SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-KSB

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

                  For the fiscal year ended June 30, 2003

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

                  Commission file Number 0-14859

                          GARB OIL & POWER CORPORATION
                  --------------------------------------------
                 (Name of small business issuer 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 200
       Salt Lake City, Utah                                  84115
----------------------------------------                  ------------
(Address of principal executive offices)                   (Zip Code)

Issuer's telephone number (801) 832-9865

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Name of each exchange on which registered

None

Securities registered pursuant to Section 12(g) of the Act:

                           Common stock (No par value)

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

         Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

         State Issuer's revenues for its most recent fiscal year: $155,400

         State 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 a specified date within the past 60 days. $314,399.

         State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: As of June 30, 2003, the
Issuer had outstanding 20,000,000 shares of common stock (no par value).

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

<PAGE>

                                     PART I

1. DESCRIPTION OF BUSINESS

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

The Company received revenues of $155,400 in the fiscal year ended June 30, 2003
and at the end of the year its current liabilities exceeded its total assets by
approximately $1,570,940. The Company continues, as it has done in recent years,
to actively pursue sales of its OTR Tire Disintegrator System, Garbalizer tire
shredders and crumb rubber plants. These activities resulted in a signed sole
agreement meant for tires in fiscal 2002, which were delivered in July 2002.
There are continuing negotiations for additional significant sales but there is
no assurance they will materialize during fiscal 2004. The Company has limited
financial resources, and it may not be able to continue in business if it does
not receive significant additional cash from operations or financing activities.
The Company cannot give assurances that its plans to generate cash will be
successful.

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

OTR Tire Processing System

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

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

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

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

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

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

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

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

Shredding Systems

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

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

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

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

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<PAGE>

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

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

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

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

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

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

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

During the third quarter of 2001 the Company began a new marketing strategy to
market its products. The Company began, and is still continuing to establish
distributorships in the United States and Internationally. As of June 30, 2003
the Company has established Distributorships in New Jersey with National
Recycling Corporation that covers a three state area, New Jersey, New York and
Delaware. A Distributorship has been established in Virginia with Minority Tire
Reclamation, Inc. that covers Virginia, North Carolina and Maryland. The Company
will continue searching for dependable Companies to establish Distributorships
throughout all of North America. Internationally the Company has concluded an
Agreement with Micron SA of Odessa, Ukraine to manufacture and market its
Shredders and other Technology throughout Eastern and Western Europe. All
Machines and Equipment for the European Market will be manufactured by Micron on
a licensed basis and marketed jointly by Garb-Oil and Micron throughout the
European market area. The Company has concluded a Distributorship with
Representaciones Internacionales of Guadalajara, Mexico for all of South and
Central America.

                                       4
<PAGE>

All machines, Equipment and Technology for the South and Central America
Distributorship will be manufactured in Mexico on a license basis with the
marketing being done jointly by Garb-Oil and Representaciones Internacionales.
It is anticipated and planned that all items sold by Garb-Oil Distributorships
in the United States and Canada will be manufactured in Mexico. The Company has
concluded a Distributorship with The Princeton Group of Alhambra, CA for all of
Asia. Machines, Equipment and Technology for the Asian market area will be
manufactured in China. Certain Technology and Machinery owned by the Chinese
Manufacturer for crumb rubber processing will be manufactured in China and
purchased by Garb-Oil to be sold in all of the marketing areas inside and
outside of the Asian market area. Because of the NAFTA Agreement and other
International Agreements currently existing, the Company is now able to
establish these Distributorship agreements and contractually protect its
technology and proprietary rights. These Agreements give the Company access to
less expensive manufacturing and technology, which Management believes will make
the Company more competitive and generate sales on a worldwide basis. As of June
30, 2003 the company management has determined that the company should take
advantage of the benefits of such manufacturing and marketing in future Company
operations.

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

Crumb Rubber Plants

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

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

                                       5
<PAGE>

Trenergy Radioactive Waste Technology

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

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

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

Trenergy may not be able to establish the scientific validity or commercial
viability of the Trenergy technology. Neither Trenergy nor the Company have the
resources necessary to develop or evaluate the Trenergy technology without
infusion of substantial capital or the joint venturing with third parties.
Neither Trenergy nor the Company have any such arrangements in place. The
Company plans to use management time and financial resources pursuing possible
transactions with the Trenergy technology for which the Company may receive no
revenue. During the years 1998, 1999 and 2000 Trenergy has continued research on
the process but at June 30, 2001 had not completed the "hot test" which would
further prove if the process could be viable. As of June 30, 2003 the "hot test"
had not been completed by Trenergy and no date has been given the Company as to
when such test would be completed.

UTTI Tire Repair and Resale Business

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

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

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

Co-generation and Electrical Power Generation

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

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

Pyrolysis

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

Patents, Trademarks and Proprietary Data

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

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

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

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

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

Sand Application

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

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Process

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

Employees

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

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

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

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

Research and Development

During the fiscal years ended June 30, 2003 and 2002, the Company has not
expended any funds on research and development activities.

Environmental Regulation

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

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



2. DESCRIPTION OF PROPERTY

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



3. LEGAL PROCEEDINGS

Not Applicable.



4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No shareholder meetings were held during the fourth quarter of the year ended
June 30, 2003.

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                                    PART II


5.  MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

The Company's common stock is traded in the over-the-counter market. The
representative bid and asked quotations are posted on the National Association
of Securities Dealers OTC Bulletin Board under the symbol GARB. On August 2,
2002 there were approximately 568 holders of record of the common stock of the
Company and the Company believes there were approximately 1,000 beneficial
owners.

During the years ended June 30, 2003 and 2002, the stock was only sporadically
traded. The following table sets forth the range of high and low representative
bid quotations for the periods indicated.

   Period

         (Fiscal Year)                               High              Low
         -------------                               ----              ---
         2002
         1st Quarter                                 .13               .05
         2nd Quarter                                 .07               .035
         3rd Quarter                                 .08               .025
         4th Quarter                                 .08               .06

            2003
         1st Quarter                                 .08               .03
         2nd Quarter                                 .055              .01
         3rd Quarter                                 .055              .02
         4th Quarter                                 .08               .035



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.

Sales of Unregistered Securities

During the fiscal year ended June 30, 2003 no sales of unregistered securities
were made by the Company.



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

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

The auditor's report accompanying the Company's financial statements for the
year ended June 30, 2003 contains the following statement: "As discussed in Note
1 to the financial statements, the Company's operating losses since inception
and the deficit accumulated during the development stage raise substantial doubt
about their ability to continue as a going concern. The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty."

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As discussed further in Item 12, in exchange for the Company's assumption of
GMC's net liabilities, Garbalizer Corporation of America transferred 1,061,668
shares of RecycleNet, Inc. common stock to the Company. As of June 30, 2003 the
Company had none of these shares remaining.

