United States
                     Securities and Exchange Commission
                            Washington, DC 20549

                                FORM 10-QSB

               Quarterly Report Under Section 13 or 15(d) of
                    the Securities Exchange Act of 1934

For the Quarter Ended                                Commission File Number
     March 31, 2002                                            0-23812

                     ADVANCED RECYCLING SCIENCES, INC.
                     ----------------------------------
           (Exact name of registrant as specified in its charter)

                                   NEVADA
                                  -------
       (State or other jurisdiction of incorporation or organization)

                                 95-4255962
                                -----------
                    (I.R.S. Employer Identification No.)

          Park Irvine Business Center, 14771 Myford Road, Suite B
          -------------------------------------------------------
                              Tustin, CA 92780
                              ----------------
                  (Address of principal executive offices)

                               (714) 508-1470
                               --------------
            (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12 (b) of the Act:          None
                                                                     ------

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

            X Yes        No
          ----      ----

State the number of shares outstanding of each of the registrants classes
of common equity, as of the latest practicable date.

        Common stock, par value $.001; 18,036,913 shares outstanding
                            as of March 31, 2002


                                                                      Page
                                                                     ------

PART I.  FINANCIAL INFORMATION

     Item 1.  Consolidated Financial Statements

          Consolidated Balance Sheet as of March 31, 2002 and
          December 31, 2001. . . . . . . . . . . . . . . . . . . . . . . .3

          Consolidated Statement of Operations for the three months
          ended March 31, 2002 and 2001  . . . . . . . . . . . . . . . . .5

          Consolidated Statement of Shareholder's Equity
          for the three months ended March 31, 2002. . . . . . . . . . . .6

          Statement of Cash Flows for the three months ended
          March 31, 2002 and 2001. . . . . . . . . . . . . . . . . . . . .8

          Notes to Financial Statements at March 31, 2002 and
          2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

     Item 2.  Management Discussion and Analysis of Financial
              Condition and Results of Operations. . . . . . . . . . . . 11

PART II.  OTHER INFORMATION

     Item 1.  Legal Proceedings. . . . . . . . . . . . . . . . . . . . . 14

     Item 2.  Changes in Securities. . . . . . . . . . . . . . . . . . . 14

     Item 3.  Default upon Senior Securities . . . . . . . . . . . . . . 15

     Item 4.  Submission of Matters to a Vote of Security Holders. . . . 15

     Item 5.  Other Information. . . . . . . . . . . . . . . . . . . . . 16

     Item 6.  Exhibits and Reports on Form 8-K . . . . . . . . . . . . . 16

                       PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                     Advanced Recycling Sciences, Inc.
                               Balance Sheets

<Table>
<Caption>
                                      March 31,     March 31,  December 31,
                                        2002          2001          2001
                                   ------------  ------------  ------------
                                    (Unaudited)   (Unaudited)
<S>                               <C>           <C>           <C>
Current Assets
--------------
  Cash                             $     7,308   $   186,230   $     3,785
  Accounts Receivable                    -            98,326         -
  Interest Receivable                    -               722         -
  Inventory                              -             2,909         -
  Equipment Inventory                  718,938     1,838,050       718,938
  Deposit                               14,281        31,409        14,281
  Note & Interest Receivable
   - Officer                            11,430         9,179        11,430
  Prepaid Expenses                       6,576       134,468         6,576
                                   ------------  ------------  ------------
     Total Current Assets              758,533     2,301,293       755,010

Property and Equipment
----------------------
  Furniture & Fixtures                  38,550        33,339        38,550
  Equipment                          1,504,870     1,732,639     1,504,870
  Vehicles                               -            81,485        39,402
  Land                                 617,840       149,119       617,840
  Web Sites                             25,728        19,468        25,728
                                   ------------  ------------  ------------
     Total Property & Equipment      2,186,988     2,016,050     2,226,390
     Less Accumulated Depreciation    (835,390)     (496,258)     (768,861)
                                   ------------  ------------  ------------
     Net Property & Equipment        1,351,598     1,519,792     1,457,529

