<PAGE>


                     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, 2002

                                       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]

                                       1
<PAGE>
State issuer's revenues for its most recent fiscal year: $127,607.

         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: $2,892,843 computed by
reference to the $0.235 average of the bid and asked price of the company's
Common Stock on April 4, 2003.

         State the number of shares outstanding of each of the issuer's classes
of common equity, as of March 20, 2003: 16,532,194 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]



                                       2
<PAGE>
                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                 Page
                                                                                                 ----
<S>                                                                                              <C>
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...........................................   10
           Seasonality.........................................................................   11
           Research and Development............................................................   11
           Environmental Controls..............................................................   11
           Number of Employees.................................................................   11

Item  2.   Properties..........................................................................   11

           Facilities..........................................................................   11

Item  3.   Legal Proceedings...................................................................   12

Item  4.   Submission of Matters to a Vote of Security Holders.................................   12

Item  5.   Market for Common Equity and Related Stockholder Matters............................   12

Item  6.   Management's Discussion and Analysis................................................   13

           Overview............................................................................   13
           Results of operations...............................................................   18
           Sales...............................................................................   18
           Gross margin........................................................................   20
           Operating expenses..................................................................   20
           Net loss............................................................................   20
           Liquidity and capital resources.....................................................   20
           Outlook.............................................................................   21

Item  7.   Financial Statements................................................................   26

Item  8.   None

Item  9.   Directors, Executive Officers, Promoters and Control Persons;
                    Compliance with Section 16(a) of the Exchange Act..........................   39

Item  10.  Executive Compensation..............................................................   41

Item  11.  Security Ownership of Certain Beneficial Owners and Management......................   42
</TABLE>

                                       3
<PAGE>
<TABLE>
<S>                                                                                              <C>
Item  12.  Certain Relationships and Related Transactions......................................   43

           Parents of the Company..............................................................   44

Item  13.  Exhibits and Reports on Form 8-K....................................................   44

Item  14.  Controls and Procedures.............................................................   45

           Signatures..........................................................................   45
</TABLE>


                                       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. Originally, Moonlighting developed and
marketed health and well-being products designed to improve the quality of an
individual's life and also marketed other industrial cleaners, chemicals and
fire suppression agents.

         In 1993, before our company was organized, the Parkers and Moonlighting
began to assess several products developed by BioGenesis Enterprises, Inc. of
Springfield, Virginia ("BioGenesis"). BioGenesis develops and manufactures
industrial products that are environmentally safe - generally, products that are
biodegradable and nontoxic. By middle 1997, the Parkers and Moonlighting
concluded that BioGenesis' products merited commercial exploitation. A trip to
the Philippines was planned to determine if a fire suppressant product of
BioGenesis' could be marketed there through personal contacts of the Parkers. A
license was obtained from BioGenesis to market the fire suppressant. The named
licensee was "B. Keith Parker and Moonlighting Distribution Corporation dba
Moonlighting International." Moonlighting International was a trade name to be
used by Moonlighting for any overseas marketing business.

         The trip to the Philippines resulted in the organization by local
businessmen there of Moonlighting International Philippines, a company not
affiliated with the Parkers' company, Moonlighting Distribution Corporation.
Moonlighting determined that the scope of 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 the 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.

         After the organization of Summit Technologies, Moonlighting licensed to
Summit Technologies the exclusive right to market products newly developed by
Moonlighting and tested for marketing, STRESSEX(TM) and PANNACHE(TM), and
the non-exclusive right to market BioGenesis' fire suppressant products,
FIREPOWER 911(TM) and FLAMEOUT(R), for which Moonlighting had earlier
obtained certain exclusive distribution rights. Later, in April 1998, Summit
Technologies entered into an agreement with Dr. Mohsen C. Amiran, the formula's
inventor, and his company, BioGenesis, that would enable Summit Technologies to
obtain ownership of all patent and other intellectual property rights associated
with the fire suppressant upon the payment of $1 million cash and 750,000 shares
of Common Stock of Summit Technologies. Then, on November 2, 1998, BioGenesis
assigned to Summit Technologies the fire suppressant's patent and other
intellectual property rights. The parties agreed for the company to complete
payment of its obligation to BioGenesis by December 1, 1999. The company
completed the funding of this obligation on December 1, 1999.

         On December 2, 1998, Summit Technologies was merged into the company.

         PRINCIPAL PRODUCTS

         Summit Environmental distributes and markets or has initiated
activities to distribute and market the following proprietary products. All of
the products are manufactured exclusively for us.

                                       5
<PAGE>
         FIREPOWER 911(TM) and FLAMEOUT(R)

         These products are fire suppressants and retardants manufactured for
us. 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. We are engaged with
International Aero in accordance with the Federal Aviation Administration
minimum performance initiative to find acceptable replacements for the onboard
Halon fire extinguishers on commercial aircraft. 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 March 1994, Surfactant Blend A was certified by the USEPA-SNAP
(Significant New Alternative Policy) which had been submitted by Dr. Mohsen C.
Amiran. 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--FLAMEOUT(R) was listed in May 1997 by Underwriter Laboratories (listing
number 7P21).

         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) reduces toxic smoke by encapsulating poisonous
hydrocarbons, reduces heat approximately 70 percent faster than water, prevents
reflash, is safe to store and handle, leaves virtually no residue, is
biodegradable, and otherwise is environmentally safe. It is nontoxic, but may
irritate the eyes. It stores at between 25 degrees and 120 degrees Fahrenheit
for prolonged periods.

         In December 2000 we submitted FLAMEOUT(R) to the United States Forestry
Service for certification as a Wetland Wildfire-approved fire extinguishing
agent. All tests have been completed and the results are listed as "acceptable".
Direct communication from the Forestry Service gave us a target date of April
2003 for our approval and Quality Product Listing (QPL) listing. With this
approval, any federal agency can issue a purchase order for FlameOut(R). With
these purchase orders, we invoice the particular United States government
agency. The latest information we have received is that the required Material
Safety Data Sheet (MSDS) changes have been submitted and are under review in
Washington, D.C.

                                       6
<PAGE>
         FLAMEOUT(R) was involved at the end of 2001 in two international tests
for the purpose of certification as an alternative replacement product for AFFF.
AFFF is a fire fighting foam which is classified as a biohazard. Suspected as a
possible link to causing cancer, fire fighters using AFFF wear biohazard suits
when using AFFF. These tests were conducted in Europe and Mexico. We completed
an initial official military specification test in the first quarter 2002 with
the United States Air Force testing laboratory. FlameOut(R) was selected as one
of three products to be tested for further evaluation during 2003.

         FIREPOWER 911(TM) contains Surfactant Blend A--FLAMEOUT(R)
formula. FIREPOWER 911(TM) and FLAMEOUT(R) 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. A new Non-Halon
certification, with regard to residential fire extinguisher sales, leaves
FIREPOWER 911(TM) in a class of its own. The Clorox Company with which we had
previously entertained private label discussions of FirePower 911(TM) informed
us that it had completed nearly four years of testing, branding, and market
research in January 2003. It is proposing the purchase of the licensing and
production rights for our aerosol can technology. The formal proposal was made
to us on March 26, 2003 by Clorox at our home offices in Longview. The Board of
Directors met on March 27, 2003 to discuss the proposal. The Board is
considering the proposal and possible counteroffers. Management has been made
aware of a major chemical company that sells fire suppression agents with the
same interest in FlameOut(R). We have also been notified of a final approval at
QVC for FirePower 911(TM). The Board of Directors will be taking all of this
into consideration during early April 2003.

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. We market industrial chemicals and cleaners that we have introduced into
our line of products.

         Due to perceived market demands, the company, 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. Due to the capabilities realized by ULTIMATE CLEAN 668(TM),
through International Aero, we are introducing 668(TM) to the aviation
industry and the United States Military.

         We submitted ULTIMATE CLEAN 668(TM) to the 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.

         We took steps during the fourth quarter of 2002 to obtain the worldwide
exclusive marketing rights to some of Dr. Amiran's chemical technology. The
agreement for the Bioremediation Technology allows for the exclusive marketing
rights to an organic technology for cleaning up contaminated sites and disposing
of toxic chemicals. Our plans for using this technology are directed toward the
disposal of banned or toxic agents no longer desired for use such as AFFF.
Another planned introduction of our

                                       7
<PAGE>
bioremediation technology during 2003 is with Pemex, the national oil company of
Mexico, for the clean-up of contaminated sites from petroleum production.

         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 use several color laboratories to make our products,
purchase components direct from suppliers and have an assembly facility at our
old office location. We hired a product development and trade show specialist in
March 2003. Operations began for product assembly during the first quarter of
2003. This allows us to reduce our cost of goods on all products in the color
line by more than 50 percent.

         Our management decided in June 2000 to develop a marketing division for
these products. In September 2000, the decision was made to develop a color line
of products complementing the rest of the Pannache line. The initial product
would be in a new category of cosmetic lipsticks; long-lasting, no smear,
semi-permanent lip color. We first introduced Luscious Lips in August 2001. We
have an entire line of color cosmetics that we developed from natural herbs and
botanicals. Our website www.pannachelusciouslips.com displays the entire
Pannache Cosmetics Product Line.

         DISTRIBUTION METHODS

         We market products primarily through the development of strategic
alliances, the first of which was with International Aero, Inc., for the
aviation industry, the U. S. Military and the United States Gulf Coast petroleum
industry. International Aero is the world's largest re-configuration and
retrofit contractor for the aviation industry. Other alliances made by the
company for specific industries include e-commerce, catalogue sales, roofing,
plumbing, heating and air conditioning, building materials, and retail mass
merchandisers and convenience stores. We launched sales efforts in 2002 through
direct television advertising on QVC. Internationally, we market products
through exclusive distribution agreements with revenue sharing clauses. A
company with nationwide manufacturing, production and distribution abilities
recently presented us with a proposal for its obtaining the licensing and
marketing rights for FirePower 911(TM).

         Exclusive distribution agreements which we have entered into include
the Philippines, England and the European Union, Scandinavia, Australia, New
Zealand, Hong Kong, Japan, Mexico, Argentina, Belize, Honduras, Guatemala,
Nicaragua, Costa Rica, Panama, El Salvador, Brazil, Chile, Uruguay, Paraguay,
Venezuela, Peru, Ecuador, Columbia, Bolivia, Puerto Rico, the Dominican
Republic, Mexico and Canada.

         COMPETITION

         We own the patent and intellectual property rights to Surfactant Blend
A--FLAMEOUT(R) and currently market under that name only. Surfactant Blend
A--FLAMEOUT(R) 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>
         The demise of the former fire suppressant of choice, Halon 1211, is a
consequence of the 1992 Geneva Peace Conference, which mandated the phase out of
Halon 1211 in all United Nations countries participating in the Conference. The
banning is now global in scope.

         We believe that FLAMEOUT(R) is the finest fire suppressant in
existence and that FIREPOWER 911(TM) is the only rated and listed fire
extinguisher in an aerosol can in the marketplace today.

