U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
                [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003

                                       or

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

                          COMMISSION FILE NO. 333-48675

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                 (Name of small business issuer in its charter)

              Texas                                     73-1537206
    ------------------------                    --------------------------
    (state of incorporation)                    (IRS Employer I.D. Number)

                               133 E Tyler Street
                               Longview, TX 75601
               --------------------------------------------------
                      (Address principal executive offices)

                     Issuer's telephone number: 800-522-7841

         Securities registered under Section 12(b) of the Exchange Act:

                           Title of each class: None.

                Name of each exchange on which registered: None.

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

                         Common Stock, $0.001 par value
               --------------------------------------------------
                                (Title of class)

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

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



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<PAGE>


State issuer's revenues for its most recent fiscal year:  $180,687.

         State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the
common equity was sold, or the average bid and asked price of such common
equity, as of a specified date within the past 60 days: $6,591,811 computed by
reference to the $0.45 average of the bid and asked price of the company's
Common Stock on April 12, 2004.

         State the number of shares outstanding of each of the issuer's classes
of common equity, as of March 22, 2004: 18,870,694 shares of Common Stock,
$0.001 par value.

DOCUMENTS INCORPORATED BY REFERENCE

         If the following documents are incorporated by reference, briefly
describe them and identify the part of the Form 10-KSB (e.g., Part I, Part II,
etc.) into which the document is incorporated: (1) any annual report to security
holders; (3) any proxy or information statement; and (3) any prospectus filed
pursuant to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act").
The list documents should be clearly described for identification purposes
(e.g., annual report to security holders for fiscal year ended December 24,
1990). None.

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



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<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----
Item     1.  Description of Business.......................................... 5

             Business Development ............................................ 5
             Principal Products............................................... 5
             Distribution Methods ............................................ 8
             Competition ..................................................... 8
             Raw Materials and Suppliers    .................................. 9
             Dependence on Major Customers ................................... 9
             Patents, Trademarks and Licenses ................................ 9
             Government Approval of Principal Products........................ 9
             Seasonality......................................................10
             Research and Development.........................................10
             Environmental Controls...........................................10
             Number of Employees..............................................10

Item     2.  Properties.......................................................10

             Facilities.......................................................10

Item     3.  Legal Proceedings................................................11

Item     4.  Submission of Matters to a Vote of Security Holders..............11

Item     5.  Market for Common Equity and Related Stockholder Matters.........11

Item     6.  Management's Discussion and Analysis.............................12

             Sales............................................................13
             Gross margin.....................................................13
             Operating expenses...............................................13
             Net loss.........................................................13
             Liquidity and capital resources..................................13
             Overview.........................................................14
             Outlook..........................................................16

Item     7.  Financial Statements.............................................18

Item     8A. Controls and Procedures .........................................32

Item     9.  Directors, Executive Officers, Promoters and Control Persons;
                      Compliance with Section 16(a) of the Exchange Act.......32

Item     10. Executive Compensation...........................................34

Item     11. Security Ownership of Certain Beneficial Owners and Management...35

Item     12.      Certain Relationships and Related Transactions..............36

                  Parents of the Company......................................37

Item     13.      Exhibits and Reports on Form 8-K............................37

Item     14.      Principal Accountant Fees and Services......................38

                  Signatures..................................................38


                                       4
<PAGE>

ITEM     1.       DESCRIPTION OF BUSINESS.

         BUSINESS DEVELOPMENT

         We are affiliated with Moonlighting Distribution Corporation, a closely
held Texas corporation ("Moonlighting"). Moonlighting is under the 52.5 percent
ownership and control of B. Keith Parker and his spouse, Paula Parker, who are
directors and, respectively, the chief executive officer and vice president for
shareholder relations of the company.

         Before our company was organized, the Parkers and Moonlighting became
aware of several products developed by Biogenesis Enterprises of Springfield,
Virginia ("Biogenesis") that are environmentally safe - generally, products that
are biodegradable and nontoxic. In 1997, the Parkers and Moonlighting obtained a
license from BioGenesis to market a fire suppressant that BioGenesis had
developed. Moonlighting soon determined that the activities that should be
undertaken for the fire suppressant product exceeded the capabilities or
business plan of Moonlighting. A company named Summit Technologies, Inc. (with
whom our company merged on December 2, 1998) was incorporated in August 1997 to
organize, finance, and direct the marketing of BioGenesis' fire suppressant
product and other products for which exclusive marketing licenses could be
obtained and for which marketing expenses could be raised.

         Moonlighting licensed to Summit Technologies the non-exclusive right to
market BioGenesis' fire suppressant products, FIREPOWER 911(TM) and FLAMEOUT(R)
and the exclusive right to market certain other products newly developed by
Moonlighting and tested for marketing, STRESSEX(TM) and PANNACHE(TM). Later, in
December 1999 our company purchased from Biogenesis its patent and other
intellectual property rights associated with the fire suppressant for $1 million
cash and 750,000 shares of Common Stock of Summit Technologies.

         On December 2, 1998, Summit Technologies was merged into our company,
Summit Environmental Corporation, Inc.

PRINCIPAL PRODUCTS

         Summit Environmental distributes and markets the following proprietary
products. All of the products are manufactured exclusively for us.

         FIREPOWER 911(TM) and FLAMEOUT(R)

         These products are fire suppressants and fire retardants. FLAMEOUT(R)
was developed by Dr. Mohsen C. Amiran and his company, BioGenesis, to be a
replacement for Halon 1211. Halon 1211 was a widely used fire suppression and
explosion protection agent. It was applied primarily as a wetting agent and was
the fire-extinguishing agent of choice for many uses, such as most fire
extinguishers. Its production was halted in 1994 by actions taken at the 1992
Geneva Peace Conference primarily because Halon 1211 has one of the higher ozone
depletion potentials of any compound. Halon 1211 is still approved for certain
limited mission-critical uses (such as ship- and shore-based crash, fire and
rescue), but existing installations of Halon 1211 that are not mission critical
must switch to an approved, acceptable alternative.


                                       5
<PAGE>

         In March 1994, Surfactant Blend A, which had been submitted by Dr.
Mohsen C. Amiran of Biogenesis, was certified by the USEPA-SNAP (Significant New
Alternative Policy). This was the first approved alternative to Halon 1211.

         The EPA has now approved at least ten other certified replacements for
Halon 1211. Three of these are water, foam and carbon dioxide. In addition to
these three, BioGenesis' Surfactant Blend A is approved for all wetting agent
uses for both residential and commercial use. Some of the replacements were
approved only for a limited time and then were phased out. Surfactant Blend A -
which is FLAMEOUT(R) - was listed in May 1997 by Underwriter Laboratories
(listing number 7P21).

         In December 2001, FLAMEOUT(R) was approved by the United States
Department of Transportation and Federal Aviation Administration as an
acceptable replacement for Halon 1211 in commercial aircraft.

         FLAMEOUT(R) is marketed at one to three percent strength for use in
extinguishing Class A fires (wood, cloth, paper, rubber and plastics) and is
marketed at three to six percent strength for suppression of Class B fires
(combustible liquids, gases and greases). Surfactant Blend A- FLAMEOUT(R) - is
also effective at ten percent strength in suppressing Class D fires (metals) but
has not yet been submitted to Underwriters Laboratory for certification for
Class D fire suppression.

         FLAMEOUT(R) -

          o    reduces toxic smoke by encapsulating poisonous hydrocarbons,

          o    reduces heat approximately 70 percent faster than water,

          o    prevents reflash,

          o    is safe to store and handle,

          o    leaves virtually no residue,

          o    is biodegradable,

          o    is environmentally safe,

          o    is nontoxic, but may irritate the eyes, and

          o    stores at between 25 degrees and 120 degrees Fahrenheit for
               prolonged periods.

         In May 2003 the United States Forestry Service approved Flameout for
listing on its Quality Products Listing. Commercial companies under contract
with the U. S. Forest Service to fight forest fires can now purchase Flameout as
their fire extinguishing agent.


                                       6
<PAGE>

         FLAMEOUT(R) is one of three products under evaluation by the U. S. Air
Force for certification as an alternative replacement product for AFFF. AFFF is
a fire fighting foam that is classified as a biohazard. It is suspected of being
a possible cause of cancer, and fire fighters using AFFF wear biohazard suits
when using AFFF.

         Our FIREPOWER 911(TM) product also contains Surfactant Blend A - the
FLAMEOUT(R) formula. FIREPOWER 911(TM) and FlameOut(R) both suppress and
extinguish fires quickly. State fire codes prohibit products from being marketed
as fire extinguishers without proper testing, listing, and rating. WE BELIEVE IT
IS THE ONLY AEROSOL FIRE SUPPRESSANT IN THE WORLDWIDE MARKETPLACE THAT HAS
OBTAINED A FIRE EXTINGUISHER LISTING AND RATING. Having the only such product is
believed by us to be significant for our long-term marketing prospects. Its
non-Halon certification, with regard to residential fire extinguisher sales,
places FIREPOWER 911(TM) into a class of its own.

ASSIGNMENT TO SUMMIT TECHNOLOGIES, LLC OF OUR RIGHTS TO FIREPOWER 911 AND
FLAMEOUT

         We are in the process of assigning our rights to our fire suppressant
products to a wholly-owned, limited liability company subsidiary, Summit
Technologies, LLC. We will initially own 100 percent of the ownership interests
in the LLC. It is our intention to have the LLC offer for sale a 10 percent
interest in the LLC for $500,000 to a group of investors whose earlier-expressed
interest in our company is limited to our fire suppressant products.

         While this proposed transaction would dilute our company's interest in
our fire suppressant products business by ten percent, there would be no
dilution in a shareholder's stock ownership in our company, as the funds raised
from these investors would be for their purchase of ownership interests in the
LLC rather than purchases of common stock in our corporation. And, such funds
would be used solely to promote and administer the fire suppression products
business.

         We are contemplating also assigning to this LLC our rights to a
remediation product we and Dr. Amiran developed to be used on oil spills. Again,
we will own 90 percent of the LLC should we sell interests in the LLC equal to
10 percent of the outstanding interests.

INDUSTRIAL CHEMICALS AND CLEANERS

         We distribute industrial chemicals and cleaners under the private label
ULTIMATE CLEAN. The products were developed by Dr. Amiran and BioGenesis.
BioGenesis concentrates its activities on developing, and then manufacturing for
marketing by other companies, industrial-use products that are environmentally
safe.

         Due to perceived market demands, through Dr. Amiran we have developed a
turbine cleaner for jet engines. The original formula, ULTIMATE CLEAN 668(TM),
was developed for Solar Turbines, a company owned by Caterpillar. We are
introducing 668(TM) to the aviation industry and the United States Military
through our association with American Business Associates (AmBiz).


                                       7
<PAGE>

         We have submitted ULTIMATE CLEAN 668(TM) to an officially licensed
testing agency in order to obtain a Quality Products Listing under military
specification number MIL-PRF-85704C. This initiative, when completed, will meet
Federal Aviation Administration guidelines for usage on commercial aircraft,
United States Naval Warfare Center Aircraft Division and United States
Department of Defense criteria for usage on U. S. military aircraft with a
Quality Products Listing for both Type II and Type III (water-based) cleaners.

PANNACHE NATURAL COSMETICS

         Prior to the formation of Summit Technologies, Moonlighting (the
original company formed by Keith and Paula Parker) was marketing Pannache
Cosmetics in the Philippines. The products of this line are manufactured by
Cosmetic Laboratories, Inc., a large custom cosmetic manufacturer located in
Irving, Texas. Cosmetic Laboratories is a 20 year member in good standing with
the Cosmetic Toiletry and Fragrance Association (CTFA). The products contain the
purest and best available ingredients available in the industry, according to
the manufacturer.

         We have developed a color line of products complementing the rest of
the Pannache line. Our initial product is a cosmetic lipsticks; long-lasting, no
smear, semi-permanent lip color. We introduced this product - PRETTY POUT
(FORMERLY LUSCIOUS LIPS) - in August 2001. Our website, www.pannache.com,
displays the entire Pannache Cosmetics Product Line.

         DISTRIBUTION METHODS

         We market products primarily through the development of strategic
alliances, most notably with AmBiz for the aviation industry and the U.S.
Military. Our contacts with AmBiz, which can be reviewed at
www.americanbusinessassociates.com, provide essential contacts for our
initiatives. We have made other alliances for specific industries such as
e-commerce, catalogue sales, roofing, plumbing, heating and air conditioning,
building materials, and retail mass merchandisers and convenience stores. We are
preparing to launch sales efforts through infomercials and through direct
television advertising.

         Internationally, we market products through exclusive distribution
agreements with revenue sharing clauses. We have entered into distribution
agreements that cover the Philippines, the Netherlands (for Europe and the
former Eastern Bloc countries), Scandinavia, Australia, New Zealand, Mexico,
Argentina, Brazil, Chile, Uruguay, Paraguay, Venezuela, Ecuador, Bolivia, and
Canada.

