SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB


[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

    For the quarterly period ended March 31, 2006

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

                        Commission File Number: 000-22855


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


          Nevada                                                95-4780218
(State or other jurisdiction of                                (IRS Employer
incorporation or organization)                               Identification No.)

                12224 Montague Street, Pacoima, California 91331
                    (Address of principal executive offices)

                                 (818) 899 4686
                           (Issuer's telephone number)

                                       N/A
              (Former name, former address and former fiscal year,
                         if changed since last report)

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

As of May 12, 2006 the number of shares of Common Stock issued and outstanding
was 27,040,174

Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
<PAGE>
                                      INDEX

                                                                           Page
                                                                          Number
                                                                          ------

PART I - FINANCIAL INFORMATION

     Item 1. Financial Statements (Unaudited)                                2

          Balance Sheet -March 31, 2006                                      2

          Statements of Operations -
          For the three months ended March 31, 2006 and 2005                 3

          Statements of Cash Flow -
          For the three months ended March 31, 2006 and 2005                 4

          Notes to Financial Statements                                      6

     Item 2. Management's Discussion and Analysis of Financial Conditions
             and Results of Operations                                      18

     Item 3. Internal Controls                                              21

PART II - OTHER INFORMATION

     Item 1. Legal Proceedings                                              22

     Item 2. Changes in Securities                                          22

     Item 3. Defaults Upon Senior Securities                                22

     Item 4. Submission of Matters to a Vote of Security Holders            22

     Item 5. Other Information                                              22

     Item 6. Exhibits and Reports on Form 8-K                               23

SIGNATURES                                                                  24

                                       1
<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AMERICAN SOIL TECHNOLOGIES, INC.

CONSOLIDATED BALANCE SHEET
MARCH 31, 2006 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S>                                                                               <C>
ASSETS:

CURRENT ASSETS
   Cash and cash equivalents                                                      $    260,035
   Accounts receivable, net of allowance of doubtful accounts of $32,356               129,164
   Employee advances                                                                       660
   Inventory                                                                           325,602
   Prepaid expenses and other current assets                                            57,469
                                                                                  ------------
      Total current assets                                                             772,930

PROPERTY AND EQUIPMENT, net of accumulated depreciation of $238,486                    350,913
INTELLECTUAL PROPERTY, net of accumulated amortization of $292,771                   2,374,396
RELATED PARTY NOTES RECEIVABLE                                                          62,866
                                                                                  ------------
    TOTAL ASSETS                                                                  $  3,561,105
                                                                                  ============

LIABILITIES AND STOCKHOLDERS' DEFICIT:

CURRENT LIABILITIES:
   Accounts payable                                                               $    438,112
   Accrued liabilities                                                                  11,674
   Notes payable - current portion                                                      21,345
   Capital lease obligation - current portion                                           17,754
   Debentures payable to related parties - current portion                              66,366
                                                                                  ------------
      Total current liabilities                                                        555,251

NOTES PAYABLE - long-term portion                                                       67,030
CAPITAL LEASE OBLIGATION - long-term portion                                            71,542
NOTES PAYABLE TO RELATED PARTIES                                                       627,500
DEBENTURES PAYABLE TO RELATED PARTIES - long term portion                              907,300
                                                                                  ------------
      Total liabilities                                                              2,228,623
                                                                                  ------------
STOCKHOLDERS' DEFICIT:
   Series A preferred stock, $0.50 stated value, 10,000,000 shares
    authorized, 2,763,699 shares issued and outstanding                              1,381,849
   Series B preferred stock, 4,500,000 shares authorized, issued
    and outstanding                                                                  2,250,000
   Common stock, $0.001 par value, 100,000,000 shares authorized,
     26,790,174 shares issued and outstanding                                           26,790
   Paid in capital                                                                  12,337,520
   Accumulated deficit                                                             (14,663,677)
                                                                                  ------------
      Total stockholders' deficit                                                    1,332,482
                                                                                  ------------

      TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                 $  3,561,105
                                                                                  ============
</TABLE>
                 The accompanying notes are an integral part of
                      these unaudited financial statements.

                                       2
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
THREE MONTHS ENDED MARCH 31, 2006 AND MARCH 31, 2005 (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                     Three Months           Three Months
                                                        Ended                  Ended
                                                       March 31,              March 31,
                                                         2006                   2005
                                                     ------------           ------------
<S>                                                  <C>                    <C>
NET REVENUES                                         $    124,426           $    252,297
                                                     ------------           ------------

COST OF GOODS SOLD                                         82,817                154,573
                                                     ------------           ------------
GROSS INCOME                                               41,609                 97,724
                                                     ------------           ------------
OPERATING EXPENSES
  General and administrative                              370,333                601,882
  Sales and marketing                                     186,791                140,113
  Research and development                                 11,297                  1,596
  Depreciation                                             29,631                 25,881
  Amortization                                             11,711                 11,756
                                                     ------------           ------------
      Total operating expenses                            609,763                781,228
                                                     ------------           ------------

OPERATING LOSS                                           (568,154)              (683,504)
                                                     ------------           ------------
OTHER (INCOME)/EXPENSE
  Interest expense and related costs                       93,821                 62,330
  Other expense                                            11,968                     --
  Interest income                                            (675)                  (640)
                                                     ------------           ------------
      Total other (income)/expense                        105,114                 61,690
                                                     ------------           ------------

LOSS BEFORE INCOME TAXES                                 (673,268)              (745,194)
                                                     ------------           ------------

INCOME TAX  PROVISION                                          --                     --
                                                     ------------           ------------

NET LOSS                                             $   (673,268)          $   (745,194)
                                                     ============           ============
NET LOSS PER SHARE:
  Basic:                                             $      (0.03)          $      (0.05)
                                                     ============           ============
  Diluted:                                           $      (0.03)          $      (0.05)
                                                     ============           ============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
  Basic                                                26,506,805             14,774,251
                                                     ============           ============
  Diluted                                              26,506,805             14,774,251
                                                     ============           ============
</TABLE>

