Income
      tax payable
            
            117,060
            
            
            113,134Stock
      options payable
            
            3,150,000
            
            
            -Common
      stock payable
            
            4,000
            
            
            -Total
      Current Liabilities
            
            5,973,463
            
            
            246,808LONG-TERM
      LIABILITIESDeferred
      tax liability
            
            17,244
            
            
            13,382Total
      Long-Term Liabilities
            
            17,244
            
            
            13,382Total
      Liabilities
            
            5,990,707
            
            
            260,190STOCKHOLDERS’
      EQUITY (DEFICIT)Common
      stock; (no par value) 80,000,000 sharesauthorized;
      79,250,000 and 27,829,291 sharesoutstanding
            
            (4,586,035)
            
            
            466,608Other
      comprehensive income
            
            51,509
            
            
            46,328Accumulated
      deficit
            
            (840,172)
            
            
            (226,604)Total
      Stockholders’ Equity (Deficit)
            
            (5,374,698)
            
            
            286,332TOTAL
      LIABILITIES AND STOCKHOLDERS’EQUITY
      (DEFICIT)
            $
            616,009
            
            $
            546,522











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





F -
5








GARB
      OIL & POWER CORPORATION AND SUBSIDIARIESConsolidated
      Statements of OperationsFor
      the Year Ended
            
            For
      the Year EndedSALES
            December
      31, 2009
            
            December
      31, 2008Sales
            $
            6,322
            
            $
            174,819Related
      party sales
            
            39,008
            
            
            131,007Total
      Sales
            
            45,330
            
            
            305,826COST
      OF SALES
            
            -
            
            
            157,725Total
      Cost of Sales
            
            -
            
            
            157,725GROSS
      PROFIT
            
            45,330
            
            
            148,101EXPENSESSalary,
      wages and commissions
            
            423,542
            
            
            177,096Professional
      fees
            
            40,983
            
            
            -Bad
      debts
            
            -
            
            
            91,485Consulting
      fees
            
            32,766
            
            
            21,885Travel
            
            27,350
            
            
            18,397Depreciation
      and amortization
            
            10,965
            
            
            11,927Telecommunications
            
            10,825
            
            
            10,038Other
      general and administrative expenses
            
            2,739
            
            
            15,187Total
      Expenses
            
            549,170
            
            
            346,015OPERATING
      (LOSS)
            
            (503,840)
            
            
            (197,914)OTHER
      INCOME (EXPENSES)Loss
      on disposal of fixed assets
            
            (2,215)
            
            
            -Loss
      on debt retirement
            
            (18,300)
            
            
            -Other
      income
            
            2,746
            
            
            25,742Interest
      expense
            
            (88,668)
            
            
            (13,861)Total
      Other Income (Expense)
            
            (106,437)
            
            
            11,881NET
      (LOSS) BEFORE INCOME TAXES
            
            (610,277)
            
            
            (186,033)INCOME
      TAXES
            
            3,291
            
            
            (10,656)NET
      (LOSS)
            $
            (613,568)
            
            $
            (175,377)OTHER
      COMPREHENSIVE INCOME (LOSS) FROM TRANSLATION ADJUSTMENT
            
            5,181
            
            
            (16,571)TOTAL
      COMPREHENSIVE LOSS
            $
            (608,387)
            
            $
            (191,948)BASIC
      (LOSS) PER SHARE
            $
            (0.02)
            
            $
            (0.01)WEIGHTED
      AVERAGE NUMBEROF
      SHARES OUTSTANDING
            
            40,286,290
            
            
            27,829,291








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





F - 6







GARB
      OIL & POWER CORPORATION AND SUBSIDIARIESConsolidated
      Statements of Stockholders’ Equity (Deficit)Common
      Stock
            
            Other
            
            AccumulatedShares
            
            Amount
            
            Comp
      Income
            
            Earnings
      (Deficit)Balance,
      December 31, 2007
            27,829,291
            
            $
            324,450
            
            $
            62,899
            
            $
            (51,227)Imputed
      interest on related partynotes
      payable
            -
            
            
            2,741
            
            
            -
            
            
            -Contributed
      services
            -
            
            
            139,417
            
            
            -
            
            
            -Foreign
      currency translation adjustment
            -
            
            
            -
            
            
            (16,571)
            
            
            -Net
      loss for the year endedDecember
      31, 2008
            -
            
            
            -
            
            
            -
            
            
            (175,377)Balance,
      December 31, 2008
            27,829,291
            
            
            466,608
            
            
            46,328
            
            
            (226,604)Equity
      instruments issued forreverse
      acquisition of RPS
            47,170,709
            
            
            (6,147,216)
            
            
            -
            
            
            -Shares
      issued for cash
            2,750,000
            
            
            20,300
            
            
            -
            
            
            -Shares
      issued for liability settlement
            1,500,000
            
            
            27,000
            
            
            -
            
            
            -Forgiveness
      of debt - related party
            -
            
            
            852,000
            
            
            -
            
            
            -Contributed
      services
            -
            
            
            195,273
            
            
            -
            
            
            -Foreign
      currency translation  adjustment
            -
            
            
            -
            
            
            5,181
            
            
            -Net
      loss for the year endedDecember
      31, 2009
            -
            
            
            -
            
            
            -
            
            
            (613,568)Balance,
      December 31, 2009
            79,250,000
            
            $
            (4,586,035)
            
            $
            51,509
            
            $
            (840,172)








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





F –
7







GARB
      OIL & POWER CORPORATION AND SUBSIDIARIESConsolidated
      Statements of Cash FlowsFor
      the Year EndedDecember
      31,2009
            
            2008CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      income (loss)
            $
            (613,568)
            
            $
            (175,377)Adjustments
      to reconcile net income (loss) to net cashused
      in operating activities:Depreciation
            
            10,965
            
            
            11,285Comprehensive
      income (loss)
            
            5,181
            
            
            (16,570)Loss
      on forgiveness of debt
            
            18,300
            
            
            -Loan
      fee expense
            
            15,571
            
            
            -Contributed
      services
            
            195,272
            
            
            139,417Changes
      in current assets and liabilities:Accounts
      receivable
            
            28,113
            
            
            48,271Intercompany
      accounts receivable
            
            (128,983)
            
            
            191,828Prepaid
      expenses
            
            (752)
            
            
            332,711Accounts
      payable and accrued expenses
            
            355,513
            
            
            (41,974)Net
      Cash Provided (Used) by Operating Activities
            
            (114,388)
            
            
            105,935CASH
      FLOWS FROM INVESTING ACTIVITIESProceeds
      from sale of property and equipment
            
            21,470
            
            
            -Net
      Cash Provided (Used) by Investing Activities
            
            21,470
            
            
            -CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds
      from notes payable
            
            6,000
            
            
            -Proceeds
      from notes payable - related party
            
            66,618
            
            
            526,991Payments
      on notes payable - related party
            
            -
            
            
            (674,756)Proceeds
      from issuance of stock
            
            20,300
            
            
            -Net
      Cash Provided (Used) by Financing Activities
            
            92,918
            
            
            (147,765)NET
      (DECREASE) IN CASH
            
            -
            
            
            (41,830)NET
      CASH AT BEGINNING OF PERIOD
            
            -
            
            
            41,830NET
      CASH AT END OF PERIOD
            $
            -
            
            $
            -SUPPLEMENTAL
      DISCLOSURE OF CASHFLOW
      INFORMATION:Cash
      paid for interest
            $
            9,405
            
            $
            13,861Cash
      paid for income taxes
            $
            -
            
            $
            -


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


F -
8







GARB
OIL & POWER CORPORATION AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


December
31, 2009 and 2008








NOTE 1
- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
PRINCIPLES





a.  Organization





Garb Oil
& Power Corporation (“Garb”) was originally incorporated under the name
Autumn Day Inc. on October 30, 1972. On January 13, 1981 the company’s name was
changed to Garb-Oil Corporation of America, which marked the start of company’s
development stage in the energy and recycling industries. Development stage
activities consisted of raising capital, purchasing property and developing
technology related to waste-to-energy electricity production, pyrolysis
(extraction of oil, carbon, and steel from used tires), the recovery of used
rubber from large off-the-road tires and the repair and sale of used truck
tires. The company’s name was changed to its current name of Garb Oil &
Power Corporation on October 4, 1985. Garb had been considered to be in the
development stage until June 30, 2004.





On
October 27, 2009, the company entered a reverse-acquisition transaction with
German-based Green-technologies company Resource Protection Systems GmbH (the
“RPS Acquisition”). The reverse-acquisition brought to Garb a large portfolio of
technologies in the areas of waste-to-energy, electronic waste (e-scrap/e-waste)
refinement and recycling, and waste-rubber refinement and recycling. Garb is
currently engaged in the sale of refining and recycling machines and the
building and commissioning of turnkey waste-to-energy plants and
refinement/recycling plants in e-scrap/e-waste and waste-rubber.





