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, 2005

[ ] 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)

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, 2005, the number of shares of Common Stock issued and outstanding
was 16,152,879.

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

                                                                           Page
                                                                          Number
                                                                          ------
PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)                                    1

         Consolidated Balance Sheet -March 31, 2005                          1

         Consolidated Statements of Operations -
         For the three months ended March 31, 2005 and 2004                  2

         Consolidated Statements of Cash Flows -
         For the three months ended March 31, 2005 and 2004                  3

         Notes to Financial Statements                                       5

Item 2.  Management's Discussion and Analysis of Financial
         Conditions and Results of Operations                               17

Item 3.  Internal Controls                                                  21

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings                                                  22

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds        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                                                           22

SIGNATURES                                                                  23
<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AMERICAN SOIL TECHNOLOGIES, INC.

CONSOLIDATED BALANCE SHEET
MARCH 31, 2005 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S>                                                                               <C>
ASSETS:

CURRENT ASSETS
   Cash and cash equivalents                                                      $     28,700
   Accounts receivable, net of allowance of doubtful accounts of $58,356               161,852
   Employee advances                                                                     1,752
   Inventory                                                                           365,933
   Prepaid expenses and other current assets                                            21,840
                                                                                  ------------
      Total current assets                                                             580,077
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $149,244                    388,297
DEPOSITS AND OTHER ASSETS                                                                9,924
INTELLECTUAL PROPERTY, net of accumulated amortization of $245,927                     433,290
RELATED PARTY NOTES RECEIVABLE                                                          60,000
                                                                                  ------------
       TOTAL ASSETS                                                               $  1,471,588
                                                                                  ============
LIABILITIES AND STOCKHOLDERS' DEFICIT:

CURRENT LIABILITIES:
   Accounts payable and accrued liabilities                                       $    623,837
   Notes payable - current portion                                                      16,571
   Notes payable to related parties - current portion                                  160,673
   Capital lease obligations - current portion                                          14,712
   Debentures payable to related parties - current portion                              84,804
                                                                                  ------------
      Total current liabilities                                                        900,597
NOTES PAYABLE - long-term portion                                                       90,306
CAPITAL LEASE OBLIGATIONS - long-term portion                                           19,241
NOTES PAYABLE TO RELATED PARTIES - long term portion                                 1,752,000
DEBENTURES PAYABLE TO RELATED PARTIES - long term portion                              903,676
                                                                                  ------------
      Total liabilities                                                              3,665,820
                                                                                  ------------
STOCKHOLDERS' DEFICIT:
   Series A preferred stock, $0.50 par value, 10,000,000 shares
    authorized, 4,763,699 shares issued and outstanding                              2,381,849
   Common stock, $0.001 par value, 100,000,000 shares authorized,
    15,348,379 shares issued and outstanding                                            15,348
   Paid in capital                                                                   8,068,752
   Accumulated deficit                                                             (12,660,181)
                                                                                  ------------
      Total stockholders' deficit                                                   (2,194,232)
                                                                                  ------------
      TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                 $  1,471,588
                                                                                  ============
</TABLE>
   The accompanying notes are an integral part of these financial statements.

                                       1
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND MARCH 31, 2004 (UNAUDITED)
--------------------------------------------------------------------------------

                                                Three Months       Three Months
                                                   Ended              Ended
                                               March 31, 2005     March 31, 2004
                                               --------------     --------------

NET REVENUES                                    $    252,297       $    240,908
                                                ------------       ------------

COST OF GOODS SOLD                                   154,573            125,236

                                                ------------       ------------
GROSS INCOME                                          97,724            115,672
                                                ------------       ------------
OPERATING EXPENSES
  General and administrative                         601,882            250,392
  Sales and marketing                                140,113            151,612
  Research and development                             1,596             45,243
  Depreciation and amortization                       37,637             39,255
                                                ------------       ------------
      Total operating expenses                       781,228            486,502
                                                ------------       ------------

OPERATING LOSS                                      (683,504)          (370,830)
                                                ------------       ------------

OTHER (INCOME)/EXPENSE
  Interest expense and related costs                  62,330             31,206
  Interest income                                       (640)
                                                ------------       ------------
      Total other (income)/expense                    61,690             31,206
                                                ------------       ------------

LOSS BEFORE INCOME TAXES                            (745,194)          (402,036)
                                                ------------       ------------

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

NET LOSS                                        $   (745,194)      $   (402,036)
                                                ============       ============