         COMPETITION

         We own the patent and intellectual property rights to Surfactant Blend
A - FLAMEOUT(R) and FIREPOWER 911(TM). Surfactant Blend A was the first formula
approved under USEPA-SNAP guidelines after the global banning of Halon 1211. Its
approval is for both commercial and residential use.


                                       8
<PAGE>

         We have compared our cosmetic product, PRETTY POUT, to similar products
manufactured by Revlon, Max Factor, Cover Girl, Avon and BeautiControl touting
no smear and extended wear. These products simply do not perform as represented
or to the extent of PRETTY POUT. We initiated a direct sales campaign in January
2002 to high school drill teams, both for personal use and as a fund-raising
tool. We have secured the endorsement for Pretty Pout from the world famous
Kilgore College Rangerettes.

         RAW MATERIALS AND SUPPLIERS

         The raw materials for our products are in abundant supply. Summit
Environmental, by virtue of our purchase of the patent and intellectual property
rights to Surfactant Blend A, has retained Dr. Amiran and his company,
BioGenesis, to formulate and package our products on a cost-plus-10 percent
basis.

         DEPENDENCE ON MAJOR CUSTOMERS

         Our markets are not dependent on one or a few major customers.

         PATENTS, TRADEMARKS AND LICENSES

         We own all patents and intellectual property rights associated with the
fire suppressant products. However, we are obligated to pay royalties to
Moonlighting Distribution Corporation as follows: $0.50 for each 16 ounce can of
FIREPOWER 911(TM), $0.50 for each gallon of FLAMEOUT(R), and $0.35 for each
one-liter can of FIREPOWER 911. The obligation to pay the above mentioned
royalties to Moonlighting, however, did not so merge and will continue in effect
during the term of the exclusive license obtained from Moonlighting.
Moonlighting views this license to be perpetual; therefore, the royalties are
perpetual.

         We have a perpetual license from our affiliated company, Moonlighting,
for its STRESSEX(TM), PANNACHE(TM) and TRIM-AWAY(TM) products. The license has
no sales quota. We pay Moonlighting a 9 percent royalty on the lowest wholesale
price for which we sell the product.

         We have a non-exclusive license to ULTIMATE CLEAN 668 and other
industrial chemicals and cleaning products formulated by Dr. Mohsen C. Amiran.
We obtain these products at Dr. Amiran's lowest wholesale price less 10 percent
to 15 percent.

         GOVERNMENTAL APPROVAL OF PRINCIPAL PRODUCTS

         Our fire suppressant products are subject to government regulation in
most countries of the world. We have obtained government approvals in all
countries and venues where we offer the products for sale.

         Our ULTIMATE CLEAN line has received the appropriate U.S. Government
approvals for the industrial chemical and cleaning products.


                                       9
<PAGE>

         The manufacturer of our cosmetic products, Cosmetic Laboratories, Inc.,
is a 20-year plus member in good standing of the Cosmetic, Toiletry and
Fragrance Association (CTFA).

         SEASONALITY

         There is no known seasonal aspect to our business.

         RESEARCH AND DEVELOPMENT

         We deal directly with SMI Laboratories in Miami, Florida for a U.S.
military specification number for Ultimate Clean(TM) 668.

         We are developing an approved fire suppression agent, tested to new
minimum performance standards established by the FAA, that will be a replacement
agent for the fire extinguishers that now contain Halon 1211 and are placed in
bathrooms and galleys on board all commercial aircraft. The Halon 1211 fire
extinguishers are no longer (as of March 1999) protected for continued use under
the classification of Mission Critical..

         We and Dr. Amiran have been jointly working on an advanced formula for
FLAMEOUT(R) to be approved as a replacement for AFFF. Military specification
tests with the United States Air Force for FlameOut(R) Foam began in April 2002.

         Our non-toxic, biodegradable turbine cleaner, ULTIMATE CLEAN 668(TM),
was developed by us for the scheduled periodic cleanings required of jet
engines. We are involved in a U. S. Department of Defense and U. S. Navy
EPA-directed test on it for non-corrosion and non-toxicity to military
specification number MIL-PRF-85704C.

         ENVIRONMENTAL CONTROLS

         We are subject to no environmental controls or restrictions that
require the outlay of capital or the obtaining of a permit in order to engage in
business operations.

         NUMBER OF EMPLOYEES

         On January 1, 2004, we employed four persons full time and one person
part time.

ITEM     2.       PROPERTIES

         We own no plants or real property. We lease space for our offices and
for storing inventory.

         FACILITIES

         We lease 4,500 square feet of space in Longview, Texas for our offices
and for inventory storage at $1,700 per month. Additional warehouse space of
1,600 square feet is leased for $400 a month for stored inventory. We believe
all space requirements can be met at its present location for at least the next
year.


                                       10
<PAGE>

ITEM     3.       LEGAL PROCEEDINGS

         On December 28, 2001, we filed a $46,000 collection lawsuit, Summit
Environmental Corporation, Inc. v. Harry Bachelder III, dba Performance
Marketing , Inc., Cause Number 2001-2667-B, 124th District Court, Gregg County,
Texas for non-performance on a guaranteed note payable and delinquent accounts.
We later amended the petition to include a cause for an alleged unlawful removal
of 21 pallets of FirePower 911(TM) from a bonded warehouse. We took a default
judgement for approximately $186,000, which default judgment was awarded on
November 8, 2002.

         In April 2002 we filed a $53,000 lawsuit, Cause Number 2002-93-B in the
124th District Court, Gregg County, Texas, against a former staff employee and
her spouse for credit card fraud and misappropriation of funds in the 124th
District Court in Longview, Gregg County, Texas. We were awarded $233,800 in
damages and attorney's fees but have been unable to collect any of the judgment
amount.

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

         None

ITEM  5.          MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         Summit Environmental's Common Stock presently trades on the OTC
Bulletin Board, having been added to the OTC Bulletin Board on April 5, 1999.
The high and low bid prices, as reported by the OTC Bulletin Board, are as
follows for 2002 and 2003. The quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not represent actual
transactions.

                                    High             Low
                                    ----             ----
         2002:
                  1st Qtr.          0.90             0.20
                  2nd Qtr.          0.75             0.26
                  3rd Qtr.          0.35             0.18
                  4th Qtr.          0.30             0.20

         2003:
                  1st Qtr.          0.27             0.20
                  2nd Qtr.          0.35             0.18
                  3rd Qtr.          0.26             0.16
                  4th Qtr.          0.25             0.14


         Holders. Based on information provided by our transfer agent, we had
660 shareholders of record of our common stock on March 22, 2004.

         Dividends. We have declared no dividends on our Common Stock. There are
no restrictions that would or are likely to limit the ability of the company to
pay dividends on its Common Stock, but we have no plans to pay dividends in the
foreseeable future and intends to use earnings for the expansion of its
business.


                                       11
<PAGE>

Recent Sales of Unregistered Securities. In 2001 we sold 320,000 shares of our
common stock for cash at $0.50 a share to accredited investors in an offering
exempt from registration pursuant to Regulation D, Rule 506 of the Commission.
We also issued 930,000 shares of our common stock for cash at $0.35 a share to
persons that exercised stock purchase warrants they had acquired in 1999 and
2000. These purchasers were all accredited investors, and the offering was
exempt from registration pursuant to Regulation D, Rule 506 of the Commission.

         During 2002 we issued 355,000 shares of our common stock to officers of
the company at $0.25 a share for services rendered; 40,000 and 11,200 shares at
$0.19 a share and $0.25 a share, respectively, for services rendered by outside
companies; and 400,000 shares at $0.60 a share for advertising and marketing
services to be rendered by an outside company. During 2002 we also issued
938,000 shares of common stock for cash at $0.25 a share with stock purchase
warrants of one warrant a share purchased and 560,000 shares for cash at $0.50 a
share with one stock purchase warrant for each two shares purchased. These
purchasers were all accredited investors, and the offerings were exempt from
registration pursuant to Regulation D, Rule 506 of the Commission.

         During 2003 we issued 210,000 shares of our common stock to officers of
the company at the following prices per share for services rendered: 15,000
shares at $0.33 per share, 15,000 shares at $0.18 per share, 15,000 shares at
$0.28 per share, 15,000 shares at $0.24 per share, 90,000 shares at $0.22 per
share, and 60,000 shares at $0.22 per share. We issued 360,000 shares of our
common stock at $0.32 per share and 180,000 purchase warrants exercisable at
$1.00 per share to purchase the worldwide exclusive marketing rights to the

BioRemediation Technology and 6,000 shares of our common stock at $0.33 per
share and 40,000 shares at $.30 per share for legal services. During 2003, we
issued 290,000 shares of our common stock for cash at $0.25 per share. We sold
1,079,000 shares of common stock for cash at $0.20 per share with stock purchase
warrants of one warrant per share purchased. We also issued 432,000 shares at
$0.25 per share to persons that exercised stock purchase warrants they had
acquired in previous stock purchases. These purchases were all accredited
investors, and the offerings were exempt from registration pursuant to
Regulation D, Rule 506 of the Commission.

ITEM     6.       MANAGEMENT'S DISCUSSION AND ANALYSIS

         The following discussion and analysis should be read in conjunction
with the financial statements and the accompanying notes thereto. It is
qualified in its entirety by the foregoing and by more detailed financial
information appearing elsewhere.

         The following table presents, as a percentage of sales, certain
selected financial data for each of the two years in the periods ended December
31, 2003 and 2002:

         Year ended December 31              2003                 2002
                                            ------             ---------
         Sales                              100.0%                100.0%
         Cost of Sales                       (248)                 50.1
                                            -----              --------
         Gross Margin                        (148)                 49.9
                                            -----              --------
         Operating Expenses                  (510)             (1,094.3)
         Other Income and Expenses, Net       2.3                   3.3

         Net income (loss)                   (656)%              (1,041)%



                                       12
<PAGE>

         SALES

         Sales of $180,687 for 2003 increased by $53,080 or 42% from the prior
year's sales of $127,607. Management devoted considerable attention during 2003
to certification and test marketing:

         GROSS MARGIN

         Because of a provision for inventory losses of $364,485, what would
have been a gross margin of $96,306, or 53% of sales, was, instead, a total cost
of sales of $448,866, which was 248% of sales. In 2002 we had a gross margin of
$63,633, or 49.9 percent of sales.

         OPERATING EXPENSES

         Operating expenses of $921,988 for 2003 decreased by $474,406, or 34
percent, from $1,396,394 in 2002. Advertising expenses decreased in 2003 by
$281,340 over 2002. Professional fees decreased in 2003 by $6,201 over 2002.
Expenses related to trade shows decreased to $4,399 in 2003 from $26,711 in
2002. Repair and maintenance expense decreased by $587 from 2002 to 2003. Office
salaries increased from $74,134 in 2002 to $94,352 in 2003 and officer
compensation increased by $16,984 from $188,416 in 2002 to $205,400 in 2003.
Consulting fees decreased in 2003 by $35,350 over 2002.

         NET LOSS

         We had a net loss of $1,185,992 during 2003, as compared to a net loss
of $1,328,512 during 2002. The years 2003 and 2002 were years of product and
marketing organization, as reflected in the acquisition of all rights related to
our fire suppressant products and in the efforts exerted to introduce the fire
suppressant products to major purchasers and distributors of these products.
Significant efforts in marketing and product research were introduced with
regards to the company's cosmetic division. Progress in reducing overall
operating expenses was accomplished in 2003. These efforts, while properly
accounted for as expenses, represent major investments by the company in the
future marketing of its fire suppressant and cosmetic products.

         LIQUIDITY AND CAPITAL RESOURCES

         We had negative cash flow from operations of $514,786 in 2003 and
negative cash flow from operations of $535,456 in 2002. Major contributors to
the 2003 negative cash flow from operations were the $1,185,992 net loss from
operations, $168,093 in amortization of patents, and $364,485 in provision for
inventory losses. Major contributors to the 2002 negative cash flow from
operations were the $1,328,512 net loss from operations and $162,335 in
amortization, $137,095 in bad debt expense, and $339,150 in stock issued for
services.

         We had negative cash flow from investing activities of $2,722 in 2003
and negative flow from investing activities of $37,088 in 2002. The major
components of both years' cash flow from investing activities were acquisitions
of property and equipment in 2003 and acquisition of patents in 2002.


                                       13
<PAGE>

         We were able to stay liquid from the sale of $396,300 of our common
stock and loan proceeds of $39,500 during 2003, and only from the sale of
$574,500 of our common stock during 2002. At year-end 2003, we had $114,054 cash
on hand. At year-end 2002, we had $195,762 cash on hand.