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

                                       3
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE  MONTHS
ENDED MARCH  31, 2006 AND MARCH  31, 2005  (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                            Three Months        Three Months
                                                               Ended               Ended
                                                           March 31, 2006      March 31, 2005
                                                           --------------      --------------
<S>                                                          <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                   $(673,268)          $(745,194)
  Adjustments to reconcile net loss to net cash
   used by operating activities:
    Depreciation and amortization                               41,342              37,591
    Provision for bad debt                                          --              20,694
    Loss on disposal of fixed assets                            11,968
    Amortization of debt discount                               55,000
    Stock issued for services                                    3,713              67,500
  Changes in assets and liabilities:
    Accounts receivable                                          3,989            (127,155)
    Receivables from officers and employees                        104                 553
    Prepaid and other current assets                            36,232              25,851
    Inventory                                                 (112,642)            (38,352)
    Accounts payable                                           153,315              66,138
    Accrued liabilities                                        (30,726)            230,457
                                                             ---------           ---------
          Net cash used by operating activities               (510,973)           (461,917)
                                                             ---------           ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of intellectual property                           (4,200)
   Purchases of property and equipment                          (6,858)                 --
                                                             ---------           ---------
          Net cash used for investing activities               (11,058)                 --
                                                             ---------           ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from related party notes payable                    450,000              35,000
  Proceeds from convertible debentures                              --             200,000
  Proceeds from sales/leaseback transaction                     75,000                  --
  Principal repayments on convertible debentures                (3,913)             (3,554)
  Principal repayments on capital lease obligation              (6,843)             (4,054)
  Repayments on notes payable                                 (304,826)             (4,309)
  Proceeds from sale of preferred stock                        300,000                  --
  Proceeds from stock issuances                                     --             215,067
                                                             ---------           ---------
          Net cash provided by financing activities            509,418             438,150
                                                             ---------           ---------

DECREASE IN CASH AND CASH EQUIVALENTS                          (12,613)            (23,767)

CASH AND CASH EQUIVALENTS, beginning of period                 272,648              52,467
                                                             ---------           ---------

CASH AND CASH EQUIVALENTS, end of period                     $ 260,035           $  28,700
                                                             =========           =========
</TABLE>

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

                                       4
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS  (CONTINUED)
FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND MARCH 31, 2005 (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                   Three Months Ended      Three Months Ended
                                                     March 31, 2006          March 31, 2005
                                                     --------------          --------------
<S>                                                    <C>                     <C>
SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest Paid                                        $   27,526              $   33,267
                                                       ==========              ==========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
  Common stock issued in exchange for
   intellectual property                               $   33,750              $        0
                                                       ==========              ==========
  Series B preferred stock issued in exchange
   for patent                                          $1,950,000              $        0
                                                       ==========              ==========
  Conversion of debt and accrued interest to
   common stock                                        $  301,000              $        0
                                                       ==========              ==========
</TABLE>

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

                                       5
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS FOR THE
THREE MONTHS ENDED MARCH 31, 2006 AND MARCH  31, 2005 (UNAUDITED)
--------------------------------------------------------------------------------

1. ORGANIZATION AND BASIS OF PRESENTATION

    The accompanying unaudited financial statements have been prepared in
    accordance with accounting principles generally accepted in the United
    States for interim financial information and the instructions for Form
    10-QSB and Regulation S-B. Accordingly, they do not include all of the
    information and footnotes required by accounting principles generally
    accepted in the United States for complete financial statements. All
    adjustments that, in the opinion of management are necessary for a fair
    presentation of the results of operations for the interim periods have been
    made and are of a recurring nature unless otherwise disclosed herein. The
    results of operations for the three and nine months ended September 30, 2005
    are not necessarily indicative of the results that will be realized for the
    entire fiscal year. These financial statements should be read in conjunction
    with the Company's Annual Report on Form 10-KSB for the period ended
    December 31, 2005

    American Soil Technologies, Inc. (the "Company"), formally Soil Wash
    Technologies, Inc., was incorporated in California on September 22, 1993. On
    November 24, 1999, the Company entered into an exchange agreement for the
    reverse acquisition of New Directions Manufacturing, Inc., a publicly traded
    Nevada corporation incorporated on January 9, 1997 ("New Directions"),
    wherein New Directions would acquire the assets of the Company and change
    its name to American Soil Technologies, Inc. This exchange agreement was
    effective as of the close of business on December 31, 1999.

    The Company is primarily engaged in the marketing of polymer and other soil
    amendments to the agricultural turf and horticulture industries. The
    Company's products are used to decrease water usage, increase nutrient
    retention in soil, enhance seed germination and sprout emergence, clarify
    ponds and increase the effectiveness of chemical fertilizers and biological
    additives. The Company recently acquired the patent to a slow release
    fertilizer to be used primarily in the turf segment of its business The
    Company also has exclusive license rights to the use of patented polymer
    application techniques as well as numerous patents on a unique machine
    designed to inject polymer and other liquid products into existing turf and
    some crops.

    GOING CONCERN AND MANAGEMENT'S PLANS

    The Company has sustained significant losses and has an accumulated deficit
    of $14,663,677. The ability of the Company to continue as a going concern is
    dependent upon obtaining additional capital and financing, and generating
    positive cash flow from operations. The Company intends to seek additional
    capital either through debt or equity offerings and is attempting to
    increase sales volume and operating margins to achieve profitability.

    The financial statements do not include any adjustments relating to the
    recoverability and classification of asset carrying amounts or the amount
    and classification of liabilities that might result should the Company be
    unable to continue as a going concern.

                                       6
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    CASH AND CASH EQUIVALENTS: This includes all short-term highly liquid
    investments that are readily convertible to known amounts of cash and have
    original maturities of three months or less. At times cash deposits may
    exceed government insured limits.

    ACCOUNTS AND NOTES RECEIVABLE: The Company utilizes the allowance method to
    provide a reserve for uncollectible accounts. The Company determines any
    required allowance by considering a number of factors including length of
    time trade accounts receivable are past due and the Company's previous loss
    history. The Company records a reserve account for accounts receivable when
    they become uncollectible, and payments subsequently received on such
    receivables are credited to the allowance for doubtful accounts. INVENTORIES
    consist primarily of purchased polymer soil amendments. Inventories are
    stated at the lower of cost (on a first-in, first-out basis) or market.

    PROPERTY AND EQUIPMENT: Property and equipment is stated at cost less
    accumulated depreciation. Depreciation is recorded on a straight-line basis
    over the estimated useful lives of the assets ranging from 3 to 7 years.
    Depreciation expense was $29,631 and $25,881 for the three month periods
    ended March 31, 2006 and 2005, respectively.

    INTELLECTUAL PROPERTY: The exclusive licenses to the patented polymer
    application techniques purchased December 31, 1999, are being amortized
    using the straight line method over the life of the licenses, which is 14
    1/2 years.

    On March 15, 2006, the Company acquired patents through the acquisition of
    Advanced Fertilizer Technologies, Inc., a non-operating entity, for
    4,500,000 shares of preferred series B stock valued at $2,250,000. The
    acquired company owned the patent on a slow release fertilizer used
    primarily in the turf segment of its business. The Company will collect
    revenues from two existing licenses and will sell products developed under
    the patents directly to its customers including to qualified distributors.
    The patent has approximately 8 years left to expiration. The valued assigned
    to the patents of the acquired company was $1,950,000.

    The carrying value of these assets is periodically evaluated for impairment.

