US SECURITIES & EXCHANGE COMMISSION
                               WASHINGTON DC 20549
                                   Form 10-QSB


                                   (Mark One)


(X)      QUARTERLY  REPORT UNDER SECTION 13 or (15)D OF THE SECURITIES  EXCHANGE
         ACT OF 1934

For the quarterly period ended    July 31, 2002
                               -------------------


                                       OR


( )      TRANSITION REPORT UNDER SECTION 13 or 15(D) OF THE SECURITIES  EXCHANGE
         ACT OF 1934

For the transition period                To
                         ----------------  ----------------

Commission file number       000-25875
                          --------------



                           EXHAUST TECHNOLOGIES, INC.
       (Exact name of small business issuer as specified in its charter)


        Washington                                           91-1970433
        ----------                                           ----------
(State or other jurisdiction of                     (IRS Employer Identification
 Incorporation or Organization)                      No.)


            230 North Division St P O Box 2822 Spokane WA 99220-2822
            --------------------------------------------------------
                    (Address of principal executive office)


                                 (509) 838-4447
                                 --------------
                           (Issuer's telephone number)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(D) of the  Exchange  Act during the past 12 months (or for such shorter
period that the  Registrant  was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days. YES ( ) NO (X)

As of September 4, 2002 there were 6,730,825 shares of the  Registrant's  common
stock outstanding.

Transitional Small Business Disclosure Format (check one)
                                                          YES ( )  NO (X)

<PAGE>

                           EXHAUST TECHNOLOGIES, INC.

                                   Form 10-QSB

                    For the Quarter Ended September 30, 2002






                                      INDEX


                                                                            Page
                                                                            ----


PART I - Financial Information


      Item 1 - Financial Statements (all financial
               statements are unaudited except
               the January 31, 2002 balance sheet):

             - Balance Sheets - July 31, 2002 and
               January 31, 2002                                              3-4

             - Statements of Income (Loss) - Three
               months and six months ended July 31,
               2002 and 2001                                                 5-6

             - Statements of Cash Flows - Six months
               ended July 31, 2002 and 2001                                  7-8
             - Notes To Financial Statements                                9-10


      Item 2 - Management's Discussion and Analysis
                and Plan of Operation                                      11-13


PART II - Other Information                                                   14

<PAGE>

Part I - Financial Information
Item 1 - Financial Statements





                           EXHAUST TECHNOLOGIES, INC.

                                 BALANCE SHEETS
                         ==============================



                                                          July         January
                                                        31, 2002          31,
                                                      (Unaudited)        2002
                                                      -----------    -----------


     ASSETS (Note 2)
     ------

CURRENT:
  Cash                                                $    61,329    $    11,890
  Accounts receivable, less $-0-
   and $4,256 allowance for doubtful
   accounts                                                40,748         22,986
  Accounts receivable-related party                        39,087         15,765
  Inventory                                               467,464        346,662
  Inventory credit note                                    23,392        199,535
  Prepaid expenses                                         10,989          7,710
                                                      -----------    -----------
         TOTAL CURRENT ASSETS                             643,009        604,548


EQUIPMENT, net of accumulated
  depreciation of $40,065 and $32,565                     118,554        122,055


LICENSES, net of accumulated
  amortization of $23,605 and $20,455                       7,829         10,979
                                                      -----------    -----------



                                                      $   769,392    $   737,582
                                                      ===========    ===========








                  (See notes to interim financial statements.)
                                       -3-
<PAGE>

                           EXHAUST TECHNOLOGIES, INC.