Other Assets
------------
  License Rights                       647,554       647,554       647,554
  Patent Rights                      4,065,000     4,065,000     4,065,000
                                   ------------  ------------  ------------
     Total Other Assets              4,712,544     4,712,544     4,712,544

     Less Accumulated Amortization    (350,632)     (285,877)     (334,443)
                                   ------------  ------------  ------------
     Net Other Assets                4,361,912     4,426,667     4,378,101
                                   ------------  ------------  ------------
     Total Assets                  $ 6,472,043   $ 8,247,752   $ 6,590,640
                                   ============  ============  ============

</Table>

                                 Continued
                                     3

                     Advanced Recycling Sciences, Inc.
                               Balance Sheets

<Table>
<Caption>
                                      March 31,     March 31,  December 31,
                                        2002          2001          2001
                                   ------------  ------------  ------------
                                    (Unaudited)   (Unaudited)
<S>                               <C>           <C>           <C>

Current Liabilities
-------------------
  Accrued Expenses                 $    80,481   $     5,254   $    61,561
  Accounts Payable                     610,099       334,934       526,123
  Notes Payable                        135,729         -           154,582
  Interest on Notes Payable              7,909         -             7,909
  Payroll Taxes Payable                  3,545        14,728         -
  Sales Tax Payable                      -             2,447         -
                                   ------------  ------------  ------------

     Total Current Liabilities         837,763       357,363       750,175

Long Term Liabilities
---------------------
  Capital Lease                         29,655        31,475        29,655
  Notes Payable                         78,721       717,884        78,721
                                   ------------  ------------  ------------
     Total Long Term Liabilities       108,376       749,359       108,376

     Minority Interest                  43,314         -           44, 738

Stockholders' Equity
--------------------
  Preferred Stock; 5,000,000
   Shares Authorized, Par Value
   of $0.001 Per Share; Zero
   Shares Issued and Outstanding         -             -             -
  Common Stock; 50,000,000 Shares
   Authorized; Par Value of
   $0.001 Per Share; 18,036,913;
   15,348,770; and 17,176,913
   Shares Issued and Outstanding
   Respectively                         18,037        15,348        17,177
  Additional Paid In Capital        14,049,323    14,122,196    13,807,412
  Paid In Capital Stock Options         25,543         -            25,543
  Accumulated Deficit               (8,523,242)   (6,996,514)   (8,075,710)
  Accumulated Other Comprehensive
   Income                              (87,071)        -           (87,071)
                                   ------------  ------------  ------------
     Total Stockholders' Equity      5,482,590     7,141,030     5,687,351
                                   ------------  ------------  ------------
     Total Liabilities and
     Stockholders' Equity          $ 6,472,043   $ 8,247,752   $ 6,590,640
                                   ============  ============  ============

</Table>

              See accompanying notes to financial statements.
                                     4
                     Advanced Recycling Sciences, Inc.
                          Statement of Operations
<Table>
<Caption>
                                                                  For the
                                                                Year Ended
                                  For the Three Months Ended   December 31,
                                       2002          2001          2001
                                   ------------  ------------  ------------
                                   (Unaudited)   (Unaudited)
<S>                               <C>           <C>           <C>
Revenues
--------
  Equipment Sales                  $     -       $     -       $    38,897
  Product Sales                          -            50,495        48,662
                                   ------------  ------------  ------------
     Total Revenues                      -            50,495        87,559
     Cost of Sales                       -            34,619        37,287
                                   ------------  ------------  ------------
     Gross Profit                        -            15,876        50,272

Expenses
--------
  Depreciation                          75,841        79,449       324,826
  Amortization                          16,189        16,189        64,756
  Travel                                20,565        21,388        87,812
  Professional Fees                     16,988        93,041       175,032
  Office                                30,041        26,941        82,221
  Rent & Utilities                      26,061        20,278       119,835
  Administrative Expenses               89,192        86,864       578,796
  Consultant Fees                      167,360       146,656       674,731
  Interest                               6,285           119         9,058
  Options Issued Expense                 -            15,000         -
                                   ------------  ------------  ------------
     Total Expenses                    448,522       505,925     2,117,067
     Net Income (Loss)
     from Operations                  (448,522)     (490,049)   (2,066,795)

