U.S. 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

                                       OR

              |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
               For the transition period from ________ to ________


                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
             (Exact name of registrant as specified in its charter)


     Texas                        333-48659                73-1537206
---------------            ----------------------         -------------
   (state of              (Commission File Number)        (IRS Employer
 incorporation)                                            I.D. Number)


                              133 East Tyler Street
                               Longview, TX 75601
                                  800-522-7841
              ----------------------------------------------------
             (Address and telephone number of registrant's principal
               executive offices and principal place of business)

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  twelve  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 11, 2005, there were 24,928,879  shares of the Registrant's  Common
Stock, par value $0.001 per share, outstanding.

Transitional Small Business Disclosure Format (check one):  Yes |_| No  |X|


<PAGE>

                                TABLE OF CONTENTS
                                                                            Page

PART I - FINANCIAL INFORMATION                                                 3

Item 1.  Financial Statements                                                  3

Item 2.  Management's Discussion and Analysis or Plan of Operation            15

Item 3.  Controls and Procedures                                              21

PART II - OTHER INFORMATION                                                   22

Item 1.  Legal Proceedings                                                    22

Item 2.  Unregistered Sales of Equity Securities                              22

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

SIGNATURES                                                                    24


                                        2
<PAGE>


                                 PART I - FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
<S>                                                                                          <C>
Condensed Balance Sheets June 30, 2005 (Unaudited) and December 31, 2004 (Audited)             4
Statements of Operations (Unaudited) Three Months Ended June 30, 2005 and 2004                 5
Statements of Operations (Unaudited) Six Months Ended June 30, 2005 and 2004                   6
Statements of Cash Flows (Unaudited) Six Months Ended June 30, 2005 and 2004                   7
Notes to Financial Statements (Unaudited)                                                      8
</TABLE>


                                        3
<PAGE>

                                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                                            CONDENSED BALANCE SHEETS


<TABLE>
<CAPTION>

                                                                                     June 30,      December 31,
                                                                                       2005            2004
                                                                                   (Unaudited)       (Audited)
                                                                                   ------------    ------------
<S>                                                                                <C>             <C>
                                                     ASSETS
CURRENT ASSETS
Cash and Cash Equivalents                                                          $    405,588    $    460,257
Accounts Receivable, less allowance for doubtful
accounts of $172,678                                                                     88,846          63,479
Inventory                                                                               568,428         352,108
Prepaid Expenses                                                                        154,082         157,409
                                                                                   ------------    ------------
Total Current Assets                                                                  1,216,944       1,033,253
                                                                                   ------------    ------------

PROPERTY AND EQUIPMENT AT COST
Property and Equipment                                                                   81,863          80,636
Leasehold Improvements                                                                   13,877          13,877
Accumulated Depreciation and Amortization                                               (60,150)        (54,406)
                                                                                   ------------    ------------
Net Property and Equipment                                                               35,590          40,107
                                                                                   ------------    ------------
OTHER ASSETS
Prepaid Royalties                                                                       476,413         490,095
Deposits                                                                                  2,180           2,180
Patents - net of accumulated amortization
of $1,047,126 and $969,800                                                            1,327,874       1,405,200
Licenses - net of accumulated amortization
of $47,201 and $41,440                                                                  128,519         134,280
                                                                                   ------------    ------------
Total Other Assets                                                                    1,934,986       2,031,755
                                                                                   ------------    ------------

TOTAL ASSETS                                                                       $  3,187,520    $  3,105,115
                                                                                   ============    ============

                                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable                                                                   $    226,793    $    141,130
Notes Payable                                                                           150,000
Accrued Liabilities                                                                      42,936          38,045
                                                                                   ------------    ------------
Total Current Liabilities                                                               419,729         179,175
                                                                                   ------------    ------------

STOCKHOLDERS' EQUITY
Preferred stock, par value $.001; 10,000,000 shares authorized, no shares issued
Common stock, par value $.001; 40,000,000
shares authorized, 23,458,636 and 23,219,344 shares issued                               23,459          23,220
Additional Paid in Capital                                                           10,465,219      10,144,383
Accumulated Deficit                                                                  (7,695,887)     (7,216,663)
Treasury Stock - 10,000 shares                                                          (25,000)        (25,000)
                                                                                   ------------    ------------
Total Stockholders' Equity                                                            2,767,791       2,925,940
                                                                                   ------------    ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                         $  3,187,520    $  3,105,115
                                                                                   ============    ============
</TABLE>

