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, 2004

[ ] 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, CA 91331
                    (Address of principal executive offices)
         (Former address 215 N. Marengo, Suite 110, Pasadena, CA 91101)

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

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

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

As of November 8, 2004, the number of shares of Common Stock issued and
outstanding was 12,835,229.

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

                                                                           Page
                                                                          Number
                                                                          ------

PART I - FINANCIAL INFORMATION

     Item 1. Financial Statements (Unaudited)                                 2

          Consolidated Balance Sheet -September 30, 2004                      2

          Consolidated Statements of Operations -
          For the three and nine months ended September 30, 2004 and 2003     3

          Consolidated Statements of Cash Flows -
          For the nine months ended September 30, 2004 and 2003               4

          Notes to Consolidated Financial Statements                          6

     Item 2. Management's Discussion and Analysis of Financial
             Conditions and Results of Operations                            13

     Item 3. Controls and Procedures                                         17

PART II - OTHER INFORMATION
                                                                             18
     Item 1. Legal Proceedings

     Item 2. Unregistered Sales of Equity Securities and Use of Proceeds     18

     Item 3. Defaults Upon Senior Securities                                 18

     Item 4. Submission of Matters to a Vote of Security Holders             18

     Item 5. Other Information                                               18

     Item 6. Exhibits                                                        18

SIGNATURES                                                                   19

                                       1
<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AMERICAN SOIL TECHNOLOGIES, INC.

CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2004 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S>                                                                               <C>
ASSETS:

CURRENT ASSETS
   Cash and cash equivalents                                                      $     18,635
   Accounts receivable, net of allowance of doubtful accounts of $17,662               123,007
   Employee advances                                                                     2,934
   Inventory                                                                           242,059
   Prepaid expenses and other current assets                                            21,612
                                                                                  ------------
      Total current assets                                                             408,247
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $97,482                     440,059
DEPOSITS AND OTHER ASSETS                                                                9,924
INTELLECTUAL PROPERTY, net of accumulated amortization of $222,505                     456,712
RELATED PARTY NOTES RECEIVABLE                                                          62,025
                                                                                  ------------
      TOTAL ASSETS                                                                $  1,376,967
                                                                                  ============

LIABILITIES AND STOCKHOLDERS' DEFICIT:

CURRENT LIABILITIES:
   Accounts payable                                                               $    316,398
   Accrued liabilities                                                                   7,386
   Notes payable - current portion                                                       7,690
   Capital lease obligation - current portion                                           16,798
   Debentures payable to related parties - current portion                             582,751
                                                                                  ------------
      Total current liabilities                                                        931,023
NOTES PAYABLE - long-term portion                                                       35,283
CAPITAL LEASE OBLIGATION - long-term portion                                            25,009
NOTES PAYABLE TO RELATED PARTIES                                                     1,877,673
DEBENTURES PAYABLE TO RELATED PARTIES - long term portion                              212,630
                                                                                  ------------
      Total liabilities                                                              3,081,618
                                                                                  ------------
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,
     11,273,585 shares issued and outstanding                                           11,274
   Paid in capital                                                                   7,325,540
   Accumulated deficit                                                             (11,423,314)
                                                                                  ------------
      Total stockholders' deficit                                                   (1,704,651)
                                                                                  ------------

    TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                   $  1,376,967
                                                                                  ============
</TABLE>

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

                                       2
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 AND SEPTEMBER 30, 2003
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                         Three Months        Three Months        Nine Months         Nine Months
                                             Ended               Ended              Ended               Ended
                                         September 30,       September 30,       September 30,       September 30,
                                             2004                2003                2004                2003
                                         -----------         -----------         -----------         -----------
<S>                                      <C>                 <C>                 <C>                 <C>
NET REVENUES                             $   161,271         $    46,557         $   544,804         $   466,616
                                         -----------         -----------         -----------         -----------

COST OF GOODS SOLD                           104,930              52,958             347,903             338,044
                                         -----------         -----------         -----------         -----------
GROSS INCOME                                  56,341              (6,401)            196,901             128,572
                                         -----------         -----------         -----------         -----------
OPERATING EXPENSES
  General and administrative                 242,541             200,154             710,019             629,799
  Sales and marketing                         84,931               2,964             288,678              31,056
  Research and development                    40,574              30,772             140,071              32,565
  Depreciation                                25,881              10,708              79,307              25,266
  Amortization                                11,712               9,988              35,135              29,985
                                         -----------         -----------         -----------         -----------
      Total operating expenses               405,639             254,586           1,253,210             748,671
                                         -----------         -----------         -----------         -----------