                                 BALANCE SHEETS
                         ===============================





                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)


CURRENT:
  Note payable                                       $    60,000    $   120,002
  Accounts payable                                        20,042        129,715
  Accrued interest-related party                         144,645        117,145
  Line of credit-related party                           500,000        500,000
                                                     -----------    -----------

         TOTAL CURRENT LIABILITIES                       724,687        866,862
                                                     -----------    -----------

Committments and Contingencies                              --             --
                                                     -----------    -----------

STOCKHOLDERS' EQUITY (DEFICIT):
  Common stock, $.00001 par value,
    100,000,000 shares authorized,
    6,730,825 and 6,491,000 shares
    outstanding, respectively                                 67             65
  Additional paid-in capital                             672,068        642,070
  Deficit                                               (627,430)      (771,415)
                                                     -----------    -----------

         TOTAL STOCKHOLDERS' EQUITY
             (DEFICIT)                                    44,705       (129,280)
                                                     -----------    -----------


                                                     $   769,392    $   737,582
                                                     ===========    ===========








                 (See notes to interim financial statements)
                                      -4-

<PAGE>

                           EXHAUST TECHNOLOGIES, INC.

                            STATEMENTS OF CASH FLOWS
                           Increase (Decrease) in Cash
                                    Unaudited


                                                            Six          Six
                                                           Months       Months
                                                           Ended        Ended
                                                          July 31,     July 31,
                                                           2002         2001
                                                         ---------    ---------

Cash flows from
operating activities:
Net income (loss)                                        $ 143,985    $(108,540)
Adjustments to
  reconcile net loss
  to net cash used in
  operating activities:
   Amortization and
    depreciation                                            10,650       10,387
   Contributed services                                       --         10,000
   Issuance of common
    stock for note
    receivable                                                --        300,000
 Changes in assets and
  liabilities:
   Accounts receivable                                     (41,084)    (103,189)
   Accounts payable                                       (109,673)      15,782
   Inventory                                              (120,802)    (117,966)
   Inventory credit note                                   176,143     (236,360)
   Prepaid expenses                                         (3,279)       5,166
   Accrued interest                                         27,500       28,750
                                                         ---------    ---------

Net cash provided by (used in)
 operating activities                                       83,440     (195,970)
                                                         ---------    ---------

Cash flows from
 investing activities:
 Cash paid for property
  and equipment                                             (3,999)      (4,223)
                                                         ---------    ---------

Net cash used in
 investing activities                                       (3,999)      (4,223)
                                                         ---------    ---------







                   (See notes to interim financial statements)
                                       -7-


<PAGE>

                           EXHAUST TECHNOLOGIES, INC.

                             STATEMENT OF CASH FLOWS
                           Increase (Decrease) in Cash
                                    Continued
                       ==================================


                                                            Six           Six
                                                           Months        Months
                                                           Ended         Ended
                                                          July 31,     July 31,
                                                            2002        2001
                                                         ---------    ---------


Cash flows from
 financing activities:
 Net proceeds from
  sale of common stock                                      30,000      200,000
 Principal payments on note                                (60,002)        --
                                                         ---------    ---------

Net cash provided by (used in)
 financing activities                                      (30,002)     200,000
                                                         ---------    ---------

Net increase
(decrease) in cash                                          49,439         (193)

Cash, beginning of
 period                                                     11,890        3,822
                                                         ---------    ---------

Cash, end of period                                      $  61,329    $   3,629
                                                         =========    =========

Supplemental Disclosures
 of Cash Flow Information:

 Cash Paid During Period
  for:
  Interest                                               $   2,936    $    --
                                                         =========    =========

  Income Taxes                                           $    --      $    --
                                                         =========    =========

Non-Cash Financing
 Activities:
 Common stock for
  note receivable                                        $    --      $ 300,000
                                                         =========    =========







                   (See notes to interim financial statements)
                                       -8-


<PAGE>

                           EXHAUST TECHNOLOGIES, INC.