         We have compared Luscious Lips to similar products manufactured by
Revlon, Max Factor, Cover Girl, Avon and Beauty Control touting no smear and
extended wear. These products simply do not perform as represented or to the
extent of Luscious Lips. 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 Luscious Lips from the world famous Kilgore
College Rangerettes. Jessie Ward, Miss Arkansas 2001/2002 is the
Pannache/Luscious Lips official National Spokesperson. Direct Response
television sales through QVC were completed during the fourth quarter of 2002.
The Pannache Luscious Dust Brush first aired on January 20, 2003. There are two
subsequent airings on February 10, 2003 and April 2003. Luscious Lips and
Pannache Sunless Tanning Mist have been approved for programming. First airing
should be in the second quarter of 2003.

         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 has retained Dr. Amiran and his company, BioGenesis, to formulate and
package the company's 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

         In mid-1997, Moonlighting and B. Keith Parker obtained a nearly
worldwide license from BioGenesis for its fire suppressant products and
improvements. See "Description of Summit Technologies' Business--Business
Development." The excepted countries were most Arabic countries and the
Scandinavian countries. On May 1, 1997, both of these areas, then under
exclusive license to other companies, became available due to the existing
licensees' failure to meet periodic sales quotas, and Parker and Moonlighting
acquired licenses in these areas pursuant to the terms of their agreement with
BioGenesis.

         In October 1997, this exclusive license from BioGenesis was assigned to
Summit Technologies (which company was merged into the company on December 2,
1998) in exchange for the payment to Moonlighting of $10,000, the issuance to
Moonlighting of 350,000 shares of common stock of Summit Technologies, and the
obligation to pay to Moonlighting a royalty of $0.50 for each 16 ounce can of
FIREPOWER 911(TM) and $0.50 for each gallon of FLAMEOUT(R). Subsequently,
the company developed a new version of FIREPOWER 911(TM) in a one-liter can.
This product bears an obligation of $.35 per can payable to Moonlighting.

         On November 2, 1998, BioGenesis assigned to Summit Technologies all
patents and intellectual property rights associated with the fire suppressant
products. See "Business Development" above. 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 royalties to
Moonlighting, however, did not so merge and will continue in effect during the
term of the exclusive license obtained

                                       9
<PAGE>
from Moonlighting. We completed the purchase of the patent and intellectual
property rights on December 1, 1999.

         We paid $30,000 for 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. Moonlighting receives a 9 percent
royalty on the lowest wholesale price for which we sell the product. We deal
directly with the laboratories manufacturing these products.

         We have the right to private label our industrial chemicals and
cleaning products formulated by Dr. Mohsen C. Amiran. We have agreements to
obtain these products at the lowest wholesale cost less 10 percent to 15
percent. We have determined the wholesale, dealer, and retail pricing schematic.
We and Dr. Amiran have a prearranged formula for percentage splits on other
products, which are developed on a case-by-case basis by Keith Parker, the
company's Chief Executive Officer.

         During the fourth quarter of 2002, we obtained the worldwide exclusive
marketing rights from Dr. Mohsen C. Amiran for his bioremediation technology. We
plan to use this technology for environmental cleanup of toxic sites and for
remediation of toxic chemicals posing threats to geographic storage sites. We
obtained the exclusive technology and products to accomplish environmental
cleanup for 360,000 shares of stock in the company and the right to purchase
180,000 warrants for stock.

         In the first quarter of 2002, we executed a bilateral exclusive
agreement with Just-in Case Fire of Calgary, Alberta, Canada. Just-in Case Fire
manufactures and markets a series of patented mobile fire extinguishing systems.
The agreement provides that Summit will not sell FlameOut(R) to any other
company manufacturing such devices. Just-in Case Fire warrants to us that it
will not manufacture these units without containing FlameOut(R) exclusively. For
this agreement, we sell FlameOut(R) to Just-In Case Fire at our Master
Distributor Wholesale Prices. We in turn receive 3.5% to 5% royalties on each
unit manufactured and sold.

         GOVERNMENT APPROVAL OF PRINCIPAL PRODUCTS

         BioGenesis obtained EPA approval in 1994 and Underwriter Laboratories
listing in May 1997 for FLAMEOUT(R) (Listing No. 7P21). The previous
approvals and listings have been registered in our name.

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

         The fire suppressant products we distribute are subject to government
regulation in most countries of the world. The existence of this regulation is
of benefit to us. The company's fire suppressants are qualified substitutes for
Halon 1211, the fire suppressant of choice in most of the world prior to the
1992 Geneva Peace Conference that implemented what today is a global banning of
Halon 1211. The company obtained a rating and listing for FIREPOWER 911(TM) as
a fire extinguisher in February 1999. FIREPOWER 911(TM) was tested to ANSI/UL8
and ANSI/UL711 according to NFPA standard 10. During 2000, state fire marshals'
offices began removing "copycat" products, which were not listed and rated
accordingly, from retail establishments via cease and desist removal orders.

         The manufacturers of our cosmetic products, Cosmetic Laboratories,
Inc., and several exclusive private label cosmetic companies are all members in
good standing of the Cosmetic, Toiletry and Fragrance Association (CTFA).

                                       10
<PAGE>
         SEASONALITY

         There is no known seasonal aspect to our business.

         RESEARCH AND DEVELOPMENT

         We have agreements with several companies and countries that are
conducting research and testing to produce new fire-fighting tools and new
products.

         International Aero, Inc., the world's largest reconfigurator of
commercial aircraft, has several projects underway. One is the development of an
approved fire suppression agent, tested to the new minimum performance standards
established by the FAA, that will be a replacement agent for the fire
extinguishers in bathrooms and galleys on board all commercial aircraft which
now contain Halon 1211. The Halon 1211 fire extinguishers are no longer (as of
March 1999) protected for continued use under the classification of Mission
Critical. FlameOut(R) was officially listed by the US DOT and FAA Halon
Replacement Product Listing for the airline industry replacement protocol in
December 2001.

         Also, a non-toxic, biodegradable turbine cleaner has been developed by
us for International Aero and for Solar Turbines, owned by Caterpillar, for the
scheduled periodic cleanings required of jet engines. While there are a couple
of cleaners available, Solar Turbines and International Aero cannot find an
acceptable cleaner. We have been involved in a U. S. Department of Defense and
U. S. Navy, EPA directed test on ULTIMATE CLEAN 668(TM) for non-corrosion and
non-toxicity to military specification number MIL-PRF-85704C. Through
International Aero, Inc., we have several of the major airlines (United,
Continental, Northwest, Delta and Eastern) as customers desiring to buy ULTIMATE
CLEAN 668(TM).

         We and Dr. Amiran have been jointly working on an advanced formula for
FlameOut(R) to be approved as a replacement for AFFF. Due to preliminary
military specification tests with the United States Air Force we conducted
during June 2002, FlameOut(R) was selected for advanced evaluation in 2003.

         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 December 31, 2002, we employed five 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 4,750 square feet of space in Longview, Texas for our offices
and for inventory storage at $1,700 per month. Additional space is leased for
assembling cosmetic products, fire extinguishing products, and more storage.
This was our old office location. We moved back into the space for fulfillment
needs on February 1, 2003. This 5,000 square foot space leases for $1,300 month.
We believe all space requirements can be met at our present location for at
least the next year.

                                       11
<PAGE>
ITEM 3.  LEGAL PROCEEDINGS

         On December 28, 2001, we filed a collection lawsuit against Harry
Bachelder III, dba Proformance Marketing , Inc. for non-performance on a
guaranteed note payable and delinquent accounts in the amount for both of
$46,000. In November 2000, we had negotiated a note payable, personally
guaranteed by Mr. Bachelder III, for existing past due accounts. The note was
paid as agreed through May 2001. When payments stopped, management negotiated
for a lump sum to be paid by December 21, 2001. When payment was not received, a
lawsuit was filed for default. We obtained a judgement in the amount of $138,000
in November 2002. Collection proceedings are currently underway.

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 2001, and 2002. The quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not represent actual
transactions.

<TABLE>
<CAPTION>
                                    High             Low
                                    ----             ---
<S>                                 <C>              <C>
         2001:
                  1st Qtr.          0.6875           0.25
                  2nd Qtr.          1.12             0.13
                  3rd Qtr.          1.05             0.40
                  4th Qtr.          0.45             0.21

         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
</TABLE>

         Holders. Based on information provided by our transfer agent, we had
624 shareholders of record of our common stock on March 20, 2003.

         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.

Recent Sales of Unregistered Securities. In January through April, 2000, we sold
1,533,000 shares of Common Stock at $0.50 per share with purchase warrants of
one warrant per 2 shares purchased. The warrants are exercisable through April
15, 2003 at $0.25 per share of Common Stock. In March and April 2000, options
covering 140,000 shares of our common stock previously granted to consultants
were exercised. In December 2000, 62,500 shares of stock were granted to The
Video Agency ("TVA") in exchange for services rendered.

                                       12
<PAGE>
         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.

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.

         OVERVIEW

         By year end 2002, we had finalized more of our distribution
negotiations, and the U.S. Forestry Service product certifications for
FlameOut(R) were near completion. Our vision continues to be marketing our
products through strategic alliances. By year end, additional new agreements had
been reached or executed in Australia, New Zealand, Belize, Honduras, Guatemala,
Costa Rica, Nicaragua, Panama, El Salvador, and by separate agreement in Mexico.

         Our management has held fast to the theme of establishing a sound
retail pricing structure for FIREPOWER 911(TM). Early on (July 1998 to March
1999), we were successful in getting FIREPOWER 911(TM) approved by Wal-Mart on
a regional basis, first, and then elevated to full category status. Existing
purchase orders were in hand.

         However, management was not comfortable on issues such as the terms for
continuing fulfillment, insufficient timing for completion of orders based on
manufacturing criteria unique to FIREPOWER 911(TM), and the possibility of
delayed payments regardless of contractual terms. When the discounting of
FIREPOWER 911(TM) was taken into consideration, management was not willing to
jeopardize long-term success for short-term gain. Therefore, an agenda was
developed to first introduce FIREPOWER 911(TM) through marketing venues where
discount pricing was not the primary negotiating factor.

         We set out to place FIREPOWER 911(TM) into a retail environment where
pricing was not an issue to its success. When initial sales were made to grocery
supply companies, grocery stores and convenience stores, there was no effective
marketing/merchandising follow-up network in place to facilitate the in-store
service requirement held by the large store chains across the country. The
existing agreement with Convenience Service Group did not meet the criteria and
was terminated in order that the company could take a new direction with
FIREPOWER 911(TM).

                                       13
<PAGE>
         Still believing in the uniqueness of an aerosol product providing
safety and ease of use for all consumers, we negotiated an agreement with a
firm, Triple-S Marketing, to provide the in-store service required by some of
the nation's larger retailers. We focused on Triple-S because of its emphasis on
home improvement stores. One national chain has approved FIREPOWER 911(TM) for
its stores, scheduled to appear in the first half of 2002. The store and its
locations will be made public when the appropriate time occurs. Due to the
events of September 11, 2001, the process was delayed. However, during the first
week of January 2002, FIREPOWER 911(TM) was approved by Lowe's. We requested
that Triple-S place the FIREPOWER 911(TM) test market on hold due to our
negotiation of a contract for endorsement of FIREPOWER 911(TM) by former World
Heavyweight Boxing Champion George Foreman. We are negotiating with a national
infomercial company for the development and placement of the infomercial. This
agreement is currently on hold due to a previous client's proposal to purchase
the licensing and marketing rights to our aerosol technology and FirePower
911(TM).