NET LOSS PER SHARE:
  Basic                                         $      (0.05)      $      (0.04)
                                                ============       ============
  Diluted                                       $      (0.05)      $      (0.04)
                                                ============       ============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
  Basic                                           14,774,251          9,096,585
                                                ============       ============

  Diluted                                         14,774,251          9,096,585
                                                ============       ============

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

                                       2
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2005 AND MARCH 31, 2004 (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                            Three Months        Three Months
                                                               Ended               Ended
                                                           March 31, 2005      March 31, 2004
                                                           --------------      --------------
<S>                                                          <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                   $(745,194)          $(402,036)
  Adjustments to reconcile net loss to net cash
   used by operating activities:
    Depreciation and amortization                               37,591              39,256
    Allowance for bad debt                                      20,694                  --
    Stock issued for services                                   67,500
  Changes in assets and liabilities:
    Accounts receivable                                       (127,155)           (155,210)
    Receivables from officers and employees                        553                 442
    Prepaid and other current assets                            25,851              13,087
    Deposits and other assets                                       --               4,107
    Inventory                                                  (38,352)             28,547
    Accounts payable                                            66,138             (18,563)
    Accrued liabilities                                        230,457                  32

                                                             ---------           ---------
          Net cash used by operating activities               (461,917)           (490,338)
                                                             ---------           ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
          Net cash used for investing activities                    --                  --
                                                             ---------           ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of common stock                       215,067                  --
  Proceeds from related party notes payable                     35,000             495,000
  Principal repayments on convertible debentures                (3,554)             (3,165)
  Principal repayments on capital lease obligation              (4,054)             (1,767)
  Repayments on notes payable                                   (4,309)             (1,807)
  Proceeds from convertible debentures                         200,000                  --
                                                             ---------           ---------
          Net cash provided by financing activities            438,150             488,261
                                                             ---------           ---------

DECREASE IN CASH AND CASH EQUIVALENTS                          (23,767)             (2,077)

CASH AND CASH EQUIVALENTS, beginning of period                  52,467              31,720
                                                             ---------           ---------

CASH AND CASH EQUIVALENTS, end of period                     $  28,700           $  29,643
                                                             =========           =========
</TABLE>

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

                                       3
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS, (CONTINUED)
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND MARCH 31, 2004 (UNAUDITED)
--------------------------------------------------------------------------------



                                       Three Months Ended     Three Months Ended
                                         March 31, 2005         March 31, 2004
                                         --------------         --------------
SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest Paid                              $33,267                $26,517
                                             =======                =======



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

                                       4
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND MARCH 31, 2004 (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 months ended March 31, 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, 2004.

     American Soil Technologies, Inc. (the "Company"), formerly 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 soil
     amendments to the agricultural community. 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
     also has exclusive license rights to the use of patented polymer
     application techniques.

     GOING CONCERN AND MANAGEMENT'S PLANS

     The Company has sustained significant losses and has an accumulated deficit
     of $12,660,181. 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 additional 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.

                                       5
<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 RECEIVABLE: The Company utilizes the allowance method to provide a
     reserve for uncollectible accounts.

     INVENTORIES consist primarily of purchased polymer soil amendments and
     manufactured injection machines. 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 $25,881 and $27,544 for the three months ended
     March 31, 2005 and 2004, 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. The carrying value of these assets is periodically evaluated for
     impairment.

     ADVERTISING: The Company expenses advertising costs as incurred.
     Advertising expense was $119,724 and $119,367 for the three months ended
     March 31, 2005 and 2004, 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.

     FINANCIAL INSTRUMENTS: Financial instruments consist primarily of accounts
     receivable, notes receivable, and obligations under accounts payable,
     capital leases, convertible debentures and notes payable to related parties
     and notes payable to unrelated entities. 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

                                       6
<PAGE>
     interest rates and have specified repayment terms. Obligations under
     capital leases approximate fair value because the original balances
     approximated the fair value of the underlying equipment at the time the
     obligations were incurred. The fair value of the related party notes
     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.

     STOCK-BASED COMPENSATION: In December 2002, the FASB approved SFAS No. 148
     ACCOUNTING FOR STOCK-BASED COMPENSATION - TRANSITION AND DISCLOSURE - AN
     AMENDMENT OF FASB STATEMENT NO. 123. SFAS No. 148 amends SFAS No. 123
     ACCOUNTING FOR STOCK-BASED COMPENSATION to provide alternative methods of
     transition for a voluntary change to the fair value based method of
     accounting for stock-based employee compensation. In addition, SFAS No. 148
     amends the disclosure requirements of SFAS No. 123 to require prominent
     disclosures in both annual and interim financial statements about the
     method of accounting used on reported results. The provisions of these
     SFAS's allow companies to account for stock-based compensation either under
     the new provisions or under the provisions of APB No. 25 ACCOUNTING FOR
     STOCK ISSUED TO EMPLOYEES, but requires pro forma disclosure in the
     footnotes to the financial statements as if the measurement provisions of
     SFAS No. 123 had been adopted. The provisions of SFAS No. 148 are effective
     for financial statements for the three months ended June 30, 2003. The
     Company has implemented SFAS No. 148. The Company will continue to account
     for stock-based compensation using the methods and provisions of APB No.
     25. As a result, there is no effect on the results of the Company for any
     period presented.