    ADVERTISING: The Company expenses advertising costs as incurred. Advertising
    expense was $186,788 and $140,113 for the three month period ended March 31,
    2006 and 2005, respectively.

    REVENUE RECOGNITION: Revenue is recognized from the soil enhancement
    products upon sale and shipment, or if the sale includes installation, upon
    completion of the installation process and acceptance by the customer.

    INCOME TAXES: The Company provides for income taxes based on the provisions
    of Statement of Financial Accounting Standards No. 109, ACCOUNTING FOR
    INCOME TAXES, which, among other things, requires that recognition of
    deferred income taxes be measured by the provisions of enacted tax laws in
    effect at the date of financial statements.

    NET LOSS PER SHARE: Net loss per share is calculated using the weighted
    average number of shares of common stock outstanding during the year. The
    Company has adopted the provisions of SFAS No. 128, EARNINGS PER SHARE.

                                       7
<PAGE>
    FINANCIAL INSTRUMENTS: Financial instruments consist primarily of accounts
    receivable, related party notes receivable, and obligations under accounts
    payable, convertible debentures and notes payable. The carrying amounts of
    accounts receivable and accounts payable approximate fair value because of
    the short term maturity of those instruments. The carrying values of notes
    payable to unrelated entities approximate fair value because they contain
    market value interest rates and have specified repayment terms. The fair
    value of the related party note receivable, debentures and notes payable
    cannot be determined because of the Company's affiliation with the parties
    with whom the agreements exist. The Company has applied certain assumptions
    in estimating these fair values. The use of different assumptions or
    methodologies may have a material effect on the estimates of fair values.

    USE OF ESTIMATES: The preparation of financial statements in conformity with
    generally accepted accounting principles requires management to make
    estimates and assumptions that affect the reported amounts of assets and
    liabilities and disclosure of contingent assets and liabilities at the date
    of the financial statements and the reported amounts of revenues and
    expenses during the reporting period. Actual results could differ from those
    estimates.

    Significant estimates made in connection with the preparation of the
    accompanying financial statements include the carrying value of accounts and
    notes receivable, the carrying value of the patented licenses and
    self-constructed machinery.

    PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include
    the accounts of the Company and its wholly owned subsidiaries. All
    significant intercompany accounts and transactions have been eliminated.

    STOCK-BASED COMPENSATION: Effective January 1, 2006, the Company adopted the
    provisions of SFAS No. 123R using the modified prospective application
    transition method. Under this method, compensation cost for the portion of
    awards for which the requisite service has not yet been rendered that are
    outstanding as of the adoption date is recognized over the remaining service
    period. The compensation cost for that portion of awards is based on the
    grant-date fair value of those awards as calculated for pro forma
    disclosures under SFAS No. 123, as originally issued. All new awards that
    are modified, repurchased, or cancelled after the adoption date are
    accounted for under provisions of SFAS no. 123R. Prior periods have not been
    restated under this transition method. The Company recognizes share-based
    compensation ratably using the straight-line attribution method over the
    requisite service period. In addition, pursuant to SFAS No. 123R, the
    Company is required to estimate the amount of expected forfeitures when
    calculating share-based compensation, instead of accounting for forfeitures
    as they occur, which was the Company's practice prior to the adoption of
    SFAS 123R. As of January 1, 2006 the cumulative effect of adopting the
    estimated forfeiture method was not material.

    Prior to January 1, 2006, the Company accounted for share-based compensation
    using the intrinsic value method prescribed by Accounting Principles Board
    Opinion No. 25, "Accounting for Stock Issued to Employees," and related
    interpretations and elected the disclosure option of SFAS no. 123 as amended
    by SFAS no. 148, "Accounting for Stock-Based Compensation - Compensation and
    Disclosure." SFAS No. 123 requires that companies either recognize
    compensation expense for grants of stock, stock options and other equity
    instruments based on fair value, or provide pro forma disclosure of net
    income and earnings per share in the notes to the financial statements.
    Accordingly, the Company measured compensation expense for stock options as
    the excess, if any, of the estimated fair market value of the Company's
    stock at the date of grant over the exercise price. The following table
    details the effect on net income and earnings per share for the three months

                                       8
<PAGE>
    ended March 31, 2005 had compensation expense for the stock plans been
    recorded based on the fair value method under SFAS No. 123.

                                                        Three Months Ended
                                                          March 31, 2005
                                                          --------------
          Net Loss                                          $(745,194)

          Deduct: Stock-based employee
          compensation expense determined
          under the fair value based method,
          net of tax                                                0
                                                            ---------

          Pro forma net loss                                $(745,194)
                                                            =========

          Net loss per share as reported                    $    (0.5)
                                                            =========

          Net loss per share pro forma                      $    (0.5)
                                                            =========

    The per share weighted average fair values of stock options granted during
    the year ended June 30, 2003 was $0.12 on the date of the grant using the
    Black-Scholes option pricing model with the following assumptions: 1)
    Dividend Yield of 0%, 2) Volatility Factor of 204%, 3) Risk-Free Interest
    Rate of 3.38% and 4) Average Expected Option Life of 10 years.

    There were no stock options granted in the three months ended March 31, 2006
    and 2005. No options expired or were exercised during the three month period
    ended March 31, 2006. All options outstanding at January 1, 2006 were fully
    vested. Therefore, no compensation expense was recognized in the period
    ended March 31, 2006 as a result of the implementation of SFAS No. 123R.

    The Company initiated a stock option plan during the three months ended June
    30, 2001 under which the Company could grant up to one million options.
    Under the plan all employees and directors, subject to employment terms,
    have been granted options to purchase 219,998 and 225,002 shares,
    respectively. The options are exercisable at $3.75 and $4.13 per share,
    respectively. At the time of the grants the market price of the stock was
    $3.75. Therefore, 219,998 options were granted at the market price and
    225,002 options were granted at 10% in excess of the market price. The
    options are vested when granted and are exercisable for ten years from the
    date of grant subject to cancellation upon termination of employment. During
    the three months ended June 30, 2003, all outstanding options under the 2001
    Plan were surrendered by the holders and cancelled by the Company.

    In November 2002, the Company enacted a stock option plan (the "2002 Plan")
    to provide additional incentives to selected employees, directors and
    consultants. Two million shares were authorized by a majority of the
    shareholders for issuance as Incentive Stock Options or Nonstatutory Stock
    Options. The 2002 Plan anticipates qualifying under Section 423 of the
    Internal Revenue Code of 1986, as an "employee stock purchase plan". Under
    the 2002 Plan, options may be granted to key employees, officers, directors
    or consultants. The purchase price of the common stock subject to each
    Incentive Stock Option shall not be less than the fair market value (as
    determined in the 2002 Plan) or in the case of a grant of an Incentive Stock
    Option to a principal shareholder, not less than 110% of the fair market
    value of such common stock at the time each option is granted. The 2002 Plan
    shall terminate 10 years from the date of adoption by the Company. The

                                       9
<PAGE>
    options are vested when granted and exercisable for 10 years from the date
    of grant and are subject to cancellation upon termination of employment.
    Under the Plan, the Company has granted options to purchase 1,010,000 shares
    and 300,000 shares at $0.50 and $0.25, respectively. The market price at the
    date of grant was $0.12.

