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 September 30, 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 [ ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

As of November 13, 2006, the number of shares of Common Stock issued and
outstanding was 32,204,648.

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

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

Item 1.  Financial Statements (Unaudited)                                    3

         Balance Sheet -September 30, 2006                                   3

         Statements of Operations -
         For the three and nine months ended September 30, 2006 and 2005     4

         Statements of Cash Flow -
         For the nine months ended September 30, 2006 and 2005               5

         Notes to Financial Statements                                       7

Item 2.  Management's Discussion and Analysis of Financial
                  Conditions and Results of Operations                      20

Item 3.  Internal Controls                                                  24

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings                                                  25

Item 2.  Changes in Securities                                              25

Item 3.  Defaults Upon Senior Securities                                    25

Item 4.  Submission of Matters to a Vote of Security Holders                25

Item 5.  Other Information                                                  25

Item 6.  Exhibits and Reports on Form 8-K                                   25

SIGNATURES                                                                  26

                                       2
<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AMERICAN SOIL TECHNOLOGIES, INC.

CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2006 (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S>                                                                               <C>
ASSETS:
CURRENT ASSETS
   Cash and cash equivalents                                                      $     14,577
   Accounts receivable, net of allowance of doubtful accounts of $32,356                69,110
   Employee advances                                                                     3,277
   Inventory                                                                           387,034
   Prepaid expenses and other current assets                                           137,489
                                                                                  ------------
      Total current assets                                                             611,486
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $297,483                    337,218
INTELLECTUAL PROPERTY, net of accumulated amortization of $444,303                   2,222,864
RELATED PARTY NOTES RECEIVABLE                                                          32,709
                                                                                  ------------
      TOTAL ASSETS                                                                $  3,204,277
                                                                                  ============

LIABILITIES AND STOCKHOLDERS' EQUITY:

CURRENT LIABILITIES:
   Accounts payable                                                               $    513,200
   Accrued liabilities                                                                  10,790
   Notes payable - current portion                                                      22,082
   Note payable related parties - current portion                                       22,000
   Capital lease obligation - current portion                                           20,938
   Debentures payable to related parties - current portion                              87,204
                                                                                  ------------
      Total current liabilities                                                        676,214
NOTES PAYABLE - long-term portion                                                       55,652
CAPITAL LEASE OBLIGATION - long-term portion                                            59,102
NOTES PAYABLE TO RELATED PARTIES                                                            --
DEBENTURES PAYABLE TO RELATED PARTIES - long term portion                              878,508
                                                                                  ------------
      Total liabilities                                                              1,669,476
                                                                                  ------------
STOCKHOLDERS' EQUITY:
   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,
    31,844,648 shares issued and outstanding                                            31,845
   Paid in capital                                                                  13,634,378
   Accumulated deficit                                                             (15,763,270)
                                                                                  ------------
      Total stockholders' equity                                                     1,534,802
                                                                                  ------------

      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                  $  3,204,277
                                                                                  ============
</TABLE>

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

                                       3
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2006 AND SEPTEMBER 30, 2005
(UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                 Three Months       Three Months       Nine Months        Nine Months
                                                    Ended              Ended              Ended              Ended
                                                 September 30,      September 30,      September 30,      September 30,
                                                     2006               2005               2006               2005
                                                 ------------       ------------       ------------       ------------
<S>                                              <C>                <C>                <C>                <C>
NET REVENUES                                     $     80,104       $     47,311       $    440,967       $    517,318
                                                 ------------       ------------       ------------       ------------

COST OF GOODS SOLD                                     50,341             40,529            286,161            325,167
                                                 ------------       ------------       ------------       ------------
GROSS INCOME                                           29,763              6,782            154,806            192,152
                                                 ------------       ------------       ------------       ------------
OPERATING EXPENSES
  General and administrative                          352,976            355,343          1,071,428          1,261,803
  Sales and marketing                                  45,163             38,010            384,301            232,348
  Research and development                              1,951              3,043             18,416             13,095
  Depreciation                                         29,733             25,881             88,628             77,643
  Amortization                                         73,040             11,711            163,243             35,133