     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.

                                       7
<PAGE>
     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 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.

     There were no stock options granted or exercised during the period ended
     March 31, 2005. All granted options were fully vested as of June 30, 2003.
     The following summarizes information at March 31, 2005:

<TABLE>
<CAPTION>
                       Options Outstanding                                    Options Exercisable
     ------------------------------------------------------- -----------------------------------------------
                                          Weighted Average     Weighted                          Weighted
                           Number            Remaining         Average           Number          Average
        Range of       outstanding at    Contractual Life      Exercise      Exercisable at      Exercise
     Exercise Prices   March 31, 2005       (in years)          Price        March 31, 2004       Price
     ----------------- ---------------- -------------------- ------------- ------------------- -------------
<S>      <C>               <C>                 <C>              <C>              <C>              <C>
         $0.50             950,000             7.75             $0.50            950,000          $0.50
         -----             -------             ----             -----            -------          -----
         $0.50             950,000             7.75             $0.50            950,000          $0.50
         =====             =======             ====             =====            =======          =====
</TABLE>

     No stock-based employee compensation cost is reflected in the March 31,
     2005 or March 31, 2004 income statements, as all options granted under
     these plans had an exercise price equal to or in excess of the market value
     of the underlying common stock on the date of the grant. The following
     table illustrates the effect in net loss and loss per share if the Company
     had applied the fair value recognition provisions of SFAS No. 123:

                                        Three Months Ended    Three Months Ended
                                          March 31, 2005        March 31, 2004
                                          --------------        --------------
     Net Loss                               $(745,194)            $(402,036)

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

     Pro forma net loss                     $(745,194)            $(402,036)
                                            =========             =========

     Net loss per share as reported         $   (0.05)            $   (0.04)
                                            =========             =========

     Net loss per share pro forma           $   (0.05)            $   (0.04)
                                            =========             =========

                                       8
<PAGE>
     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.

     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, 2004 financial statements in order to conform to the March 31, 2005
     presentation.

     RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS: In April 2003, the FASB issued
     SFAS No. 149, "AMENDMENT OF STATEMENT 133 ON DERIVATIVE INSTRUMENTS AND
     HEDGING ACTIVITIES," effective for contracts entered into or modified after
     June 30, 2003. This amendment clarifies when a contract meets the
     characteristics of a derivative, clarifies when a derivate contains a
     financing component and amends certain other existing pronouncements. The
     adoption of SFAS No. 149 did not have a material effect on the Company's
     financial statements.

     In May 2003, the FASB issued SFAS No. 150, "ACCOUNTING FOR CERTAIN
     FINANCIAL INSTRUMENTS WITH CHARACTERISTICS OF BOTH LIABILITIES AND EQUITY."
     SFAS No. 150 was effective for financial instruments entered into or
     modified after May 31, 2003, and otherwise was effective at the beginning
     of the first interim period beginning after June 15, 2003. SFAS No. 150
     requires the classification as a liability of any financial instruments
     with a mandatory redemption feature, an obligation to repurchase equity
     shares, or a conditional obligation based on the issuance of a variable
     number of its equity shares. The Company does not have any financial
     instruments with a mandatory redemption feature and therefore, the adoption
     of SFAS 150 did not have a material effect on the Company's financial
     statements.

     In November 2002, the FASB issued FASB Interpretation No. 45, "GUARANTOR'S
     ACCOUNTING AND DISCLOSURE REQUIREMENTS FOR GUARANTEES, INCLUDING INDIRECT
     GUARANTEES OF INDEBTEDNESS OF OTHERS" (FIN 45). FIN 45 clarifies the
     requirements for a guarantor's accounting for and disclosure of certain
     guarantees issued and outstanding. The initial recognition and initial
     measurement provisions of FIN 45 are applicable to guarantees issued or
     modified after December 31, 2002. The disclosure requirements of FIN 45 are
     effective for financial statements for periods ending after December 15,
     2002. The adoption of FIN 45 did not have a significant impact on the
     Company's financial statements.

