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

                                   FORM 10-KSB

|X|   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT OF
      1934

                   For the fiscal year ended December 31, 2004

                                       OR

|_|   TRANSITION  UNDER  SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
      1934

               For the transition period from ________ to ________


                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
             (Exact name of registrant as specified in its charter)

     Texas                     333-122402                    73-1537206
     -----                     ----------                    ----------
   (state of            (Commission File Number)            (IRS Employer
 incorporation)                                              I.D. Number)


                              133 East Tyler Street
                               Longview, TX 75601
                                  800-522-7841
              ----------------------------------------------------
             (Address and telephone number of registrant's principal
               executive offices and principal place of business)


       Securities registered under Section 12(b) of the Exchange Act: None

       Securities registered under Section 12(g) of the Exchange Act: None

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past twelve 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 the  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|

State issuer's revenues for its most recent fiscal year:  $190,702


<PAGE>

State the aggregate market value of the 16,917,686  voting and non-voting common
equity held by  non-affiliates  computed by reference to the $0.195  average bid
and asked price of such common equity, as of March 31, 2005: $3,298,949.

As of March 31, 2005, there were 23,759,344  shares of the  Registrant's  Common
Stock, par value $0.001 per share, outstanding.

                      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;
(2) 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 listed
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|


                                       ii

<PAGE>

                                TABLE OF CONTENTS


                                                                            Page

Item 1   Description of Business.............................................  1
         Business Development................................................  1
         Our Business........................................................  1
         Distribution Methods................................................  4
         Competition.........................................................  4
         Raw Materials and Suppliers.........................................  4
         Dependence on Major Customers or Suppliers .........................  5
         Patents, Trademarks and Licenses ...................................  5
         Government Approval of Principal Products ..........................  5
         Seasonality ........................................................  6
         Research and Development ...........................................  6
         Environmental Controls .............................................  6
         Number of Employees ................................................  6

Item 2   Description of Property ............................................  6

Item 3   Legal Proceedings ..................................................  7

Item 4   Submission of Matters to a Vote of Security Holders ................  7

Item 5   Market for Common Equity and Related Stockholder Matters ...........  8

Item 6   Management's Discussion and Analysis ...............................  9
         Results of operations ..............................................  9
         Sales ..............................................................  9
         Gross Margin ....................................................... 10
         Operating Expenses ................................................. 10
         Net Loss ........................................................... 10
         Liquidity and Capital Resources .................................... 10
         Outlook ............................................................ 11
         Off-Balance Sheet Arrangements ..................................... 14
         Contractual obligations ............................................ 14

Item 7   Financial Statements ............................................... 15

Item 8   Changes In and Disagreements With Accountants on Accounting
           and Financial Disclosure ......................................... 33

Item 8A  Controls and Procedures ............................................ 33


                                      iii

<PAGE>

         Other Information .................................................. 34

Item 9   Directors, Executive Officers, Promoters and Control Persons;
           Compliance with Section 16(a) of the Exchange Act ................ 34
         Audit Committee and Audit Committee Financial Expert ............... 37
         Code of Ethics ..................................................... 37
         Compliance with Section 16(a) of the Exchange Act .................. 37

Item 10  Executive Compensation ............................................. 38
         Employment Contracts ............................................... 38
         Stock Options ...................................................... 38

Item 11  Security Ownership of Certain Beneficial Owners
           and Management ................................................... 40

Item 12  Certain Relationships and Related Transactions ..................... 41

Item 13  Exhibits ........................................................... 42

Item 14  Principal Accountant Fees and Services ............................. 44

Signatures .................................................................. 45


                                       iv

<PAGE>

ITEM 1.  DESCRIPTION OF BUSINESS.

BUSINESS DEVELOPMENT.

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

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

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

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

OUR BUSINESS.

PRINCIPAL PRODUCTS

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

         FIREPOWER 911(TM) and FLAMEOUT(R)

         These products are fire  suppressants and fire retardants.  FLAMEOUT(R)
was  developed  by Dr.  Mohsen C. Amiran and his  company,  BioGenesis,  to be a
replacement  for Halon 1211.  Halon 1211 was a widely used fire  suppression and
explosion  protection agent. It was applied primarily as a wetting agent and was
the  fire-extinguishing  agent of  choice  for many  uses,  such as in 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 was still approved for certain
limited  mission-critical  uses (such as ship- and shore-based  crash,  fire and
rescue),  but as of March  1999  Halon  1211  fire  extinguishers  are no longer
approved for continued use even under the classification "mission critical."


                                       1
<PAGE>

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

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

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

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

         FLAMEOUT(R) -

         o  reduces toxic smoke by encapsulating poisonous hydrocarbons,

         o  reduces heat approximately 70 percent faster than water,

         o  prevents reflash,

         o  is safe to store and handle,

         o  leaves virtually no residue,

         o  is biodegradable,

         o  is environmentally safe,

         o  is nontoxic, but may irritate the eyes, and

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


                                       2
<PAGE>

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

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

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

INDUSTRIAL CHEMICALS AND CLEANERS

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

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

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

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.


                                       3
<PAGE>

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

         DISTRIBUTION METHODS

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

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

         COMPETITION

         We own the patent and intellectual  property rights to Surfactant Blend
A -  FLAMEOUT(R)  and  FIREPOWER(TM).  SurfacTANT  Blend A was the first formula
approved under USEPA-SNAP guidelines after the global banning of Halon 1211. Its
approval is for both commercial and residential use.  FLAMEOUT(R)  competes with
established products owned by DuPont, 3M anD Monsanto.  However,  FLAMEOUT(R) is
the only non-toxic fire  suppression  agent listed by the U.S.  Forest  Service.
FIREPOWER(TM) has no competition. This is the only validated and listed portable
fire  extinguisher  available  in an  aerosol  can (like air  freshener  or hair
spray).

         We have  compared  our  cosmetic  product,  SUGAR KISS LIP,  to similar
products  manufactured by Revlon, Max Factor, Cover Girl, Avon and BeautiControl
touting no smear and extended  wear.  These other  products,  in our opinion and
according to the results of our tests, simply do not stay on the lips the length
of time advertised. 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 SUGAR KISS LIP from the world-famous Kilgore College
Rangerettes.

         RAW MATERIALS AND SUPPLIERS

         The raw  materials  for our  products  are in abundant  supply.  Summit
Environmental, by virtue of our purchase of the patent and intellectual property
rights  to  Surfactant  Blend  A,  has  retained  Dr.  Amiran  and his  company,
BioGenesis,  to  formulate  and package our products on a  cost-plus-10  percent
basis. We have had difficulties  getting prompt delivery of the aluminum cans we
use in our aerosol FIREPOWER(TM) fire extinguisher.  One of the three facilities
in the world thAT makes  these cans to the  required  National  Fire  Protection
Association  and U.S.  Department of  Transportation  requirements,  went out of
business  recently.  We are currently on a systematic  inventory  purchase order
cycle with a facility in Monterey, Mexico that is one of two remaining suppliers
of this required can. We have no current difficulties.


                                       4
<PAGE>

         DEPENDENCE ON MAJOR CUSTOMERS

         Approximately  35  percent  and 68  percent  of sales  were made to two
customers  in 2003 and two  customer  in 2004,  respectively.  Approximately  68
percent of sales in the third quarter of 2004 were made to four customers and 68
percent of sales in the third quarter of 2003 were made to two  customers.  This
concentration of sales is already being reduced in 2005 by our success this year
in selling our FIREPOWER(R) aerosol fire extinguishers  through television's QVC
channel.

         PATENTS, TRADEMARKS AND LICENSES

         We own all patents and intellectual property rights associated with the
fire  suppressant  products.  However,  we are  obligated  to pay  royalties  to
Moonlighting Distribution Corporation as follows: $0.40 for each 16 ounce can of
FIREPOWER(TM),  $0.50  for  each  gallon  of  FLAMEOUT(R),  and  $0.35  for each
one-liter  can of  FIREPOWERTM.  The  obligation  to  PAY  the  above  mentioned
royalties to Moonlighting, however, did not so merge and will continue in effect
during  the  term  of  the  exclusive   license   obtained  from   Moonlighting.
Moonlighting  views this license to be perpetual;  therefore,  the royalties are
perpetual.

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

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

         GOVERNMENTAL APPROVAL OF PRINCIPAL PRODUCTS

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

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

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


                                       5
<PAGE>

         SEASONALITY

         There is no known seasonal aspect to our business.

         RESEARCH AND DEVELOPMENT

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

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

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

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

         ENVIRONMENTAL CONTROLS

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

         NUMBER OF EMPLOYEES

         On March 23,  2005,  we employed  four persons full time and one person
part time.

ITEM 2.  DESCRIPTION OF PROPERTY.

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

         FACILITIES

         We lease 4,500 square feet of space in Longview,  Texas for our offices
and for inventory  storage at $1,700 per month.  Additional  warehouse  space of
5,000 square feet is leased for $1,300 a month for stored  inventory.  The lease
for our office space extends through April 2005. The space for inventory storage
is on a  month-to-month  lease. We believe all space  requirements can be met at
its present  location for at least the next year.  We intend to extend the lease
on our office space.


                                       6
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS.

         On December 28, 2001,  we filed a $46,000  collection  lawsuit,  Summit
Environmental  Corporation,   Inc.  v.  Harry  Bachelder  III,  dba  Proformance
Marketing , Inc., Cause Number 2001-2667-B,  124th District Court, Gregg County,
Texas for non-performance on a guaranteed note payable and delinquent  accounts.
We later amended the petition to include a cause for an alleged unlawful removal
of 21 pallets of FirePower  911(TM) from a bonded  warehouse.  We took a default
judgement for  approximately  $186,000,  which  default  judgment was awarded on
November 8, 2002.  We have not collected on this judgment but have hired counsel
to file a collection lawsuit in New Jersey.

         In April 2002 we filed a $53,000 lawsuit, Cause Number 2002-93-B in the
124th District Court, Gregg County,  Texas,  against a former staff employee and
her  spouse for credit  card  fraud and  misappropriation  of funds in the 124th
District Court in Longview,  Gregg County,  Texas.  We were awarded  $233,800 in
damages and  attorney's  fees.  A  settlement  agreement  has been  entered into
whereby  the  former  employee  and her  spouse  will pay to Summit  $52,000  as
settlement of all outstanding  issues. The money should be paid to Summit within
the next twenty days.

         In March 2003 we were sued by Lady Burd Exclusive  Cosmetics,  Inc. for
$43,000 in a collection lawsuit,  Lady Burd Exclusive  Cosmetics,  Inc v. Summit
Environmental Corporation, Case No. 104268/03, Supreme Court of the State of New
York, County of New York. We filed a cross-petition against Lady Burd for breach
of  contract  and  unpaid  commissions,  in the  amount  of  $45,000.  Currently
depositions and discoveries are being conducted.  An initial offer of settlement
from Lady Burd Exclusive  Cosmetics,  Inc. has been refused.  We believe we will
prevail in this litigation.

         In  March,  2003,  we filed  an  action  against  Lady  Burd  Exclusive
Cosmetics,  Inc.,  Case Number  2003-589-A in the 188th  District  Court,  Gregg
County, Texas, for fraud and misrepresentation regarding our earlier purchase of
patent rights to a "permanent"  lipstick we sell under the name "Sugar Kiss Lip"
collection.  After paying $50,000 and 500,000 shares of our common stock to Lady
Burd we discovered that Lady Burd had never filed for a patent.  A trial date of
May 5, 2005 has been scheduled.

         No  director,  officer or  affiliate  of the  company,  and no owner of
record or beneficial  owner of more than 5.0% of the  securities of the company,
or any  associate of any such  director,  officer or security  holder is a party
adverse  to the  company or has a material  interest  adverse to the  Company in
reference to any litigation.

