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 June 30, 2005

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

                        Commission File Number: 000-22855


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


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


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


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


                                       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 August 10, 2005, the number of shares of Common Stock issued and
outstanding was 24,688,817.

Transitional Small Business Disclosure Format (check one):  Yes [ ] No [X]

                                       1
<PAGE>
                                      INDEX

                                                                           Page
                                                                          Number
                                                                          ------

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)                                      3

         Balance Sheet -June 30, 2005                                          3

         Statements of Operations -
         For the three and six months ended June 30, 2005 and 2004             4

         Statements of Cash Flow -
         For the six months ended June 30, 2005 and 2004                       5

         Notes to Financial Statements                                         7

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

Item 3.  Internal Controls                                                    22

                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings                                                    23

Item 2.  Changes in Securities                                                23

Item 3.  Defaults Upon Senior Securities                                      23

Item 4.  Submission of Matters to a Vote of Security Holders                  23

Item 5.  Other Information                                                    23

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

SIGNATURES                                                                    24

                                       2
<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AMERICAN SOIL TECHNOLOGIES, INC.

CONSOLIDATED BALANCE SHEET
JUNE 30, 2005 (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S>                                                                               <C>
ASSETS:
CURRENT ASSETS
   Cash and cash equivalents                                                      $     17,219
   Accounts receivable, net of allowance of doubtful accounts of $58,356               144,177
   Employee advances                                                                     1,113
   Inventory                                                                           393,816
   Prepaid expenses and other current assets                                            40,832
                                                                                  ------------
      Total current assets                                                             597,157
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $175,125                    362,416
DEPOSITS AND OTHER ASSETS                                                                9,924
INTELLECTUAL PROPERTY, net of accumulated amortization of $257,638                     421,579
RELATED PARTY NOTES RECEIVABLE                                                          60,000

                                                                                  ------------
      TOTAL ASSETS                                                                $  1,451,076
                                                                                  ============

LIABILITIES AND STOCKHOLDERS' DEFICIT:

CURRENT LIABILITIES:
   Accounts payable and accrued liabilities                                       $    240,007
   Accrued liabilities                                                                 235,847
   Notes payable - current portion                                                      19,038
   Capital lease obligation - current portion                                           12,365
   Debentures payable to related parties - current portion                              85,187
                                                                                  ------------
      Total current liabilities                                                        592,444
NOTES PAYABLE - long-term portion                                                       83,409
CAPITAL LEASE OBLIGATION - long-term portion                                            17,262
NOTES PAYABLE TO RELATED PARTIES                                                            --
DEBENTURES PAYABLE TO RELATED PARTIES - long term portion                              899,710
                                                                                  ------------
      Total liabilities                                                              1,592,825
                                                                                  ------------
STOCKHOLDERS' DEFICIT:
   Series A preferred stock, $0.50 stated value, 10,000,000 shares
    authorized, 2,763,699 shares issued and outstanding                              1,381,849
   Common stock, $0.001 par value, 100,000,000 shares authorized,
    23,962,577 shares issued and outstanding                                            23,963
   Paid in capital                                                                  11,457,521
   Accumulated deficit                                                             (13,005,082)
                                                                                  ------------
      Total stockholders' deficit                                                     (141,749)
                                                                                  ------------

      TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                 $  1,451,076
                                                                                  ============
</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 SIX MONTHS ENDED JUNE 30, 2005 AND JUNE 30, 2004 (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                              Three Months      Three Months        Six Months        Six Months
                                                  Ended             Ended             Ended             Ended
                                              June 30, 2005     June 30, 2004     June 30, 2005     June 30, 2004
                                              -------------     -------------     -------------     -------------
<S>                                           <C>               <C>               <C>               <C>
NET REVENUES                                  $    217,710      $    142,625      $    470,007      $    383,533
                                              ------------      ------------      ------------      ------------

COST OF GOODS SOLD                                 130,064           117,737           284,637           242,973
                                              ------------      ------------      ------------      ------------
GROSS INCOME                                        87,646            24,888           185,370           140,560
                                              ------------      ------------      ------------      ------------
OPERATING EXPENSES
  General and administrative                       304,503           217,086           906,431           467,478
  Sales and marketing                               54,225            52,135           194,338           203,747
  Research and development                           8,456            54,254            10,052            99,497
  Depreciation                                      25,881            25,882            51,761            53,426
  Amortization                                      11,711            11,712            23,422            23,423