OPERATING LOSS                              (349,298)           (260,987)         (1,056,309)           (620,099)
                                         -----------         -----------         -----------         -----------
OTHER (INCOME)/EXPENSE
  Interest expense and related costs          41,591              21,301             108,881              81,000
  Interest income                               (675)                 --              (2,025)                 --
                                         -----------         -----------         -----------         -----------
      Total other (income)/expense            40,916              21,301             106,856              81,000
                                         -----------         -----------         -----------         -----------

LOSS BEFORE INCOME TAXES                    (390,214)           (282,288)         (1,163,165)           (701,099)
                                         -----------         -----------         -----------         -----------

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

NET LOSS                                    (390,214)        $  (282,288)        $(1,163,165)        $  (701,099)
                                         ===========         ===========         ===========         ===========
NET LOSS PER SHARE:
  Basic                                  $     (0.04)        $     (0.03)        $     (0.12)        $     (0.08)
                                         ===========         ===========         ===========         ===========
  Diluted                                $     (0.04)        $     (0.03)        $     (0.12)        $     (0.08)
                                         ===========         ===========         ===========         ===========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
  Basic                                    9,757,009           9,096,585           9,335,092           9,176,792
                                         ===========         ===========         ===========         ===========

  Diluted                                  9,757,009           9,096,585           9,335,092           9,176,792
                                         ===========         ===========         ===========         ===========
</TABLE>

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

                                       3
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 2004 AND SEPTEMBER 30, 2003 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                              Nine Months          Nine Months
                                                                 Ended                Ended
                                                              September 30,        September 30,
                                                                  2004                 2003
                                                              -----------          -----------
<S>                                                           <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                    $(1,163,165)         $  (701,099)
  Adjustments to reconcile net loss to net cash
   used by operating activities:
    Depreciation and amortization                                 114,441               55,232
    Cancellation of shares                                             --              (56,769)
  Changes in assets and liabilities:
    Accounts receivable                                          (108,254)             (40,991)
    Allowance for doubtful accounts                                13,555                   --
    Receivables from officers and employees                          (459)              11,556
    Prepaid and other current assets                               (2,442)             130,627
    Deferred income tax asset                                          --               23,000
    Deposits and other assets                                       4,107                1,903
    Inventory                                                     (61,596)             (59,174)
    Accounts payable                                               60,867              181,475
    Accrued liabilities                                            (1,547)              (6,953)
                                                              -----------          -----------
        Net cash  used by operating activities                 (1,144,493)            (461,193)
                                                              -----------          -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                              (2,283)            (294,820)
                                                              -----------          -----------
        Net cash used for investing activities                     (2,283)            (294,820)
                                                              -----------          -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from related party notes payable                       929,673              810,500
  Principal repayments on related party notes payable             (31,000)                  --
  Principal repayments on convertible debentures                   (9,674)             (11,919)
  Principal repayments on capital lease obligation                 (8,204)                  --
  Repayments on notes payable                                      (5,569)                  --
  Proceeds from stock issuances                                   258,465                   --
                                                              -----------          -----------
        Net cash provided by financing activities               1,133,691              798,581
                                                              -----------          -----------

DECREASE IN CASH AND CASH EQUIVALENTS                             (13,085)              42,568

CASH AND CASH EQUIVALENTS, beginning of period                     31,720               19,308
                                                              -----------          -----------

CASH AND CASH EQUIVALENTS, end of period                      $    18,635          $    61,876
                                                              ===========          ===========
</TABLE>

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

                                       4
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS  (CONTINUED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND SEPTEMBER 30, 2003 (UNAUDITED)
--------------------------------------------------------------------------------

                                                Nine Months        Nine Months
                                                   Ended              Ended
                                                September 30,      September 30,
                                                    2004               2003
                                                -----------        -----------

SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest Paid                                 $   84,300         $   81,000
                                                ==========         ==========

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
  Equipment acquired under capital lease        $   32,000         $        0
                                                ==========         ==========

  Conversion of debt to preferred stock         $        0         $2,381,849
                                                ==========         ==========

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

                                       5
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 AND SEPTEMBER 30, 2003
(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, 2004
    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, 2003.