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

         There were no matters  submitted to a vote of the  stockholders  of our
company during 2004 through the solicitation of proxies or otherwise.


                                       7
<PAGE>

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         Summit'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 and asked prices,  as reported by the OTC Bulletin Board, are as follows for
2003 and 2004.  The  quotations  reflect  inter-dealer  prices,  without  retail
mark-up, mark-down or commission and may not represent actual transactions.

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

         2004:
                  1st Qtr.          0.25             0.145
                  2nd Qtr.          0.72             0.25
                  3rd Qtr.          0.59             0.37
                  4th Qtr.          0.41             0.24

         Holders.  Based on information  provided by our transfer  agent, we had
640 shareholders of record of our common stock on March 15, 2005.

         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.

         SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS.

         Keith Parker,  our  president,  Paula Parker,  a vice president and the
spouse  of Keith  Parker,  and Chris  Dellinges,  our  chief  financial  officer
received  the  following  shares of common  stock  during  2004 as part of their
compensation:

                  Keith Parker                         7,500 shares a month,
                  Paula Parker                         5,000 shares a month,
                  Chris Dellinges                     15,000 shares a quarter.

         This  arrangement  continues  today and is expected  to continue  until
sufficient  income  is  generated  by the  company  to  pay  these  officers  an
appropriate cash salary. In addition to the above common stock compensation, Mr.
Parker receives a cash salary of $90,000 a year, and Mrs. Parker receives a cash
salary of $60,000 a year.


                                       8
<PAGE>

         RECENT SALES OF UNREGISTERED SECURITIES.

         Information  regarding all  securities we sold in the last three fiscal
years without  registering  the  securities  under the Securities Act of 1933 is
disclosed in Part II, Item 26 of our  Amendment  No. 1 to Form SB-2,  Commission
File No. 333-122402, and is incorporated herein by reference thereto.

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  and is
qualified  in its  entirety  by the  foregoing  and by more  detailed  financial
information appearing elsewhere. See "Financial Statements."

         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, 2004 and 2003:

         Year ended December 31                           2004            2003
                                                         ------          -----
         Sales                                            100.0%         100.0%
         Cost of Sales                                     57.8           (248)
                                                         ------           ----
         Gross Margin                                      42.2           (148)
                                                         ------           ----
         Operating Expenses                                (641)          (510)
         Other Income and Expenses, Net                     2.4            2.3

         Net income (loss)                                 (596)%         (656)%

         SALES

         Sales of $190,702 for 2004  increased by $10,015 or 5.5% from the prior
year's sales of $180,687.  Management devoted considerable attention during 2004
to certification and test marketing.

         The amount of sales,  by product  segment,  for 2003 and 2004,  were as
follows:

                  PRODUCT                                 2003            2004

                  Fire Suppressants                    $125,232       $177,642
                  Ultimate Clean(R) Chemicals             1,818          4,823
                  Cosmetics                              53,228          6,755
                  Energy Drinks(1)                          409          1,482


      (1)   In late 2003 we began test marketing an energy drink, similar to the
            Gatorade-like  drinks,  that was developed by Dr. Amiran, a director
            of our company and the inventor of all our  products.  No plans have
            been made to devote  significant  efforts to the  promotion  of this
            product.


                                       9
<PAGE>

         GROSS MARGIN

         In 2004 we had a gross margin of $80,486,  or 42.2 percent of sales. In
2003, because of a provision for inventory losses of $364,485 relating to faulty
FirePower 911(TM) cans subject to litigation for being incorrectLY  manufactured
by Pel Associates,  Ultimate Absorb, and older Pannache skin care products, what
would have been a gross  margin of $96,306,  or 53% of sales,  was,  instead,  a
total cost of sales of $448,866, which was 248% of sales in 2003.

         OPERATING EXPENSES

         Operating  expenses of $1,221,861  for 2004  increased by $299,873,  or
32.5 percent,  from $921,988 in 2003.  Advertising expenses increased in 2004 by
$116,818 over 2003.  Professional  fees  increased in 2004 by $30,363 over 2003.
Expenses  related to trade  shows  increased  to $16,804 in 2004 from  $4,399 in
2003.  Repair  and  maintenance  expense  decreased  by $700  from 2003 to 2004.
Research and Development  expenses decreased by $8,283 from 2003 to 2004. Office
salaries  decreased  from  $94,352  in  2003 to  $83,237  in  2004  and  officer
compensation decreased by $32,275 from $205,400 in 2003 to $187,375 in 2004.

         NET LOSS

         We had a net loss of $1,136,783  during 2004, as compared to a net loss
of  $1,185,992  during  2003.  The years 2004 and 2003 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.  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  $942,867  in 2004 and
negative cash flow from  operations of $514,786 in 2003.  Major  contributors to
the 2004 negative cash flow from  operations  were the  $1,136,783 net loss from
operations and a $150,440 increase in our inventory.  Major  contributors to the
2003  negative  cash  flow from  operations  were the  $1,185,992  net loss from
operations and $364,485 in provision for inventory losses.

         We had negative cash flow from investing  activities of $23,038 in 2004
and  negative  flow from  investing  activities  of  $2,722  in 2003.  The major
components of both years' cash flow from investing  activities were acquisitions
of property and equipment in 2003 and 2004.

         We were able to stay liquid from the sale of  $1,351,608  of our common
stock  during  2004,  and from the sale of $396,300 of our common stock and loan
proceeds of $39,500 during 2003. At year-end 2004, we had $460,257 cash on hand.
At year-end 2003, we had $114,054 cash on hand.


                                       10
<PAGE>

          We successfully  test marketed  FirePower(TM) on QVC in 2004. We began
regular  monthly  programming  in January 2005,  and through March 2005 have had
$256,917 in sales orders through completed programming.  Several known retailers
have indicated the purchase of FirePower(TM) in the second quarter of 2005. Also
to be purchased is our SafeTree(TM) Christmas Tree Protectant.

SOURCES OF LIQUIDITY

         The following  table sets forth for 2005 our expected  sources and uses
of cash,  significant  capital  expenditures,  marketing  expenses  and  product
development expenses:

<TABLE>
<CAPTION>
                                                                           EXPECTED PRODUCT-RELATED USES OF CASH
                                                                           ---------------------------------------------
                                      EXPECTED             EXPECTED          SIGNIFICANT                       PRODUCT
                                       SOURCE               AMOUNT             CAPITAL        MARKETING      DEVELOPMENT
PRODUCT                                OF CASH             OF CASH           EXPENDITURES      EXPENSES        EXPENSES
<S>                              <C>                 <C>                    <C>             <C>           <C>
Fire Suppressants                 Warrants, line     Range of $0.25 to           $220,000       $50,000        $15,000
                                  of credit          $0.50
                                                     $349,920 to $699,843
Industrial Cleaning Products      Sale of products                                      0       $10,000        $ 5,000
Cosmetics                         Sale of products                                      0       $10,000        $ 5,000
Energy Drinks                     Sale of products                                      0       $ 5,000              0
</TABLE>


         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.

EVENTS AND TRENDS.

         The following  events and trends are expected to have a material impact
on our business:

         o  Regular   programming  on  QV  of  our  FIREPOWER(TM)  aerosol  fire
            extinguisher  began in January 2005. On the first airing in January,
            11,000 cans were sold in 8.5 minutes.  On March 2, 2005, 13,000 cans
            were sold in 10 minutes.  Airings are scheduled  throughout 2005. As
            of March 18, 2005 we have  recorded  sales of  $256,917  through QVC
            since 2002.

         o  We are completing the  preparations  for retail sales of FLAMEOUT(R)
            also as an aerosol-rated fire  extinguisher.  FLAMEOUT(R) is offered
            primarily to franchise and mass marketing companies. A TV commercial
            will  feature   FLAMEOUT(R)  during  the  second  quarter  of  2005.
            FlameOut(R)  Aerosol  is being  presented  for  first  orders at the
            National Hardware Show in Chicago, March 20-23, 2005.


                                       11
<PAGE>

         o  FLAMEOUT(R) and FIREPOWERTM  aerosol fire extinguishers  contain the
            same  surfactant,  FlameOut(R).  FLAMEOUT(R)  is SOLd in concentrate
            form. The logging industry is endorsing FLAMEOUT(R) more and more on
            its insured heavy equipment. Three insurance companies - Bituminous,
            Lloyds of London and Santee - now require  FLAMEOUT(R)  or A product
            like FLAMEOUT(R) to be on all insured logging  equipment for renewal
            purposes of existing  fire  coveragE or on new equipment in order to
            bind fire  coverage.  There is no other product that has the various
            government approvals FLAMEOUT(R) has, is non-toxic, is non-corrosive
            and is rapidly biodegradable. As oF March 18, 2005, we have recorded
            sales of $35,290to the logging industry.

         o  FLAMEOUT(R)  has  been  submitted  to the U.S.  Government  Services
            Administration  ("GSA") for a federal  supply number  ("FSN") by our
            agent,  GSA  Awards,  Inc.  Completion  is  expected  by June  2005.
            Possession  of an FSN could lead to large supply  contracts for U.S.
            Government Institutions,  U.S. Forestry, State Forestry departments,
            Bureau of Land Management, and U.S. Parks and Wildlife.  FIREPOWERTM
            and FLAMEOUT(R) are now carried in W.S. Darley Company's most recent
            fire products catalog  published in February 2005. This catalog goes
            to  every  fire  department  in  the  U.S.  and  a  number  of  fire
            departments in 23 foreign countries.

         o  Using our unique  aerosol  technology,  a new product sold under the
            brand  name  SAFETREE(R)  for  use  with  ChristmaS  Trees  will  be
            introduced in various retail locations  through the Christmas Season
            2005.  Sprayed  on the tree,  it not only  guards  against  fire but
            extends the period when the needles  stay green and do not drop.  We
            have  developed an alliance with Noble  Mountain Tree Farms,  one of
            the  world's  premier   Christmas  tree  growers  and  suppliers  to
            companies  such as  Wal-Mart,  Home Depot and Lowe's.  It also sells
            trees  through a network  of Noble  Tree  lots.  During  the  fourth
            quarter of 2004 Noble  supplied  two-can  samples of  SAFETREE(R) to
            more than 50 major  retailers in the U.S. that yearly sell more than
            6 million  Noble trees and wreaths.  We expect that this  initiative
            with Noble will bear fruit during Christmas Season 2005.

         o  We will be changing in 2005 the  propellant  in our aerosol  cans to
            nitrogen or a mix of 134A and nitrogen. This will reduce our cost of
            goods by approximately $1.20 a can.

MATERIAL COMMITMENTS FOR CAPITAL EXPENDITURES.

         We have the following  material  commitments  for capital  expenditures
during 2005:

         o  Building    of    an    inventory     of    aluminum     cans    for
            FirePower(TM)/FlameOut(R) (1 Liter cans)

         o  Building of an inventory for SafeTree(TM) (16 oz. cans)

         o  Building  of an  inventory  of  FlameOut(R)  concentrate  for  ready
            deployment for wildland/wildfire emergency supply.


                                       12
<PAGE>

         We expect we shall obtain the funds for such expenditures from -

         o  Exercise of some of the warrants by the 21 Selling  Security Holders
            that hold common stock purchase warrants,

         o  Revenues from sales of our FIREPOWERTM,  FLAMEOUT(R) and SAFETREE(R)
            fire suppressants, and

         o  Bank line of credit and/or purchase order financing.

         IMPORTANT FACTORS.