Other Income (Expenses)
-----------------------
  Interest Income                        -               672         1,215
  Gain (Loss) on Sale of Assets           (434)        -               988
                                   ------------  ------------  ------------
     Total Other Income (Expenses)        (434)          672         2,203

     Minority Interest                   1,424         -             9,262
                                   ------------  ------------  ------------
     Net Income (Loss)             $  (447,532)  $  (489,377)  $(2,055,330)
                                   ============  ============  ============
     Net Income (Loss) Per Share   $     (0.03)  $     (0.04)  $     (0.13)

     Weighted Average Shares
     Outstanding                    17,606,913    12,766,113    15,873,294

     Fully Diluted Net Profit
     Per Share                             N/A           N/A           N/A

</Table>
              See accompanying notes to financial statements.
                                     5

                     Advanced Recycling Sciences, Inc.
                     Statement of Stockholders' Equity
                   From January 1, 2001 to March 31, 2002
<Table>
<Caption>
                            Common Stock         Paid In  Comprehensive  Accumulated
                         Shares     Amount       Capital       Income       Deficit
                   -----------------------------------------------------------------
<S>                <C>         <C>         <C>            <C>           <C>
Balance,
January 1, 2001     12,752,128  $  12,751   $11,128,925    $   (80,391)  $(6,020,380)

Shares Issued for
Patent Rights at
$1.625 Per Share     1,446,153      1,446     2,348,554          -             -

Shares Issued for
Services at $.85
Per Share               85,000         85        67,915          -             -

Shares Issued for
Cash (Euro Reg-S)
at $.54 Per Share    1,457,464      1,458       782,373          -             -

Shares Issued for
Cash (Euro Reg-S)
at $.48 Per Share    1,311,250      1,311       623,689          -             -

Shares Issued for
Debt at $.40 Per
Share                  765,385        766       305,388          -             -

Shares Canceled
for Asset Return      (640,467)      (640)   (1,360,365)         -             -

Options Adjustment       -          -           (63,524)         -             -

Foreign Currency
Translation              -          -             -             (6,710)        -

Net Loss for the
Year Ended
December 31, 2001        -          -             -              -        (2,055,330)
                    -----------------------------------------------------------------
Balance,
December 31, 2001   17,176,913  $  17,177   $13,832,955     $  (87,101)  $(8,075,710)
                    =================================================================

</Table>

                                 Continued
                                     6

                     Advanced Recycling Sciences, Inc.
                     Statement of Stockholders' Equity
                   From January 1, 2001 to March 31, 2002

<Table>
<Caption>
                            Common Stock         Paid In  Comprehensive  Accumulated
                         Shares     Amount       Capital       Income      Deficit
                   -----------------------------------------------------------------
<S>                <C>         <C>         <C>            <C>           <C>
Balance,
January 1, 2002     17,176,913  $  17,177   $13,832,955     $  (87,101)  $(8,075,710)

Shares Issued for
Cash (Asian Reg-S)
at $.25 Per Share      560,000        560       167,211          -             -

Shares Issued for
Cash (Euro Reg-S)
at $.30 Per Share      300,000        300        74,700          -             -

Net Loss for the
Three Months Ended
March 31, 2002           -          -             -              -          (447,532)
                    -----------------------------------------------------------------
Balance,
March 31, 2002      18,036,913  $   18,037  $14,074,866    $   (87,101)  $(8,523,242)
                    =================================================================


</Table>

              See accompanying notes to financial statements.
                                     7