                      NOTES TO INTERIM FINANCIAL STATEMENTS
                      =====================================

1.       BASIS OF PRESENTATION

The  foregoing  unaudited  interim  financial  statements  have been prepared in
accordance with generally accepted  accounting  principles for interim financial
information  and with the  instructions  to Form  10-QSB and  Regulation  S-B as
promulgated  by the  Securities  and  Exchange  Commission.  Accordingly,  these
financial statements do not include all of the disclosures required by generally
accepted  accounting  principles  for  complete  financial   statements.   These
unaudited  interim  financial  statements should be read in conjunction with the
audited  financial  statements  for the period ended  January 31,  2001.  In the
opinion of management,  the unaudited  interim  financial  statements  furnished
herein include all adjustments,  all of which are of a normal recurring  nature,
necessary for a fair statement of the results for the interim period presented.

The preparation of financial  statements in accordance  with generally  accepted
accounting  principles requires the use of estimates and assumptions that affect
the reported amounts of assets and liabilities,  disclosure of contingent assets
and  liabilities  known to exist as of the  date the  financial  statements  are
published,  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period.  Uncertainties  with respect to such estimates and assumptions
are  inherent  in  the  preparation  of  the  Company's  financial   statements;
accordingly,  it is possible  that the actual  results  could  differ from these
estimates  and  assumptions  that could have a material  effect on the  reported
amounts of the Company's financial position and results of operations.

The Company has been in the  development  stage  since its  inception.  The year
beginning  February 1, 2001 is the first year during which it is  considered  an
operating company.

Operating  results for the three-month and six month periods ended July 31, 2002
are not necessarily  indicative of the results that may be expected for the year
ending January 31, 2003.

2. GOING  CONCERN

Prior to the three months  ended July 31, 2002 the Company has  incurred  losses
since  inception  totaling  $674,746.  In  addition,  the  Company has a working
capital  deficiency,  limited  revenues to date and a product  for which  market
acceptance remains generally  untested.  While the Company has commenced selling
its product and entered into license agreements, until the six months ended July
31,  2002,  sales  and  royalties  have not  been  sufficient  to pay  expenses.
Primarily as a result of these  factors,  the  Company's  independent  certified
public  accountants  included an  explanatory  paragraph  in their report on the
Company's 2002 financial statements which expressed  substantial doubt about the
Company's  ability to continue as a going concern.  The financial  statements do
not include any  adjustments  that may be  necessary if the Company is unable to
continue as a going concern.

                                      -9-


<PAGE>

                           EXHAUST TECHNOLOGIES, INC.

                      NOTES TO INTERIM FINANCIAL STATEMENTS
                      =====================================

Management  of the  Company  has  undertaken  certain  actions to address  these
conditions. Management has commenced limited operations, sold license agreements
and has found a limited number of companies to manufacture  its products.  Funds
required to carry out management's  plans are expected to be derived from future
stock  sales,  borrowings  from  the  Company's  shareholders  or  sales  of its
products.  There can be no  assurances  that the Company  will be  sucessful  in
executing its plans.

3.       STOCK OFFERING

The  Company  entered  into a letter of intent with an  underwriter  pursuant to
which the  underwriter  agreed to sell, on a best efforts  basis,  up to 550,000
units at a per unit  price of  $5.10.  The  underwriting  was  unsuccessful  and
terminated in April, 2001.


4.       REVENUE RECOGNITION

In December 1999, the United States  Securities and Exchange  Commission  issued
Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements"
("SAB  101").  SAB 101 refined the  criteria  for  determining  when  revenue is
considered  recognizable and is effective no later than the first fiscal quarter
of the fiscal year beginning  after  December 31, 1999. The Company  adopted the
principles specified in SAB 101, and accordingly,  sales of product are recorded
and  customers  are billed when  products are shipped to  customers  under firm,
enforceable  commitments and  collectibility  is reasonably  assured.  Estimated
amounts for  reserves for sales  returns,  provision  for  customer  rebates and
discounts  and a provision  for an  allowance  for bad debts are recorded at the
time of sale and based on management's  estimates using reasonable  assumptions.
Revenue  recognition from royalty payments based upon licensing  agreements will
be recognized when the royalties are received,  or when a reasonable estimate of
royalties  due  under  the  licensing  agreements  can be  made.  Non-refundable
royalties  paid in advance  under  minimum  guarantee  clauses of the  licensing
agreements are considered revenue in the period they are received.