The
accompanying consolidated financial statements include Garb and its wholly-owned
subsidiary, Resource Protection Systems GmbH (“RPS”) which was acquired on
October 27, 2009 in an exchange of stock, and another wholly-owned subsidiary,
Rialto Power Corporation (which has been suspended by the State of California
for failure to renew), and its 55% owned subsidiary, Utah Truck Tire, Inc.
(“Utah Truck Tire”) (which was dissolved by the State of Utah for failure to
renew), which are collectively referred to as the Company.





RPS is a
corporation organized under the laws of Germany engaged in the business of
recycling and salvage. RPS’s technology includes processes and procedures to
manufacture rubber talc.  Rubber talc is a fine powder and is used in
various products.





To effect
the Acquisition of RPS, the Company purchased the shares from John Rossi and
Igor Plahuta. Each owned 12,500 shares of common stock of RPS and the 25,000
shares constituted all of RPS’s issued and outstanding shares. There are no
relationships other than those related to the transaction between Mr. Rossi and
Mr. Plahuta and the Company or any of its affiliates, directors, and
officers.





To
acquire the 25,000 shares the Company issued a total of 27,829,291 shares of its
common stock, and granted common stock options to acquire 100,000,000 shares of
common stock for a term of five years at a price(s) to be determined based on
one-tenth of the closing ask price for ten trading days prior to the exercise of
the option. The terms resulted from negotiations between the Company and Mr.
Rossi and Mr. Plahuta.





Subsequent
to the Acquisition, RPS became a wholly owned subsidiary of Garb. Under
generally accepted accounting principles, the acquisition by Garb of RPS is
considered to be capital transactions in substance, rather than a business
combination. That is, the Acquisition is equivalent, to the acquisition by RPS
of Garb. As the Acquisition was a capital transaction, and not a business
combination, there is no assigned goodwill or other intangible asset resulting
from the Acquisition.





F-9





GARB
OIL & POWER CORPORATION AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


December
31, 2009 and 2008








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





This
transaction is reflected as a recapitalization, and is accounted for as a change
in capital structure. Accordingly, the accounting for the Acquisition is
identical to that resulting from a reverse acquisition. Under reverse
acquisition accounting, the comparative historical financial statements of Garb,
as the legal acquirer, are those of the accounting acquirer, RPS. The
accompanying financial statements reflect the recapitalization of the
stockholders’ equity as if the transactions occurred as of the beginning of the
first period presented. Thus, the 27,829,291 shares of common stock issued to
the former RPS stockholders are deemed to be outstanding for all periods
reported prior to the date of the reverse acquisition. Hereinafter Garb or RPS
each is to be referred to as the “Company”, unless specific reference is made to
a particular company or a subsidiary of a company.





The
Company has recorded the granting of the 100,000,000 stock options as the
$3,150,000 liability on the balance sheet labeled common stock options payable,
because the options do not become effective or exercisable until the authorized
capital of the Company is increased to not less than 220,000,000 shares of
common stock.  Effective March 5, 2010, the Company increased its
authorized shares to 500,000,000.





Prior to
the Acquisition the Company’s fiscal year end was June 30, but the Company’s
fiscal year end has subsequently been changed to December 31.





b. Use of
Estimates





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





c. Basis
of Presentation - Going Concern





The
accompanying consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the ordinary course of business. As shown in the consolidated
financial statements, during the years ended December 31, 2009 and 2008, the
Company has incurred a net loss of $613,568 and $175,377, respectively, and as
of December 31, 2009, the Company’s accumulated deficit was $840,172. These
factors, among others, raise substantial doubt that the Company can 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. Management is pursuing
avenues of generating cash or revenues during the next twelve months. The
Company is pursuing sales of its waste-to-energy, waste-rubber and e-scrap
plants on which the Company would earn a commission. The Company is also
attempting to interest purchasers, or potential purchasers, of Garb shredders
and plants in establishing joint ventures. The Company also continues to pursue
financing to build, commission and operate its own waste refinement and
recycling plants. Management also believes that with the new line-up of
next-regeneration machines, industry expertise, website and marketing strategies
that are now implemented, the potential for machinery and plant sales has
increased.





F-10








GARB
OIL & POWER CORPORATION AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


December
31, 2009 and 2008








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





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.
Current funding has come from operations and sales and the Company is currently
in negotiations with several investment sources for equity investment in the
company, which if successful, will satisfy long-term operations and capital
expenditures. There are no guarantees that such negotiations will be
successful.





d.
Principles of Consolidation





The
consolidated financial statements include the accounts of Garb and its
subsidiaries. All significant intercompany accounts and transactions have been
eliminated in consolidation.





e.
Property and Equipment





Property
and equipment is recorded at cost and is depreciated using the straight-line
method based on the expected lives of the assets which range from five to ten
years. Depreciation expense for the years ended December 31, 2009 and 2008, was
$10,965 and $11,285, respectively.





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





f.
Revenue Recognition





Revenue
is recognized when the sales amount is determined, shipment of goods to the
customer has occurred, and collection is reasonably assured.  In the
past the company has engaged in consulting activities but currently has no
consulting contracts, revenue from these activities or expectations for such in
the foreseeable future.





g.
Advertising Costs





The
Company expenses all advertising costs as incurred. Advertising expense was $0
and $0 for the years ending December 31, 2009 and 2008,
respectively.





h. Income
Taxes





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





F-11





GARB
OIL & POWER CORPORATION AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


December
31, 2009 and 2008








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





i.  Basic
Income (Loss) Per Share





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





For
      the Years Ended December 312009
            
            2008Net
      income (loss) (numerator)
            $
            (613,568)
            $
            (175,377)Weighted
      average shares outstanding (denominator)
            
            40,286,290
            
            27,829,291Basic
      income (loss) per share
            $
            (0.02)
            $
            (0.01)







j.
Financial Instruments





Cash
equivalents include highly liquid short-term investments with original
maturities of three months or less, readily convertible to known amounts of
cash. The amounts reported as cash, prepaid expenses, trade accounts payable 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 December 31, 2009. The use of
different market assumptions and/or estimation methodologies could have a
material effect on the estimated fair value amounts. The reported fair values do
not take into consideration potential expenses that would be incurred in an
actual settlement.





k.
Concentration of Credit and Other Risks





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





The
Company had one and two customers whose sales were greater than 10% for the
years ended December 31, 2009 and December 31, 2008, respectively. Sales to the
Company’s one customer whose sales were greater than 10% for the year ended
December 31, 2009 totaled 86% of total revenues in 2009. Sales to the Company’s
two customers whose sales were greater than 10% for the year ended December 31,
2008 totaled 51% and 34% of total revenues in 2008.





Revenue from foreign
operations of the Company for the years ending December 31, 2009 and 2008, was
$45,330 and $305,826, respectively. Net loss from operations for the same
periods was $503,840 and $197,914, respectively. The net loss from foreign
operations for 2009 and 2008 was $342,030 and $197,914, respectively. The
largest expense incurred during each of these periods was for salaries and
wages, being $423,542 in 2009 and $177,096 in 2008.  We are subject to
extensive foreign laws, regulations, rules and ordinances relating to safety,
pollution, protection of the environment and the generation, storage, handling,
transportation, treatment, disposal and remediation of waste
materials.  Other risks of international operations include trade
barriers, tariffs, exchange controls, national and regional labor strikes,
social and political risks, general economic risks and required compliance with
a variety of U.S. and foreign laws, including tax laws. Furthermore, in foreign
jurisdictions where process of law may vary from country to country, we may
experience difficulty in enforcing agreements. To the extent our cash flows and
earnings are from foreign operations, they may subject to fluctuations due to
exchange rate variation. In jurisdictions where bankruptcy laws and practices
may vary, we may experience difficulty collecting foreign receivables through
foreign legal systems. The occurrence of these risks, among others, could
disrupt the businesses of our international subsidiaries, which could
significantly affect their ability to make distributions to us.





F-12





GARB
OIL & POWER CORPORATION AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


December
31, 2009 and 2008








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





The
Company’s December 31, 2009 accounts receivable was due entirely from one
customer. The company’s December 31, 2008 accounts receivable was due entirely
from two customers with one customer representing 56% of the accounts receivable
balance and the other representing 44% of the balance.





The loss
of any of these significant customers would have a temporary adverse effect on
the Company’s revenues, which would continue until the Company located new
customers to replace them.





l. Newly
Issued Accounting Pronouncements





Effective
October 15, 2009, the Company adopted the Financial Accounting Standards Board
(“FASB”) new Accounting Standard Codification (“ASC” or “Codification”) as the
single source of authoritative accounting guidance under the Generally Accepted
Accounting Principles Topic.





The ASC
does not create new accounting and reporting guidance, rather it reorganizes
U.S. GAAP pronouncements into approximately 90 topics within a consistent
structure. All guidance in the ASC carries an equal level of authority. Relevant
portions of authoritative content, issued by the U.S. Securities and Exchange
Commission (“SEC”) for SEC reporting entities, have been included in the ASC.
After the effective date of the Codification, all non-grandfathered, non-SEC
accounting literature not included in the ASC was superseded and deemed
non-authoritative. Adoption of the Codification also changed how the U.S. GAAP
is referenced in financial statements.