                     Advanced Recycling Sciences, Inc.
                          Statement of Cash Flows
<Table>
<Caption>
                                                                            For the
                                             For the Three Months Ended   Year Ended
                                                March 31,     March 31,  December 31,
                                                  2002          2001         2001
                                             ------------  ------------  ------------
                                              (Unaudited)   (Unaudited)
<S>                                         <C>           <C>           <C>
Cash Flows from Operating Activities
------------------------------------
 Net Profit or (Loss)                        $  (447,532)  $  (489,377)  $(2,055,330)
 Adjustments to Reconcile Net Profit
  or (Loss) to Net Cash;
   Options Issued                                  -            15,000       (63,524)
   Amortization and Depreciation                  92,030        95,638       389,582
   Gain on Sale of Fixed Assets                     (423)        -              (988)
   Stock Issued for Services                       -             -            68,000
 Changes in Operating Assets & Liabilities;
  (Increase) Decrease in Accounts Receivable       -           (38,377)       59,949
  (Increase) Decrease in Interest Receivable       -             -               722
  (Increase) Decrease in Inventory                 -            34,619        37,528
  (Increase) Decrease in Equipment Inventory       -            (2,839)        -
  (Increase) Decrease in Notes Receivable          -            24,851        22,570
  (Increase) Decrease in Prepaid Expense           -             4,976       132,868
  (Increase) Decrease in Deposits                  -             -            17,128
  Increase (Decrease) in Accrued Expenses         18,920        (3,893)       52,324
  Increase (Decrease) in Accounts Payable         83,976      (117,154)       74,035
  (Decrease) Increase in Interest on
   Notes Payable                                   -            (3,637)        4,272
  Increase (Decrease) in Payroll Taxes
   Payable                                         3,545        14,728         -
  Increase (Decrease) in Sales Taxes
   Payable                                         -             2,447         -
                                             ------------  ------------  ------------
   Net Cash Provided (Used)
   by Operating Activities                      (249,484)     (463,108)   (1,260,864)

Cash Flows from Investing Activities
------------------------------------
 Land Preparation and Costs                        -             -          (218,803)
 Purchase of Equipment                             -            (9,845)      (70,087)
 Purchase of Website                               -             -           (16,078)
 Purchase of Furniture & Fixtures                  -             -              (772)
 Proceeds from Sale of Equipment                  30,513         -            31,054
                                             ------------  ------------  ------------
   Net Cash Provided (Used)
   by Investing Activities                        30,513        (9,845)     (274,686)

</Table>

                                 Continued
                                     8

                     Advanced Recycling Sciences, Inc.
                          Statement of Cash Flows
<Table>
<Caption>
                                                                            For the
                                             For the Three Months Ended   Year Ended
                                                March 31,     March 31,  December 31,
                                                  2002          2001          2001
                                             ------------  ------------  ------------
                                              (Unaudited)   (Unaudited)
<S>                                         <C>           <C>           <C>
Cash Flows from Financing Activities
------------------------------------
 Sale of Common Stock                            242,771       630,868     1,481,096
 Payment of Long Term Debt                       (18,853)        -            (1,820)
 Increase (Decrease) in Minority Interest         (1,424)       12,994        44,738
                                             ------------  ------------  ------------
   Net Cash Provided (Used) by
   Financing Activities                          222,494       643,862     1,524,014
                                             ------------  ------------  ------------

   Increase (Decrease) in Cash                     3,523       170,909       (11,536)

   Cash at Beginning of Period                     3,785        15,321        15,321
                                             ------------  ------------  ------------
   Cash at End of Period                     $     7,308   $   186,230   $     3,785
                                             ============  ============  ============
Disclosures from Operating Activities
-------------------------------------
 Interest                                    $     -       $       119   $     9,058
 Taxes                                             -             -             -

</Table>


              See accompanying notes to financial statements.
                                     9


                     Advanced Recycling Sciences, Inc.
                       Notes to Financial Statements
                               March 31, 2002

NOTE 1 - Corporate History
--------------------------

The Company was organized on December 2, 1968, under the laws of the state
of California as Acquatic Systems, Inc.  On June 27, 1989, the Company
merged with Country Maid, Inc., a Nevada Corporation, the Corporate
domicile was changed to the state of Nevada.  On September 18, 1992, the
name of the Company was changed to The Quantum Group, Inc.  On March 26,
2001, the Company filed an Amendment to the Articles of Incorporation
changing it's name to Advanced Recycling Sciences, Inc.  The Company is
registered and qualified to do business in the state of California.