         In 2000, the first shipment of FIREPOWER 911(TM) was packaged for
international sales with foreign language labels. Initial first market shipments
ranging from 2,000 to 5,000 cans went to Chile, Hong Kong and Japan. 5,000 cans
were to be sold to the public by the local fire departments in Chile. We and
Marketing Perspectives Incorporated ("MPI") will be satisfying labeling
requirements and insurance requests for completed product liability coverage.
FIREPOWER 911(TM) has also been approved for the Federales (military police)
in Chile as part of their military equipment belt. FIREPOWER 911(TM) will be
on these equipment belts as a tool for riot control due to fire bombs thrown
into crowds at large public events such as soccer matches. Through our South
American alliance partner, we submitted material, product, and previous
certifications to the authorities in Chile and Argentina in order to obtain the
appropriate approvals and ratings with each country. Our existing certifications
on both FIREPOWER 911(TM) and FLAMEOUT(R) have been accepted. During
January 2000, the actual state fire department tests began taking place.
FIREPOWER 911(TM) has been successfully tested in Chile. The first product was
shipped in September 2000 for the initial test market, under the Spanish label
"FIREPOWER LIQUIDO 911(TM)." The official government approval for FirePower
911(TM) was issued on January 10, 2002 by the University of Chile.

         Official government of Chile approval and certification have been
completed with the regulatory agencies. The first customer for FirePower Liquido
911 is the Federal Police of Chile. We met with the United States Government
Export-Import Bank in October 2002. The purpose was to learn about the
environmental products export program. The program allows us to accept
International Purchase Orders, granting payment terms to our international
customers. With a qualifying credit report, we can take a purchase order to the
bank and finance 90 percent of the total amount. By virtue of Ex-Im Bank's
credit analysis, Ex-Im Bank guarantees the repayment of our loan. We then
purchase export credit insurance from Ex-Im Bank to be used in the event of
default. We submitted the application to the ExIm Bank on March 10, 2003 on
behalf of our customer in Chile. The initial order, which will depend on the
final credit approval of our customer, will be between 15,000 and 20,000 cans.
The overall plan, which carries Chilean government endorsement, is for 250,000
cans over the next two years.

         In 2000, we were notified by a direct home product television sales
channel that FIREPOWER 911(TM) would be part of its programming in 2001. QVC
notified us in March 2002 that product approval has been completed. QVC, seeking
a letter of verification that FIREPOWER 911(TM) is validated for sales in all 50
states, received same from Applied Research Laboratories which is posted on our
web site. We have complied with all requirements and passed Quality Control
requirements. For product shipping, QVC sought a confirming letter from UPS that
the proper classification for shipping FIREPOWER 911(TM) according to US-DOT
guidelines was as "Consumer Commodity - aerosol non-flammable". UPS wrote two
separate qualifying letters for our company. QVC's legal department then
requested a letter from the US-DOT confirming what we claimed and UPS supported.
Official confirmation from DOT was

                                       14
<PAGE>
obtained on February 21, 2003. QVC had informed the company that once this
letter was obtained "all" requirements would be met. On March 3, 2003, the buyer
at QVC informed management that FIREPOWER 911(TM) had been approved and would be
submitted for the TSV (Today's Special Value) programming rather than regular
programming like we have experienced with the Pannache Cosmetics Luscious Dust
Brush. This is an 8-to-10 program airing in the same 24-hour period. We
anticipate this occurring during the second quarter 2003. However, due to the
proposal from Clorox, we are not sure whether we will be allowed to continue
with this project. The proposal from Clorox for the purpose of purchasing the
licensing and marketing rights will contain language which will either allow or
disallow our continuation with the marketing of FirePower 911(TM). The meeting
with Clorox was held on March 26, 2003. The Board of Directors met on March 27,
2003 to discuss the Clorox offer versus the QVC purchase order. The purchase
order from QVC has been noted to be very sizable. In addition, management has
been contacted regarding another offer from a large chemical and fire products
company stating that a proposed private label offer for FirePower 911(TM) was to
be presented to us. The Board of Directors will be evaluating all possibilities
in early April 2003.

         Our strategic alliance partner, International Aero, Inc., is the
world's largest reconfiguration company for commercial aircraft. We and
International Aero have been working on the minimum performance standards
requirements established by the Federal Aviation Administration. Previously, the
handheld fire extinguishers onboard all commercial aircraft contained Halon
1211. The Geneva Peace Conference banning of Halon 1211 included a catastrophic
exposure clause called Mission Critical that allowed the airline industry an
extension of time before these extinguishers faced mandated replacement. The
testing protocol for selecting the replacement agent has been published by the
FAA. FLAMEOUT(R) meets all of the technical criteria required by the
performance standards. Last year, the actual Gross Volume Production Tests of
FLAMEOUT(R) on jet fuel and heptane were conducted. The initial performance
tests will be conducted at International Aero's new licensed fire testing
facility. In December 2001, FLAMEOUT(R) was officially listed by the US
Department of Transportation and Federal Aviation Administration as an
officially approved replacement for Halon.

         International Aero's distribution rights extend to the aviation
industry, the United States Military, and the United States Gulf Coast petroleum
industry. In conjunction with the research department at International Aero, we
are developing an alternative to another fire-fighting agent, AFFF. AFFF, used
primarily for petroleum fires, is a known cancer-causing agent. Our intent with
International Aero is to develop a non-toxic, non-corrosive, biodegradable
alternative for AFFF. During April of 2000, FLAMEOUT FOAM(TM) was tested at the
Ansul fire test facility in Marinette, Wisconsin. The foam stability test was
very successful. Additionally, FLAMEOUT FOAM(TM) was the only product tested to
pass the UL162 encapsulation and emulsification test. This new formula has been
tested by Jockel Manufacturing in Germany and by the National State Fire
Department and Testing Agency in Brazil and Exxon of Norway. Testing for a
military specification number as an alternative for AFFF at the United States
Air Force testing center at Eglin Air Force base in Florida began in April 2002.
FLAMEOUT(R) FOAM has been selected as one of the three products for further
advanced testing for approval.

         We have developed a non-toxic, biodegradable turbine cleaner for use on
jet engines. In only fifteen minutes, ULTIMATE CLEAN 668(TM) can remove enough
residue from jet engine blades that the next flight would experience fuel
savings sufficient to pay for the expense of the cleaning. The cleaning of the
engines on planes is required as regular periodic maintenance. When fuel savings
are considered, this means savings for the airlines. Currently used products
produce a run-off residue with contamination by metal particles that find their
way into the ground water. The first in a series of required tests began in
November 1999, for the purpose of establishing ULTIMATE CLEAN 668(TM) as
non-corrosive regarding eight different metals. With the completion of the
corrosive metals tests, actual onboard tests will begin in order for us to
obtain a military specification number for ULTIMATE CLEAN 668(TM). The
protocol under

                                       15
<PAGE>
which ULTIMATE CLEAN 668(TM) is now being tested is for multiple applications
and is expected to culminate in a military specification number. The use of this
product will allow commercial airline companies to be in compliance with the
newly mandated EPA Water Runoff Quality Standards. The alternatives for the
airlines are very costly measures that would affect every department of their
operations. Continued use of the corrosive cleaners would require the cleanings
to be performed in designated cleaning areas, away from the airlines'
operations.

         Additionally, the Department of Defense ("DOD") is also involved with
this testing and approval. The original direction of ULTIMATE CLEAN 668(TM)
was for the commercial airline industry. The DOD's involvement has increased our
potential market by another 50 percent from the original projections based on
International Aero's customer base.

         Also incorporated into the test of the company's Type III concentrate
was the addition of Type II concentrate and Type II ready-to-use tests for
additional approvals. These additional approvals also increase the size of the
market for the product and the amounts of product to be used.

         We concede that this testing process has been very tedious and
time-consuming. The reward for us will be a head start in the market. Even
though there have been unknowns to be dealt with, we and our product have not
experienced any setbacks. The lab conducting the test protocols for the
MIL-PRF-85704C has notified us that ULTIMATE CLEAN 668(TM) has successfully
conformed with the requirements for corrosion, crazing, painted surfaces,
acrylic surfaces, and water and acid stability. The storage stability test is
the final remaining requirement and is now classified as "accelerated storage
stability." Application was formally requested by the United States Navy, and we
and International Aero promptly submitted said application. Our physical testing
request has been accepted at Pax River. The major obstacle has centered around
an aqueous (water) based product testing to a 50-year-old-plus military
specification designed for petro-chemically produced products. We, BioGenesis,
and the laboratory collectively have resolved a major obstacle with regards to
storage stability. We and International Aero are fervently working at completion
of the protocol as there are several major airlines awaiting product approval in
order that orders be placed through International Aero.

         Further tests being on FLAMEOUT(R) had positioned FlameOut(R) to
become officially approved in Brazil by the end of the second quarter of 2002.
The financial crisis in Argentina put this process on hold. Once the IMF Bank
fund reclassifies the currency in Argentina, the company can proceed through
ExIm Bank. This approval will also be accepted in the other Mercosur Pact
countries -- Argentina, Uruguay and Paraguay. MPI notified us that the IMF
rating for Argentina's currency occurred in February 2003. Representatives of
MPI will be traveling to Argentina to reopen the process we have been involved
with during the third week of March 2003.

         COSMETICS

         During the 3rd Quarter of 2000, management gave Paula Parker,
Vice-President for Shareholder Relations, a directive to develop a new product
line, a color cosmetic line to complement 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. The initial
product would be in a new category of cosmetic lipsticks; long-lasting, no
smear, semi-permanent lip color. The company first introduced Luscious Lips in
August 2001. Luscious Lips initially was manufactured for Pannache by Lady Burd
Exclusive Private Label Cosmetics. Our website www.pannachelusciouslips.com
displays the entire Pannache/Luscious Cosmetics Product Line.

                                       16
<PAGE>
         The idea for the star product of the color line was to develop a
semi-permanent, long-wearing, no smear or stain lip color. Companies like Avon,
Beauty Control, Max Factor, Revlon, Cover Girl and Maybelline have developed
products they tout as long-wear, no smear; however, we believe they do not
perform as advertised. Luscious Lips will stay on 8 to 10 hours and will not
come off until removed with remover. The development phase began in September
2000 with final formula approvals in June 2001. We received four of the twelve
selected colors in August and began the first of two directed test markets. One
market was to sell product directly to performing groups such as dance lines,
dance schools, high school drill teams, cheerleaders and twirling groups. Prior
to beginning, we secured the endorsements during July for the Miss Texas and
Miss Arkansas Pageants. Both Stacy James (Miss Texas 2001) and Jessie Ward (Miss
Arkansas 2001) were using Luscious Lips during their state pageants when they
won their respective pageants. Stacy was in the top twenty and Jessie was a top
ten finalist in the Miss America Pageant.

         Pageants were being held every weekend from October 1, 2001, through
July, 2002. There were over 50,000 contestants introduced to - and many using -
Luscious Lips in the Arkansas pageant system. Jessie Ward's photos appear in all
official company publications and web sites. The official web address is
www.lusciouslips.cc and www.pannachelusciouslips.com.

         The success of the test markets indicates to management that expanding
the marketing toward performing groups and through direct distributors should
create high-profit-margin venues. The sale of a single tube of Luscious Lips
wholesale creates a greater profit margin than the sale of a can of FIREPOWER
911(TM). Luscious Lips is now manufactured for the company under a
non-disclosure, non-circumvention agreement by a private label color laboratory
that gives the company an exclusive product.