                                                 ------------       ------------       ------------       ------------
      Total operating expenses                        502,863            433,988          1,726,017          1,620,022
                                                 ------------       ------------       ------------       ------------

OPERATING LOSS                                       (473,101)          (427,206)        (1,571,210)        (1,427,871)
                                                 ------------       ------------       ------------       ------------
OTHER (INCOME)/EXPENSE
  Interest expense and related costs                   44,755             27,021            189,887            117,798
  Other expense                                           867                 --              1,155                 --
  Loss on sale                                         11,968
  Interest income                                          (4)              (675)            (1,357)            (2,026)
                                                 ------------       ------------       ------------       ------------
      Total other (income)/expense                     45,618             26,346            201,654            115,772
                                                 ------------       ------------       ------------       ------------

LOSS BEFORE INCOME TAXES                             (518,718)          (453,552)        (1,772,864)        (1,543,643)
                                                 ------------       ------------       ------------       ------------

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

NET LOSS                                         $   (518,718)      $   (453,552)      $ (1,772,864)      $ (1,543,643)
                                                 ============       ============       ============       ============
NET LOSS PER SHARE:
  Basic:                                         $      (0.02)      $      (0.02)      $      (0.07)      $      (0.07)
                                                 ============       ============       ============       ============
  Diluted:                                       $      (0.02)      $      (0.02)      $      (0.07)      $      (0.07)
                                                 ============       ============       ============       ============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
  Basic                                            27,619,909          4,782,411         27,065,310         20,661,955
                                                 ============       ============       ============       ============

  Diluted                                          27,619,909          4,782,411         27,065,310         20,661,955
                                                 ============       ============       ============       ============
</TABLE>
                 The accompanying notes are an integral part of
                     these unaudited financial statements.

                                       4
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 AND SEPTEMBER  30, 2005 (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                           Nine Months         Nine Months
                                                              Ended               Ended
                                                           September 30,       September 30,
                                                              2006                2005
                                                           -----------         -----------
<S>                                                        <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                 $(1,772,864)        $(1,543,643)
  Adjustments to reconcile net loss to net cash
   used by operating activities:
     Depreciation and amortization                             251,871             112,776
     Bad debt                                                   30,000
     Loss on disposal of fixed assets                           11,968
     Amortization of debt discount                              55,000
     Common stock issued to employees and directors                 --             224,208
     Stock issued for services                                  29,715             170,500
  Changes in assets and liabilities:
     Accounts receivable                                        64,043             (84,891)
     Allowance for doubtful accounts                                --              20,694
     Receivables from officers and employees                    (5,222)                571
     Prepaid and other current assets                          (40,922)              7,560
     Deposits and other assets                                      --              (2,120)
     Inventory                                                (174,069)            (87,998)
     Accounts payable                                          319,843              (5,936)
     Accrued liabilities                                       (31,611)              6,419
                                                           -----------         -----------
         Net cash  used by operating activities             (1,262,248)         (1,181,859)
                                                           -----------         -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of intellectual property                            (4,200)
  Purchases of property and equipment                          (36,032)                 --
                                                           -----------         -----------
         Net cash used for investing activities                (40,232)                 --
                                                           -----------         -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from related party notes payable                    962,841             310,500
  Proceeds from convertible debentures                              --             200,000
  Proceeds from sales/leaseback transaction                     75,000
  Principal repayments on convertible debentures              (11,866)             (10,749)
  Principal repayments on capital lease obligation            (16,099)             (12,999)
  Repayments on notes payable                                 (315,467)            (13,297)
  Proceeds from exercise of stock options                           --              30,000
  Proceeds from sale of preferred stock                        300,000                  --
  Proceeds from stock issuances                                 50,000             654,807
                                                           -----------         -----------
         Net cash provided by financing activities           1,044,409           1,158,262
                                                           -----------         -----------

DECREASE IN CASH AND CASH EQUIVALENTS                         (258,071)            (23,597)

CASH AND CASH EQUIVALENTS, beginning of period                 272,648              52,467
                                                           -----------         -----------
CASH AND CASH EQUIVALENTS, end of period                   $    14,577         $    28,870
                                                           ===========         ===========
</TABLE>
                 The accompanying notes are an integral part of
                     these unaudited financial statements.