                                      -10-


<PAGE>

                           EXHAUST TECHNOLOGIES, INC.


5.       LICENSE AGREEMENTS

During the quarter ended October 31, 2001, the Company entered into two separate
agreements  licensing  rights to their  patents.  The terms of the  licenses are
enforceable for the life of the patents.  Quarterly royalties are payable to the
Company with certain minimum advance  royalties due quarterly and annually.  The
Company  has also  retained  the right to produce  and sell its  products in the
United States and Canada under their branded trademark.

6.       STOCK ISSUANCES

During the quarter ending July 31, 2002, the Company issued 60,000 shares of
common stock for cash at $0.50 per share. Also during this period, the Company
issued 179,825 shares of common stock at par value as a subsequent price
adjustment related to an original stock issuance in April 2001 whereby the
Company issued 469,275 shares of common stock for $500,000 of cash and inventory
credit.

Item 2. Management's Discussion and Analysis or Plan of Operation

General
-------

This Quarterly Report on Form 10-QSB,  including the information incorporated by
reference herein,  includes "forward looking  statements"  within the meaning of
section 27A of the Securities Act of 1933, as amended (the "Securities Act") and
Section 21E of the  Securities  Exchange Act of 1934, as amended (the  "Exchange
Act"). All of the statements  contained in this Quarterly Report on Form 10-QSB,
other than statements of historical fact,  should be considered  forward looking
statements,  including,  but not  limited to,  those  concerning  the  Company's
strategies,  objectives and plans for expansion of its operations,  products and
services  and  growth  in demand  for the  Company's  services.  There can be no
assurance  that  these  expectations  will prove to have been  correct.  Certain
important  factors that could cause actual results to differ materially from the
Company's expectations (the "Cautionary Statements") are disclosed in the annual
report filed on Form 10-KSB.  All  subsequent  written and oral forward  looking
statements by or attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by such Cautionary  Statements.  Investors
are cautioned not to place undue reliance on these forward  looking  statements,
which  speak  only  as of the  date  hereof  and are not  intended  to give  any
assurance as to future results. The Company undertakes no obligation to publicly
release any revisions to these forward  looking  statements to reflect events or
reflect the occurrence of unanticipated events.

                                      -11-


<PAGE>

                           EXHAUST TECHNOLOGIES, INC.

Plan of Operation
-----------------

The Company is attempting to increase our customer base through  advertising and
marketing and aggressively promote all our products.

We have inadequate cash to maintain operations during the next twelve months. In
order to meet our cash requirements we have to raise additional  capital royalty
receipts,  sales of our  products  or  additional  borrowings  from a  corporate
officer.  If  these  alternatives  are  unsuccessful,   we  may  have  to  cease
operations.  At July 31,  2002,  we owed Mr.  Sterling  $500,000 on an unsecured
note. We believe that we will need to raise at least  $750,000  from  operations
and/or borrowings in order to maintain operations during the next twelve months.

The Company does not anticipate spending monies for capital expenditures.

The  research  and  development  is  expected  to  continue  as the  Company  is
continually trying to adapt its muffler to products currently on the market.


Three  Months and Six Months  Ended July 31,  2002  (Unaudited)  compared to the
--------------------------------------------------------------------------------
Three Months and Six Months Ended July 31, 2001
-----------------------------------------------
(Unaudited)
-----------


During the three months ended July 31, 2002 the Company  recognized  net revenue
in the second  quarter of fiscal 2002 of  approximately  $123,000 as compared to
$23,000 for the same period of the prior fiscal year and approximately  $289,000
for the six  months  ended July 31,  2002 as  compared  to $67,000  for the same
period of the prior year.  The  increase in sales is the result of our  products
reaching a larger market due to marketing  efforts and the collection of advance
royalties.