         The cosmetic industry is a 300 billion-dollar industry worldwide with
Avon being the largest, controlling only 7% of the market share. Therefore, no
one company can control the market. Prices are always stable while sales are
always consistent.

         The initially established dealer network attained a closing ratio of
close to 100% of the presentations being closed and purchasing the initial
inventory for a dealer. A dealer purchases at 50% off of retail and makes 100%
profit on resale. Our margin is at 106%. The direct sales test market directed
to drill teams and cheerleading groups produced a 100% closing ratio. We have
become an associate member of the Texas High School Dance and Drill Teams
Association, whose state convention was held in Houston, Texas, January 3-5,
2002. There are 178,000 drill team participants in high schools in Texas each
year. Couple this with the middle and high school cheerleaders, and the market
is over 500,000 participants in Texas alone. We introduced a targeted fund
raising program especially designed for these groups at the January meeting of
the association. The response was better than anticipated which has led us to
begin to hire commissioned sales agents for four specific territories in Texas
to follow up on the sales leads from this one meeting.

         Luscious Lips has been submitted and approved for programming at QVC.
We are required to conduct a certain microbiological and dermatological assay.
These tests take six to eight weeks to complete. We can, after the completion of
these tests, complete the QA process in order to be scheduled for programming.
First programming is projected at the end of the second quarter of 2003.

         Lighthouse America, which had been distributing FirePower 911(TM)
through its internet distribution marketing program, TEAMFIRE, has decided to
market the Pannache Luscious Cosmetics line through its internet Multi-Level
Marketing (MLM) company, The Free Store. During July 2002, Lighthouse had 40,000
distributors. They have experienced exponential growth and by the end of January
2003, Lighthouse had 1,200,000 distributors. In October 2002, Lighthouse decided
to use

                                       17
<PAGE>
Luscious Lips as the product to kick-off their cosmetic store within their
internet marketing program, The Free Store. The company is packaging Luscious
Lips under a private label and delivered the initial inventory purchase to
Lighthouse the first week of March 2003. Plans at Lighthouse are to introduce a
new Pannache Luscious Cosmetics product per month beginning in April 2003.

         RESULTS OF OPERATIONS

         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, 2002 and 2001:

<TABLE>
<CAPTION>
         Year ended December 31              2001              2002
                                            ------            ------
<S>                                         <C>               <C>
         Sales                               100.0%            100.0%
         Cost of Sales                        50.6              50.1
                                            ------            ------
         Gross Margin                         49.4              49.9
                                            ------            ------
         Operating Expenses                  728.6           1,094.3
         Other Income and Expenses, Net      (27.7)             (3.3)
                                            ------
         Net income (loss)                  (651.5)%          (1,041)%
</TABLE>

         SALES

         Sales of $127,607 for 2002 increased by $5,951 or 5% from the prior
year's sales of $121,656. Management devoted considerable attention during 2002
to certification and test marketing:

-        The time and money invested by us in developing FIREPOWER 911(TM) as
         the world's only listed and rated fire extinguisher in an aerosol can
         met an unforeseen detour. When marketing began, the buyers were
         uneducated regarding listings and ratings. They were purchasing on
         price only. Other "copycat" products found their way in front of these
         buyers. With the word fire extinguisher on the front of these
         "copycats," buyers were looking at what they perceived the public would
         pay. However, when an adult sees a product demonstration for FIREPOWER
         911(TM) knock out a skillet fire, a flaming lawn mower, or a blazing
         Christmas tree before their eyes in only a matter of seconds, they
         realize that there is a degree of ease and safety for children and the
         elderly not afforded by other products. Thus a $20.00 purchase price
         for security is no longer an obstacle.

         With the buyers not being knowledgeable of the state fire codes which
         prohibit illegal sales of these "copycats," we took the posture during
         2000 of notifying the state fire marshals of the stores who offered
         such "copycat" products. This is a slow process, but we had no other
         choice than to protect our investment and unique product by encouraging
         the state fire marshals' offices to issue cease and desist orders to
         companies violating the state fire codes by selling "copycats" which do
         not have the validations and listings of FIREPOWER 911(TM). This
         slow-down has resulted in knowledge to the buyers and pre-approvals by
         one of the nation's largest building materials superstores. During the
         development phase of the company, we met with a major retailing product
         company, a known household name. Non-disclosure, non-circumvention
         agreements were executed and the prospective client began testing
         FirePower 911(TM) in terms of test marketing, branding and performance.
         During January 2003, the talks were initiated once again. We await a
         proposal from the client for the purchasing of the licensing and
         production rights from the company. The reach of the client would place
         FirePower 911(TM) in virtually every grocery store, convenience store,
         auto parts stores, drug stores and mass merchandisers in the United
         States and Canada. The company is anticipating the presentation from
         the client mid-March 2003.

                                       18
<PAGE>
-        Lighthouse America is a direct sale company which during the year 2000
         was selling a fire fighting product through their networking
         membership. The product which they were selling was not a validated and
         listed fire extinguisher. They received notification from several state
         fire marshals' offices that they could no longer sell their product. We
         were contacted by the management of Lighthouse America in August 2001.
         After Lighthouse verified that FIREPOWER 911(TM) would satisfy the
         issues with which they were dealing, a marketing agreement was
         executed. Lighthouse ordered product in the fourth quarter of 2001 and
         began marketing to their dealers. Lighthouse had over 7,000 dealers
         when they were forced to discontinue their previous product sales.
         After reintroduction periods of the fourth quarter of 2001 and the
         first quarter of 2002, Lighthouse decided to introduce FirePower
         911(TM) through its internet MLM company, The Free Store, in mid-2003.

-        In November 2000, we submitted FLAMEOUT(R) to the United States
         Forestry Service for Qualification Testing as an approved wetting agent
         under the category of Wildland Fire Chemical. We have received
         progressive test result reports. All results received have been in the
         "acceptable" category. The anticipated approval date is April 2003. New
         protocols in Canada prevent the dropping from the air any fire
         suppression agent which is toxic by containing any phosphates.
         Monoammonium phosphate is the primary ingredient of nearly all agents
         dropped from the air. FLAMEOUT(R) is 100% non-toxic and biodegradable.
         The company has orders pending from two large aerial fire fighting
         companies in Canada. All product testing has been completed. On March
         18, 2003 we were told that our required change in our Material Safety
         Data Sheet (MSDS) for FlameOut(R) is in Washington D.C. under review.
         On March 27, 2003 we were informed that biodegradability standards had
         been met. We were told that we could anticipate listing with the
         Quality Products Listing for the April 2003 posting, which should occur
         in the first half of April.

-        We introduced our super absorbent, ULTIMATE ABSORB 1103(TM), into the
         marketplace through convenience stores initially. We began testing this
         super absorbent at several worldwide industrial companies toward the
         end of 2000. Some anticipated approvals are expected in second quarter
         2003. Ultimate Absorb 1103(TM) meets or exceeds those requirements for
         FDA, USDA, EPA, California TH622 and World Health Organization.

-        We introduced our natural botanical skin care cosmetic and color
         cosmetics lines through the production of an infomercial, direct
         television shopping and e-commerce business to customer programs by
         late 2001. Direct Market sales venues were opened. Approvals for Direct
         Home Shopping for more than one of the Pannache/Luscious Lips products
         have been obtained.

-        FLAMEOUT(R) FOAM(TM) was successfully tested at the Ansul Fire Test
         Facility in Marinette, Wisconsin. Additional preparatory tests for
         future U. S. Naval testing were conducted at International Aero's fire
         test facility. The new formulation has been submitted in Europe as a
         newly approved alternative for 3M's AFFF for which manufacturing has
         been halted. Regular FlameOut(R) was also submitted for the same test
         and has been approved. Tests were conducted on FlameOut(R) Foam at the
         United States Air Force during the second quarter of 2002.

-        We expanded the tests for ULTIMATE CLEAN 668(TM) from Type III
         concentrate to include Type II concentrate and Type II ready-to-use
         certifications in order to increase the market potential and gain an
         additional approval from the United States Department of Defense. The
         formulation for Ultimate Clean 668(TM) is aqueous based and is testing
         to a petrochemical protocol. It is like fitting a round peg in a square
         hole. Completion is down to very finite issues on sodium and potassium
         levels.

                                       19
<PAGE>
-        International agreements negotiated and executed expanded the prospects
         for our products to New Zealand, Australia, Belize, Guatemala,
         Honduras, El Salvador, Panama, Costa Rica, and Nicaragua.

-        Just-in Case Fire of Calgary, Alberta, Canada has an agreement for
         repackaging of FLAMEOUT(R) in home and mobile fire extinguishing
         systems named the Fire Caddy(TM). We will sell FLAMEOUT(R) for the
         system and receive a royalty on the sale of each of these units.

-        The Pannache Luscious Cosmetics line has been expanded to a full color
         line of over 100 products. A dealer network was kicked-off at the end
         of the third quarter 2002 in Florida, Texas, California, Arkansas, and
         Missouri. Specialty products, the Luscious Dust Brush, Luscious Lips
         Long Wear Lip color and Pannache Sunless Tanning Mist, were submitted
         to QVC. The Luscious Dust Brush began programming on January 20, 2003.
         Luscious Lips and the Pannache Sunless Tanning Mist will be aired
         during the second quarter of 2003.

         GROSS MARGIN

         Gross margin of $63,633 in 2002, or 49.9 percent of sales, increased
from $60,120, or 49.4 percent of sales in 2001. Sales have not yet reached a
level to reflect a gross margin percentage with accuracy.

         OPERATING EXPENSES

         Operating expenses of $1,396,394 for 2002 increased by $510,063, or
57.5 percent, from $886,331 in 2001. Advertising expenses increased in 2002 by
$235,142 over 2001. Professional fees increased in 2002 by $26,398 over 2001.
Expenses related to trade shows increased to $26,711 in 2002 from $3,775 in
2001. Repair and maintenance expense decreased by $9,670 from 2001 to 2002.
Office salaries decreased from $108,156 in 2001 to $74,135 in 2002 and officer
compensation increased by $33,158 from $155,258 in 2001 to $188,416 in 2002.
Consulting fees increased in 2002 by $29,919 over 2001. Also included in
operating expenses in 2002 are $50,000 in losses for cash paid to Lady Burd in
an asset purchase agreement which was rescinded and $64,179 in losses related to
inventory lost by Proformance Marketing, LLC.

         NET LOSS

         We had a net loss of $1,328,512 during 2002, as compared to a net loss
of $792,536 during 2001. The years 2002 and 2001 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 2001. 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 $535,456 in 2002 and
negative cash flow from operations of $705,143 in 2001. Major contributors to
the 2002 negative cash flow from operations were the $1,328,512 net loss from
operations, $339,150 in stock issued for services, $162,335 in amortization of
patents, and $137,095 in bad debts. Major contributors to the 2001 negative cash
flow from operations were the $792,536 net loss from operations and $162,333 in
amortization.

                                       20
<PAGE>
         We had negative cash flow from investing activities of $37,088 in 2002
and positive flow from investing activities of $17,975 in 2001. The major
components of both years' cash flow from investing activities were acquisitions
of property and equipment in 2002, sales of equipment in 2001 and acquisition of
patents in both 2002 and 2001.