NOTE 2 - Significant Accounting Policies
----------------------------------------

A.   The Company uses the accrual method of accounting.
B.   Revenues and directly related expenses are recognized in the period
     when the goods are shipped to the customer.
C.   The Company considers all short term, highly liquid investments that
     are readily convertible, within three months, to known amounts as cash
     equivalents.  The Company currently has no cash equivalents.
D.   Primary Earnings Per Share amounts are based on the weighted average
     number of shares outstanding at the dates of the financial statements.
     Fully Diluted Earnings Per Shares shall be shown on stock options and
     other convertible issues that may be exercised within ten years of the
     financial statement dates.
E.   The inventory is stated at the lower of cost or market.  The inventory
     is a single recycling system that the Company intends to sell as a
     system.  The Company is currently pursuing several prospects to sell
     the system.
F.   Consolidation Policies:    The accompanying consolidated financial
     statements include the accounts of the company and its majority -
     owned subsidiaries. Intercompany transactions and balances have been
     eliminated in consolidation.
G.   Foreign Currency Translation / Remeasurement Policy:   Assets and
     liabilities that occur in foreign countries are recorded at historical
     cost and translated at exchange rates in effect at the end of the
     year.  Income Statement accounts are translated at the average
     exchange rates for the year. Translation gains and losses shall be
     recorded as a separate line item in the equity section of the
     financial statements.
H.   Depreciation:   The cost of property and equipment is depreciated over
     the estimated useful lives of the related assets. The cost of
     leasehold improvements is depreciated (amortized) over the lesser of
     the length of the related assets or the estimated lives of the assets.
     Depreciation is computed on the straight line method for reporting
     purposes and for tax purposes.
I.   Issuance of Subsidiary's Stock: The Company has elected to account for
     shares issued by its subsidiary as an equity transaction.



                                 Continued
                                     10
                     Advanced Recycling Sciences, Inc.
                       Notes to Financial Statements
                               March 31, 2002

NOTE 2 - Significant Accounting Policies -continued-
----------------------------------------

J.   Use of Estimates: The preparation of financial statements in
     conformity with generally accepted accounting principles requires
     management to make estimates and assumptions that affect the reported
     amounts of assets and liabilities and disclosure of contingent assets
     and liabilities at the date of the financial statements and reported
     amounts of revenues and expenses during the reporting period.  Actual
     results could differ from those estimates.
K.   As permitted by SFAS #123 "Accounting for Stock-Based Compensation,"
     the Company has elected to account for the stock option plans as a
     compensation cost when options were issued at equal to or more than
     fair market value.

NOTE 3 - Interim Financial Statements
-------------------------------------

The financial statements for the three months ended March 31, 2001 and 2000
were prepared from the books and records of the company.  Management
believes that all adjustments have been made to the financial statements to
make a fair presentation of the financial condition of the company as of
March 31, 2001 and 2000.  The results of the three months are not
indicative of a full year of operation for the Company.

Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted.  It is suggested that these
financial statements be read in conjunction with the financial statements
and notes thereto included in the Company's December 31, 2001 audited
financial statements.  The results of operations for the three month
periods ended March 31, 2001 and 2000 are not necessarily indicative of the
operating results for the full year.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL STATEMENTS

     This Form 10-QSB contains certain forward-looking statements.  For
this purpose any statements contained in this Form 10-QSB that are not
statements of historical fact may be deemed to be forward-looking
statements.  Without limiting the foregoing, words such as "may," "will,"
"expect," "believe," "anticipate," "estimate" or "continue" or comparable
terminology are intended to identify forward-looking statements.  These
statements by their nature involve substantial risks and uncertainties, and
actual results may differ materially depending on a variety of factors.

General
-------

     Advanced Recycling Sciences, Inc., ("ARS" or the "Company") is in the
business of developing innovative products and technologies in the
environmental and recycling industries, with specific emphasis on scrap
tire and industrial rubber recycling.  The Company has several websites
that can be viewed at at http://www.ars-tech.com,  http://www.poseidon-
products.com,  http://www.tires2oil.com, http://www.ast-paving.com and
http://www.no-ice.com.  These websites allow visitors to access an overview
of the Company's activities, obtain market information for the Company's
trading stock and view the Company's EDGAR filings.  The Company also has a
portal website, http://www.tirerecycling.com.