                                       9
<PAGE>
     In January 2003, the FASB issued FIN No. 46, "CONSOLIDATION OF VARIABLE
     INTEREST ENTITIES" (FIN 46). FIN No. 46 states that companies that have
     exposure to the economic risks and potential rewards from another entity's
     assets and activities have a controlling financial interest in a variable
     interest entity and should consolidate the entity, despite the absence of
     clear control through a voting equity interest. The consolidation
     requirements apply to all variable interest entities created after January
     31, 2003. For variable interest entities that existed prior to February 1,
     2003, the consolidation requirements are effective for annual or interim
     periods beginning after June 15, 2003. Disclosure of significant variable
     interest entities is required in all financial statements issued after
     January 31, 2003, regardless of when the variable interest was created. The
     adoption of FIN 46 did not have a significant impact on the Company's
     financial statements.

     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 Company is evaluating the impact of this
     new pronouncement and has not yet estimated the effect of implementation on
     the Company's financial statements.

3. INVENTORY

     Inventory is comprised of the following at March 31, 2005:


                  Work in progress             $ 95,614
                  Finished goods                270,319
                                               --------
                  Total                        $365,933
                                               ========

     The work in progress category accrues costs incurred on the construction of
     ten injection machines. The estimated cost to complete the machines is
     approximately $335,000.

  4. INTELLECTUAL PROPERTY

     On December 31, 1999 the Company purchased exclusive license rights to
     patented polymer application techniques. The licenses are being amortized
     using the straight line method over the life of the licenses, which is 14
     1/2 years. The carrying value of these assets is periodically evaluated for
     impairment. The amortization expense was $11,711 for each of the three
     months ended March 31, 2005 and 2004. The following summarizes the
     estimated future amortization expense of the intellectual property:

                      Year                      Amount
                      ----                      ------
                      2005                     $ 35,132
                      2006                       46,843
                      2007                       46,843
                      2008                       46,843
                      2009                       46,843
                   Thereafter                   210,786
                                               --------
                     Total                     $433,290
                                               ========

                                       10
<PAGE>
     In addition, the Company is required to pay royalties to the patent holder.
     Per the terms of the agreement, the Company is required to pay the patent
     holder one and a half percent (1.5%) of net sales generated by the Company
     as a result of holding the patent. During the three months ended March 31,
     2005 and 2004, total royalties earned were $1,493 and $ -0-, respectively.
     The payment of royalties are reduced by amounts owed to the Company by the
     patent holder - see Note 5.

5. NOTE RECEIVABLE

     The $60,000 note receivable is due from an individual who has been
     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, 2005 and 2004, the
     Company recognized $675 and $ -0- in interest income and $1,493 and $-0- in
     royalty expense, respectively, related to this agreement.

6. NOTES PAYABLE

     Notes payable at March 31, 2005 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, 2007.                                               $  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, 2007.                                                    250,000

     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, 2007.                                                  200,000

     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, 2006.                                                   25,000

                                       11
<PAGE>
     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, 2006.                                                   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
     June 22, 2005.                                                      20,000

     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.                               218,480

     Note payable to related party, original balance of
     $152,000, interest at 8% per annum and payable monthly.
     Note is unsecured. Principal is due September 29, 2006.            152,000

     Note payable to related party, original balance of
     $1,600,000, interest at 8% per annum and payable
     monthly. Note is unsecured. Principal is due September
     29, 2006.                                                        1,600,000

     Note payable to lending institution, original balance
     of $48,542, interest at 2.9% per annum. Requires
     monthly principal and interest payments of $736 through
     2009. Collateralized by vehicle.                                    39,156

     Note payable to related party, original balance of
     $156,673, interest at prime rate, 4.75% at March 31,
     2005, and is payable monthly. Note is unsecured.
     Principal is due September 29, 2006.                               160,673

     Note payable to finance company, original balance of
     $75,000, interest at 17.7% per annum. Requires monthly
     principal and interest payments of $1,814 through 2009.
     Collateralized by polymer injection machine.                        67,721
                                                                     ----------
            Total                                                    $3,008,030

            Less current portion                                       (262,048)
                                                                     ----------

            Total long-term portion                                  $2,745,982
                                                                     ==========

                                       12
<PAGE>
     Future maturities of principal as of March 31 are as follows:

         2006                                                        $  262,048
         2007                                                         2,238,003
         2008                                                           290,245
         2009                                                            45,121
         2010                                                            42,871
         Thereafter                                                     129,742
                                                                     ----------

                  Total                                              $3,008,030
                                                                     ==========

    The notes payable of $1,600,000, $160,673 and $152,000 and the three
    convertible debentures totaling $700,000 are held by entities that hold
    approximately 23% of the Company's common stock. Subsequent to March 31,
    2005, the $1,600,000, $160,673 and the $152,000 notes and their related
    accrued interest through April 7, 2005 were converted to a total of
    4,986,998 shares of common stock.