         We have received indications from several prospective buyers of fire
suppressant, industrial cleaning products and cosmetic products that a
considerable market for these products will develop during 2004. See "Outlook"
below.

OVERVIEW

         During 2003, several of our markets for FlameOut(R) began to develop.
Key to this process was the listing of FlameOut(R) on the QPL 5100-307 on May 5,
2003 by the United States Forestry Service for application in the fighting of
wildfires after 32 months of testing. The listing for FlameOut(R) gives the
firefighting industry a product with the capabilities to fight all types of
fires using FlameOut(R) more efficiently and economically than with any other
product while accomplishing these tasks in a totally environmentally risk-free
environment.

         During 2003, FlameOut(R) was used in forest and wildland fires in
Canada and the United States. In addition to fighting fires, FlameOut(R) was
successfully used on residential housing and restored historical sites for the
purpose of protecting the structures and keeping them from burning. The Canadian
initiatives are led by Just-In Case Fire, Ltd. of Calgary, Alberta, with whom we
have a distribution agreement.

         Just-In Case manufactures the Fire Caddy(TM), a portable mobile fire
extinguishing system built on the concept of a physical appearance of a
two-wheeled freight dolly. We executed a bi-lateral exclusive marketing
agreement with Just-In Case in 2002. The agreement sets out that Just-In Case
manufactures their system exclusively with FlameOut(R) while Summit agrees not
to sell FlameOut(R) to mobile systems like the Fire Caddy(TM). Just-In Case
compensates us for their exclusive arrangement with royalties on each Fire
Caddy(TM) unit.

         In August 2003, we executed a master distribution agreement with
Western Fire Inc. of Casa Grande, Arizona. for the purpose of marketing
FlameOut(R) to the various state and federal forestry services. Western has its
own fleet of specialty equipment trucks that get called into action by the
various incident commanders in the event of wildfire. In September 2003, Western
introduced Summit to its customer, Evergreen International Aviation. We were
invited to participate in a new project, a field testing program to determine if
FlameOut(R) would be compatible in a new delivery system utilizing a converted
Boeing 747 aircraft. It is. This aircraft utilizes a large compressed air foam
system carrying 24,000 gallons of FlameOut(R) within its payload. The Evergreen
Super Tanker is capable of dispensing a single foam blanket 100 feet wide for
25,000 feet or segmented drops if needed. FlameOut(R) is the only non-toxic
product approved by the United States Forestry Service.


                                       14
<PAGE>

         Our first chemical blending facility agreement was negotiated in
November 2003 with BioCoP International B.V. in the Netherlands.

         In the last quarter of 2002, we began marketing FlameOut(R) to the
logging industry. This venue was initiated when we were contacted by Bituminous
Insurance Company, the oldest and largest underwriter of fire insurance coverage
for equipment used in the logging industry. With insured equipment ranging from
$275,000 to $650,000, Bituminous took the position that a product like
FlameOut(R) would have to be present in extinguishers on insured equipment, or
face a non-renewal status. For new equipment, the same requirement would be
required for binding of coverage. We expanded the sale of FlameOut(R) to these
customers from five gallon containers of FlameOut(R) concentrate to include 2
1/2 gallon and 6 liter extinguishers and brackets to mount the extinguishers. We
began to package topper bottles (pre-measured bottles of FlameOut(R)) to be used
to complete the fill of extinguishers out on the logging line. During 2003, we
added endorsements from Santee Insurance Company and Lloyd's of London for
marketing FlameOut(R) to their insureds. These companies now discount premiums
from 15% to 25% when FlameOut(R) is installed on their insured equipment. We
provide marketing materials to the senior underwriters of the insurance
companies. They hold regional marketing meetings and disburse the materials to
their field agents. The marketing directly of our products to a logging customer
is handled mostly through the logger's insurance agent or local equipment
suppliers we have set up as dealers.

         Due to very stiff regulatory guidelines with regards to portable fire
extinguishers, the approval of our aerosol can fire extinguisher prompted our
competitors to create a myriad of road blocks, attempting to prevent us from
completing in some of our target venues. One of our initial venues was to market
FirePower (TM) on QVC. In order to complete this targeted goal, we accomplished
the following:

          o    Completed the NFPA 10 certification tests for both chemical
               contents (ANSI/UL 711) and the container (ANSI/UL 8).

          o    Obtained a validated listing number from Applied Research
               Laboratories for listing FirePower(TM) as a legally tested,
               certified, and insured product.

          o    Completed Quality Assurance at QVC.

          o    Secured programming approval at QVC.

          o    Obtained certification confirmation from United Parcel Service on
               the shipping classification for FirePower(TM) as "aerosol
               non-flammable". This allows FirePower(TM) to be shipped as any
               other product and not as hazardous material

          o    Secured the confirmation letter from the United States Department
               of Transportation confirming FirePower(TM) for shipping as ORM-D.
               This confirmation eliminates additional shipping issues created
               about aerosols in the aftermath of September 11, 2001.

          o    Obtained the right for George Foreman to be the national
               spokesperson for FirePower(TM) when retail "roll-out" of the
               product would become viable after initial branding on QVC.


                                       15
<PAGE>

         OUTLOOK

         The statements made in this Outlook are based on current plans and
expectations. These statements are forward looking, and actual results may vary
considerably from those that are planned.

         In February 2004 we executed an Advisory Services Agreement with
American Business Associates (AmBiz). AmBiz will assist us with introductions
into military, homeland security and emergency management venues, with retailing
some of our products and with development and financing for future special
projects. More about AmBiz can be found at www.americanbusinessassociates.com.

         Our FlameOut(R) was used in some of the fighting of wild fires in
California, Arizona, and Canada during 2003. We anticipate much more activity in
2004, as our approval by the U.S. Forestry Service occurred in May 2003 after
most of the fire suppressants had been bought for the 2003 fire fighting season.
In the fourth quarter of 2003, President Bush signed the Healthy Forest
Initiative. We immediately met with our US Congressman for the purpose of
presenting FlameOut(R) as the answer to the problems which have occurred from
"pre burns". It is a given that one will get out of control. It is just not
known where. Our lobbying efforts focus on the non-toxic and biodegradable
benefits of FlameOut(R), as a politically popular answer for the solution of
these issues when they occur.

         Western Fire, our distributor in Casa Grande, Arizona, has been holding
training classes for wildland fire fighting crews in Arizona, New Mexico,
Colorado, California and Nevada for the purpose of teaching fire fighting crews
how to use FlameOut(R) in the fighting of wildfires. New compressed air foam
systems are now being introduced as fire fighting equipment. These systems
display properties of FlameOut(R) that were unknown until FlameOut(R) was
introduced through these types of systems. Western is the licensed procurement
office for several large municipal fire departments, even as far away from
Arizona as the District of Columbia. Western Fire's projections to us are to
move between 60,000 and 80,000 gallons of FlameOut(R) during 2004.

         Just-In Case Fire introduced its Hose Caddy(TM) during the fourth
quarter of 2003. This devise connects to the end of a garden hose. It is similar
to a garden fertilizer/insecticide sprayer. The unit comes filled with 32 ounces
of FlameOut(R). Major retail marketing began in Canada at a spring garden show
held in January and February 2004.

         In January 2004, Just-In Case Fire introduced its FireCaddy DC(TM).
This is a portable fire extinguishing system in a tool box. Just-In Case has
confirmation letters for the purchase of 4,500 DC Caddy units. One confirmation
letter is for 2000 DC units from State Farm Insurance. The addition of the Hose
Caddy(TM) and the DC Caddy(TM) to Just-In Case Fire's line of products now
provides three fire extinguishing systems exclusively containing FlameOut(R).
Each of these units provides a royalty payable to Summit on each unit
manufactured when sold.


                                       16
<PAGE>

         Just-In Case estimates that it can sell 100,000 Caddy units during 2004
and 2005. This would provide sales of 250,000 to 500,000 gallons of FlameOut(R)
depending on the breakdown of each of the Fire Caddy Products.

         During the period March 3-5, 2004 our involvement with Evergreen
Aviation, through our distributor Western Fire, was introduced to the fire
fighting community at the NFPA Wildland Wildfire Conference in Reno, Nevada.
Evergreen has equipped a SuperTanker (a converted 747) with a large, compressed
air, foam system. This system can disperse 24,000 gallons of FlameOut(R) mixed
with water along a path of foam 100 feet wide for 25,000 feet in a continuous
drop - or in segmented drops, if necessary. The largest aerial application
currently in use in the industry is capable of one continuous drop for only
2,080 feet.

         The Evergreen Aviation SuperTanker will also be used to disperse
remediation products on oil spills. We own the exclusive marketing rights to a
remediation technology obtained from Dr. Mohsen Amiran in 2003. While all of our
successful testing has been centered on FlameOut(R) in the SuperTanker CAF
system, our remediation product is planned for usage on oil spills.

         We project logging-related sales in excess of $150,000 for 2004. In
2003 we established logging-related dealers in Texas, Louisiana, Mississippi,
Alabama, Georgia, South Carolina, North Carolina, Virginia, West Virginia,
Wisconsin and Minnesota. During the first week of May, we will present
FlameOut(R) and the Fire Caddy(TM) system to the Forest Resource Association at
a joint outdoor logging show to be held on the property of International Paper
Company in Arkansas. Specially established control burns using FlameOut(R) and
Fire Caddy(TM) systems have been approved in order to enhance our presentations.

         During March 2004, FirePower will be included in programming for the
first time on QVC. We will perform live, on-air demonstrations of
FirePower(TM)'s amazing capabilities. FirePower(TM) is approved for programming
as "Today's Special Value". This type of promotion involves conducting 8 to 10
appearances in a 24 hour period.

         FirePower(TM) has been preliminarily approved for inclusion in the WW
Grainger "red catalog" for 2005 that goes to press in May 2004. We anticipate
the first order for product late in the third quarter or early in the fourth
quarter 2004.

         Cosmetics

         We have two products at QVC under review for quality assurance - "Beach
in the Bag," featuring our Pannache Sunless Tanner, and the "Pampering Pail,"
featuring sugar scrubs and exfoliators for the feet and elbows. We will soon be
submitting a new product package to QVC each month.

       Our future results of operations and the other forward-looking statements
contained in this Outlook involve a number of risks and uncertainties. Among the
factors that could cause actual results to differ materially are the following:
the inability of the company to obtain needed additional capital, loss of
personnel, particularly chief executive officer B. Keith Parker, as a result of


                                       17
<PAGE>

accident or for health reasons, interruptions in the supply of inventory from
manufacturers of the inventory, the development of a competing fire suppressant
by a well-capitalized competitor that either is able to develop a new product
with the same attributes as our fire suppressant or is able to discover the
additives to our fire suppressant that give it its unique and superior
qualities, and an accident involving life or serious bodily harm that fairly or
unfairly would bring into question the safety of using the company's fire
suppressant products.

ITEM 7.    FINANCIAL STATEMENTS

         Report of Independent Certified Public Accountants                   19
         Balance Sheet December 31, 2003                                      20
         Statements of Operations Year Ended December 31, 2003 and 2002
                  and Period from August 14, 1997 to December 31, 2003        21
         Statements of Changes in Stockholders' Equity for the period from
                  August 14, 1997 to December 31, 2003                        22
         Statements of Cash Flows Year Ended December 31, 2003 and 2002
                  and Period from August 14, 1997 to December 31, 2003        23
         Notes to Financial Statements                                        24




                                       18
<PAGE>


Report of Independent Certified Public Accountants



Board of Directors and Stockholders
Summit Environmental Corporation, Inc.
Longview, Texas


We  have  audited  the  accompanying   balance  sheet  of  Summit  Environmental
Corporation,  Inc. (A Development Stage Company) as of December 31, 2003 and the
related statements of operations, changes in stockholders' equity and cash flows
for each of the two years in the period  ended  December 31, 2003 and the period
from August 14, 1997 (Date of Inception) to December 31, 2003.  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 auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,   the  financial   position  of  Summit   Environmental
Corporation, Inc. as of December 31, 2003, and the results of its operations and
its cash flows for each of the two years in the period  ended  December 31, 2003
and the period from August 14, 1997 (Date of Inception) to December 31, 2003, in
conformity with accounting principles generally accepted in the United States of
America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in Note 11 to the
financial statements, the Company has suffered recurring losses from operations.
This raises substantial doubt about the Company's ability to continue as a going
concern.  Management's  plans in regard to these  matters are also  described in
Note 11. The  financial  statements  do not include any  adjustments  that might
result from the outcome of this uncertainty.


/s/ Lane Gorman Trubitt, L.L.P.