    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 $11,423,314. The ability of the Company to continue as a going concern is
    dependent upon obtaining additional capital and financing, and generating
    positive cash flow from operations. The Company intends to seek additional
    capital either through debt or equity offerings and is attempting to
    increase sales volume and operating margins to achieve profitability. The
    Board of Directors approved a resolution to negotiate and structure a
    Regulation S offering of up to $3,500,000 during the nine months ended
    September 30, 2004.

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

                                       6
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

    INVENTORIES consist primarily of purchased polymer soil amendments.
    Inventories are stated at the lower of cost (on a first-in, first-out basis)
    or market.

    PROPERTY AND EQUIPMENT: Property and equipment is stated at cost less
    accumulated depreciation. Depreciation is recorded on a straight-line basis
    over the estimated useful lives of the assets ranging from 3 to 7 years.
    Depreciation expense was $24,738 and $79,307 and $10,708 and $25,266 for the
    three and nine month periods ended September 30, 2004 and 2003,
    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 $65,255 and $215,971 and $2,963 and $11,014 for the three and
    nine month periods ended September 30, 2004 and 2003, 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,
    convertible debentures and notes payable. The carrying amounts of accounts
    receivable and accounts payable, convertible debentures and notes payable
    approximate fair value because of the short term maturity of those
    instruments. 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. The fair value of the
    related party notes receivable and payable cannot be determined because of
    the Company's affiliation with the parties with whom the agreements exist.

    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

                                       7
<PAGE>
    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 year 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.

    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, 2003 financial statements in order to conform to the September 30, 2004
    presentation.

3. INVENTORY

    Inventory is comprised of the following at September 30, 2004:

          Work in progress                $ 19,981
          Finished goods                   222,078
                                          --------
          Total                           $242,059
                                          ========

    The work in progress category accrues costs incurred on the construction of
    ten injection machines. The estimated cost to complete the machines is
    approximately $420,000.

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 $11,712 and $35,135 and $9,988 and

                                       8
<PAGE>
    $29,965 for the three and nine month periods ended September 30, 2004 and
    September 30, 2003, respectively. The following summarizes the estimated
    future amortization expense of the intellectual property:

               Year                         Amount
               ----                         ------
          Remaining three
           months of 2004                 $ 11,712
                     2005                   46,843
                     2006                   46,843
                     2007                   46,843
                     2008                   46,843
               Thereafter                  257,628
                                          --------
                  Total                   $456,712
                                          ========

5. PROPERTY AND EQUIPMENT

    Property and equipment consisted of the following at September 30, 2004:

          Machinery                                          $ 474,994
          Vehicle                                               44,614
          Office furnishings, fixtures and equipment            17,932
                                                             ---------
            Total                                              537,541
            Less accumulated depreciation                      (97,482)
                                                             ---------

            Property and equipment, net                      $ 440,059
                                                             =========

    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. NOTES PAYABLE

    Notes payable at September 30, 2004 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, 2005.       $  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, 2005.            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, 2005.           25,000

                                9
<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, 2005.           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.                                                              225,381

    Note payable to related party, original balance of $152,000,
    interest at 8% per annum and payable monthly. 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.
    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.                                           42,973

    Note payable to related party, original balance of $156,673,
    interest at prime rate, 4.75% at September 30, 2004, and is
    payable monthly. Principal is due September 29, 2006.               125,673
                                                                     ----------
        Total                                                         2,716,027

        Less current portion                                           (590,441)
                                                                     ----------
        Total long-term portion                                      $2,125,586
                                                                     ==========

    Future maturities of principal at September 30 are as follows:

        2004                                                         $  590,441
        2005                                                             23,794
        2006                                                          1,777,685
        2007                                                             27,756
        2008                                                             27,756
        Thereafter                                                      268,595
                                                                     ----------
          Total                                                      $2,716,027
                                                                     ==========

    The notes payable of $1,600,000, $125,673 and $152,000 are held by entities
    that hold approximately 67% of the Company's common stock. As of September
    30, 2004, the $1,600,000 and the $152,000 notes were restructured. Under the
    terms of the new agreements, the notes were changed from demand notes to two
    year term notes. The interest charged was also increased from four percent
    to eight percent.