         We work  closely  with  American  Business  Associates  (AmBiz).  AmBiz
assists with  introductions  into  military,  homeland  security  and  emergency
management  venues,  with retail  development and  introductions for some of our
products and with  development  and financing for future retail  projects.  More
about AmBiz can be found at www.americanbusinessassociates.com.  Through AmBiz's
efforts,  we submitted  FlameOut(R) and FlameOut(R)  Foam to the U. S. AiR Force
chemical  testing  center at Tyndal  Air Force  Base in  Florida.  The series of
testing involves the protocol to find a new agent to suppress  ground-based fuel
fires.  Our FlameOut(R)  Foam (AFFF  Replacement)  and FlameOut(R)  will undergo
continUeD  toxicity  testing  and  efficacy  tests  during  2005.  We also  will
introduce  FlameOut(R)  to the US Air  Force  testing  center  at  Little  Rock,
Arkansas  for use in the Air  Force  fleet of C-130  tankers  in early  2005 for
wildland, wildfire applications.

         FLAMEOUT(R)  is  not  just  a  fire   suppressant.   It  is  non-toxic,
biodegradable  and has  significant  encapsulatioN  features  that  surround and
smother   particles  it  contacts.   We  demonstrated  its   fire-fighting   and
fire-retardant qualities before FEMA, Homeland Security, Arizona State Emergency
Management, the Office of Emergency Management and the Bureau of Land Management
in July 2004.  The  demonstration  consisted of using  Evergreen  Aviation's 747
Supertanker to disperse  FLAMEOUT(R) as a compressed-air foam over a path 100 to
125 feet wide for 20,000 feet.  The success of the  demonstratioN  has led us to
consider  FLAMEOUT(R) as the carrying agent for additional products that address
environmental  issues.  Dr.  Amiran,  one of our  directors  and the inventor of
FLAMEOUT(R),  is  addressing  this  expanded use of  FLAMEOUT(R)  - uses such aS
treating toxic spills or chemical exposure, cleaning the air of free radicals in
the event of terrorist attacks,  and a fire retardant sealant to be sprayed on a
structure  prior to  evacuating  an area  threatened  by a wildfire.  We have no
revenues yet from such an expanded use of  FLAMEOUT(R).  Our  relationship  with
Evergreen Aviation is not yet the subject oF an executed contract.

ULTIMATE CLEANTM PRODUCTS.

         Working  with  our  distributor  for  ULTIMATE  CLEAN(TM) chemicals and
cleaners, Asah Terra, a Washington-based bioremediation contractor, we expect we
will sell  significant  amounts of our  chemicals  and  cleaners  in the heavily
contaminated petroleum production areas of Nigeria.

         Asah Terra is working  with the  Nigerian  Government  and Shell Oil of
Nigeria in providing  consultation  and products with specific  applications for
what is estimated at up to ten years of existing clean-up of contamination.  One
of the first  sites  that we will be  cleaning  is a stagnate  lake that  allows
bacteria to grow.  When it rains,  the overflow  provides such a large amount of
toxic  residue  that this site has been  linked to being a leading  cause of the
deaths of infants and young children in Nigeria.  Dr. Amiran  estimated from his
preliminary  studies that this initial  project will probably last for up to two
years.


                                       13
<PAGE>

         Asah Terra sells some of our other ULTIMATE CLEAN(TM) products to clean
the grease traps at restaurants, primarily in the Northwest United States.

OFF-BALANCE SHEET ARRANGEMENTS

         Our company has not entered  into any  transaction,  agreement or other
contractual  arrangement  with an entity  unconsolidated  with us under which we
have

         o  an obligation under a guarantee contract,

         o  a retained  or  contingent  interest  in assets  transferred  to the
            unconsolidated  entity or similar arrangement that serves as credit,
            liquidity or market risk support to such entity for such assets,

         o  an obligation,  including a contingent obligation,  under a contract
            that would be accounted for as a derivative instrument, or

         o  an obligation,  including a contingent obligation,  arising out of a
            variable interest in an  unconsolidated  entity that is held by, and
            material  to, us where such entity  provides  financing,  liquidity,
            market  risk or credit  risk  support  to, or  engages  in  leasing,
            hedging, or research and development services with, us.

CONTRACTUAL OBLIGATIONS

         The  following  table sets  forth,  as of the end of the latest  fiscal
year-end  balance  sheet,  information  with  respect  to our known  contractual
obligations.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                                               PAYMENTS DUE-BY PERIOD
--------------------------------------------------------------------------------------------------------------------
        CONTRACTUAL                                 LESS THAN                                            MORE THAN
        OBLIGATIONS                TOTAL             1 YEAR            1-3 YEARS         3-5 YEARS        5 YEARS
--------------------------------------------------------------------------------------------------------------------
<S>                               <C>              <C>                <C>                <C>            <C>
Long-Term Debt Obligations          $ 0
--------------------------------------------------------------------------------------------------------------------
Capital Lease Obligations           $ 0
--------------------------------------------------------------------------------------------------------------------
Operating Lease Obligations     $12,206.61           $9,620            $2,586.61
--------------------------------------------------------------------------------------------------------------------
Other Long-Term
Liabilities Reflected on
Our Balance Sheet under
GAAP                               $ 0
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
Total                           $12,206.61           $9,620            $2,586.61
--------------------------------------------------------------------------------------------------------------------
</TABLE>

       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


                                       14
<PAGE>

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

ITEM 7.  FINANCIAL STATEMENTS.

                                                                            PAGE

   Report of Independent Certified Public Accountants April 6, 2005           16
   Report of Independent Registered Public Accounting Firm February 20, 2004  17
   Balance Sheet December 31, 2004                                            18
   Statements of Operations for the Years Ended December 31, 2004 and 2003    19
   Statements of Changes in Stockholders' Equity for the Years Ended
            December 31, 2004 and 2003                                        20
   Statements of Cash Flows for the Years Ended December 31, 2004 and 2003    21
   Notes to Financial Statements                                              22



                                       15
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS
SUMMIT ENVIRONMENTAL CORPORATION, INC.
LONGVIEW, TEXAS

We have audited the balance sheet of Summitt Environmental Corporation,  Inc. as
of December 31, 2004, and the related  statements of  operations,  of changes in
stockholders'  equity and of cash flows for the year then ended. These financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  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  audit  provides  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  Summitt   Environmental
Corporation, Inc. as of December 31, 2004, and the results of its operations and
its cash flows for the year then ended, in conformity with accounting principles
generally accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in Note 10 to the
financial statements, the Company has suffered recurring losses from operations.
This raises substantial doubt about the Company's ability to continue as a going
concern.  Management's  plans in regard to these  matters are also  described in
Note 10. The  financial  statements  do not include any  adjustments  that might
result from the outcome of this uncertainty.


                                                   PHILIP VOGEL & CO. PC

                                                   /S/ PHILIP VOGEL & CO. PC

                                                   CERTIFIED PUBLIC ACCOUNTANTS

DALLAS, TEXAS

APRIL 6, 2005


                                       16
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

We have audited the statements of operations,  changes in stockholders'  equity,
and cash  flows of Summit  Environmental  Corporation,  Inc.  for the year ended
December 31, 2003.  These  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  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  audit  provides  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  results  of  operations  and cash flows of Summit
Environment  Corporation,  Inc.  for  the  year  ended  December  31,  2003,  in
conformity with accounting principles generally accepted in the United States of
America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in Note 10 to the
financial statements, the Company has suffered recurring losses from operations.
This raises substantial doubt about the Company's ability to continue as a going
concern.  Management's  plans in regard to these  matters are also  described in
Note 10. The  financial  statements  do not include any  adjustments  that might
result from the outcome of this uncertainty.


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

Dallas, Texas
February 20, 2004



                                       17
<PAGE>

                             SUMMIT ENVIRONMENTAL CORPORATION, INC.
                                         BALANCE SHEET
                                       DECEMBER 31, 2004


<TABLE>
<CAPTION>

                                             ASSETS
<S>                                                                               <C>
CURRENT ASSETS
Cash and Cash Equivalents                                                          $    460,257
Accounts Receivable, less allowance for doubtful
accounts of $172,678                                                                     63,479
Inventory                                                                               352,108
Prepaid Expenses                                                                         86,316
                                                                                   ------------
Total Current Assets                                                                    962,160
                                                                                   ------------
PROPERTY AND EQUIPMENT AT COST
Property and Equipment                                                                   80,636
Leasehold Improvements                                                                   13,877
Accumulated Depreciation and Amortization                                               (54,406)
                                                                                   ------------
Net Property and Equipment                                                               40,107
                                                                                   ------------
OTHER ASSETS
Prepaid Royalties                                                                       561,188
Deposits                                                                                  2,180
Patents and Licenses -net of accumulated
amortization of $1,011,240                                                            1,539,480
                                                                                   ------------
Total Other Assets                                                                    2,102,848
                                                                                   ------------
TOTAL ASSETS                                                                       $  3,105,115
                                                                                   ============

                            LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable                                                                   $    141,130
Accrued Liabilities                                                                      38,045
                                                                                   ------------
Total Current Liabilities                                                               179,175
                                                                                   ------------
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, 23,209,344 shares issued                                              23,220
Additional Paid in Capital                                                           10,144,383
Accumulated Deficit                                                                  (7,216,663)
Treasury Stock - 10,000 shares                                                          (25,000)
                                                                                   ------------
Total Stockholders' Equity                                                            2,925,940
                                                                                   ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                         $  3,105,115
                                                                                   ============
</TABLE>

The accompanying notes are an integral part of this financial statement


                                       18
<PAGE>

<TABLE>
<CAPTION>
                         SUMMIT ENVIRONMENTAL CORPORATION, INC.
                                STATEMENTS OF OPERATIONS
                     FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003


                                                     2004                  2003
                                               -----------------     -----------------
<S>                                            <C>                   <C>
SALES                                                 $ 237,952             $ 180,687

RETURNS AND ALLOWANCES                                  (47,250)                    -
                                               -----------------     -----------------
NET SALES                                               190,702               180,687
                                               -----------------     -----------------
COST OF SALES
     Cost of sales                                      102,190                84,381
     Provision for inventory losses                       8,026               364,485
                                               -----------------     -----------------
            Total cost of sales                         110,216               448,866
                                               -----------------     -----------------

GROSS PROFIT (LOSS)                                      80,486              (268,179)
                                               -----------------     -----------------
OPERATING EXPENSES
Selling, general, and administrative expenses         1,039,310               744,029
Amortization                                            170,013               168,093
Depreciation                                             12,538                 9,866
                                               -----------------     -----------------
Total operating expense                               1,221,861               921,988
                                               -----------------     -----------------
LOSS FROM OPERATIONS                                 (1,141,375)           (1,190,167)
                                               -----------------     -----------------
OTHER INCOME (EXPENSE)
Interest income                                           4,176                 1,333
Interest expense                                         (1,636)                    -
Royalty income                                                -
Miscellaneous                                                 -                 2,842
                                               -----------------     -----------------
Total other income (expense)                              4,592                 4,175
                                               -----------------     -----------------
NET LOSS                                           $ (1,136,783)         $ (1,185,992)
                                               =================     =================
NET LOSS PER SHARE                                      $ (0.05)              $ (0.07)
                                               =================     =================
WEIGHTED AVERAGE SHARES                              20,772,163            16,375,542
                                               =================     =================
</TABLE>


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


                                       19
<PAGE>

<TABLE>
<CAPTION>
                                                 SUMMIT ENVIRONMENTAL CORPORATION, INC.
                                             STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                             FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003


