UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549


FORM
10-K








ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d)OF


THE
SECURITIES EXCHANGE ACT OF 1934





For the
fiscal year ended December 31, 2008








Commission
File Number 1-15497


RecycleNet
Corporation


(Exact
name of small business issuer in its charter)


Utah
                  87-0301924(State
      or other jurisdiction of
                  (IRS
      Employerincorporation
      or organization)
                  Identification
      No.)








175 East 400 South, Suite 900
      Salt Lake City, Utah 84111
                801-531-0404(Address
      of principal executive offices, including Zip Code)
                (Registrant's
      telephone number,)








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


Common
Stock, $.01 par value




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




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




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




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  Yes  ( x
)        No( )




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.




Large Accelerated
      Filer (  )
            Accelerated
      Filer  (  )Non-Acclerated
      Filer  
        (  )
            Smaller Reporting
      Company   ( x )




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


As of
June 30, 2008, the aggregate market value of the voting stock held by
non-affiliates of the registrant, based on the average bid and ask prices of
$0.04 and $0.04 respectively, namely $0.040 x 48,082,877 common shares
outstanding was $1,923,315.




As of
March 31, 2009, there were 56,800,000 class N voting non-equity shares
outstanding.




As ofMarch 31, 2009,there were 79,091,412 of the issuer's
Common Shares, $.010 par value, outstanding.









RECYCLENET
CORPORATION


INDEX





Table of
Contents





Part
      IItem
      1.
                                                    Business
                                                    3Item
      1A.
                                                    Risk
      Factors
                                                    5Item
      1B.
                                                    Unresolved
      Staff Comments
                                                    5Item
      2.
                                                    Properties
                                                    5Item
      3.
                                                    Legal
      Proceedings
                                                    6Item
      4.
                                                    Submission
      of Matters to a Vote of Security Holders
                                                    6Part
      IIItem
      5.
                                                    Market
      for Registrant’s Common Equity, Related Stockholder Matters and
      Issuer Purchases of Equity Securities
                                                    6Item
      6.
                                                    Selected
      Financial Data
                                                    7Item
      7.
                                                    Management's
      Discussion and Analysis of FinancialCondition
      and
      Results of Operations
                                                    7Item
      7A.
                                                    Quantitative
      and Qualitative Disclosures About Market Risk
                                                    12Item
      8.
                                                    Financial
      Statements and Supplemental Data
                                                    13Item
      9.
                                                    Changes
      in and Disagreements with Accountants on Accounting
      and Financial Disclosures
                                                    14Item
      9A(T).
                                                    Controls
      and Procedures
                                                    14Part
      IIIItem
      10.
                                                    Directors,
      Executive Officers, and Corporate Governance
                                                    14Item
      11.
                                                    Executive
      Compensation
                                                    16Item
      12.
                                                    Security
      Ownership of Certain Beneficial Owners and Management
      and Related Stockholders Matters
                                                    16Item
      13.
                                                    Certain
      Relationships and Related Transactions and Director Independence
                                                    17Item
      14.
                                                    Principal
      Accountant Fees and Services
                                                    19Part
      IVItem
      15.
                                                    Exhibits,
      Financial Statement Schedules
                                                    20











FORWARD
LOOKING STATEMENTS





RecycleNet
Corporation (the "Company", "we" or "us") cautions readers that certain
important factors may affect our actual results and could cause such results to
differ materially from any forward-looking statements that may have been made in
this Form 10-K or that are otherwise made by or on behalf of us. For this
purpose, any statements contained in the Form 10-K that are not statements of
historical fact may be deemed to be forward-looking statements.





Without
limiting the generality of the foregoing, words such as "may," "expect,"
"believe," "anticipate," "intend," "could," "estimate," "plan" or “continue" or
the negative other variations thereof or comparable terminology are intended to
identify forward-looking statements. Factors that may affect our results
include, but are not limited to, our limited history of non-profitability, our
dependence on a limited number of customers and key personnel, the need for
additional financing and our dependence on certain industries. We are also
subject to other risks detailed herein or detailed from time to time in our
filings with the Securities and Exchange Commission.








PART
I




ITEM
1.  BUSINESS





Introduction





RecycleNet
Corporation ("the Company") is a Utah corporation originally incorporated on
December 29, 1961 as Bern Enterprises Inc. and the name was changed to
Garbalizer Machinery Corporation in April 1977. On February 25, 1999, RecycleNet
Corporation (Ontario) entered into a reorganization agreement with Garbalizer
Machinery Corporation of Utah, a company whose shares were publicly traded on
the bulletin board securities market utilizing the symbol “GARM.” On March 19,
1999, the reorganization was consummated with Garbalizer Machinery Corporation
surviving and changing its name to RecycleNet Corporation (Utah). Prior to the
March 19, 1999 reorganization, the assets less liabilities of Garbalizer
Machinery Corporation were sold to Garb-Oil & Power Corporation
(Utah).





RecycleNet
Corporation (Utah) acquired all of the common shares of RecycleNet Corporation
(Ontario) for shares of the Utah Company. As a result of that reorganization,
shareholders of RecycleNet (Ontario) exchanged their common shares in that
company for Class N voting, non-equity shares of RecycleNet Corporation (Utah)
and Class X non-voting, equity shares of RecycleNet Corporation (Ontario). One
Class N share and one Class X share are exchangeable into one common share of
RecycleNet Corporation (Utah). The Company has retained the market symbol "GARM"
as its market symbol and as an acronym for the slogan, "Global Access to
Recycling Markets".





Company
History





In 1989,
Paul Roszel, an officer, director and principal shareholder of the Company began
publishing a newsletter entitled "The Recycler's Exchange". This newsletter was
published for a period of approximately seven years and was a regional recycling
industry newsletter that circulated to an estimated 3,200 recycling based
businesses in Ontario, Canada. Along with the newsletter, Mr. Roszel inserted
classified type advertisements for commodities that were available to buy, sell
or trade. In late 1994, Mr. Roszel began work on physically developing the
concept of an electronic format trading system to distribute the Recycler's
Exchange information world wide via the World Wide Web and e-mail. Thus, the
Recycler's Exchange evolved from a printed newsletter with limited distribution
to one available electronically with worldwide distribution.





3





The
electronic exchange was activated online on May 1, 1995. Since that time, the
Company has developed and implemented a broad range of solutions including
exchange management, sales management, customer interaction, and transaction
processing systems using a combination of proprietary custom designed
technologies and commercially available, licensed technologies.





Mission





RecycleNet
operates a Secondary Commodity Exchange making inefficient recyclable markets
more efficient.  RecycleNet’s mission is to become the leading
exchange for recyclable commodities in the world.





We have
built the world’s largest and abundant trading system for scrap in which anyone,
anywhere, can buy, sell or trade secondary commodities, recyclables, used
equipment and related services. We pioneered online trading for the recycling
industry by developing a network-based marketplace in which buyers and sellers
are brought together in an intuitive, easy-to-use environment. We continue to
evolve to be the first stop for scrap trade and scrap market
trends.





Growth
of Our Exchange





Our
success has been largely dependent upon the success of our individual traders.
This success is reflected in the growth of confirmed, registered members as well
as the participation of free, unregistered traders in the
marketplace.





The
Company has no one customer that the loss of would have a material adverse
impact to the Company, with the exception of Google.  The Google
pay-per-click advertising represents 31.4% of the revenue of the
Company.  The Company believes that the competitive design of the
Google pay-per-click advertising favors the advertisers and may result in a
diminishing percentage of return for web publishers such as us.


Competition




The
market for business-to-business trade is new and quickly evolving. Competition
for advertising, electronic commerce and business users is intense and will
increase substantially in the future. Technological barriers to entry by
competitors are relatively insignificant.  Management expects to face
intensified competition in the future from traditional trade publishers,
directory registry companies, as well as from Internet search engine companies,
trade associations, etc. The Company also competes with traditional forms of
business-to-business advertising and commerce, such as trade magazines, trade
shows, and trade associations for advertisers.




Marketing


The
Company's marketing strategy is described in "Management's Discussion &
Analysis and Financial Condition and Results of Operations."




4





Effect
of Governmental Regulations




The Company is a "Reporting Company" under the
Securities Exchange Act of 1934 and is required to file annual, quarterly and
periodic reports with the Securities and Exchange Commission, such as Forms
10-K, 10-Q, and 8-K.  The reports are available at the Commission's Public
Reference Room at 450 Fifth Street, NW, Washington, DC 20549, telephone
1-800-SEC-0330 and may be retrieved electronically via the Internet at
www.sec.gov.




Reports
to Security Holders




The Company intends to prepare and deliver to its
security holders an annual report each year, which will include audited
financial statements.




Employees





All
management and staff are retained on an unwritten contract basis under a related
party transaction with Inter-Continental Recycling Inc. Inter-Continental
Recycling is owned 100% by the Company’s President. Because of the affiliation
between Inter-Continental and the Company, the agreement between them has no
definite duration and will continue as necessary for the conduct of business by
the Company. Inter-Continental assigns and provides employees to the Company as
long as the Company requires them and can pay the associated costs.
Inter-Continental provides services to and for the Company by employees of
Inter-Continental. There is no mark-up or other charges incurred by the Company
from Inter-Continental and the Company pays the same amount for services for the
Inter-Continental employees as does Inter- Continental.





The
average monthly invoice from Inter-Continental to the Company approximates
$17,023 paying for services for seven full-time and part-time employees of
Inter-Continental utilized by the Company. The Company is invoiced for the
salaries as well as employee benefits, such as deductions for Canada Pension
Plans and Employment Insurance, which is a deduction mandated by the Canadian
Government. Management of the Company believes this arrangement is beneficial to
the Company in that all payroll and employee withholding transactions are
consolidated into one company, Inter-Continental, thereby saving the Company a
duplicative expense.