Dallas, Texas
February 20, 2004


<PAGE>

                     Summit Environmental Corporation, Inc.
                          (A Development Stage Company)
                                  BALANCE SHEET
                                December 31, 2003

                                     ASSETS

<TABLE>
<CAPTION>
CURRENT ASSETS

<S>                                                                                   <C>
Cash and cash equivalents                                                             $ 114,054
Accounts receivable, less allowance of  $166,321                                         29,444
Note receivable - related party, less allowance of  $20,496                                  --
Inventories                                                                             209,694
Prepaid expenses                                                                         79,916
                                                                                        -------
Total current assets                                                                    433,108
                                                                                       --------

PROPERTY AND EQUIPMENT - AT COST

Office furniture and equipment                                                           58,235
Leasehold improvements                                                                   13,760
Accumulated depreciation and amortization                                               (41,868)
                                                                                        --------
Net property and equipment                                                               30,127
                                                                                        -------

OTHER ASSETS

Prepaid royalties                                                                       511,859
Deposits                                                                                  2,180
Patent and licenses, net of acumulated amortization of  $841,227                      1,708,973
                                                                                     ----------
Total other assets                                                                    2,223,012
                                                                                     ----------
Total assets                                                                       $  2,686,247
                                                                                   ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Notes payable                                                                      $     39,500
Accounts payable                                                                         71,730
Accrued liabilities                                                                      32,588
                                                                                        -------
Total current liabilities                                                               143,818
                                                                                       --------

COMMITMENTS AND CONTINGENCIES                                                                --

STOCKHOLDERS' EQUITY

Preferred stock, par value $.001; 10,000,000 shares authorized; no shares issued             --
Common stock, par value $.001; 40,000,000 shares authorized;
16,899,194 shares issued and outstanding                                                 16,900
Subscription to capital                                                                 300,800
Additional paid-in capital                                                            8,329,609
Deficit accumulated in development stage                                             (6,079,880)
                                                                                     -----------
                                                                                      2,567,429
Less 10,000 shares of common stock in treasury - at cost                                (25,000)
                                                                                        --------
Total stockholders' equity                                                            2,542,429
                                                                                     ----------
Total liabilities and stockholders' equity                                         $  2,686,247
                                                                                   ============
</TABLE>


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

<PAGE>

                     Summit Environmental Corporation, Inc.
                          (A Development Stage Company)
                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                                   Period from
                                                             Years Ended December 31,             August 14, 1997
                                                         ---------------------------------    (date of inception) to
                                                             2003                 2002           December 31, 2003
                                                         ------------         ------------    -----------------------
<S>                                                      <C>                  <C>                  <C>
SALES                                                    $    180,687         $    127,607         $    887,255

COST OF SALES
Cost of sales                                                  84,381               63,974              350,091
Provision for inventory losses                                364,485                   --              364,485
                                                         ------------         ------------         ------------
Total cost of sales                                           448,866               63,974              714,576
                                                         ------------         ------------         ------------


Gross profit (loss)                                          (268,179)              63,633              172,679
                                                         ------------         ------------         ------------

OPERATING EXPENSES
Selling, general, and administrative expenses                 744,029            1,222,839            5,291,050
Amortization                                                  168,093              162,335              850,924
Depreciation                                                    9,866               11,220               66,837
                                                         ------------         ------------         ------------
Total operating expenses                                      921,988            1,396,394            6,208,811
                                                         ------------         ------------         ------------

Net loss from operations                                   (1,190,167)          (1,332,761)          (6,036,132)

OTHER INCOME (EXPENSE)
Interest income                                                 1,333                2,493               61,713
Interest expense                                                   --               (2,923)             (16,401)
Loss on sale of assets                                             --                   --               (2,753)
Miscellaneous                                                   2,842                4,679              (33,287)
                                                         ------------         ------------         ------------
                                                                4,175                4,249               75,846
                                                         ------------         ------------         ------------

Net loss before income tax                                 (1,185,992)          (1,328,512)          (5,960,286)

INCOME TAXES                                                       --                   --                   --

Net loss before cumulative effect of the
   change in accounting principle                          (1,185,992)          (1,328,512)          (5,960,286)

Cumulative effect on prior years of change in
   accounting principle, net of tax                                --                   --             (119,594)
                                                         ------------         ------------         ------------

NET LOSS                                                 $ (1,185,992)        $ (1,328,512)        $ (6,079,880)
                                                         ============         ============         ============

NET LOSS PER SHARE before cumulative
   effect of the change in accounting principle          $      (0.07)        $      (0.09)        $      (0.55)

Cumulative effect on prior years of the change in
   accounting principle                                            --                   --                (0.01)
                                                         ------------         ------------         ------------

NET LOSS PER SHARE                                       $      (0.07)        $      (0.09)        $      (0.56)
                                                         ============         ============         ============

WEIGHTED AVERAGE SHARES                                    16,375,542           14,037,379           10,800,157
                                                         ============         ============         ============
</TABLE>

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

<PAGE>

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                          (A Development Stage Company)
            STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY Period From
            August 14, 1997 (Date of Inception) to December 31, 2003


<TABLE>
<CAPTION>


                                                                    Common Stock
                                                           ---------------------------        Additional        Subscription
                                                              Shares            Amount      Paid-in Capital      to Capital
                                                           -----------         -------        -----------         ---------
<S>                                                        <C>                 <C>            <C>                 <C>
Balances, August 14, 1997 (Date of Inception)                       --         $    --        $        --         $      --

Issued for cash ($.46 per share)                               100,000           1,000             45,000                --
Net earnings                                                        --              --                 --                --
                                                           -----------         -------        -----------         ---------

Balances, December 31, 1997                                    100,000           1,000             45,000                --

Adjustment for 33.6-for-1 stock split                        3,260,000           2,360             (2,360)               --
Sale of 500,000 shares ($.20 per share)                        500,000             500             99,500                --
Sale of 1,000,000 shares ($.29 per share)                    1,000,000           1,000            289,000                --
Summit Environmental Corporation, Inc.                              --              --
  merger 750,000 shares (.001 per share)                       750,000             750               (750)               --
Sale of 250,000 shares ($.60 per share)                        250,000             250            149,750                --
Sale of 384,840 shares ($2.50 per share)                       384,840             385            961,715                --
122,000 shares issued for services ($.14 per share)            122,000             122             17,372                --
750,000 shares issued for patent ($2.50 per share)             750,000             750          1,874,250                --
Sale of 289,854 shares ($2.49 per share)                       289,854             289            721,346                --
Net loss                                                            --              --                 --                --
                                                           -----------         -------        -----------         ---------

Balances, December 31, 1998                                  7,406,694           7,406          4,154,823                --

Sale of 123,000 shares ($2.50 per share)                       123,000             123            307,377                --
Sale of 1,704,000 shares ($.50 per share)                    1,704,000           1,704            850,296                --
Re-purchase of 10,000 shares ($2.50 per share)                      --              --                 --                --
Conversion of long-term debt to 260,000
  shares ($0.50 per share)                                     260,000             260            129,740                --
Correction of shares outstanding                                (1,200)             --                 --                --
Issuance of 875,000 shares ($.40 per share) as
   satisfaction for related party note payable                 875,000             875            349,125                --
Net loss                                                            --              --                 --                --
                                                           -----------         -------        -----------         ---------

Balances, December 31, 1999                                 10,367,494          10,368          5,791,361                --

Sale of 1,533,000 shares ($.50 per share)                    1,533,000           1,533            764,967                --
Issuance of 140,000 shares upon exercise
of stock optionss ($.40 per share)                             140,000             140             55,860                --
62,500 shares issued for services ($.80 per share)              62,500              63             49,937                --
Net loss                                                            --              --                 --                --
                                                           -----------         -------        -----------         ---------

Balances, December 31, 2000                                 12,102,994          12,104          6,662,125                --

Sale of 320,000 shares ($.50 per share)                        320,000             320            159,680                --
Issuance of 930,000 shares upon exercise
of stock options ($.35 per share)                              930,000             930            324,570                --
Net loss                                                            --              --                 --                --
                                                           -----------         -------        -----------         ---------

Balances, December 31, 2001                                 13,352,994          13,354          7,146,375                --

Sale of 560,000 shares ($.50 per share)                        560,000             560            279,440                --
Sale of 938,000 shares ($.25 per share)                        938,000             938            233,562                --
400,000 shares issued for services ($.60 per share)            400,000             400            239,600                --
366,200 shares issued for services ($.25 per share)            366,200             366             91,184                --
40,000 shares issued for services ($.19 per share)              40,000              40              7,560                --
Money received for a 2003 stock purchase                            --              --                 --            60,000
Net loss                                                            --              --                 --                --
                                                           -----------         -------        -----------         ---------
Balances, December 31, 2002                                 15,657,194          15,658          7,997,721            60,000

Sale of 530,000 shares ($.25 per share)                        530,000             530            131,970           (60,000)
Issuance of 92,000 shares upon exercise
of warrants ($.25 per share)                                    92,000              92             22,908            23,000
15,000 shares issued for services ($.18 per share)              15,000              15              2,685                --
150,000 shares issued for services ($.22 per share)            150,000             150             32,850                --
15,000 shares issued for services ($.24 per share)              15,000              15              3,585                --
15,000 shares issued for services ($.25 per share)              15,000              15              3,735                --
15,000 shares issued for services ($.28 per share)              15,000              15              4,185                --
44,000 shares issued for services ($.30 per share)              44,000              44             13,156                --
360,000 shares issued for licenses ($.32 per share)            360,000             360            114,840                --
6,000 shares issued for services ($.33 per share)                6,000               6              1,974                --
Money received for a 2004 stock purchase                            --              --                 --           300,800
Net loss                                                            --              --                 --                --
                                                           -----------         -------        -----------         ---------

Balances, December 31, 2003                                 16,899,194         $16,900        $ 8,329,609         $ 300,800
                                                           ===========         =======        ===========         =========
</TABLE>

<TABLE>
<CAPTION>
                                                             Deficit
                                                           Accumulated
                                                               in
                                                           Development         Treasury
                                                              Stage              Stock              Total
                                                           -----------         --------         -----------
<S>                                                        <C>                 <C>              <C>
Balances, August 14, 1997 (Date of Inception)              $        --         $     --         $        --

Issued for cash ($.46 per share)                                    --               --              46,000
Net earnings                                                    40,762               --              40,762
                                                           -----------         --------         -----------

Balances, December 31, 1997                                     40,762               --              86,762

Adjustment for 33.6-for-1 stock split                               --               --                  --
Sale of 500,000 shares ($.20 per share)                             --               --             100,000
Sale of 1,000,000 shares ($.29 per share)                           --               --             290,000
Summit Environmental Corporation, Inc.
  merger 750,000 shares (.001 per share)                            --               --                  --
Sale of 250,000 shares ($.60 per share)                             --               --             150,000
Sale of 384,840 shares ($2.50 per share)                            --               --             962,100
122,000 shares issued for services ($.14 per share)                 --               --              17,494
750,000 shares issued for patent ($2.50 per share)                  --               --           1,875,000
Sale of 289,854 shares ($2.49 per share)                            --               --             721,635
Net loss                                                      (646,678)              --            (646,678)
                                                           -----------         --------         -----------

Balances, December 31, 1998                                   (605,916)              --           3,556,313

Sale of 123,000 shares ($2.50 per share)                            --               --             307,500
Sale of 1,704,000 shares ($.50 per share)                           --               --             852,000
Re-purchase of 10,000 shares ($2.50 per share)                      --          (25,000)            (25,000)
Conversion of long-term debt to 260,000
  shares ($0.50 per share)                                          --               --             130,000
Correction of shares outstanding                                    --               --                  --
Issuance of 875,000 shares ($.40 per share) as
   satisfaction for related party note payable                      --               --             350,000
Net loss                                                      (991,274)              --            (991,274)
                                                           -----------         --------         -----------

Balances, December 31, 1999                                 (1,597,190)         (25,000)          4,179,539

Sale of 1,533,000 shares ($.50 per share)                           --               --             766,500
Issuance of 140,000 shares upon exercise
of stock optionss ($.40 per share)                                  --               --              56,000
62,500 shares issued for services ($.80 per share)                  --               --              50,000
Net loss                                                    (1,175,650)              --          (1,175,650)
                                                           -----------         --------         -----------

Balances, December 31, 2000                                 (2,772,840)         (25,000)          3,876,389

Sale of 320,000 shares ($.50 per share)                             --               --             160,000
Issuance of 930,000 shares upon exercise
of stock options ($.35 per share)                                   --               --             325,500
Net loss                                                      (792,536)              --            (792,536)
                                                           -----------         --------         -----------

Balances, December 31, 2001                                 (3,565,376)         (25,000)          3,569,353

Sale of 560,000 shares ($.50 per share)                             --               --             280,000
Sale of 938,000 shares ($.25 per share)                             --               --             234,500
400,000 shares issued for services ($.60 per share)                 --               --             240,000
366,200 shares issued for services ($.25 per share)                 --               --              91,550
40,000 shares issued for services ($.19 per share)                  --               --               7,600
Money received for a 2003 stock purchase                            --               --              60,000
Net loss                                                    (1,328,512)              --          (1,328,512)
                                                           -----------         --------         -----------
Balances, December 31, 2002                                 (4,893,888)         (25,000)          3,154,491