                                            Common Stock          Additional
                                     --------------------------    Paid-In      Subscription  Accumulated    Treasury
                                       Shares        Amount         Capital     to Capital      Deficit       Stock        Total
                                     ------------  ------------  ------------   -----------  ------------  ------------  -----------
<S>                                  <C>           <C>           <C>            <C>          <C>           <C>           <C>
Balances December 31, 2002            15,657,194        15,658     7,997,721        60,000    (4,893,888)      (25,000)   3,154,491

Sale of 530,000 shares ($.25 per share)  530,000           530       131,970       (60,000)            -             -       72,500
Issuance of 92,000 shares upon exercise
  of warrants ($.25 per share)            92,000            92        22,908             -             -             -       23,000
15,000 shares issued for services
  ($.18 per share)                        15,000            15         2,685             -             -             -        2,700
150,000 shares issued for services
  ($.22 per share)                       150,000           150        32,850             -             -             -       33,000
15,000 shares issued for services
  ($.24 per share)                        15,000            15         3,585             -             -             -        3,600
15,000 shares issued for services
  ($.25 per share)                        15,000            15         3,735             -             -             -        3,750
15,000 shares issued for services
  ($.28 per share)                        15,000            15         4,185             -             -             -        4,200
44,000 shares issued for services
  ($.30 per share)                        44,000            44        13,156             -             -             -       13,200
360,000 shares issued for licenses
  ($.32 per share)                       360,000           360       114,840             -             -             -      115,200
6,000 shares issued for services
  ($.33 per share)                         6,000             6         1,974             -             -             -        1,980
Money received for a 2004 stock purchase       -             -             -       300,800             -             -      300,800
Net loss                                       -             -             -             -    (1,185,992)            -   (1,185,992)
                                     ------------  ------------  ------------   -----------  ------------  ------------  -----------
Balances December 31, 2003            16,899,194        16,900     8,329,609       300,800    (6,079,880)      (25,000)   2,542,429

Issuance of 100,000 shares upon exercise
  of options ($.16 per share)            100,000           100        38,125             -             -             -       38,225
12,500 shares issued for services
  ($.16 per share)                        12,500            13         1,987             -             -             -        2,000
12,500 shares issued for services
  ($.17 per share)                        12,500            12         2,113             -             -             -        2,125
Sale of 2,346,250 shares
  ($.20 per share)                     2,346,250         2,346       466,904      (207,000)            -             -      262,250
27,500 shares issued for services
  ($.20 per share)                        27,500            28         5,472             -             -             -        5,500
Issuance of 44,000 shares upon
  exercise of warrants
  ($.20 per share)                        44,000            44         8,756        (8,800)            -             -            -
Issuance of 2,558,000 shares upon
  exercise of warrants
  ($.25 per share)                     2,558,000         2,558       636,942       (85,000)            -             -      554,500
12,500 shares issued for services
  ($.27 per share)                        12,500            13         3,362             -             -             -        3,375
25,000 shares issued for services
  ($.31 per share)                        25,000            25         7,725             -             -             -        7,750
15,000 shares issued for services
  ($.34 per share)                        15,000            15         5,085             -             -             -        5,100
12,500 shares issued for services
  ($.35 per share)                        12,500            12         4,363             -             -             -        4,375
74,400 shares issued for services
  ($.45 per share)                        74,400            74        33,406             -             -             -       33,480
37,500 shares issued for services
  ($.48 per share)                        37,500            38        17,962             -             -             -       18,000
Sale of 1,000,000 shares
  ($.50 per share)                     1,000,000         1,000       499,000             -             -             -      500,000
15,000 shares issued for services
  ($.53 per share)                        15,000            15         7,935             -             -             -        7,950
12,500 shares issued for services
  ($.69 per share)                        12,500            12         8,613             -             -             -        8,625
15,000 shares issued for services
  ($.74 per share)                        15,000            15        11,085             -             -             -       11,100
Exercise of options for 94,292 shares
 of stock ($.20 per share) - shares not
 issued as of December 31, 2004                                       55,939             -             -             -       55,939

Net loss                                       -             -             -             -    (1,136,783)            -   (1,136,783)
                                     ------------  ------------  ------------   -----------  ------------  ------------  -----------
Balances December 31, 2004            23,219,344      $ 23,220   $ 10,144,383          $ -   $ (7,216,663)   $ (25,000)  $ 2,925,940
                                     ============  ============  ============   ===========  ============  ============  ===========
</TABLE>


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

                                       20
<PAGE>

<TABLE>
<CAPTION>
                       SUMMIT ENVIRONMENTAL CORPORATION, INC.
                              STATEMENTS OF CASH FLOWS
                    FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

                                                                  2004                2003
                                                              --------------     ---------------
<S>                                                           <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                       $ (1,136,783)       $ (1,185,992)
Adjustments to reconcile net loss to cash
used in operating activities
Amortization                                                        170,013             168,093
Bad debt expense                                                      6,357              15,248
Provision for inventory losses                                        8,026             364,485
Depreciation                                                         12,538               9,866
Common stock and options issued for services                        168,686              62,430
Change in assets and liabilities
Accounts receivable                                                 (40,392)            (15,579)
Inventory                                                          (150,440)             24,314
Prepaid expenses and deposits                                       (55,729)             23,744
Accounts payable                                                     69,400              17,573
Accrued liabilities                                                   5,457               1,032
                                                              --------------     ---------------
Net cash used in operating activities                              (942,867)           (514,786)
                                                              --------------     ---------------

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment                               (22,518)             (2,722)
Acquisition of licenses/patents                                        (520)                  -
                                                              --------------     ---------------
Net cash used in investing activities                               (23,038)             (2,722)
                                                              --------------     ---------------

CASH FLOWS FROM FINANCING ACTIVITIES
Loan proceeds                                                             -              39,500
Loan principal repayments                                           (39,500)                  -
Proceeds from sale of stock                                       1,351,608             396,300
                                                              --------------     ---------------
Net cash provided by financing activities                         1,312,108             435,800
                                                              --------------     ---------------

NET INCREASE (DECREASE) IN CASH                                     346,203             (81,708)

Cash - Beginning of Period                                          114,054             195,762
                                                              --------------     ---------------
Cash - End of Period                                              $ 460,257           $ 114,054
                                                              ==============     ===============
SUPPLEMENTAL CASH FLOW INFORMATION
Issuance of common stock for licenses                                     -             115,200
Cash paid for interest                                                1,636                   -
</TABLE>

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


                                       21
<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.

       Management has determined  that,  effective  January 1, 2004, the Company
       was  no  longer  in  the  development  stage  as  its  planned  principal
       operations  had  commenced  and  significant  revenues were being derived
       therefrom.  Until December 31, 2003, the Company  reported the results of
       its operations and its cash flows as a Development Stage Company.

       Revenue Recognition

       The Company follows the provisions of SEC Staff Accounting Bulletin (SAB)
       No. 104,  "Revenue  Recognition"  which was issued in December  2003, and
       recognizes revenues when its products are shipped to customers (terms are
       FOB shipping  point),  at which time evidence of a completed  transaction
       and  customer  acceptance  exists,  or  when  title  passes.  Appropriate
       provisions  for estimated  returns of product and other  allowances  have
       been made in the accompanying financial statements. SAB No. 104 codified,
       revised and rescinded certain sections of Staff Accounting Bulletin (SAB)
       No. 101, "Revenue Recognition in Financial Statements",  in order to make
       this  interpretive   guidance   consistent  with  current   authoritative
       accounting guidance and SEC rules and regulations.

       Cash and Cash Equivalents

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

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

       Accounts Receivable

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

       Inventories

       Inventories,  which  consists  of raw  materials  and  products  held for
       resale,  are  recorded  at the lower of cost or  market,  with cost being
       determined by the first-in,  first-out method. At December 31, 2004, fire
       suppression  inventory was $286,612.  Pannache inventory was $23,667, and
       consigned inventory was $41,829.


                                       22
<PAGE>

                     Summit Environmental Corporation, Inc.
                          NOTES TO FINANCIAL STATEMENTS

       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.  The  Company  has  adopted  the  provisions  of  Statement  of
       Financial  Accounting  Standards  (SFAS)  No.  142,  Goodwill  and  Other
       Intangible  Assets,  effective for periods beginning January 1, 2002, and
       thereafter.  SFAS 142 addresses  financial  accounting  and reporting for
       acquired  goodwill and other intangible assets and supersedes APB Opinion
       No. 17,  Intangible  Assets.  Specifically,  the statement  addresses how
       intangible  assets that are acquired should be accounted for in financial
       statements  upon their  acquisition,  as well as how  goodwill  and other
       intangible  assets should be accounted for after they have been initially
       recognized in the financial statements. The statement requires intangible
       assets to be  reviewed  for  impairment  whenever  events or  changes  in
       circumstances indicate that their carrying amounts may not be recoverable
       and  that  a loss  shall  be  recognized  if the  carrying  amount  of an
       intangible  exceeds its fair value.  As of December 31, 2004, the Company
       has tested its  intangible  assets for  impairment  and does not  believe
       these amounts to be impaired.

       Income Taxes

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

       Property and Equipment

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

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

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

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

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

              Description                              Estimated Service Life
              ------------------------------           ----------------------
              Office furniture and equipment                5 - 7 years
              Leasehold improvements                          4 years

       Advertising and Marketing

       Advertising and marketing  costs are expensed as incurred,  which totaled
       $141,701 and $24,883 for 2004 and 2003, respectively.


                                       23
<PAGE>

                     Summit Environmental Corporation, Inc.
                          NOTES TO FINANCIAL STATEMENTS

       Shipping and handling costs

       The Company includes shipping and handling costs in "Selling, general and
       administrative  expenses" for purposes of income statement  presentation.
       Shipping and handling costs were approximately  $42,000 and $19,000,  for
       the years ended December 31, 2004 and 2003, respectively.

       Research and development costs

       The costs associated with research and development activities are expense
       as incurred.  Total  research and  development  costs were  approximately
       $43,000  and  $51,000,  for the years ended  December  31, 2004 and 2003,
       respectively.

       Use of Estimates

       The  preparation of financial  statements in conformity  with  accounting
       principles  generally  accepted in the United States of America  requires
       management to make estimates and assumptions that affect certain reported
       amounts and  disclosures.  Accordingly,  actual results could differ from
       those estimates.

       Per Share Information

       The  Company  has  adopted  the  provisions  of  Statement  of  Financial
       Accounting  Standards (SFAS) No. 128,  "Earnings per Share." SFAS No. 128
       requires the  presentation  of basic earnings  (loss) per share (EPS) and
       diluted  EPS.  Basic EPS is  calculated  by  dividing  net income or loss
       (available  to common  stockholders)  by the weighted  average  number of
       common  shares  outstanding  for the  period.  Diluted EPS  reflects  the
       potential  dilution that could occur if securities or other  contracts to
       issue  common  stock,  such  as  stock  options,  warrants,   convertible
       preferred stock and convertible  debentures,  were exercised or converted
       into common stock.  Potential dilutive securities (stock warrants,  stock
       options) have not been considered  since the Company  reported a net loss
       and, accordingly, their effects would be antidilutive.

       Financial Instruments

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

       Stock Based Compensation

       Accounting  Principles Board ("APB") Opinion No. 25, Accounting for Stock
       Issued  to   Employees,   and  related   interpretations   require   that
       compensation  expense  be  recorded  on the  date of the  grant  of stock
       options and warrants only if the current  market price of the  underlying
       stock exceeded the exercise price. Alternatively,  Statement of Financial
       Accounting   Standards   (SFAS)  No.  123,   Accounting  for  Stock-Based
       Compensation,  permits entities to recognize, as expense over the vesting
       period,  the fair value of all  stock-based  awards on the date of grant.
       SFAS No. 123 allows  entities to continue to apply the  provisions of APB
       Opinion No. 25 and provide proforma net income and proforma  earnings per
       share  disclosures  for  employee  stock  option  grants made in 1996 and
       future years as if the  fair-valued-based  method defined in SFAS No. 123
       had been  applied.  However,  under the  provisions  of SFAS  123,  stock
       options and  warrants  granted to service  providers  are  required to be
       recorded  as  expense  over the  service  period at the fair value of the
       service  received or the fair value of the instrument,  whichever is more
       identifiable.  The  Company has  elected to apply the  provisions  of APB
       Opinion No. 25 and provide the proforma disclosure provisions of SFAS No.
       123 for stock options granted to employees.