7. STOCKHOLDERS' DEFICIT

   COMMON STOCK

   The Company has 100,000,000 shares authorized. At March 31, 2005, the Company
   had 15,348,379 shares of $0.001 par value common stock outstanding.

   SERIES A CONVERTIBLE PREFERRED STOCK

   The Company has 10,000,000 shares of Series A Convertible Preferred Stock
   authorized. At March 31, 2005, the Company had 4,763,699 shares of $0.50
   stated value Series A preferred stock issued and outstanding. On March 31,
   2003, the Company issued 4,763,699 shares of Series A convertible preferred
   stock for the conversion of debt in the principal amount of $2,381,849. The
   holders of the preferred stock have the option to convert to common stock at
   a rate of one share of common stock for each share of preferred stock
   tendered. Except as otherwise required by law or pursuant to any other
   provision, the holders of Series A Preferred stock have no voting rights.
   Subsequent to March 31, 2005, 2,000,000 shares of Series A preferred stock
   was converted to 2,000,000 shares of common stock.

   DIVIDENDS: Preferred shareholders are entitled to receive preferential
   quarterly dividends equal to the prime rate per share, when and if declared
   by the Board of Directors, out of any assets that are legally available. If
   the Board of Directors declares that such dividends may only be payable in
   shares of common stock for any quarter, holders of Series A preferred stock
   have the option of accepting the dividend paid in shares of common stock of
   the Company, or letting the dividend accrue for a cash payment. No dividends
   have been declared, accrued or paid.

   LIQUIDATION RIGHTS: The holders of Series A preferred stock are entitled to
   be paid the stated value of their holdings out of the assets of the Company,
   prior and in preference to any payment or distribution out of the assets of
   the Company to the holders of common stock or any other class or series of
   capital stock.

                                       13
<PAGE>
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 periods ended March 31, 2005 and 2004. The following securities have
     been excluded from the calculation because inclusion of such would be
     anti-dilutive:

                                        March 31, 2005            March 31, 2004
                                        --------------            --------------
     Convertible preferred stock          4,763,699                 4,763,699
     Common stock options                   950,000                 1,310,000
     Convertible debt                     1,612,947                 1,217,297
                                          ---------                 ---------
                                          7,326,646                 7,290,996
                                          =========                 =========

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

<TABLE>
<CAPTION>
                                        March 31, 2005                                    March 31, 2004
                             -------------------------------------         ----------------------------------------
<S>                          <C>           <C>            <C>              <C>              <C>             <C>
     Net Loss                $(745,194)                                    $(402,036)

     Preferred stock
     dividends                      --                                            --
                             ---------                                     ---------
     Loss available
     to common
     Stockholders            $(745,194)                                    $(402,036)
                             =========                                     =========
     BASIC EARNINGS
     PER SHARE:

     Loss available to
     common stockholders     $(745,194)    14,774,251     $(0.05)          $(402,036)       9,096,585       $(0.04)
                             =========                    ======           =========                        ======
     Effect of dilutive
     securities                  N/A            N/A                            N/A             N/A


     DILUTED EARNINGS
     PER SHARE               $(745,194)    14,774,251     $(0.05)          $(402,036)       9,096,585       $(0.04)
                             =========                    ======           =========                        ======
</TABLE>

                                       14
<PAGE>
9. RELATED PARTY TRANSACTIONS

     During the three months ended March 31, 2005 and 2004, respectively, the
     Company conducted related party transactions with Board members, officers
     and affiliated entities as described below:

     DIRECTORS & Officers

     Neil C. Kitchen, a Director and Vice President, has a $20,000 Debenture
     with the Company which is convertible at $0.50 per share with interest at
     10%, maturing in the second calendar quarter of 2005. Interest incurred on
     this debenture was $394, and $399 for the three months ended March 31,
     2005, and 2004, respectively.

     The holders of the two $25,000 convertible debentures and the $218,480
     convertible debenture are personally related to Louis Visco. Interest
     incurred on these debentures was $6,449, and $6,831 for the three months
     ended March 31, 2005 and 2004, respectively.