         We were able to stay liquid only from the sale of $574,500 of our
common stock during 2002 and $485,500 of our common stock during 2001. At
year-end 2002, we had $195,762 cash on hand. At year-end 2001, we had $193,806
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 2002. See "Outlook"
below.

         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.

         Continuing to believe that, with the approval, listing and rating of
FIREPOWER 911(TM) as a fire extinguisher, a niche market has been created.
This is supported by actions taken by the USEPA, which has been mentioned
previously, and actions of the Connecticut State Fire Marshal's Office and the
California State Fire Marshal's Office. This year, the additional enforcement by
other state fire marshals' offices which we began seeking began to be
implemented.

         The formula for FIREPOWER 911(TM) and FLAMEOUT(R), is one of only
a few suppressing agents certified by the EPA as a replacement for the globally
banned fire agent, Halon 1211. Initially, the Connecticut State Fire Marshal's
Office notified us that our aerosol fire suppressant, FIREPOWER 911(TM), was
to be removed from the shelves of Home Depot, because it was not listed and
rated as a fire extinguisher. All other aerosol can products representing that
they were fire extinguishers were also to receive the same notification. While
we were not marketing FIREPOWER 911(R) as a fire extinguisher at that time,
the other aerosol fire suppressors subject to this action were touting their
products to be fire extinguishers.

         Due to the capabilities of FLAMEOUT(R), we applied for the minimum
fire extinguisher rating in order to establish FIREPOWER 911(R) as a fire
extinguisher and satisfy the State Fire Codes. The specific fire code is
ANSI/UL8 and ANSI/UL711, set forth in the NFPA Standard 10. NFPA 10 establishes
the requirements for listing and rating portable fire extinguishers.

         We completed the listing and rating requirements, placing FIREPOWER
911(R) in a class of its own, the only listed and rated fire extinguisher in
an aerosol can available in the global marketplace. Subsequently, we received a
letter from the Connecticut State Fire Marshal's Office certifying that the
company's FIREPOWER 911(R) had satisfied their fire code requirements.

         California has a unique legislative requirement in addition to the NFPA
and ANSI/UL standards for portable fire extinguishers. This is a new area,
termed Non-Halon Certification, and means that any portable fire extinguisher
whose marketing intent is directed to the residential and individual use market
must contain a formula that has been certified as Non-Halon. FLAMEOUT(R) is
the first of seven permanent listed and certified replacements for Halon 1211.
It is the only product that can meet this California requirement due to the type
of approval for FLAMEOUT(R). The approval is for residential as well as
commercial use. All other products are approved for commercial use only. Applied
Research

                                       21
<PAGE>
Laboratories has completed the application process on behalf of our company,
meeting the California Non-Halon requirements.

         With these requirements, approvals, listings, certifications, and
confirmations, we have positioned FIREPOWER 911(TM) to become the only product
that can be sold in the retail residential market in California. The completion
of this certification will place FIREPOWER 911(TM) as the only product that
has survived this process, according to the California State Fire Marshal's
Office.

         In other states where Non-Halon certification has not become effective
to date, there is still the NFPA 10 requirement that all aerosol cans must be
tested, listed, and rated as a fire extinguisher. FIREPOWER 911(TM) is the
only product that possesses the validated listing and rating for an aerosol fire
extinguisher. Last year, we sought additional enforcement action when we became
aware of "copycat" products of FIREPOWER 911(TM). Mass merchandisers and direct
response television companies were forced to remove products from their
programs.

         Several issues have slowed down the marketing of FIREPOWER 911(TM). Its
formula is FLAMEOUT(R), a technology for fire suppression, not merely soap in
an aerosol can. A specific type of aluminum is required for the container to
meet the ANSI/UL8 portion of the validation and listing tests. The size and type
of can required to hold the FLAMEOUT(R) by the very rigid standard for fire
extinguishers is not manufactured in the United States. We must bring the empty
shells in from Madrid, Spain.

         These production issues, plus the manufacturing efforts to produce a
product with a five-year shelf life, and royalties paid to the testing
laboratory calculated on each unit are examples of the unique requirements for
the pricing of our fire extinguishers.

         When attempts to market a product like FIREPOWER 911(TM) were met with
"copycats" which have not passed the scrutiny of the validations, listings and
ratings, an education issue is created which must be carried out at the buyers'
level. For this education effort to have meaningful effect, enforcement action
is required by the state fire marshals' offices. The copycat products have been
met with enforcement actions which we were seeking and are almost non-existent.
These enforcement actions are public record.

         Presenting the information in this format last year, we negotiated an
agreement with a national marketing and merchandising company, Triple S
Marketing, that places the products they represent into two of the largest home
building products stores in the country. The senior buyer for one of these
chains of stores has approved FIREPOWER 911(TM). A redesign of the home safety
products section began in June 2001. Currently, FIREPOWER 911(TM) is scheduled
to appear in these stores but we do not have a firm date. Management met for
line review at Lowe's headquarters in North Carolina the first week of January
2002. FirePower 911(TM) has been approved for test marketing. During August
2002, we negotiated an agreement for George Foreman to be the national
spokesperson for FirePower 911(TM). Management notified Lowe's in September 2002
of its desire to put off the roll-out at Lowe's. We requested that the Lowe's
program for National Fire Prevention be cancelled due to a pre-emptive action
which could have short circuited the longer range and much larger scale program
for marketing FirePower 911(TM).

         We have executed an agreement for the sale of FIREPOWER 911(TM) with
Lighthouse America and its direct sales company TEAMFIRE. TEAMFIRE previously
had 8,000 direct dealers selling a portable fire product that was classified as
a portable fire extinguisher by State Fire Marshals. TEAMFIRE has a great
appreciation for FIREPOWER 911(TM) because of its experience with the fire
marshals' offices. With FIREPOWER 911(TM) which is the only rated and
validated portable fire extinguisher in an aerosol can in the world, TEAMFIRE
feels that it will quickly begin to move FIREPOWER 911(TM) through its
established network of direct dealers. Before regulatory measures halted
TEAMFIRE's selling, previous sales were

                                       22
<PAGE>
1.6 million dollars from January through August, 2000. Lighthouse ordered its
first pallet of FIREPOWER 911(TM) in November 2001. It began rebuilding its
former distributor base, which previously had been selling fire extinguishers.
FirePower 911(TM) will be moved into Lighthouse America's Free Store internet
MLM program in 2003.

         In 1998 we executed a non-circumvention, non-disclosure agreement with
The Clorox Corporation reflecting Clorox's possibly marketing FirePower 911(TM)
under a private label throughout its nationwide marketing network. By 2000,
further examinations were conducted and management met with legal, branding,
marketing, pricing and research/development representation of our potential new
client. In January 2003, we met with Clorox and were presented a proposed
licensing and manufacturing agreement whereby we would license. for the retail
consumer market, the technology, production rights and tradename for FirePower
911(TM) to Clorox. On March 26, 2003, representatives from Clorox made a formal
proposal to us in Longview, Texas. The proposal was presented to the Board of
Directors on March 27, 2003. Several key issues must be negotiated involving the
proprietary formulation of FirePower 911(TM) - FlameOut(R). Management is
preparing a response to the representatives from Clorox based upon the combined
input from the Board. The proposal provided for cash, up front, for the purchase
of the licensing rights and a continuing royalty to be paid on all sales.

         FLAMEOUT(R) has been submitted to the United States Forestry Service
through its technology development program in order to satisfy the requirements
for qualification testing as a Wildland Fire Chemical. This test protocol will
be ongoing for eighteen months. The Forestry Service requested and we supplied
the actual test product in order to complete the protocol through our Canadian
Strategic Alliance Partner, Mark Hays dba 614751 Alberta Limited. The aerial
fire fighting company Pro Air, and the Canadian Forestry Service are following
the U. S. Forestry Service's test. Feedback is that FLAMEOUT(R) is performing
very favorably. The reports received by the Company are that the Canadian
Forestry will accept the U. S. Forestry approval for immediate sales in Canada.
The Company has been notified of pending orders at Pro Air. During the fourth
quarter of 2002, the toxicity and corrosive tests and storage stability test
were successfully completed. The Forestry Service informed us on March 18, 2003
that our MSDS is under review in Washington D.C.

         FLAMEOUT(R) will be tested as a wetting agent and fire suppression
foam. When approved, FLAMEOUT(R) can be used in catastrophic wildfires that
occur every year. Our product, in unofficial tests, has outperformed every
product with which it has been compared. Management knows this first-hand from
being on the actual fire lines in Florida. This should become a large venue for
product sales beginning with the 2003 fire season.

         We have been in negotiations with QVC for the sale of FIREPOWER 911(TM)
since October 2000. FIREPOWER 911(TM)'s front runner, Chief's Choice, was the
initial aerosol fire suppressant sold on QVC. While FIREPOWER 911(TM) was going
through the validation and listing process at Applied Research Laboratories,
"ARL," QVC was notified of the NFPA standards requirement held by State Fire
Marshals' offices and substituted another "copycat" product for Chief's Choice,
which also violated the requirements for which we had chosen to qualify in order
to be in compliance in all 50 states. Last year, this "copycat" product was
removed from programming at QVC, due to action taken by the Texas State Fire
Marshal's office, and we were notified that the category buyers at QVC had
approved FIREPOWER 911(TM) one-liter rated fire extinguisher for purchase. We
were told that once the legal department was cleared, scheduling of programming
and initial purchases would begin. During April 2001, we were notified that the
QVC legal department would be requesting a letter of verification that FIREPOWER
911(TM) is legal in all 50 states. We are awaiting the official request from
QVC's legal department. However, a letter stating this verification is currently
posted on our web site, www.seci-us.com or www.summitenvironmental.com.
Management met with the buyers at QVC in February 2002, and

                                       23
<PAGE>
FIREPOWER 911(TM) was approved for programming. The company is working through
Reliant Interactive Media Group for this promotion going through the quality
assurance process. QVC viewed FirePower 911(TM) as requiring hazardous material
classification in order to be shipped by UPS. We took exception due to the fact
that we have been shipping FirePower 911(TM) direct via UPS for five years.
FirePower 911(TM) is appropriately classified as ORM-D Consumer Commodity
Aerosol non-flammable as is thus excerpted from the HazMat classifications. In
order to resolve the issue, we had to request UPS support our position. They
provided us with two letters in an attempt to satisfy the QVC requirements.
After receiving said confirmation, QVC requested that we obtain a confirmation
of classification from the United States Department of Transportation. On
February 21, 2003, we received the confirmation. The buyer at QVC has informed
us that FirePower 911(TM) will be approved for the TSV (Today's Special Value)
programming. We do not have a date for programming at this time.

         International marketing agreements continue to be negotiated and
executed this year. A key element of these agreements is the revenue sharing
clause that provides us profit sharing from the tools, devices or mechanisms
into which FLAMEOUT(R) is introduced for resale. Global agreements reached
during the year agreements in Belize, Guatemala, Nicaragua, Honduras, El
Salvador, Panama, Costa Rica, New Zealand, Australia and Mexico. We have been
assisting our distributor partners with necessary testing, listing, ratings and
certification in order to complete the registration process in each of these
countries.

         During February 2001, we sold our first order of FIREPOWER 911(TM) to
our distributor, Techno-Supplies, in Norway. During 2002, Techno-Supplies
continued to order FLAMEOUT(R) for Exxon of Norway, and other Black Sea
petroleum companies. Tests results have been favorable and are concluding.