       In  addition,  the  Company  has  adopted  the  provisions  of  Financial
       Accounting  Standards  Board  Interpretation  (FIN)  44,  Accounting  for
       Certain Transactions Involving Stock Compensation, which became effective
       July 1, 2000.  FIN 44  clarifies  the  application  of APB 25 for certain
       issues. Among other issues, this interpretation  clarifies the definition
       of an  employee  for  purposes  of  applying  APB 25,  the  criteria  for
       qualification   of  a  plan  as   compensatory,   the   consequences   of
       modifications  to the  terms  of a  plan,  and  the  treatment  of  stock
       compensation  issued to service providers who are not employees.  Certain
       modifications  made to existing grants of options and warrants  require a
       remeasurement of their fair value and potential  expense to be recognized
       by the Company.


                                       24
<PAGE>

                     Summit Environmental Corporation, Inc.
                          NOTES TO FINANCIAL STATEMENTS

       In December 2002, the Financial  Accounting  Standards  Board issued SFAS
       No.  148,  Accounting  for  Stock-Based  Compensation  -  Transition  and
       Disclosure,  which amends SFAS No. 123. SFAS No. 148 provides alternative
       methods of  transition  for a  voluntary  change to the fair value  based
       method of accounting for stock-based compensation.  In addition, SFAS No.
       148 amends the  disclosure  requirements  of SFAS No. 123 to require more
       prominent and more frequent disclosures in financial statements about the
       effects of stock-based  compensation.  The transition guidance and annual
       disclosure  provisions were effective for years ending after December 15,
       2002. The interim disclosure  provisions were effective financial reports
       containing  financial  statements  for interim  periods  beginning  after
       December  15,  2002.  The  transition  rules  of  this  standard  are not
       applicable  since  the  Company  continues  to  account  for  stock-based
       compensation under the guidance of APB Opinion 25. The other requirements
       of this standard  have been adopted by the Company for periods  beginning
       January 1, 2003. Disclosures required by this statement are in Note 7.

       Recent Accounting Pronouncements

       In November 2004, the Financial  Accounting  Standards  Board issued SFAS
       No. 151,  "Inventory Costs - an amendment of ARB No. 43, Chapter 4." This
       Statement  amends  the  guidance  in ARB No. 43,  Chapter  4,  "Inventory
       Pricing," to clarify the accounting for abnormal amounts of idle facility
       expense,   freight,  handling  costs,  and  wasted  material  (spoilage).
       Paragraph 5 of ARB No. 43,  Chapter 4,  previously  stated that "...under
       some  circumstances,  items  such as  idle  facility  expense,  excessive
       spoilage,  double freight,  and rehandling costs may be so abnormal as to
       require treatment as current-period  charges..." This Statement  requires
       that those items be recognized as  current-period  charges  regardless of
       whether  they meet the  criterion  of "so  abnormal."  In  addition,  the
       Statement  requires that allocation of fixed production  overheads to the
       costs of  conversion  be based on the normal  capacity of the  production
       facilities.  This  statement is effective  for inventory  costs  incurred
       during the fiscal years  beginning  after June 15, 2005.  Management does
       not  believe  the  adoption  of this  Statement  will have any  immediate
       material impact on the Company.

       In December 2004, the Financial  Accounting  Standards  Board issued SFAS
       No.  123,  "Share-Based  Payment,"  which is a revision  of SFAS No. 123,
       "Accounting  for  Stock-Based  Compensation,"  and supersedes APB No. 25,
       "Accounting  for Stock Issued to Employees."  This Statement will require
       the  Company to  recognize  compensation  costs  related  to  stock-based
       payment transactions (i.e. granting of stock options and warrants) in the
       financial statements. With limited exceptions, the amount of compensation
       cost will be measured based on the grant-date fair value of the equity or
       liability  instruments  issued.  In  addition,  liability  awards will be
       remeasured each reporting  period.  Compensation  cost will be recognized
       over the period that an employee  provides  services in exchange  for the
       award.  This new standard  will be effective for awards that are granted,
       modified  or  settled in cash in interim  and  annual  financial  periods
       beginning after June 15, 2005. In addition,  this new standard will apply
       to unvested  options  granted prior to the effective  date. This standard
       will be adopted during the third quarter of 2005; however, management has
       not yet determined  what impact this statement will have on the Company's
       financial position or results of operations.

       In December 2004, the Financial  Accounting  Standards  Board issued SFAS
       No. 153,  "Exchanges of Non-monetary  Assets an amendment of APB No. 29."
       This Statement  amends APB Opinion No. 29,  "Accounting for  Non-monetary
       Transactions"  to clarify the  accounting for  non-monetary  exchanges of
       similar  productive  assets and replaces it with a general exception from
       fair value  accounting for exchanges of  non-monetary  assets that do not
       have  commercial  substance.   A  non-monetary  exchange  has  commercial
       substance  if the future cash flows of the Company are expected to change
       significantly as a result of the exchange. This Statement will be applied
       prospectively and is effective for non-monetary asset exchanges occurring
       in fiscal  periods  beginning  after June 15, 2005.  Management  does not
       believe  adoption of this  Statement  will have a material  impact on the
       Company's financial position or results of operations.

1.     INVENTORY

       Inventory is made up of the following as of December 31, 2004:

       Finished goods                                    $  132,344
       Raw materials                                        219,764
                                                         ----------
                                                         $  352,108
                                                         ==========


                                       25
<PAGE>

                     Summit Environmental Corporation, Inc.
                          NOTES TO FINANCIAL STATEMENTS

2. PATENT

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

3. LICENSES

       Licenses for  exclusive  marketing  rights to various  products have been
       acquired for fees totaling $175,720 from related parties.  The Company is
       the manufacturer/supplier of the products.

4. ACCRUED EXPENSES

       Accrued expenses are made up of the following as of December 31, 2004:

       Commissions                                       $   14,664
       Salaries                                              12,756
       Taxes                                                  2,378
       Other                                                  8,247
                                                         ----------
                                                         $   38,045
                                                         ==========

5.     INCOME TAXES

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

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

       The deferred tax assets include the following components:

       Deferred tax assets:
          Current                                        $   58,710
          Noncurrent                                      2,419,880
       Valuation allowance                               (2,471,040)
                                                         ----------
         Deferred tax assets, net                             7,550
                                                         ----------

       Deferred tax liabilities:
          Current                                                 -
          Noncurrent                                          7,550
                                                         ----------
                                                              7,550
                                                         ----------
                                                         $        -
                                                         ==========

       The valuation  allowance was established to reduce the deferred tax asset
       for the  amounts  that more likely  than not will not be  realized.  This
       reduction is primarily  necessary due to the uncertainty of the Company's
       ability to  utilize  all of the net  operating  loss  carryforwards.  The
       valuation  allowance  increased  $397,665  and $402,355 in 2004 and 2003,
       respectively.  The  Company has a net  operating  loss  carryforwards  of
       approximately  $7,110,000  of which  $605,000  expires in 2018,  $882,000
       expires in 2019,  $1,200,000  expires in 2020,  $819,000 expires in 2021,
       $1,240,000 expires in 2022 and $1,190,000 expires in 2023, and $1,174,000
       expires in 2024.


                                       26
<PAGE>

                     Summit Environmental Corporation, Inc.
                          NOTES TO FINANCIAL STATEMENTS

6.     COMMITMENTS AND CONTINGENCIES

       Leases

       The Company is obligated  under various  operating  leases for equipment,
       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, 2004.  Rent
       expense for all operating  leases was  approximately  $47,432 and $67,283
       for 2004 and  2003,  respectively,  which  includes  related  party  rent
       expense of $2,452 and $2,217, respectively.

       At  December  31,  2004,   approximate   rental   commitments  under  all
       noncancellable leases having terms in excess of one year are as follows:

       Year Ending December 31,                            Total
       ------------------------                          ----------
              2005                                       $    9,620
              2006                                            2,585
              2007                                                -
              2008                                                -
                                                         ----------
                  Total minimum lease payments           $   12,205
                                                         ==========

       The Company's  office lease requires the Company to maintain  $250,000 in
       general liability  insurance among other requirements or the landlord has
       the  option to (a)  terminate  the  Company's  right to occupy the leased
       premises by providing  the Company  with at least 3 days written  notice;
       and (b)  accelerate  all rents which are payable  during the remainder of
       this lease or any renewal period without notice or demand. As of December
       31,  2004,  the Company does not maintain  general  liability  insurance.
       Management is in the process of obtaining general liability  insurance to
       satisfy this requirement.  The Company's  landlord has provided a written
       notice  indicating  that they will not terminate  the Company's  right to
       occupy the leased  premises  and will not  accelerate  all rents  payable
       during the remainder of the lease without notice or demand, provided that
       the Company will  provide a copy of the new  insurance  certificate  once
       coverage is obtained.

       Gain Contingency

       In November, 2002, the Company won a default judgment against Proformance
       Marketing,  LLC  (Proformance),  a  related  party,  for  $204,189.  This
       settlement  was a result of the loss of the Company's  inventory that was
       in the  possession of  Proformance  as well as for the  collection of two
       delinquent  receivables from Proformance.  This inventory was expensed by
       the  Company  in  2002  and  the   corresponding   receivables  due  from
       Proformance  have been allowed for as of December 31, 2004 and 2003. This
       default  judgment  balance  due  of  $204,189  is  not  reflected  in the
       Company's  balance  sheet as there is doubt as to the  collectibility  of
       this balance.  As a result,  any funds received from  Proformance will be
       recorded as income, net of collection costs, as received.

       Litigation

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


                                       27
<PAGE>

                     Summit Environmental Corporation, Inc.
                          NOTES TO FINANCIAL STATEMENTS

7.     COMMON STOCK

       Lady Burd(R) stock rescission

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

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

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

       As of December 31, 2004 lawsuits between Lady Burd(R) and the Company and
       between the  Company  and Lady  Burd(R) are in process and the outcome is
       still not determinable.

       Private placement

       During the first  quarter of 2004,  640,000  shares of common  stock were
       sold in a private placement at $.20 per share.  During the second quarter
       of 2004,  681,250 shares of common stock were sold in a private placement
       at $.20 per share, and 1,000,000 shares of common stock were sold at $.50
       per share in a private  placement.  As noted  below,  warrants to acquire
       additional  shares  were issued  along with the shares  under the private
       placements.

       Warrants

       During 2004 and 2003,  the Company issued  warrants to acquire  1,354,000
       and 802,000  shares of common  stock,  respectively,  for $0.25 per share
       through June 11, 2004, in connection  with private  placement  offerings.
       During 2004, the expiration date of these warrants was extended to August
       and October 2004. During 2004, 2,097,000 of these warrants were exercised
       and 1,333,500  were expired.  As of December 31, 2004,  180,000  warrants
       were still outstanding.

       During 2004, the Company issued warrants to acquire  1,321,250  shares of
       common stock for $0.50 per share through  January 31, 2005, in connection
       with private  placement  offerings.  During 2005, the expiration  date of
       these  warrants  was extended to May 27,  2005.  During 2004,  460,000 of
       these warrants were exercised.  As of December 31, 2004, 861,250 warrants
       were still outstanding.