Inter-Continental
is responsible for acquiring and maintaining appropriate insurance covering
liabilities, including employee conduct.





ITEM
1A.  RISK FACTORS





As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
is not required to provide information required by this Item.





ITEM
1B.  UNRESOLVED STAFF COMMENTS





None




ITEM
2. PROPERTIES





Facilities





The
Company does not currently own any operating facilities.  The
Company’s corporate offices are located at 175 East 400 South, Suite 900, Salt
Lake City, Utah.  The Company also maintains shared office space at 7
Darren Place, Guelph, Ontario, Canada and RecycleNet Corporation pays $200 (US)
per month to Paul Roszel. The Company believes that the current facilities will
be adequate for the foreseeable future. All research and development activities
are performed in these facilities. The Company believes that the nature of its
business coupled with computer networking technology will allow and support
future employees of the Company working from remote locations outside of the
Company's current (or future) facilities.




5





ITEM
3. LEGAL PROCEEDINGS





Neither
the Company nor any of its officers, directors or greater than 10% beneficial
shareholders are involved in any litigation or legal proceedings involving the
business of the Company.








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





No
matters were submitted to a vote of the Company's security holders during the
fourth quarter of the fiscal year ended December 31, 2008.







PART
II




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





Market
Information





The
Company's shares are traded on the over-the-counter bulletin board securities
market. The following table gives the range of high and low bid information for
the Company's common shares for each quarter within the last two fiscal years
through December 31, 2008. Because the Company's shares are traded in the
over-the-counter market, the quotations shown below reflect inter-dealer prices
without retail mark up, markdown or commission and they may not represent actual
transactions.





Fiscal
      Quarter
                                    
                                    High
      Bid
                                    
                                    
                                    Low
      Bid1st
      Quarter, 2008
                                    
                                    $
                                    0.050
                                    
                                    
                                    $
                                    0.0302nd
      Quarter, 2008
                                    
                                    $
                                    0.040
                                    
                                    
                                    $
                                    0.0303rd
      Quarter, 2008
                                    
                                    $
                                    0.050
                                    
                                    
                                    $
                                    0.0404th
      quarter, 2008
                                    
                                    $
                                    0.040
                                    
                                    
                                    $
                                    0.0301st
      Quarter, 2007
                                    
                                    $
                                    0.050
                                    
                                    
                                    $
                                    0.0502nd
      Quarter, 2007
                                    
                                    $
                                    0.050
                                    
                                    
                                    $
                                    0.0503rd
      Quarter, 2007
                                    
                                    $
                                    0.040
                                    
                                    
                                    $
                                    0.0404th
      Quarter, 2007
                                    
                                    $
                                    0.040
                                    
                                    
                                    $
                                    0.040







As of
December 31, 2008, the number of holders of record of the Company's common
shares was 707.  Neither the Company (nor its subsidiaries) have
declared or paid any cash dividends for the last two fiscal years. It is not
anticipated that any cash dividends will be declared or paid in the near future.
There are no contractual or other restrictions that limit the ability of the
Company to pay dividends on its common shares and none are anticipated in the
future.




Recent
Sales of Unregistered Securities





The
Company has made no offers or sales of unregistered securities during the year
ended December 31, 2008 and none are intended at the present time.




6





ITEM
6.  SELECTED FINANCIAL DATA





As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
is not required to provide information required by this Item.






ITEM
7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS





The
following discussion of the financial condition and results of operations of the
Company should be read in conjunction with the financial statements and notes
related thereto, included elsewhere in this report.





Overview





RecycleNet
Corporation provides "Global Access to Recycling Markets" (GARM) by providing an
exchange system that facilitates the trade of secondary
commodities.





The
spectrum of goods exchanged on the RecycleNet system includes all grades of
scrap metals, waste paper, recycled plastics, glass, rubber, wood, textiles,
minerals, chemicals and used items. The Company believes that the recyclables
market sector for scrap and used items exceeds $300 billion/year in North
America.





RecycleNet
does not act as a dealer, broker nor processor but rather as an exchange system
that can be utilized by dealers, brokers, processors, generators and consumers
of scrap materials. Any purchasing agent at any factory that has scrap, waste or
by-product is a potential user of the RecycleNet exchange system.





RecycleNet’s
activities today are primarily focused on the electronic exchange of secondary
commodities through an integrated network of Internet portals.





The
RecycleNet system is a hybrid exchange modeled from various aspects utilized by
other formal exchange systems such as the London Metals Exchange, the NASDAQ
stock exchange and other commodity or livestock exchanges and includes some of
the strategies employed by the emerging ECN’s (Electronic Communication
Networks) such as Archipelago.  Unlike eBay that has developed a
marketplace to trade consumer goods using an auction model, RecycleNet is
primarily focused on commercial and industrial goods exchanged in a
buy/sell/trade and bid/ask order matching system.





The
company is unaware of any current direct competition in the market space we
occupy and believes it is a pioneer in maturing a formal market exchange for
secondary commodities.  The Company believes that with the maturing of
Internet technologies and general business acceptance at doing transactions over
the Internet, we will see an incubation of potential competitors.





RecycleNet
believes it has a larger membership base than existing recycling trade
associations from around the world.  Compared to the circulation of
traditional recycling trade publications, RecycleNet’s audience is
larger.





In the
year 2000, the Company recognized the need for specific geographic web portals
within its business and established an online presence to correspond with each
continent.  The Company also believed that the growing potential for
business in Asia demanded separate attention and therefore, implemented a
strategy to establish a Secondary Commodity Clearinghouse service in
China.




7





On June
15, 2005, Scrap China Corporation was organized under the laws of the State of
Utah as a new business segment and considered to be a development stage
enterprise.  On November 24, 2005, the Board of Directors approved a
pro-rata spin-off of all shares of Scrap China Corporation effective January 20,
2006.





The common shareholders of RecycleNet
received one share of Scrap China Corporation for every ten shares of RecycleNet
common stock.  The Board of Directors of RecycleNet decided to distribute
the Scrap China Corporation shares to the RecycleNet shareholders to benefit its
shareholders and to separate the different lines of business.





Scrap
China Corporation now functions as its own fully reporting entity and is no
longer a wholly owned subsidiary of RecycleNet Corporation.





Oldwebsites.com,
Inc., formerly Fiberglass.com, was formed by the Company to undertake a
different line of business from the business regularly engaged in by
RecycleNet.  Oldwebsites.com, Inc. will offer services to grow organic and
natural search traffic to the web sites listed in the exchange.  The
Company believes that the true value of a web site is in the traffic it
generates.  Web sites that utilize the exchange will be monetized
using the services available to the Company.





On June
6, 2007, the Board of Directors of the Company adopted a resolution declaring a
pro-rata spin-off of all shares of Oldwebsites.com, Inc. owned by the Company
effective September 7, 2007.





As of
September 7, 2007 the spin-off of Oldwebsites.com, Inc. was
completed.  Oldwebsites.com, Inc. shares were issued to all common
shareholders of record of the Company as of the close of business on
September 7, 2007.  The shareholders of RecycleNet Corporation received one
share of Oldwebsites.com, Inc. for every ten shares of RecycleNet
Corporation.   The Board of Directors of the Company decided to
distribute the Oldwebsites.com, Inc. shares to the RecycleNet shareholders to
benefit its shareholders and to separate the different lines of
business.  This spin-off of Oldwebsites.com, Inc. resulted in the
shareholders of the Company assuming the common stock and accumulated losses of
Oldwebsites.com, Inc and the Company recorded a distribution to its shareholders
in the amount of $48,409.





Oldwebsites.com,
Inc. now functions as its own fully reporting entity and is no longer a wholly
owned subsidiary of RecycleNet Corporation.





On
December 31, 2007, the Company sold its RecycleNet Corporation (Ontario)
operations to Inter-Continental Recycling Inc.  Inter-Continental
Recycling Inc. assumed the outstanding debt of $138,019 owed by RecycleNet
Corporation (Utah) to RecycleNet Corporation (Ontario) in exchange for 100% of
the issued and outstanding common shares of RecycleNet Corporation (Ontario)
held by RecycleNet Corporation (Utah).





RecycleNet
has concentrated on building the fundamentals of its business following a
strategy of future profitability before expansion is considered. Over the past
year the Company has continued on its strategy to build its core user base.
RecycleNet believes that the bulk of our future revenues will be derived from
the base it is building now.





While the
Company has cash in the bank and no debt, the relative size of its operations
does not support the speed at which the management believes the Company needs to
grow.  In order to execute on its business plan and ramp its
operations, the Company will seek access to capital to ensure that it can
maintain its predominance in this market space and fully exploit the business
opportunity.




8





Results
of Operations





In
September 2007, the Company did a pro-rata spin-off of Oldwebsites.com, Inc. In
December 2007, the Company sold its RecycleNet Corporation (Ontario) operations
to Inter-Continental Recycling Inc. The following financial data does not
include the results of the discontinued operations of Oldwebsites.com, Inc. or
RecycleNet Corporation (Ontario) for the years ended December 31, 2008 and
2007.





Sales
Revenues





2008
                      
                      
                      2007Sales
      Revenues
                      
                      $
                      594,900
                      
                      
                      $
                      857,700





Sales
revenues have declined by $262,800 in 2008 in comparison to 2007. This is
primarily related to the reduction of Pay-Per-Click advertising revenue income
that diminished substantially in 2008 compared to 2007, and the monthly or
annual subscriptions being changed to a Pay-Per-Lead type
service.  The type of advertising that customers are willing to pay
for has changed from the monthly or yearly “fixed amount” advertising fee or
membership fee to the Pay-Per-Lead type service. As this change matures, we see
our revenues stabilizing.