                                              ------------      ------------      ------------      ------------
      Total operating expenses                     404,776           361,069         1,186,004           847,571
                                              ------------      ------------      ------------      ------------

OPERATING LOSS                                    (317,130)         (336,181)       (1,000,634)         (707,011)
                                              ------------      ------------      ------------      ------------
OTHER (INCOME)/EXPENSE
  Interest expense and related costs                28,446            36,084            90,776            67,290
  Interest income                                     (675)           (1,350)           (1,315)           (1,350)
                                              ------------      ------------      ------------      ------------
      Total other (income)/expense                  27,771            34,734            89,461            65,940
                                              ------------      ------------      ------------      ------------

LOSS BEFORE INCOME TAXES                          (344,901)         (370,915)       (1,090,095)         (772,951)
                                              ------------      ------------      ------------      ------------

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

NET LOSS                                      $   (344,901)     $   (370,915)     $ (1,090,095)     $   (772,951)
                                              ============      ============      ============      ============
NET LOSS PER SHARE:
  Basic:                                      $      (0.02)     $      (0.04)     $      (0.06)     $      (0.08)
                                              ============      ============      ============      ============
  Diluted:                                    $      (0.02)     $      (0.04)     $      (0.06)     $      (0.08)
                                              ============      ============      ============      ============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
  Basic                                         22,319,222         9,096,585        18,567,579         9,096,585
                                              ============      ============      ============      ============
  Diluted                                       22,319,222         9,096,585        18,567,579         9,096,585
                                              ============      ============      ============      ============
</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 SIX MONTH
PERIODS ENDED JUNE 30, 2005AND JUNE 30, 2004 (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                               Six Months            Six Months
                                                                 Ended                 Ended
                                                             June 30, 2005         June 30, 2004
                                                             -------------         -------------
<S>                                                          <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                   $(1,090,095)          $  (772,951)
  Adjustments to reconcile net loss to net cash
   used by operating activities:
    Depreciation and amortization                                 75,183                76,849
    Allowance for bad debt                                        20,694                 3,100
    Stock issued for services                                    117,500                    --
  Changes in assets and liabilities:
    Accounts receivable                                         (109,480)              (52,762)
    Receivables from officers and employees                        1,192                  (353)
    Prepaid and other current assets                               6,859                (1,784)
    Deposits and other assets                                         --                 4,107
    Inventory                                                    (66,235)              (41,028)
    Accounts payable                                             (16,889)               70,467
    Accrued liabilities                                          229,626                   979
                                                             -----------           -----------
          Net cash  used by operating activities                (831,645)             (713,376)
                                                             -----------           -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                                 --                    --
                                                             -----------           -----------
          Net cash used for investing activities                      --                    --
                                                             -----------           -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance from common stock                       567,652                    --
  Proceeds from related party notes payable                       53,000               687,670
  Principal repayments on convertible debentures                  (7,137)               (6,411)
  Principal repayments on capital lease obligation                (8,380)               (4,640)
  Repayments on notes payable                                     (8,738)               (3,681)
  Bank overdraft                                                      --                 8,718
  Proceeds from convertible debentures                           200,000                    --
                                                             -----------           -----------
          Net cash provided by financing activities              796,397               681,656
                                                             -----------           -----------

DECREASE IN CASH AND CASH EQUIVALENTS                            (35,248)              (31,720)

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

CASH AND CASH EQUIVALENTS, end of period                     $    17,219           $        --
                                                             ===========           ===========
</TABLE>
              The accompanying notes are an integral part of these
                        unaudited financial statements.

                                       5
<PAGE>
AMERICAN SOIL TECHNOLOGIES, INC.

STATEMENT OF CASH FLOWS, (CONTINUED)
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND JUNE 30, 2004 (UNAUDITED)
--------------------------------------------------------------------------------


                                            Six Months Ended    Six Months Ended
                                             June 30, 2005       June 30, 2004
                                             -------------       -------------
SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest Paid                                $   54,629          $   26,517
                                               ==========          ==========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:

Equipment acquired under capital lease         $        0          $   32,000
                                               ==========          ==========
Conversion of debt and interest into common
 stock                                         $1,994,799          $        0
                                               ==========          ==========
Conversion of preferred stock into common
 stock                                         $1,000,000          $        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
THREE AND SIX MONTHS ENDED JUNE 30, 2005 AND JUNE 30, 2004 (UNAUDITED)
--------------------------------------------------------------------------------