                                       5
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 AND SEPTEMBER 30, 2005 (UNAUDITED)
--------------------------------------------------------------------------------

                                                Nine Months        Nine Months
                                                   Ended              Ended
                                                September 30,      September 30,
                                                   2006               2005
                                                -----------        -----------
SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest Paid                                 $   55,528         $   65,436
                                                ==========         ==========


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                                   $1,510,782         $1,994,799
                                                ==========         ==========

Conversion of preferred stock to common stock   $        0         $1,000,000
                                                ==========         ==========
Common stock issued in exchange for equipment
  and inventory                                 $   16,128         $        0
                                                ==========         ==========

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

                                       6
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 AND SEPTEMBER 30, 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, 2006 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"), 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 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
$15,763,270. 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.

                                       7
<PAGE>
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.

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 and other 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 $29,733 and $88,628 and $25,881 and $77,643 for the three and nine
month periods ended September 30, 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 $23,546 and $325,435 and $26,681 and $187,256 for the three and nine
month periods ended September 30, 2006 and 2005, respectively.

                                       8
<PAGE>
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, 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,

                                       9
<PAGE>
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. There were no such transactions for the three and nine months ended
September 30, 2006 or 2005.

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.

                                       10
<PAGE>
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 September 30, 2006:

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

                          Number        Weighted Average      Weighted        Number         Weighted
                      outstanding at       Remaining          Average     Exercisable at     Average
        Range of      September 30,     Contractual Life     Exercise     September 30,      Exercise
     Exercise Prices       2006            (in years)          Price           2006           Price
     ---------------       ----            ----------          -----           ----           -----
<S>      <C>             <C>                  <C>              <C>           <C>              <C>
         $  0.50         680,000              6.09            $  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      September 30,     Contractual Life     Exercise     September 30,      Exercise
     Exercise Prices       2006            (in years)          Price           2006           Price
     ---------------       ----            ----------          -----           ----           -----
         $  0.23         300,000              1.21            $  0.23        300,000         $  0.23
         $  0.23          21,000               .27            $  0.23         21,000         $  0.23
</TABLE>

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 September 30,
2005 financial statements in order to conform to the September30, 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.

                                       11
<PAGE>
3. INVENTORY

Inventory is comprised entirely of finished goods at September 30, 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 $73,040 and $163,243 and $11,711 and $35,133 for the
three and nine month periods ended September 30, 2006 and 2005, respectively.
The following summarizes the estimated future amortization expense of the
intellectual property:

                     Year                                  Amount
                     ----                                  ------
            Remaining three months
                   of 2006                              $   72,258
                     2007                                  291,561
                     2008                                  291,561
                     2009                                  291,561
                     2010                                  291,561
                  Thereafter                               984,362
                                                        ----------

                    Total                               $2,222,864
                                                        ==========

5. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at September 30, 2006:

     Machinery                                           $ 567,001
     Vehicle                                                44,615
     Office furnishings, fixtures and equipment             23,085
                                                         ---------
          Total                                            634,701
     Less accumulated depreciation                        (297,483)
                                                         ---------

          Property and equipment, net                    $ 337,218
                                                         =========

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

                                       12
<PAGE>
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
nine months ended September 30, 2006 and 2005, the Company recognized $1,350 and
$2,025 in interest income and $725 and $2637 in royalty expense, respectively,
related to this agreement. Due to slow sales, the Company has ceased to accrue
interest on this note and has reserved $30,000 of this note in the three and
nine months ended September 30, 2006.