                                       10
<PAGE>
7. NET LOSS PER SHARE

    Net loss per share is calculated using the weighted average number of shares
    of common stock outstanding during the year. Preferred stock dividends are
    subtracted from the net income to determine the amount available to common
    shareholders. There were no preferred stock dividends in the three and nine
    month periods ended September 30, 2004. The following securities have been
    excluded from the calculation because inclusion of such would be
    anti-dilutive:

                                                         Three months ended
                                                         September 30, 2004
                                                         ------------------
          Convertible preferred stock                        4,763,699
          Common stock options                               1,310,000
          Convertible debt                                   1,215,127
                                                             ---------
                                                             7,288,826
                                                             =========

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

<TABLE>
<CAPTION>
                                              Three Months Ended                     Nine Months Ended
                                              September 30, 2004                    September 30, 2004
                                              ------------------                    ------------------
<S>                                   <C>         <C>          <C>            <C>         <C>          <C>
    Net  Loss                         $(390,214)                              $(1,163,165)

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

    Loss available to common
    Stockholders                      $(390,214)                              $(1,163,165)
                                      =========                               ===========
    BASIC EARNINGS PER SHARE:

    Loss available to common
    stockholders                      $(390,214)  9,757,009    $(0.04)        $(1,163,165)  9,335,092   $(0.12)
                                      =========                ======         ===========               ======

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

    DILUTED EARNINGS PER SHARE        $(390,214)  9,757,009    $(0.04)        $(1,163,165)  9,335,092   $(0.12)
                                      =========                ======         ===========               ======
</TABLE>

8. RELATED PARTY TRANSACTIONS

    During the three and nine month periods ended September 30, 2004 and
    September 30, 2003, 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 third calendar quarter of 2005. Interest incurred on this
    debenture was $400 and $1,141 and $504 and $1,495 during the three and nine
    month periods ended September 30, 2004 and 2003, respectively.

                                       11
<PAGE>
    The holders of the two $25,000 convertible debentures and the $225,381
    convertible debenture are personally related to Louis Visco. Interest
    incurred on these debentures during the three and nine month periods ended
    September 30, 2004 and 2003 were $6,693 and $20,297 and $6,962 and $21,072,
    respectively.

    AFFILIATED ENTITIES

    Louis Visco, Director, is an owner and director of FLD Corporation, the
    holder of two$250,000 Debentures convertible at $0.50 per share with
    interest at 10%, maturing in the third calendar quarter of 2005 and
    $1,725,673 in notes payable. Interest incurred on these debentures and notes
    during the three and nine month periods ended September 30, 2004 and 2003
    was $29,026 and $74,060 and $12,304 and $32,142, respectively.

    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 $1,520 and $4,553 and $1,532 and $26,097 during the three and
    nine month periods ended September 30, 2004 and 2003, respectively.

9. 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, 2004, the Company did not exceed those limits.

    During the three month period ended September 30, 2004, sales to four
    customers aggregated to approximately 72% of total sales for the period.
    Approximately 67% of the accounts receivable balance at September 30, 2004
    was comprised of balances due from three customers.

10. COMMITMENTS

    During the three month period ended September 30, 2004, the Company arranged
    to have ten polymiser machines built for eventual resale. The estimated cost
    for the machines is $420,000, of which $19,982 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.

                                  * * * * * * *

                                       12
<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. The Company has received its first patent from the U S Patent
office on the M-216 and two more patents have been allowed. The Company has also
received notification that all International Patent Applications have been
filed.

RESULTS OF OPERATIONS

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

                                       Nine months Ended      Nine months Ended
                                       September 30, 2004     September 30, 2003
                                       ------------------     ------------------
                                          (unaudited)            (unaudited)
Statement of Operations Data:
  Revenue                                $    544,804           $    466,616
  (Loss)                                 $ (1,056,309)          $   (620,099)
  (Net Loss) Per Share                   $      (0.12)          $      (0.08)
Balance Sheet Data:
  Current Assets                         $    408,247           $    341,976
  Total Property & Equipment, Net        $    440,059           $    296,934
  Patents, Net                           $    456,712           $    529,389
  Net Deferred Tax Asset                 $          0           $  2,283,000
  Total Assets                           $  1,376,967           $  3,455,406
  Total Current Liabilities              $    931,023           $    290,925
  Accumulated Deficit                    $(11,423,314)          $ (7,598,146)

                                       13
<PAGE>
NINE MONTHS ENDED SEPTEMBER 30, 2004 (UNAUDITED) COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 2003 (UNAUDITED)

REVENUES

Revenues for the nine months ended September 30, 2004 were $544,804 compared to
$466,616 for the same period in 2003, an increase of 16.8%. This increase in
revenue was the result of orders that were normally shipped in the quarter
ending June 30 being shipped in the current quarter and increased sales activity
from Company dealers based upon customer awareness through advertising.