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

Operating expenses for the Company have been paid in part from short-term
unsecured notes from shareholders. At June 30, 2003 the Company had a deficit in
working capital (current liabilities in excess of current assets) of $1,570,940.
The working capital deficit at June 30, 2002 was $1,403,378. The decrease in
working capital was caused by the continued accrual of salary, unearned revenue,
accounts payable for expenses, which the Company was unable to pay in cash and
additional short-term unsecured notes incurred as part of the assumption of GMC
liabilities.

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

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

The Company incurred a loss from operations before other income (expense) and
extraordinary items during the year ended June 30, 2003 of $169,609 compared to
a loss of $177,996 for the year ended June 30, 2002. Total expenses for 2003
were $150,497 compared to $177,996 in 2002. Salaries, wages and commissions were
$86,410 for 2003 compared to $83,308 for 2002. Rental expenses were $11,400 in
2003 and $17,065 in 2002. If any of the Company's plans for revenue producing
activities come to fruition, expenses will rise accordingly.

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<PAGE>

Net loss for the year ended June 30, 2003 was $169,609 compared to a net gain of
$370,418 in 2002. On a per share basis, the net loss for the year ended June 30,
2003 was ($0.01) compared to net loss of ($0.02) in 2002. Operating losses are
expected to continue until such time, if ever, as the Company receives revenues
from the sale of shredders, crumb rubber plants, the lease or license of the OTR
Tire Disintegrator System, or other operations. There is no assurance that the
Company will ever be profitable.

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

During the year ended June 30, 2003, the Company had a net decrease in cash of
$55,800. The primary sources of cash were from the sale of tires and additional
loans from financing activities.



7. FINANCIAL STATEMENTS

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<PAGE>

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

                        CONSOLIDATED FINANCIAL STATEMENTS

                                  June 30, 2003



                                       F-1
<PAGE>

                                 C O N T E N T S



Independent Auditors' Report ............................................. F-3

Consolidated Balance Sheet................................................ F-4

Consolidated Statements of Operations..................................... F-6

Consolidated Statements of Stockholders' Equity (Deficit)................. F-8

Consolidated Statements of Cash Flows.................................... F-11

Notes to the Consolidated Financial Statements .......................... F-13


                                      F-2
<PAGE>

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

We have audited the accompanying consolidated balance sheet of Garb Oil & Power
Corporation and Subsidiaries (a development stage company) as of June 30, 2003,
and the related consolidated statements of operations, stockholders' equity
(deficit), and cash flows for the years ended June 30, 2003 and 2002 and from
inception on January 14, 1981 through June 30, 2003. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits. The financial statements for the period from
inception on January 14, 1981 through June 30, 1999 were audited by other
auditors whose report dated September 10, 1999 expressed an unqualified opinion
on these statements. Our opinion on the statements of operations, stockholders'
equity (deficit) and cash flows for the period January 14, 1981 (inception)
through June 30, 2003, insofar as it relates to amounts for prior periods
through June 30, 1999, is based solely on the report of other audits.

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

In our opinion, based on our audits, the consolidated financial statements
referred to above present fairly, in all material respects, the consolidated
financial position of Garb Oil & Power Corporation and Subsidiaries as of June
30, 2003 and the consolidated results of their operations and their cash flows
for the years ending June 30, 2003 and 2002, in conformity with accounting
principles generally accepted in the United States of America.

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


HJ & Associates, LLC
Salt Lake City, Utah
September 16, 2003

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



                                             ASSETS

                                                                                                     June 30,
                                                                                                       2003
                                                                                               -----------------
<S>                                                                                            <C>
CURRENT ASSETS

   Cash                                                                                        $               -
   Prepaid expenses                                                                                          300
                                                                                               -----------------
     Total Current Assets                                                                                    300
                                                                                               -----------------

PROPERTY AND EQUIPMENT

   Engineering drawings                                                                                    2,500
   Office equipment                                                                                       11,658
   Tools and equipment                                                                                    30,099
   Building improvements                                                                                   8,022
   Less:  accumulated depreciation                                                                       (50,103)
                                                                                               -----------------
     Total Property and Equipment                                                                          2,176
                                                                                               -----------------
OTHER ASSETS

   Assets held for resale                                                                                 30,232
   Patents - net of accumulated amortization                                                                   -
                                                                                               -----------------
     Total Other Assets                                                                                   30,232
                                                                                               -----------------
     TOTAL ASSETS                                                                              $          32,708
                                                                                               =================


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

                                                      F-4
<PAGE>
<CAPTION>
                                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                                          (A Development Stage Company)
                                     Consolidated Balance Sheet (Continued)


                                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

                                                                                                     June 30,
                                                                                                       2003
                                                                                               -----------------
<S>                                                                                            <C>
CURRENT LIABILITIES

   Cash overdraft                                                                              $             134
   Customer deposit                                                                                       10,000
   Accounts payable and accrued expenses                                                                  58,347
   Notes payable (Note 8)                                                                                 60,000
   Notes payable - related parties (Note 4)                                                              590,188
   Accrued interest                                                                                      293,181
   Accrued interest- related parties                                                                       6,585
   Wages payable (Note 6)                                                                                552,000
   Equity option and liability (Note 9)                                                                      805
                                                                                               -----------------
     Total Current Liabilities                                                                         1,571,240
                                                                                               -----------------
     Total Liabilities                                                                                 1,571,240
                                                                                               -----------------

STOCKHOLDERS' EQUITY (DEFICIT)

   Common stock; (no par value) 20,000,000 shares
    authorized; 20,000,000 shares outstanding                                                          2,654,811
   Treasury stock; 126,500 shares at cost                                                                (10,455)
   Accumulated deficit - prior to development stage                                                      (27,178)
   Accumulated deficit during the development stage                                                   (4,155,710)
                                                                                               -----------------
     Total Stockholders' Equity (Deficit)                                                             (1,538,532)
                                                                                               -----------------
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                      $          32,708
                                                                                               =================


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

                                                         F-5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                                          (A Development Stage Company)
                                      Consolidated Statements of Operations

                                                                                                     From
                                                                                                   Inception
                                                                                                    of the
                                                                                                  Development
                                                                                                    Stage on
                                                                                                   January 14,
                                                                  For the Years Ended             1981 Through
                                                                       June 30,                      June 30,
                                                                2003               2002                2003
                                                        ------------------  ------------------  ------------------
<S>                                                     <C>                 <C>                 <C>
SALES AND OTHER REVENUES

   Tire sales                                           $          155,400  $                -  $          273,332
   Equipment sales                                                       -                   -             595,723
   Other revenues                                                        -                   -             402,333
                                                        ------------------  ------------------  ------------------
     Total Revenues                                                155,400                   -           1,271,388
                                                        ------------------  ------------------  ------------------
COST OF SALES                                                      122,145                   -             182,165
                                                        ------------------  ------------------  ------------------
GROSS MARGIN                                                        33,255                   -           1,089,223
                                                        ------------------  ------------------  ------------------
EXPENSE