7. NOTES PAYABLE

Notes payable at September 30, 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

Note payable to related party, original balance of $22,000,
interest at prime rate payable monthly. Note is unsecured
and due upon demand.                                                     22,000

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.                                                                  195,712

                             13
<PAGE>
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 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.                                               27,368

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.                             50,366
                                                                     ----------

            Total                                                     1,065,446
           Less current portion                                        (131,286)
                                                                     ----------
            Total long-term portion                                  $  934,160
                                                                     ==========

Future maturities of principal at September 30, 2006 are as follows:

         Due twelve months ending 9/30/07                            $  131,286
         2008                                                            44,010
         2009                                                           748,445
         2010                                                            25,390
         2011                                                            25,623
         2012                                                            28,305
         Thereafter                                                      62,387
                                                                     ----------
                  Total                                              $1,065,446
                                                                     ==========

The three of the 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.

During the nine months ended September 30, 2006, $1,368,341 in related party
notes payable and $177,016 in related accrued interest and accounts payable were
converted into 6,324,789 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%.

                                       14
<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 nine month periods
ended September 30, 2006 and 2005. The following securities have been excluded
from the calculation because inclusion of such would be anti-dilutive:

                                                Nine months ended
                                                September 30, 2006
                                                ------------------
     Convertible preferred stock                    7,263,699
     Common stock options                             680,000
      Warrants                                        321,000
      Convertible debt                              1,606,570
                                                    ---------
                                                    9,871,269
                                                    =========

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

<TABLE>
<CAPTION>
                                             Nine Months Ended                                Nine Months Ended
                                             September 30, 2006                               September 30, 2005
                                             ------------------                               ------------------
<S>                                <C>                 <C>            <C>          <C>              <C>              <C>
Net  Loss                      $(1,772,864)                                    $(1,543,643)

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

Loss available to common
Stockholders                   $(1,772,864)                                    $(1,543,643)
                               ===========                                     ===========
BASIC EARNINGS PER SHARE:


Loss available to common
stockholders                   $(1,772,864)        27,065,310     $(0.07)      $(1,543,643)     20,661,955       $(0.07)
                               ===========                        ======       ===========                       ======

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


DILUTED EARNINGS PER SHARE     $(1,772,864)        27,065,310     $(0.07)      $(1,543,643)     20,661,955       $(0.07)
                               ===========                        ======       ===========                       ======
</TABLE>
                                       15
<PAGE>
9. RELATED PARTY TRANSACTIONS

During the three and nine month periods ended September 30, 2006 and September
30, 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 $150,000 and $22,000 in notes payable. In
September 2006, a $150,000 note payable was converted to stock at .25 cents for
a total of 600,000 shares of common stock. Interest incurred on these notes and
debenture and was $4,172 and $8,249 during the three and nine month periods
ended September 30, 2006, respectively and $399 and $990 for the three and nine
month periods ended September 30 2005, respectively.

The holders of the two $25,000 convertible debentures and the $195,712
convertible debenture are personally related to Louis Visco. Interest incurred
on these debentures was $6,010 and $18,125 during the three and nine month
periods ended September 30, 2006 and $6,395 and $19,242 for the three and six
month ended September 30 2005, respectively.

Louie Visco, Director, is an owner and director of the FLD Corporation, the
holder of two $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 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. In May 2006, $250,000 principal due and $51,000 of accrued
interest was converted to stock at .37 cents a share. In September 2006 a total
of $1,010,850 in notes payable and current liabilities were converted to common
stock at .25 cents for a total of 4,042,602 shares of common stock. Interest
incurred on these debentures and note was $27,992 and $70,343 during the three
and nine month periods ended September 30, 2006 and $15,838 and $79,450 for the
three and nine month ended September 30 2005, 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. In May
2006, an additional lease was added to include warehouse space. Rents charged by
this entity for the three and nine months ended September 30, 2006 and 2005 were
$7,962 and $15,487 and $1,662 and $3,325, 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 1.5% of net sales generated by the Company as a
result of holding the patent. As of September 30, 2006, total royalties earned
were $4,851. In addition, Mr. Salestrom has a note receivable with the Company

                                       16
<PAGE>
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 nine months
ended September 30, 2006, the Company recognized interest income on this note of
$1,350 and $2,025, respectively. Accrued interest receivable at September 30,
2006 is $2,709.

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 September 30,
2006, the Company did not exceed those limits.