Effective
June 15, 2009, the Company adopted new guidance to the Subsequent Events - ASC
Topic 855. The Subsequent Events Topic establishes general standards of
accounting for and disclosure of events that occur after the balance sheet date
but before financial statements are issued or are available to be issued. In
particular, the Subsequent Events Topic sets forth the period after the balance
sheet date during which management of an SEC reporting entity should evaluate
events or transactions that may occur for potential recognition or disclosure in
the financial statements, the circumstances under which an entity should
recognize events or transactions occurring after the balance sheet date of its
financial statements, and the disclosures that an entity should make about
events or transactions that occurred after the balance sheet date. Entities are
required to disclose the date through which subsequent events were evaluated as
well as the date the financial statements were issued or available to be issued.
Adoption of this guidance did not have any impact on the financial statements
presented.





In its
2009 financial statements, the Company adopted new guidance to the “Business
Combinations Topic” of the FASB ASC Topic 805, which was originally effective
for fiscal years ending after November 1, 2008. This guidance establishes
principles and requirements for how an acquirer recognizes and measures in its
financial statements the identifiable assets acquired, the liabilities assumed,
and any non-controlling interest in the acquiree, recognizes and measures the
goodwill acquired in the business combination and determines what information to
disclose to enable users of the financial statements to evaluate the nature and
financial effects of the business combination. The adoption of this guidance had
no impact on the financial statements presented.





F-13





GARB
OIL & POWER CORPORATION AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


December
31, 2009 and 2008





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





In April
2009, the FASB issued additional guidance under the “Fair Value Measurements and
Disclosures Topic” of the ASC. This topic relates to determining fair values
when there is no active market or where the price inputs being used represent
distressed sales. This additional guidance requires the entity to (i) evaluate
certain factors to determine whether there has been a significant decrease in
the volume and level of activity for the asset or liability when compared with
normal market activity, (ii) consider whether the preceding indicates that
transactions or quoted prices are not determinative of fair value and, if so,
whether a significant adjustment thereof is necessary to estimate fair value,
and (iii) ignore the intent to hold the asset or liability when estimating fair
value. This additional guidance also provides guidance in determining whether a
transaction is orderly (or not orderly) when there has been a significant
decrease in the volume and level of activity for the asset or liability, based
on the weight of available evidence. The Company adopted this additional
guidance in its 2009 financial statements. The adoption of this additional
guidance did not have any impact on the financial statements
presented.





In April
2009, the FASB issued additional guidance under the “Financial Instruments
Topic” of the ASC. This topic requires disclosure of the carrying amount and the
fair value of all financial instruments for interim and annual financial
statements of SEC-reporting entities (even if the financial instrument is not
recognized in the balance sheet), including the methods and significant
assumptions used to estimate the fair values and any changes in such methods and
assumptions.





This
topic also requires disclosures in summarized financial information in interim
financial statements. The Company adopted this additional guidance in its 2009
financial statements. The adoption of this additional guidance did not have any
impact on the financial statements presented.





In April
2009, the FASB issued additional guidance under the “Investments – Debt and
Equity Securities Topic” of the ASC. This topic requires the entity to consider
(i) whether the entire amortized cost basis of the security will be recovered
(based on the present value of expected cash flows), and (ii) its intent to sell
the security. Based on the factors described in the preceding sentence, this
topic also explains the process for determining the other than temporary
impairment (“OTTI”) to be recognized in “other comprehensive income” (generally,
the impairment charge for other than a credit loss) and in earnings. This topic
does not change existing recognition or measurement guidance related to OTTI of
equity securities. Certain transition rules apply to debt securities held at the
beginning of the interim period of adoption when an OTTI was previously
recognized. The Company adopted this additional guidance in its 2009 financial
statements. The adoption of this additional guidance did not have any impact on
the financial statements presented.





In
December 2007, the FASB issued guidance as codified in ASC 810-10, Consolidation
— Non-controlling Interests (previously SFAS No. 160, Non-controlling Interests
in Consolidated Financial Statements — Amendments of ARB No. 51). ASC 810-10
states that accounting and reporting for minority interests will be
recharacterized as non-controlling interests and classified as a component of
equity. ASC 810-10 also establishes reporting requirements that provide
sufficient disclosures that clearly identify and distinguish between the
interests of the parent and the interests of the noncontrolling owners. SFAS No.
160 was effective for fiscal years beginning after December 15, 2008, which for
the Company is its fiscal ending December 31, 2009.





In March
2008, the FASB issued guidance as codified in ASC 815-10, Derivatives and
Hedging (previously SFAS No. 161, Disclosures about Derivative Instruments and
Hedging Activities — an Amendment of FASB Statement No. 133). ASC 815-10
requires entities with derivative instruments to disclose information that
should enable financial-statement users to understand how and why the entity
uses derivative instruments, how derivative instruments and related hedged items
are accounted for under ASC 815-10 and how derivative instruments and related
hedged items affect an entity’s financial position, financial performance and
cash. ASC 815-10 was effective for fiscal years and interim periods beginning
after November 15, 2008, which includes its financial statements for the 2009
fiscal year.





F-14





GARB
OIL & POWER CORPORATION AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


December
31, 2009 and 2008





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





In June
2008, the FASB issued FASB ASC 815-40, “Derivatives and Hedging,” that provides
guidance on how to determine if certain instruments (or embedded features) are
considered indexed to a company’s own stock, including instruments similar to
warrants to purchase the company’s stock. FASB ASC 815-40 requires companies to
use a two-step approach to evaluate an instrument’s contingent exercise
provisions and settlement provisions in determining whether the instrument is
considered to be indexed to its own stock and therefore exempt from the
application of FASB ASC 815. Although FASB ASC 815-40 was effective for fiscal
years beginning after December 15, 2008, any outstanding instrument at the date
of adoption will require a retrospective application of the accounting through a
cumulative effect adjustment to retained earnings upon adoption. This
pronouncement had no effect upon the Company’s 2009 financial
statements.





The FASB
recently amended its guidance surrounding an entity’s analysis to determine
whether any of its variable interests constitute controlling financial interests
in a variable interest entity. This analysis identifies the primary beneficiary
of a variable interest entity as the enterprise that has both of the following
characteristics: (a) the power to direct the activities of a variable interest
entity that most significantly impact the entity’s economic performance; and (b)
the obligation to absorb losses of the entity that could potentially be
significant to the variable interest entity or the right to receive benefits
from the entity that could potentially be significant to the variable interest
entity. Additionally, an enterprise is required to assess whether it has an
implicit financial responsibility to ensure that a variable interest entity
operates as designed when determining whether it has the power to direct the
activities of the variable interest entity that most significantly impact the
entity’s economic performance.





The
amended guidance also requires ongoing reassessments of whether an enterprise is
the primary  beneficiary of a variable interest entity. The amended
guidance is effective for the first annual reporting period that begins after
November 15, 2009. The Company will re-evaluate any interests in variable
interest entities for the period beginning on January 1, 2010 to determine that
the entities are reflected properly in the financial statements as investments
or consolidated entities. The Company does not expect the adoption of this
guidance to have a material impact on either its financial position or results
of operations for the fiscal year ending December 31, 2010.





m. Income
Taxes





Deferred
income taxes are provided using the liability method whereby deferred tax assets
are recognized for deductible temporary differences and operating loss and tax
credit carryforwards and deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets
will not be realized. Deferred tax assets and liabilities are adjusted for the
effects of the changes in tax laws and rates of the date of
enactment.





When tax
returns are filed, it is highly certain that some positions taken would be
sustained upon examination by the taxing authorities, while others are subject
to uncertainty about the merits of the position taken or the amount of the
position that would be ultimately sustained. The benefit of a tax position is
recognized in the financial statements in the period during which, based on all
available evidence, management believes it is more likely than not that the
position will be sustained upon examination, including the resolution of appeals
or litigation processes, if any. Tax positions taken are not offset or
aggregated with other positions. Tax positions that meet the
more-likely-than-not recognition threshold are measured as the largest amount of
tax benefit that is more than 50 percent likely of being realized upon
settlement with the applicable taxing authority. The portion of the benefits
associated with tax positions taken that exceeds the amount measured as
described above is reflected as a liability for unrecognized tax benefits in the
accompanying balance sheet along with any associated interest and penalties that
would be payable to the taxing authorities upon examination.





Interest
and penalties associated with unrecognized tax benefits are classified as
additional income taxes in the statement of income.