The accompanying notes are an integral part of this financial statement


                                                       4
<PAGE>

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                            STATEMENTS OF OPERATIONS
                                   (Unaudited)


                                                      THREE MONTHS ENDED
                                                          JUNE 30,
                                                ----------------------------
                                                    2005            2004
                                                ------------    ------------
SALES                                           $    145,171    $     97,459
RETURNS AND ALLOWANCES                                                    --
                                                ------------    ------------
NET SALES                                            145,171          97,459

COST OF SALES
     Cost of sales                                    65,255          48,675
                                                ------------    ------------
GROSS PROFIT                                          79,916          48,784
                                                ------------    ------------
OPERATING EXPENSES
Selling, general, and administrative expenses        329,646         270,350
Amortization                                          42,503          40,584
Depreciation                                           2,939           2,889
                                                ------------    ------------
Total operating expense                              375,088         313,823
                                                ------------    ------------
NET EARNINGS (LOSS) FROM OPERATIONS                 (295,172)       (265,039)
                                                ------------    ------------
OTHER INCOME (EXPENSE)
Interest income                                        1,015             484
Interest expense                                      (2,635)           (461)
Royalty income
Gain/Loss on Sale of Asset                                --              --
Miscellaneous                                         (1,182)           (164)
                                                ------------    ------------
Total other income (expense)                          (2,803)           (141)
                                                ------------    ------------
NET LOSS                                        $   (297,975)   $   (265,180)
                                                ============    ============
NET EARNINGS (LOSS) PER SHARE                   $      (0.01)   $      (0.01)
                                                ============    ============
WEIGHTED AVERAGE SHARES                           23,365,572      19,283,608
                                                ============    ============


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

                                        5

<PAGE>

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                            STATEMENTS OF OPERATIONS
                                   (Unaudited)


                                                       SIX MONTHS ENDED
                                                            JUNE 30,
                                                ----------------------------
                                                    2005            2004
                                                ------------    ------------
SALES                                           $    355,356    $    139,487
RETURNS AND ALLOWANCES                                  (306)             --
                                                ------------    ------------
NET SALES                                            355,050         139,487

COST OF SALES
     Cost of sales                                   196,745          66,368
                                                ------------    ------------
GROSS PROFIT                                         158,305          73,119
                                                ------------    ------------
OPERATING EXPENSES
Selling, general, and administrative expenses        543,850         432,704
Amortization                                          83,087          81,168
Depreciation                                           5,744           5,694
                                                ------------    ------------
Total operating expense                              632,681         519,566
                                                ------------    ------------
NET EARNINGS (LOSS) FROM OPERATIONS                 (474,376)       (446,447)
                                                ------------    ------------
OTHER INCOME (EXPENSE)
Interest income                                        2,120             557
Interest expense                                      (3,442)         (1,152)
Royalty income
Gain/Loss on Sale of Asset                                --              --
Miscellaneous                                         (3,526)         (2,253)
                                                ------------    ------------
Total other income (expense)                          (4,848)         (2,848)
                                                ------------    ------------
NET LOSS                                        $   (479,224)   $   (449,295)
                                                ============    ============
NET EARNINGS (LOSS) PER SHARE                   $      (0.02)   $      (0.02)
                                                ============    ============
WEIGHTED AVERAGE SHARES                           23,170,870      18,730,383
                                                ============    ============