         FLAMEOUT(R)'S formal certification with the government of Brazil is
ongoing. Sales orders are already in place through strategic alliance partner,
MPI, and are awaiting release of this product's registration number. The
collapse of Argentina's monetary system has stalled our progress. With the
reclassification of Argentina's currency by the IMF, we will begin to utilize
ExIm Bank in 2003.

         A company manufacturing a home fire extinguishing unit in Canada has
approved FLAMEOUT(R) over fifteen other products as the product of choice to
be utilized in its system. The Canadian company has completed securing of five
separate patents on the system. The company will be supplying FLAMEOUT(R) for
the Canadian sales and will handle distribution of the units through its other
strategic alliance partners. The first orders of FLAMEOUT(S) were shipped in
January 2002. Subsequent orders were shipped in February and March 2002. This
agreement has resulted in global sales where the Fire Caddy will only be
manufactured utilizing FlameOut(R). We receive a royalty on each unit
manufactured by Just-In Case Fire. During November 2002, we and Just-In Case
Fire participated in a FEMA/Homeland Security demonstration using FlameOut(R)
and the Fire Caddy(TM) in extinguishing a mock plane crash which was part of an
overall simulation of how to handle potential terrorist attacks. Our FEMA
product number is expected in the first quarter of 2003.

         Our test for securing the military specification number MIL-PRF-85704C,
which will enable the company's ULTIMATE CLEAN 668(TM) jet engine cleaner to be
listed with the Department of Defense, Quality Products Listing, has proceeded
into classification tests for Type III concentrates and Type II ready-to-use.
The testing for this non-corrosive approval has resulted in some adjustments to
the formula for the test on ceramic and acrylic finishes. This test is also
being done in the "water soluble" category. To our knowledge, there are no other
products that are aqueous-based which can accomplish the cleaning requirements
of the test protocol or the actual engine cleanings. The expanding from the
initial Type III approvals to include the two categories of Type II greatly
increased the market potential for ULTIMATE


                                       24
<PAGE>
CLEAN 668(TM). Technical testing confirmation for protocols was received in May
2001. We are now awaiting a slotting appointment for the completion of the
physical application test in cleaning test engines. Through our strategic
alliance partner, International Aero, we have initial sales to be made to major
airlines such as United, Continental, Delta, Northwest and Eastern airlines. The
recent increase in jet fuel costs has heightened the airlines' interest in
ULTIMATE CLEAN 668(TM). During September, 2001, formal application for the
physical test was submitted to and accepted by the United States Navy. Progress
has been made on the accelerated storage stability final phase of the testing.
We are continuing to try to satisfy very finite sodium and potassium
requirements.

         Our development of ULTIMATE ABSORB 1103(TM) has led to our negotiating
the purchase of the patents, formulas and intellectual property rights. Of
special importance to this agreement is the completion of the
never-before-issued EPA Landfill Stamp approval. ULTIMATE ABSORB 1103(TM)
already has EPA (as non-toxic), USDA, FDA, WHO and California Title 22
approvals. However, the EPA Landfill Stamp allows for encapsulated and absorbed
materials to be deposited in landfills anywhere. On April 2, 2001, we were
notified that we had successfully stabilized heavy metals in the hazardous
materials containment portion of this testing. No other product has ever
completed this portion of the test protocol. We have introduced the absorbent in
South America, Scandinavia, Europe and in several industries within the U.S.
Ultimate Absorb 1103(TM) has been submitted for vendor application approval to
Ace Hardware and Lowe's Home Improvement stores.

         COSMETICS

         Successful test markets of Pannache/Luscious Cosmetics for direct
dealer sales and shopping channel sales have shown us two high volume markets.
Both test markets provided nearly 100% closing ratios. The profit margins are
greater than any of our other products whether sold wholesale or direct to the
consumer from us. We have taken steps to begin manufacturing all of our products
and control our formulations through non-disclosure agreements. Our line now
includes over 100 products. 2003 will see the full development of a dealer sales
network.

         New innovative fund raising programs were kicked off in January selling
Luscious Lips through high school drill teams, cheerleading groups and twirling
groups. We will also be attending a national show each month promoting the
entire line and securing new dealers. International expansion is also
anticipated from those shows as the shows for 2002 will include Italy, Hong Kong
and Canada.

         Negotiations for Luscious Lips and Luscious Dust Brushes were completed
during first quarter 2002 on home shopping channels through Reliant Interactive
Media Group. The Luscious Dust Brush was approved for programming at QVC. The
first sale programming occurred on January 20, 2003.

         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 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.

                                       25
<PAGE>
ITEM 7.  FINANCIAL STATEMENTS
<TABLE>
<S>                                                                                              <C>
         Report of Independent Certified Public Accountants                                      27
         Balance Sheet December 31, 2002                                                         28
         Statements of Operations Year Ended December 31, 2002 and 2001
                  and Period from August 14, 1997 to December 31, 2002                           29
         Statements of Changes in Stockholders' Equity for the period from
                  August 14, 1997 to December 31, 2002                                           30
         Statements of Cash Flows Year Ended December 31, 2002 and 2001
                  and Period from August 14, 1997 to December 31, 2002                           31
         Notes to Financial Statements                                                           32
</TABLE>



                                       26
<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, 2002 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, 2002 and the period
from August 14, 1997 (date of incorporation) to December 31, 2002. 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, 2002, and the results of its operations and
its cash flows for each of the two years in the period ended December 31, 2002
and the period from August 14, 1997 (date of incorporation) to December 31,
2002, in conformity with accounting principles generally accepted in the United
States of America.

/s/ Lane Gorman Trubitt, L.L.P.
-------------------------------
LANE GORMAN TRUBITT, L.L.P.
Dallas, Texas
March 5, 2003



                                       27
<PAGE>
                     Summit Environmental Corporation, Inc.
                          (A Development Stage Company)
                                  BALANCE SHEET
                                December 31, 2002

                                     ASSETS

<Table>
<S>                                                                                  <C>
CURRENT ASSETS
  Cash and cash equivalents                                                          $   195,762
  Accounts receivable, less allowance of $152,300                                         29,113
  Note receivable - related party, less allowance of $20,496                                  --
  Inventories                                                                            615,786
  Prepaid insurance                                                                       88,660
                                                                                     -----------
       Total current assets                                                              929,321
                                                                                     -----------

PROPERTY AND EQUIPMENT - AT COST
  Office furniture and equipment                                                          55,774
  Leasehold improvements                                                                  13,499
  Accumulated depreciation and amortization                                              (32,002)
                                                                                     -----------
       Net property and equipment                                                         37,271
                                                                                     -----------

OTHER ASSETS
  Prepaid royalties                                                                      509,566
  Deposits                                                                                 2,180
  Patent and licenses, net of acumulated amortization of $673,134                      1,761,866
                                                                                     -----------
       Total other assets                                                              2,273,612
                                                                                     -----------

       Total assets                                                                  $ 3,240,204
                                                                                     ===========

                                   LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                                                                   $    54,157
  Accrued liabilities                                                                     31,556
                                                                                     -----------
       Total current liabilities                                                          85,713
                                                                                     -----------

COMMITMENTS                                                                                   --

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;  15,657,194 shares issued and outstanding                                     15,658
Subscription to capital                                                                   60,000
Additional paid-in capital                                                             7,997,721
Deficit accumulated in development stage                                              (4,893,888)
                                                                                     -----------
                                                                                       3,179,491
Less:  Treasury stock (at cost)                                                          (25,000)
                                                                                     -----------
       Total stockholders' equity                                                      3,154,491
                                                                                     -----------

       Total liabilities and stockholders' equity                                    $ 3,240,204
                                                                                     ===========
</Table>

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


                                       28
<PAGE>

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

<Table>
<Caption>
                                                         Years Ended December 31,         Period from
                                                      ------------------------------   August 14, 1997 to
                                                          2002             2001        December 31, 2002
                                                      ------------      ------------   ------------------
<S>                                                   <C>               <C>            <C>
SALES                                                 $    127,607      $    121,656      $    706,568

COST OF SALES                                               63,974            61,536           265,710
                                                      ------------      ------------      ------------

    Gross profit                                            63,633            60,120           440,858
                                                      ------------      ------------      ------------

OPERATING EXPENSES
  Selling, general, and administrative expenses          1,222,839           707,829         4,547,021
  Amortization                                             162,335           162,333           682,831
  Depreciation                                              11,220            16,169            56,971
                                                      ------------      ------------      ------------
    Total operating expenses                             1,396,394           886,331         5,286,823
                                                      ------------      ------------      ------------

    Net loss from operations                            (1,332,761)         (826,211)       (4,845,965)

OTHER INCOME (EXPENSE)
  Interest income                                            2,493            13,558            60,380
  Interest expense                                          (2,923)           (2,629)          (16,401)
  Loss on sale of assets                                        --            (4,723)          (13,200)
  Miscellaneous                                              4,679            27,469            40,892
                                                      ------------      ------------      ------------
                                                             4,249            33,675            71,671
                                                      ------------      ------------      ------------

    Net loss before income tax                          (1,328,512)         (792,536)       (4,774,294)

INCOME TAXES                                                    --                --                --
                                                      ------------      ------------      ------------

    Net loss before cumulative effect of the
    change in accounting principle                      (1,328,512)         (792,536)       (4,774,294)

Cumulative effect on prior years of change in
accounting principle, net of tax                                --                --          (119,594)
                                                      ------------      ------------      ------------
    NET LOSS                                          $ (1,328,512)     $   (792,536)     $ (4,893,888)
                                                      ============      ============      ============

NET LOSS PER SHARE before cumulative
effect of the change in accounting principle          $      (0.09)     $      (0.06)     $      (0.49)

  Cumulative effect on prior years of the change in
  accounting principle                                          --                --             (0.01)
                                                      ------------      ------------      ------------
NET LOSS PER SHARE                                    $      (0.09)     $      (0.06)     $      (0.50)
                                                      ============      ============      ============

WEIGHTED AVERAGE SHARES                                 14,037,379        12,757,422         9,764,526
                                                      ============      ============      ============
</Table>

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


                                       29
<PAGE>

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                          (A Development Stage Company)
              STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY For the
                Period From August 14, 1997 to December 31, 2002

<Table>
<Caption>

                                                               Common Stock
                                                        ----------------------------     Additional      Subscription
                                                          Shares           Amount      Paid-in Capital    to Capital
                                                        -----------      -----------   ---------------   ------------
<S>                                                     <C>              <C>           <C>               <C>
Balances, August 14, 1997 (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 ($.50 per share)                 1,533,000            1,533         764,967               --
Issuance of 140,000 shares upon exercise
   of stock options ($.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
                                                        ===========      ===========     ===========      ===========

<Caption>

                                                            Deficit
                                                           Accumulated
                                                               in
                                                           Development       Treasury
                                                              Stage            Stock            Total
                                                           -----------      -----------      -----------
<S>                                                        <C>              <C>              <C>
Balances, August 14, 1997 (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 ($.50 per share)                           --               --          766,500
Issuance of 140,000 shares upon exercise
   of stock options ($.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
                                                           ===========      ===========      ===========
</Table>