   Cost of equipment                                                     -                  -              473,837
   Bad debt                                                              -                  -              266,750
   Salary and wages                                                 80,693              83,308           1,758,704
   Sales commissions                                                 5,717                  -               33,502
   Office                                                            5,582               4,146             174,148
   Rent                                                             11,400              17,065             282,756
   Telephone                                                         3,156               3,854             118,326
   Professional fees                                                15,188              18,758             531,058
   Finders' fee                                                          -                  -              145,000
   Insurance                                                         6,382               6,948             107,829
   Taxes and licenses                                                3,224               4,118             121,723
   Travel                                                              860               9,794             234,924
   Promotion and entertainment                                           -                  -               14,053
   Testing                                                               -                  -               27,073
   Advertising                                                       1,471              12,945             166,358
   Amortization                                                          -                 294              54,260
   Depreciation                                                      2,047               1,271              74,068
   Consulting fee                                                        -                   -              19,737
   Stockholders' meetings                                                -                   -                 670
   Parking                                                               -                   -              11,544
   Subcontractors                                                        -                   -              40,138
   Auto expense                                                        356                 592               5,365
   Repairs and maintenance                                             139                 554               4,675
   Other                                                            14,282              14,349             110,954
                                                        ------------------  ------------------  ------------------
     Total Expenses                                     $          150,497  $          177,996  $        4,777,452
                                                        ------------------  ------------------  ------------------



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

                                                         F-6
<PAGE>
<CAPTION>
                                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                                          (A Development Stage Company)
                                Consolidated Statements of Operations (Continued)

                                                                                                     From
                                                                                                   Inception
                                                                                                    of the
                                                                                                  Development
                                                                                                    Stage on
                                                                                                   January 14,
                                                                  For the Years Ended             1981 Through
                                                                       June 30,                      June 30,
                                                                2003               2002                2003
                                                        ------------------  ------------------  ------------------
<S>                                                     <C>                 <C>                 <C>
OPERATING LOSS                                          $         (117,242) $         (177,996) $       (3,688,229)

OTHER INCOME (EXPENSES)

   Write-off and abandonment of assets                                   -                   -            (431,690)
   Gain (loss) on sale of assets                                         -            (147,934)            192,031
   Interest income                                                     163                   -             147,973
   Interest expense                                                (56,669)            (44,488)           (426,415)
   Minority interest in losses of subsidiary                             -                   -               5,383
   Income from expired option                                            -                   -             150,000
   Income on equity option liability                                 4,139                   -               4,139
                                                        ------------------  ------------------  ------------------
     Total Other Income (Expense)                                  (52,367)           (192,422)           (358,579)
                                                        ------------------  ------------------  ------------------
LOSS BEFORE EXTRAORDINARY ITEMS                                   (169,609)           (370,418)         (4,046,808)
                                                        ------------------  ------------------  ------------------
EXTRAORDINARY ITEMS

   Loss on extinguishment of debt                                        -                   -            (116,212)
   Gain on forgiveness of debt                                           -                   -               7,310
                                                        ------------------  ------------------  ------------------
     Total Extraordinary Gain (Loss)                                     -                   -            (108,902)
                                                        ------------------  ------------------  ------------------
NET LOSS                                                          (169,609)           (370,418)         (4,155,710)
                                                        ==================  ==================  ==================
BASIC (LOSS) PER SHARE                                  $            (0.01) $            (0.02)
                                                        ==================  ==================
WEIGHTED AVERAGE NUMBER
 OF SHARES OUTSTANDING                                          20,000,000          20,000,000
                                                        ==================  ==================


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

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


                                                                                               Deficit
                                                                 Unrealized                  Accumulated
                                             Common Stock          Gain on                   During the           Treasury Stock
                                       -----------------------   Investment   Accumulated    Development       --------------------
                                         Shares       Amount   in Securities    Deficit         Stage          Shares      Amount
                                       ----------  -----------  -----------  ------------   -------------     --------  -----------
<S>                                    <C>         <C>          <C>          <C>            <C>             <C>         <C>
Balance, January 14, 1981              12,833,333  $    61,894  $         -  $    (27,178)  $           -            -  $         -

Stock issued to satisfy current
 liabilities:
June 1983 - $2.94 per share                82,000      240,889            -             -               -            -            -

Stock issued to satisfy related
 party liabilities:
November 1993-$0.20 per share              64,310       12,882            -             -               -            -            -
December 1993-$0.14 per share              87,000       12,200            -             -               -            -            -
November 1994-$0.21 per share              25,000        5,342            -             -               -            -            -

Stock issued for services:
May 1981-$0.20 per share                    5,000        8,000            -             -               -            -            -
May 1983-$1.50 per share                   50,000       75,000            -             -               -            -            -
August 1992-$0.15 per share                25,000        3,750            -             -               -            -            -
December 1992-$0.15 per share               4,000          600            -             -               -            -            -
November 1994-$0.21 per share               4,000          855            -             -               -            -            -
January 1995-$0.21 per share               76,167       16,276            -             -               -            -            -
February 1995-$0.21 per share              10,000        2,137            -             -               -            -            -

Stock issued for cash:
March 1981-$0.70 per share                 10,000        7,000            -             -               -            -            -
April 1981-$0.42 per share                192,834       80,000            -             -               -            -            -
June 1981-$1.31 per share                  27,518       35,945            -             -               -            -            -
March 1983-$0.75 per share                 14,000       10,500            -             -               -            -            -
April 1983-$1.00 per share                 50,000       50,000            -             -               -            -            -
June 1983-$3.04 per share                  30,000       91,272            -             -               -            -            -
September 1984-$1.00 per share            200,000      200,000            -             -               -            -            -
November 1984-$0.95 per share             105,470      100,000            -             -               -            -            -
April 1986-$1.27 per share                770,000      980,000            -             -               -            -            -
May 1992-$0.234 per share                 208,334       50,000            -             -               -            -            -
December 1992-$0.15 per share              50,000        7,500            -             -               -            -            -
February 1993-$0.15 per share             100,000       15,000            -             -               -            -            -
March 1993-$0.15 per share                100,000       15,000            -             -               -            -            -
May 1993-$0.15 per share                  100,000       15,000            -             -               -            -            -
June 1993-$0.25 per share                 100,000       25,000            -             -               -            -            -
August 1993-$0.20 per share               100,000       20,000            -             -               -            -            -
October 1993-$0.07 to $0.15
 per share                                250,000       25,000            -             -               -            -            -
November 1993-$0.25 per share              20,000        5,000            -             -               -            -            -
December 1993-$0.15 to $0.20
 per share                                180,000       32,500            -             -               -            -            -
January 1994-$0.25 per share               20,000        5,000            -             -               -            -            -
February 1995-$0.20 per share              50,000       10,000            -             -               -            -            -
March 1995-$0.20 to $0.22
 per share                                263,000       56,500            -             -               -            -            -
May 1995-$0.25 per share                   20,000        5,000            -             -               -            -            -
June 1995-$0.20 per share                  25,000        5,000            -             -               -            -            -