F-15





GARB
OIL & POWER CORPORATION AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


December
31, 2009 and 2008





NOTE 2 –
RESOURCE PROTECTION SYSTEMS GmbH





On
October 27, 2009, the Company acquired all of the issued and outstanding shares
of common stock of Resource Protection Services GmbH (“RPS”), a corporation
organized under the laws of Germany. The Company issued a total of 27,829,291
shares of its common stock in exchange for the 25,000 outstanding shares of RPS.
RPS is engaged in the business of recycling and salvage; its technology includes
processes and procedures to manufacture rubber talc. Rubber talc is a fine
powder and is used in various products. RPS currently reports on its balance
sheet an investment in Sistema Proteccion Recursos (“SPR”), a sister company
located in Madrid, Spain.





Through
December 31, 2009 RPS had invested approximately $153,000 in SPR, but the
investment has since been impaired to a value of $1 on the balance sheet at
December 31, 2009 and 2008.





NOTE 3 -
RELATED PARTY TRANSACTIONS





On May 1,
1986 the Company executed an employment agreement with its then CEO. Under the
terms of the agreement, the CEO’s salary was stated at $48,000 per year and
remained so until the current period and has been accrued each year since. Upon
the acquisition of RPS the former CEO resigned and agreed to forgive the accrued
salary totaling $852,000. The forgiveness of accrued salary was recorded as a
contribution of capital to the Company. During the year ending December 31,
2008, $139,417 in compensation to Igor Plahuta was also recorded as a
contribution of capital. During the year ending December 31, 2009, compensation
to both John Rossi and Igor Plahuta of $97,637 each, for a total of $195,273,
was recorded as a contribution of capital to the Company. As of December 31,
2009, the Company has accrued $30,000 each to both its new CEO and its Director
of Technology, and $155,650 to its new Executive Vice President, formerly its
President. During the year ended December 31, 2009 and 2008, notes
payable-related parties increased $465,819 and decreased $155,580, respectively.
On June 10, 2009, 23,271,611 shares of common stock were issued at the then fair
market value of $.015 per share in payment of related-party loans and accrued
interest due to the company’s CEO, decreasing the balance of notes
payable-related parties. The prior year increase was due to additional proceeds
from notes payable.





RPS had
revenue transactions with related parties for the years ending December 31, 2009
and 2008 in the amount of $39,008 and $131,007, respectively. Related party
accounts receivable were $0 and $20,453 at December 31, 2009 and 2008,
respectively.





The
Company’s former CEO, John Brewer had accrued wages owed to him of
$852,000. Mr. Brewer agreed to forgive the total amount of wages owed to
him December 31, 2009. Given that Mr. Brewer is a related party the
forgiveness of this obligation resulted in a credit to additional paid-in
capital in the amount of $852,000.









Short-term
related party notes receivable at December 31, were





2009
            
            2008Newview
            $
            85,425
            
            $
            0Igor
      Plahuta
            
            83,084
            
            
            55,408Clinica
      Dental
            
            432,000
            
            
            0Short-Term
      Notes Receivable from Related Parties
            $
            600,509
            
            $
            55,408





F-16





GARB
OIL & POWER CORPORATION AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


December
31, 2009 and 2008





NOTE 4
-                                                                            RELATED
PARTY TRANSACTIONS (continued)





Long-term
notes receivable from related parties at December 31, were





2009
            
            2008Clinica
      Dental
            $
            -
            
            $
            416,118Long-Term
      Notes Receivable from Related Parties
            $
            -
            
            $
            416,118





Accounts
payable and notes payable to related parties consisted of the following at
December 31, 2009 and 2008:





2009
            
            2008Accounts
      payable to a related party, due ondemand,
      no interest, unsecured
            $
            180,000
            
            
            -Notes
      payable to a related party, due on demand,plus
      interest at 18% per annum, unsecured
            
            188,075
            
            
            -Accounts
      payable to related party, due on demand,plus
      interest at 8% per annum, unsecured
            
            21,500
            
            
            -Note
      payable to a related party, due on demand,plus
      interest at 5% per month, unsecured
            
            12,363
            
            
            -Note
      payable to a related party, plus interestat
      4% per annum
            
            57,658
            
            
            -Note
      payable to a related party, plus interestat
      1.25% per annum
            
            6,223
            
            
            -465,819
            
            
            -Less:
      Current Portion
            
            (465,819)
            
            
            -Long-Term
      Notes Payable to Related Parties
            $
            -
            
            $
            -





The
aggregate principal maturities of notes payable to related parties are as
follows:





Year
      Ended December 31, 2011
            
            $
            465,8192012
            
            
            -2013
            
            
            -2014
            
            
            -2015
            
            
            -Total
            
            $
            465,819





As of
December 31, 2009 and 2008, accrued interest related to the related party notes
payable was $124,055 and $0, respectively. Interest expense related to the
related party notes payable for the years ended December 31, 2009 and 2008 was
$13,489 and $0, respectively.





A line of
credit with Dresdner Bank in Germany for 10,000 Euros is personally secured by
Igor Plahuta, Director of European Operations of the Company. The agreement
was signed September 28, 2006.









GARB
OIL & POWER CORPORATION AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


December
31, 2009 and 2008





NOTE 5
- INCOME TAXES





The
Company accounts for income taxes in accordance with Accounting Standards
Codification Topic 740, Income Taxes (“Topic 740”), which requires the
recognition of deferred tax liabilities and assets at currently enacted tax
rates for the expected future tax consequences of events that have been included
in the financial statements or tax returns. A valuation allowance is recognized
to reduce the net deferred tax asset to an amount that is more likely than not
to be realized. Topic 740 provides guidance on the accounting for uncertainty in
income taxes recognized in a company’s financial statements. Topic 740 requires
a company to determine whether it is more likely than not that a tax position
will be sustained upon examination based upon the technical merits of the
position. If the more-likely-than-not threshold is met, a company must measure
the tax position to determine the amount to recognize in the financial
statements. At the adoption date of January 1, 2007, the Company had no
unrecognized tax benefit which would affect the effective tax rate if
recognized. The Company includes interest and penalties arising from the
underpayment of income taxes in the statements of operation in the provision for
income taxes. As of December 31, 2009, the Company had no accrued interest or
penalties related to uncertain tax positions.





The
Company files income tax returns in the U.S. federal jurisdiction and in the
state of Utah. We are no longer subject to tax examinations for years before
2006.  Deferred taxes are provided on a liability method whereby
deferred tax assets are recognized for deductible temporary differences and
operating loss and tax credit carryforwards and deferred tax liabilities are
recognized for taxable temporary differences. Temporary differences are the
differences between the reported amounts of assets and liabilities and their tax
bases. Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, it is more likely than not that some portion or all of
the deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws and rates on the
date of enactment. Net deferred tax liabilities consist of the following
components as of December 31, 2009 and 2008.





2009
            
            2008Deferred
      tax assets:NOL
      carryover
            $
            1,066,870
            
            $
            1,012,750Related
      parties
            
            48,380
            
            
            -Accrued
      wages
            
            154,320
            
            
            -Capital
      carryover
            
            -
            
            
            -Deferred
      tax liabilities:Depreciation
            
            -
            
            
            -Valuation
      allowance
            
            (1,269,570)
            
            
            (1,012,750)Net
      deferred tax asset
            $
            -
            
            $
            -





The
income tax provision differs from the amount of income tax determined by
applying the federal and state income tax rates of 39% for U.S. tax rates and an
average of 30% for German tax rates related to RPS activities for pretax income
from continuing operations for the years ended December 31, 2009 and 2008 due to
the following:





2009
            
            2008Book
      income (loss)
            $
            (187,659)
            
            $
            (59,530)Related
      parties
            
            8,130
            
            
            -Accrued
      wages
            
            93,165
            
            
            -Valuation
      allowance
            
            86,364
            
            
            59,530$
            -
            
            $
            -





Current
income taxes payable relates to liabilities associated with income tax
obligations of RPS in Germany for taxable income generated in 2006 and
2007.





F-18





GARB
OIL & POWER CORPORATION AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


December
31, 2009 and 2008





NOTE 5
- INCOME TAXES (continued)





At
December 31, 2009, the Company had net operating loss carryforwards of
approximately $2,480,000 that may be offset against future taxable income from
the year 2009 through 2029. No tax benefit has been reported in the December 31,
2009 financial statements since the potential tax benefit is offset by a
valuation allowance of the same amount.





Due to
the change in ownership provisions of the Tax Reform Act of 1986, net operating
loss carryforwards for Federal income tax reporting purposes are subject to
annual limitations. Should a change in ownership occur, net operating loss
carryforwards may be limited as to use in future years.





NOTE 6
- COMMITMENTS





The
Company is currently negotiating employment agreements with its newly appointed
officers.





As of
December 31, 2009 the company had accrued a total of $257,988 in compensation to
these officers. As of December 31, 2008, the company had accrued $0 to its
officers.





NOTE 7
- OPERATING LEASES





The
Company leases office space under a lease agreement on a month-to-month basis.
Rental expense relating to this operating lease was $4,500 and $0 for the years
ended December 31, 2009 and 2008, respectively.