       During 2004, the Company issued warrants to acquire  1,000,000  shares of
       common stock for $1.00 per share through May 7, 2005, in connection  with
       private  placement  offerings.  During March 2005, the expiration date of
       these warrants was extended to May 27, 2005.  During 2004,  none of these
       warrants were  exercised.  As of December 31, 2004, all of these warrants
       were still outstanding.

       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 to 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.


                                       28
<PAGE>

                     Summit Environmental Corporation, Inc.
                          NOTES TO FINANCIAL STATEMENTS

       The following  schedule  summarizes  the changes in the Plan for the five
       years ended December 31, 2004:

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

 Outstanding at December 31, 1999          350,000    $1.00    $ 350,000
 For the year ended December 31, 2000:
     Granted                                    --       --           --
     Exercised                                  --       --           --
     Expired                               (85,000)   (1.00)     (85,000)
                                           -------    -----    ---------
 Outstanding at December 31, 2000          265,000    $1.00    $ 265,000
 (127,500 exercisable)

 For the year ended December 31, 2001:
     Granted                                    --       --           --
     Exercised                                  --       --           --
     Expired                               (66,250)   (1.00)     (66,250)
                                           -------    -----    ---------
 Outstanding at December 31, 2001
 (95,000 exercisable)                      198,750    $1.00    $ 198,750
                                           -------    -----    ---------
 For the year ended December 31, 2002:
     Granted                               280,000     0.30       84,000
     Exercise price reduction                   --    (0.70)    (129,500)
     Exercised                                  --       --           --
     Expired                               (13,750)   (1.00)     (13,750)
                                           -------    -----    ---------
 Outstanding at December 31, 2002
 (465,000 exercisable)                     465,000     0.30      139,500
                                           -------    -----    ---------
For the year ended December 31, 2003:
     Granted                                10,000     0.30        3,000
     Exercised                                  --       --           --
     Expired                               (80,000)   (0.30)     (24,000)
                                           -------    -----    ---------
 Outstanding at December 31, 2003
  (395,000 exercisable)                    395,000    $0.30    $ 118,500
                                           -------    -----    ---------
 For the year ended December 31, 2004:
     Granted                                 5,000     0.16          800
     Exercised                                  --       --           --
     Expired                                (2,500)   (0.16)        (400)
                                           -----      -----    ---------
 Outstanding at December 31, 2004
 (395,000 exercisable)                     397,500    $0.30    $ 118,900
                                           =======    =====    =========

       During 2004,  the board of directors  approved the 2004 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 to 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
       1,000,000.


                                       29
<PAGE>

                     Summit Environmental Corporation, Inc.
                          NOTES TO FINANCIAL STATEMENTS

       The following  schedule  summarizes  the changes in the Plan for the year
       ended December 31, 2004:

              For the year ended December 31, 2004:

                  Granted                  480,000    $0.16    $  76,800
                  Exercised                      -        -            -
                  Expired                        -        -            -
                                           -------    -----    ---------
              Outstanding at
                December 31, 2004          480,000    $0.16    $  76,800
               (480,000 exercisable)       -------    -----    ---------

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

       During  2001,  the Company  issued  options  outside the Plan to purchase
       250,000 shares of common stock at $0.50 to a strategic  alliance partner.
       During 2004, the Company reduced the exercise price to $0.40 and extended
       the  expiration of these options to June 30, 2005.  During  January 2005,
       the  expiration  date of these options was extended to February 12, 2006.
       These stock options are exercisable as of December 31, 2004.

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

       During 2004,  the Company  issued  options to purchase  188,584 shares of
       common stock at $0.16 per share to a consultant  offering  investment and
       marketing advice. As of December 31, 2004,  141,438 of these options were
       exercisable. The remaining 47,146 options will be exercisable as of March
       9, 2005.  These stock options  expire as follows:  47,146  options expire
       June 9, 2009;  47,146  options expire  September 9, 2009;  47,146 options
       expire  December 9, 2009;  47,146  options  expire  March 9, 2010.  As of
       December 31, 2004,  94,294 of these options had been  exercised,  but had
       not been issued as of December 31, 2004.  For the year ended December 31,
       2004,  $30,901 has been recognized in expense in connection with services
       provided under this option contract.

       During 2004,  the Company  issued  options to purchase  100,000 shares of
       common  stock  at $0.16  per  share to a  consultant  offering  marketing
       consulting  services.  As of December 31, 2004,  all of these options had
       been  exercised.  For the year ended December 31, 2004,  $22,225 has been
       recognized in expense in connection  with  services  provided  under this
       option contract.

       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>
                                            2004                                      2003
                            -------------------------------------  ---------------------------------------
                               As Reported          Pro forma           As Reported          Pro forma
                            -------------------------------------  ---------------------------------------
       <S>                 <C>                <C>                   <C>                    <C>
       Net loss             $     (1,136,783)  $      (1,213,754)     $  (1,185,992)        $ (1,188,394)
       Loss per share       $           (.05)  $            (.06)     $        (.07)        $       (.07)
</TABLE>

       The fair  value of all  options  and  warrants  are  estimated  using the
       Black-Scholes  option-pricing  model with the following  weighted-average
       assumptions:  risk free  interest rate of 4.10 - 4.22% for 2004 and 3.92%
       for 2003, expected life of 1 - 10 years;  expected volatility of 208% for
       2004 and 128% for 2003;  dividend  yield of 0%; and an exercise  price of
       $.0.16 for 2004 and an exercise  price of $0.30 for 2003. The fair values
       generated by the Black-Scholes  model may not be indicative of the future
       benefit, if any, which may be received by the holders.

       Common Stock Issued for Services Rendered

       During 2004,  the Company  issued  210,000  shares of stock  ranging from
       $0.16  to $0.74  per  share  to  officers  of the  Company  for  services
       rendered. During 2003, the Company issued 210,000 shares of stock ranging
       from $0.18 to $0.28 per share to officers  of the  Company  for  services
       rendered


                                       30
<PAGE>

                     Summit Environmental Corporation, Inc.
                          NOTES TO FINANCIAL STATEMENTS

       During 2004,  the Company  issued  11,900 and 50,000  shares at $0.45 per
       share  respectively,  for services rendered by outside companies.  During
       2003,  the Company  issued 44,000 and 6,000 shares at $0.30 and $0.33 per
       share respectively, for services rendered by outside companies.

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

8.     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 $851 and $8,823 were made to related  parties in 2004 and
       2003, respectively.

       At December 31, 2004,  accounts  receivables from related parties totaled
       $154,037  all of which was  reserved  for at  December  31,  2004.  Notes
       receivable  from a  related  party  totaled  $20,496,  all of  which  was
       reserved for at December 31, 2004.

       The  Company has a royalty  payable to a related  party with a balance of
       $9,328 as of  December  31,  2004.  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  $565,659  as of December  31,  2004.
       Included in accounts payable is $15,573 due to BioGenesis at December 31,
       2004, for goods received and royalties due.

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

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

9.     CONCENTRATIONS

       Approximately   50%  and  18%  of  sales  were  made  to  two  customers,
       respectively in 2004 and 35% of sales were made to two customers in 2003,
       respectively.  These  customers were  different for each year  presented.
       Accounts  receivable  from the two customers was $16,589 and from the two
       customers $11,366 in 2004 and 2003, respectively.

10.    FINANCIAL RESULTS AND LIQUIDITY

       The  accompanying  financial  statements  have been  prepared  on a going
       concern  basis,  which  contemplates  the  realization  of assets and the
       satisfaction of liabilities in the normal course of business. As shown in
       the  accompanying  financial  statements,  the Company has  incurred  net
       losses of $1,136,783 and $1,185,992 for the years ended December 31, 2004
       and 2003,  respectively,  and has  incurred  losses of  $7,216,663  since
       inception.  The Company also has negative  cash flows from  operations of
       $942,867  and  $514,786  for the years ended  December 31, 2004 and 2003,
       respectively,  and  has  used  cash in  operations  of  $6,208,075  since
       inception.  These  factors,  among others,  may indicate that the Company
       will be unable to continue as a going concern for a reasonable  period of
       time. The financial statements do not include any adjustments relating to
       the  recoverability and classification of recorded assets, or the amounts
       and  classification  of liabilities  that might be necessary in the event
       the Company cannot continue in existence.


                                       31
<PAGE>

                     Summit Environmental Corporation, Inc.
                          NOTES TO FINANCIAL STATEMENTS

       Despite  its  negative  cash flow,  the  Company  has been able to secure
       financing to support its operations to date.  Going  forward,  additional
       cash will be needed to implement  the proposed  business plan and to fund
       losses until the Company becomes profitable.  Where there is no assurance
       that  funding  will be  available  to execute  the plan,  the  Company is
       continuing  to seek  financing to support its  turnaround  efforts and is
       exploring  a  number  of  alternatives  in  this  regard.  Management  is
       exploring  alternatives  that include  seeking  strategic  investors  and
       implementing  cost  reduction  programs.  There can be no assurance  that
       management's  efforts in this  regard  will be  successful.  The  Company
       believes  that the  capital  raised  in  fiscal  2004  and  2005  will be
       sufficient  to  support  the  Company's  liquidity  requirements  through
       December 31, 2005,  depending on operating results.  Management  believes
       that,  despite the  financial  hurdles and  funding  uncertainties  going
       forward,  it has under development,  a business plan that if successfully
       funded  and  executed  as  part  of  the  financial  restructuring,   can
       significantly improve operating results.


                                       32
<PAGE>

ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE.

         On November 22, 2004 Summit Environmental Corporation,  Inc. ("Summit")
received a letter, dated November 18, 2004, from Lane Gorman Trubitt,  L.L.P. of
Dallas,  Texas,  the principal  independent  registered  public  accountants  of
Summit, in which the accountants resigned.  Lane Gorman Trubitt, L.L.P. had been
engaged as Summit's  principal  independent  registered public accountants since
December 17, 1998, when it replaced Hogan & Slovacek of Oklahoma City,  Oklahoma
as Summit's principal  independent  registered public accountants.  See Summit's
Form 8-K filed with the  Commission  on December 18, 1998  (Commission  File No.
333-48659).

         The reports of Lane Gorman Trubitt,  L.L.P. on the financial statements
of Summit for its fiscal  years ended  December  31, 2002 and 2003  contained no
adverse  opinion or disclaimer of opinion,  and, other than raising  substantial
doubt about Summit's  ability to continue as a going concern for the fiscal year
ended  December  31,  2003,  was  not  otherwise  qualified  or  modified  as to
uncertainty,  audit scope,  or  accounting  principles  during the period of its
engagement (December 17, 1998) to November 18, 2004, the date of resignation.

         During  the past two years or interim  periods  prior to  November  18,
2004, there were no disagreements between Summit and Lane Gorman Trubitt, L.L.P.
whether or not resolved,  on any matter of  accounting  principles or practices,
financial  statement  disclosure,  or auditing scope or procedure  which, if not
resolved to the satisfaction of Lane Gorman Trubitt,  L.L.P.,  would have caused
them to make  reference  to the  subject  matter of the  disagreements  in their
reports on the financial statements.

         Summit  provided  Lane  Gorman  Trubitt,  L.L.P.  with  a  copy  of the
disclosures  it makes  in its Form 8-K and  requested  Lane  Gorman  Trubitt  to
furnish a letter addressed to the Commission  stating whether it agreed with the
statements  made therein  and, if not,  stating the respects in which it did not
agree.  Such a letter was filed as Exhibit 16.1 to said Form 8-K on November 24,
2004.