     AFFILIATED ENTITIES

     Louis Visco, Director, is an owner and director of FLD Corporation, the
     holder of two (2) $250,000 and one $200,000 debentures convertible at $0.50
     per share with interest at 8%, maturing in the first calendar quarter of
     2007 and $1,760,673 in notes payable. Interest incurred on these debentures
     and notes was $47,170, and $20,569 for the three months ended March 31,
     2005, and 2004, respectively. Subsequent to March 31, 2005, the $1,725,673
     in notes payable and accrued interest thru April 7, 2005 were converted to
     common stock.

     Louis Visco is also an owner of the Benz Disposal Company, which is the
     holder of notes payable totaling $152,000. Interest incurred on this
     debenture was $1,516, and $3,040 for the three months ended March 31, 2005
     and 2004, respectively. Subsequent to March 31, 2005, the $152,000 in notes
     payable and accrued interest through April 7, 2005 were converted to common
     stock.

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

     Ronald Salestrom, contracted to provide services to the Company as its
     Chief Technical Officer, is also 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 1.5% of net sales generated by the Company as
     a result of holding the patent. As of March 31, 2005, total royalties
     earned were $1,493. 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, 2005, the Company recognized interest
     income on this note of $675. Accrued interest receivable at March 31, 2005
     was $1,388. Mr. Salestrom's contract expired January 4, 2005 and has not
     been renewed.

                                       15
<PAGE>
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, 2005, the Company did not exceed those limits.

     During the three months ended March 31, 2005 and 2004, respectively, sales
     to two customers aggregated to approximately 54% and 52%, respectively, of
     total sales for the period. Approximately 34% and 53% of the accounts
     receivable balance at March 31, 2005 and March 31, 2004, respectively, were
     comprised of balances due from two customers.

     The Company has an agreement with a supplier that grants the Company
     exclusive rights to sell and distribute the supplier's products in the
     western United States. This supplier's products represent approximately 63%
     and 42% of product in inventory at March 31, 2005 and 2004, respectively
     and 80% and 69% of the products sold in the three months ended March 31,
     2005 and 2004, respectively.

11. COMMITMENTS

     During the year ended December 31, 2004, the Company arranged to have ten
     polymer injector machines built for eventual resale. The estimated cost for
     the machines is $420,000, of which $95,614 has been incurred and is shown
     as work in progress in (see footnote 3).

     Additionally, 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 also entered into an agreement on November 24, 2004 with an
     unrelated entity whereby the entity will provide investor relation services
     for an initial period of six months beginning December 1, 2004. In exchange
     for these services, the Company will provide a total of $60,000 and 250,000
     shares of common stock in remuneration, payable in monthly installments of
     $10,000 and 50,000 shares of common stock per month. This contract may be
     renewed by the Company at its discretion. Expense recorded as of March 31,
     2005 related to this agreement is $32,500. The contract has been renewed
     for another six months at $10,000 per month without additional stock
     compensation.

12. SUBSEQUENT EVENTS

     On April 7, 2005, Benz Disposal Co. elected to convert its loan to the
     Company, which consisted of principal in the amount of $152,000 and
     interest in the amount of $5,067 for a total of $157,067 into shares of
     common stock of the Company at $0.40 per shares for a total of 392,668
     shares.

     On April 7, 2005, the Benz Group elected to convert 2,000,000 shares of
     Series A Preferred Stock of the Company into 2,000,000 shares of common
     stock of the Company pursuant to the terms of the Series A Preferred Stock.

     On April 7, 2005, FLD Corporation elected to convert its loan to the
     Company which consisted of principal in the amount of $1,778,673 and
     interest in the amount of $59,059 for a total of $1,837,732 into shares of
     common stock of the Company at $0.40 per shares for a total of 4,594,330
     shares.

                                       16
<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 the
Company's financial statements, including the notes thereto, appearing elsewhere
in this Report.

FORWARD-LOOKING STATEMENTS

The following information contains certain forward-looking statements of
management of the Company. 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

The Company owns 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, the Company has devoted substantial
resources, including executive time and money, to the development of strategic
relationships and contracts for the marketing and distribution of its polymer
products. Additionally, the Company has developed the M-216 Polymer Injector, an
injection machine designed to install the Company's products accurately and
quickly on all types and sizes of turf including golf courses, sport fields, as
well as commercial and private lawns. Over the last year, the Company has been
exhibiting the M-216 Polymer Injector along with its products throughout Arizona
and California.