NOTE 8
- NOTES PAYABLE





Notes
payable consisted of the following at December 31, 2009 and 2008:





2009
            2008Note
      payable, due on demand, plus interestat
      12% per annum, unsecured
            
            $
            68,493
            $
            -Note
      payable, due on demand, plus interestat
      12% per annum, unsecured
            
            
            165,000
            
            -Notes
      payable, due on demand, plus interestat
      10% per annum, unsecured
            
            
            20,000
            
            -Note
      and fee payable, due on demand, plusinterest
      at 3% per month, unsecured
            
            
            6,000
            
            -Note
      payable, due September 5, 2006, plus onetime
      loan fee of 100,000 stock options andinterest
      at 5% per month, unsecured
            
            
            2,750
            
            -Notes
      payable, due on demand, plus interestat
      10%, unsecured
            
            
            7,500
            
            -Note
      payable, due on demand, plus interestat
      3% per month, unsecured
            
            
            3,000
            
            -Note
      payable, due on demand, plus interest at$500
      per week, secured by sales contract andofficer
      guarantee
            
            
            53,000
            
            -Notes
      and fees payable, due on demand, 12%interest
      per annum, unsecured
            
            
            46,459
            
            -Note
      payable, due on demand, plus interestat
      18% per annum Oct. 7, 2005 through Jan. 6,2006
      then $500 per week through April 1,2009,then
      $5,000 per month, secured bycompany
      stock owned by stockholder
            
            
            129,327
            
            -





F-19





GARB
OIL & POWER CORPORATION AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


December
31, 2009 and 2008





NOTE 8 -
NOTES PAYABLE (continued)





Note
      payable, due January 6, 2007, one timeloan
      fee of one million shares, secured by allcompany
      assets including future sales ofcement
      and urea by a related company
            
            
            57,200
            
            -Note
      payable, due August 1, 2006, 12% interest,one
      time loan fee of $2,500, secured by allcompany
      assets
            
            
            10,000
            
            -Note
      payable, due September 5, 2006, plusinterest
      at 5% per month, unsecured
            
            
            2,250
            
            -570,979
            
            -Less:
      Current Portion
            
            
            (570,979)
            
            -Long-Term
      Notes Payable
            
            $
            -
            $
            -





The
aggregate principal maturities of notes payable are as follows:





AmountYear
      Ended December 31, 2010
            
            $
            570,9792011
            
            
            -2012
            
            
            -2013
            
            
            -2014
            
            
            -2015
      and thereafter
            
            
            -Total
            
            $
            570,979





As of
December 31, 2009 and 2008, accrued interest related to notes payable was
$842,393 and $0, respectively. Interest expense related to notes payable for the
years ended December 31, 2009 and 2008 was $80,572 and $0,
respectively.





NOTE 9
– NON-CASH DISCLOSURES FOR INVESTING AND FINANCING
TRANSACTIONS





In
connection with the purchase of RPS, Garb granted some stock options to John
Rossi, CEO, & Igor Plahuta, Director, to purchase up to 100,000,000 shares
of the Company’s common stock. These shares had not been issued as of December
31, 2009 and as a result, this transaction produced a decrease to additional
paid-in capital and an increase in a stock options payable liability of
$3,150,000 at December 31, 2009.





The
Company’s former CEO, John Brewer had a balance of accrued wages owed to him of
$852,000 at year end. Pursuant to year end, Mr. Brewer agreed to forgive the
total amount of wages owed to him which was to be retro-actively applied at
December 31, 2009. Given that Mr. Brewer is a related party to the Company, this
transaction was treated as a non-cash item and resulted in a decrease to wages
payable and an increase to additional paid-in capital of $852,000.





During
the fourth quarter of 2009, the Company issued 1,000,000 shares of common stock
in payment for $3,700 of debt owed to John Wright. These shares were issued at a
discount and resulted in a loss on debt forgiveness. As a result of this
transaction, additional paid-in capital increased by $15,000, debt was reduced
by $3,700, resulting in a loss of $11,300 being recorded. In addition, the
Company also issued 500,000 shares of common stock as payment for $5,000 in
legal Fees owed to Mr. Wally Boyack. These shares were also issued at a discount
and resulted in a loss on debt forgiveness. As a result of this transaction,
additional paid-in capital increased by $12,000, debt was reduced by $5,000,
resulting in a loss of $7,000 being recorded.





F-20





GARB
OIL & POWER CORPORATION AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


December
31, 2009 and 2008





NOTE 10
- SUBSEQUENT EVENTS





Management
has evaluated subsequent events as of the date the financial statements were
issued. There are a number of material subsequent events that have occurred, as
follows:





On
January 15, 2010, RPS acquired 80% of Newview S.L. Spain for up to €600,000.
Newview S.L. holds important patents and other technology relating to the
Company’s e-waste recycling and processing business.





On
January 28, 2010, the Company issued 50,000 shares of the Company’s common stock
to LeRoy Jackson for aggregate gross proceeds of $5,000 in an unregistered sale
of securities.





On
February 26, 2010, John Brewer resigned as President and CEO of Garb and John
Rossi was appointed as President, Chairman and CEO of the Company.





On
February 27, 2010, the Company entered agreement with Premier Media Service,
Inc. for public relations and investor relations services.





On March
10, 2010, the Company amended Article IV of its Articles of Incorporation to,
among other things increase its authorized common shares from 80,000,000 to
500,000,000 and create three new classes of preferred stock, class A preferred,
consisting of 150,000,001 authorized shares, class B preferred, consisting of
1,200,000 authorized shares and class C preferred, consisting of 1,000,000
authorized shares.





On March
11, 2010, the Company entered into a Securities Purchase Agreement pursuant to
which, among other things, the Company borrowed $50,000 by issuing a convertible
debenture note to Asher Enterprises, Inc. (the “Asher Note”).  The
Asher Note is due September 11, 2010, carries an interest rate of 8% per annum
and is convertible into shares of common stock during the loan period at a
“Variable Conversion Price.”




On March
18, 2010, the Company received and accepted purchase orders to design, install
and sell its first e-waste recycling plant to Soil Remediation Inc. (“SRI”) of
Lowellville, Ohio for $13,492,000 (the “SRI Plant”). Building of the plant is
expected to start by September 20, 2010, with commissioning planned by December
15, 2010.  Proceeds from the sale of the SRI Plant are paid on certain
milestones and benchmarks during the life of the project.  Sale of the
SRI Plant is subject to the buyer’s timely payment of milestone
payments.


On March
22, 2010, Garb entered into a Stock Purchase Agreement with John Rossi and Igor
Plahuta for the sale and issuance of one (1) share of the Company’s Class A
Preferred Stock (“Class A Preferred”) to each of Mr. Rossi and Mr.
Plahuta.  The shares were issued in satisfaction of €50,000 owed by
Garb to each of Mr. Rossi and Mr. Plahuta.





On March
24, 2010, the Company, along with SRI, Steel Valley Design Inc., LMW Holding
Company Inc., Odyssey Environmental LLC, Robert D. Carcelli, Inc., Liberian
Holding Corporation, Inc., and Three C’s Distributing, Inc. formed eWaste USA,
Inc., a Delaware corporation, (“eWaste”) with the intent of building, owning and
managing ten e-scrap (e-waste) plants on the East Coast of the United States
totaling $135,000,000.  Garb owns 51% of eWaste and John Rossi is the
Chairman and Chief Executive Officer of eWaste.





F-21





GARB
OIL & POWER CORPORATION AND SUBSIDIARIES


Notes to
Consolidated Financial Statements


December
31, 2009 and 2008





NOTE 10
- SUBSEQUENT EVENTS (continued)





On March
26, 2010, the Company’s board of directors authorized the Company to issue (a)
15,250 Class B Shares to Matthew Shepard in satisfaction of accrued wages of
$155,650.00 and any other amounts owing to Mr. Shepard, (b) 30,338 Class B
Shares to Bill Anderson in satisfaction of loans by Mr. Anderson with
outstanding principal and unpaid interest of $12,363.00 and any other amounts
owing to Mr. Anderson and (c) 11,715 Class B Shares to Alan Fleming in
satisfaction of unreimbursed business expenses of $267.00 and $6,763 AUD
(Australian Dollar), accrued fees for services of $58,000.00 AUD and any other
amounts owning to Mr. Fleming.





On April
10, 2010, the Company received and accepted purchase orders to design, install
and sell another e-waste recycling plant to La Stella Maris Inc. of Virginia for
$13,492,000 (the “La Stelle Maris Plant”). Building of the La Stella Maris Plant
is expected to start by November 30, 2010, with commissioning planned by March
15, 2011.  Proceeds from the sale of the La Stelle Maris Plant are
paid on certain milestones and benchmarks during the life of the
project.  Sale of the La Stelle Maris Plant is subject to the buyer’s
timely payment of milestone payments.


F-22





9.
CHANGES IN ACCOUNTANTS AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE





Not
applicable except as previously reported.