                                     11
Liquidity and Capital Resources

     As of March 31, 2002, the Company had cash on hand of $7,308.  The
Company raised $242,771 during the three months ended March 31, 2002 in a
Regulation S offering. This is the initial funding from the first of two
2002 Regulation S offerings. This first 2002 Regulation S offering is
anticipated to raise  a total of between $1,000,000 and $2,000,000
depending on market conditions. The second Regulation S offering is
scheduled to commence in May 2002, and is expected to raise between
$1,500,000 and $2,000,000. This funding, should it materialize, would be
utilized to implement the Company's business development strategy.


RESULTS OF OPERATIONS

Comparison of the three months ended March 31, 2002 and the three months
ended March 31, 2001.


     The Company generated a loss of $447,532 in the quarter ended March
31, 2002, compared to a loss of $489,377 for the quarter ended March 31,
2001. This $41,485  (8.5%) reduction in loss is a result of a reduction in
professional fees expense of $72,476 offset by increases in office expense,
administrative expenses and consulting expense. The Company had no
significant sales in either year. The Company had $50,495 in crumb rubber
sales for the three months ended March 31, 2001. The Company  had no
revenue for the three months ended March 31, 2002. No revenue from license
fees was generated in either the quarter ended March 31, 2002 or 2001. Due
to the emphasis on technology transfer, no license fee income is
anticipated until a full scale Tires2Oil(TM) plant is operational. Such
plant will not be begun until and unless the pilot plant proves successful.
Subject to the above referenced funding, the pilot plant is expected to be
completed during the third quarter of 2002.

     Historically, the majority of the Company's equipment sales were
recorded when equipment was shipped and title passed to the buyer. Typical
sales were by letter of credit, with the funds released by the bank when
the equipment was placed for shipment with the carrier. Historically,
payment for the Company's equipment sales have been made on the basis of
10% due at the time of sale, 80% due on shipment of the equipment and 10%
due on the completion of installation. This has resulted in the Company
receiving its revenue in large lump sums at irregular intervals rather than
smaller amounts at frequent intervals. Equipment purchased for the use of a
subsidiary or joint venture is recorded as a purchase of assets with no
revenue or inter-company profit generated upon the transfer to the
operating entity. The Company revised its equipment sales approach during
2000.  In the future, the Company will receive fees for the design,
configuration and specification of certain pieces of equipment. The Company
will receive revenue from the sale of scrap tire shredding and granulating
equipment, after market product manufacturing equipment and rubberized
asphalt paving blending equipment. In most cases, the sale will be made
directly from the specified supplier to the client. The manufacturer will
warrant its equipment directly to the buyer. The acquisition of the
Tires2Oil(TM) technology and the de-icing technology directs a significant
portion of the Company's future revenue generation activities to a
technology transfer emphasis combined with its anticipated tire processing
and tire manufacturing facility  rather than only equipment sales.


                                     12

     Net cash used in operations was $249,484 during the three months ended
March 31, 2002 compared to $463,108 in the three months ended March 31,
2001. The primary use of cash was the funding of the net operating loss of
$447,532 for the quarter ended March 31, 2002. This was also the case in
2001, where the operating loss was $489,377.  During the first quarter
2002, Accounts Payable increased by $83,976 and Accrued Expenses increased
$18,920. During the first quarter 2001, Accounts Receivable increased by
$38,377, Inventory decreased $34,619 and Accounts Payable were reduced by
$117,154.

     Depreciation Expense of $75,841 for the three months ended March 31,
2002, is a slight reduction from the 2001 expense of $79,449   This $3,608
reduction is due to the disposal of a truck previously acquired for the
QCAL operation and not necessary in current operations.

     Travel expenses of $20,565 for the quarter ended March 31, 2002, is a
practically unchanged  from the $21,388 expense for the quarter ended March
31, 2001.

     Professional fees decreased from $93,041 for the three months ended
March 31, 2001, to $20,565 for the comparable 2002 quarter. The legal
expenses in the first quarter of 2001 were abnormally high due, primarily,
to the legal activities regarding patents and related matters for both the
Tires2Oil(TM) license and the purchase of the de-icing technology license.