         On December  28, 2004.  the board of directors of Summit  Environmental
Corporation,  Inc. ("Summit") engaged Philip Vogel & Co. PC, of Dallas, Texas as
Summit's  principal  independent  registered  public  accountants  to audit  its
financial  statements.  Summit did not consult the new accountant  regarding the
application  of accounting  principles to a specific  completed or  contemplated
transaction, or the type of audit opinion that might be rendered on the issuer's
financial statements.

ITEM 8A. CONTROLS AND PROCEDURES.

         EVALUATION  OF  DISCLOSURE  CONTROLS  AND  PROCEDURES.   The  Company's
management,  with the participation of the Company's Chief Executive Officer and
Chief  Financial  Officer,  has  evaluated  the  effectiveness  of the Company's
disclosure  controls  and  procedures  as of December  31,  2004.  Based on this
evaluation,  the Company's Chief Executive  Officer and Chief Financial  Officer
concluded that the Company's disclosure controls and procedures are effective.


                                       33
<PAGE>

                                OTHER INFORMATION

         There is no  information  that was required to be disclosed on Form 8-K
during the fourth quarter of 2004 that was not reported.

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

DIRECTORS, OFFICERS AND SIGNIFICANT EMPLOYEES.

         The following table shows information as of March 24, 2005 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>
                                                                                       TERM OF
                                                                    OFFICE HELD        OFFICE
           NAME                          OFFICE                       SINCE            EXPIRES
           ----                          ------                       -----            -------
<S>                                 <C>                              <C>              <C>
B. Keith Parker, 55(1)              Chief Executive Officer and        1998            5-05
                                    Director

Chris Dellinges, 55                 Chief Financial Officer            2002            5-05
                                    Director                           2001            5-05

Paula Parker, 50(1)                 Vice President, Secretary          1998            5-05
                                    And Director

Dean Haws, 34                       Director                           1998            5-05

James J. Roach, 56                  Director                           1998            5-05

Thomas J. Kenan, 73                 Director                           1998            5-05

Mohsen Amiran, 54                   Director                           1999            5-05

Wilton Dennis Stripling, 62         Director                           2000            5-05
</TABLE>


-------------------
(1) Mr. and Mrs. Parker are husband and wife.


                                       34
<PAGE>

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.  which merged with
Summit  Environmental  in 1998.  Mr. Parker has been the full-time CEO of Summit
Technologies and, then, Summit Environmental, since 1997.

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. He has been self-employed as a CPA in Dallas, Texas for the
last five years and the CFO of Summit Environmental since 2002.

PAULA B. PARKER, VICE PRESIDENT SHAREHOLDER AND PUBLIC RELATIONS

         Ms. Parker is a former runway model, an accomplished businesswoman, and
a strong  competitor.  She was responsible for developing the first freestanding
ATM program in conjunction with the American Bankers Association in the state of
Texas.  She also  developed a successful  franchise  program for Great  American
Foods and facilitated its growth from three units to nearly 50 in five states in
24 months.  During this time, Ms. Parker worked with then Arkansas  Secretary of
State Bill McQuen and Governor Bill Clinton as the liaison  between the governor
and the restaurant  industry.  In late 1995, Ms. Parker put her marketing skills
to the  test by  combining  efforts  with  her  spouse,  Keith  Parker,  to form
Moonlighting  Distribution  Corporation  and  then,  in  1997,  to  form  Summit
Environmental  Corporation.   She  has  been  a  full-time  employee  of  Summit
Technologies and, then, Summit Environmental since 1997.

         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 was the owner and  operator  of a  satellite  dish  sales and
installation company,  Gilmer Satellites of Gilmer, Texas, from 1988 to 2001. He
has also been active in the oil field service business and the ostrich business.
In 2001 he was employed for three months as an  administrative  staff member for
Summit Environmental.  During 2002 he was employed by Mike Craig Ford Mercury in
Gilmer, Texas, as a car salesman. In 2003 he became the manager of car sales for
that  company  and still is so  employed.  He has been a director of our company
since 1998.


                                       35
<PAGE>

JAMES J. ROACH, DIRECTOR

         Mr. Roach was 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. He has been a director of our company since 1998.

THOMAS J. KENAN, DIRECTOR

         Mr. Kenan has  practiced  securities  and  corporation  law in Oklahoma
City, Oklahoma for the last 38 years. He has been affiliated with Fuller,  Tubb,
Pomeroy & Stokes in an "of counsel"  capacity  since May 1, 1993.  He has been a
director and outside corporate counsel of Summit Environmental since 1998.

DR. MOHSEN AMIRAN, DIRECTOR

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

         Soon after, the Islamic revolution took place and a new government took
over. For a two-month period,  Dr. Amiran lived a life of torment and feared for
his life.  The new regime  destroyed  the  laboratory,  burned his equipment and
destroyed  all his  research.  Eventually,  Ayatollah  Khameni,  the new leader,
stepped in and asked Dr.  Amiran to become an advisor and help  industry and the
military to get back on their feet.  After a short time,  Dr. Amiran  managed to
escape  with his wife and son to  London.  The news that one of  Iran's  leading
minds had  defected  caused much turmoil in Iran.  Fearing  that Dr.  Amiran was
working with the CIA, his possessions were seized and family members  tormented,
tortured  or killed.  He came to the United  States  and became a  professor  at
Northwestern  University.  He later  founded  BioGenesis,  where he again  began
working on his environment-saving fire suppressants and cleaning agents.

         Dr. Amiran received his undergraduate  degree in Organic Chemistry from
Areya Mehr University in Tehran, Iran and his Ph.D. from the University of Essex
in England.  He has been  employed the last five years as the CEO of  BioGenesis
and a director of our company since 1999.


                                       36
<PAGE>

DR. WILTON DENNIS STRIPLING, DIRECTOR

         Dr. Stripling is an orthopaedic surgeon specializing in hand, wrist and
forearm surgery in the Dallas area and has been practicing  medicine there since
1968. He is board certified in Orthopaedic Surgery. 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 has a certificate in
finance  from  the Cox  Business  School  at SMU and a  certificate  in  Medical
Management  from  Carnegie  Mellon  University.  He has been a  director  of our
company since 2000.

         No executive officer,  director, person nominated to become a director,
promoter or control person of our company has been involved in legal proceedings
during the last five years such as

         o  bankruptcy,

         o  criminal  proceedings  (excluding traffic violations and other minor
            offenses), or

         o  proceedings   permanently   or   temporarily   enjoining,   barring,
            suspending  or  otherwise  limiting his  involvement  in any type of
            business, securities or banking activities.

         o  Nor  has  any  such  person  been  found  by a  court  of  competent
            jurisdiction  in a civil  action,  or the  Securities  and  Exchange
            Commission  or the  Commodity  Futures  Trading  Commission  to have
            violated a federal or state securities or commodities law.

AUDIT COMMITTEE AND AUDIT COMMITTEE FINANCIAL EXPERT

         We have an  audit  committee.  There is no  audit  committee  financial
expert  serving on the audit  committee.  However,  the audit  committee has the
authority  to hire a  financial  expert  any  time it has the  need  for  expert
financial advice.

CODE OF ETHICS

         We have  adopted a Code of Ethics that  applies to our chief  executive
officer,  chief  financial  officer,  and - should we acquire  such -  principal
accounting officer or controller or persons performing similar functions. A copy
of the Code of Ethics is filed as an exhibit to this Form 10-KSB annual report.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

         Our  securities  are not  registered  with the  Securities and Exchange
Commission  under Section 12(b) or 12(g) of the Exchange Act.  Accordingly,  our
officers,  directors and beneficial owners of 10 percent or more of any class of
stock are not subject to Section 16(a) of the Exchange Act.


                                       37
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION.

         The following  sets forth the  remuneration  received in the last three
fiscal years by Keith Parker (CEO), the president of Summit,  in all capacities.
No other officer or employee has received total remuneration of $100,000 or more
in any of such years.

<TABLE>
<CAPTION>
                                            -------------------------------------------------
                                                          Long Term Compensation
                                            -------------------------------------------------
                                                                  Awards                                    Payouts
                                            --------------------------------------------------     --------------------------
                                                                                  Securities
                                            Other Annual      Restricted          Underlying         LTIP        All Other
   Year          Salary         Bonus       Compensation      Stock Award      Options/SARS(#)      Payouts     Compensation
------------   ----------    ----------     -------------   --------------   ------------------    --------------------------
<S>             <C>             <C>          <C>             <C>              <C>                 <C>         <C>
2004:
     CEO        $90,000            0                            32,625                /                0      $11,932

2003:
     CEO        $90,000            0                            13,230                /                0      $12,006

2002:
     CEO        $67,500            0                            24,215                /                0      $12,098
</TABLE>

         EMPLOYMENT CONTRACTS.

         We have no employment agreements.

         STOCK OPTIONS.

         We have two stock option plans.  The major  provisions of the 1998 Plan
are as follows:

         Options  granted under the 1998 Plan may be "employee  incentive  stock
options"  as  defined  under  Section  422  of  the  Internal  Revenue  Code  or
non-qualified  stock options, as determined by the option committee of the board
of  directors  at the time of grant of an option.  The plan  enables  the option
committee of the board of directors to grant up to five hundred  thousand  stock
options to employees and  consultants  from time to time.  The following  tables
disclose the stock  options that were granted to our executive  officers  during
the last fiscal year,  the number of options that were exercised the last fiscal
year and the value of unexercised options retained by such executive officers at
year end 2004.


                                       38
<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
                                   Option/SAR Grants in Last Fiscal Year
-------------------------------------------------------------------------------------------------------------
                                             Individual Grants
-------------------------------------------------------------------------------------------------------------
                                                         % of Total
                                                        Options/SARs
                             Number of Securities        Granted to
Name of Executive Officer  Underlying Options/SARs      Employees in                        Expiration Date
                                   Granted               Fiscal Year       Exercise Price
-------------------------- ------------------------- -------------------- ----------------- -----------------
<S>                        <C>                       <C>                  <C>               <C>
Keith Parker, CEO                     0                       0
-------------------------- ------------------------- -------------------- ----------------- -----------------
Paula Parker, VP                      0                       0
-------------------------- ------------------------- -------------------- ----------------- -----------------
Chris Dellinges, CFO                  0                       0
-------------------------- ------------------------- -------------------- ----------------- -----------------
</TABLE>

<TABLE>
<CAPTION>
                  Aggregate Option/SAR Exercisable in Last Fiscal Year and FY-End Option/SAR Values
----------------------------------------------------------------------------------------------------------------------
                             Shares                 Number of Securities Underlying     Value of Unexercised In-the-
                            Acquired                  Unexercised Options/SARs at        Money Options/SARs at FY-
                               On        Value                 FY-End (#)                         End ($)
         Name of            Exercise    Realized
    Executive Officer         (#)         ($)          Exercisable/Unexercisable         Exercisable/Unexercisable
-------------------------- ----------- ----------- ----------------------------------- -------------------------------
<S>                        <C>         <C>         <C>                                 <C>
Keith Parker, CEO              0           $0                     0/0                                0
-------------------------- ----------- ----------- ----------------------------------- -------------------------------
Paula Parker, VP               0           $0                     0/0                                0
-------------------------- ----------- ----------- ----------------------------------- -------------------------------
Chris Dellinges, CFO           0           $0                   40,000/0                         $12,000/0
-------------------------- ----------- ----------- ----------------------------------- -------------------------------
</TABLE>