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


                                        6
<PAGE>

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                         SIX MONTHS ENDED
                                                              JUNE 30,
                                                    --------------------------
                                                       2005            2004
                                                    -----------    -----------
<S>                                                 <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                            $  (479,224)   $  (449,295)
Adjustments to reconcile net earnings (loss)
 to cash used in operating activities
Amortization                                             83,087         81,168
Bad debt expense
Provision for inventory losses
Cumulative effect of change in accounting principle          --             --
Depreciation                                              5,744          5,694
Gain (loss) on sale of assets                                --             --
Recission of Lady Burd asset purchase agreement              --             --
Common stock and options issued for services             33,075         58,130
Change in assets and liabilities
Accounts receivable                                     (25,367)       (15,970)
Inventory                                              (216,320)       (14,382)
Prepaid expenses and deposits                            17,009        (46,865)
Accounts payable                                         85,663        (54,945)
Accrued liabilities                                       4,891           (236)
                                                    -----------    -----------
Net cash used in operating activities                  (491,442)      (436,701)
                                                    -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment                    (1,227)        (3,479)
Organization costs                                           --             --
Acquisition of licenses/patents                              --
Proceeds from sale of equipment                              --             --
                                                    -----------    -----------
Net cash used in investing activities                    (1,227)        (3,479)
                                                    -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Loan proceeds                                           150,000
Loan principal repayments                                    --
Loan principal repayments - related party                    --             --
Proceeds from sale of stock                             288,000      1,332,750
                                                    -----------    -----------
Net cash provided by financing activities               438,000      1,332,750
                                                    -----------    -----------
NET INCREASE (DECREASE) IN CASH                         (54,669)       892,570

Cash - Beginning of Period                              460,257        114,054
                                                    -----------    -----------
Cash - End of Period                                $   405,588    $ 1,006,624
                                                    ===========    ===========
</TABLE>

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


                                        7

<PAGE>

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                   NOTES TO THE CONDENSED FINANCIAL STATEMENTS
                                  June 30, 2005
                                   (Unaudited)

The balance sheet of Summit Environmental  Corporation,  Inc., the "company", at
December 31, 2004 has been taken from the company's audited financial statements
at that date.  The balance  sheet at June 30, 2005,  the statement of operations
for the three months and six months ended June 30,  2005,  and the  statement of
cash flows for the six  months  ended June 30,  2005 have been  prepared  by the
company without audit. The financial statements have been prepared in conformity
with accounting  principles  generally  accepted in the United States of America
for interim  financial  reporting.  Accordingly,  they do not include all of the
information and notes required by accounting  principles  generally  accepted in
the United States of America for complete financial statements.  These financial
statements contain such adjustments as management feels are necessary to present
fairly, in all material aspects, the financial position and results of operation
of the company. Operating results for the three months and six months ended June
30, 2005 are not  necessarily  indicative of the results,  which may be expected
for the fiscal year ended  December 31, 2005. The interim  financial  statements
should be read in  conjunction  with the  audited  financial  statements  of the
company for the year ended December 31, 2004.

1.    SIGNIFICANT ACCOUNTING POLICIES

      Business Activity

      Summit  Environmental  Corporation,  Inc. (the "company") was organized in
      accordance  with the  Business  Corporation  Act of the  State of Texas on
      February 2, 1998,  for the purpose of merging (the  "merger")  with Summit
      Technologies, Inc., a Texas corporation. The company continued to exist as
      the  surviving   corporation  under  its  present  name  pursuant  to  the
      provisions of the Texas Business  Corporation Act. The merger was effected
      on  December  2,  1998 as a  tax-free  reorganization  accounted  for as a
      pooling of interests.

      The company  markets  fire  suppression  materials,  environmentally  safe
      cleaning chemicals, and natural, botanical cosmetic products. The products
      are proprietary or are under exclusive license.  Marketing efforts include
      "infomercials" and other television and radio promotion,  videotapes,  and
      personal   demonstrations.   Products   are  marketed   domestically   and
      internationally.

      Revenue Recognition

      The Company follows the provisions of SEC Staff Accounting  Bulletin (SAB)
      No. 104,  "Revenue  Recognition"  which was issued in December  2003,  and
      recognizes  revenues when its products are shipped to customers (terms are
      FOB shipping point), at which time evidence of a completed transaction and
      customer acceptance exists and when title passes.  Appropriate  provisions
      for estimated  returns of product and other  allowances  have been made in
      the accompanying financial statements.  SAB No. 104 codified,  revised and
      rescinded  certain  sections of Staff  Accounting  Bulletin (SAB) No. 101,
      "Revenue  Recognition  in  Financial  Statements",  in order to make  this
      interpretive  guidance  consistent with current  authoritative  accounting
      guidance and SEC rules and regulations.


                                        8
<PAGE>

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                   NOTES TO THE CONDENSED FINANCIAL STATEMENTS
                                  June 30, 2005
                                   (Unaudited)


      Revenues   earned  under  royalty   agreements  are  recognized  when  the
      respective  products are sold and the royalty amounts  attributable to the
      Company have been determined.