In
addition, the financial meltdown of “World Class” banks in the United States and
Europe in the third quarter of 2008, and the injection of Government funding to
prevent the complete collapse of the financial system has created immediate
uncertainty in the business and consumer world. Credit standards for debt
assumption was initially frozen and then tightened. Cash available for loans,
auto leases, etc has been frozen. The growth in the world economies has fallen
dramatically since the third quarter of 2008 reflecting reduced demand for all
materials and correspondingly a dramatic price reduction in all
commodities.





RecycleNet
cannot avoid this business environment and correspondingly has suffered from a
reduction in sales activity.





The
Company entered into an Affiliate Marketing Agreement with Cooksmill NetSystems,
Inc. on January 1, 2008.  Through this affiliate marketing agreement,
Cooksmill NetSystems, Inc. pays the Company (the “Affiliate”) a commission on
net Pay-Per-Lead service sales generated by customers referred by the Company’s
web sites.




9


Operating
Expenses
 
 2008
                        
                        
                        2007OPERATING
      EXPENSES
                        
                        $
                        576,300
                        
                        
                        $
                        904,500
 Operating
Expenses decreased in 2008 over 2007 by $328,200. With the erosion of sales
revenues, Management has eliminated any unnecessary expenses and re-evaluated
which expenses will still be incurred. Sales commissions have decreased by
$78,600, and traveling and convention expenses were curtailed by
$50,900.  The balance of the decrease in expense is attributed to
reduction of costs in ISP charges by $5,400, office and administrative expenses
by $28,100, postage of $4,500, bank service charges by $2,700, telephone charges
by $8,000, legal and accounting fees by $9,900, advertising and promotion by
$15,900 and labor charges by $129,700.  Other expenses increased by
$5,500.


Management
has “right-sized” or re-aligned our expenditures with the corresponding revenues
that were generated throughout the year and will continue to manage our
resources in a prudent manner.





During
the year ended December 31, 2007, the Company purchased the web domain
“scrap.net” and all rights to the name for cash of $7,669.  In
comparison, during the year ended December 31, 2008 no web domains were
purchased.





The
entire purchase price for the website was allocated to the website, which was
accounted for as marketing and advertising costs in accordance with Statement of
Position No. 98-01.  Accordingly, the advertising costs were expensed
at the date of acquisition.





Management
continues to control these expenses to the best of our abilities under these
circumstances.  Management continues to expend most of its excess cash
on continued development of our website and continues to participate in Regional
Trade Shows and Conventions. We feel that this continuing exposure in the
marketplace is in the best interest of the Company to continue this
presence.





Net
Income (Loss) from Continuing Operations





2008
                      
                      
                      2007Net
      Income (Loss) from Continuing Operations
                      
                      $
                      18,500
                      
                      
                      $
                      (46,800
                      )








As
discussed above, sales revenues decreased significantly during 2008 compared to
2007.  Management was able to reduce expenses accordingly to offset
these declining sales and as such show an increase in profit of $65,300 in
comparison to 2007.





The Company engaged in an affiliate
marketing agreement with Cooksmill NetSystems, Inc. on January 1,
2008.  Through this affiliate marketing agreement, Cooksmill
NetSystems, Inc. pays the Company (the “Affiliate”) a commission on net
Pay-Per-Lead service sales generated by customers referred by the Company’s web
sites.





We
continue, on a more limited basis, to fund expenditures in our “BRANDING” of the
“RECYCLENET” name as we feel this is an important long-term
objective.





10


Cash
Position
 
 The
Company’s cash position at December 31, 2008 has decreased to $41,300, an
$11,100 decrease from the December 31, 2007 balance of $52,400. In response to
the reduced cash flows, management is monitoring its cash position and
evaluating expenditures daily.





During
the year ended December 31, 2006, the Company advanced an affiliate of the
Company $5,000 with no terms of repayment.  Due to the present
economic conditions, management has assessed the probability of collecting the
re-payment of this advance within the next 12 months unlikely.  As
such, this amount has been written to a bad debt allowance.





As of
December 31, 2008, the Company has advanced $160,900 to Scrap China
Corporation.  Since Scrap China Corporation’s inception in June 2005,
the Company has paid certain expenses for travel, management and legal, and
accounting expenses on their behalf. These advances are due on demand and bear
no interest.





Deferred
Revenue





Deferred
revenue results from customers who pay for services in advance, such as
quarterly, semi-annually, or annually. The Company records the initial payment
in deferred revenue and then recognizes sales revenue in each subsequent month
in proportion to the services provided.





As of
December 31, 2008, deferred revenue amounted to $57,100 compared with the
$91,500 at December 31, 2007.  This decrease is reflective of
decreased revenues and the change to “pay-per-lead” and affiliate revenues
instead of monthly, quarterly or annual sales.





Marketing





The
Company's marketing strategy is designed to strengthen and increase brand
awareness, increase customer traffic to the web sites, build customer loyalty,
encourage repeat site visitation and develop incremental product and service
revenue opportunities.





The
Company inventively applies technology to deliver personalized service programs
to ensure customer satisfaction and loyalty. The Company's goal is to attract
industry decision-makers to its web sites on a regular and consistent basis by
developing and providing customer services. The Company’s marketing strategy
consists of traditional print media advertising, direct and indirect outbound
email advertising, Internet advertising, tradeshow participation, trade
association partnerships and strategic alliances with other media and related
companies and organizations. Due to the Company's experience gained over the
past thirteen years, management of the Company believes that the Company
benefits from positive "word of mouth" and customer referrals. Every effort is
made to achieve frequent communication with, and obtain feedback from, customers
to continually improve services and products.





Future
Plans for Expansion





The
Company plans to continue to sell and support its existing line of information
technology products and services and to continue development of its Application
Service Provider and E-commerce Business segments. It is management's opinion
that its current commercially developed products and services in its Internet
Portal services business segment have been tested, refined and accepted by the
industry at large. The Company will continue, with the feedback of its existing
customer base, to develop and bring to market additional information technology
products and services. The Company intends to continue to increase the market's
awareness of the Company's products and services using traditional print and
online marketing methods.


The
Company's future plans include a program of joint ventures, strategic alliances,
and mergers and acquisitions, which management believes will enable the Company
to acquire and maintain a dominant position as a business-to-business and
business-to-consumer trading resource.





11





Off
Balance Sheet Arrangements





None





ITEM
7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





As a
“smaller reporting company” (as defined by Item 10 of Regulation S-K), the
Company is not required to provide information required by this Item, as defined
by Regulation S-K Item 305(e).












12





ITEM
7. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA







RECYCLENET
      CORPORATIONINDEX
      TO FINANCIAL STATEMENTSPageReport
      of Independent Registered Public Accounting Firm
                                    F-1Consolidated
      Balance Sheets
                                    F-2Consolidated
      Statements of Operations
                                    F-3Consolidated
      Statements of Stockholders' Equity
                                    F-4Consolidated
      Statements of Cash Flows
                                    F-5Notes
      to Consolidated Financial Statements
                                    F-6





13








HANSEN, BARNETT& MAXWELL,
      P.C.A
      Professional Corporation
            
            Registered
      with the Public CompanyCERTIFIED
      PUBLIC ACCOUNTANTS
            
            Accounting
      Oversight Board5
      Triad Center, Suite 750Salt
      Lake City, UT 84180-1128Phone:
      (801) 532-2200
              Fax:
      (801) 532-7944www.hbmcpas.com
            
            A
      Member of the Forum of Firms








REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








To the
Shareholders and the Board of Directors


RecycleNet
Corporation





We have
audited the consolidated balance sheets of RecycleNet Corporation and
subsidiaries as of December 31, 2008 and 2007 and the related consolidated
statements of operations, stockholders' equity and cash flows for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.





We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.





In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of RecycleNet Corporation and
subsidiaries as of December 31, 2008 and 2007 and the results of its operations
and cash flows for the years then ended, in conformity with accounting
principles generally accepted in the United States of America.














/s/
              HANSEN,
      BARNETT & MAXWELL, P.C.





Salt Lake
City, Utah


March 28,
2009





F-1





RECYCLENET CORPORATON AND SUBSIDIARIES


CONSOLDATED
BALANCE SHEETS


December
      31,
                                                                                                                                                                
                                                                                                                                                                2008
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                2007ASSETSCurrent
      AssetsCash
                                                                                                                                                                
                                                                                                                                                                $
                                                                                                                                                                41,348
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                $
                                                                                                                                                                52,364Trade
      accounts receivable, net of $2,500 and $2,500 respectively ofallowance
      for bad debt
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                13,213
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                16,928Prepaid
      expenses
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                6,061
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                5,621Total
      Current Assets
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                60,622
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                74,913Property
      and EquipmentEquipment
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                21,422
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                21,422Less:
      Accumulated depreciation
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                (12,853
                                                                                                                                                                )
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                (8,568
                                                                                                                                                                )Net
      Property and Equipment
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                8,569
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                12,854Related
      party receivable, net of $5,000 and $0 respectively of allowance
      for bad debt
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                160,892
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                151,185Total
      Assets
                                                                                                                                                                
                                                                                                                                                                $
                                                                                                                                                                230,083
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                $
                                                                                                                                                                238,952LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      LiabilitiesRelated
      party accounts payable
                                                                                                                                                                