     Office expense of $30,041 for the three months ended March 31, 2002,
is a $3,100 increase from the 2001 expenses of $26,941 for the same
quarter. This increase is primarily due to increased translation expense
for documentation related to the Poseidon project and the CISAP settlement.

     Administrative expenses of $89,192 for the three months ended March
31, 2002, are $2,328 higher than the $86,864 for the comparable 2001
period.  This increase is due to the salary expense of a project manager,
who was on a consulting basis in the first quarter of 2001 offset by
reductions in public relations, automobile and insurance expenses.

     Consulting expenses of $167,360 for the three months ended March 31,
2002 increased from the three months ended March 31, 2001 expense of
$146,656. This increase is due to the addition of two consultants working
in Germany ($30,000) less the consulting fees ($10,000) of a project
manager who worked as a consultant during the first quarter of 2001 and who
is now a full time employee.

     Options expense of $15,000 was recognized in the three months ended
March 31, 2001, for the 2001 employee incentive stock option program. The
year 2002 expense has yet to be incurred. The Company has not  issued the
2002 options, but intends to do so during the second quarter of 2002.


Comparison of the three months ended March 31, 2001 and the three months
ended March 31, 2000.


     The Company generated a loss of $489,377 in the quarter ended March
31, 2001, compared to a loss of $662,410 for the quarter ended March 31,
2000. This $173,033  (26%) reduction in loss is a result of general
reductions in General and Administrative expenses and the closing of the
Company's subsidiary operation in San Diego, California. Company had no
significant sales in either year. The Company had $50,495 in crumb rubber
sales for the three months ended March 31, 2001. The Company  had $108,214
in revenue for the three months ended March 31, 2000. The crumb rubber
sales in 2001 are essentially the disposition of the inventory remaining
after the closing of the San Diego facility, and as such, will not be
repeated.
                                     13
     Net cash used in operations was $463,106 during the three months ended
March 31, 2001 compared to $559,242 in the three months ended March 31,
2000. The primary use of cash was the funding of the net operating loss of
$489,377 for the quarter ended March 31, 2001. This was also the case in
2000, where the operating loss was $662,410.  During the first quarter
2001, Accounts Receivable increased by $38,377, Inventory decreased $34,619
and Accounts Payable where reduced by $117,154.  Cash used in operations in
2000 was affected by an increase in Accounts Receivable of $89,019.
Additionally, Inventory increased by $39,521, Customer Deposits decreased
by $190,714, and Accounts Payable were reduced  by $89,019 during the 2000
first quarter.

     Depreciation Expense of $79,449 for the three months ended December
31, 2001, exceeds the 2000 expense of $68,830 by $11,619. This is due to
the equipment purchased and manufactured for the QCAL operation.

     Travel expenses of $21,388 for the quarter ended March 31, 2001,
decreased by 39% or $13,987 compared to $35,375  for the quarter ended
March 31, 2000. This decrease is due to eliminating marketing activities in
support of the QCAL operation.

     Professional fees increased from $31,860 for the three months ended
March 31, 2000, to $93,041 for the comparable 2001 quarter. This increase
is due, primarily, to the legal activities regarding patents and related
matters for both the Tires2Oil(TM) license and the purchase of the de-icing
technology license in the first quarter of 2001. Additionally, legal
support for the Company's current and in-formation overseas joint venture
was increased, as these projects move closer to maturity.

     Office expense of $26,941 for the three months ended March 31, 2001,
is a $20,661 decrease from the 2000 expenses of $47,602 for the same
quarter. This decrease is primarily due to discontinuation of  the QCAL
operation in the first half of 2000.

     Administrative expenses of $84,940 for the three months ended March
31, 2001, are significantly lower than the $273,973 for the comparable 2000
period. This reduction is due to closing the San Diego operation in mid
year 2000, and cessation of QCAL marketing activities.

     Consulting expenses of $146,656 for the three months ended March 31,
2001 decreased from the three months ended March 31, 2000 expense of
$171,777. This decrease is primarily  timing differences, and is not,
necessarily,  a downward trend.