Contributed capital                             -       356,402           -             -               -            -            -

Purchase of treasury stock                      -            -            -             -               -       10,000      (10,009)
Retirement of treasury stock              (10,000)     (10,009)           -             -               -      (10,000)      10,009

   Net loss from January 14, 1981
    through June 30, 1995                       -            -            -             -      (2,829,005)           -            -
                                       ----------  -----------  -----------  ------------   -------------     --------  -----------
Balance, June 30, 1995                 16,241,966  $ 2,632,435  $         -   $   (27,178) $   (2,829,005)           -  $         -
                                       ----------  -----------  -----------  ------------   -------------     --------  -----------


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

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


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

Stock issued for services:
September 1995-$0.13 per share             20,000        2,684            -             -               -            -            -

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

Net loss for the period ended
 June 30, 1996                                  -            -            -             -        (124,871)           -            -
                                       ----------  -----------  -----------  ------------   -------------     --------  -----------
Balance, June 30, 1996                 16,641,966    2,686,119            -       (27,178)     (2,953,876)           -            -

Stock issued for services:
May 1997-$0.15 per share                   86,333       12,949            -             -               -            -            -

Stock issued for cash:
January 1997-$0.15 per share              300,000       45,000            -             -               -            -            -

Net loss for the period ended
 June 30, 1997                                  -            -            -             -        (177,298)           -            -
                                       ----------  -----------  -----------  ------------   -------------     --------  -----------
Balance June 30, 1997                  17,028,299    2,744,068            -       (27,178)     (3,131,174)           -            -

Net loss for the period ended
 June 30, 1998                                  -            -            -             -        (217,439)           -            -
                                       ----------  -----------  -----------  ------------   -------------     --------  -----------
Balance June 30, 1998                  17,028,299    2,744,068            -       (27,178)     (3,348,613)           -            -

Stock issued for services:
October 1998-$0.09 per share                5,000          450            -             -               -            -            -

Stock issued for cash
January 1999-$0.05 to $0.10
 per share                                770,000       47,000            -             -               -            -            -

February 1999-$0.10 per share             130,000       13,000            -             -               -            -            -

Distribution from majority
 shareholder                                    -     (473,060)           -             -               -            -            -

Change in unrealized gain on
 investment in securities, net of tax           -            -      290,625             -               -            -            -

Net loss for the period ended
 June 30, 1999                                  -            -            -             -        (123,519)           -            -
                                       ----------  -----------  -----------  ------------   -------------     --------  -----------
Balance June 30, 1999                  17,933,299  $ 2,331,458  $   290,625  $    (27,178)  $  (3,472,132)           -            -
                                       ----------  -----------  -----------  ------------   -------------     --------  -----------


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

                                                              F-9
<PAGE>
<CAPTION>
                                          GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                                                  (A Development Stage Company)
                              Consolidated Statements of Stockholders' Equity (Deficit) (Continued)


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

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

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

Net income for the period ended
 June 30, 2000                                  -            -            -             -         177,022            -            -
                                       ----------  -----------  -----------  ------------   -------------     --------  -----------
Balance, June 30, 2000                 17,943,299    2,332,458      82,944        (27,178)     (3,295,110)           -            -

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

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

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

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

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

Net loss for the period
 ended June 30, 2001                            -            -            -             -        (320,573)           -            -
                                       ----------  -----------  -----------  ------------   -------------     --------  -----------
Balance, June 30, 2001                 20,000,000    2,654,811      (40,525)      (27,178)     (3,615,683)     185,000      (16,584)

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

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

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

Net loss for the period ended
 June 30, 2003                                  -            -            -             -        (169,609)           -            -
                                       ----------  -----------  -----------  ------------   -------------     --------  -----------
Balance, June 30, 2003                 20,000,000  $ 2,654,811  $         -  $    (27,178)  $  (4,155,710)     126,500  $   (10,455)
                                       ==========  ===========  ===========  ============   =============     ========  ===========

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

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

                                                                                                             From
                                                                                                       Inception of the
                                                                                                          Development
                                                                                                            Stage on
                                                                                                          January 14,
                                                                        For the Years Ended               1981 Through
                                                                               June 30,                     June 30,
                                                                       2003                2002               2003
                                                               ------------------  -----------------   -----------------
<S>                                                            <C>                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES

   Net (loss)                                                  $         (169,609) $        (370,418)  $      (4,155,710)
   Adjustments to reconcile net loss to net cash
    used in operating activities:
     Depreciation and amortization                                          2,047              1,315             128,328
     Bad debt expense                                                           -                  -             266,500
     Gain on sale of asset                                                      -                  -              (5,364)
     Loss on sale of available-for-sale securities                              -            147,934             101,574
     Write-off and abandonment of assets                                        -                  -             431,690
     Loss on extinguishment of debt                                             -                  -             116,212
     Stock issued for services and interest                                     -                  -             122,701
     Treasury stock issued for services                                         -              9,405              19,163
     Available for sale securities issued for services                          -                  -              52,560
     Treasury stock expensed                                                    -                  -               1,000
   Changes in current assets and liabilities:
     Accrued interest receivable                                                -                  -             (24,250)
     Accounts receivable                                                        -                  -               11,645
     Accounts receivable - related party                                        -                  -            (150,344)
     Contract receivable                                                        -                  -            (242,500)
     Restricted cash                                                      103,338           (103,338)                  -
     Income tax refund receivable                                               -                  -                 537
     Inventory                                                                  -                  -              62,494
     Prepaid expenses                                                         950               (950)               (300)
     Accounts payable and accrued expenses                                  6,829             (1,506)             45,214
     Deferred income                                                     (157,785)           157,785             (22,000)
     Advances payable - related party                                           -                  -            (120,106)
     Accrued payroll                                                       48,000             48,000             552,000
     Accrued interest payable and accrued interest payable
       - related party                                                     45,193             36,540             490,429
     Equity option liability                                               (4,139)             4,944                 805
     Other current liabilities                                             10,000                  -             250,954
                                                               ------------------  -----------------   -----------------
       Net Cash Used by Operating Activities                             (115,176)           (70,289)         (2,066,768)
                                                               ------------------  -----------------   -----------------
CASH FLOWS FROM INVESTING ACTIVITIES