                                       30
<PAGE>
                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS

<Table>
<Caption>

                                                                Years Ended December 31,         Period from
                                                              ----------------------------    August 14, 1997 to
                                                                  2002               2001     December 31, 2002
                                                              ------------    ------------    ------------------
<S>                                                           <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                                    $ (1,328,512)   $   (792,536)   $      (4,893,888)
  Adjustments to reconcile net loss to cash
    used in operating activities
    Amortization                                                   162,335         162,333              682,831
    Bad debt expense                                               137,095              --              185,530
    Cumulative effect of change in accounting principle                 --              --              119,594
    Depreciation                                                    11,220          16,169               56,971
    (Gain) loss on sale of assets                                       --          (5,724)               2,753
    Rescission of Lady Burd asset purchase agreement                50,000              --               50,000
    Common stock issued for services                               339,150              --              406,644
    Change in operating assets and liabilities:
      Accounts receivable                                           (8,252)        (84,499)            (230,378)
      Inventories                                                   76,706          26,213             (692,938)
      Prepaid expenses and deposits                                 (6,016)            620             (523,254)
      Accounts payable                                              20,168         (25,197)              54,157
      Accrued liabilities                                           10,650          (2,522)              31,556
                                                              ------------    ------------    -----------------
        Net cash used in operating activities                     (535,456)       (705,143)          (4,750,422)
                                                              ------------    ------------    -----------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Acquisition of property and equipment                          (12,088)         (4,465)             (83,999)
    Proceeds from sale of equipment                                     --          47,440               47,440
    Organization costs                                                  --              --             (129,291)
    Acquisition of patent                                          (25,000)        (25,000)             (50,000)
    Acquisition of licenses                                             --              --              (60,000)
                                                              ------------    ------------    -----------------
        Net cash provided by (used in) investing activities        (37,088)         17,975             (275,850)
                                                              ------------    ------------    -----------------

CASH FLOWS FROM FINANCING ACTIVITIES
    Loan proceeds                                                       --              --                6,554
    Loan principal repayments                                           --         (48,739)             (66,990)
    Loan principal repayments - related party                           --          15,735             (134,265)
    Proceeds from sale of stock                                    574,500         485,500            5,416,735
                                                              ------------    ------------    -----------------
        Net cash provided by financing activities                  574,500         452,496            5,222,034
                                                              ------------    ------------    -----------------

NET INCREASE (DECREASE) IN CASH                                      1,956        (234,672)             195,762

Cash - Beginning of period                                         193,806         428,478                   --
                                                              ------------    ------------    -----------------

Cash - End of period                                          $    195,762    $    193,806    $         195,762
                                                              ============    ============    =================

SUPPLEMENTAL INFORMATION
    Cash paid for interest                                    $         --    $      2,629    $          14,201
    Cash paid for income taxes                                          --              --                7,252
    Issuance of common stock for patent                                 --              --            1,875,000
    Issuance of common stock for services                          339,150              --              339,150
    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.



                                       31
<PAGE>

                     Summit Environmental Corporation, Inc.
                          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.

       For purposes of the statement of cash flows, the Company considers all
       highly liquid investments with a maturity of three months or less when
       purchased to be cash equivalents.

       Inventory

       Inventory, which consists of 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, 2002, fire suppression inventory was
       $530,396 and Pannache inventory was $85,390.

       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.



                                       32
<PAGE>

                     Summit Environmental Corporation, Inc.
                          NOTES TO FINANCIAL STATEMENTS


       SIGNIFICANT ACCOUNTING POLICIES (continued)

       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.

       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.

       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:

<Table>
<Caption>
              Description                                              Estimated Service Life
              -----------                                              ----------------------
<S>                                                                    <C>
              Automobiles                                                      5 years
              Office furniture and equipment                                 5 - 7 years
              Leasehold improvements                                           4 years
</Table>

       Advertising and Marketing

       Advertising and marketing costs are expensed as incurred, which totaled
       $306,223 and $46,489 for 2002 and 2001, respectively.

       Litigation

       The Company is involved in various lawsuits during the normal 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 and does not feel that their
       outcomes will have a material impact on the current or future financial
       position of the Company.

       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.



                                       33
<PAGE>

                     Summit Environmental Corporation, Inc.
                          NOTES TO FINANCIAL STATEMENTS


       SIGNIFICANT ACCOUNTING POLICIES (continued)

       Operations

       The Company has suffered recurrent losses from operations of $1,328,512
       and $792,536 for the years ended December 31, 2002 and 2001 and had
       negative cash flows from operations of $535,456 and $705,143 at December
       31, 2002 and 2001, respectively. If the Company is unable to meet current
       obligations as they come due as a result of an inability to raise further
       funds, the Company could be forced to substantially reduce operations and
       sell significant amounts of their assets at below market. The Company is
       currently working to raise the additional capital which would be used to
       fund current operations and is working to reduce cash based capital
       expenditures.

       Lady Burd

       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. 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 ($50,000 was paid through December 31, 2002).

       Late in 2002, the Company was made aware that Lady Burd did not have the
       patents on the products that it represented to the Company. Also at this
       time, Lady Burd 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 of $475,000 and has canceled the 500,000 shares
       of stock issued to Lady Burd.

       Reclassifications

       Certain amounts in the 2001 financial statements have been reclassified
       to conform to the 2002 financial statement presentation.

       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.

1.     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.

2.     LICENSES

       Licenses for exclusive marketing rights to various products have been
       acquired for fees totaling $60,000 from a related party. The Company is
       the manufacturer/supplier of the products.



                                       34
<PAGE>

                     Summit Environmental Corporation, Inc.
                          NOTES TO FINANCIAL STATEMENTS


3.     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, 2002.
       Rent expense for all operating leases was approximately $37,984 and
       $55,439 for 2002 and 2001, respectively.

       At December 31, 2002, approximate rental commitments under all
       noncancelable leases having terms in excess of one year are as follows:

<Table>
<Caption>
              Year Ending
              December 31,
              ------------
<S>                                                                <C>
                  2003                                             $  40,539
                  2004                                                26,893
                  2005                                                 9,300
                  2006                                                 2,292
                  2007                                                     -
                                                                   ---------
              Total minimum lease payments                         $  79,024
                                                                   =========
</Table>

       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 has been expensed
       by the Company in the current year and the corresponding receivables due
       from Proformance have been allowed for as of December 31, 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.

4.     COMMON STOCK

       Warrants

       During 2002 and 2001, the Company issued warrants to acquire 1,003,000
       and 160,000 shares, respectively, for $0.25 per share through April 15,
       2003 in connection with a private placement.

       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.

       In September 1999, the Board of Directors granted options to purchase
       350,000 shares of common stock to employees and directors pursuant to the
       Plan.



                                       35
<PAGE>

                     Summit Environmental Corporation, Inc.
                          NOTES TO FINANCIAL STATEMENTS


4.     COMMON STOCK (Continued)

       The following schedule summarizes the changes in the Plan for the four
       years ended December 31, 2002:

<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
(127,500 exercisable)                             265,000    $    1.00    $    265,000

For the year ended December 31, 2001:
    Granted                                            --           --              --
    Exercised                                          --           --              --
    Expired                                        66,250        (1.00)        (66,250)
                                                ---------    ---------    ------------
Outstanding at December 31, 2001
(95,000 exercisable)                              198,750    $    1.00    $    198,750
                                                ---------    ---------    ------------

For the year ended December 31, 2002:
    Expired                                       (13,750)       (1.00)        (13,750)
    Exercise price conversion                          --        (0.70)       (129,500)
    Exercised                                          --           --              --
    Granted                                       280,000         0.30          84,000
                                                ---------    ---------    ------------
Outstanding at December 31, 2002
(465,000 exercisable)                             465,000    $    0.30    $    139,500
                                                =========    =========    ============
</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 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, 2002 and expire January, 2003.

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

       In compliance with Statement of Financial Accounting Standards No. 123,
       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>
                             2002                            2001
                 ----------------------------    ----------------------------
                 As Reported      Pro forma      As Reported      Pro forma
                 ------------    ------------    ------------    ------------
<S>              <C>             <C>             <C>             <C>
Net loss         $  1,328,512    $  1,409,971    $    792,536    $    798,680
Loss per share   $       (.09)   $       (.10)   $       (.06)   $       (.09)
</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 4.29%, expected life 1 - 10 years;
       expected volatility 143%; dividend yield 0%; and an exercise price of
       $0.35 to $0.50. 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.



                                       36
<PAGE>

                     Summit Environmental Corporation, Inc.
                          NOTES TO FINANCIAL STATEMENTS


4.     COMMON STOCK (Continued)

       During 2002, the Company issued 355,000 shares of stock at $0.25 per
       share to officers of the Company for services rendered.

       During 2002, the Company issued 40,000 and 11,200 shares at $0.19 and
       $0.25 per share for services rendered by outside companies.

       During 2002, the Company issued 400,000 shares of stock at $0.60 per
       share for advertising and marketing to be rendered by an outside company
       on behalf of the Company.

5.     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 $5,040 and $29,311 were made to related parties in 2002
       and 2001, respectively.

       At December 31, 2002 and 2001 accounts receivables from related parties
       totaled $38,900 and $33,860 and notes receivables from related parties
       totaled $20,496 and $20,496, respectively.

       The Company has a royalty payable to a related party with a balance of
       $5,932 as of December 31, 2002. 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 $509,566 and $511,505 as of December 31,
       2002 and 2001, respectively.

       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 costs.

6.     CONCENTRATIONS

       Approximately 23% and 46% of sales were made to two and three customers
       in 2002 and 2001, respectively. Only one customer was the same for each
       of the years presented. Accounts receivable from the two and three
       customers were $6,094 and $34,437 in 2002 and 2001, respectively.



                                       37
<PAGE>

                     Summit Environmental Corporation, Inc.
                          NOTES TO FINANCIAL STATEMENTS


7.     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:

<Table>
<Caption>
                                             2002            2001
                                         ------------    ------------
<S>                                      <C>             <C>
       Deferred tax assets:
       Deferred tax asset - current      $     51,781    $     14,960
       Deferred tax asset - noncurrent      1,621,279       1,208,039
       Valuation allowance                 (1,671,020)     (1,220,374)
                                         ------------    ------------
         Deferred tax assets, net               2,040           2,625
                                         ------------    ------------

       Deferred tax liabilities:
       Current                                     --              --
       Noncurrent                               2,040           2,625
                                         ------------    ------------
                                                2,040           2,625
                                         ------------    ------------
                                         $         --    $         --
                                         ============    ============
</Table>

       The valuation allowance was established to reduce the deferred tax asset
       for the amounts that will more likely than 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 carryforward. The
       valuation allowance increased $450,646 and $271,176 in 2002 and 2001,
       respectively. The Company has a net operating loss carryforward of
       approximately $4,746,000 of which $605,000 expires in 2018, $882,000
       expires in 2019, $1,200,000 expires in 2020, $819,000 expires in 2021 and
       $1,240,000 expires in 2022.

8.     SUBSEQUENT EVENT (UNAUDITED)

       On February 11, 2003, the Company agreed to purchase the worldwide
       marketing rights to a bioremediation formula for 360,000 shares of the
       Company's common stock plus 180,000 stock warrants of the Company's stock
       exercisable at $1.00 per share with a term of three years.



                                       38
<PAGE>

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.