9A.
CONTROLS AND PROCEDURES





a)
Evaluation of Disclosure Controls and Procedures:





Our
management evaluated, with the participation of our Chief Executive Officer, the
effectiveness of our disclosure controls and procedures, as such term is defined
in Rules 13a-15(e) or 15d-15(e) promulgated under the Exchange Act, as of
the end of the period covered by this annual report on Form 10-K,. Based on
that evaluation, the Company’s Chief Executive Officer has concluded that its
disclosure controls and procedures contained significant internal control
weaknesses that, in the aggregate, represent material weaknesses, as of the end
of the period covered by this report to ensure that information required to be
disclosed by the Company in periodic SEC reports that it file or submit under
the Exchange Act is accumulated and communicated to our management, including
our Chief Executive Officer and Principal Financial Officer, as appropriate to
allow timely decisions regarding required disclosure, and is recorded,
processed, summarized and reported within the time periods specified by the
SEC’s rules and forms.





Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in the Company’s reports filed
or submitted under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the SEC’s rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in the
Company’s reports filed under the Exchange Act is accumulated and communicated
to management, including its Chief Executive Officer and Principal Financial
Officer, to allow timely decisions regarding required disclosure.





(b)
Management’s Annual Report on Internal Control Over Financial
Reporting:





Management
is responsible for establishing and maintaining adequate internal control over
financial reporting as defined in Exchange Act Rule 13a-15(f) and 15d-15(f).
Management conducted an evaluation of the effectiveness of the internal control
over financial reporting as of December 31, 2009, using the criteria established
in Internal Control - Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Because of its inherent
limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.





A
material weakness is a control deficiency, or combination of control
deficiencies, that results in more than a remote likelihood that a material
misstatement of the annual or interim financial statements will not be prevented
or detected.





In
connection with the preparation of the Company’s financial statements for the
year ended December 31, 2009, certain significant internal control deficiencies
became evident to management that, in the aggregate, represent material
weaknesses, including,







i.
            Insufficient
      control processes for recording and approving journal
    entries;




ii.
            Insufficient
      policies and procedures over various financial statement
      areas;




iii.
            Failure
      to correctly record transactions and failure to timely complete
      documentation, testing and evaluation of internal accounting and financial
      reporting controls, resulting in untimely completion of accounting,
      preparation of financial statements and preparation of this annual
      report.







A control
deficiency exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned
functions, to prevent or detect financial statement misstatements on a timely
basis.  A deficiency in design exists when a control necessary to meet
the control objective is missing, or when an existing control is not properly
designed so that even if the control operates as designed, the control objective
would not be met.  A deficiency in operation exists when a properly
designed control does not operate as designed or when the person performing the
control does not possess the necessary authority or competence to perform the
control effectively.










A
significant deficiency is a deficiency, or a combination of deficiencies, in
internal control over financial reporting that is less severe than a material
weakness, yet important enough to merit attention by those responsible for
oversight of the Company’s financial reporting.





A
material weakness is a deficiency, or a combination of deficiencies, in internal
control over financial reporting, such that there is a reasonable possibility
that a material misstatement of the Company’s annual or interim financial
statements will not be prevented or detected on a timely basis.





This
Annual Report does not include an attestation report of the Company’s registered
public accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by the Company’s registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit the Company to provide only management’s report
in this annual report.





c)
Changes in Internal Control Over Financial Reporting





As of
December 31st, 2009 the Company continued to have significant problems with
segregation of duties. However, in the first quarter 2010, the Company nominated
an Executive Vice President to separate some of the conflicting duties from the
President. The Company also hired a Chief Operations Officer who, as a major
responsibility, is tasked with creating an environment of proper segregation of
duties. This includes the establishment of detailed job descriptions and the
hiring of personnel to fill the required roles of the Company.





The term
“internal control over financial reporting” is defined as a process designed by,
or under the supervision of, the registrant’s principal executive and principal
financial officers, or persons performing similar functions, and effected by the
Board, management and other personnel, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles and includes those policies and procedures
that:





i.
Pertain to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of the
Company;





ii.
Provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the registrant are
being made only in accordance with authorizations of management and directors of
the Company; and





iii.
Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Company’s assets that could
have a material effect on the financial statements.





d)  Inherent
Limitations on Effectiveness of Controls





Our
management, including our Chief Executive Officer, do not expect that our
disclosure controls or our internal control over financial reporting will
prevent all errors and all fraud. A control system, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within the Company have been detected. These inherent limitations include
the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of a simple error or mistake. Additionally,
controls can be circumvented by the individual acts of some persons, by
collusion of two or more people or by management override of the controls. The
design of any system of controls also is based in part upon certain assumptions
about the likelihood of future events, and there can be no assurance that any
design will succeed in achieving its stated goals under all potential future
conditions; over time, controls may become inadequate because of changes in
conditions, or the degree of compliance with policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be
detected.





9B.
OTHER INFORMATION





None












PART
III





10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.





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. The Board has no nominating,
audit or compensation committee and, accordingly, no audit committee financial
expert.





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







Name
            
            Age
            
            PositionJohn
      Rossi
            
            50
            
            CEO,
      President, Chairman of the Board of Directors, DirectorMatthew
      G. Shepard
            
            35
            
            Executive
      Vice President, DirectorIgor
      Plahuta
            
            47
            
            Director
      European Operations, DirectorBill
      Vee Anderson
            
            59
            
            Secretary,
      DirectorJohn
      Wright
            
            67
            
            Treasurer,
      Director





Bill
Anderson





Bill
Anderson has been with Garb since 1990.  Bill was first elected to the
Board in September 1993.  Prior to joining the Company, Mr. Anderson
spent five years as a design engineer at Sperry Univac. Prior to that, he was a
design engineer with Bell Telephone Laboratories.  Bill is experienced
in manufacturing, mechanical design engineering and computer aided design and
has made design improvements to our shredders to make them more reliable and
easier to maintain.  Bill also has experience on the field and at
coordinating on the project site.  He has expertise in the
construction of tire shredders with different vendors and
manufacturers.   Bill is a designer of several twin shaft
shredders and a machine to remove the tread from large OTR mining tires so the
rubber from the tread can be reclaimed and used for other products, Bill’s
know-how extends to creating all of the patent drawings as well as the
manufacturing drawing for OTR machine.  Mr. Anderson is experienced in
dealing with our international supplier and negotiated machine purchasing
contracts. He coordinated with manufacturing plant to build components for the
shredders and then the final assembly of the shredders are done in the United
States.  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.





Igor
Plahuta, ME





Igor
Plahuta has 20 years of experience in recycling industries.  Mr.
Plahuta was first elected to the Garb Board on October 27, 2009.  Mr.
Plahuta has a background in physics and started his career in various recycling
and waste technology companies.  In 1992 he founded Artech
Recyclingtechnik GmbH.  His initial task was to build up a company for
the aftersales of all existing shredders in the market.  Igor worked
as a mechanic in machinery at Mannesmann AG in Germany before going to
university, personally repairing the company’s machines.  Igor
developed two state of the art machines in 1999 and 2001. Based on his
experience in changing shredder tools and adjusting equipment for the knives of
fast speed shredders, he developed the quick exchange system for the rotor
shear, and the automatic knife adjustment device which allows the knife
adjustment while the machine is running.  Both systems have been
patented and are still state of the art, and being used in many waste facilities
in Germany with availabilities of up to 98%. Since then he has focused on tire
recycling.





In 2003
Igor was one of the first to mix 25% special treated rubber powder into raw
rubber, to produce retreads for OTR-tire for recovery. This will be the next
step to be developed, the combination of the Garb OTR-machine and the recovery
technology already developed to be used in large mining
facilities.  In 2004 Igor founded RPS with the strong belief that a
raw material crisis is unavoidable, and began to focus on raw material
substitution technology and recycling designs.  In 2008 he finished
the development of a special rubber powder production line now to be marketed
through Garb.  From 2007 to 2009 Igor served as a director of Sistema
Proteccion Recursos and Managing Director of RPS.  From 2004 to
present Mr., Plahuta has served as Managing Director at Newview and from 1992 to
2006 served as director of Artech Recyclingtechnik GmbH.









Matthew
Shepard





Mr.
Shepard has been an executive and a director of Garb since January 9,
2006.  Matthew has 14 years of management experience to include
positions held in not-for-profit organizations, military, private companies and
public companies.  He has held positions in the United States, Europe,
Middle-East and Asia.  Coming into Garb, Mr. Shepard brought with him
a skill-set centered around clear vision, strategic thinking and an ability to
inspire and mobilize.  Mr. Shepard holds a BS of Business Marketing
from the University of Phoenix.





Mr.
Shepard communication and organizational skills are of particular importance to
Garb.  He came to Garb with experience as a Marketing Director for
national mail-order business and as a Chief Editor for a national
magazine.  While an Infantry Officer for the Army he deployed to Iraq
gaining experience as a Battle Captain in combat, which required precise skills
in communication under stress and forward thinking.  Mr. Shepard’s
ability to present a clear plan and direct message is a great asset to the
company.   Mr. Shepard’s passion has been with green technologies
for the past 10 years and throughout these years he has promoted, consulted and
sold technologies that have made a difference in our communities.