1. ORGANIZATION AND BASIS OF PRESENTATION

     The accompanying unaudited financial statements have been prepared in
     accordance with accounting principles generally accepted in the United
     States for interim financial information and the instructions for Form
     10-QSB and Regulation S-B. Accordingly, they do not include all of the
     information and footnotes required by accounting principles generally
     accepted in the United States for complete financial statements. All
     adjustments that, in the opinion of management are necessary for a fair
     presentation of the results of operations for the interim periods have been
     made and are of a recurring nature unless otherwise disclosed herein. The
     results of operations for the three and six months ended June 30, 2005 are
     not necessarily indicative of the results that will be realized for the
     entire fiscal year. These financial statements should be read in
     conjunction with the Company's Annual Report on Form 10-KSB for the period
     ended December 31, 2004.

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

     The Company is primarily engaged in the marketing of polymer 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 $13,005,082. The ability of the Company to continue as a going concern
     is dependent upon obtaining additional capital and financing, and
     generating positive cash flow from operations. The Company intends to seek
     additional capital either through debt or equity offerings and is
     attempting to increase sales volume and operating margins to achieve
     profitability.

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

                                       7
<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 $25,881 and $51,761 and $25,882 and $53,426 for
     the three and six-month periods ended June 30, 2005 and 2004, respectively.

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

     ADVERTISING: The Company expenses advertising costs as incurred.
     Advertising expense was $40,851 and $160,575 and $31,350 and $142,788 for
     the three and six-month periods ended June 30, 2005 and 2004, respectively.

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

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

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

     FINANCIAL INSTRUMENTS: Financial instruments consist primarily of accounts
     receivable, notes receivable, and obligations under accounts payable,
     capital leases, convertible debentures and notes payable to related parties
     and notes payable to unrelated entities. The carrying amounts of accounts
     receivable and accounts payable approximate fair value because of the short
     term maturity of those instruments. The carrying values of notes payable to
     unrelated entities approximate fair value because they contain market value
     interest rates and have specified repayment terms. Obligations under
     capital leases approximate fair value because the original balances
     approximated the fair value of the underlying equipment at the time the
     obligations were incurred. The fair value of the related party notes
     receivable, debentures and notes payable cannot be determined because of
     the Company's affiliation with the parties with whom the agreements exist.

                                       8
<PAGE>
     The Company has applied certain assumptions in estimating these fair
     values. The use of different assumptions or methodologies may have a
     material effect on the estimates of fair values.

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

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

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

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

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

                                       9
<PAGE>
     determined in the 2002 Plan) or in the case of a grant of an Incentive
     Stock Option to a principal shareholder, not less than 110% of the fair
     market value of such common stock at the time each option is granted. The
     2002 Plan shall terminate 10 years from the date of adoption by the
     Company. The options are vested when granted and exercisable for 10 years
     from the date of grant and are subject to cancellation upon termination of
     employment. Under the Plan, the Company has granted options to purchase
     1,010,000 shares and 300,000 shares at $0.50 and $0.25, respectively. The
     market price at the date of grant was $0.12.

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

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

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

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

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

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

<TABLE>
<CAPTION>
                       Options Outstanding                               Options Exercisable
     -----------------------------------------------------     ------------------------------------------
                                          Weighted Average     Weighted                          Weighted
                           Number            Remaining         Average           Number          Average
        Range of       outstanding at    Contractual Life      Exercise      Exercisable at      Exercise
     Exercise Prices    June 30, 2005       (in years)          Price         June 30, 2004       Price
     ---------------    -------------       ----------          -----         -------------       -----
<S>      <C>               <C>                 <C>              <C>              <C>              <C>
         $0.50             950,000             7.75             $0.50            950,000          $0.50
         -----             -------             ----             -----            -------          -----
         $0.50             950,000             7.75             $0.50            950,000          $0.50
         =====             =======             ====             =====            =======          =====
</TABLE>

                                       10
<PAGE>
     No stock-based employee compensation cost is reflected in the June 30, 2005
     or June 30, 2004 income statements, as all options granted under these
     plans had an exercise price equal to or in excess of the market value of
     the underlying common stock on the date of the grant. The following table
     illustrates the effect in net loss and loss per share if the Company had
     applied the fair value recognition provisions of SFAS No. 123:

                                           Six Months Ended     Six Months Ended
                                            June 30, 2005        June 30, 2004
                                            -------------        -------------
     Net Loss                                $(1,090,095)         $  (772,951)

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

     Pro forma net loss                      $(1,090,095)         $  (772,951)
                                             ===========          ===========

     Net loss per share as reported          $     (0.06)         $     (0.08)
                                             ===========          ===========

     Net loss per share pro forma            $     (0.06)         $     (0.08)
                                             ===========          ===========

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

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

     RECLASSIFICATIONS: Certain reclassifications have been made to the June 30,
     2004 financial statements in order to conform to the June 30, 2005
     presentation.