Operating  expenses include those costs incurred to bring the Company's  product
to market relative to research and development,  sales,  marketing,  and general
administration. Operating expenses increased for the three months ended July 31,
2002  to  approximately   $84,000  from  approximately   $49,000  for  the  same
three-month  period in 2001.  The  increase of $35,000 was due to  decreases  in
professional  services of approximately $23,000 due to reduced legal fees as the
patent  applications have been completed,  increases in research and development
of approximately  $8,000 as the Company  continues to apply its patented muffler
to other  products on the market,  decreases  in  commissions  of  approximately
$4,000  because the Company is no longer  bound to a  commission  agreement  and
administrative expenses increased $54,000 as a result of increased operations as
the Company  expands  its  customer  base and  services  its royalty  contracts.
Additionally,  interest decreased  approximately $6,000 as a result of decreases
in interest rates. Other income increased  approximately  $23,000 as the Company
received reimbursement by its supplier for past warranty costs.


                                      -12-


<PAGE>

                           EXHAUST TECHNOLOGIES, INC.


For  the  six  months  ended  July  31,  2002,   operating   expenses  increased
approximately  $46,000 for the same six month period of last year as a result of
decreases in professional  development of  approximately  $34,000 due to reduced
legal fees as the patent applications have been completed, increases in research
and development of approximately  $15,000 due to continual  efforts to apply the
patented  muffler to new products,  decreases in  commissions  of  approximately
$15,000 because of the elimination of the commission  agreement and increases in
administrative  expenses of approximately  $80,000 as the Company  increases its
sales  operations and supports its royalty  agreements.  Additionally,  interest
decreased  approximately $5,000 because of interest rate declines.  Other income
increased  approximately $71,000 due to warranty reimbursements of approximately
$23,000 and the discount of prior accounting fees.

Net Income (Loss)
-----------------

Primarily as a result of the  foregoing  factors,  the  Company's net income was
approximately  $47,000  compared to a net loss of $47,000  for the three  months
ended July 31,  2002 and 2001,  respectively  and a net income of  approximately
$144,000  compared to a net loss of  approximately  $108,000  for the six months
ended July 31, 2002 and 2001, respectively.


Financial Conditions and Liquidity
----------------------------------

At July 31, 2002,  the Company had  approximately  $61,000 of cash.  For the six
months ended July 31, 2002,  the Company  received  approximately  $105,000 from
collections  of product  sales and  approximately  $250,000  in advance  royalty
payments.  The Company expended  approximately $306,000 for the six months ended
July 31, 2002, to market the Company's products and operate the Company.  Future
funds required to carry out  management's  plans are expected to be derived from
royalty receipts,  product sales and borrowings. If none of the alternatives are
successful, we may have to cease operations.







                                      -13-


<PAGE>

                           EXHAUST TECHNOLOGIES, INC.



                           PART II - OTHER INFORMATION


ITEM 1.   LEGAL PROCEEDINGS

The Company  knows of no  litigation  present,  threatened  or  contemplated  or
unsatisfied  judgment  against the  Company,  its  officers or  directors or any
proceedings in which the Company, its officers or directors are a party.

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

The rights of the holders of the Company's securities have not been modified nor
have the rights  evidenced  by the  securities  been limited or qualified by the
issuance or modification of any other class of securities.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

There are no senior secutities issued by the Company.

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

There were no matters  presented to the  shareholders  for vote during the three
months ended July 31, 2002.

ITEM 5.   OTHER INFORMATION

None

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

During the quarter ended July 31, 2002,  the Company did not file any reports on
Form 8-K.










                                      -14-


<PAGE>

                              SIGNATURES




Pursuant to the  requirements  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, on this 6th day of September, 2002.



                             EXHAUST TECHNOLOGIES, INC.



                                 /s/  Robert E. Sterling
                                 ----------------------------
                                      Robert E. Sterling
                                      President


                                 /s/  William A. Sutherland
                                 ----------------------------
                                      William A. Sutherland
                                      Chief Financial Officer
















                                      -15-