John
Rossi MBA, MEntrepInnov





John
Rossi was elected as a director of the Company on October 27,
2009.  John was appointed President, CEO and Chairman of the Board of
the Company on February 26, 2010. Mr. Rossi devotes approximately 60 hours per
week to the Company.  Mr. Rossi holds an MBA and MEntrepInnov from
Queensland University of Technology.  Mr. Rossi has an excellent
background for his role at Garb; He is responsible, together with the Board, for
developing and directing Garb’s strategy and attainment of business
objectives.





Prior to
joining Garb in 2009, Mr. Rossi has also held the positions of Managing Director
in the following company Terra Elastomer Technologies S.L. (until Oct 2007)
holding company for the following companies Inteso AG, Spreelast Advanced
Cryotech AG and Spreelast AG of which Mr. Rossi was CEO of all companies (until
he resigned in Oct 2007) he took over as CEO of German Rubber Industries AG in
Oct 2008 and still holds this position presently. He has further held the
position of CEO for the Abacus Group in Italy, General Manager Techso S.p.A. in
Italy, General Manager Sales IBS in Australia and National Telemarketing Manager
Xerox in Australia.


Ten years
ago Mr. Rossi believed that commercially viable products could be produced from
recycling tires; today Garb has the capacity to build and produce the necessary
machinery to refine and manufacture the finest rubber powder in the world and
technology and know how to build plants that manage rubber waste, electronic
waste and waste to energy.





John
Wright





John was
first elected to the Company on November 2, 2009.  Prior to that Mr.
Wright worked as a certified public accountant for 12 years, including 8 years
as CPA for a manufacturing company.  Mr. Wright has also been involved
in personal and family business.





Section
16(a) Beneficial Ownership Reporting Compliance





Section
16(a) of the Exchange Act 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.  Individuals
required to file reports under Section 16(a) with respect to Garb are John
Rossi, John Brewer, John Wright, Matthew Shepard, Alan Fleming, Bill Anderson
and Igor Plahuta.




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 December 31, 2009 all Section 16(a)
filing requirements applicable to its officers, directors and greater than
ten-percent beneficial owners were complied with.





Code
of Ethics





The
Company has not adopted a code of ethics applicable to its principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, but anticipates complying
with the requirement to adopt such a code of ethics in the near term and making
it available on the Company’s website.










11. EXECUTIVE COMPENSATION





There is
shown below information concerning the total compensation of the Company’s chief
executive officer for the fiscal years ended December 31, 2009 and December 31,
2008. Compensation for the other highly compensated executive officers is not
required nor presented as no such executive officer’s salary and bonus exceeded
$100,000.




SUMMARY
      COMPENSATION TABLEName and Principal
      Position
            
            Fiscal
      Year
            
            Annual
      Compensation Salary ($)John
      Rossi, CEO
            
            2009
            
            $
            99,7402008
            
            $
            0





No
officer received any form of non-cash compensation from the Company in the
fiscal year ended December 31, 2009 or currently receives any such compensation
and no equity based awards are outstanding to the officers.





The
Company is currently negotiating employment agreements with all of its newly
appointed officers.





As of
December 31, 2009, the Executive Vice President was owed accrued salary of
$155,650 which accrued to him while serving as the Company’s
president.





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, agreements or understanding covering them.





Directors
received no cash or non-cash fees or compensation for their services as
directors during the fiscal year ended December 31, 2009 and no directors have
outstanding options or other equity-based awards in connection with their
services as directors as of December 31, 2009.





12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS





The
following table sets forth certain information with respect to the beneficial
ownership of the Company’s common stock as of December 31, 2009, (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 ClassJohn
      C. Brewer
                  1588
      S. Main St.
                  Salt
      Lake City, UT
              
              23,271,611
              
              29.3648%Garbalizer
      Corporation of America
                  Newhouse
      Office Building, Suite 507
                  Salt
      Lake City, Utah
                  (Notes
      1, 3 & 4)
              
              9,788,291
              
              12.3516%Bill
      Anderson
                1588
      S. Main St., Suite 200
                Salt
      Lake City, Utah
              
              306,000
              
              0.3861%Commodities
      Trading Corporation

                1588
      S. Main St., Suite 200
                Salt
      Lake City Utah (Note 1)
              
              500,000
              
              0.6309%John
      Rossi
                  1588
      S. Main St., Suite 200
                  Salt
      Lake City, Utah
              
              13,914,645.5
              
              17.5579%
















Name
      and Address
            
            Amount
            
            Percent
      of ClassIgor
      Plahuta
              1588
      S. Main St., Suite 200
              Salt
      Lake City, Utah
            
            13,914,645.5
            
            17.5579%Matthew
      Shepard1588
      S. Main St., Suite 200
              Salt
      Lake City, Utah
            
            46,725
            
            0.05896%John
      Wright
              1588
      S. Main St., Suite 200
              Salt
      Lake City, Utah
            
            2,000,000
            
            2.5237%All
      directors and  officers as a group
            
            63,695,193
            
            80.3725%


________________





(1) John
C. Brewer beneficially owns 98% of the outstanding common stock of Garbalizer
Corporation of America (“GCA”). John Brewer also owns 100% of the outstanding
common stock of Commodities Trading Corporation (“CTC”).





(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 9,788,291 shares held by GCA in which Mr. Brewer may be deemed to
share beneficial ownership as a result of his position as a director and
principal shareholder of GCA.








The
following table sets forth certain information with respect to the beneficial
ownership of the Company’s class A preferred stock as of April 20, 2010, (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 ClassJohn
      Rossi
              1588
      S. Main St., Suite 200
              Salt
      Lake City, Utah
            
            1
            
            50.00%Igor
      Plahuta
              1588
      S. Main St., Suite 200
              Salt
      Lake City, Utah
            
            1
            
            50.00%All
      directors and  officers as a group
            
            2
            
            100.00%





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












13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE.





On May 1,
1986 the Company executed an employment agreement with its then CEO. Under the
terms of the agreement, the CEO’s salary was stated at $48,000 per year and
remained so until the current period and has been accrued each year since. Upon
the reverse acquisition of RPS the former CEO resigned and agreed to forgive the
accrued salary totaling $852,000. As of December 31, 2009, the Company has
accrued $30,000 each to both its new CEO and its Director of Technology, and
$155,650 to its new Executive Vice President, formerly its President. During the
year ended December 31, 2009 and 2008, notes payable-related parties increased
$465,819 and decreased $155,580, respectively. On June 10, 2009,23,271,611
shares of common stock were issued at the then fair market value of $.015 per
share in payment of related-party loans and accrued interest due to the
company’s CEO, decreasing the balance of notes payable-related parties. The
prior year increase was due to additional proceeds from notes
payable.





The
Company is in the process of finalizing an employment agreement with Igor
Plahuta (the “Plahuta Agreement”).  Pursuant to the currently proposed
Plahuta Agreement, Mr. Plahuta would, among other things, receive a base salary
of $15,000 (adjusted for Euro parity pricing) as well as incentive bonuses based
on certain revenue and profit metrics and certain other
perquisites.





The
Company is in the process of finalizing an employment agreement with John Rossi
(the “Rossi Agreement”). Pursuant to the currently proposed Rossi Agreement, Mr.
Rossi would, among other things, receive a base salary of $15,000 (adjusted for
Euro parity pricing) as well as incentive bonuses based on certain revenue and
profit metrics and certain other perquisites.





The Board
has approved but not effected the issuance of:


(a)
            40,407
      shares of the Company’s class B preferred stock (“Class B Shares”) to GCA
      in satisfaction of loans by GCA with outstanding principal and unpaid
      interest of $180,000.00 and any other amounts owing to
  GCA.


(b)
            10,000
      Class B Shares to Commodities Trading Corporation (“CTC”) in satisfaction
      of loans by CTC with outstanding principal and unpaid interest of
      $266,004.88 and any other amounts owing to
CTC.


(c)
            9,593
      Class B Shares to John Brewer in satisfaction of loans by Mr. Brewer with
      outstanding principal and unpaid interest of $42,732.54 and any other
      amounts owing to Mr. Brewer.





The
Company is in the process of finalizing the issuance of:


(a)
            15,250
      Class B Shares to Matthew Shepard in satisfaction of accrued wages of
      $155,650.00 and any other amounts owing to Mr.
  Shepard.


(b)
            30,338
      Class B Shares to Bill Anderson in satisfaction of loans by Mr. Anderson
      with outstanding principal and unpaid interest of $12,363.00 and any other
      amounts owing to Mr. Anderson.


(c)
            11,715
      Class B Shares to Alan Fleming in satisfaction of unreimbursed business
      expenses of $267.00 and $6,763 AUD (Australian Dollar), accrued fees for
      services of $58,000.00 AUD and any other amounts owning to Mr.
      Fleming.





RPS had
revenue transactions with related parties for the years ending December 31, 2009
and 2008 in the amount of $39,008 and $131,007, respectively. Related party
accounts receivable were $0 and $20,453 at December 31, 2009 and 2008,
respectively.