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

     In May 2003, the FASB issued SFAS No. 150, "ACCOUNTING FOR CERTAIN
     FINANCIAL INSTRUMENTS WITH CHARACTERISTICS OF BOTH LIABILITIES AND EQUITY."
     SFAS No. 150 was effective for financial instruments entered into or
     modified after May 31, 2003, and otherwise was effective at the beginning
     of the first interim period beginning after June 15, 2003. SFAS No. 150
     requires the classification as a liability of any financial instruments
     with a mandatory redemption feature, an obligation to repurchase equity

                                       11
<PAGE>
     shares, or a conditional obligation based on the issuance of a variable
     number of its equity shares. The Company does not have any financial
     instruments with a mandatory redemption feature and therefore, the adoption
     of SFAS 150 did not have a material effect on the Company's financial
     statements.

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

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

     In December 2004 the FASB issued a revised Statement 123 (SFAS 123R),
     "ACCOUNTING FOR STOCK-BASED COMPENSATION" requiring public entities to
     measure the cost of employee services received in exchange for an award of
     equity instruments based on grant date fair value. The cost will be
     recognized over the period during which an employee is required to provide
     service in exchange for the award -- usually the vesting period. The
     effective date for this statement is as of the first interim period that
     begins after June 15, 2005. The Company is evaluating the impact of this
     new pronouncement and has not yet estimated the effect of implementation on
     the Company's financial statements.

3. INTELLECTUAL PROPERTY

     On December 31, 1999 the Company purchased exclusive license rights to
     patented polymer application techniques. The licenses are being amortized
     using the straight-line method over the life of the licenses, which is 14
     1/2 years. The carrying value of these assets is periodically evaluated for
     impairment. The amortization expense was $11,711 and $23,422 and $11,712
     and $23,423 for the three and six-month periods ended June 30, 2005 and
     June 30, 2004, respectively. The following summarizes the estimated future
     amortization expense of the intellectual property:

                   Year                     Amount
                   ----                     ------
           Remaining six months of
                   2005                    $ 23,422
                   2006                      46,843
                   2007                      46,843
                   2008                      46,843
                   2009                      46,843
                Thereafter                  210,785
                                           --------

                  Total                    $421,579
                                           ========

                                       12
<PAGE>
4. INVENTORY

     Inventory is comprised of the following at June 30, 2005:

           Work in progress                $139,637
           Finished goods                  $254,179
                                           --------

           Total                           $393,816
                                           ========

     The work in progress category accrues costs incurred on the construction of
     ten injection machines. The estimated cost to complete the machines is
     approximately $290,000.

5. NOTE RECEIVABLE

     The $60,000 note receivable is due from an individual who was formerly
     contracted to perform services for the Company as its Chief Technical
     Officer, and who also holds the patents licensed to the Company. Under the
     terms of the note receivable, the Company is to receive 4.5% interest on
     the note, to be satisfied through the reduction of royalties due to the
     individual. During the three and six months ended June 30, 2005, the
     Company recognized $675 and $1,350 in interest income and $1,077 and $2,570
     in royalty expense, respectively, related to this agreement.

6. NOTES PAYABLE

     Notes payable at June 30, 2005 are comprised of the following:

     Convertible debenture to related party, original balance of
     $250,000, interest at 8% per annum, interest payable
     quarterly. Principal is convertible at a rate of $0.50 for
     one share of common stock. Principal due February 1, 2007.      $  250,000

     Convertible debenture to related party, original balance of
     $250,000, interest at 8% per annum, interest payable
     quarterly. Principal is convertible at a rate of $0.50 for
     one share of common stock. Principal due March 27, 2007.           250,000

     Convertible debenture to related party, original balance of
     $200,000, interest at 8% per annum, interest payable
     quarterly. Principal is convertible at a rate of $0.50 for
     one share of common stock. Principal due February 1, 2007.         200,000