    A 2005 Stock Option/Stock Issuance Plan (the "2005 Plan") was authorized by
    the majority shareholders during the three months ended June 30, 2005. The
    2005 Plan provides for the issuance of up to 10,000,000 shares of common
    stock to our directors, officers, employees and consultants in the form of
    stock options and shares of common stock.

    The 2005 Plan has two separate components: the option grant program and the
    stock issuance program. To date, no shares of common stock or stock options
    have been issued pursuant to the 2005 Plan.

    Grants under the option grant program may be structured as installment
    options which become exercisable for vested shares over the optionee's
    period of service or as immediately exercisable options for unvested shares
    which will be subject to repurchase by the Company, at the option exercise
    price paid per share, upon the optionee's termination of service prior to
    vesting in those shares. All option grants must have an exercise price not
    less than 100% of the fair market value of the option shares on the grant
    date.

    The stock issuance program allows eligible persons to purchase shares of
    common stock at fair market value or at a discount of up to 15% of fair
    market value. The shares may be fully vested when issued or may vest over
    time as the recipient provides services or as specified performance
    objectives are attained. In addition, shares of common stock may be issued
    as bonus awards in recognition of services rendered, without any cash outlay
    required of the recipient.

    The Board of Directors will initially administer the 2005 Plan, except that
    the Board may, at its discretion, establish a committee comprised of two or
    more members of the Board or two or more other persons to administer the
    2005 Plan (the "Plan Administrator").

    The following summarizes information at March 31, 2006:

<TABLE>
<CAPTION>
                      Options Outstanding                               Options Exercisable
    ----------------------------------------------------     ----------------------------------------

                          Number        Weighted Average      Weighted        Number         Weighted
                      outstanding at       Remaining          Average     Exercisable at     Average
        Range of         March 31,       Contractual Life     Exercise       March 31,      Exercise
     Exercise Prices       2006            (in years)          Price           2006           Price
     ---------------       ----            ----------          -----           ----           -----
<S>      <C>             <C>                  <C>              <C>           <C>              <C>
         $0.50           680,000              6.75             $0.50         680,000          $0.50

                      Warrants Outstanding                               Warrants Exercisable
    ----------------------------------------------------     ----------------------------------------

                          Number        Weighted Average      Weighted        Number         Weighted
                      outstanding at       Remaining          Average     Exercisable at     Average
        Range of         March 31,       Contractual Life     Exercise       March 31,      Exercise
     Exercise Prices       2006            (in years)          Price           2006           Price
     ---------------       ----            ----------          -----           ----           -----
         $0.23           300,000              1.75             $0.23         300,000          $0.23
         $0.23            21,000              1.00             $0.23          21,000          $0.23
</TABLE>

                                       10
<PAGE>
    IMPAIRMENT OF LONG-LIVED ASSETS: The Company assesses long-lived assets for
    impairment in accordance with the provisions of SFAS 144, ACCOUNTING FOR THE
    IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS. SFAS 144 requires that the
    Company report discontinued operations separately from continuing operations
    and long-lived assets to be disposed of at their fair value net of the cost
    of disposal.

    RECLASSIFICATIONS: Certain reclassifications have been made to the March 31,
    2005 financial statements in order to conform to the March 31, 2006
    presentation.

    RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:

    In December 2004 the FASB issued a revised Statement 123 (SFAS 123R),
    "ACCOUNTING FOR STOCK-BASED COMPENSATION" requiring public entities to
    measure the cost of employee services received in exchange for an award of
    equity instruments based on grant date fair value. The cost will be
    recognized over the period during which an employee is required to provide
    service in exchange for the award -- usually the vesting period. The
    effective date for this statement is as of the first interim period that
    begins after June 15, 2005. The effect of the implementation was
    insignificant.

3. INVENTORY

    Inventory is comprised entirely of finished goods at March 31, 2006.

4. INTELLECTUAL PROPERTY

    On December 31, 1999 the Company purchased exclusive license rights to
    patented polymer application techniques. Additionally, during the three
    months ended March 31, 2006, the Company purchased a total of $1,987,950 in
    intellectual property, primarily a patent. The licenses are being amortized
    using the straight line method over the life of the licenses, which is 14
    1/2 years. The patent is being amortized over eight years, the remaining
    life of the patent. The carrying value of these assets is periodically
    evaluated for impairment. The amortization expense was $11,711 and $11,711
    for the three month periods ended March 31, 2006 and 2005, respectively. The
    following summarizes the estimated future amortization expense of the
    intellectual property:

                   Year                   Amount
                   ----                   ------
              Remaining nine
              months of 2006           $  221,503
                   2007                   295,336
                   2008                   295,336
                   2009                   295,336
                   2010                   295,336
                Thereafter                971,549
                                       ----------

                  Total                $2,374,396
                                       ==========

                                       11
<PAGE>
5. PROPERTY AND EQUIPMENT

    Property and equipment consisted of the following at March 31, 2006:

         Machinery                                           $ 522,348
         Vehicle                                                44,615
         Office furnishings, fixtures and equipment             22,436
                                                             ---------
           Total                                               589,399
           Less accumulated depreciation                      (238,486)
                                                             ---------

                  Property and equipment, net                $ 350,913
                                                             =========

    Included in the machinery category is approximately $380,000 of capitalized
    costs associated with the construction of a demonstration injection machine.
    The machine was placed in service in the quarter ended March 31, 2004.

6. NOTE RECEIVABLE

    The $60,000 note receivable is due from an individual who was formerly
    contracted to perform services for the Company as its Chief Technical
    Officer, and who also holds the patents licensed to the Company. Under the
    terms of the note receivable, the Company is to receive 4.5% interest on the
    note, to be satisfied through the reduction of royalties due to the
    individual. During the three months ended March 31, 2006 and 2005, the
    Company recognized $675 and $675 in interest income and $262 and $1,493 in
    royalty expense, respectively, related to this agreement.