      The Company  provides a reserve for sales  returns and  allowances  in the
      same period as the related  revenues are  recognized,  based on individual
      circumstances and historical experience.

      Cash and cash equivalents

      The company maintains cash balances at financial  institutions  located in
      Longview,  Texas,  which at times may exceed federally insured limits. The
      company has not experienced any losses in such accounts and believes it is
      not exposed to any significant credit risk on cash and cash equivalents.

      The company  considers  all highly liquid  investments  with a maturity of
      three months or less when purchased to be cash equivalents.

      Accounts Receivable

      The Company  records  accounts  receivable at net realizable  value.  This
      value  includes  an  appropriate  allowance  for  estimated  uncollectible
      accounts  to  reflect  any loss  anticipated  on the  accounts  receivable
      balances and charged to the provision for doubtful  accounts.  The Company
      calculates  this allowance based on historical  write-offs,  level of past
      due accounts and relationships with and economic status of the customers.

      Inventory

      Inventory is recorded at the lower of cost or market,  with the cost being
      determined by the first-in, first-out method.

      The Company periodically reviews inventory to determine which products, if
      any,  are no longer  marketable.  The  Company  establishes  a reserve for
      obsolete inventory to reduce its cost to management's  estimate of its net
      realizable  value based on forecasts of sales for ensuing  years and other
      factors.


                                        9
<PAGE>

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                   NOTES TO THE CONDENSED FINANCIAL STATEMENTS
                                  June 30, 2005
                                   (Unaudited)


      Intangible Assets

      Patents and licenses costs are recorded at cost.  Amortization is computed
      on the straight-line method over the identifiable lives of the patents and
      licenses. The Company has adopted the provisions of Statement of Financial
      Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets,
      effective for periods beginning January 1, 2002, and thereafter.  SFAS 142
      addresses  financial  accounting  and reporting for acquired  goodwill and
      other  intangible  assets and  supersedes  APB Opinion No. 17,  Intangible
      Assets.  Specifically,  the statement addresses how intangible assets that
      are acquired  should be accounted for in financial  statements  upon their
      acquisition, as well as how goodwill and other intangible assets should be
      accounted for after they have been  initially  recognized in the financial
      statements.  The statement  requires  intangible assets to be reviewed for
      impairment whenever events or changes in circumstances indicate that their
      carrying  amounts  may  not  be  recoverable  and  that a  loss  shall  be
      recognized if the carrying amount of an intangible exceeds its fair value.

      Income Taxes

      The  Company  provides  for  income  taxes  under the asset and  liability
      method.  Under the asset and  liability  method,  deferred  tax assets and
      liabilities are recognized for the future tax consequences attributable to
      differences  between the financial  statement carrying amounts of existing
      assets and liabilities and their respective tax bases. Deferred tax assets
      and  liabilities are measured using enacted tax rates expected to apply to
      taxable  income  in the years in which  those  temporary  differences  are
      expected to be recorded or settled.  The effect on deferred tax assets and
      liabilities of a change in tax rates is recognized in income in the period
      that includes the enactment date.  Valuation  allowances are recognized to
      limit  recognition  of  deferred  tax  assets  where   appropriate.   Such
      allowances may be reversed when  circumstances  provide  evidence that the
      deferred tax assets will more likely than not be realized.

      Property and Equipment

      Depreciation and amortization are provided in amounts sufficient to relate
      the cost of depreciable  assets to operations over their estimated service
      lives by the straight-line method.

      Leasehold  improvements  are  amortized  over the lives of the  respective
      leases or the service lives of the improvements, whichever is shorter.

      Major repairs or replacements  of property and equipment are  capitalized.
      Maintenance,  repairs and minor  replacements are charged to operations as
      incurred.


                                       10
<PAGE>

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                   NOTES TO THE CONDENSED FINANCIAL STATEMENTS
                                  June 30, 2005
                                   (Unaudited)


      When units of property  are retired or  otherwise  disposed of, their cost
      and related accumulated depreciation are removed from the accounts and any
      resulting gain or loss is included in operations.

      The  estimated   service  lives  used  in  determining   depreciation  and
      amortization are:

      Description                           Estimated Service Life
      ------------------------------        ----------------------
      Office furniture and equipment                     5-7 years
      Leasehold improvements                               4 years

      Advertising and Marketing

      Advertising  and marketing  costs are expensed as incurred,  which totaled
      $27,471,  $53,697,  $23,614 and $26,197 for the three and six months ended
      June 30, 2005 and 2004, respectively.