                                       13
<PAGE>
     Convertible debenture to related party, original balance of
     $25,000, interest at 8% per annum, interest payable
     quarterly. Principal is convertible at a rate of $0.50 for
     one share of common stock. Principal due February 1, 2006.          25,000

     Convertible debenture to related party, original balance of
     $25,000, interest at 8% per annum, interest payable
     quarterly. Principal is convertible at a rate of $0.50 for
     one share of common stock. Principal due February 1, 2006.          25,000

     Convertible debenture to related party, original balance of
     $25,000, interest at 8% per annum, interest payable
     quarterly. Principal is convertible at a rate of $0.50 for
     one share of common stock. Principal due June 22, 2006.             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.                                                             214,898

     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.                                          37,227

     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.                        65,219
                                                                     ----------

           Total                                                      1,087,344

           Less current portion                                        (104,225)
                                                                     ----------

           Total long-term portion                                   $  983,119
                                                                     ==========

     Future maturities of principal at June 30 are as follows:

         2006                                                        $  104,225
         2007                                                           738,052
         2008                                                            42,597
         2009                                                            47,829
         2010                                                            32,640
         Thereafter                                                     122,001
                                                                     ----------

                  Total                                              $1,087,344
                                                                     ==========

                                       14
<PAGE>
     During the three months ended June 30, 2005, related party notes payable of
     $1,600,000, $125,673 and $152,000 and their related accrued interest were
     converted into common stock at $0.40 per share for a total of 4,986,998
     shares of common stock. In addition, three convertible debentures totaling
     $700,000 are held by entities that hold approximately 43% of the Company's
     common stock.

7. STOCKHOLDERS' DEFICIT

     COMMON STOCK

     The Company has 100,000,000 shares authorized. At June 30, 2005, the
     Company had 23,962,577 shares of $0.001 par value common stock outstanding.

     SERIES A CONVERTIBLE PREFERRED STOCK

     The Company has 10,000,000 shares of Series A Convertible Preferred Stock
     authorized. At June 30, 2005, the Company had 2,763,699 shares of $0.50
     stated value Series A preferred stock issued and outstanding. On March 31,
     2003, the Company issued 4,763,699 shares of Series A convertible preferred
     stock for the conversion of debt in the principal amount of $2,381,849. The
     holders of the preferred stock have the option to convert to common stock
     at a rate of one share of common stock for each share of preferred stock
     tendered. Except as otherwise required by law or pursuant to any other
     provision, the holders of Series A Preferred stock have no voting rights.
     During the three months ended June 30, 2005, 2,000,000 shares of preferred
     stock were converted to common stock.

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

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

8. NET LOSS PER SHARE

     Net loss per share is calculated using the weighted average number of
     shares of common stock outstanding during the year. Preferred stock
     dividends are subtracted from the net income to determine the amount
     available to common shareholders. There were no preferred stock dividends
     in the three and six-month periods ended June 30, 2005. The following
     securities have been excluded from the calculation because inclusion of
     such would be anti-dilutive:

                                                          Three and Six
                                                           Months Ended
                                                          June 30, 2005
                                                          -------------
           Convertible preferred stock                      2,763,699
           Common stock options                             1,310,000
           Convertible debt                                 1,611,632
                                                           ----------

                                                            5,685,331
                                                           ==========

                                       15
<PAGE>
     The following presents the computation of basic and diluted loss per share
     from continuing operations:

<TABLE>
<CAPTION>
                                        Six Months Ended                            Six Months Ended
                                         June 30, 2005                                June 30, 2004
                             -------------------------------------         ---------------------------------------
<S>                          <C>           <C>            <C>              <C>              <C>             <C>
     Net Loss                $(1,090,095)                                  $(772,951)

     Preferred stock
     dividends                        --                                          --
                             -----------                                   ---------
     Loss available
     to common
     Stockholders            $(1,090,095)                                  $(772,951)
                             ===========                                   =========
     BASIC EARNINGS
     PER SHARE:

     Loss available to
     common stockholders     $(1,090,095)  18,567,579     $(0.06)          $(772,951)       9,096,585       $(0.08)
                             ===========                  ======           =========                        ======
     Effect of dilutive
     securities                  N/A            N/A                            N/A             N/A

     Diluted Earnings
     Per Share               $(1,090,095)  18,567,579     $(0.06)          $(772,951)       9,096,585       $(0.08)
                             ===========                  ======           =========                        ======
</TABLE>

 9. RELATED PARTY TRANSACTIONS

     During the three and six month periods ended June 30, 2005 and 2004, the
     Company entered into the 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
     8%, maturing in the second calendar quarter of 2006. Interest incurred on
     this debenture was $394 and $793 during the three and six month periods
     ended June 30, 2005 and $363 and $741 for the three and six months ended
     June 30, 2004, respectively.