   Construction in progress                                                     -                  -          (2,937,790)
   Cash acquired from Garbalizer Machinery                                      -                  -                 899
   Net (advances) payments (to)/from related party                              -                  -            (148,526)
   Increase (decrease) of other assets                                          -                  -          (1,956,733)
   Purchase of property and equipment                                           -                  -             (69,730)
   Purchase of treasury stock                                                   -             (3,276)            (59,143)
   Proceeds from sale of available for sale securities                          -             45,191             367,734
   Proceeds from sales of assets                                                -                  -               9,500
                                                               ------------------  -----------------   -----------------
       Net Cash Provided (Used) by Investing Activities        $                -  $          41,915   $      (4,793,789)
                                                               ------------------  -----------------   -----------------

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

                                                           F-11
<PAGE>
<CAPTION>
                                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                                          (A Development Stage Company)
                                Consolidated Statements of Cash Flows (Continued)

                                                                                                             From
                                                                                                       Inception of the
                                                                                                          Development
                                                                                                            Stage on
                                                                                                          January 14,
                                                                        For the Years Ended               1981 Through
                                                                               June 30,                     June 30,
                                                                       2003                2002               2003
                                                               ------------------  -----------------   -----------------
<S>                                                            <C>                 <C>                 <C>
CASH FLOWS FROM FINANCING ACTIVITIES

   Bank overdraft                                              $              134  $               -   $             134
   Proceeds from notes payable - related party                             54,242             16,000             300,083
   Proceeds from notes payable                                              5,000             55,000              60,000
   Proceeds from bank loans                                                     -                  -           4,636,647
   Sale of common stock                                                         -                  -           2,007,217
   Contribution to capital by parent company                                    -                  -             356,402
   Principal payments on bank loans                                             -                  -            (500,000)
                                                               ------------------  -----------------   -----------------
     Net Cash Provided by Financing Activities                             59,376             71,000           6,860,483
                                                               ------------------  -----------------   -----------------
NET INCREASE (DECREASE) IN CASH                                           (55,800)            42,626                 (74)

NET CASH AT BEGINNING OF PERIOD                                            55,800             13,174                  74
                                                               ------------------  -----------------   -----------------
NET CASH AT END OF PERIOD                                      $                -  $          55,800   $               -
                                                               ==================  =================   =================

SUPPLEMENTAL DISCLOSURE OF CASH
 FLOW INFORMATION:

   Treasury stock issued for available for
    sale securities                                            $                -  $              -    $          41,869
   Common stock issued for available
    for sale securities                                        $                -  $              -    $         300,000
   Related party payable issued for available
    for sale securities                                        $                -  $               -   $         180,000
   Securities issued for debt                                  $                -  $               -   $          70,000
   Treasury stock issued for services                          $                -  $           9,405   $          19,163
   Cash paid for interest                                      $            2,782  $               -   $         156,745
   Cash paid for income taxes                                  $                -  $               -   $               -



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

                                                              F-12
</TABLE>
<PAGE>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                             June 30, 2003 and 2002


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

         a. Organization

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

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

         b. Use of Estimates

         The preparation of 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 June 30, 2003 and 2002, the Company has incurred a net loss of
         $169,609 and $370,418, respectively, and as of June 30, 2003, the
         Company's deficit accumulated during the development stage was
         $4,155,710. These factors, among others, indicate that the Company may
         be unable to continue as a going concern for a reasonable period of
         time. The consolidated financial statements do not include any
         adjustments relating to the recoverability and classification of
         recorded asset amounts or the amount and classification of liabilities
         that might be necessary should the Company be unable to continue as a
         going concern. The Company's ability to continue as a going concern is
         dependent upon its ability to generate sufficient cash flows to meet
         its obligations on a timely basis, to obtain additional financing as
         may be required, and ultimately to attain successful operations.
         Management is continuing its efforts to obtain the necessary financing
         as may be required to generate sufficient cash flows for future
         operations.

                                      F-13
<PAGE>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                              June 30, 2003 an 2002


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

         d. Principles of Consolidation

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

         e. Patents

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

         f. Property and Equipment

         Property and equipment is recorded at cost and is depreciated using the
         straight-line method based on the expected lives of the assets which
         range from five to ten years. Depreciation expense for the years ended
         June 30, 2003 and 2002, was $2,047 and $1,271, respectively.

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

         g. Revenue Recognition

         Revenue is recognized when the sales amount is determined, shipment of
         goods to the customer has occurred, and collection is reasonably
         assured

         h. Advertising Costs

         The Company expenses all advertising costs as incurred. Advertising
         expense was $1,471 and $12,945 for the years ending June 30, 2003 and
         2002, respectively.

         i. 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-14
<PAGE>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                             June 30, 2003 and 2002


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

         j. Basic Income (Loss) Per Share

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

                                                    For the Years Ended June 30,
                                                         2003         2002
                                                    ------------  ------------
              Net income (loss) (numerator)         $   (169,609) $   (370,418)

              Weighted average shares outstanding
                (denominator)                         20,000,000    20,000,000
                                                    ------------  ------------
              Basic income (loss) per share         $      (0.01) $      (0.02)
                                                    ============  ============

         k. 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 June 30, 2003. 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.

         l. Concentration of Credit Risk

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

         m. Newly Issued Accounting Pronouncements

         New accounting pronouncements that have a current or future potential
         impact on our financial statements are as follows:

                                      F-15
<PAGE>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                             June 30, 2003 and 2002


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

         m. Newly Issued Accounting Pronouncements (Continued) SFAS No. 145 --
         On April 30, 2002, the FASB issued FASB Statement No. 145 (SFAS 145),
         "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
         Statement No. 13, and Technical Corrections." SFAS 145 rescinds both
         FASB Statement No. 4 (SFAS 4), "Reporting Gains and Losses from
         Extinguishment of Debt," and the amendment to SFAS 4, FASB Statement
         No. 64 (SFAS 64), "Extinguishments of Debt Made to Satisfy Sinking-Fund
         Requirements." Through this rescission, SFAS 145 eliminates the
         requirement (in both SFAS 4 and SFAS 64) that gains and losses from the
         extinguishment of debt be aggregated and, if material, classified as an
         extraordinary item, net of the related income tax effect. However, an
         entity is not prohibited from classifying such gains and losses as
         extraordinary items, so long as it meets the criteria in paragraph 20
         of Accounting Principles Board Opinion No. 30, Reporting the Results of
         Operations Reporting the Effects of Disposal of a Segment of a
         Business, and Extraordinary, Unusual and Infrequently Occurring Events
         and Transactions. Further, SFAS 145 amends paragraph 14(a) of FASB
         Statement No. 13, "Accounting for Leases", to eliminate an
         inconsistency between the accounting for sale-leaseback transactions
         and certain lease modifications that have economic effects that are
         similar to sale-leaseback transactions. The amendment requires that a
         lease modification (1) results in recognition of the gain or loss in
         the 9 financial statements, (2) is subject to FASB Statement No. 66,
         "Accounting for Sales of Real Estate," if the leased asset is real
         estate (including integral equipment), and (3) is subject (in its
         entirety) to the sale-leaseback rules of FASB Statement No. 98,
         "Accounting for Leases: Sale-Leaseback Transactions Involving Real
         Estate, Sales-Type Leases of Real Estate, Definition of the Lease Term,
         and Initial Direct Costs of Direct Financing Leases." Generally, FAS
         145 is effective for transactions occurring after May 15, 2002. The
         Company does not expect that the adoption of SFAS 145 will have a
         material effect on its financial performance or results of operations.