Sale of 530,000 shares ($.25 per share)                             --               --              72,500
Issuance of 92,000 shares upon exercise
of warrants ($.25 per share)
15,000 shares issued for services ($.18 per share)                  --               --               2,700
150,000 shares issued for services ($.22 per share)                 --               --              33,000
15,000 shares issued for services ($.24 per share)                  --               --               3,600
15,000 shares issued for services ($.25 per share)                  --               --               3,750
15,000 shares issued for services ($.28 per share)                  --               --               4,200
44,000 shares issued for services ($.30 per share)                  --               --              13,200
360,000 shares issued for licenses ($.32 per share)                 --               --             115,200
6,000 shares issued for services ($.33 per share)                   --               --               1,980
Money received for a 2004 stock purchase                            --               --             300,800
Net loss                                                    (1,185,992)              --          (1,185,992)
                                                           -----------         --------         -----------

Balances, December 31, 2003                                $(6,079,880)        $(25,000)        $ 2,542,429
                                                           ===========         ========         ===========
</TABLE>

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

<PAGE>

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                                  Period from
                                                                 Years Ended December 31,        August 14, 1997
                                                            -------------------------------    (date of inception) to
                                                               2003                2002          December 31, 2003
                                                            -----------         -----------      -----------------
<S>                                                         <C>                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                                  $(1,185,992)        $(1,328,512)        $(6,079,880)
  Adjustments to reconcile net loss to cash
used in operating activities
Amortization                                                    168,093             162,335             850,924
Bad debt expense                                                 15,248             137,095             200,778
Provision for inventory losses                                  364,485                  --             364,485
Cumulative effect of change in accounting principle                  --                  --             119,594
Depreciation                                                      9,866              11,220              66,837
Loss on sale of assets                                               --                  --               2,753
Rescission of Lady Burd asset purchase agreement                     --              50,000              50,000
Common stock issued for services                                 62,430             339,150             469,074
Change in operating assets and liabilities:
Accounts receivable                                             (15,579)             (8,252)           (245,957)
Inventories                                                      24,314              76,706            (668,624)
Prepaid expenses and deposits                                    23,744              (6,016)           (499,510)
Accounts payable                                                 17,573              20,168              71,730
Accrued liabilities                                               1,032              10,650              32,588
                                                            -----------         -----------         -----------
Net cash used in operating activities                          (514,786)           (535,456)         (5,265,208)
                                                            -----------         -----------         -----------

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment                            (2,722)            (12,088)            (86,721)
Proceeds from sale of equipment                                      --                  --              47,440
Organization costs                                                   --                  --            (129,291)
Acquisition of patent                                                --             (25,000)            (50,000)
Acquisition of licenses                                              --                  --             (60,000)
                                                            -----------         -----------         -----------
Net cash used in investing activities                            (2,722)            (37,088)           (278,572)
                                                            -----------         -----------         -----------

CASH FLOWS FROM FINANCING ACTIVITIES
Loan proceeds                                                    39,500                  --              46,054
Loan principal repayments                                            --                  --             (66,990)
Loan principal repayments - related party                            --                  --            (134,265)
Proceeds from sale of stock and exercise of warrants            396,300             574,500           5,813,035
                                                            -----------         -----------         -----------
Net cash provided by financing activities                       435,800             574,500           5,657,834
                                                            -----------         -----------         -----------

NET INCREASE (DECREASE) IN CASH                                 (81,708)              1,956             114,054

Cash - Beginning of period                                      195,762             193,806                  --
                                                            -----------         -----------         -----------

Cash - End of period                                        $   114,054         $   195,762         $   114,054
                                                            ===========         ===========         ===========

SUPPLEMENTAL INFORMATION
Cash paid for interest                                      $        --         $     2,923         $    16,401
Cash paid for income taxes                                           --                  --               7,252
Issuance of common stock for patent                                  --                  --           1,875,000
Issuance of common stock for licenses                           115,200                  --             115,200
Issuance of note payable for patent                                  --                  --             500,000
Issuance of notes payable to purchase equipment                      --                  --             102,561
Conversion of notes payable to common stock                          --                  --             350,000
Conversion of long-term debt to common stock                         --                  --             130,000
Conversion of accounts receivable to note receivable                 --                  --              36,231
</TABLE>


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

<PAGE>

                     Summit Environmental Corporation, Inc.
                          (a Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS


SIGNIFICANT ACCOUNTING POLICIES

Business Activity

Summit  Environmental  Corporation,   Inc.  (the  "Company")  was  organized  in
accordance  with the Business  Corporation Act of the State of Texas on February
2, 1998,  for the purpose of merging (the  "Merger")  with Summit  Technologies,
Inc.,  a Texas  corporation.  The Company  continued  to exist as the  surviving
corporation  under its  present  name  pursuant to the  provisions  of the Texas
Business  Corporation  Act.  The Merger was  effected  on  December 2, 1998 as a
tax-free reorganization accounted for as a pooling of interests.

The Company markets fire suppression  materials,  environmentally  safe cleaning
chemicals and natural, botanical cosmetic products. The products are proprietary
or are under exclusive  license.  Marketing efforts include  "infomercials"  and
other television and radio promotion,  videotapes,  and personal demonstrations.
Products are marketed domestically and internationally.

During 2001,  the Company began sales of a color cosmetic line to compliment the
already  developed  skin care  cosmetic  line,  Pannache.  This  product line is
environmentally  friendly and made with premium  botanical and natural essential
oils and vitamins.

Change in Accounting Principle

During 1999 the  Company  changed its method of  accounting  for  organizational
costs to conform with requirements of the American Institute of Certified Public
Accountants  Statement  of  Position  98-5.  The  effect of this  change  was to
increase the net loss for 1999 by $93,736 ($0.01 per share).

Revenue Recognition

Revenues from sales of materials and products are recorded at the time the goods
are shipped or when title passes.

Cash

The  Company  maintains  cash  balances at a  financial  institution  located in
Longview, Texas, which at times may exceed federally insured limits. The Company
has not  experienced  any losses in such accounts and believes it is not exposed
to any significant credit risk on cash and cash equivalents.

The Company  considers  all highly liquid  investments  with a maturity of three
months or less when purchased to be cash equivalents.

Accounts Receivable

The Company  records  accounts  receivable at net realizable  value.  This value
includes  an  appropriate  allowance  for  estimated  uncollectible  accounts to
reflect any loss anticipated on the accounts  receivable balances and charged to
the provision for doubtful accounts. The Company calculates this allowance based
on historical of write-offs,  level of past due accounts and relationships  with
and economic status of the customers.

Inventories

Inventories,  which  consists of raw materials and products held for resale,  is
recorded  at the lower of cost or  market,  with cost  being  determined  by the
first-in, first-out method. At December 31, 2003, fire suppression inventory was
$187,189 and Pannache inventory was $22,505.




<PAGE>

                     Summit Environmental Corporation, Inc.
                          (a Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS

SIGNIFICANT ACCOUNTING POLICIES (continued)

Intangible Assets

Patents  and  licenses  are  recorded at cost.  Amortization  is computed on the
straight-line method over the identifiable lives of the patent and licenses.

Income Taxes

The Company  provides  for income  taxes under the asset and  liability  method.
Under the asset and liability  method,  deferred tax assets and  liabilities are
recognized for the future tax consequences  attributable to differences  between
the financial  statement carrying amounts of existing assets and liabilities and
their  respective tax bases.  Deferred tax assets and  liabilities  are measured
using  enacted  tax rates  expected  to apply to taxable  income in the years in
which those temporary  differences  are expected to be recorded or settled.  The
effect  on  deferred  tax  assets  and  liabilities  of a change in tax rates is
recognized in income in the period that includes the enactment  date.  Valuation
allowances  are  recognized  to limit  recognition  of deferred tax assets where
appropriate. Such allowances may be reversed when circumstances provide evidence
that the deferred tax assets will more likely than not be realized.

Property and Equipment

Depreciation and  amortization are provided in amounts  sufficient to relate the
cost of depreciable  assets to operations over their estimated  service lives by
the straight-line method.

Leasehold  improvements are amortized over the lives of the respective leases or
the service lives of the improvements, whichever is shorter.

Major  repairs or  replacements  of  property  and  equipment  are  capitalized.
Maintenance,  repairs  and minor  replacements  are  charged  to  operations  as
incurred.

When units of property  are retired or  otherwise  disposed  of,  their cost and
related accumulated depreciation are removed from the accounts and any resulting
gain or loss is included in operations.

The estimated  service lives used in determining  depreciation  and amortization
are:

              Description                            Estimated Service Life

              Office furniture and equipment               5 - 7 years
              Leasehold improvements                         4 years

Advertising and Marketing

Advertising and marketing costs are expensed as incurred,  which totaled $24,883
and $306,223 for 2003 and 2002, respectively.

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 certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.

Per Share Information

Per share  information  is based on the weighted  average number of common stock
and common stock equivalent  shares  outstanding.  Only basic earnings per share
are shown, as there are no dilutive items.



<PAGE>
                     Summit Environmental Corporation, Inc.
                          (a Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS

      SIGNIFICANT ACCOUNTING POLICIES (continued)


      Financial Instruments

      The Company's financial  instruments recorded on the balance sheet include
      cash and cash equivalents, accounts receivable, accounts payable and notes
      payable.  The  carrying  amounts  approximate  fair  value  because of the
      short-term nature of these items.


      Lady Burd(R)

      During 2002, the Company issued 500,000 shares of stock at $0.45 per share
      with the  intention to purchase  the rights to patents from Lady  Burd(R).
      Also included in this exchange were a non-refundable deposit of $25,000 in
      late  2001  and a  payment  of  $25,000  in  early  2002.  As part of this
      transaction,  the Company recorded a prepaid royalty asset of $200,000,  a
      patent of  $550,000  and an  initial  liability  of  $525,000  due to Lady
      Burd(R) ($50,000 was paid through December 31, 2002).

      Late in 2002,  the Company  was made aware that Lady  Burd(R) did not have
      the patents on the products that it  represented  to the Company.  Also at
      this time,  Lady  Burd(R)  notified  the Company that they did not have an
      agreement  with the Company and they have no  obligation  to complete this
      transaction.

      As a result, as of December 31, 2002, the Company has relieved the prepaid
      royalty  asset  of  $200,000,   the  patent  of  $550,000,  the  remaining
      obligation to Lady Burd(R) of $475,000 and has canceled the 500,000 shares
      of stock issued to Lady Burd(R).

      As of December 31, 2003 lawsuits  between Lady Burd(R) and the Company and
      between  the  Company  and Lady  Burd(R) are in process and the outcome is
      still not determinable.

      New Accounting Standards

      Recent Accounting  Pronouncements - During 2003, the Financial  Accounting
      Standards Board (FASB) released Statement No. 149, "Amendment of Statement
      133 on Derivative  Instruments and Hedging Activities",  and Statement No.
      150 "Accounting for Certain Financial  Instruments with Characteristics of
      both  Liabilities  and Equity".  The FASB also revised  Statement No. 132,
      "Employers' Disclosures about Pensions and Other Postretirement Benefits -
      an amendment of Statements No. 87, 88, and 103". The Company believes that
      the impact of these new standards  will not have a material  effect on the
      Company's financial position, results of operations or disclosures.


1.    INVENTORY

      Inventory is made up of the following as of December 31, 2003:


Finished goods                           $           48,102
Raw materials                                       161,592
                                         ------------------

                                         $          209,694
                                         ==================

2.    PATENT

      On November 2, 1998,  the Company  purchased  via issuance of common stock
      and a note  payable,  patent rights and  intellectual  property to various
      fire  suppression  products  for a  purchase  price  of  $2,375,000.  This
      purchase  required cash payments of $500,000 and 875,000  shares of common
      stock of the Company to be issued and delivered to BioGenesis Enterprises,
      Inc. The estimated aggregate amortization expense of intangible assets for
      each of the five succeeding years is $170,013 per year.

3.    LICENSES

      Licenses for  exclusive  marketing  rights to various  products  have been
      acquired for fees totaling  $175,200 from related parties.  The Company is
      the manufacturer/supplier of the products.


4.    ACCRUED EXPENSES

      Accrued expenses are made up of the following as of December 31, 2003:


      Commissions                         $           14,664
      Salaries                                         9,942
      Other                                            7,982
                                          ------------------
                                          $           32,588
                                          ==================

5. NOTES PAYABLE

      Notes payable consists of the following as of December 31, 2003:

      Note payable to a bank, due on demand,  or if no demand is made on May 14,
      2004 including  interest at 7.00%,  secured by substantially all assets of
      the Company and personally guaranteed by a stockholder.    $       39,500
                                                                 ==============


6.    INCOME TAXES

      Deferred tax assets and liabilities are determined based on the difference
      between the financial statement and tax bases of assets and liabilities as
      measured  by the  currently  enacted  tax rates.  Deferred  tax expense or
      benefit  is  the  result  of  the  changes  in  deferred  tax  assets  and
      liabilities.