During the nine month period ended September 30, 2006, sales to three customers
aggregated to approximately 37% of total sales for the period. Approximately 56%
of the accounts receivable balance at September 30, 2006 was comprised of
balances due from three customers.

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.

In September 2005, the Company 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

                                       17
<PAGE>
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 Alchemy 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.

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.

Except as otherwise indicated, there are no material relationships between the
Company or its affiliates and any of the parties to the agreements described
above.

On July 7, 2006, the Company entered into an acquisition agreement with Smart
World Organics, Inc. ("Smart World"). Pursuant to the agreement, the Company
paid a $120,000 refundable deposit towards the acquisition of all of the
outstanding shares of Smart World. The agreement provides that, upon closing,
all of the shareholders of Smart World will exchange all of their shares of
common stock in Smart World for 2,300,000 shares of the common stock of the
Company. As of November 13, 2006, this transaction has not yet been finalized
and the $120,000 deposit is included in other current assets as of September 30,
2006.

                                       18
<PAGE>
On November 3, 2006, the Company entered into an agreement to lease
approximately 100 acres of land in San Mateo, California. Per the terms of the
agreement, the Company is required to pay rent of $100,000 per year for a total
of seven years or $700,000. The annual rent is due in advance each year of the
agreement. In addition, the Company is required to pay a $100,000 security
deposit.

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,
  Three months remaining in 2006                                   $  8,142
          2007                                                       32,569
          2008                                                       25,256
          2009                                                       21,600
          2010                                                       19,800
          Thereafter                                                      0
                                                                   --------
                Total                                               107,368
       Less: Amount representing interest                           (27,318)
                                                                   --------
                Total payments, net of interest                      80,040
       Less: Current portion                                        (20,938)
                                                                   --------
                Total long term minimum lease payments             $ 59,102
                                                                   ========

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

                                                                  September 30,
                                                                     2006
                                                                   ---------

Machinery and equipment                                            $ 107,000
Less: Accumulated depreciation                                       (23,822)
                                                                   ---------
                                                                   $  83,178
                                                                   =========

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.

                                  * * * * * * *

                                       19
<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:

                                       Nine months Ended      Nine months Ended
                                       September 30, 2006     September 30, 2005
                                       ------------------     ------------------
                                          (unaudited)            (unaudited)
Statement of Operations Data:
Revenue                                  $    440,967           $    517,318

(Loss)                                   $ (1,772,864)          $ (1,427,871)
(Net Loss) Per Share                     $      (0.07)          $      (0.07)
Balance Sheet Data:
Current Assets                           $    611,486           $    605,899
Total Property & Equipment, Net          $    337,218           $    336,535
Patents, Net                             $  2,222,864           $    409,868
Net Deferred Tax Asset                   $          0           $          0
Total Assets                             $  3,204,277           $  1,424,346
Total Current Liabilities                $    676,214           $    358,578
Accumulated Deficit                      $(15,763,270)          $(13,458,631)

                                       20
<PAGE>
NINE MONTHS ENDED SEPTEMBER 30, 2006 (UNAUDITED) COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 2005 (UNAUDITED)

REVENUES

Revenues for the nine months ended September 30, 2006 were $440,967 compared to
$517,318 for the same period in 2005, a decrease of 14.75%. This decrease in
revenue was the result of the increase in energy costs and climatic conditions
experienced in our markets.
..
COST OF SALES

Cost of goods sold for the nine months ended September 30, 2006 were $286,161
compared to $325,167 for the nine months ended September 30, 2005, a decrease of
12%. The cost of sales is consistent with the gross sales figures, increased
material costs and a direct result of our purchasing controls.

INVENTORY

Inventory balances were $387,034 for the nine months ended September 30, 2006
compared to $415,577 for the nine months ended September 30, 2005.

OPERATING EXPENSES

Operating expenses increased by approximately 6.5% from $1,620,022 for the nine
months ended September 30, 2005 compared to $1,726,017 for the nine months ended
September 30, 2006. This increase in operating expenses was primarily a result
of the increase in our amortization costs.