7. NOTES PAYABLE

    Notes payable at March 31, 2006 are comprised of the following:

     Convertible debenture to related party, original balance
     of $250,000, interest at 8% per annum, interest payable
     quarterly. Principal is convertible at a rate of $0.50
     for one share of common stock. Principal due February 1,
     2008.                                                           $  250,000

     Convertible debenture to related party, original balance
     of $250,000, interest at 8% per annum, interest payable
     quarterly. Principal is convertible at a rate of $0.50
     for one share of common stock. Principal due March 27,
     2008.                                                              250,000

     Convertible debenture to related party, original balance
     of $25,000, interest at 8% per annum, interest payable
     quarterly. Principal is convertible at a rate of $0.50
     for one share of common stock. Principal due February 1,
     2007.                                                               25,000

     Convertible debenture to related party, original balance
     of $25,000, interest at 8% per annum, interest payable
     quarterly. Principal is convertible at a rate of $0.50
     for one share of common stock. Principal due February 1,
     2007.                                                               25,000

     Convertible debenture to related party, original balance
     of $25,000, interest at 8% per annum, interest payable
     quarterly. Principal is convertible at a rate of $0.50
     for one share of common stock. Principal due August 15,
     2007.                                                               20,000

                                       12
<PAGE>
     Convertible debenture to related party, original balance
     of $250,000, interest at 10% per annum. Monthly
     principal and interest payments of $3,000 are due
     through 2014. Principal is convertible at a rate of
     $3.00 for one share of common stock.                               203,665

     Convertible debenture to related party, original balance
     of $200,000, interest at 8% per annum, interest payable
     quarterly. Principal is convertible at a rate of $0.50
     for one share of common stock. Principal due February 1,
     2008.                                                              200,000

     Note payable to related party, original balance of
     $257,500, interest at 8% per annum and payable monthly.
     Principal is due March 17, 2008.                                   477,500

     Note payable to related party, original balance of
     $150,000, interest at prime rate payable monthly. Note
     is unsecured. Principal is due March 14, 2008                      150,000


     Note payable to lending institution, original balance of
     $48,542, and interest at 2.9% per annum. Requires
     monthly principal and interest payments of $736 through
     2009. Collateralized by vehicle.                                    31,354

     Note payable to finance company, original balance of
     $75,000, and interest at 17.7% per annum. Requires
     monthly principal and interest payments of $1,814
     through 2009. Collateralized by polymer injection
     machine.                                                            57,022
                                                                     ----------
           Total                                                      1,689,542

           Less current portion                                         (87,711)
                                                                     ----------
           Total long-term portion                                   $1,601,831
                                                                     ==========

    Future maturities of principal at March 31 are as follows:

         2007                                                        $   87,711
         2008                                                         1,391,874
         2009                                                            50,399
         2010                                                            36,457
         2011                                                            25,532
         Thereafter                                                      97,568
                                                                     ----------

                  Total                                              $1,689,542
                                                                     ==========

    The note payable of $477,500 and three convertible debentures are held by an
    entity that holds approximately 21% of the Company's common stock. Notes are
    payable in two years, providing payment is not detrimental to the company.

                                       13
<PAGE>
    During the three months ended March 31, 2006, $250,000 in related party
    notes payable and $51,000 in related accrued interest were converted into
    1,204,000 shares of common stock.

    During the year ended December 31, 2005, the Company entered into a $300,000
    note agreement that included 300,000 warrants as an additional incentive.
    The imputed value of the warrants was calculated to be $66,000 using the
    Black-Scholes valuation model. The note was discounted by this amount and at
    December 31, 2005, $11,000 in expense was recognized on the discount. The
    remaining $55,000 in expense was recognized in the three months ended March
    31, 2006. The effective interest rate of this instrument was determined to
    be 125%.

8. NET LOSS PER SHARE

    Net loss per share is calculated using the weighted average number of shares
    of common stock outstanding during the year. Preferred stock dividends are
    subtracted from the net income to determine the amount available to common
    shareholders. There were no preferred stock dividends in the three month
    periods ended March 31, 2006 and 2005. The following securities have been
    excluded from the calculation because inclusion of such would be
    anti-dilutive:

                                                         Three months ended
                                                           March 31, 2006
                                                           --------------
         Convertible preferred stock                          7,263,699
         Common stock options                                   680,000
          Warrants                                              321,000
          Convertible debt                                    1,607,888
                                                              ---------
                                                              9,872,587
                                                              =========

    The following presents the computation of basic and diluted loss per share
    from continuing operations:

<TABLE>
<CAPTION>
                                                Three Months Ended                    Three Months Ended
                                                  March 31, 2006                        March 31, 2005
                                                  --------------                        --------------
<S>                                 <C>           <C>           <C>            <C>           <C>            <C>
    Net  Loss                       $(673,268)                                 $(745,194)

    Preferred stock dividends              --                                         --
                                    ---------                                  ---------

     Loss available to common
     Stockholders                   $(673,268)                                 $(745,194)
                                    =========                                  =========
    BASIC EARNINGS PER SHARE:

    Loss available to common
    stockholders                    $(673,268)    26,506,805    $(0.03)        $(745,194)    14,774,251     $(0.05)
                                    =========                   ======         =========                    ======

    Effect of dilutive securities       N/A          N/A                          N/A            N/A

    DILUTED EARNINGS PER SHARE      $(673,268)    26,506,805    $(0.03)        $(745,194)    14,774,251     $(0.05)
                                    =========                   ======         =========                    ======
</TABLE>

                                       14
<PAGE>
9. RELATED PARTY TRANSACTIONS

    During the three month periods ended March 31, 2006 and March 31, 2005, the
    Company conducted related party transactions with Board members, officers
    and affiliated entities as described below:

    DIRECTORS & OFFICERS

    Diana Visco, Company Secretary, has a $20,000 Debenture with the Company
    which is convertible at $0.50 per share with interest at 8%, maturing in the
    third calendar quarter of 2007 as well as a $150,000 note payable. Interest
    incurred on this debenture and note was $1,574 and $394 during the three
    month period ended March 31, 2006 and 2004, respectively.

    The holders of the two (2) $25,000 convertible debentures and the $203,665
    convertible debenture are personally related to Louis Visco. Interest
    incurred on these debentures during the three month period ended March 31,
    2006 and 2005 were $6,073 and $6,449 respectively.

    Louie Visco, Director, is an owner and director of the FLD Corporation, the
    holder of two (2) $250,000 and one (1) $200,000 debentures convertible at
    $0.50 per share with interest at 8%, maturing in the first calendar quarter
    of 2007 and a $477,500 note payable. During the three months ended June 30,
    2005, notes payable and the related accrued interest due to this entity
    totaling $1,837,732 were converted at a rate of $0.40 per share for a total
    of 4,594,330 shares of common stock. Interest incurred on these debentures
    and notes during the three month period ended March 31, 2006 and 2005 was
    $19,163 and $47,442.57 respectively.

    AFFILIATED ENTITIES

    The Company also entered into an operating lease in 2004 for its office
    space with Customized Box Company, an entity beneficially owned by Louie
    Visco. Rents charged by this entity for the three months ended March 31,
    2006 and 2005 were $1,662 and $1,662, respectively.