                                                                                                                                                                $
                                                                                                                                                                8,702
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                $
                                                                                                                                                                -Accrued
      liabilities
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                29,494
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                31,109Deferred
      revenue
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                57,074
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                91,549Total
      Current Liabilities
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                95,270
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                122,658Stockholders'
      EquityClass
      N convertible shares $0.01 par value;70,896,789
      shares authorized; 56,800,000 and 56,800,000 Class N sharesissued
      and outstanding, respecitvely
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                568,000
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                568,000Common
      shares $0.01 par value; 179,103,211 shares authorized;79,091,412
      and 79,091,412 shares issued and oustanding,
      respectively
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                790,914
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                790,914Additional
      paid-in capital
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                4,462
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                4,462Accumulated
      deficit
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                (1,228,563
                                                                                                                                                                )
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                (1,247,082
                                                                                                                                                                )Total
      Stockholders' Equity
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                134,813
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                116,294Total
      Liabilities and Stockholders' Equity
                                                                                                                                                                
                                                                                                                                                                $
                                                                                                                                                                230,083
                                                                                                                                                                
                                                                                                                                                                
                                                                                                                                                                $
                                                                                                                                                                238,952
  The accompanying notes are an integral part of these consolidated financial
statements
 F-2




RECYCLENET
CORPORATION AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF OPERATIONS


For
      the Years Ended December 31,
                                                                                                                                                                                        
                                                                                                                                                                                        2008
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        2007Sales
                                                                                                                                                                                        
                                                                                                                                                                                        $
                                                                                                                                                                                        594,848
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        $
                                                                                                                                                                                        857,671Operating
      ExpensesSelling,
      general and administrative expenses
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        576,329
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        904,512Total
      Operating Expenses
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        576,329
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        904,512Income
      (Loss) From Continuing Operations
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        18,519
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (46,841
                                                                                                                                                                                        )Discontinued
      OperationsLoss
      from discontinued operations - Oldwebsites.com, Inc
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        -
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (32,935
                                                                                                                                                                                        )Gain
      from discontinued operations - RecycleNet Ontario
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        -
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        2,755Net
      Income (Loss)
                                                                                                                                                                                        
                                                                                                                                                                                        $
                                                                                                                                                                                        18,519
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        $
                                                                                                                                                                                        (77,021
                                                                                                                                                                                        )Basic
      Income (Loss) Per Common Share FromContinuing
      Operations
                                                                                                                                                                                        
                                                                                                                                                                                        $
                                                                                                                                                                                        -
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        $
                                                                                                                                                                                        -Discontinued
      Operations
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        -
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        -Basic
      Income (Loss) Per Common Share
                                                                                                                                                                                        
                                                                                                                                                                                        $
                                                                                                                                                                                        -
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        $
                                                                                                                                                                                        -Diluted
      Income (Loss) Per Common Share FromContinuing
      Operations
                                                                                                                                                                                        
                                                                                                                                                                                        $
                                                                                                                                                                                        -
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        $
                                                                                                                                                                                        -Discontinued
      Operations
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        -
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        -Diluted
      Income (Loss) Per Common Share
                                                                                                                                                                                        
                                                                                                                                                                                        $
                                                                                                                                                                                        -
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        $
                                                                                                                                                                                        -Basic
      Weighted-Average Common Shares Outstanding
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        79,091,412
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        77,897,928Diluted
      Weighted-Average Common Shares Outstanding
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        135,891,412
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        77,897,928
  The
accompanying notes are an integral part of these consolidated financial
statements
 F-3






RECYCLENET
CORPORATION AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY


FOR
THE YEARS ENDED DECEMBER 31, 2007 AND 2008


Class
      N Common Shares
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    Additional
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    Total(and
      Class X Shares)
                                                                                                                    
                                                                                                                    
                                                                                                                    Common
      Shares
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    Paid-in
                                                                                                                    
                                                                                                                    
                                                                                                                    Accumulated
                                                                                                                    
                                                                                                                    
                                                                                                                    Stockholders'Shares
                                                                                                                    
                                                                                                                    
                                                                                                                    Amount
                                                                                                                    
                                                                                                                    
                                                                                                                    Shares
                                                                                                                    
                                                                                                                    
                                                                                                                    Amount
                                                                                                                    
                                                                                                                    
                                                                                                                    Capital
                                                                                                                    
                                                                                                                    
                                                                                                                    Deficit
                                                                                                                    
                                                                                                                    
                                                                                                                    EquityBalance
      - December 31, 2006
                                                                                                                    
                                                                                                                    
                                                                                                                    60,539,259
                                                                                                                    
                                                                                                                    
                                                                                                                    $
                                                                                                                    605,393
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    77,108,214
                                                                                                                    
                                                                                                                    
                                                                                                                    $
                                                                                                                    771,082
                                                                                                                    
                                                                                                                    
                                                                                                                    $
                                                                                                                    34,315
                                                                                                                    
                                                                                                                    
                                                                                                                    $
                                                                                                                    (1,081,225
                                                                                                                    )
                                                                                                                    
                                                                                                                    $
                                                                                                                    329,565Conversion
      of 1,983,198 shares of Class N (and
      1,938,198 shares of Class X) to 1,938,198
      shares of common stock;
                                                                                                                    
                                                                                                                    
                                                                                                                    (1,983,198
                                                                                                                    )
                                                                                                                    
                                                                                                                    
                                                                                                                    (19,832
                                                                                                                    )
                                                                                                                    
                                                                                                                    
                                                                                                                    1,983,198
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    19,832
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    -
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    -
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    -Redemption
      of 1,756,061 Class N (and 1,756,061 Class
      X) shares;
                                                                                                                    
                                                                                                                    
                                                                                                                    (1,756,061
                                                                                                                    )
                                                                                                                    
                                                                                                                    
                                                                                                                    (17,561
                                                                                                                    )
                                                                                                                    
                                                                                                                    
                                                                                                                    -
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    -
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    (29,853
                                                                                                                    )
                                                                                                                    
                                                                                                                    
                                                                                                                    -
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    (47,414
                                                                                                                    )Distribtion
      from spin-off of Oldwebsites.com, Inc.
                                                                                                                    
                                                                                                                    
                                                                                                                    -
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    -
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    -
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    -
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    -
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    (48,409
                                                                                                                    )
                                                                                                                    
                                                                                                                    
                                                                                                                    (48,409
                                                                                                                    )Distribution
      from sale of RecycleNet Ontario
                                                                                                                    
                                                                                                                    
                                                                                                                    -
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    -
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    -
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    -
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    -
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    (40,427
                                                                                                                    )
                                                                                                                    
                                                                                                                    
                                                                                                                    (40,427
                                                                                                                    )Net
      loss for the year ended December 31, 2007
                                                                                                                    
                                                                                                                    
                                                                                                                    -
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    -
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    -
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    -
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    -
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    (77,021
                                                                                                                    )
                                                                                                                    
                                                                                                                    
                                                                                                                    (77,021
                                                                                                                    )Balance
      - December 31, 2007
                                                                                                                    
                                                                                                                    
                                                                                                                    56,800,000
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    568,000
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    79,091,412
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    790,914
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    4,462
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    (1,247,082
                                                                                                                    )
                                                                                                                    
                                                                                                                    
                                                                                                                    116,294Net
      income for the year ended December 31, 2008
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    18,519
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    18,519Balance
      - December 31, 2008
                                                                                                                    
                                                                                                                    
                                                                                                                    56,800,000
                                                                                                                    
                                                                                                                    
                                                                                                                    $
                                                                                                                    568,000
                                                                                                                    
                                                                                                                    
                                                                                                                    
                                                                                                                    79,091,412
                                                                                                                    
                                                                                                                    
                                                                                                                    $
                                                                                                                    790,914
                                                                                                                    
                                                                                                                    
                                                                                                                    $
                                                                                                                    4,462
                                                                                                                    
                                                                                                                    
                                                                                                                    $
                                                                                                                    (1,228,563
                                                                                                                    )
                                                                                                                    
                                                                                                                    $
                                                                                                                    134,813







The
accompanying notes are an integral part of these consolidated financial
statements
 F-4






RECYCLENET
CORPORATION AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF CASH FLOWS


For
      the Years Ended Dec 31,
                                                                                                                                  
                                                                                                                                  2008
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  2007Cash
      Flows From Operating ActivitiesNet
      income (loss)
                                                                                                                                  
                                                                                                                                  $
                                                                                                                                  18,519
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  $
                                                                                                                                  (77,021
                                                                                                                                  )Adjustments
      to reconcile net income to net cash provided
      by operating activities:Depreciation
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  4,285
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  8,626Foreign
      currency exchange loss
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  -
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  5,488Bad
      debt expense
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  5,000
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  -Changes
      in assets and liabilities:Accounts
      and other receivables
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  3,715
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  15,335Related
      party accounts payable
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  8,702
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  -Prepaid
      expenses
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (440
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  10,401Accrued
      liabilities
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (1,615
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (24,697
                                                                                                                                  )Deferred
      revenue
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (34,475
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (32,019
                                                                                                                                  )Net
      Cash Provided by (Used) in Operating Activities
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  3,691
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (93,887
                                                                                                                                  )Cash
      Flows From Investing ActivitiesAdvances
      to related party
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (14,707
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (35,228
                                                                                                                                  )Contribution
      from spin off of Oldwebsites.com, Inc
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  -
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (51,269
                                                                                                                                  )Cash
      distributed in sale of RecycleNet Ontario, Inc
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  -
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (42,411
                                                                                                                                  )Net
      Cash Used In Investing Activities
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (14,707
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (128,908
                                                                                                                                  )Cash
      Flows From Financing Activities
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  -
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  -Redemption
      of class X and N shares
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  -
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (47,414
                                                                                                                                  )Net
      Cash Used In Financing Activities
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  -
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (47,414
                                                                                                                                  )Effect
      of Exchange Rate Changes on Cash
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  -
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  7,269Net
      Change in Cash
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (11,016
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (262,940
                                                                                                                                  )Cash
      at Beginning of Period
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  52,364
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  315,304Cash
      at End of Period
                                                                                                                                  
                                                                                                                                  $
                                                                                                                                  41,348
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  $
                                                                                                                                  52,364







The
accompanying notes are an integral part of these consolidated financial
statements
 F-5





RECYCLENET
CORPORATION


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


DECEMBER
31, 2008 AND 2007





NOTE
1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES





Consolidation
- The accompanying consolidated financial statements include the accounts of
RecycleNet Corporation and its wholly-owned subsidiaries Scrap.Net, Inc.,
Waste.Net, Inc. and Recycle West Network. Inter-company accounts and
transactions have been eliminated in consolidation.