     The holders of the two (2) $25,000 convertible debentures and the $214,897
     convertible debenture are personally related to Louis Visco. Interest
     incurred on these debentures during the three and six month periods ended
     June 30, 2005 and 2004 were $6,443 and $12,847 and $6,750 and $13,550,
     respectively.

     AFFILIATED ENTITIES

     Louie Visco, Director, is an owner and director of FLD Corporation, the
     holder of two (2) $250,000 and one (1) $200,000 debentures convertible at
     $0.50 per share with interest at 8%, maturing in the first calendar quarter
     of 2007. During the three months ended June 30, 2005, notes payable and the
     related accrued interest due to this entity totaling $1,837,732 were
     converted at a rate of $0.40 per share for a total of 4,594,330 shares of
     common stock. Interest incurred on these debentures and notes during the
     three and six month periods ended June 30, 2005 and 2004 was $48,102 and
     $73,612 and $24,465 and $44,965 respectively.

     Louis Visco is also an owner of the Benz Disposal Company. During the three
     months ended June 30, 2005, a note payable and its related interest due to
     this entity totaling $157,067 was converted at a rate of $0.40 per share
     into 392, 668 shares of common stock. Interest incurred on this note was

                                       16
<PAGE>
     $3,040 and $3,273 and $1,500 and $3,000 during the three and six month
     periods ended June 30, 2005 and 2004, respectively.

     The Company also entered into an operating lease in 2004 for its office
     space with Customized Box Company, an entity beneficially owned by Louie
     Visco. Rents charged by this entity for the three and six months ended June
     30, 2005 were $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 one and a half percent (1.5%) of
     net sales generated by the Company as a result of holding the patent. As of
     June 30, 2005, total royalties earned were $3,985. In addition, Mr.
     Salestrom has a note receivable with the Company of $60,000. The note
     accrues interest at 4.5% per annum, with payments to be reduced by
     royalties earned under the license agreement. In the three and six months
     ended June 30, 2005, the Company recognized interest income on this note of
     $675 and $1,350, respectively. Accrued interest receivable at June 30, 2005
     is $1,698.

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
     June 30, 2005, the Company did not exceed those limits.

     During the six months ended June 30, 2005 and 2004, respectively, sales to
     two customers aggregated to approximately 38% and 40% of total sales for
     the period. Approximately 86% and 52% of the accounts receivable balance at
     June 30, 2005 and June 30, 2004, respectively, were comprised of balances
     due from 3 and 4 customers respectively.

     The Company has an agreement with a supplier that grants the Company
     exclusive rights to sell and distribute the supplier's products in the
     western United States. This supplier's products represent approximately 57%
     and 73% of product in inventory at June 30, 2005 and 2004, respectively and
     81% and 70% and 69% and 73% of the products sold in the three and six
     months ended June 30, 2005 and 2004, respectively.

11. COMMITMENTS

     During the year ended December 31, 2004, the Company arranged to have ten
     polymer injection machines built for eventual resale. The estimated cost
     for the machines is $420,000, of which $139,637 has been incurred and is
     shown as work in progress in (see footnote 4).

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

     The Company also entered into an agreement on November 24, 2004 with an
     unrelated entity whereby the entity will provide investor relation services
     for an initial period of six months beginning December 1, 2004. In exchange
     for these services, the Company will provide a total of $60,000 and 250,000
     shares of common stock in remuneration, payable in monthly installments of
     $10,000 and 50,000 shares of common stock per month. The contract has been
     renewed by the Company for another six months at $10,000 per month without
     additional stock compensation.