<TABLE>
<CAPTION>
                                                                                              OFFICE HELD                 TERM OF
           NAME                                           OFFICE                                 SINCE                    OFFICE
           ----                                           ------                                 -----                    ------
<S>                                             <C>                                           <C>                         <C>
B. Keith Parker, 54                             Chief Executive Officer and                       1997                     4-03
                                                Director

Chris Dellinges, 53                             Chief Financial Officer                           2001                     4-03

Paula Parker, 49                                Vice President, Secretary                         1997                     4-03
                                                And Director

Dean Haws, 33                                   Director                                          1997                     4-03

John Brooks, 55                                 Director                                          1999                     4-03

James J. Roach, 55                              Director                                          1997                     4-03

Thomas J. Kenan, 71                             Director                                          1997                     4-03

Mohsen Amiran, 53                               Director                                          1999                     4-03

Wilton Dennis Stripling, 61                     Director                                          2000                     4-03
</TABLE>


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.

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



                                       39
<PAGE>
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 currently the President of Electrical Generation
Technologies, which specializes in the development and installation of network
communications. He is a retired Connecticut State Police sergeant and owns a
private detective and security company. His clients include many insurance
companies and the State of Connecticut.

JOHN BROOKS, DIRECTOR

         Mr. Brooks is a retired Naval Aviation Maintenance Officer with
twenty-five years of active naval service. In 1993, he joined Mach II Aviation,
an FAA repair station, directing the development of global positioning system
(GPS) applications. He was responsible for developing differential corrected GPS
as an alternative to existing instrument landing systems, for the approval of
SCAT-1 systems under FAA order 8400.11. He managed the first installation and
approval of supplementary GPS receivers for oceanic navigation. In 1995, he
joined International Aero, Inc. as director of purchasing. In 1997, he was
reassigned as its director of research in its fire protection laboratory. He
began focusing on aerospace applications of encapsulated micro aerosol agents
and pyrotechnic gas generators. His recent research has concentrated on
aerospace fire protection and suppression systems testing, aimed at developing
alternative systems to replace existing Halon 1301 and 1211 installations.

THOMAS J. KENAN, DIRECTOR

         Mr. Kenan has practiced securities and corporation law in Oklahoma
City, Oklahoma for the last 37 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

                                       40
<PAGE>
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,
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 IranSections
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. Stripling is an orthopaedic surgeon in the Dallas area and has been
practicing medicine since 1968. He is a member of the Dallas County Medical
Society, Texas Medical Society, American Academy of Orthopaedic Surgeons, and
American Society for Surgery of the Hand. He is currently the President-elect of
Presbyterian Hospital of Dallas Medical Staff, Chair of Quality and Resource
Management Committee and a member of numerous committees for Presbyterian
Hospital of Dallas.

ITEM 10. EXECUTIVE COMPENSATION

         Mr. Parker, the chief executive officer of Summit Environmental
Corporation, receives a salary of $5,000 a month. Mrs. Parker, vice president,
receives a salary of $4,000 a month.

         Pursuant to the Corporation's 1998 Stock Option Plan, on September 21,
1999, the officers issued options to purchase shares of Common Stock of the
Corporation at $1.00 a share to the following persons in the amounts and subject
to the vesting conditions set forth opposite their names:

<TABLE>
<CAPTION>
                                                 Incentive Stock           Non-Qualified Stock
       Grantee                     Position          Options                    Options                 Service Date
       -------                     --------          -------                    -------                 ------------
<S>                                <C>           <C>                       <C>                          <C>
Jennifer Woolbert (2)              Employee           10,000                                              08-14-97
Nicole Parker (2)                  Employee           10,000                                              01-04-99
Ann Graff (2)                      Employee           10,000                                              05-12-98
Laurie Grigsby (2)                 Employee           10,000                                              07-10-98
Val Allen (2)                      Employee           10,000                                              06-01-99
Dean Haws (1)                      Director                                     40,000
Jim Roach (1)                      Director                                     40,000
Thomas J. Kenan (1)                Director                                     40,000
Chuck Wilde (1)                    Director                                     40,000
John Brooks (1)                    Director                                     40,000
Mohsen Amiran (1)                  Consultant                                   25,000
Tom Rouse (1)                      Consultant                                   25,000
</TABLE>


(1)      25% vests the day granted. 25% vests on each of 1-1-2000, 1-1-2001, and
         1-1-2002 if the grantee is still an officer or director of the company.

                                       41
<PAGE>
(2)      25% vests on the first, second, third and fourth anniversaries of the
         date of initial employment.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table shows information as of December 31, 2002 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:

<TABLE>
<CAPTION>
                                                                         NO. OF                  % OF
SUMMIT ENVIRONMENTAL CORP.                                               SHARES                  CLASS
--------------------------                                               -----                   -----
<S>                                                                    <C>                       <C>
B. Keith Parker                                                        2,176,305(1)              13.2
133 East Tyler Street
Longview, TX 75601

Paula Parker                                                           406,500(2)                 2.5
133 East Tyler Street
Longview, TX 75601

Moonlighting Distribution                                              350,000(3)                 2.1
Corporation
133 East Tyler Street
Longview, TX 75601

Dean Haws                                                              250,000                    1.5
P. O. Box 1071
Gilmer, TX 75644

John Brooks                                                            5,000                        *
11817 Westar Lane
Burlington, WA  98233

James J. Roach                                                         30,000                       *
182 Curtis Road
Middlebury, CT  06762

Thomas J. Kenan                                                        190,620(4)                 1.2
212 NW 18th Street
Oklahoma City, OK  73103

BioGenesis Enterprises, Inc.                                           12,750(5)                    *
7420 Alban Station, Ste. B-208
Springfield, VA  22150

Mohsen Amiran                                                          212,750(5)                 1.3
7420 Alban Station, Ste. B-208
Springfield, VA  22150
</TABLE>

                                       42
<PAGE>
<TABLE>
<S>                                                                    <C>                       <C>
Wilton Dennis Stripling                                                1,357,550                  8.2
5230 Walnut Hill Lane, Ste. 306
Dallas, TX  75231

Officers and Directors                                                 4,222,225                 25.5
as a group (8 persons)
</TABLE>


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

(1) Mr. Parker directly owns 1,850,805 shares of common stock. He is attributed
the beneficial ownership of 31,500 shares owned by a son, Casey Joe Parker and
25,000 shares owned by a daughter, Leslie Nicole Parker. 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. These same 406,500 shares are attributed to Paula Parker. See
footnote (2).

(2) Mrs. Parker, who is the spouse of B. Keith Parker, is attributed 350,000
shares through her controlling stock ownership and position as a director of
Moonlighting Distribution Corporation, the record owner of the shares. She is
attributed the beneficial ownership of 31,500 shares owned by a minor son, Casey
Joe Parker and 25,000 shares owned by a daughter, Leslie Nicole Parker. These
same 406,500 shares are attributed to Mr. Parker.

(3) Some 52.5 percent of the stock of Moonlighting Distribution Corporation is
owned by B. Keith Parker and Paula Parker, husband and wife, who also are
directors of such company. These 350,000 shares are also attributed to Mr. and
Mrs. Parker by reason of their controlling stock ownership of such company and
their positions as directors of it.

(4) These shares are owned by the Marilyn C. Kenan Trust, which trust is under
the control of Marilyn C. Kenan, its sole trustee and beneficiary for her life.
Mrs. Kenan is the spouse of Mr. Kenan. Mr. Kenan disclaims any beneficial
interest in shares of capital stock of Summit Environmental Corporation owned by
this trust.

(5) Dr. Amiran directly owns 200,000 shares of common stock. He beneficially
owns another 12,750 shares through his controlling stock ownership and position
as a director of BioGenesis Enterprises, Inc., which directly owns such 12,750
shares.

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-

                                       43
<PAGE>
ounce can of FIREPOWER 911(TM), $0.35 for each 1-liter can of FIREPOWER 911(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.

         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:

<TABLE>
<S>              <C>     <C>
      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.***

      99.1       -       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.

      99.2       -       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.
</TABLE>

                                       44
<PAGE>
<TABLE>
<S>                      <C>

      **                 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.
</TABLE>

(B)      REPORTS ON FORM 8-K

         None

ITEM 14. 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.

                                      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.

<TABLE>
<S>                                 <C>
                                    SUMMIT ENVIRONMENTAL CORPORATION, INC.

                                    /s/ B. Keith Parker
Date:  April 15, 2003
                                    -----------------------------------------------------
                                    B. Keith Parker, Chief Executive Officer
</TABLE>

         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.

<TABLE>
<S>                                   <C>
                                    /s/ Chris Dellinges
Date:  April 15, 2003
                                    -----------------------------------------------------
                                    Chris Dellinges, Chief Financial Officer


                                    /s/ B. Keith Parker
Date:  April 15, 2003
                                    -----------------------------------------------------
                                    B. Keith Parker, Chief Executive Officer and Director
</TABLE>

                                       45
<PAGE>
<TABLE>
<S>                                   <C>
                                      /s/ Paula Parker
Date:  April 15, 2003
                                      --------------------------------------------------------------
                                      Paula Parker, Director


                                      /s/ Dean Haws
Date:  April 15, 2003
                                      --------------------------------------------------------------
                                      Dean Haws, Director


                                      /s/ Thomas J. Kenan
Date:  April 15, 2003
                                      --------------------------------------------------------------
                                      Thomas J. Kenan, Director


                                      /s/ James J. Roach
Date:  April 15, 2003
                                      --------------------------------------------------------------
                                      James J. Roach, Director


                                      /s/ John Brooks
Date:  April 15, 2003
                                      --------------------------------------------------------------
                                      John Brooks, Director


                                      /s/ Mohsen Amiran
Date:  April 15, 2003
                                      --------------------------------------------------------------
                                      Mohsen Amiran, Director


                                      /s/ Wilton Dennis Stripling
Date:  April 15, 2003
                                      --------------------------------------------------------------
                                      Wilton Dennis Stripling, Director
</TABLE>



                                       46
<PAGE>
                            CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
                            (18 U.S.C. SECTION 1350)

I, B. Keith Parker, Chief Executive Officer of the registrant, certify that:

         1. I have reviewed this annual report on Form 10-KSB of Summit
Environmental Corporation, Inc.;

         2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
annual report;

         3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

         4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

            a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

            b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and

            c. presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

         5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):

            a. all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

            b. any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

         6. The registrant's other certifying officers and I have indicated in
this annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date:  April 15, 2003                                /s/ B. Keith Parker
                                                     -----------------------
                                                     B. Keith Parker
                                                     Chief Executive Officer


                                       47
<PAGE>
                            CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
                            (18 U.S.C. SECTION 1350)

I, Chris Dellinges, Chief Financial Officer of the registrant, certify that:

         1. I have reviewed this annual report on Form 10-KSB of Summit
Environmental Corporation, Inc.;

         2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
annual report;

         3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

         4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

            a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

            b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and

            c. presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

         5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):

            a. all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

            b. any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

         6. The registrant's other certifying officers and I have indicated in
this annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date:  April 15, 2003                                /s/ Chris Dellinges
                                                     -----------------------
                                                     Chris Dellinges
                                                     Chief Financial Officer


                                       48
<PAGE>
                               INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
  No.               Description
-------             -----------
<S>         <C>     <C>
 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.***

 99.1       -       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.

 99.2       -       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.
</TABLE>