         SFAS No. 146 -- In June 2002, the FASB issued SFAS No. 146, "Accounting
         for Exit or Disposal Activities" (SFAS 146). SFAS 146 addresses
         significant issues regarding the recognition, measurement, and
         reporting of costs that are associated with exit and disposal
         activities, including restructuring activities that are currently
         accounted for under EITF No. 94-3, "Liability Recognition for Certain
         Employee Termination Benefits and Other Costs to Exit an Activity
         (including Certain Costs Incurred in a Restructuring)." The scope of
         SFAS 146 also includes costs related to terminating a contract that is
         not a capital lease and termination benefits that employees who are
         involuntarily terminated receive under the terms of a one-time benefit
         arrangement that is not an ongoing benefit arrangement or an individual
         deferred-compensation contract. SFAS 146 will be effective for exit or
         disposal activities that are initiated after December 31, 2002 and
         early application is encouraged. The provisions of EITF No. 94-3 shall
         continue to apply for an exit activity initiated under an exit plan
         that met the criteria of EITF No. 94-3 prior to the adoption of SFAS
         146. The effect on adoption of SFAS 146 will change on a prospective
         basis the timing of when the restructuring charges are recorded from a
         commitment date approach to when the liability is incurred. The Company
         does not expect that the adoption of SFAS 146 will have a material
         effect on its financial performance or results of operations.

                                      F-16
<PAGE>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                             June 30, 2003 and 2002


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

         m. Newly Issued Accounting Pronouncements (Continued)

         SFAS No. 148 -- In December 2002, the FASB issued SFAS No. 148,
         "Accounting for Stock-Based Compensation -- Transition and
         Disclosure"(SFAS 148"). SFAS 148 amends SFAS No. 123 "Accounting for
         Stock-Based Compensation" ("SFAS 123"), to provide alternative methods
         of transition for a voluntary change to the fair value based method of
         accounting for stock-based employee compensation. In addition, SFAS 148
         amends the disclosure requirements of SFAS 123 to require prominent
         disclosures in both annual and interim financial statements about the
         method of accounting for stock-based employee compensation and the
         effect of the method used on reported results. SFAS 148 is effective
         for fiscal years beginning after December 15, 2002. The interim
         disclosure provisions are effective for financial reports containing
         financial statements for interim periods beginning after December 15,
         2002. The Company is currently evaluating the effect that the adoption
         of SFAS 148 will have on its results of operations and financial
         condition. The Company does not expect that the adoption of SFAS 148
         will have a material effect on their financial statements.

         SFAS No. 149 - In April 2003, the FASB issued Statement of Financial
         Accounting Standards No. 149 ("SFAS 149"), "Amendment of Statement 133
         on Derivative Instruments and Hedging Activities", to provide
         clarification on the meaning of an underlying, the characteristics of a
         derivative that contains financing components and the meaning of an
         initial net investment that is smaller than would be required for other
         types of contracts that would be expected to have a similar response to
         changes in market factors. This statement will be applied prospectively
         and is effective for contracts entered into or modified after June 30,
         2003. The statement will be applicable to existing contracts and new
         contracts relate to forward purchases or sales of when-issued
         securities or other securities that do not yet exist. The Company does
         not expect that the adoption of SFAS 149 will have a material effect on
         the Company's financial statements.

         SFAS No. 150 - In May 2003, the FASB issued Statement of Financial
         Accounting Standards No. 150 ("SFAS 150), "Accounting for Certain
         Financial Instruments with Characteristics of Both Liabilities and
         Equity." This statement establishes standards for how a company
         classifies and measures certain financial instruments with
         characteristics of both liabilities and equity. This statement is
         effective for financial instruments entered into or modified after May
         31, 2003 and otherwise is effective at the beginning of the first
         interim period beginning after June 15, 2003. The statement will be
         implemented by reporting the cumulative effect of a change in
         accounting principle for financial instruments created before the
         issuance date of the statement and still existing at the beginning of
         the period of adoption. The Company does not expect that the adoption
         of SFAS 150 will have a material effect on the Company's financial
         statements.

                                      F-17
<PAGE>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                             June 30, 2003 and 2002


NOTE 2 - INVESTMENT IN SECURITIES

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

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

                                                    For the Years Ending
                                                          June 30,
                                                 ---------------------------
                                                     2003           2002
                                                 ----------     ------------
         Proceeds from sales of securities       $        -     $     45,191
                                                 ==========     ============

         Gross realized gains                    $        -     $          -
         Gross realized (losses)                          -         (147,934)
                                                 ----------     ------------
         Net (Loss) from Sale of Investments     $        -     $   (147,934)
                                                 ==========     ============

NOTE 3 - UTAH TRUCK TIRE, INC.

         Utah Truck Tire, Inc. was formed May 20, 1994, and on May 24, 1994, the
         Company was issued 55% (55 shares) of the outstanding shares of Utah
         Truck Tire, Inc. in exchange for the Company's experience, expertise
         and reputation in dealing with tire and rubber products. The remaining
         45% (45 shares) was issued to a director of Utah Truck Tire, Inc. for a
         commitment to loan Utah Truck Tire, Inc. $150,000. Utah Truck Tire,
         Inc. is currently dormant, having no revenues and incurring minimal
         expenses during the years ended June 30, 2003 and 2002. Utah Truck
         Tire, Inc. was primarily in the business of selling retread diesel
         truck tires.

                                      F-18
<PAGE>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                             June 30, 2003 and 2002


NOTE 4 - RELATED PARTY TRANSACTIONS

         The Company executed an employment agreement with its President on May
         1, 1986. The agreement is of a continuing nature and specifies no date
         of termination. Under the terms of the agreement, the President's
         salary is $48,000 per year and is reviewed by the Board of Directors
         annually. As of June 30, 2003 and 2002, the president was owed accrued
         salary of $552,000 and $504,000, respectively.

         During the years ended June 30, 2003 and 2002, notes payable - related
         parties increased $54,242 and $71,000. The changes are due to proceeds
         from additional notes payable. No payments were made on notes payable
         during the years ended June 30, 2003 and 2002.