INCOME TAXES

We did not provide for income tax expense or provision for the period ended
September 30, 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 $(1,772,864) for the nine months
ended September 30, 2006 as compared to a net loss of $(1,543,643) for the nine
months ended September 30, 2005. The increase in the net loss is related to an
increase in our sales and marketing efforts of $151,953. We also increased our
interest expenses by $72,089 and our amortization expenses increased by
$128,110. We continue to focus our efforts on developing strategic alliances,
marketing agreements, and distribution networks. Revenue from the sale of

                                       21
<PAGE>
products decreased from $517,318 for the nine months ended September 30, 2005 to
$440,967 for the nine months ended June 30, 2006. This decrease in revenue was
the result of the increase in energy costs and climatic conditions experienced
in our markets.

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 $14,577 and $28,870 at September 30, 2006 and
2005, respectively. Net cash used by operations was $(1,262,248) for the period
ended September 30, 2006 compared to net cash used by operations of $(1,181,859)
for the comparable period ended September 30, 2005. We have historically relied
upon one of our directors 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 September
30, 2006, the outstanding balance of the debentures was $965,712 and at
September 30, 2005, the outstanding balance of the debentures was $981,285. At
September 30, 2006, convertible debentures consisted of $770,000 of 8% per annum
debentures at a rate of $0.50 per share and $195,712 of 10% per annum
convertible at a rate of $3.00 per share. If the remaining debt is converted, we
would issue an additional 1,605,238 shares. Interest expense for the nine months
ended September 30, 2006 was $189,887 and interest expense for the nine months
ended September 30, 2005 was $117,798.

We have a working capital deficit (current assets less current liabilities) of
$(64,728) as of September 30, 2006 compared to working capital of $247,321 as of
September 30, 2005. Our increase in current liabilities is directly related to
the cost of our inventory.

As shown in the accompanying financial statements, we have incurred an
accumulated deficit of $(15,763,270) and a working capital deficit of
approximately $(64,728) as of September 30, 2006. Our ability to continue as a
going concern is dependent on obtaining additional capital and financing and

                                       22
<PAGE>
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 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.

CRITICAL ACCOUNTING ESTIMATES

The preparation of our financial statements in conformity with accounting
principles generally accepted in the United States 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, 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 $380,000, less accumulated depreciation of
$185,619 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 $363,024 at September 30, 2006.

On March 14, 2006, we purchased Advanced Fertilizer Technologies, Inc.,
including patent 5,443,613, "A Method for Producing Suspension Fertilizer." The
acquisition for this patent was approximately $1,950,000. Management
periodically evaluates the carrying value of this asset for impairment. The
patent is critical to the process by which we based our plan of operations. The
carrying value of this patent was $1,816,024 at September 30, 2006.

                                       23
<PAGE>
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.

                                       24
<PAGE>
                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On or about September 21, 2006, we, along with Richard Roos and Dick Hansen
(collectively, "Plaintiffs"), filed a Complaint in the United States District
Court, District of Arizona against Earth Chem, Inc. ("Defendant") seeking
declaratory relief that Plaintiffs are not infringing on a patent allegedly
owned by Defendant, for declaratory relief that a patent purportedly owned by
Defendant is unenforceable, and enjoining Defendant from threatening the
Plaintiffs' customers, suppliers, dealers and users of Sircle Saver Sacks with
statements or representations that they are infringing upon a patent owned by
Defendant, as well as attorneys fees and costs. This matter is in an early stage
and Defendant has not yet been served with the Complaint.

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

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

Information may be obtained from our Information Statement on Schedule 14C filed
with the Securities and Exchange Commission on November 6, 2006.

ITEM 5. OTHER INFORMATION

On November 3, 2006, we entered into a Land Lease with Zion Half Moon, L.P.
whereby we leased approximately 100 acres of land in San Mateo County,
California, for a period of seven years at a rate of $100,000 per year. We plan
to use this land as a campus for agricultural and horticultural demonstrations
using our products.

ITEM 6.  EXHIBITS

The following Exhibits are filed herein:

 No.                                  Title
 ---                                  -----
10.1     Land Lease with Zion Half Moon, L.P., dated November 3, 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

                                       25
<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: November 13, 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)

                                       26