     Options expense of $19,146 was recognized in 2000 as a result of the
Board of Directors approval of the 2000 employee incentive stock option
program. Options expense of $15,000 was recognized in the three months
ended March 31, 2001, for the 2001 employee incentive stock option program.
The year 2001 expense is less than the 2000 expense due to the reduced
price of the Company's stock.

                        PART II - OTHER INFORMATION

Item 1.  Legal Proceedings


     There were no significant changes in the Company's litigation with
Veplas Manufacturing LTD., during the quarter ended March 31, 2002.

Item 2.  Changes in Securities

     No instruments defining the rights of the holders of any class of
registered securities have been materially modified, limited or qualified.

                                     14
     The following securities, which are not registered under the
Securities Act of 1933, were issued since the Company's last quarterly
report for the quarter ended March 31, 2002.

     During the quarter ended March 31, 2002, the Company sold 860,000
shares of its common stock to non United States persons in Asia and Europe.
The Company received $230,000 from the sale of the shares.  These shares
were sold pursuant to Regulation S promulgated by the Securities and
Exchange Commission under the Securities Act of 1933.  The Company did not
offer the securities to any person in the United States, any identifiable
groups of U.S. citizens abroad, or to any U.S. Person as that term is
defined in Regulation S.  At the time the buy orders were originated, the
Company reasonably believed the Buyers were outside of the United States
and were not U.S. Persons.  The Company reasonably believed that the
transaction had not been pre-arranged with a buyer in the United States.
The Company has not nor will engage in any "Directed Selling Efforts" and
reasonably believes the Buyers have not nor will engage in any "Directed
Selling Efforts."  The Company reasonably believed the Buyers purchased the
securities for their own accounts and for investment purposes and not with
the view towards distribution or for the account of a U.S. Person.

Item 3.  Defaults upon Senior Securities

     None.

Item 4.  Submission of Matters to a Vote of Security Holders

     None.

Item 5.  Other Information

     On March 11, 2002, the Company, through its subsidiary Advanced
Surfacing Technologies, Inc., ("AST") entered into an Agent Agreement
("Agreement") with CEI Enterprises, Inc., ("CEI") to market CEI's
proprietary rubberized asphalt hot mix blending and reaction systems.  CEI,
which is based in Albuquerque, New Mexico, specializes in heating, storage
and mixing equipment for the hot asphalt mix industry.  AST was given the
exclusive rights to market the technology in Europe.

     Pursuant to the Agent Agreement, AST will be responsible to generate
interest in and locate potential customers to purchase CEI's equipment.
AST will arrange meetings, provide marketing plans and analysis to
potential buyers and assist in negotiations, contract completion and follow
up activities.  Under the terms of the Agreement, CEI will be responsible
for providing sales material including brochures, equipment layouts, trade
show displays and pricing information.  CEI will also be responsible to
provide training seminars, product warranties, technical support and
installation related requirements.

     For its services, AST will be paid fees for initial equipment sales,
spare parts sales by CEI after initial equipment package delivery, and fees
for subsequent sales to or generated by customers introduced to CEI by AST.

     To retain its exclusive rights in Europe, AST must sell at least one
crumb rubber modified asphalt paving blending system per year.  If AST
cannot fulfill this requirement, it will retain a non-exclusive right in
Europe.  The term of this Agreement is five years, unless extended by the
parties in writing.

     AST may also market CEI's technology any where else in the world on a
non-exclusive basis upon terms to be negotiated between AST and CEI on a
case by case basis.

                                     15

Item 6.  Exhibits and Reports on Form 8-K

     (A)  Reports on Form 8-K

     No reports on Form 8-K were filed or required to be filed during the
quarter ended March 31, 2002.

     (B)  Exhibits.  The following exhibits are included as part of this
report:

     None.










                                     16




                                 SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this to be signed on its behalf by the
undersigned thereunto duly authorized.


                                     Advanced Recycling Sciences, Inc.

May 10, 2002                         /s/ Keith J. Fryer
                                     ------------------
                                     Keith J. Fryer
                                     President and Chief Operating Officer

May 10, 2002                         /s/ John F. Pope
                                     ----------------
                                     John F. Pope
                                     Vice President, Finance
                                     Chief Accounting Officer