         Accounts payable and notes payable to related parties consisted of the
         following at June 30, 2003:

         Accounts payable to a related party, due on
           demand, no interest                                     $   180,000

         Note payable to a related party, due on demand,
           plus interest at 12% per annum, unsecured.                  176,695

         Note payable to a related party, due on demand,
           plus interest at 12% per annum, unsecured.                   68,493

         Note payable to a related party, due on demand,
           plus interest at 12% per annum, unsecured.                  165,000

         Less: Current Portion                                        (590,188)
                                                                   -----------
         Long-Term Notes Payable to Related Parties                $         -
                                                                   ===========

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

                     Year Ended
                       June 30,                               Amount
                       --------                               ------
                         2004                             $     590,188
                         2005                                         -
                         2006                                         -
                         2007                                         -
                  2008 and thereafter                                 -
                                                          -------------
                        Total                             $     590,188
                                                          =============

         As of June 30, 2003 and 2002, accrued interest related to the related
         party note payable was $11,008 and $3,435, respectively. Interest
         expense related to the related party note payable for the years ended
         June 30, 2003 and 2002 was $19,019 and $11,496, respectively.

                                      F-19
<PAGE>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                             June 30, 2003 and 2002


NOTE 5 - INCOME TAXES

         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
         June 30, 2003 and 2002.

                                                     2003          2002
                                                ------------  ------------
         Deferred tax liabilities:
           NOL Carryover                        $    829,600  $    842,699

         Deferred tax liabilities:                         -             -

         Valuation allowance                        (829,600)     (842,699)
                                                ------------  ------------
         Net deferred asset                     $          -  $          -
                                                ============  ============

         The income tax provision differs from the amount of income tax
         determined by applying the U.S. federal and state income tax rates of
         39% to pretax income from continuing operations for the years ended
         June 31, 2003 and 2002 due to the following:

                                                     2003          2002
                                                ------------  ------------
         Book income                            $    (66,150) $     (5,123)
         Related accruals                             61,111             -
         Accrued wages                                18,720             -
         Other                                          (611)            -
         NOL allowance                               (13,070)            -
         Valuation allowance                               -         5,123
                                                ------------  ------------
                                                $          -  $          -
                                                ============  ============

         At June 30, 2003, the Company had net operating loss carryforwards of
         approximately $2,131,191 that may be offset against future taxable
         income from the year 2003 through 2023. No tax benefit has been
         reported in the June 30, 2003 financial statements since the potential
         tax benefit is offset by a valuation allowance of the same amount.

                                      F-20
<PAGE>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                             June 30, 2003 and 2002


NOTE 5 - INCOME TAXES (Continued)

         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

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

         The Company executed an employment agreement with its President on May
         1, 1986. The agreement is of a continuing nature and specifies no date
         of termination. Under the terms of the agreement, the President's
         salary is $48,000 per year and is reviewed by the Board of Directors
         annually. As of June 30, 2003, the president is owed $552,000 of
         accrued salary.

NOTE 7 - OPERATING LEASES

         The Company shares office space with Garbalizer Corporation of America
         under a lease agreement on a month-to-month basis. The Company also
         leases facilities on a month-to-month basis. Rental expense relating to
         these operating leases was $11,400 and $17,065 for the years ended June
         30, 2003 and 2002, respectively.

                                      F-21
<PAGE>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                             June 30, 2003 and 2002

NOTE 8 - NOTES PAYABLE

         During the years ended June 30, 2003 and 2002, notes payable increased
         $5,000 and $55,000. The changes are due to proceeds from additional
         notes payable. No payments were made on notes payable during the years
         ended June 30, 2003 and 2002.

         Notes payable consisted of the following at June 30, 2003:

         Note payable, due on demand, plus interest
          at 8% per annum, unsecured.                             $      30,000

         Note payable, due on demand, plus interest
          at 12% per annum, unsecured.                            $      30,000

         Less: Current Portion                                          (60,000)
                                                                  -------------
         Long-Term Notes Payable                                  $           -
                                                                  =============

         The aggregate principal maturities of notes payable are as follows:

                     Year Ended
                      June 30,                                         Amount
                      --------                                         ------
                        2004                                      $      60,000
                        2005                                                  -
                        2006                                                  -
                        2007                                                  -
                 2008 and thereafter                                          -
                                                                  -------------
                       Total                                      $      60,000
                                                                  =============

         As of June 30, 2003 and 2002, accrued interest related to notes payable
         was $6,585 and $950, respectively. Interest expense related to notes
         payable for the years ended June 30, 2003 and 2002 was $5,635 and $950,
         respectively.

                                      F-22
<PAGE>

                  GARB OIL & POWER CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                             June 30, 2003 and 2002

NOTE 9 - EQUITY OPTION LIABILITY

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

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

         Concurrent with the issuance of a $25,000 related party note payable,
         the Company granted 100,000 options with an exercise price of $0.10 as
         an inducement to loan the money. The options were valued at $4,944
         pursuant to the Black Scholes calculation at June 30, 2002. Pursuant to
         EITF 00-19, the Company revalued the options at June 30, 2003 at $805.
         The reduction in the equity option liability of $4,139 was recorded as
         income on equity option liability. This amount is presented as a
         liability because the Company has no authorized shares available should
         the options be exercised.

         A summary of the status of the Company's outstanding stock options as
         of June 30, 2003 and 2002 and changes during the years ended June 30,
         2003 and 2002 is presented below:
<TABLE>
<CAPTION>
                                                           2003                     2002
                                                    -------------------      -------------------
                                                               Weighted                 Weighted
                                                               Average                  Average
                                                               Exercise                 Exercise
                                                    Shares      Price         Shares     Price
                                                    -------  ----------      -------  ----------
         <S>                                        <C>      <C>             <C>      <C>
         Outstanding, beginning of year             100,000  $     0.10            -  $        -
         Granted                                          -           -      100,000        0.10
         Expired/Cancelled                                -           -            -           -
         Exercised                                        -           -            -           -
                                                    -------  ----------      -------  ----------
         Outstanding end of year                    100,000  $     0.10      100,000  $     0.10
                                                    =======  ==========      =======  ==========
         Exercisable                                100,000  $     0.10      100,000  $     0.10
                                                    =======  ==========      =======  ==========
<CAPTION>
                                          Outstanding                         Exercisable
                           ----------------------------------------  --------------------------
                                           Weighted
                             Number         Average      Weighted        Number      Weighted
                           Outstanding     Remaining      Average     Exercisable     Average
             Range of      at June 30,    Contractual    Exercise     at June 30,    Exercise
          Exercise Prices     2003            Life         Price          2003         Price
            <S>             <C>               <C>         <C>           <C>           <C>
            $   0.10        100,000           0.75        $  0.10       100,000       $ 0.10
            --------        -------           ----        -------       -------       ------
            $   0.10        100,000           0.75        $  0.10       100,000       $ 0.10
            ========        =======           ====        =======       =======       ======
</TABLE>
                                      F-23
<PAGE>

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

         Not applicable except as previously reported.