RESULTS OF OPERATIONS

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

                                      Three Months Ended      Three Months Ended
                                        March 31, 2005          March 31, 2004
                                        --------------          --------------
                                          (unaudited)
(unaudited)
Statement of Operations Data:
  Revenue                                $    252,297            $    240,908
  (Loss)                                 $   (745,194)           $   (420,036)
  (Net Loss) Per Share                   $      (0.05            $      (0.04)
Balance Sheet Data:
  Current Assets                         $    580,077            $    375,218
  Total Property & Equipment, Net        $    388,297            $    457,537
  Patents, Net                           $    433,290            $    480,136
  Net Deferred Tax Asset                 $          0            $          0
  Total Assets                           $  1,471,588            $  1,382,815
  Total Current Liabilities              $    900,597            $    845,596
  Accumulated Deficit                    $(12,660,181)           $(10,662,185)

                                       17
<PAGE>
THREE MONTHS ENDED MARCH 31, 2005 (UNAUDITED) COMPARED TO THREE MONTHS ENDED
MARCH 31, 2004 (UNAUDITED)

REVENUES

Revenues for the three months ended March 31, 2005 were $252,297 compared to
$240,908for the same period in 2004, an increase of 4.7%. This increase in
revenue was the result of the initial sales efforts of new distributors.

COST OF SALES

Cost of goods sold for the three months ended March 31, 2005 were $154,573
compared to $125,236 for the three months ended March 31, 2004, an increase of
18.9%. The cost of goods sold increased because of two raw material price
increases and additional packaging costs.

INVENTORY

Inventory balances were $365,933 for the three months ended March 31, 2005
compared to $151,916 for the three months ended March 31, 2004. The Company
previously would only purchase raw materials upon receipt of a customer order.
To facilitate quicker order filling processes and reducing materials' costs by
ordering in bulk, the Company began to inventory larger volumes of raw materials
in the period ended December 31, 2003.

OPERATING EXPENSES

Operating expenses increased 37,7% from $486,502 for the three months ended
March 31, 2004 compared to $781,228 for the three months ended March 31, 2005.
The sales and marketing costs in this reporting period decreased to $140,113
from $151,612 during the same period in 2004. The Company had a decrease in
research and development costs regarding its new machine, the M-216 Polymer
Injector, during this reporting period of $43,647

INCOME TAXES

The Company did not provide for income tax expense or provision for the period
ended March 31, 2005 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

The Company experienced a net loss from operations of $(745,194) for the three
months ended March 31, 2005 as compared to a net loss of $(402,036) for the
three months ended March 31, 2004. The loss is directly related to the Company's
increased general and administrative expenses from $250,392 in the three months
ended March 31, 2004 to $601,882 for the three months ended March 31, 2005. The
increase is directly related to common stock granted to directors and certain
employees valued at $294,726 as well as $67,500 expended for investor relations
service. The sales and marketing efforts by the Company also decreased by
$11,500. The Company also decreased its expenses for the research and

                                       18
<PAGE>
development of the M-216 Polymer Injector by $43,647. The Company continues to
focus its efforts on developing strategic alliances, marketing agreements, and
distribution networks. Revenue from the sale of agricultural products increased
from $240,908 for the three months ended March 31, 2004 to $252,297 for the
three months ended March 31, 2005. Because these arrangements are new and
untested, it is uncertain whether this trend will continue.

SEASONALITY

The efforts of the Company 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 the Company's markets will become
diverse and therefore not indicate significant seasonal variations. As the
Company expands into the residential and commercial markets nationally, it is
expected that the Company 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 $28,700 and $29,643 at March 31, 2005 and
2004, respectively. Net cash used by operations was $(461,917) for the period
ended March 31, 2005 compared to net cash used by operations of $(490,338) for
the comparable period ended March 31, 2004.

In March 2000, the Company 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 common stock of the Company at a rate
of one share for each three dollars converted. The debentures matured in the
first calendar quarter of 2002. During 2001, $250,000 of debentures were
converted into 83,334 shares of stock and, during 2002, the Company redeemed
$500,000 of debentures and issued $250,000 of debentures. In February 2005, the
Company issued a $200,000 debenture convertible at a rate of $0.50 for one share
of common stock. At March 31, 2005, debentures consisted of $970,000 of 8% per
annum convertible debentures at a rate of $0.50 per share and $218,480 of 10%
per annum convertible at a rate of $3.00 per share. If the remaining debt is
converted, the Company would issue an additional 1,612,826 shares. Interest
expense for the three months ended March 31, 2005 was $62,330 compared to
$31,206 for the three months ended March 31, 2004.