COST OF SALES

Cost of goods sold for the nine months ended September 30, 2004 were $347,903
compared to $338,044 for the nine months ended September 30, 2003, an increase
of 2.8%. The cost of sales is consistent with the gross sales figures and a
direct result of the Company's purchasing controls.

INVENTORY

Inventory balances were $242,059 for the nine months ended September 30, 2004
compared to $139,260 for the nine months ended September 30, 2003. The Company
previously would only purchase raw materials upon receipt of a customer order.
To facilitate quicker order filling processes and reduce material 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 40.25% from $748,671 for the nine months ended
September 30, 2003 compared to $1,253,210 for the nine months ended September
30, 2004. The sales and marketing costs in this reporting period increased to
$288,678 from $31,056 during the same period in 2003. The Company had an
increase in research and development costs regarding its new machine, the M-216
Polymer Injector, during this reporting period of $107,506.

INCOME TAXES

The Company did not provide for income tax expense or provision for the period
ended September 30, 2004 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 $(1,163,165) for the nine
months ended September 30, 2004 as compared to a net loss of $(701,099) for the
nine months ended September 30, 2003. The loss is directly related to the
Company's increased sales and marketing expenses from $31,056 in the nine months
ended September 30, 2003 compared to $288,678 for the nine months ended
September 30, 2004. The sales and marketing efforts by the Company also
increased general and administrative expenses by $80,220. The Company spent an

                                       14
<PAGE>
additional $107,506 for the research and development of the M-216 Polymer
Injector. 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 $466,616 for the nine months ended
September 30, 2003 to $544,804 for the nine months ended September 30, 2004.
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 $18,635and $61,876 at September 30, 2004 and
2003, respectively. Net cash used by operations was $(1,144,493) for the period
ended September 30, 2004 compared to net cash used by operations of $(461,193)
for the comparable period ended September 30, 2003.

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. At September 30, 2004,
debentures consisted of $570,000 of 8% per annum convertible debentures at a
rate of $0.50 per share and $225,381 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 1,215,127 shares. Interest expense for the nine months ended
September 30, 2004 was $108,881 compared to $81,000 for the nine months ended
September 30, 2003.

During the nine months ended September 30, 2003, 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.

The Company has a deficit in working capital (current assets less current
liabilities) of $(522,776) as of September 30, 2004 compared to working capital
of $51,051 as of September 30, 2003. 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 $(11,423,314) and has a working capital deficit of
approximately $(522,776) as of September 30, 2004. The ability of the Company to

                                       15
<PAGE>
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 nine months ended September 30,
2004. As of the date of this Report, $914,608 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
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 carry-forwards. 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 intends to place
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, 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 $468,424 at September 30, 2004.

                                       16
<PAGE>
The Company has notes payable with a total principal balance of $1,877,673 at
September 30, 2004. These notes are held by the Company's controlling
shareholder and have a two-year term. Accordingly, the Company has not
classified the debt as current.

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.

                                       17
<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 August 13, 2004 through November 9, 2004, the Company sold 3,738,644shares
of its common stock to 54non-United States residents for gross proceeds of
$914,608. 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 on August 31, 2004 with HRE of
Benton City, Washington to distribute the Company's linear polymer products in
both agriculture and other commercial applications.

On October 20, 2004, the Company executed a Marketing Agreement with Spectrum
Advisors, LLC, a Nevada limited liability company located in California
providing that Spectrum will act as a non-exclusive sales and marketing
consultant for the Company to sell the Company's Nutrimoist (R)L, Nutrimoist
(R)System, Nutrimoist Crystals and Bio-Nutrients products to the retail and turf
market including growers who use the products in connection with the production
of horticultural products in the states of Washington, Oregon and California.

On November 1, 2004, the Company mailed a newsletter to all of its shareholders.

ITEM 6. EXHIBITS

The following Exhibits are filed herein:

         No.                                 Title
         ---                                 -----
        10.1    Dealer Agreement with HRE of Benton City, Washington, dated
                August 31, 2004.
        10.2    Marketing Agreement with Spectrum Advisors, LLC, dated October
                20, 2004
        20.1    Newsletter dated October 28, 2004 and mailed to security holders
                on or about November 1, 2004.
        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

                                       18
<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 8, 2004          AMERICAN SOIL TECHNOLOGIES, INC.


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



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

                                       19