8A. CONTROLS AND PROCEDURES

         The registrant maintains disclosure controls and procedures that are
         designed to ensure that information required to be disclosed in the
         registrant's Exchange Act reports is recorded, processed, summarized
         and reported within the time periods specified in the SEC's rules and
         forms, and that such information is accumulated and communicated to the
         registrant's management, including its Chief Executive Officer, as
         appropriate, to allow timely decisions regarding required disclosure
         based closely on the definition of "disclosure controls and procedures"
         in Rule 13a-14(c). In designing and evaluating the disclosure controls
         and procedures, management recognized that any controls and procedures,
         no matter how well designed and operated, can provide only reasonable
         assurance of achieving the desired control objectives, and management
         necessarily was required to apply its judgment in evaluating the
         cost-benefit relationship of possible controls and procedures.

         Within 90 days prior to the date of this report, the registrant carried
         out an evaluation, under the supervision and with the participation of
         the Company's management, including the registrant's Chief Executive
         Officer, of the effectiveness of the design and operation of the
         registrant's disclosure controls and procedures. Based on the
         foregoing, the company's Chief Executive Officer concluded that the
         registrant's disclosure controls and procedures were effective.

         There have been no significant changes in the registrant's internal
         controls or in other factors that could significantly affect the
         internal controls subsequent to the date the registrant completed its
         evaluation.


                                       12
<PAGE>

                                    PART III


9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT; COMPLIANCE WITH SECTION
16(A) OF THE EXCHANGE ACT.

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

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

              Name                 Age               Position
            ---------             -----            ------------

         John C. Brewer            80        President, Chairman of the Board of
                                             Directors and Director

         Bill Vee Anderson         51        Vice-President and Director

         Charles Laver             79        Secretary and Director


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

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

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

                                       13
<PAGE>

         Compliance With Section 16(a)

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

         To the Company's knowledge, based solely on review of the copies of
         such reports furnished to the Company and written representations that
         no other reports were required, during the fiscal year ended June 30,
         2003 all Section 16(a) filing requirements applicable to its officers,
         directors and greater than ten-percent beneficial owners were complied
         with.


ITEM 10. EXECUTIVE COMPENSATION

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

                        SUMMARY COMPENSATION TABLE

                                                       Annual Compensation
Name and Principal Position          Fiscal Year           Salary ($)
---------------------------          -----------       -------------------

John C. Brewer                            2003              $48,000
President and CEO                         2002               48,000


No person received any form of non-cash compensation from the Company in the
fiscal year ended June 30, 2003 or currently receives any such compensation. The
Company does provide medical insurance to Mr. Brewer.

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

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

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


11. 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 June 30, 2002 (i) each
person known by the Company to own more than five percent (5%) of the Company's
outstanding stock, (ii) each director of the Company and (iii) all officers and
directors as a group.

                                       14
<PAGE>

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

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

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

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

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

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

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

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

* less than 1%


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

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

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

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

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

                                       15
<PAGE>

12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The Company executed an employment agreement with its President on May 1, 1986.
The agreement is of a continuing nature and specifies no date of termination.
Under the terms of the agreement, the President's salary is $48,000 per year and
is reviewed by the Board of Directors annually. As of June 30, 2003 and 2002,
the president was owed accrued salary of $552,000 and $504,000, respectively.

During the years ended June 30, 2003 and 2002, notes payable - related parties
increased $54,242 and $71,000. The changes are due to proceeds from additional
notes payable. No payments were made on notes payable during the years ended
June 30, 2003 and 2002.

Accounts payable and notes payable to related parties consisted of the following
at June 30, 2003:

         Accounts payable to a related party, due on demand,
           no interest                                             $   180,000

         Notes payable to related parties, due on demand,
           plus interest at 12% per annum, unsecured.                  410,188

As of June 30, 2003 and 2002, accrued interest related to the related party
notes payable was $11,008 and $3,435, respectively. Interest expense related to
the related party notes payable for the years ended June 30, 2003 and 2002 was
$19,019 and $11,496, respectively.


13. EXHIBITS AND REPORTS ON FORM 8-K

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

                  Garb Oil & Power Corporation

                  Consolidated Balance Sheet - June 30, 2003.

                  Consolidated Statements of Operations - For the Years Ended
                  June 30, 2002 and 2003 and for the Period from January 14,
                  1981 (Date of Inception of the Development Stage) to June 30,
                  2003.

                  Consolidated Statements of Stockholders' Equity (Deficit) -
                  For the Period from Inception of the Development Stage
                  (January 14, 1981) through June 30, 2003.

                  Consolidated Statements of Cash Flows For the Years Ended June
                  30, 2003 and 2002 and for the Period from January 14, 1981
                  (Date of Inception of the Development Stage) to June 30, 2003.

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

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

                                       16
<PAGE>

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

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

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

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

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

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

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

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

 31       31.1    Certification of Chief      Filed herewith
                  Executive Officer of
                  Periodic Report pursuant
                  to Rule 13a-14a and
                  Rule 15d-14(a)

 31       31.2    Certification of Chief      Filed herewith
                  Financial Officer of
                  Periodic Report
                  pursuant to Rule
                  13a-14a and Rule
                  15d-14(a)

 32       32.1    Certification of Chief      Filed herewith
                  Executive Officer
                  pursuant to 18 U.S.C.
                  - Section 1350

 32       32.2    Certification of Chief      Filed herewith
                  Financial Officer
                  pursuant to 18 U.S.C.
                  - Section 1350

                                       17
<PAGE>

14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Aggregate professional fees billed by principal accountant:

                                         June 30, 2003        June 30, 2002
                                         -------------        -------------
Audit Fees                                     $5,500                $5,627

Audit-Related Fees                              1,800                 2,714

Tax Fees                                            -                     -

All Other Fees                                      -                     -

                                       18
<PAGE>

                                   SIGNATURES

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

                                     GARB OIL & POWER CORPORATION


                                     By: /s/ John C. Brewer
                                         ---------------------------
                                         John C. Brewer, Chief Executive Officer

         DATED this 22nd. Day of September, 2003

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

         1. By its principal executive officer.


                  Date: September 22nd, 2003       /s/ John C. Brewer
                                                 ----------------------------
                                                 John C. Brewer, President

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


                  Date:  September 22nd, 2003       /s/ Charles Laver
                                                 ----------------------------
                                                 Charles Laver, Treasurer

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


                  Date:    September 22nd, 2003      /s/ John C. Brewer
                                                   ----------------------------
                                                   John C. Brewer, Director


                  Date:    September 22nd, 2003        /s/ Charles Laver
                                                   ----------------------------
                                                   Charles Laver, Director


                  Date:    September 22nd, 2003        /s/ Bill Vee Anderson
                                                   ----------------------------
                                                   Bill Vee Anderson, Director

                                       19