      Shipping and handling costs

      The Company includes shipping and handling costs in "Selling,  general and
      administrative  expenses" for purposes of income  statement  presentation.
      Shipping and handling costs were approximately  $8,500,  $13,400,  $11,100
      and  $17,300  for the three and six months  ended June 30,  2005 and 2004,
      respectively.

      Research and development costs

      The costs associated with research and development activities are expensed
      as incurred.  Total  research  and  development  costs were  approximately
      $22,000,  $28,000,  $18,300 and $22,600 for the three and six months ended
      June 30, 2005 and 2004, respectively.

      Use of Estimates

      The  preparation  of financial  statements in conformity  with  accounting
      principles  generally  accepted in the United  States of America  requires
      management to make estimates and assumptions  that affect certain reported
      amounts and  disclosures.  Accordingly,  actual  results could differ from
      those estimates.


                                       11
<PAGE>

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                   NOTES TO THE CONDENSED FINANCIAL STATEMENTS
                                  June 30, 2005
                                   (Unaudited)


      Per Share Information

      The  Company  has  adopted  the   provisions  of  Statement  of  Financial
      Accounting  Standards  (SFAS) No. 128,  "Earnings per Share." SFAS No. 128
      requires the  presentation  of basic  earnings  (loss) per share (EPS) and
      diluted  EPS.  Basic EPS is  calculated  by  dividing  net  income or loss
      (available  to common  stockholders)  by the  weighted  average  number of
      common  shares  outstanding  for the period.  Diluted  earnings  per share
      reflects the  potential  dilution  that could occur if securities or other
      contracts  to  issue  common  stock,  such  as  stock  options,  warrants,
      convertible preferred stock and convertible debentures,  were exercised or
      converted  into  common  stock.   Potential  dilutive   securities  (stock
      warrants,  stock  options)  have not been  considered  since  the  Company
      reported a net loss and, according, their effect would be antidilutive.

2.    PATENT

      On November 2, 1998,  the company  purchased  via issuance of common stock
      and a note payable,  patent  rights and  intellectual  property  rights to
      various fire suppression products for a purchase price of $2,375,000. This
      purchase  required  initial cash payments of $150,000 and 1,625,000 shares
      of common stock of the company to be issued and  delivered  to  BioGenesis
      Enterprises,  Inc. The estimated aggregate  amortization expense of patent
      rights  for  each of the  five  succeeding  years is  $158,333  per  year.
      Amortization  expense was $39,583 for the three month  periods  ended June
      30, 2005 and 2004 and $77,379 and $75,592 for the six month  periods ended
      June 30, 2005 and 2004.

3.    LICENSES

      Licenses for  exclusive  marketing  rights to various  products  have been
      acquired for fees totaling $175,200 from related parties.  The prices paid
      were demanded by the seller. The company is the  manufacturer/supplier  of
      the products. The estimated aggregate amortization expense of licenses for
      each  of  the  five   succeeding   years  is   $11,680   per   year.   The
      weighted-average   amortization   period   for   licenses   is  15  years.
      Amortization expense was $2,920 for the three month periods ended June 30,
      2005 and 2004 and $5,708 and $5,576 for the six month  periods  ended June
      30, 2005 and 2004.

      Worldwide   exclusive   marketing  rights  to  BioRemediation   Technology
      developed by Mohsen C. Amiran, Ph.D. were acquired for stock in the amount
      of 360,000 shares and warrants for 180,000 shares of stock  exercisable at
      $1.00 per share during the first quarter of 2003.


                                       12
<PAGE>

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                   NOTES TO THE CONDENSED FINANCIAL STATEMENTS
                                  June 30, 2005
                                   (Unaudited)


4.    LEASES

      The company is obligated  under various  operating  leases for  equipment,
      vehicles,  and office and warehouse space.  Rent expense for all operating
      leases was  $14,501,  $28,153,  $12,666  and $29,768 for the three and six
      months  ended June 30, 2005 and 2004,  respectively.  We renewed our lease
      for office space for one year.  The lease  payment  remained  unchanged at
      $1,700 per month.  We continue to maintain  warehouse  space on a month to
      month basis at $1,300 per month.