On
September 7, 2007, the Company did a pro-rata spin-off of all shares of
Oldwebsites.com, Inc. owned by the Company to its common shareholders of
record.  At the completion of the spin-off, Oldwebsites.com, Inc.
became its own fully reporting entity and is no longer a wholly owned subsidiary
of the Company.  On December 31, 2007, the Company sold RecycleNet
Corporation (Ontario) to a related party.





Accordingly,
the Company has reflected these operations as discontinued and has restated the
prior year consolidated financial statements to conform to such
presentation.





On
November 7, 2007, the Company purchased 15,000,000 common shares of Waste.
Net,Inc. for $9,000. This represents 100% of the issued common shares of
Waste.Net,Inc.





Waste.Net
was incorporated on August 20, 2007.  Waste.Net,Inc. is a network
responsible for building and maintaining the branding and awareness for
RecycleNet's US recycling portal operations. Waste.Net,Inc has been divided
into 5 regions.  The first region, Recycle West Network, was incorporated
on August 20, 2007 to represent the states of Texas, New Mexico, Arizona,
Nevada, Utah, Colorado, Oregon, Washington, Arkansas, Idaho, Montana, Wyoming,
North Dakota, South Dakota and California.





Also on
November 7, 2007, the Company purchased 600,000 common shares of Recycle West
Network, Inc for $60.





On
November 14, 2007 Waste.net purchased 3,000,000 common shares of Recycle West
Network, Inc for $1,500. RecycleNet and Waste.net now control 100% of the common
shares issued of Recycle West Network, Inc.





As such,
Waste.Net,Inc. and Recycle West Network, Inc. are wholly owned subsidiaries of
RecycleNet Corporation (Utah) and these companies are included in the
consolidated financial statements of the Company.





Operations
- The Company is in the business of designing Internet sites, Internet
advertising and Internet trading of consumable recyclable goods. The Company has
developed web site management, sales management, search, customer interaction,
and transaction processing systems using a combination of proprietary custom
designed technologies and commercially available licensed technologies. The
Company designs web systems and flexible databases which allow for the addition,
modification, or replacement of web site content. The Company provides Internet
hosting facilities and redundant high speed Internet connectivity. The Company
has developed its own content and web site management tools to facilitate the
maintenance and updating of its web sites.





Use of
Estimates - The preparation of 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 periods.
Actual results could differ from those estimates.





F-6





Fair Values of
Financial Instruments - Due to their near-term nature, the amounts
reported as trade accounts receivable, advances to related party, related party
accounts payable, accrued liabilities and deferred revenues are considered to be
reasonable approximations of their fair values.





Accounts
Receivable–The
Company provides an allowance for doubtful accounts equal to the estimated
collection losses that could be incurred in collection of all receivables. The
estimated losses are based on historical collection experience coupled with
review of the current status of existing receivables. Allowance for doubtful
accounts for December 31, 2008 and 2007 was $2,500 and $2,500,
respectively.





Equipment
–Equipment is stated at cost. Maintenance and repairs of equipment are charged
to operations and major improvements are capitalized. Upon retirement, sale, or
other disposition, the cost and accumulated depreciation are eliminated from the
accounts and a gain or loss is included in operations. Depreciation is computed
using the straight-line method over the estimated useful lives of the property
and equipment, which are three to five years. Depreciation expense was $4,285
and $8,626 for the years ended December 31, 2008 and 2007,
respectively.  Computer software costs incurred for internal use are
expensed as incurred during the preliminary evaluation stage, are capitalized
during the acquisition and development stage, and are expensed during the
operation stage, including training and maintenance. Capitalizable software
development costs for internal use were not material for the years ended
December 31, 2008 and 2007.





Revenue
Recognition - Revenue from services are recognized as the services are
provided. Website advertising services are charged on a monthly or Pay-Per-Lead
basis without guarantee of the number of customers viewing the web site.
Revenues from the Internet portal services business are derived from individual
custom packages that include any combination of the following services:
subscription fees, credit package bundles that are used in the Pay-Per-Lead
services, HTML linking services, advertising, and web page construction. The
Company’s Pay-Per-Lead service is designed so that the customer can buy the
information that is of value to them instead of paying a monthly or annual
fee.  With respect to the Internet portal sites that facilitate
e-commerce trading, the Company only charges a fee for services that are
provided to customers. The Company does not charge sellers or buyers a
percentage of the value of their transactions nor does the Company charge a
back-end fee. Customer payments received in advance of providing services are
recorded as deferred revenue and are then recognized proportionately as services
are performed.





The
Company engaged in an affiliate marketing agreement with Cooksmill NetSystems,
Inc. on January 1, 2008.  Through this affiliate marketing agreement,
Cooksmill NetSystems, Inc. pays the Company (the “Affiliate”) a commission on
net Pay-Per-Lead service sales generated by customers referred by the Company’s
web sites.





Advertising
Costs - Advertising costs are charged to expense in the period incurred.
Advertising expense for the years ended December 31, 2008 and 2007 was $124 and
$16,023 respectively.





Recent Accounting
Pronouncements–In September 2006, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standard Number 157, Fair Value Measurements,
(SFAS 157) which defines fair value, establishes a framework for measuring fair
value in generally accepted accounting principles and expands disclosures about
fair value measurements. The provisions of SFAS No. 157 related to
financial assets and financial liabilities were effective during
2008.  With respect to certain nonfinancial assets and nonfinancial
liabilities, SFAS No. 157 is effective for fiscal years beginning after
November 15, 2008, and interim periods within those fiscal
years.  The Company does not expect that the adoption of SFAS
No. 157 with respect to nonfinancial assets and nonfinancial liabilities
will have a material impact on its consolidated financial
statements.




F-7





In March
2008, the FASB issued SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities.  SFAS No. 161 amends SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities to require enhanced disclosures
concerning the manner in which an entity uses derivatives (and the reasons it
uses them), the manner in which derivatives and related hedged items are
accounted for underSFAS No. 133 and interpretations
thereof, and the effects that derivatives and related hedged items have on an
entity's financial position, financial performance, and cash
flows.  SFAS No. 161 is effective for financial statements of fiscal
years and interim periods beginning after November 15, 2008.  The
Company has not yet determined the effects on its consolidated financial
statements, if any, that may result upon the adoption of SFAS
161.





In
December 2007, the FASB issued SFAS No. 141(R), Business Combinations, and
SFAS No. 160, Non-controlling Interests in
Consolidated Financial Statements. SFAS No. 141(R) requires an
acquirer to measure the identifiable assets acquired, the liabilities assumed
and any non-controlling interest in the acquire at their fair values on the
acquisition date, with goodwill being the excess value over the net identifiable
assets acquired. SFAS No. 160 clarifies that a non-controlling interest in
a subsidiary should be reported as equity in the consolidated financial
statements, consolidated net income shall be adjusted to include the net income
attributed to the non-controlling interest and consolidated comprehensive income
shall be adjusted to include the comprehensive income attributed to the
non-controlling interest. The calculation of earnings per share will continue to
be based on income amounts attributable to the parent. SFAS
No. 141(R) and SFAS No. 160 are effective for financial
statements issued for fiscal years beginning after December 15, 2008. Early
adoption is prohibited. The Company has not yet determined the effect on our
consolidated financial statements, if any, upon adoption of SFAS
No. 141(R) or SFAS No. 160.





In May
2008, the FASB issued SFAS 162, The Hierarchy of Generally Accepted Accounting
Principles.  SFAS No. 162 identifies the sources of accounting
principles and provides entities with a framework for selecting the principles
used in preparation of financial statements that are presented in conformity
with GAAP.  The current GAAP hierarchy has been criticized because it
is directed to the auditor rather than the entity, it is complex, and it ranks
FASB Statements of Financial Accounting Concepts, which are subject to the same
level of due process as FASB Statements of Financial Accounting Standards, below
industry practices that are widely recognized as generally accepted but that are
not subject to due process.  The Board believes the GAAP hierarchy
should be directed to entities because it is the entity (not its auditors) that
is responsible for selecting accounting principles for financial statements that
are presented in conformity with GAAP.  The adoption of FASB 162 is
not expected to have a material impact on the Company’s financial
statements.





Basic and Diluted Income (Loss) per
Common Share - Basic income (loss) per common share is calculated by
dividing net income (loss) by the weighted-average number of common shares
outstanding. Diluted income per common share is calculated by dividing net
income by the weighted-average number of Class N shares and common shares
outstanding to give effect to potentially issuable common shares, except during
loss periods when those potentially issuable shares are anti-dilutive. At
December 31, 2007, the Company had 56,800,000 Class N shares outstanding that
were excluded from the calculation of diluted loss per share. The shares used in
the computation of basic and diluted income (loss) per common share for the year
ended December 31, 2008 and 2007 are as follows:





F-8




For
      the Years Ended December 31,
                                                              
                                                              2008
                                                              
                                                              
                                                              2007Weighted-average
      number of common shares used in basicincome (loss) per common share calculation
                                                              
                                                              
                                                              79,091,412
                                                              
                                                              
                                                              
                                                              77,897,928Incremental
      potentially issuable common shares from assumedconversion of Class N common shares
                                                              
                                                              
                                                              56,800,000
                                                              
                                                              
                                                              
                                                              -Weighted-average
      number of common shares and dilutive potential
      common shares used in diluted income (loss) percommon share calculation
                                                              
                                                              
                                                              135,891,412
                                                              
                                                              
                                                              
                                                              77,897,928


NOTE
2 - ACQUISITIONS





On
November 7, 2007, the Company purchased 15,000,000 common shares of Waste.Net
for $9,000. This represents 100% of the issued common shares of Waste.Net,
Inc.