    Ronald Salestrom, a former contract employee, is the holder of the patents
    under license to the Company. Per the terms of the license agreement, the
    Company is required to pay Mr. Salestrom one and a half percent (1.5%) of
    net sales generated by the Company as a result of holding the patent. As of
    March 31, 2006, total royalties earned were $4,386. In addition, Mr.
    Salestrom has a note receivable with the Company of $60,000. The note
    accrues interest at 4.5% per annum, with payments to be reduced by royalties
    earned under the license agreement. In the three months ended March 31,
    2006, the Company recognized interest income on this note of $675 and $675,
    respectively. Accrued interest receivable at March 31, 2006 is $2,866.

10. CONCENTRATIONS

    The Company maintains cash balances at banks in California. Accounts are
    insured by the Federal Deposit Insurance Corporation up to $100,000. At
    March 31, 2006, the Company exceeded those limits by $160,035.

    During the three month period ended March 31, 2006 sales to four customers
    aggregated to approximately 53.5% of total sales for the period.
    Approximately 68% of the accounts receivable balance at March 31, 2006 was
    comprised of balances due from two customers.

                                       15
<PAGE>
11. COMMITMENTS

    On October 20, 2004, the Company entered into an agreement with an unrelated
    entity to obtain marketing and sales consulting services The agreement has
    an initial term of six months with automatic six month renewals unless
    either party notifies the other in writing at least thirty days prior to the
    expiration that it does not consent to such renewal. The Company will pay
    $7,000 per month and commissions ranging from five percent to ten percent on
    related sales for these services. This agreement is now on a month-to-month
    basis at $5,000 per month subject to performance.

    The Company") in September of 2005 entered into a Consulting Agreement (the
    "Agreement") with Telperion Business Consultants, LLC located in New York
    ("Telperion").

    The Agreement provides that Telperion will perform consulting services,
    including business introductions, strategic planning, and assisting the
    Company's management in developing and implementing the Company's investor
    relations/public relations plan. The Agreement has a term of 180 days at
    which time the Company and Telperion can extend the Agreement for another
    term. The Agreement may be cancelled by either party with 30 days written
    notice after the first 60 days of the Agreement. The Company will pay
    Telperion $1,000 upon signing the Agreement and $5,000 per month. The
    monthly payment will accrue until such time as a financing is completed by
    the Company. In addition, 100,000 shares of common stock of the Company
    stock will be issued by the Company to Telperion according to the following
    schedule: 50,000 shares upon signing the Agreement and 50,000 shares upon
    the closing of the Company's next financing. The contract has expired and
    the Company will remit the $30,000 .

    On February 7, 2006 the Company hired Donette Lamson as Vice President for
    Turf and Horticulture and Woodrow Thorpe as Director of Development. Both
    parties received three year contracts. The Company issued 75,000 shares of
    restricted common stock to both Lamson and Thorpe as consideration of them
    assigning their trade secrets, proprietary information, trade marks, and
    customer lists.

    On March 6, 2006, the Company entered into a Professional Services Agreement
    with Grosvenor Financial Partners, LLC, a Delaware corporation, located in
    New Jersey The Agreement provides that Grosvenor will provide advisory and
    consulting services in connection with qualifying suitable strategic
    partners and other business opportunities. The Agreement has a term of three
    years from the date an introduction is made. The Company will pay Grosvenor
    $2,500 per month for five months and $5,000 per month for twelve months if
    the Company enters into a strategic partnership agreement with a client
    introduced by Grosvenor.

    On March 8, 2006, the Company entered into a Brokerage Services Agreement
    with Alchemy Alternatives, Inc., a registered broker/dealer with the
    Securities and Exchange Commission and member of the National Association of
    Securities Dealers, Inc., located in California.

    The Brokerage Agreement provides that Alchemy will provide brokerage and
    advisory services in connection with obtaining financing for the Company in
    an amount up to $10,000,000. The Agreement has a term of three years from
    the date an introduction is made. The Company will pay Alchmey a cash fee of
    10% and common stock in the amount of 10% of the amount of financing
    received from an introduction by Alchemy.

    There is no material relationship between the Company or its affiliates and
    any of the parties, other than with respect to the Agreement and the
    Brokerage Agreement.

                                       16
<PAGE>
    On March 14, 2006, the Company entered into an Agreement and Plan of
    Acquisition with UTEK Corporation, a Delaware corporation, located in
    Florida and Advanced Fertilizer Technologies, Inc., a Florida corporation,
    located in Florida ("AFTI").

    The Agreement provides that UTEK, as 100% owner of AFTI, shall exchange all
    of their shares of common stock of AFTI for newly issued shares of Series B
    Preferred Stock of the Company. AFTI will then become a wholly-owned
    subsidiary of the Company. AFTI is the owner of a patented method for
    producing suspension fertilizer. The Company also acquired the rights to
    develop and market this patented and proprietary technology as part of this
    transaction.

    There is no material relationship between the Company or its affiliates and
    any of the parties, other than with respect to the Agreement.

    CAPITAL LEASES

    The Company leases certain equipment under capital leases that expire
    through 2010. Minimum required lease payments under the lease agreements for
    the years ending December 31 are as follows:

         Year ending December 31,
            Nine moths remaining in 2006                          $  24,426
            2007                                                     32,570
            2008                                                     25,260
            2009                                                     21,600
            2010                                                     19,800
            Thereafter                                                    0
                                                                  ---------
                  Total                                             123,656
         Less: Amount representing interest                         (34,360)
                                                                  ---------
                  Total payments, net of interest                    89,296
         Less: Current portion                                      (17,754)
                                                                  ---------
                  Total long term minimum lease payments          $  71,542
                                                                  =========

    Equipment under capital leases is included in machinery and equipment as
    follows:

                                                                 December 31,
                                                                    2005
                                                                  ---------

         Machinery and equipment                                  $ 107,000
         Less: Accumulated depreciation                             (12,894)
                                                                  ---------
                                                                  $  94,106
                                                                  =========

12. ACQUISITION OF INTELLECTUAL PROPERTY

    On March 15, 2006, the Company acquired a patent and $300,000 cash for
    4,500,000 shares of Series B preferred stock having a value of $2,250,000.
    The value was determined based on the equivalent value of common stock at
    the stated conversion price of $2,250,000 The acquired company had no
    operations and owned the patent on a slow release fertilizer used primarily
    in the turf segment of its business. The Company will collect royalty
    revenues from two existing licenses and will sell products derived from the
    patents directly to its customers including qualified distributors. The
    patent has approximately 8 years left to expiration. The acquired company
    also had cash deposits of $300,000 effectively resulting in the sale of
    preferred stock for $300,000 and the patent rights.