During the three months ended March 31, 2004, the Benz Group agreed to convert
the Company's outstanding debt of $2,381,849 into shares of Series A Preferred
Stock of the Company. This conversion resulted in the issuance of 4,763,699
shares of Series A Preferred Stock with a stated value of $0.50 per share, a
dividend rate equal to the prime rate for the period and a conversion option
into shares of common stock on a one-for-one basis. On April 7, 2005, the Benz
Group elected to convert 2,000,000 shares of Series A Preferred Stock of the
Company into 2,000,000 shares of common stock of the Company pursuant to the
terms of the Series A Preferred Stock.

                                       19
<PAGE>
On April 7, 2005, Benz Disposal Co. elected to convert its loan to the Company
which consisted of principal in the amount of $152,000 and interest in the
amount of $5,067 for a total of $157,067 into shares of common stock of the
Company at $0.40 per shares for a total of 392,668 shares.

On April 7, 2005, FLD Corporation elected to convert its loan to the Company
which consisted of principal in the amount of $1,778,673 and interest in the
amount of $59,059 for a total of $1,837,732 into shares of common stock of the
Company at $0.40 per shares for a total of 4,594,330 shares.

The Company has a deficit in working capital (current assets less current
liabilities) of $(320,520) as of March 31, 2005 compared to working capital of
$470,378 as of March 31, 2004. The working capital deficit is primarily caused
by the current status of the debentures payable.

As shown in the accompanying financial statements, the Company has incurred an
accumulated deficit of $(12,660,181) and has a working capital deficit of
approximately $(2,194,232) as of March 31, 2005. The ability of the Company to
continue as a going concern is dependent on obtaining additional capital and
financing and operating at a profitable level. The Company intends to seek
additional capital either through debt or equity offerings and to increase sales
volume and operating margins to achieve profitability. The Company's working
capital and other capital requirements during the next fiscal year and
thereafter will vary based on the sales revenue generated by the recent
accumulation of additional products and the distribution and sales network the
Company has created and will continue to grow.

The Company will consider both the public and private sale of securities and or
debt instruments for expansion of its operations if such expansion would benefit
the overall growth and income objectives of the Company. Should sales growth not
materialize, the Company may look to these public and private sources of
financing. There can be no assurance, however, that the Company 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 the
Company's ability to timely meet its business objectives.

The Board of Directors approved a resolution to negotiate and structure a
Regulation S offering of $3,5000,000 during the three months ended March 31,
2004. As of the date of this Report, a gross amount of $2,223,527 has been
raised in this financing.

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

                                       20
<PAGE>
America, our actual realized results may differ from management's initial
estimates as reported. A summary of our significant accounting policies is
detailed in the notes to the financial statements which are an integral
component of this filing.

Management evaluates the probability of the utilization of the deferred income
tax asset related to the net operating loss carryforwards. The Company had
previously recorded a net deferred income tax asset of $2,283,000. Management
determined that because the Company has yet to generate taxable income and that
the generation of taxable income in the short term is uncertain, it was
appropriate to provide a valuation allowance for the total deferred income tax
asset.

The Company has capitalized approximately $380,000 associated with the
construction of a demonstration injection machine. The Company is negotiating to
place the machine in service in June 30, 2005. Management believes that although
the capitalized costs exceed a value at which the unit could be sold, the
Company will derive several years of benefits from the unit by using it in sales
demonstrations and as a loaner unit.

On December 31, 1999 the Company 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 the Company has based its plan of operations. The carrying
value of these licensing rights was $433,290 at March 31, 2005.

The Company has demand notes payable with a total principal balance of
$1,930,673 at March 31, 2005. These notes are held by the Company's controlling
shareholder. The Company has received assurances from the controlling
shareholder that the notes will not be called within the next year. Accordingly,
the Company has not classified the debt as current. On Aril 7, 2005 these notes
including interest in the amount of $64,126 were converted to 4,986,998common
shares of the Company.

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 the Company.

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

From March 30, 2005, the date of the Company's last report, through May 13,
2005, the Company sold 614,500 shares of its common stock to 70 non-United
States residents for gross proceeds of $609,599. 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.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5. OTHER INFORMATION

The Company entered into a Dealer Agreement with Reinke Pasco, Inc of Pasco,
Washington on May 6, 2005.

ITEM 6. EXHIBITS

The following Exhibits are filed herein:

         No.                              Title
         ---                              -----
        10.1    Dealer Agreement with Reinke Pasco, Inc dated May 6, 2005
        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

                                       22
<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 20, 2005                      AMERICAN SOIL TECHNOLOGIES, INC.


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


                                             /s/ Ken Lew
                                             -----------------------------------
                                         By:  Ken Lew
                                         Its: Chief Financial Officer
                                              (Principal Financial Officer and
                                              Principal Accounting Officer)

                                       23