5.    COMMON STOCK

      Private Placement

      On May 25, 2005,  the Board of Directors  authorized the sale of 1,000,000
      shares  of  common  stock in a  private  placement  at $0.40  per share to
      accredited  investors.  Each unit of stock consists of one share of common
      stock plus one purchase warrant.  The initial term for the warrants is six
      months.  During the second  quarter of 2005,  522,500 shares were sold for
      $0.40 per share.  The  522,500  shares had not been  issued as of June 30,
      2005.

      Common Stock Options

      The sole  director  and  stockholders  approved the 1998 Stock Option Plan
      (the "Plan") of the company whereby, at the discretion of the directors or
      of a Stock Option Committee  appointed by the board of directors,  invited
      employees of the company or directors of the company or consultants to the
      company  will have the  option  of  subscribing  to  common  shares of the
      company  based on a price  determined  by the  directors  or Stock  Option
      Committee. The number of shares subject to the Plan is 500,000.

      In February  2004,  the board of  directors  adopted the 2004 Stock Option
      Plan (the "2004 Plan").  The number of shares  subject to the 2004 Plan is
      1,000,000.

      At June 30, 2005,  there were 385,000 options to purchase shares of common
      stock  outstanding  pursuant to the Plan and  480,000  options to purchase
      shares of common stock outstanding pursuant to the 2004 Plan.

      Warrants

      There were 1,861,250 warrants outstanding at June 30, 2005, exercisable at
      $0.50 per share  through  August 26,  2005.  There were  180,000  warrants
      outstanding  at June 30,  2005,  exercisable  at $0.25 per  share  with no
      expiration date.


                                       13
<PAGE>

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                   NOTES TO THE CONDENSED FINANCIAL STATEMENTS
                                  June 30, 2005
                                   (Unaudited)


6.    RELATED PARTY TRANSACTIONS

      The  following  transactions  occurred  between  the  company  and related
      parties:

      The company and another  business  with common  shareholders  share office
      space and the related expenses.

      The  company   acquired  a  patent  from  BioGenesis   Enterprises,   Inc.
      (BioGenesis)  on November 2, 1998 (see Note 2) pursuant to which  advanced
      royalty fees totaling $500,000 were paid. The purchase  agreement requires
      the company to pay  BioGenesis a periodic  royalty of $.50 per 16-oz.  can
      and $.35 per 1 liter can of FirePower(TM) and an equivalent (approximately
      7 percent)  on all other  product  categories  using the fire  suppressant
      technology.  One-half of all periodic  royalty fees due to BioGenesis will
      be credited  against the advance  royalty fee (until fully  recovered) and
      one-half  will be paid to  BioGenesis  in cash on the  30th of each  month
      based upon invoiced  sales through the close of the preceding  month.  The
      company  has  prepaid  royalties  to  BioGenesis  totaling  $490,095 as of
      December 31, 2004 and  $476,413 as of June 30, 2005.  Included in accounts
      payable is $15,573 due to  BioGenesis  at  December  31,  2004,  for goods
      received  and  royalties  due. We credited  against the advance  royalties
      $7,527  for the second  quarter  of 2005 and $0 for the second  quarter of
      2004. The product  certification process that the Company was subjected to
      took  5-1/2  years  to  complete  before  it was  allowed  to  begin  test
      marketing,  which  first  occurred in 2004.  In 2005 QVC  started  regular
      monthly  programming,  and the Company has since received  purchase orders
      from retailers for 3rd and 4th quarter shipments in excess of $1,000,000.

7.    CONCENTRATIONS

      Approximately  83 percent of the sales in the second  quarter of 2005 were
      made to two customers and 67 percent of the sales in the second quarter of
      2004 were made to two customers.


                                       14
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         The following  discussion  and analysis  should be read in  conjunction
with  the  financial  statements  and the  accompanying  notes  thereto  for the
six-month  period  ended June 30, 2005 and is  qualified  in its entirety by the
foregoing and by more detailed financial  information  appearing elsewhere.  See
"Item  1.   Financial   Statements."   The  discussion   includes   management's
expectations for the future.

RESULTS OF  OPERATIONS - SECOND  QUARTER OF 2005  COMPARED TO SECOND  QUARTER OF
2004

         Summit  Environmental's  sales for Q2 2005 were 149  percent of Q2 2004
sales $145,171 in Q2 2005 compared to $97,459 in Q2 2004.  Gross margin was 55.0
percent for Q2 2005 compared to 50.1 percent for Q2 2004. Sales have not reached
a level to generate consistent gross margin percentages.