         Options  granted under the 2004 Plan may be "employee  incentive  stock
options"  as  defined  under  Section  422  of  the  Internal  Revenue  Code  or
non-qualified  stock options, as determined by the option committee of the board
of  directors  at the time of grant of an option.  The plan  enables  the option
committee of the board of directors to grant up to one million  stock options to
employees and consultants  from time to time. The following  tables disclose the
stock options that were granted to our executive officers during the last fiscal
year,  the number of options  that were  exercised  the last fiscal year and the
value of unexercised  options  retained by such  executive  officers at year end
2004.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
                                   Option/SAR Grants in Last Fiscal Year
-------------------------------------------------------------------------------------------------------------
                                             Individual Grants
-------------------------------------------------------------------------------------------------------------
                                                         % of Total
                                                        Options/SARs
                             Number of Securities        Granted to
Name of Executive Officer  Underlying Options/SARs      Employees in                        Expiration Date
                                   Granted               Fiscal Year       Exercise Price
-------------------------- ------------------------- -------------------- ----------------- -----------------
<S>                         <C>                      <C>                   <C>              <C>
Keith Parker, CEO                     0                       0
-------------------------- ------------------------- -------------------- ----------------- -----------------
Paula Parker, VP                      0                       0
-------------------------- ------------------------- -------------------- ----------------- -----------------
Chris Dellinges, CFO                80,000                   16%               $0.16             2/2014
-------------------------- ------------------------- -------------------- ----------------- -----------------
</TABLE>


                                       39
<PAGE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                  Aggregate Option/SAR Exercisable in Last Fiscal Year and FY-End Option/SAR Values
----------------------------------------------------------------------------------------------------------------------

                             Shares                 Number of Securities Underlying     Value of Unexercised In-the-
                            Acquired                  Unexercised Options/SARs at        Money Options/SARs at FY-
                           On            Value                 FY-End (#)                         End ($)
         Name of            Exercise    Realized
    Executive Officer         (#)         ($)          Exercisable/Unexercisable         Exercisable/Unexercisable
-------------------------- ----------- ----------- ----------------------------------- -------------------------------
<S>                        <C>         <C>          <C>                                <C>

Keith Parker, CEO              0           $0                     0/0                                0
-------------------------- ----------- ----------- ----------------------------------- -------------------------------
Paula Parker, VP               0           $0                     0/0                                0
-------------------------- ----------- ----------- ----------------------------------- -------------------------------
Chris Dellinges, CFO           0           $0                   80,000/0                         $12,800/0
-------------------------- ----------- ----------- ----------------------------------- -------------------------------
</TABLE>

         COMPENSATION OF DIRECTORS.

         We have no  standard  arrangements  pursuant  to  which  directors  are
compensated for any services as directors,  including compensation for committee
participation or special assignments.  However,  during the last fiscal year the
following directors were each granted stock options to purchase 80,000 shares of
common stock at an exercise price of $0.16 and expiring in February  2014:  Dean
Haws,  Jim Roach,  Thomas  Kenan,  Mohsen  Amiran,  Dennis  Stripling  and Chris
Dellinges.  The options granted to Mr.  Dellinges are the same options  reported
above under "Option/SAR Grants in Last Fiscal Year."

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         The following table shows information as of March 24, 2005 with respect
to each beneficial owner of more than 5 percent of each class of voting stock of
the  company  and  to  each  of  the  officers  and  directors  of  the  company
individually and as a group:

                                                   NO. OF             % OF
         SUMMIT ENVIRONMENTAL CORP.                SHARES            CLASS
         --------------------------                ------            -----

         B. Keith Parker                        2,458,805(1)(4)       10.4
         133 East Tyler Street
         Longview, TX 75601

         Paula Parker                             580,000(2)           2.4
         133 East Tyler Street
         Longview, TX 75601

         Dean Haws                                410,000(4)           1.7
         P. O. Box 1071
         Gilmer, TX 75644


                                       40
<PAGE>

         James J. Roach                           175,000(4)           0.7
         182 Curtis Road
         Middlebury, CT  06762

         Thomas J. Kenan                          238,253(4)           1.0
         212 NW 18th Street
         Oklahoma City, OK  73103

         Mohsen Amiran                            472,500(4)           2.0
         7420 Alban Station, Ste. B-208
         Springfield, VA  22150

         Wilton Dennis Stripling                1,837,100(4)           7.8
         5230 Walnut Hill Lane, Ste. 306
         Dallas, TX  75231

         Chris Dellinges                          320,000(4)           1.4
         5949 Sherry Lane, Suite 650
         Dallas, TX   75225

         Officers and Directors                 6,491,658             27.4
         as a group (8 persons)

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

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

(4)   These shares include the shares subject to stock options reported for this
      person under "Stock Options" on page 39.


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   pays  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,


                                       41
<PAGE>

and initially  paid to  Moonlighting a royalty of $0.50 for each 16-ounce can of
FIREPOWER  911(TM),  $0.35 for each 1-liter can Of FirePower(TM),  and $0.50 for
each gallon of FLAMEOUT(R).  As of January 2005, the royalties for FIREPOWER(TM)
and FLAMEOUT(R) in aerosol form are now reduced to $0.25 a can.

         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.

         Royalties that have been paid to Moonlighting are as follows:

                        DATE            AMOUNT            BALANCE PAID

                        03-31-99        $  5,780.00       $  5,780.00
                        05-05-99        $ 39,685.80       $ 45,465.80
                        08-28-01        $ 10,322.62       $ 55,788.42
                        11-05-03        $  5,391.78       $ 61,180.20
                        06-11-04        $  4,966.81       $ 66,147.01

         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.

         The following  exhibits are filed, by  incorporation  by reference,  as
part of this Form SB-2 Registration Statement:

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


                                       42
<PAGE>

3.2         -           Bylaws of Summit Environmental Corporation, Inc.*

5           -           Opinion of Thomas J. Kenan,  Esquire, on the legality of
                        the securities being registered.+++

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

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

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

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

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

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

14          -           Code of  Ethics  for the  Chief  Executive  officer  and
                        Senior Financial Officers.

16.1        -           Letter of  November  24,  2004 of Lane  Gorman  Trubitt,
                        L.L.P.  agreeing with the statements made in Form 8-K by
                        Summit  Environmental   Corporation,   Inc.,  concerning
                        Summit's change of principal independent accountants.++

23          -           Consent of Lane Gorman Trubitt, L.L.P. to be named as an
                        expert in the  Registrant's  Form  10-KSB for the fiscal
                        year ended  December  31,  2003,  which is  incorporated
                        herein.

23.1        -           Consent of Thomas J. Kenan, Esquire, to the reference to
                        him  as  an  attorney   who  has  passed  upon   certain
                        information contained in the Registration Statement.

            ----------
            *     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.

            +     Previously  filed with Form 10-KSB Annual Report FYE 12-31-03,
                  Commission File No. 333-48675 incorporated herein.

            ++    Previously  filed with Form 8-K November 22, 2004;  Commission
                  File No. 333-48659 incorporated herein.

            +++   Being  filed  with  Form  SB-2  Am  1;   Commission  File  No.
                  333-122402 incorporated herein.


                                       43
<PAGE>

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

         AUDIT FEES. Our principal independent accountant billed us, for each of
the last two fiscal years,  the following  aggregate  fees for its  professional
services rendered for the audit of our annual financial statements and review of
financial  statements  included  in our Form  10-QSB  reports or other  services
normally  provided  in  connection  with  statutory  and  regulatory  filings or
engagements for those two fiscal years:

                  Fiscal Year ended December 31, 2004         $39,005.50
                  Fiscal Year ended December 31, 2003         $34,662.71

         AUDIT-RELATED FEES. Our principal independent accountant billed us, for
each of the last two fiscal years,  the following  aggregate  fees for assurance
and  related  services  reasonably  related to the  performance  of the audit or
review of our financial statements and not reported above under "Audit Fees":

                  Fiscal Year ended December 31, 2004         $0
                  Fiscal Year ended December 31, 2003         $0

         TAX FEES. Our principal  independent  accountant billed us, for each of
the last  two  fiscal  years,  the  following  aggregate  fees for  professional
services rendered for tax compliance, tax advice and tax planning:

                  Fiscal Year ended December 31, 2004         $0
                  Fiscal Year ended December 31, 2003         $0

         ALL OTHER FEES.  Our principal  independent  accountant  billed us, for
each of the last two fiscal years, the following aggregate fees for products and
services  provided by it,  other than the  services  reported in the above three
categories:

                  Fiscal Year ended December 31, 2004         $0
                  Fiscal Year ended December 31, 2003         $0

         PRE-APPROVAL  OF AUDIT AND  NON-AUDIT  SERVICES.  The  Audit  Committee
charter  requires that the committee  pre-approve  all audit,  review and attest
services and non-audit services before such services are engaged.


                                       44
<PAGE>

                                   SIGNATURES

In  accordance  with  Section 13 or 15(d) of the Exchange  Act,  the  Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

Date:  April 20, 2005               SUMMIT ENVIRONMENTAL CORPORATION, INC.

                                    By /s/ B. Keith Parker
                                    -----------------------------------------
                                    B. Keith Parker, Chief Executive Officer,
                                    and individually as a Director

In  accordance  with  the  requirements  of the  Securities  Act of  1933,  this
registration statement was signed by the following persons in the capacities and
on the dates stated:


Date:  April 20, 2005               /s/ Chris Dellinges
                                    --------------------------------------------
                                    Chris Dellinges, Chief Financial Officer
                                    and Principal Accounting Officer


Date:  April 20, 2005               /s/ Paula Parker
                                    --------------------------------------------
                                    Paula Parker, Vice President, Secretary, and
                                    Director


Date:  April 20, 2005               /s/ Dean Haws
                                    --------------------------------------------
                                    Dean Haws, Director


Date:  April 20, 2005               /s/ James J. Roach
                                    --------------------------------------------
                                    James J. Roach, Director


Date:  April 20, 2005               /s/ Mohsen Amiran
                                    --------------------------------------------
                                    Mohsen Amiran, Director


Date:  April 20, 2005               /s/ Thomas J. Kenan
                                    --------------------------------------------
                                    Thomas J. Kenan, Director


Date:  April 20, 2005               /s/ Wilton Dennis Stripling
                                    --------------------------------------------
                                    Wilton Dennis Stripling, Director


                                       45
<PAGE>

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

                                  EXHIBIT INDEX

                                   FORM 10-KSB
                      FOR THE YEAR ENDED DECEMBER 31, 2004

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

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

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.*

5           -           Opinion of Thomas J. Kenan,  Esquire, on the legality of
                        the securities being registered.+++

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)**


                                       46
<PAGE>

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

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

14          -           Code of  Ethics  for the  Chief  Executive  officer  and
                        Senior Financial Officers.

16.1        -           Letter of  November  24,  2004 of Lane  Gorman  Trubitt,
                        L.L.P.  agreeing with the statements made in Form 8-K by
                        Summit  Environmental   Corporation,   Inc.,  concerning
                        Summit's change of principal independent accountants.++

23          -           Consent of Lane Gorman Trubitt, L.L.P. to be named as an
                        expert in the  Registrant's  Form  10-KSB for the fiscal
                        year ended  December  31,  2003,  which is  incorporated
                        herein.

23.1        -           Consent of Thomas J. Kenan, Esquire, to the reference to
                        him  as  an  attorney   who  has  passed  upon   certain
                        information contained in the Registration Statement.

            ----------
            *     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.

            +     Previously  filed with Form 10-KSB Annual Report FYE 12-31-03,
                  Commission File No. 333-48675 incorporated herein.

            ++    Previously  filed with Form 8-K November 22, 2004;  Commission
                  File No. 333-48659 incorporated herein.

            +++   Being  filed  with  Form  SB-2  Am  1;   Commission  File  No.
                  333-122402 incorporated herein.



                                       47