                                       17
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

The following discussion and analysis should be read in conjunction with our
financial statements, including the notes thereto, appearing elsewhere in this
Report.

FORWARD-LOOKING STATEMENTS

The following information contains certain forward-looking statements.
Forward-looking statements are statements that estimate the happening of future
events and are not based on historical fact. Forward-looking statements may be
identified by the use of forward-looking terminology, such as "may," "could,"
"expect," "estimate," "anticipate," "plan," "predict," "probable," "possible,"
"should," "continue," or similar terms, variations of those terms or the
negative of those terms. The forward-looking statements specified in the
following information have been compiled by our management on the basis of
assumptions made by management and considered by management to be reasonable.
Our future operating results, however, are impossible to predict and no
representation, guaranty, or warranty is to be inferred from those
forward-looking statements.

OVERVIEW

We own patents and operating rights to certain polymer based soil enhancements
designed to increase production and reduce costs to the agriculture industry.
During the last three years, we have devoted substantial resources, including
executive time and money, to the development of strategic relationships and
contracts for the marketing and distribution of our polymer products.
Additionally, we developed the M-216 Polymer Injector, an injection machine
designed to install our products accurately and quickly on all types and sizes
of turf including golf courses, sport fields, as well as commercial and private
lawns. On March 21, 2006 we acquired the US Patent on a slow release liquid
fertilizer through our acquisition of Advanced Fertilizer Technologies, Inc.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, our selected
financial information:

                                       Three Months Ended     Three Months Ended
                                         March 31, 2006         March 31, 2005
                                         --------------         --------------
                                           (unaudited)            (unaudited)
Statement of Operations Data:
Revenue                                   $    124,426           $    252,297
(Loss)                                    $   (673,268)          $   (745,194)
(Net Loss) Per Share                      $      (0.03)          $      (0.05)
Balance Sheet Data:
Current Assets                            $    772,930           $    580,077
Total Property & Equipment, Net           $    350,913           $    388,297
Patents, Net                              $  2,374,396           $    433,290
Net Deferred Tax Asset                    $          0           $          0
Total Assets                              $  3,561,105           $  1,471,588
Total Current Liabilities                 $    555,251           $    900,597
Accumulated Deficit                       $(14,663,677)          $(12,660,181)

                                       18
<PAGE>
THREE MONTHS ENDED MARCH 31, 2006 (UNAUDITED) COMPARED TO THREE MONTHS ENDED
MARCH 31, 2005 (UNAUDITED)

REVENUES

Revenues for the three months ended March 31, 2006 were $124,426 compared to
$252,297 for the same period in 2005, a decrease of 50.6%. This decrease in
revenue was the result of the increase in energy costs and climatic conditions
experienced in our markets as well as some deliveries historically made in this
reporting quarter delayed until the following quarter.

COST OF SALES

Cost of goods sold for the three months ended March 31, 2006 were $82,817
compared to $154,573 for the three months ended March 31, 2005, a decrease of
46.5%. The cost of sales is consistent with the gross sales figures and a direct
result of the Company's purchasing controls.

INVENTORY

Inventory balances were $325,602 for the three months ended March 31, 2006
compared to $365,933 for the three months ended March 31, 2005.

OPERATING EXPENSES

Operating expenses decreased by approximately 21.9% from $781,228 for the three
months ended March 31, 2005 compared to $609,763 for the three months ended
March 31, 2006. This decrease in operating expenses was a result of the
decreased costs of investor relations and stock compensation.

INCOME TAXES

We did not provide for income tax expense or provision for the period ended
March 31, 2006 because any income tax benefit generated from taxable losses
incurred is equally offset by an increase in the valuation allowance for the
deferred income tax asset.

NET LOSS

We experienced a net loss from operations of $(673,268) for the three months
ended March 31, 2006 as compared to a net loss of $(745,194) for the three
months ended March 31, 2005. The decrease in the net loss is directly related to
our decrease in general and administrative expenses from $601,882 in the three
months ended March 31, 2005 to $370,333 for the three months ended March 31,
2006. Our sales and marketing efforts increased by $46,678. We also increased
our expenses for the research and development of the M-216 Polymer Injector by
$9,701. We continue to focus our efforts on developing strategic alliances,
marketing agreements, and distribution networks. Revenue from the sale of
products decreased from $252,297 for the three months ended March 31, 2005 to

                                       19
<PAGE>
$124,426 for the three months ended March 31, 2006. This decrease in revenue was
the result of the increase in energy costs and climatic conditions experienced
in our markets as well as some deliveries historically made in this reporting
quarter delayed until the following quarter.

SEASONALITY

Our efforts in the United States have focused on the southern states and
therefore generally experience year round growing cycles, with the sale of the
agricultural products preceding the growing cycle of various crops.
International sales have not been sufficient enough or the geographic
distribution of sales concentrated enough to determine if a seasonal trend
exists although the initial indication is that our markets will become diverse
and therefore not indicate significant seasonal variations. As we expand into
the residential and commercial segments nationally, we will experience some
seasonal declines in sales during the fall and winter quarters in less temperate
climates.

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents totaled $260,035 and $28,700 at March 31, 2006 and
2005, respectively. Net cash used by operations was $(510,973) for the period
ended March 31, 2006 compared to net cash used by operations of $(461,917) for
the comparable period ended March 31, 2005. We have historically relied upon one
of our officers and significant shareholders to provide cash to meet short term
operating cash requirements.

In March 2000, we authorized the issuance of an aggregate of $1,325,000 of
convertible debentures with interest payable quarterly at 10% per annum. The
convertible debentures are convertible to our common stock at a rate of one
share for each three dollars converted. The debentures matured in the first
calendar quarter of 2002. All of the debentures were subscribed and at March 31,
2006, the outstanding balance of the debentures was $973,666 and at March 31,
2005, the outstanding balance of the debentures was $988,480. At March 31, 2006,
convertible debentures consisted of $770,000 of 8% per annum debentures at a
rate of $0.50 per share and $203,665 of 10% per annum convertible at a rate of
$3.00 per share. If the remaining debt is converted, we would issue an
additional 1,607,888 shares. Interest expense for the three months ended March
31, 2006 was $93,821and interest expense for the three months ended March 31,
2005 was $62,330.

We have working capital (current assets less current liabilities) of $217,679 as
of March 31, 2006 compared to a deficit of $(320,520) as of March 31, 2005.

As shown in the accompanying financial statements, we have incurred an
accumulated deficit of $14,663,677 and working capital of approximately $217,679
as of March 31, 2006. Our ability to continue as a going concern is dependent on
obtaining additional capital and financing and operating at a profitable level.
We intend to seek additional capital either through debt or equity offerings and
to increase sales volume and operating margins to achieve profitability. Our
working capital and other capital requirements during the next fiscal year and

                                       20
<PAGE>
thereafter will vary based on the sales revenue generated by the recent
accumulation of additional products and the distribution and sales network we
have created and will continue to grow.