Short-term
related party notes receivable at December 31, were





2009
            
            2008Newview
            $
            85,425
            
            $
            -Igor
      Plahuta
            
            83,084
            
            
            55,408Clinica
      Dental
            
            432,000
            
            
            -Short-Term
      Notes Receivable from Related Parties
            $
            600,509
            
            $
            55,408
















Long-term
notes receivable from related parties at December 31, were




2009
            
            2008Clinica
      Dental
            
            -
            
            
            416,118Long-Term
      Notes Receivable from Related Parties
            $
            -
            
            $
            416,118





Accounts
payable and notes payable to related parties consisted of the following at
December 31, 2009 and 2008:







2009
            
            
            2008Accounts
      payable to a related party, due ondemand,
      no interest, unsecured
            $
            180,000
            
            $
            -Notes
      payable to a related party, due on demand,plus
      interest at 18% per annum, unsecured
            
            188,075
            
            
            -Accounts
      payable to related party, due on demand,plus
      interest at 8% per annum, unsecured
            
            21,500
            
            
            -Note
      payable to a related party, due on demand,plus
      interest at 5% per month, unsecured
            
            12,363
            
            
            -Note
      payable to a related party, plus interestat
      4% per annum
            
            57,658
            
            
            -Note
      payable to a related party, plus interestat
      1.25% per annum
            
            6,223
            
            
            -465,819
            
            
            -Less:
      Current Portion
            
            (465,819)
            
            
            -Long-Term
      Notes Payable to Related Parties
            $
            -
            
            $
            -





The
aggregate principal maturities of notes payable to related parties are as
follows:










Year
      Ended December 31, 2011
            
            $
            465,8192012
            
            
            -2013
            
            
            -2014
            
            
            -2015
            
            
            -Total
            
            $
            465,819





As of
December 31, 2009 and 2008, accrued interest related to the related party notes
payable was $124,055 and $0, respectively. Interest expense related to the
related party notes payable for the years ended December 31, 2009 and 2008 was
$13,489 and $0, respectively.





A line of
credit with Dresdner Bank in Germany for 10,000 Euros is personally secured by
Igor Plahuta, Director of European Operations of the Company. The agreement
was signed September 28, 2006.





Director
Independence





The
Company’s directors are John Rossi, Igor Plahuta, Matthew Shepard, John Wright
and Bill Anderson.  During fiscal year ended December 31, 2009 John
Brewer and Lynette Williams also served as directors.  The OTC
Bulletin Board does not have rules regarding director
independence.  John Wright is an independent director and Lynette
Williams was an independent director as defined in NASD Rule
4200.  None of the other directors are or, during the fiscal year
ended December 31, 2009, were independent.












14.
PRINCIPAL ACCOUNTING FEES AND SERVICES





The
following is a summary of the fees billed to Garb by its principal accountants
during the fiscal years ended December 31, 2009, June 30, 2009 and June 30,
2008.







December
      31,
            
            June
      30,Fee
      Category
            2009
            
            2009
            
            2008Audit
      Fees
            $
            59,300
            
            $
            16,900
            
            
            22,600Audit-related
      Fees
            
            -
            
            
            -
            
            
            -Tax
      Fees
            
            -
            
            
            -
            
            
            -All
      other fees
            
            -
            
            
            -
            
            
            -Total
      Fees
            $
            59,300
            
            $
            16,900
            
            $
            22,600





Audit
fees. Consists of fees for professional services rendered by the Company’s
principal accountants for the audit of our annual financial statements and the
review of financial statements included in our Forms 10-K or services that are
normally provided by our principal accountants in connection with statutory and
regulatory filings or engagements.





Audit-related
fees. Consists of fees for assurance and related services by the Company’s
principal accountants that are reasonably related to the performance of the
audit or review of its financial statements and are not reported under “Audit
fees.”





Tax fees.
Consists of fees for professional services rendered by the Company’s principal
accountants for tax compliance, tax advice and tax planning.





All other
fees. Consists of fees for products and services provided by the Company’s
principal accountants, other than the services reported under “Audit fees,”
“Audit-related fees” and “Tax fees” above.





The
Company has no audit committee, accordingly none of the audit fees were
pre-approved by an audit committee.





15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES








(a) The
following documents are filed as part of this Annual Report.





1. All
Financial Statements:





The
following financial statements of the Company are filed as part of this Annual
Report beginning on page F-1.





Report of Independent Registered Public
Accounting Firm





Consolidated Balance Sheet – December
31, 2009.





Consolidated Statements of Operations -
For the Years Ended December 31, 2009 and 2008.





Consolidated
Statements of Stockholders’ Equity (Deficit) - For the Years Ended December 31,
2009 and 2008.





Consolidated Statements of Cash Flows
For the Years Ended December 31, 2009 and 2008.





Notes to Consolidated Financial
Statements





2.
Financial Statement Schedules:





All other
schedules are omitted as the required information is either inapplicable or it
is presented in the consolidated financial statements and notes
thereto.









3.
Exhibits:





The
Exhibits required by Item 601 of Regulation S-K are listed in paragraph (b)
below.





(b)
Exhibits





The
following exhibits are filed or furnished herewith or are incorporated herein by
reference to exhibits previously filed with the SEC.





No.
            
            Description
            
            Location2.1
            
            Stock
      Purchase Agreement dated October 19, 2009 by and among Garb Oil &
      Power Corporation, Igor Plahuta and John Rossi
            
            Exhibit
      2.1 to our current report on Form 8-K filed on November 3,
      20093.1
            
            Articles
      of Incorporation
            
            Exhibit
      3.1 of Registration Statement on Form 10, File No
  000-148593.2
            
            Articles
      of Amendment to Articles of Incorporation dated January 27,
      1978
            
            Filed
      herewith3.3
            
            Articles
      of Amendment to Articles of Incorporation dated January 13,
      1981
            
            Filed
      herewith3.4
            
            Articles
      of Amendment to Articles of Incorporation dated  April 19,
      1984
            
            Filed
      herewith3.5
            
            Articles
      of Amendment to Articles of Incorporation dated  October 29,
      1985
            
            Filed
      herewith3.6
            
            Articles
      of Amendment to Articles of Incorporation dated  May 19,
      2006
            
            Filed
      herewith3.7
            
            Articles
      of Amendment to Articles of Incorporation dated March 10,
    2010
            
            Exhibit
      99.3 to our current report on Form 8-K filed on March 11,
    20103.8
            
            By-Laws
            
            Exhibit
      3.2 of Registration Statement on Form 10, File No.
    000-148594.1
            
            Stock
      Purchase Agreement by and among Garb Oil & Power Corporation, John
      Rossi and Igor Plahuta dated March 22, 2010
            
            Exhibit
      4.1 to our current report on Form 8-K filed on March 26,
    20104.2
            
            Addendum
      No. 1 to Stock Purchase Agreement between Garb-Oil & Power Corporation
      on One Part and John Rossi and Igor Plahuta and Resource Protection
      Services GmbH as the Other Part, dated October 19, 2010
            
            Filed
      herewith21.1
            
            List
      of Subsidiaries
            
            Filed
      herewith24.1
            
            Power
      of Attorney (set forth on the signature page to this Annual Report on Form
      10-K)
            
            Filed
      herewith31.1
            
            Rule 13a-14(a)/15d-14(a)
      Certification of Chief Executive Officer
            
            Filed
      herewith31.2
            
            Certification
      of Principal Financial Officer Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002
            
            Filed
      herewith32.1
            
            Certification
      of Chief Executive Officer and Principal Financial Officer Pursuant to 18
      U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002
            
            Furnished
      herewith










SIGNATURES









Pursuant to the requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.









GARB
      OIL & POWER CORPORATIONBy:
      /s/ John
      RossiJohn
      Rossi, President and Chief Executive OfficerDATED
      this 22nd day of April, 2010







KNOW ALL
PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby
constitutes and appoints John Rossi and Matthew Shepard, and each of them, as
his/her true and lawful attorney-in-fact and agent with full power of
substitution, for him/her in any and all capacities, to sign any and all
amendments to this annual report on Form 10-K, and to file the same, with
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto each said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully for all
intents and purposes as he/she might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his substitute, may
lawfully do or cause to be done by virtue hereof.





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.









Name and Signature
            Title
            Date/s/ John
      Rossi
              John
      Rossi
            President,
      Chief Executive Officer, Chairman and Director (Principal Executive
      Officer, Principal Financial Officer and Principal Accounting
      Officer)
            April
      22, 2010/s/ Matthew G.
      Shepard
              Matthew
      G. Shepard
            Director
            April
      22, 2010/s/ Bill Vee
      Anderson
              Bill
      Vee Anderson
            Director
            April
      22, 2010/s/ Igor
      Plahuta
              Igor
      Plahuta
            Director
            April
      22, 2010/s/ John
      Wright
              John
      Wright
            Director
            April
      22, 2010