Also on
November 7, 2007, the Company purchased 600,000 common shares of Recycle West
Network, Inc for $60.





On
November 14, 2007 Waste.net purchased 3,000,000 common shares of Recycle West
Network, Inc for $1,500. RecycleNet and Waste.net now control 100% of the common
shares issued of Recycle West Network, Inc.





Domain Names - During the year
ended December 31, 2007, the Company purchased the web domain “scrap.net” and
all rights to the name for cash of $7,669. The entire purchase price for this
website was allocated to the website which was accounted for as marketing and
advertising costs in accordance with Statement of Position No.
98-01.  Accordingly, the advertising costs were expensed at the date
of acquisition.





NOTE
3 - RELATED PARTY TRANSACTIONS





Related Party Receivable — At various times during 2008
and 2007, the Company paid expenses on behalf of Scrap China Corporation,
resulting from travel, management, legal and accounting expenses. Additional
funds, if required, will be provided by the Company and will be treated as an
advance to a related party.  These advances are due on demand and bear
no interest. At December 31, 2008 and 2007, amounts due from Scrap China totaled
$160,892 and $146,185, respectively.





During
the year ended December 31, 2006, the Company advanced an affiliate of the
Company $5,000 with no terms of repayment.  Due to the present
economic conditions, management has assessed the probability of collecting the
re-payment of this advance within the next 12 months unlikely.  As
such, this amount has been written to a bad debt allowance.





F-9





Service Agreements - The
Company has an agreement with Inter-Continental Recycling, Inc. and its wholly
owned subsidiary Cooksmill NetSystems, Inc. to provide various services for the
Company. Inter-Continental Recycling, Inc., and as such Cooksmill NetSystems,
Inc., is 100% owned by the immediate family of the President of the
Company.  The Company is billed monthly for services supplied for
internet service provider fees, merchant services and management and sales
activities, which vary monthly based on the activity level. The charges for
these services for the year ended December 31, 2008 and 2007 were $235,198 and
$425,496, respectively and are discussed further below.





As part
of this agreement, Cooksmill NetSystems Inc. provides Rhodium Webweaver Services
to the Company for website management and e-commerce software (ISP) and the fees
for these services are billed to the Company on a monthly basis. The Rhodium
Webweaver Services (ISP) charges for the year ended December 31, 2008 and 2007
were $24,000 and $29,443, respectively.





All
management and staff are retained on an unwritten contract basis under a related
party transaction with Inter-Continental Recycling, Inc. Because of the
affiliation between Inter-Continental and the Company, the agreement between
them has no definite duration and will continue as necessary for the conduct of
business by the Company. Inter-Continental assigns and provides employees to the
Company as long as the Company requires them and can pay the associated costs.
Inter-Continental provides services to and for the Company by employees of
Inter-Continental. There is no mark-up or other charge incurred by the Company
from Inter-Continental and the Company pays the same amount for services for the
Inter-Continental employee’s as does Inter-Continental. The management/staff
charges for year ended December 31, 2008 and 2007 were $204,278 and $333,947,
respectively.





Inter-Continental
Recycling, Inc. and the Company are also engaged in a merchant services
agreement. On behalf of Inter-Continental Recycling, Inc. the Company operates,
maintains, bills and collects payments for services offered on web sites owned
by Inter-Continental Recycling, Inc.  The Company then issues payment
to Inter-Continental Recycling, Inc. for an agreed upon rate.  The
commissions paid and recorded by the Company for this merchant service agreement
with Inter-Continental Recycling, Inc. for the year ended December 31, 2008 and
2007 were $6,920 and $62,106, respectively.





The
Company is engaged in an affiliate marketing agreement with Cooksmill
NetSystems, Inc. as of January 1, 2008.  Through this affiliate
marketing agreement, Cooksmill NetSystems, Inc. pays the Company (the
“Affiliate”) a commission on net Pay-Per-Lead service sales generated by
customers referred by the Company’s web sites.  Revenue recorded under
the affiliate marketing agreement was $24,841 and $0 for the years ended
December 31, 2008 and 2007, respectively.





The
Company has office space in a facility owned by the President of the Company.
For the year ended December 31, 2008 and 2007, rent expense was $2,400 and
$2,245, respectively.





Under the
terms of a distribution rights agreement related to the Rhodium WebWeaver
TurnKey E-Commerce system, the Company is obligated to pay Mr. Roszel, the
President of the Company, a $1,000 royalty payment for each Rhodium WebWeaver
license the Company is able to secure.  For the years ended December
31, 2008 and 2007, no royalty payments were required under this
agreement.




F-10





NOTE
4 - STOCKHOLDERS' EQUITY





The
Company is authorized to issue 250,000,000 common shares with a par value of
$0.01 per share. The board of directors is authorized to designate one or more
series within the class of common shares and to designate relative preferences,
limitations and rights. The Board has designated 70,896,789 common shares as
Class N shares. The Class N shares have voting rights of one vote per share and
are non-equity participating. The Class N shares are convertible into common
shares on the basis of one Class N share into one common share of the Company,
solely at the option of the holders.





In August
and September 2007, 1,983,198 Class X/N shares were converted by shareholders
into 1,983,198 common shares of RecycleNet Corporation. A shareholder is
entitled to convert one Class X share along with one Class N share into one
Common share of the Corporation at no cost to the shareholder. After the
conversion, the Company had 58,556,061 class X/N shares
outstanding.





In
September 2007, 1,756,061 Class X/N shares were redeemed by shareholders for
$47,414 cash.  After the redemption, the Company had 56,800,000 class
X/N shares outstanding.





As
further discussed in Note 6, the Company approved a pro-rata spin-off of
Oldwebsites.com, Inc. in September 2007, recognizing a distribution to
shareholders of $48,409.





As
further discussed in Note 6, the Company sold RecycleNet Corporation (Ontario)
to a related party and recognized a distribution to shareholders of
$40,427.





NOTE
5 - INCOME TAXES





Deferred
tax assets are comprised of the following at December 31, 2008 and
2007:




For
      the years ended December 31,
                                                      
                                                      2008
                                                      
                                                      
                                                      2007Operating
      Loss Carry Forward
                                                      
                                                      $
                                                      313,426
                                                      
                                                      
                                                      $
                                                      339,453Valuation
      Allowance
                                                      
                                                      
                                                      (313,426
                                                      )
                                                      
                                                      
                                                      (339,453
                                                      )Total
      Deferred Tax Asset
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      $
                                                      -


The
Company had no income tax expense for the years ended December 31, 2008 and
2007.





The
following is a reconciliation of the amount of expense that would result from
applying federal statutory rates to pretax income (loss) with the provision for
income taxes for the years ended December 31:


For
      the years ended December 31,
                                                    
                                                    2008
                                                    
                                                    
                                                    2007Tax
      at federal statutory rates (34%)
                                                    
                                                    $
                                                    6,296
                                                    
                                                    
                                                    $
                                                    (27,126
                                                    )Non-deductible
      expenses
                                                    
                                                    
                                                    479
                                                    
                                                    
                                                    
                                                    -Benefit
      of operating loss carryforward
                                                    
                                                    
                                                    (9,252
                                                    )
                                                    
                                                    
                                                    -Net
      operating losses distributed in spin-off and sale
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    43,944Expiration
      of net operating losses
                                                    
                                                    
                                                    (19,813
                                                    )
                                                    
                                                    
                                                    (77,890
                                                    )Other
      changes in the valuation allowance
                                                    
                                                    
                                                    21,678
                                                    
                                                    
                                                    
                                                    60,653State
      Benefit, net of federal tax
                                                    
                                                    
                                                    612
                                                    
                                                    
                                                    
                                                    (1,005
                                                    )Effect
      of actual tax rates lower than statutory rate
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (203
                                                    )Effect
      of exchange rate changes
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    1,627Provision
      for Income Taxes
                                                    
                                                    $
                                                    -
                                                    
                                                    
                                                    $
                                                    -
  The
Company has federal operating loss carry forwards of $835,284 that expire from
2009 through 2028. The use of operating loss carry forwards are limited and may
not be available to offset future income.


F-11




NOTE
6 – DISCONTINUED OPERATIONS





On June
6, 2007, the Board of Directors approved a pro-rata spin-off of all shares of
Oldwebsites.com, Inc. effective September 7, 2007. The common shareholders
of RecycleNet received one share of Oldwebsites.com, Inc. for every ten shares
of RecycleNet common stock.  The Board of Directors of RecycleNet decided
to distribute the Oldwebsites.com, Inc. shares to the RecycleNet shareholders to
benefit its shareholders and to separate the different lines of business. At
September 7, 2007, Oldwebsites.com, Inc. had common stock of $131,927 and
accumulated losses of $83,518.  This spin-off of Oldwebsites.com, Inc.
resulted in the shareholders of the Company assuming the common stock and
accumulated losses of Oldwebsites.com, Inc. and the Company recorded a
distribution to shareholders in the amount of $48,409. The discontinued
operations of Oldwebsites.com, Inc. for the year ended December 31, 2007 are as
stated below.