12. SUBSEQUENT EVENTS

     None

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

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

FORWARD-LOOKING STATEMENTS

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

OVERVIEW

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

RESULTS OF OPERATIONS

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

                                         Six Months Ended       Six Months Ended
                                           June 30, 2005          June 30, 2004
                                           -------------          -------------
                                            (unaudited)            (unaudited)
Statement of Operations Data:
  Revenue                                  $    470,007           $    383,533
  (Loss)                                   $ (1,090,095)          $   (772,951)
  (Net Loss) Per Share                     $      (0.06)          $      (0.08)
Balance Sheet Data:
  Current Assets                           $    597,157           $    323,918
  Total Property & Equipment, Net          $    362,416           $    463,656
  Patents, Net                             $    421,579           $    468,424
  Net Deferred Tax Asset                   $          0           $          0
  Total Assets                             $  1,451,076           $  1,327,272
  Total Current Liabilities                $    592,444           $    951,744
  Accumulated Deficit                      $(13,005,082)          $(11,033,100)

                                       18
<PAGE>
SIX MONTHS ENDED JUNE 30, 2005 (UNAUDITED) COMPARED TO SIX MONTHS ENDED JUNE 30,
2004 (UNAUDITED)

REVENUES

Revenues for the six months ended June 30, 2005 were $470,007 compared to
$383,533 for the same period in 2004, an increase of 22.5%. This increase in
revenue was the result of the initial sales efforts of new distributors as well
as repeat sales from our existing dealers.

COST OF SALES

Cost of goods sold for the six months ended June 30, 2005 were $284,637 compared
to $242,973 for the three months ended June 30, 2004, an increase of 17%. 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 $393,816 for the six months ended June 30, 2005 compared
to $221,491 for the six months ended June 30, 2004. The increase in inventory is
primarily due to the manufacture of ten M-216 polymer injector machines. These
machines have been recorded as work in progress at June 30, 2005 in the amount
of approximately $140,000

OPERATING EXPENSES

Operating expenses increased 40% from $847,571 for the six months ended June 30,
2004 compared to $1,186,004 for the six months ended June 30, 2005. The sales
and marketing costs in this reporting period decreased to $194,338 from $203,747
during the same period in 2004. The Company had a decrease in research and
development costs regarding its new machine, the M-216 Polymer Injector, during
this reporting period of $89,445.

INCOME TAXES

The Company did not provide for income tax expense or provision for the period
ended June 30, 2005 because any income tax benefit generated from taxable losses
incurred is equally offset by an increase in the valuation allowance for the
deferred income tax asset.

NET LOSS

The Company experienced a net loss from operations of $1,090,095 for the six
months ended June 30, 2005 as compared to a net loss of $772,951 for the six
months ended June 30, 2004. The loss is directly related to the Company's
increased general and administrative expenses from $467,478 in the six months
ended June 30, 2004 to $906,431 for the six months ended June 30, 2005. The
increase is directly related to common stock granted to directors and certain
employees valued at $224,208 as well as $97,008 expended for investor relations
services. The sales and marketing efforts by the Company also decreased by
$9,399. The Company also decreased its expenses for the research and development
of the M-216 Polymer Injector by $89,445. 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 $383,533 for the six months ended June 30, 2004 to $470,007 for the six
months ended June 30, 2005. Because these arrangements are new and untested, it
is uncertain whether this trend will continue.

                                       19
<PAGE>
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 $17,219 and $-0- at June 30, 2005 and 2004,
respectively. Net cash used by operations was $831,645 for the period ended June
30, 2005 compared to net cash used by operations of $713,376 for the comparable
period ended June 30, 2004.

In March 2000, the Company authorized the issuance of an aggregate of $1,325,000
of convertible debentures with interest payable quarterly at 10% per annum. The
convertible debentures are convertible to common stock of the Company at a rate
of one share for each three dollars converted. The debentures matured in the
first calendar quarter of 2002. During 2001, $250,000 of debentures were
converted into 83,334 shares of stock and, during 2002, the Company redeemed
$500,000 of debentures and issued $250,000 of debentures. In February 2005, the
Company issued a $200,000 debenture convertible at a rate of $0.50 for one share
of common stock. At June 30, 2005, debentures consisted of $770,000 of 8% per
annum convertible debentures at a rate of $0.50 per share and $214,898 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 1,611,632 shares. Interest
expense for the six months ended June 30, 2005 was $90,776 compared to $67,290
for the six months ended June 30, 2004.