We will consider both the public and private sale of securities and or debt
instruments for expansion of our operations if such expansion would benefit our
overall growth and income objectives. Should sales growth not materialize, we
may look to these public and private sources of financing. There can be no
assurance, however, that we can obtain sufficient capital on acceptable terms,
if at all. Under such conditions, failure to obtain such capital likely would at
a minimum negatively impact our ability to timely meet our business objectives.

Beginning in July 2004, we undertook a Regulation S offering up to a maximum of
$3,500,000. We sold 8,061,494 shares of our common stock to 148 non-United
States residents for gross proceeds of $2,710,921 in that offering. These
transactions are exempt from registration under Regulation S of the Securities
Act of 1933 as no sales efforts were made in the United States. All proceeds
were used for operating capital.

CRITICAL ACCOUNTING ESTIMATES

The preparation of our financial statements in conformity with accounting
principles generally accepted in the United States of America requires our
management to make certain estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. As such, in accordance with
the use of accounting principles generally accepted in the United States of
America, our actual realized results may differ from management's initial
estimates as reported. A summary of our significant accounting policies are
detailed in the notes to the financial statements which are an integral
component of this filing.

We have capitalized approximately $380,199 less accumulated depreciation of
$171,098 associated with the construction of a demonstration injection machine.
We placed the machine in service in the fiscal year ended December 31, 2004.
Management believes that although the capitalized costs exceed a value at which
the unit could be sold, we will derive several years of benefits from the unit
by using it in sales demonstrations and as a loaner unit.

On December 31, 1999, we purchased exclusive license rights to patented polymer
application techniques. The acquisition price of these rights was approximately
$679,000. Management periodically evaluates the carrying value of these assets
for impairment. The application techniques are critical to the process by which
we based our plan of operations. The carrying value of these licensing rights
was $386,446 at March 31, 2006.

ITEM 3. CONTROLS AND PROCEDURES

Our Chief Executive Officer, President, and Chief Financial Officer (the
"Certifying Officers") are responsible for establishing and maintaining
disclosure controls and procedures for the Company. The Certifying Officers have
designed such disclosure controls and procedures to ensure that material
information is made known to them, particularly during the period in which this
report was prepared. The Certifying Officers have evaluated the effectiveness of
the Company's disclosure controls and procedures within 90 days of the date of
this report and believe that the Company's disclosure controls and procedures
are effective based on the required evaluation. There have been no significant
changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of their evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.

                                       21
<PAGE>
                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

To the best knowledge of management, there are no legal proceedings pending or
threatened against us.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On January 18, 2006, we sold 75,000 shares of our common stock in exchange for
an assignment of trademarks, trade secrets and a customer list. The seller
became one of our employees. We relied on the exemption from registration
relating to offerings that do not involve any public offering pursuant to
Section 4(2) under the Securities Act of 1933 (the "Act") and/or Rule 506 of
Regulation D promulgated pursuant thereto. We believe that, at the time of the
sale, the investor was an "accredited investor" under Rule 501 under Regulation
D of the Act and had adequate access to information about us.

On February 20, 2006, we sold 75,000 shares of our common stock in exchange for
an assignment of trade secrets, a customer list and proprietary information. The
seller became one of our employees. We relied on the exemption from registration
relating to offerings that do not involve any public offering pursuant to
Section 4(2) under the Act and/or Rule 506 of Regulation D promulgated pursuant
thereto. We believe that, at the time of the sale, the investor was an
"accredited investor" under Rule 501 under Regulation D of the Act and had
adequate access to information about us.

On April 14, 2006, we sold 250,000 shares of our common stock to one accredited
investor at a price of $0.20 per share for total gross proceeds of $50,000. We
relied on the exemption from registration relating to offerings that do not
involve any public offering pursuant to Section 4(2) of the Act and/or Rule 506
of Regulation D promulgated pursuant thereto. We believe that, at the time of
the purchase, the investor was an "accredited investor" under Rule 501 under
Regulation D of the Act and had adequate access to information about us.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5.  OTHER INFORMATION

On January 18, 2006, we entered into a three-year employment agreement with
Donette Lamson as Vice President of the Turf, Horticulture and Landscape
Division. Ms Lamson, in consideration of 75,000 shares of our common stock, also
executed an agreement assigning all her right, title, and interest to trade
secrets, trademarks and any intellectual property or proprietary information she
possessed as it relates to our business.

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<PAGE>
On January 22, 2006, we entered into a three-year employment agreement with
Woodrow Thorpe II as the Director of Business Development. On February 22, 2006,
Mr. Thorpe, in consideration of 75,000 shares of our common stock, also executed
an agreement assigning all his right, title, and interest to trade secrets,
trademarks and any intellectual property or proprietary information he possessed
as it relates to our business.

On May 1, 2006, whe entered into a Dealer Agreement with Dreamscapes LTD of Dell
Rapids, South Dakota.

On May 10, 2006, we entered into an agreement with Environmental Development
Company, a Kuwait corporation, appointing it as our exclusive sales and
marketing representative to promote and solicit contracts for agricultural and
soil enhancement as it relates to soil improvement services from governmental
and private entities and individuals in Kuwait and the U.A.E.

ITEM 6. EXHIBITS

The following Exhibits are filed herein:

         No.               Title

       10.1   Employment Contract with Donette Lamson, dated January 18, 2006
       10.2   Assignment Agreement from Donette Lamson, dated January 18, 2006
       10.3   Employment Contract with Woodrow Thorpe II, dated January 22, 2006
       10.4   Assignment Agreement from Woodrow Thorpe II, dated February 20,
              2006
       10.5   Dealer Agreement with Dreamscapes LTD., dated May 1, 2006
       10.6   Agency Agreement with Environmental Development Company of Kuwait,
              dated May 10, 2006
       31.1   Certification of Chief Executive Officer Pursuant to the
              Securities Exchange Act of 1934, Rules 13a-14 and 15d-14, as
              adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
       31.2   Certification of Chief Financial Officer Pursuant to the
              Securities Exchange Act of 1934, Rules 13a-14 and 15d-14, as
              adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
       32     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
              Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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<PAGE>
                                   SIGNATURES

In accordance with the Exchange Act, the registrant caused this report to be
signed on its behalf by the undersigned, duly authorized.

DATED: May 15, 2006                    AMERICAN SOIL TECHNOLOGIES, INC.



                                        By: /s/ Carl P. Ranno
                                           -------------------------------------
                                             Carl P. Ranno
                                        Its: President, Chief Executive Officer,
                                             Chief Financial Officer
                                             (Principal Executive Officer,
                                             Principal Financial Officer
                                             and Principal Accounting Officer)

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