On
December 31, 2007, the Company sold its RecycleNet Corporation (Ontario)
operations to Inter-Continental Recycling Inc., a related party.
Inter-Continental Recycling Inc. assumed the outstanding debt of $138,019 owed
by RecycleNet Corporation (Utah) to RecycleNet Corporation (Ontario) in exchange
for 100% of the issued and outstanding common shares of RecycleNet Corporation
(Ontario) held by RecycleNet Corporation (Utah). At December 31, 2007,
RecycleNet (Ontario) had common stock of $3 and accumulated losses of $458,674.
As a result of the sale, the Company recognized a distribution to shareholders
in the amount of $40,427. The discontinued operations of RecycleNet Corporation
(Ontario) for the year ended December 31, 2007 are as stated below.





A summary
of the results from discontinued operations for the years ended December 31,
2008 and 2007 are as follows:




2008
                                      
                                      
                                      2007Oldwebsites.com,
      Inc.Net
      revenue
                                      
                                      
                                      -
                                      
                                      
                                      
                                      3,129Operating
      expenses
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (36,064
                                      )Loss
      from operations
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (32,935
                                      )Net
      loss
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (32,935
                                      )
 
 
 2008
                                      
                                      
                                      2007RecycleNet
      Corporation (Ontario)Net
      revenue
                                      
                                      
                                      -
                                      
                                      
                                      
                                      79,698Operating
      expenses
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (76,943
                                      )Income
      from operations
                                      
                                      
                                      -
                                      
                                      
                                      
                                      2,755Net
      income
                                      
                                      
                                      -
                                      
                                      
                                      
                                      2,755





F-12





ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURES





None.





Item
9A(T). CONTROLS AND PROCEDURES





Evaluation
of disclosure controls and procedures.





As of the
end of the period covered by this report, the Company conducted an evaluation,
under the supervision and with the participation of the principal executive
officer and principal financial officer, of the Company’s disclosure controls
and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934 (the “Exchange Act”)). Based on this evaluation, the
principal executive officer and principal financial officer concluded that the
Company’s disclosure controls and procedures are effective to ensure that
information required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in Securities and Exchange Commission rules
and forms.





Management’s
Report on Internal Control over Financial Reporting.





The
Company’s management is responsible for establishing and maintaining adequate
internal control over financial reporting (as defined in Rule 13a-15(f) under
the Exchange Act). The Company’s management assessed the effectiveness of the
Company’s internal control over financial reporting as of December 31, 2008. In
making this assessment, management used the criteria set forth by the Committee
of Sponsoring Organizations of the Treadway Commission in Internal
Control-Integrated Framework. The Company’s management has concluded that, as of
December 31, 2008, the Company’s internal control over financial reporting is
effective based on these criteria.





Changes
in internal control over financial reporting.





There was
no change in the Company’s internal control over financial reporting that
occurred during the year ended December 31, 2008 that has materially affected,
or is reasonably likely to materially affect, the Company’s internal control
over financial reporting.





Part
III





ITEM
10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE




The
directors and officers of the Company are as follows:





Name
                                                                
                                                                Age
                                                                
                                                                Position
                                                                
                                                                Term
      of OfficePaul
      Roszel
                                                                
                                                                52
                                                                
                                                                Chairman
      of the Board,
                                                                
                                                                Inception
      to PresentPresidentRichard
      R. Ivanovick C.A.
                                                                
                                                                68
                                                                
                                                                Chief
      Financial Officer,
                                                                
                                                                03/99
      to PresentKeith
      A. Deck
                                                                
                                                                72
                                                                
                                                                Director
                                                                
                                                                06/00
      to
Present




14





Paul
Roszel has been involved with the Company since 1988. Mr. Roszel has over 25
years of hands on experience in the recycling industry. He has been actively
involved in the development and implementation of collection, processing,
transportation and sales/marketing programs for secondary
commodities.





Richard
R. Ivanovick C.A. joined the Company in November 1998. For the past 30 years,
Mr. Ivanovick has been serving as President of Marsh Tire Service Ltd., Ontario,
Canada, a company involved in automobile service, sales and leasing of
automobiles, in the Guelph, Ontario area.





Keith A.
Deck is a retired executive with experience in the Automotive and Electrical
Manufacturing areas of business. From 1989 to 1999 Mr. Deck was the General
Manager of the Rocktell and Autocom plant operations of Linamar Corporation in
Guelph, Ontario Canada. Linamar Corporation is a publicly traded company on the
Toronto Stock Exchange in Canada.





Each of
these persons owns, directly or indirectly, common shares of the
Company.  Mr. Roszel also owns, directly or indirectly, class N shares
of the Company, which are convertible into common shares on a one-to-one basis,
as detailed in the following schedules found in Item 11.





Indemnification
of Directors and Officers





Section
16-10a-901 through 909 of the Utah Revised Business Corporation Act authorizes a
corporation's board of directors or a court to award indemnification to
directors and officers in terms sufficiently broad to


permit
such indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred, including counsel fees)


arising
under the Securities Act of 1933. A director of a corporation may only be
indemnified if: (1) the conduct was in good faith; and (2) the


director
reasonably believed that the conduct was in or not opposed to the corporation's
best interest; and (3) in the case of any criminal proceeding, the director had
no reasonable cause to believe the conduct was unlawful. A corporation may not
indemnify a person under the Utah Act unless and until the corporation's board
of directors has determined that the applicable standard of conduct set forth
above has been met.





The
Company's Articles of Incorporation do not provide for any additional or
different indemnification procedures other than those provided by the Utah Act,
nor has the Company entered into any indemnity agreements with its current
directors and officers regarding the granting of other or additional or
contractual assurances regarding the scope of the indemnification allowed by the
Utah Act. At present, there is no pending litigation or proceeding involving a
director, officer or employee of the Company regarding which indemnification is
sought, nor is the Company aware of any threatened litigation that may result in
claims or indemnification. The Company has not obtained director's and officer's
liability insurance, although the board of directors of the Company may
determine to investigate and, possibly, acquire such insurance in the
future.





Involvement
in Certain Legal Proceedings





None




Promotors
of the Company
 
 The
promoter of the Company is Mr. Paul Roszel. Prior to the incorporation of
RecycleNet Corporation (Ontario), Paul Roszel developed the concept of the
electronic dissemination of the information described above. In so doing, Mr.
Roszel acquired the domain name, the web sites and the web pages described
herein. Upon the incorporation of RecycleNet Corporation (Ontario), in
consideration for his services and expertise in developing the web sites and
pages, Mr. Roszel transferred ownership of these items to the corporation for
shares. As of November 1999, after the March 19, 1999 merger reorganization, the
number of Class N Shares issued by the corporation to Mr. Roszel and his related
corporation, for the above services and expertise, totaled 61,559,581.




15




ITEM
11. EXECUTIVE COMPENSATION





The
following table shows compensation earned during the fiscal years 2008 and 2007
by the Officers and Directors of the Company.  They are the only
persons who received compensation during those periods. No other miscellaneous
compensation was paid or stock options granted during those
periods.





Summary
Compensation Table





Name
      & Principal Positions
                                          
                                          Fiscal
      Year
                                          
                                          SalaryPaul
      Roszel, President & Chairman
                                          
                                          2008
                                          
                                          $
                                          80,4822007
                                          
                                          $
                                          79,711Richard
      R. Ivanovick, CFO
                                          
                                          2008
                                          
                                          $
                                          37,764(Note
      1)
                                          
                                          2007
                                          
                                          $
                                          37,428Keith
      A. Deck, Director
                                          
                                          2008
                                          
                                          $NIL(Note
      1)
                                          
                                          2007
                                          
                                          $NIL





NOTE
1:  During the years ended December 31, 2008 and 2007 Richard R
Ivanovick, CFO was paid for consulting services of $37,764 and 37,428,
respectively. Keith A Deck did not receive any funds in the year ended December
31, 2008 or for the year ended December 31, 2007. Subsequent to December 31,
2003, neither had drawn any salary or benefits.





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





The
following tables sets forth, as of the date herein, the share ownership of each
person known by the Company to be the beneficial owner of 5% or more of the
Company's shares, each officer and director individually and all directors and
officers of the Company as a group.





16





Title
                                                                        Name
      & Address
                                                                        Amount,
      Nature & Percentageof
      Class
                                                                        of
      Beneficial Owner
                                                                        of
      Beneficial Ownership(Note
      1)
                                                                        (Note
      1)
                                                                        (on
      a fully converted basis)Class
      N
                                                                        Inter-Continental
      Recycling, Inc.
                                                                        56,800,000
      shares (voting)
                                                                        100.00%(Note
      2 & 3)7
      Darren PlaceGuelph,
      Ontario CanadaClass
      N
                                                                        Paul
      Roszel
                                                                        no
      shares (voting)
                                                                        0.00%(Note3)7
      Darren PlaceGuelph,
      Ontario CanadaClass
      N
                                                                        Richard
      R. Ivanovick
                                                                        no
      shares (voting)
                                                                        0.00%23
      Cottontail PlaceCambridge,
      Ontario CanadaClass
      N
                                                                        Keith
      A. Deck
                                                                        no
      shares (voting)
                                                                        0.00%46
      Sherwood Dr.Guelph,
      Ontario CanadaCommon
                                                                        Inter-Continental
      Recycling, Inc.
                                                                        39,821,121
      shares (voting)
                                                                        50.35%(Note
      2 & 3)(see
      above address)Common
                                                                        Paul
      Roszel
                                                                        3,344,130
      shares (voting)
                                                                        4.23%(Notes
      2 & 3)(see
      above address)Common
                                                                        Richard
      R. Ivanovick C.A.
                                                                        4,105,622
      shares (voting)
                                                                        5.19%(see
      above address)Common
                                                                        Keith
      A. Deck
                                                                        812,004
      shares (voting)
                                                                        1.03%see
      above address)





Note (1)
Class N shares are convertible into common shares on a one for one basis. As of
December 31, 2008, there were 56,800,000 Class N shares outstanding. At the same
date, there were 79,091,412 common shares outstanding. The percentages in the
above table are for the particular class.