      Deferred income taxes and liabilities arise principally from the temporary
      differences  between  financial  statement and income tax  recognition  of
      depreciation and amortization, bad debts and net operating losses.

      The deferred tax assets include the following components:

      Deferred tax assets:
         Current                                   $           56,549
         Noncurrent                                         2,020,440
      Valuation allowance                                  (2,073,375)
                                                   ------------------
        Deferred tax assets, net                                3,614
                                                   ------------------

      Deferred tax liabilities:
         Current                                                    -
         Noncurrent                                             3,614
                                                   ------------------
                                                                3,614
                                                   $                -
                                                   ==================

      The valuation  allowance was  established to reduce the deferred tax asset
      for the  amounts  that more  likely  than not will not be  realized.  This
      reduction is primarily  necessary due to the  uncertainty of the Company's
      ability  to  utilize  all of the net  operating  loss  carryforwards.  The
      valuation  allowance  increased  $402,355  and  $450,646 in 2003 and 2002,
      respectively.  The  Company  has a net  operating  loss  carryforwards  of
      approximately  $5,936,000  of which  $605,000  expires  in 2018,  $882,000
      expires in 2019,  $1,200,000  expires in 2020,  $819,000  expires in 2021,
      $1,240,000 expires in 2022 and $1,190,000 expires in 2023.


<PAGE>
                     Summit Environmental Corporation, Inc.
                          (a Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS


7.    COMMITMENTS AND CONTINGENCIES

      Leases

      The Company is obligated  under various  operating  leases for  equipment,
      vehicles, and office and warehouse space.  Management expects that, in the
      normal  course of  business,  leases  that expire will be renewed by other
      leases;  thus it is anticipated that future minimum lease commitments will
      not be less than the amount  shown for the year ending  December 31, 2003.
      Rent  expense  for all  operating  leases was  approximately  $67,283  and
      $55,862 for 2003 and 2002, respectively, which includes related party rent
      expense of $2,217 and $0, respectively.

      At  December  31,  2003,   approximate   rental   commitments   under  all
      noncancellable leases having terms in excess of one year are as follows:


<TABLE>
<CAPTION>
       Year Ending December 31,                          Related Party                Total
       ------------------------                     ------------------  -------------------
       <S>                                          <C>                 <C>
              2004                                  $            8,868  $            35,761
              2005                                               8,868               18,168
              2006                                               6,651                8,943
              2007                                                   -                    -
              2008                                                   -                    -
                                                    ------------------  -------------------
                  Total minimum lease payments      $           24,387  $            62,872
                                                    ==================  ===================
</TABLE>

      The Company's  office lease  requires the Company to maintain  $250,000 in
      general liability  insurance among other  requirements or the landlord has
      the  option to (a)  terminate  the  Company's  right to occupy  the leased
      premises by providing the Company with at least 3 days written notice; and
      (b)  accelerate  all rents which are payable  during the remainder of this
      lease or any renewal period  without notice or demand.  As of December 31,
      2003,  the  Company  does  not  maintain  general   liability   insurance.
      Management is in the process of obtaining general  liability  insurance to
      satisfy this  requirement.  The Company's  landlord has provided a written
      notice  indicating  that they will not terminate  the  Company's  right to
      occupy the  leased  premises  and will not  accelerate  all rents  payable
      during the remainder of the lease without  notice or demand  provided that
      the Company  will  provide a copy of the new  insurance  certificate  once
      coverage is obtained.

      Gain Contingency

      In November,  2002, the Company won a default judgment against Proformance
      Marketing,  LLC  (Proformance),   a  related  party,  for  $204,189.  This
      settlement was a result of the loss of the Company's inventory that was in
      the  possession  of  Proformance  as  well as for  the  collection  of two
      delinquent  receivables from  Proformance.  This inventory was expensed by
      the Company in 2002 and the corresponding receivables due from Proformance
      have been  allowed for as of  December  31,  2003 and 2002.  This  default
      judgment balance due of $204,189 is not reflected in the Company's balance
      sheet as there is doubt as to the  collectibility  of this  balance.  As a
      result,  any funds received from  Proformance  will be recorded as income,
      net of collection costs, as received.

      Litigation

      The Company is involved in various claims and legal actions arising in the
      ordinary  course of business.  These  lawsuits are in various stages and a
      determination  as to the outcome of these lawsuits and their effect on the
      financial   statements  is  not  determinable.   The  Company  intends  to
      vigorously  defend its  positions  in regards  to these  lawsuits.  In the
      opinion of management,  the ultimate disposition of these matters will not
      have a material adverse effect on the Company's financial position.

8.    COMMON STOCK

      Warrants

      During 2003 and 2002, the Company issued  warrants to acquire  802,000 and
      1,003,000  shares  of  common  stock,  respectively,  for  $0.25 per share
      through  June 11, 2004 in  connection  with private  placement  offerings.
      There are  2,256,500  warrants  outstanding  at December 31, 2003,  all of
      which are exercisable at $0.25 per share.


<PAGE>
                     Summit Environmental Corporation, Inc.
                          (a Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS

8. COMMON STOCK (continued)

      Common Stock Options

      The sole  director  and  stockholders  approved the 1998 Stock Option Plan
      (the "Plan") of the Company whereby, at the discretion of the directors or
      of a Stock Option Committee  appointed by the board of directors,  invited
      employees of the Company or directors of the Company or consultants to the
      Company  will have the  option  of  subscribing  to  common  shares of the
      Company  based on a price  determined  by the  directors  or Stock  Option
      Committee. The number of shares subject to the Plan is 500,000.

      The  following  schedule  summarizes  the changes in the Plan for the five
      years ended December 31, 2003:

<TABLE>
<CAPTION>
                                                                       Option Price
                                                              ------------------------------
                                             Number of                          Total Option
                                              Shares           Per Share            Price
                                             --------         -----------         ---------
<S>                                          <C>               <C>                 <C>
Outstanding at December 31, 1998                   --         $        --         $      --
For the year ended December 31, 1999:
    Granted                                   350,000                1.00           350,000
    Exercised                                      --                                    --
                                             --------         -----------         ---------

Outstanding at December 31, 1999              350,000         $      1.00                 $
                                                                                    350,000
For the year ended December 31, 2000:
    Granted                                        --                  --                --
    Exercised                                      --                  --                --
    Expired                                   (85,000)              (1.00)          (85,000)
                                             --------         -----------         ---------


Outstanding at December 31, 2000              265,000         $      1.00         $ 265,000
(127,500 exercisable)

For the year ended December 31, 2001:
    Granted                                        --                  --                --
    Exercised                                      --                  --                --
    Expired                                   (66,250)              (1.00)          (66,250)
                                             --------         -----------         ---------

Outstanding at December 31, 2001              198,750         $      1.00         $ 198,750
(95,000 exercisable)                         --------         -----------         ---------

For the year ended December 31, 2002:
    Granted                                   280,000                0.30            84,000
    Exercise price reduction                       --               (0.70)         (129,500)
    Exercised                                      --                  --                --
                                             --------         -----------         ---------
    Expired                                   (13,750)              (1.00)          (13,750)

Outstanding at December 31, 2002              465,000                0.30           139,500
(465,000 exercisable)                        --------         -----------         ---------

For the year ended December 31, 2003:
    Granted                                    10,000                0.30             3,000
    Exercised                                      --                  --                --
    Expired                                   (80,000)              (0.30)          (24,000)
                                             --------         -----------         ---------

Outstanding at December 31, 2003              395,000         $      0.30         $  18,500
(395,000 exercisable)                        ========         ===========         =========
</TABLE>

During 2002,  the Company  reduced the exercise price for all stock options from
$1.00 per share to $0.30 per share.

During 2001,  the Company issued  options  outside the Plan to purchase  250,000
shares of common  stock at $0.50 to a strategic  alliance  partner.  These stock
options are exercisable as of December 31, 2003 and expire June 30, 2004.

During 2001,  the Company issued  options  outside the Plan to purchase  150,000
shares of common  stock at $0.40 to a marketing  partner.  These  stock  options
expired in 2002.


<PAGE>

                     Summit Environmental Corporation, Inc.
                          (a Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS


8.    COMMON STOCK (Continued)

      In compliance  with Statement of Financial  Accounting  Standards No. 148,
      the Company  recognizes  and measures  compensation  costs  related to the
      Employee Plan utilizing the intrinsic value based method.  Accordingly, no
      compensation  cost  has  been  recorded.  Had  compensation  expense  been
      determined  on the fair  value of  awards  granted,  net loss and loss per
      share would have been as follows:

<TABLE>
<CAPTION>
                                                               2003                                      2002
                                               -------------------------------------  ---------------------------------------
                                                  As Reported          Pro forma           As Reported          Pro forma
                                               -------------------------------------  ---------------------------------------
<S>                                            <C>                <C>                 <C>                 <C>
       Net loss                                $     (1,185,992)  $      (1,188,394)  $      (1,328,512)  $        (1,409,971)
       Loss per share                          $           (.07)  $            (.07)  $            (.09)  $              (.10)
</TABLE>

      The fair  value of all  options  and  warrants  are  estimated  using  the
      Black-Scholes  option-pricing  model with the  following  weighted-average
      assumptions: risk free interest rate of 3.92% for 2003 and 4.29% for 2002,
      expected  life of 1 - 10 years;  expected  volatility of 128% for 2003 and
      143% for 2002;  dividend  yield of 0%; and an exercise  price of $0.30 for
      2003 and an  exercise  price of $0.35 to $0.50 for 2002.  The fair  values
      generated by the  Black-Scholes  model may not be indicative of the future
      benefit, if any, which may be received by the holders.

      Common Stock Issued for Services Rendered

      During 2003, the Company issued 210,000 shares of stock ranging from $0.18
      to $0.28 per share to  officers  of the  Company  for  services  rendered.
      During 2002, the Company issued 355,000 shares of stock at $0.25 per share
      to officers of the Company for services rendered.

      During 2003, the Company issued 44,000 and 6,000 shares at $0.30 and $0.33
      per share respectively, for services rendered by outside companies. During
      2002,  the Company  issued 40,000 and 11,200 shares at $0.19 and $0.25 per
      share  respectively,  for services rendered by outside  companies.  During
      2002, the Company issued 400,000 shares at $0.60 per share for advertising
      and marketing rendered by an outside company on behalf of the Company.

      During 2003, the Company issued 360,000 shares of stock at $0.32 per share
      for licenses.


9.    RELATED PARTY TRANSACTIONS

      The  following  transactions  occurred  between  the  Company  and related
      parties:

      The Company and another  business  with common  shareholders  share office
      space and the related expenses.

      Sales totaling  $8,823 and $5,040 were made to related parties in 2003 and
      2002, respectively.

      At December 31, 2003,  accounts  receivables  from related parties totaled
      $3,500 net of  allowances  of $150,537.  Notes  receivable  from a related
      party totaled $20,496, all of which was reserved for at December 31, 2003.

      The  Company  has a royalty  payable to a related  party with a balance of
      $4,967 as of  December  31,  2003.  This  balance is  included in accounts
      payable on the balance sheet.

      The  Company   acquired  a  patent  from  BioGenesis   Enterprises,   Inc.
      (BioGenesis)  on  November  2, 1998 (see Note 2). The  purchase  agreement
      requires  the  Company to pay  BioGenesis  a periodic  royalty of $.50 per
      16-oz.  can and an  equivalent  (approximately  7%) on all  other  product
      categories using the fire suppressant technology. One-half of all periodic
      royalty  fees due to  BioGenesis  will be  credited  against  the  advance
      royalty  fee  (until  fully  recovered)  and  one-half  will  be  paid  to
      BioGenesis  in cash on the 30th of each month  based upon  invoiced  sales
      through  the  close  of the  preceding  month.  The  Company  has  prepaid
      royalties  to  BioGenesis  totaling  $511,859  as of  December  31,  2003.
      Included in accounts  payable is $9,300 due to  BioGenesis at December 31,
      2003.


<PAGE>
                     Summit Environmental Corporation, Inc.
                          (a Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS

9.    RELATED PARTY TRANSACTIONS (continued)

      During 1998, the Company  purchased a license for various products from an
      entity with common shareholders and management members of the Company, and
      paid $60,000 for such license.

      During 2003, the Company  purchased a license for various products from an
      entity with common shareholders and management members of the Company, and
      paid $115,200 for such license.


10.   CONCENTRATIONS

      Approximately  35% and 23% of sales were made to two customers in 2003 and
      2002,   respectively.   These  customers  were  different  for  each  year
      presented.  Accounts  receivable  from the two customers  were $11,366 and
      $6,094 in 2003 and 2002, respectively.