During the six months ended June 30, 2004, the Benz Group agreed to convert the
Company's outstanding debt of $2,381,849 into shares of Series A Preferred Stock
of the Company. This conversion resulted in the issuance of 4,763,699 shares of
Series A Preferred Stock with a stated value of $0.50 per share, a dividend rate
equal to the prime rate for the period and a conversion option into shares of
common stock on a one-for-one basis. On April 7, 2005, the Benz Group elected to
convert 2,000,000 shares of Series A Preferred Stock of the Company into
2,000,000 shares of common stock of the Company pursuant to the terms of the
Series A Preferred Stock.

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

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

The Company has working capital (current assets less current liabilities) of
$4,713 as of June 30, 2005 compared to a deficit in working capital of
$(627,826) as of June 30, 2004. The working capital is primarily caused by the
conversion of current payables to equity.

                                       20
<PAGE>
As shown in the accompanying financial statements, the Company has incurred an
accumulated deficit of $(13,005,082 and has working capital of $4,713 as of June
30, 2005. The ability of the Company to continue as a going concern is dependent
on obtaining additional capital and financing and operating at a profitable
level. The Company intends to seek additional capital either through debt or
equity offerings and to increase sales volume and operating margins to achieve
profitability. The Company's working capital and other capital requirements
during the next fiscal year and thereafter will vary based on the sales revenue
generated by the recent accumulation of additional products and the distribution
and sales network the Company has created and will continue to grow.

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

The Board of Directors approved a resolution to negotiate and structure a
Regulation S offering of $3,5000,000 during the six months ended June 30, 2004.
As of the date of this Report, a gross amount of $2,580,012 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 carryforwards. The Company had
previously recorded a net deferred income tax asset of $2,283,000. Management
determined that because the Company has yet to generate taxable income and that
the generation of taxable income in the short term is uncertain, it was
appropriate to provide a valuation allowance for the total deferred income tax
asset.

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

On December 31, 1999 the Company purchased exclusive license rights to patented
polymer application techniques. The acquisition price of these rights was
approximately $679,000. Management periodically evaluates the carrying value of
these assets for impairment. The application techniques are critical to the
process by which the Company has based its plan of operations. The carrying
value of these licensing rights was $421,579 at June 30, 2005.

                                       21
<PAGE>
On April 7, 2005 related party noteholders converted outstanding related party
demand notes payable totaling of $1,930,673, plus interest in the amount of
$64,126 into 4,986,998 common shares of the Company.

ITEM 3. CONTROLS AND PROCEDURES

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

                                       22
<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 May 14, 2005 through August 15, 2005, the Company sold 850,700 shares of
its common stock to 17 non-United States residents for gross proceeds of
$356,485. 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

On June 1, 2005, a majority of our shareholders executed a majority written
consent in lieu of an annual meeting to avoid the expenses of holding a formal
annual meeting. The majority shareholders voted: (a) to re-elect the current
directors on the Company's Board of Directors (Louie Visco, Carl P. Ranno, Ken
Lew, Neil C. Kitchen, and Scott Baker); (b) to ratify the Company's 2005 Stock
Option/Stock Issuance Plan; and (c) to ratify the appointment of Epstein, Weber
& Conover, PLC as the Company's independent public accountants.

ITEM 5.  OTHER INFORMATION

On July 5, 2005, Ken Lew submitted his resignation as a director effective
immediately and as Chief Financial Officer effective July 20, 2005 of the
Company. There were no disagreements between Mr. Lew and the Company. The Board
of Directors of the Company accepted Mr. Lew's resignations. The Board of
Directors then elected Carl Ranno to act as Chief Financial Officer of the
Company until a new Chief Financial Officer can be located and elected.

ITEM 6. EXHIBITS

The following Exhibits are filed herein:

      No.                               Title
      ---                               -----
     10.1   Financial Public Relations Consulting Agreement with Reynolds World
            Investment Enterprises, LLC, dated May 23, 2005
     10.2   Dealer Agreement with The Kern Company dated June 28, 2005
     31.1   Certification of Chief Executive Officer Pursuant to the Securities
            Exchange Act of 1934, Rules 13a-14 and 15d-14, as adopted pursuant
            to Section 302 of the Sarbanes-Oxley Act of 2002
     31.2   Certification of Chief Financial Officer Pursuant to the Securities
            Exchange Act of 1934, Rules 13a-14 and 15d-14, as adopted pursuant
            to Section 302 of the Sarbanes-Oxley Act of 2002
     32     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
            Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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<PAGE>
                                   SIGNATURES

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

DATED: August 15, 2005    AMERICAN SOIL TECHNOLOGIES, INC.


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

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