Note (2)
Inter-Continental Recycling Inc. is owned and beneficially held by Mr. Paul
Roszel, a director of the Company, and his immediate family.





Note (3)
Mr. Roszel may be deemed to be a beneficial owner of the 56,800,000 Class N
shares held by Inter-Continental Recycling, Inc.








ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE





The
Company has an agreement with Inter-Continental Recycling, Inc., an Ontario
Corporation with its head office address at 7 Darren Place, Guelph Ontario.
Inter-Continental Recycling, Inc. is controlled 100% by Mr. Paul Roszel and his
immediate family. Inter-Continental Recycling Inc. operates a pool of qualified
personnel, working on development projects, computer programming updates and
sales activities for various companies.  From this pool of personnel,
Inter-Continental assigns and provides employees to the Company as long as the
Company requires them and can pay the associated costs.





RecycleNet
Corporation is billed on average $2000 monthly for direct costs for web hosting
fees and utilization of bandwidth. It is also billed monthly for services
supplied directly for management and sales activities, which vary monthly based
on the activity level.





Inter-Continental
Recycling Inc. owns 56,800,000 Class N shares and 39,821,121 common shares of
RecycleNet Corporation. Inter-Continental owned approximately 94.9% of the
outstanding shares in RecycleNet Corporation (Ontario) at the time of the
reorganization between RecycleNet and Garbalizer


Machinery
Corporation in April, 1999. It then exchanged its equity interest in RecycleNet
(Ontario) for Class X shares in RecycleNet (Ontario) and an equal number of
Class N shares in RecycleNet (Utah), which are convertible into common shares of
RecycleNet (Utah).




17




Mr. Paul
Roszel through his holdings also controls the majority of the shares in
RecycleNet Corporation (Utah).
  There are
no other transactions during 2008, or proposed transactions, between the Company
and any director or officer or greater than 5% shareholder in which such persons
had or is to have a direct or indirect material interest. The Company has no
stock options, option plans or other incentive compensation plans at the present
time, although the Company anticipates that it may adopt incentive compensation
plans in the future. Further, the Company has no formal management or employment
agreements with any of its officers, directors or other
employees.





The
Company intends to enter into agreements in the future with other companies or
entities to process credit card merchant transactions, for which the Company
will receive a fee. Officers, directors and greater than 5% shareholders of the
Company may have a direct or indirect interest in future potential businesses or
entities in the recycling industry.





The
Company has an agreement with Inter-Continental Recycling, Inc. to provide
various services for the Company. Inter-Continental Recycling, Inc. is owned
100% by the immediate family of the President of the Company. The Company is
billed monthly for services supplied for management and sales activities, which
vary monthly based on the activity level. The charges for these services for the
years ended December 31, 2008 and 2007 were $235,198 and $425,496
respectively.





As of
December 31, 2008, the Company had advanced $160,892 to Scrap China
Corporation.  This resulted from expenses incurred for travel,
management and legal and accounting expenses paid on behalf of Scrap China
Corporation.  Additional funds, if required, will be provided by the
Company and will be treated as an advance to a related party.  These
advances are due on demand and bear no interest.








Promotors
of the Company





The
promoter of the Company is Mr. Paul Roszel. Prior to the incorporation of
RecycleNet Corporation (Ontario), Paul Roszel developed the concept of the
electronic dissemination of the information described above. In so doing, Mr.
Roszel acquired the domain name, the web sites and the web pages described
herein. Upon the incorporation of RecycleNet Corporation (Ontario), in
consideration for his services and expertise in developing the web sites and
pages, Mr. Roszel transferred ownership of these items to the corporation for
shares. As of November 1999, after the March 19, 1999 merger reorganization, the
number of Class N Shares issued by the corporation to Mr. Roszel and his related
corporation, for the above services and expertise, totaled 61,559,581.








Description
of Securities





The
Company has authorized 250,000,000 common shares, par value $.01, of which
79,091,412 common shares were issued and outstanding at December 31, 2008 and
56,800,000 Class N voting, non-equity shares were outstanding at December 31,
2008. The Class N voting, non-equity shares are convertible on a one for one
basis into common shares of the Company, RecycleNet Corporation
(Utah).





Upon
surrender of one Class N share the Company will issue one common share of the
Company and the Class N share will be cancelled. Subject to the foregoing, the
owners of outstanding common shares of the Company are entitled to receive
dividends out of assets legally available therefore at such times and in amounts
as the directors of the Company may determine. Each shareholder of common and
each shareholder of Class N shares is entitled to one vote for each common share
or Class N share held on all matters submitted to a vote of
shareholders.


18




Cumulative
voting for the election of directors is not provided for in the Company's
amended Articles of Incorporation, which means that the holders of a majority of
the shares voted can elect all of the directors then standing for election. The
voting shares are not entitled to preemptive rights and are not subject to
conversion or redemption. Upon a liquidation, dissolution or winding-up of the
Company, the assets legally available for distribution to stockholders are
distributable equally among the holders of the shares after payment of claims of
creditors. Each outstanding share is, and all shares that may be issued in the
future, will be fully paid and non-assessable.





There are
no provisions in the amended Articles of Incorporation of the Company that would
delay, defer, or prevent a change in control of the Company. The Company has no
debt securities issued and the Company does not contemplate issuing any in the
near future.






ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES





Hansen,
Barnett & Maxwell, P.C. served as the Company’s Independent Registered
Public Accountants for the years ended December 31, 2008 and 2007, and is
expected to serve in that capacity for the current year. Principal accounting
fees for professional services rendered for the Company by Hansen, Barnett &
Maxwell, P.C. for the years ended December 31, 2008 and 2007 are summarized as
follows:





2008
                                    
                                    
                                    2007Audit
      Fees
                                    
                                    $
                                    25,900
                                    
                                    
                                    $
                                    22,500Audit
      related
                                    
                                    
                                    
                                    
                                    
                                    
                                    1,750Tax
                                    
                                    
                                    2,100
                                    
                                    
                                    
                                    1,300Total
                                    
                                    $
                                    28,000
                                    
                                    
                                    $
                                    25,550








Audit
Fees.Audit fees were
for professional services rendered in connection with the Company’s annual
financial statement audits and quarterly reviews of financial statements and
review of, and preparation of, consents for registration statements for filing
with the Securities and Exchange Commission.





Tax
Fees.  Tax fees related to services for tax compliance and
consulting.





Audit Committee
Pre-Approval Policies and Procedures.  At its regularly
scheduled and special meetings, the Audit Committee of the Board of Directors,
which is comprised of independent directors knowledgeable of financial
reporting, considers and pre-approves any audit and non-audit services to be
performed by the Company’s independent accountants. The Audit Committee has the
authority to grant pre-approvals of non-audit services.





19





ITEM
15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES





Exhibit
                                                            Description20
                                                            Consent
      Resolution dated June 7, 2007.Filed
      on June 7, 200720
                                                            Consent
      Resolution dated November 24, 2005.Filed
      on November 30, 2005INDEX
      TO EXHIBITSExhibit
                                                            Description2
                                                            Stock
      Exchange Agreement as an exhibit to Form 10-SB are hereby incorporated
      by reference.  Filed on April 4, 2001.3.1
                                                            Articles
      of Incorporation filed as an exhibit to Form 10-SB are
      hereby incorporated by reference. Filed on December 8,
      1999.3.2
                                                            By-laws
      filed as an exhibit to Form 10-SB, Amendment No. 5 are
      hereby incorporated by reference. Filed on March 7,
      2000.10
                                                            Material
      Contracts(a)
                                                            Agreement
      between RecycleNet Corporation and Paul Roszelas
      an exhibit to Form 10-SB, Amendment No. 6 are herebyincorporated
      by reference. Filed on April 12, 2001.(b)
                                                            Agreement
      between RecycleNet Corporation and fiberglass.com,inc.as
      an exhibit to Form 10-SB, Amendment No. 6 are herebyincorporated
      by reference. Filed on April 12, 2001.(c)
                                                            Agreement
      between RecycleNet Corporation and metalworld.com, inc.as
      an exhibit to Form 10-KSB hereby incorporated by
  reference.Filed
      on April 16, 200131.1
                                                            Chief
      Executive Officer Certification under Section 302 of the Sarbanes-Oxley
      Act of 2002.31.2
                                                            Chief
      Financial Officer Certification under Section 302 of the Sarbanes-Oxley
      Act of 2002.32.1
                                                            Chief
      Executive Officer Certification under Section 906 of the Sarbanes-Oxley
      Act of 2002.32.2
                                                            Chief
      Financial Officer Certification under Section 906 of the Sarbanes-Oxley
      Act of
2002.




20





SIGNATURES





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





RECYCLENET
CORPORATION





March 31,
2009











BY:
/s/ Paul Roszel


Paul
Roszel, Chairman of the Board of Directors


March 31,
2009





Pursuant
to the requirements of the Securities Exchange Act of 1934,, this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.





March 31,
2009





BY: /s/
Paul Roszel


Paul
Roszel, Chairman of the Board of Directors








March 31,
2009





BY: /s/
Richard R. Ivanovick


Richard
R. Ivanovick, C.A., CFO










21