11.   FINANCIAL RESULTS AND LIQUIDITY

      The  accompanying  financial  statements  have  been  prepared  on a going
      concern  basis,  which  contemplates  the  realization  of assets  and the
      satisfaction of liabilities in the normal course of business.  As shown in
      the accompanying financial statements, the Company has incurred net losses
      of $1,185,992  and  $1,328,512  for the years ended  December 31, 2003 and
      2002 respectively,  and has incurred losses of $6,079,880 since inception.
      The Company also has negative  cash flows from  operations of $514,786 and
      $535,456 for the years ended December 31, 2003 and 2002  respectively  and
      has used cash in operations of $5,265,208 since inception.  These factors,
      among others,  may indicate that the Company will be unable to continue as
      a going concern for a reasonable period of time. The financial  statements
      do  not  include  any  adjustments  relating  to  the  recoverability  and
      classification  of recorded assets,  or the amounts and  classification of
      liabilities  that  might be  necessary  in the  event the  Company  cannot
      continue in existence.

      Despite  its  negative  cash  flow,  the  Company  has been able to secure
      financing to support its  operations to date.  Going  forward,  additional
      cash will be needed to implement  the proposed  business  plan and to fund
      losses until the Company becomes  profitable.  Where there is no assurance
      that  funding  will be  available  to  execute  the plan,  the  Company is
      continuing  to seek  financing  to support its  turnaround  efforts and is
      exploring a number of alternatives in this regard. Management is exploring
      alternatives  that include seeking  strategic  investors and  implementing
      cost  reduction  programs.  There can be no  assurance  that  management's
      efforts in this regard will be successful.  The Company  believes that the
      capital  raised in fiscal 2003 and 2004 will be  sufficient to support the
      Company's liquidity  requirements  through December 31, 2004, depending on
      operating results. Management believes that, despite the financial hurdles
      and funding  uncertainties  going  forward,  it has under  development,  a
      business  plan that if  successfully  funded and  executed  as part of the
      financial restructuring, can significantly improve operating results.

12.   SIGNIFICANT FOURTH-QUARTER EVENTS (UNAUDITED)

      In the  fourth  quarter of 2003,  as a result of a thorough  review of the
      product lines,  the Company  recorded a provision for inventory  losses of
      $364,485  which was  charged to  operations.  The Company  also  corrected
      revenues  in the  fourth  quarter  of 2003 as a  result  of an  improperly
      recorded sale in the third quarter of 2003. The effect of this  correction
      decreases  revenues and accounts  receivable  by $79,000 at September  30,
      2003. The  accompanying  financial  statements for 2003 have been adjusted
      for these events.

13.   SUBSEQUENT EVENT (UNAUDITED)

      On February 12, 2004,  the  Company's  Board of Directors  agreed to grant
      20,000 stock  options to each director for Board Service and 20,000 shares
      to each  committee  member at $0.16 per share.  There were  480,000  total
      stock options granted to Directors.

<PAGE>


ITEM 8A. CONTROLS AND PROCEDURES

         Evaluation of disclosure controls and procedures. We maintain controls
and procedures designed to ensure that information required to be disclosed in
this report is recorded, processed, accumulated and communicated to our
management, including our chief executive officer and our chief financial
officer, to allow timely decisions regarding the required disclosure. Within the
90 days prior to the filing date of this report, our management, with the
participation of our chief executive officer and chief financial officer,
carried out an evaluation of the effectiveness of the design and operation of
these disclosure controls and procedures. Our chief executive officer and chief
financial officer concluded, as of fifteen days prior to the filing date of this
report, that these disclosure controls and procedures are effective.

         Changes in internal controls. Subsequent to the date of the above
evaluation, we made no significant changes in our internal controls or in other
factors that could significantly affect these controls, nor did we take any
corrective action, as the evaluation revealed no significant deficiencies or
material weaknesses.

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
         PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

         Set forth below are the names and terms of office of each of the
directors, executive officers and significant employees of the company and a
description of the business experience of each.

                                                            OFFICE HELD  TERM OF
       NAME                               OFFICE               SINCE     OFFICE
       ----                               ------               -----     -------

B. Keith Parker, 55             Chief Executive Officer and     1997      4-04
                                Director

Chris Dellinges, 54             Chief Financial Officer         2001      4-04

Paula Parker, 50                Vice President, Secretary       1997      4-04
                                And Director

Dean Haws, 34                   Director                        1997      4-04

James J. Roach, 56              Director                        1997      4-04

Thomas J. Kenan, 72             Director                        1997      4-04

Mohsen Amiran, 54               Director                        1999      4-04

Wilton Dennis Stripling, 62     Director                        2000      4-04


KEITH PARKER, CHAIRMAN, CEO

         Mr. Parker graduated from Texas A & M University at Commerce and
pursued graduate studies in tax law, estate planning and philosophy at Southern
Methodist University and Southwest Texas State University. He began a career in
financial and tax planning in 1973, is a licensed financial planner and has
earned numerous industry awards for production. In 1995, he and Paula Parker,
his spouse, organized Moonlighting Distribution Corporation and began the
distribution of more than 30 products, many of which they developed themselves.
In August 1997, they organized Summit Technologies, Inc.

CHRIS DELLINGES, CFO

         Mr. Dellinges graduated from the College of the Southwest and attended
Texas Wesleyan University School of Law. He has been a CPA since 1977 and has
particular expertise in complex tax matters, audits, appeals, tax court issues,
Internal Revenue Service installment agreements and offers in compromise,
bankruptcy, reorganization, business management and turnaround, divorce
litigation, tax and business fraud, oil and gas, partnership, corporation, and
individual taxation.


                                       32
<PAGE>

PAULA B. PARKER, VICE PRESIDENT SHAREHOLDER AND PUBLIC RELATIONS

         Ms. Parker is a former runway model, an accomplished businesswoman, and
a strong competitor. She was responsible for developing the first freestanding
ATM program in conjunction with the American Bankers Association in the state of
Texas. She also developed a successful franchise program for Great American
Foods and facilitated its growth from three units to nearly 50 in five states in
24 months. During this time, Ms. Parker worked with then Arkansas Secretary of
State Bill McQuen and Governor Bill Clinton as the liaison between the governor
and the restaurant industry. In late 1995, Ms. Parker put her marketing skills
to the test by combining efforts with Keith Parker to form Summit Environmental
Corporation.

         Ms. Parker is extensively involved in her community and has served as
Chamber of Commerce President, has been a United Way Board Member and an
American Red Cross Board Member. She has served on the education committee of
the Miss Texas Scholarship Pageant Association. A graduate of the University of
Colorado - Bank Marketing Association, Ms. Parker earned Marketing and Finance
degrees from the Association.

DEAN HAWS, DIRECTOR

         Mr. Haws has been the owner and operator of a satellite dish sales and
installation company, Gilmer Satellites of Gilmer, Texas, for the last ten
years. He has also been active in the oil field service business and the ostrich
business.

JAMES J. ROACH, DIRECTOR

         Mr. Roach is a retired Connecticut State Police Sergeant and former
owner of a security and detective agency in Connecticut. Presently, he is in
Florida dealing with real estate.

THOMAS J. KENAN, DIRECTOR

         Mr. Kenan has practiced securities and corporation law in Oklahoma
City, Oklahoma for the last 38 years. He is presently affiliated with Fuller,
Tubb, Pomeroy & Stokes in an "of counsel" capacity.

DR. MOHSEN AMIRAN, DIRECTOR

         Dr. Amiran grew up with a passion for the environment. While attending
a UK University, his two thesis papers on organic chemistry received national
attention. He was viewed as one of the brilliant minds in his field. He was then
invited by the Shah of Iran to set up a new technical university in Tehran to do
research and development for both military and civilian causes. The operation
quickly grew into the largest research facility in the Middle East. His work on
solvents for cleaning oil spills and other environmentally safe cleaning
solvents was historic. Subsequently, the Shah of Iran presented him with three
awards, including a gold medal, the country's highest honor.

         Soon after, the Islamic revolution took place and a new government took
over. For a two-month period, Dr. Amiran lived a life of torment and feared for
his life. The new regime destroyed the laboratory, burned his equipment and
destroyed all his research. Eventually, Ayatollah Khameni, the new leader,


                                       33
<PAGE>

stepped in and asked Dr. Amiran to become an advisor and help industry and the
military to get back on their feet. After a short time, Dr. Amiran managed to
escape with his wife and son to London. The news that one of Iran's leading
minds had defected caused much turmoil in Iran. Fearing that Dr. Amiran was
working with the CIA, his possessions were seized and family members tormented,
tortured or killed. He came to the United States and became a professor at
Northwestern University. He later founded BioGenesis, where he again began
working on his environment-saving fire suppressants and cleaning agents.

         Dr. Amiran received his undergraduate degree in Organic Chemistry from
Areya Mehr University in Tehran, Iran and his Ph.D. from the University of Essex
in England.

DR. WILTON DENNIS STRIPLING, DIRECTOR

         Dr. W. Dennis Stripling received a Bachelor Degree in chemistry from
Baylor University and a MD degree from the University of Texas Medical Branch.
He is a board certified Orthopaedic Surgeon specializing in surgery of the hand,
wrist, and forearm. He has served on the Medical Board of Trustees for
Presbyterian Hospital of Dallas. He was Medical Staff President 2001-2002. He is
a member of the Dallas County Medical Society, Texas Medical Association,
American Society for Surgery of the Hand, American Academy of Orthopaedic
Surgeons, and American College of Physician Executives. He is a Fellow in the
American College of Surgeons. He is Associate Clinical Professor of Orthopaedic
Surgery at the University of Texas Southwestern Medical School. Dr. Stripling
has a Certificate in Finance from the Cox School of Business at Southern
Methodist University and a Certificate in Medical Management from
Carnegie-Mellon University through the American College of Physician Executives.

ITEM 10.   EXECUTIVE COMPENSATION

         Mr. Parker, the chief executive officer of Summit Environmental
Corporation, receives a salary of $7,500 a month, the use of a rental
automobile, gasoline for the automobile and a membership in a country club in
Longview, Texas. Mrs. Parker, vice president, receives a salary of $5,000 a
month, the use of a rental automobile and gasoline for the automobile.

         STOCK OPTIONS. Pursuant to the Corporation's 1998 Stock Option Plan and
2004 Stock Option Plan, the directors issued options to purchase shares of
Common Stock of the Corporation to the following persons in the amounts and
subject to the exercise prices set forth opposite their names:

<TABLE>
<CAPTION>
--------------------- ----------------- -------------------- ------------------ ------------ ---------
                                          INCENTIVE STOCK    NON-QUALIFIED       EXERCISE
GRANTEE               POSITION                OPTIONS        STOCK OPTIONS         PRICE     EXPIRES
--------------------- ----------------- -------------------- ------------------ ------------ ---------
<S>                   <C>                 <C>                           <C>           <C>    <C>
Dean Haws             Director                                          40,000        $0.30  9/2009
                                                                        40,000          .30  8/2012
                                                                        80,000          .16  2/2014
--------------------- ----------------- -------------------- ------------------ ------------ ---------
Jim Roach             Director                                          40,000        $0.30  9/2009
                                                                        40,000          .30  8/2012
                                                                        80,000          .16  2/2014
--------------------- ----------------- -------------------- ------------------ ------------ ---------
Thomas Kenan          Director                                          40,000        $0.30  9/2009
                                                                        40,000          .30  8/2012
                                                                        80,000          .16  2/2014
--------------------- ----------------- -------------------- ------------------ ------------ ---------
</TABLE>


                                       34
<PAGE>

<TABLE>
<CAPTION>
--------------------- ----------------- -------------------- ------------------ ------------ ---------
<S>                   <C>                 <C>                           <C>           <C>    <C>
Charles Wilde         Former Director                                   10,000        $0.30  9/2209
--------------------- ----------------- -------------------- ------------------ ------------ ---------
John Brooks           Former Director                                   40,000        $0.30  9/2009
                                                                        40,000          .30  8/2012
--------------------- ----------------- -------------------- ------------------ ------------ ---------
Mohsen Amiran         Director                                          25,000        $0.30  9/2209
                                                                        40,000          .30  8/2012
                                                                        80,000          .16  2/2014
--------------------- ----------------- -------------------- ------------------ ------------ ---------
Dennis Stripling      Director                                          40,000         $.30  8/2012
                                                                        80,000          .16  2/2014
--------------------- ----------------- -------------------- ------------------ ------------ ---------
Chris Dellinges       Director                                          40,000         $.30  8/2012
                                                                        80,000          .16  2/2014
--------------------- ----------------- -------------------- ------------------ ------------ ---------
Tom Rouse             Consultant                                         6,250        $0.30  9/2209
--------------------- ----------------- -------------------- ------------------ ------------ ---------
Jennifer Woolbert     Employee                                          10,000        $0.30  3/2013
                                                                         2,500          .16  2/2014
--------------------- ----------------- -------------------- ------------------ ------------ ---------
Don Burns             Consultant                                       100,000         $.16  2/2006
--------------------- ----------------- -------------------- ------------------ ------------ ---------
MPI/GTM               Consultant                                       250,000         $.50  7/2011
--------------------- ----------------- -------------------- ------------------ ------------ ---------
</TABLE>


ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table shows information as of March 16, 2004 with respect
to each beneficial owner of more than 5 percent of each class of voting stock of
the company and to each of the officers and directors of the company
individually and as a group:

                                                    NO. OF               % OF
         SUMMIT ENVIRONMENTAL CORP.                 SHARES              CLASS
         --------------------------               --------------       -------
         B. Keith Parker                          2,456,805(1)(5)        12.4
         133 East Tyler Street
         Longview, TX 75601

         Paula Parker                               576,500(2)            2.9
         133 East Tyler Street
         Longview, TX 75601

         Dean Haws                                  410,000(5)            2.1
         P. O. Box 1071
         Gilmer, TX 75644

         James J. Roach                             190,000(5)            1.0
         182 Curtis Road
         Middlebury, CT  06762

         Thomas J. Kenan                            238,253(4)(5)         1.2
         212 NW 18th Street
         Oklahoma City, OK  73103

         Mohsen Amiran                              357,750(5)            1.8
         7420 Alban Station, Ste. B-208
         Springfield, VA  22150


                                       35
<PAGE>

         Wilton Dennis Stripling                  1,477,550(5)            7.5
         5230 Walnut Hill Lane, Ste. 306
         Dallas, TX  75231

         Chris Dellinges                            300,000(5)            1.5
         5949 Sherry Lane, Suite 650
         Dallas, TX   75225

         Officers and Directors                   5,430,358              27.5
         as a group (8 persons)

----------
*Less than 1 percent.

(1)  Mr. Parker directly owns 1,850,805 shares of common stock. He is attributed
     the beneficial ownership of 1,451,000 shares owned by a family limited
     partnership. He beneficially owns an additional 350,000 shares through his
     controlling stock ownership and position as a director of Moonlighting
     Distribution Corporation, which directly owns such 350,000 shares. He is
     also attributed the ownership of 170,000 shares owned by his spouse, Paula
     Parker. All these same shares are attributed to Paula Parker. See footnote
     (2).

(2)  Mrs. Parker, who is the spouse of B. Keith Parker, is attributed the
     beneficial ownership of the same shares attributed to Mr. Parker. See
     footnote (1).

(4)  These shares include the shares subject to stock options reported above for
     this person under "Stock Options."

(5)  This person is also attributed the ownership of the shares underlying the
     stock options described above under the heading "Stock Options."

ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Summit Technologies, prior to its merger with our company, paid $30,000
to Moonlighting Distribution Corporation for the exclusive license to distribute
products manufactured by Moonlighting Distribution Corporation - STRESSEX(TM),
PANNACHE(TM), and TRIM-AWAY(TM). B. Keith Parker and his spouse, Paula Parker,
who were officers and directors of SUmmit Technologies, own 52.5 percent of the
capital stock of Moonlighting. Summit Environmental will pay royalties to
Moonlighting for the exclusive licensing rights to the products from
Moonlighting.

         Summit Technologies' and, now, our company's distribution rights to
BioGenesis's fire suppression products were acquired not from BioGenesis, but,
rather, from Moonlighting Distribution Corporation, which had acquired these
rights before Summit Technologies was formed. In exchange for the transfer of
these rights to Summit Technologies, it issued 350,000 shares of its common
stock to Moonlighting Distribution Corporation, paid $10,000 to Moonlighting,
and will pay to Moonlighting a royalty of $0.50 for each 16-ounce can of
FIREPOWER 911(TM), $0.35 for each 1-liter can of FIREPOWER(TM), and $0.50 for
each gallon of FLAMEOUT(R).

         On November 2, 1998, BioGenesis assigned to Summit Technologies all
patents and intellectual property rights associated with the fire suppressant
products. Because of our merger with Summit Technologies, these rights are now
owned by our company. The obligation to pay licensing fees to BioGenesis merged
with the acquisition of the patent rights and, accordingly, was extinguished.
The obligation to pay the above-described annual royalties to Moonlighting,
however, did not so merge and will continue in effect during the term of the
exclusive license obtained from Moonlighting.


                                       36
<PAGE>

         PARENTS OF THE COMPANY

         Moonlighting Distribution Corporation ("Moonlighting") is affiliated
with the company through the common control of it and our company by B. Keith
Parker and Paula Parker, husband and wife, who are directors of each
corporation, own 52.5 percent of the capital stock of Moonlighting (which itself
owns 2.9 percent of the capital stock of the company) and own of record 19.4
percent of the capital stock of the company.

ITEM 13.   EXHIBITS AND REPORTS ON FORM 8-K

(a)      EXHIBITS

         The following exhibits are filed, by incorporation by reference, as
part of this Form 10-KSB:

       2.1       -      Agreement of Merger of July 14, 1998, between Summit
                        Environmental Corporation, Inc. and Summit Technologies,
                        Inc.**

       3.1       -      Articles of Incorporation of Summit Environmental
                        Corporation, Inc.*

       3.1.1     -      Amendment to Articles of Incorporation of Summit
                        Environmental Corporation, Inc.**

       3.2       -      Bylaws of Summit Environmental Corporation, Inc.*

      10.1       -      1998 Stock Option Plan adopted by Summit Environmental
                        Corporation, Inc.*

      10.3       -      Limited Exclusive Marketing Bilateral Agreement Between
                        Moonlighting Distribution Corporation-USA and Summit
                        Technologies, Inc. (Poder Sexual, Ultimate Stressex
                        and/or Poder 24)*

      10.4       -      Limited Exclusive Marketing Bilateral Agreement among B.
                        Keith Parker, individually and as Chairman of the Board
                        and CEO of Moonlighting Distribution Corporation-USA,
                        d/b/a Moonlighting International, and Summit
                        Technologies, Inc. (FireKare, FIREPOWER 911(TM), Super
                        Cold Fire, and FLAME OUT(R))*

      10.6       -      Exclusive Marketing Bilateral Agreement between
                        Moonlighting Distribution Corporation-USA and Summit
                        Technologies, Inc. (Trim-Away)**

      10.7       -      November 2, 1998 Amendment to April 27, 1998 Letter of
                        Intent between BioGenesis Enterprises, Inc. and Summit
                        Technologies, Inc., and April 27, 1998 Letter of
                        Intent.***

      10.8       -      2004 Stock Option Plan adopted by Summit Environmental
                        Corporation, Inc.

      31         -      Certification of Chief Executive Officer pursuant to 18
                        U.S.C. Section 1350, as adopted pursuant to Section 302
                        of the Sarbanes-Oxley Act of 2002.

      31.1       -      Certification of Chief Financial Officer pursuant to 18
                        U.S.C. Section 1350, as adopted pursuant to Section 302
                        of the Sarbanes-Oxley Act of 2002.

      32         -      Certification of Chief Executive Officer pursuant to 18
                        U.S.C. Section 1350, as adopted pursuant to Section 906
                        of the Sarbanes-Oxley Act of 2002.


                                       37
<PAGE>

      32.1       -      Certification of Chief Financial Officer pursuant to 18
                        U.S.C. Section 1350, as adopted pursuant to Section 906
                        of the Sarbanes-Oxley Act of 2002.

      *                 Previously filed with Form SB-2; Commission File No.
                        333-48675 incorporated herein.

      **                Previously filed with Amendment No. 1 to Form SB-2;
                        Commission File No. 333-48675 incorporated herein.

      ***               Previously filed with Amendment No. 5 to Form SB-2;
                        Commission File No. 333-48675 incorporated herein.

(b)      REPORTS ON FORM 8-K

         None

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

         The information required by item 14 of Form 10-KSB is hereby
incorporated by reference from the Company's definitive proxy statement, which
will be filed pursuant to Regulation 14A within 120 days after the Company's
year end for the year covered by this report, under the caption "Principal
Accountant Fees and Services" in the proxy statement.

                                   SIGNATURES


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

                                        SUMMIT ENVIRONMENTAL CORPORATION, INC.


                                        /s/ B. Keith Parker
Date:  April 14, 2003                   ----------------------------------------
                                        B. Keith Parker, Chief Executive Officer




                                       38
<PAGE>


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


                               /s/ Chris Dellinges
Date:  April 14, 2003          -------------------------------------------------
                               Chris Dellinges, Chief Financial Officer


                               /s/ B. Keith Parker
Date:  April 14, 2003          -------------------------------------------------
                               B. Keith Parker, Chief Executive Officer and
                               Director


                               /s/ Paula Parker
Date:  April 14, 2003          -------------------------------------------------
                               Paula Parker, Director


                               /s/ Dean Haws
Date:  April 14, 2003          -------------------------------------------------
                               Dean Haws, Director


                               /s/ Thomas J. Kenan
Date:  April 14, 2003          -------------------------------------------------
                               Thomas J. Kenan, Director


                               /s/ James J. Roach
Date:  April 14, 2003          -------------------------------------------------
                               James J. Roach, Director


                               /s/ John Brooks
Date:  April 14, 2003          -------------------------------------------------
                               John Brooks, Director


                               /s/ Mohsen Amiran
Date:  April 14, 2003          -------------------------------------------------
                               Mohsen Amiran, Director


                               /s/ Wilton Dennis Stripling
Date:  April 14, 2003          -------------------------------------------------
                               Wilton Dennis Stripling, Director



                                       39
<PAGE>

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                          Commission File No. 333-48659

                                  EXHIBIT INDEX

                                   FORM 10-KSB
                      FOR THE YEAR ENDED DECEMBER 31, 2003

Exhibit No.                        Description
-----------                        -----------

         The following exhibits are filed, by incorporation by reference, as
part of this Form 10-KSB:

       2.1       -      Agreement of Merger of July 14, 1998, between Summit
                        Environmental Corporation, Inc. and Summit Technologies,
                        Inc.**

       3.1       -      Articles of Incorporation of Summit Environmental
                        Corporation, Inc.*

       3.1.1     -      Amendment to Articles of Incorporation of Summit
                        Environmental Corporation, Inc.**

       3.2       -      Bylaws of Summit Environmental Corporation, Inc.*

      10.1       -      1998 Stock Option Plan adopted by Summit Environmental
                        Corporation, Inc.*

      10.3       -      Limited Exclusive Marketing Bilateral Agreement Between
                        Moonlighting Distribution Corporation-USA and Summit
                        Technologies, Inc. (Poder Sexual, Ultimate Stressex
                        and/or Poder 24)*

      10.4       -      Limited Exclusive Marketing Bilateral Agreement among B.
                        Keith Parker, individually and as Chairman of the Board
                        and CEO of Moonlighting Distribution Corporation-USA,
                        d/b/a Moonlighting International, and Summit
                        Technologies, Inc. (FireKare, FIREPOWER 911(TM), Super
                        Cold Fire, and FLAME OUT(R))*

      10.6       -      Exclusive Marketing Bilateral Agreement between
                        Moonlighting Distribution Corporation-USA and Summit
                        Technologies, Inc. (Trim-Away)**

      10.7       -      November 2, 1998 Amendment to April 27, 1998 Letter of
                        Intent between BioGenesis Enterprises, Inc. and Summit
                        Technologies, Inc., and April 27, 1998 Letter of
                        Intent.***

      10.8       -      2004 Stock Option Plan adopted by Summit Environmental
                        Corporation, Inc.

      31         -      Certification of Chief Executive Officer pursuant to 18
                        U.S.C. Section 1350, as adopted pursuant to Section 302
                        of the Sarbanes-Oxley Act of 2002.

      31.1       -      Certification of Chief Financial Officer pursuant to 18
                        U.S.C. Section 1350, as adopted pursuant to Section 302
                        of the Sarbanes-Oxley Act of 2002.

      32         -      Certification of Chief Executive Officer pursuant to 18
                        U.S.C. Section 1350, as adopted pursuant to Section 906
                        of the Sarbanes-Oxley Act of 2002.


                                        1
<PAGE>

      32.1       -      Certification of Chief Financial Officer pursuant to 18
                        U.S.C. Section 1350, as adopted pursuant to Section 906
                        of the Sarbanes-Oxley Act of 2002.


      *                 Previously filed with Form SB-2; Commission File No.
                        333-48675 incorporated herein.

      **                Previously filed with Amendment No. 1 to Form SB-2;
                        Commission File No. 333-48675 incorporated herein.

      ***               Previously filed with Amendment No. 5 to Form SB-2;
                        Commission File No. 333-48675 incorporated herein.



                                       2