         Operating  expenses increased 19.5 percent during Q2 2005 over Q2 2004.
Operating  expenses increased by $61,265 from $313,823 in Q2 2004 to $375,088 in
Q2 2005. The increase was due primarily to advertising  and marketing  costs and
commissions.

         Amortization and depreciation were $45,442 in Q2 2005 and $43,473 in Q2
2004.

         Summit had a net loss from  operations of $297,975 for Q2 2005, up from
a net loss of  $265,180  for Q2 2004,  a $32,795 or a 12 percent  increase.  The
increase in the net loss was  attributed  primarily to the increase in marketing
costs.

RESULTS  OF  OPERATIONS  - FIRST  TWO  QUARTERS  OF 2005  COMPARED  TO FIRST TWO
QUARTERS OF 2004

         Summit  Environmental's  sales for the first two  quarters of 2005 were
255 percent of the first two  quarters of 2004 sales - $355,050 in the first two
quarters of 2005  compared to $139,487 in the first two quarters of 2004.  Gross
margin was 44.6 percent for the six months ended June 30, 2005  compared to 52.4
percent for the six months ended June 30,  2004.  Sales have not reached a level
to generate consistent gross margin percentages.

         Operating  expenses  increased 22 percent during the first two quarters
of 2005 over the first two  quarters of 2004.  Operating  expenses  increased by
$113,115  from $519,566 in the six months ended June 30, 2004 to $632,681 in the
six months ended June 30, 2005.  The increase was due  primarily to  advertising
and marketing expenses and commissions.

         Amortization and  depreciation  were $88,831 in the first six months of
2005 and $86,862 in the first six months of 2004.

         Summit had a net loss from  operations  of  $479,224  for the first two
quarters of 2005,  up from a net loss of $449,295  for the first two quarters of
2004,  a  $29,929  or a 7 percent  increase.  The  increase  in the net loss was
attributed primarily to the increase in marketing costs.


                                       15
<PAGE>

         Increased  sales  began  in  2005  due  to  the  successful  launch  of
FIREPOWERTM into regular monthly programming on QVC. This led to the development
of a "twin sister" product named FlameOut  Aerosol Fire  Extinguisher to be sold
to retailers.  The initial launch  occurred over the week of July 4, 2005 at the
311 Big 5  Sporting  Goods  Stores in the  Western  part of the  United  States.
Production is under way from purchase  orders  received from Target Stores,  CVS
Pharmacy  and Brooks  Pharmacy  for  delivery on the shelves of these  stores by
September  2,  2005.  Additional  orders  for Rite Aid,  Sports  Chalet,  Sports
Authority  and AAFES are  currently  in the vendor  setup status for delivery in
late September and early October (National Fire Prevention Month). We anticipate
$1.5  million in sales for Q3 and Q4 in 2005.  Securing  financing  from outside
lenders is already  under way. We have an active line of credit for  FIREPOWERTM
from Austin Bank and  applications  are in process for  inventory  financing for
components  (shells,  boxes and  chemicals) to have the  necessary  materials on
hand. Accounts receivables  financing through Austin Bank is in the second phase
of the  financing  package.  This will be  utilized  once  purchase  orders  are
received.  When the accounts receivable  financing is initiated,  80% - less the
financing  fees  and the  corresponding  deduction  of  cost-of-goods  - will be
advanced to the company repaying the inventory loan for the order.  Reduction of
expense is not likely to decrease  as the company has moved from a research  and
development company to a marketing company.

         OVERVIEW - RECENT DEVELOPMENTS

         In April  2005,  we added Mr. Paul  Kowalenko  as Director of Sales and
Marketing  for the  FLAMEOUT(R)  Fire  Suppressor  Division of the company.  Mr.
Kowalenko, formerly Operations Director for Just-In-Case-Fire, has had extensive
experience in the oil and gas industry.  Paul served in capacities as Manager of
Corporate Planning,  Vice President of Finance and Chief Financial Officer. Paul
is already working with clients in India,  Taiwan,  Poland, the logging industry
and developing  marketing  point-of-sales  aids. Paul has a Bachelor of Commerce
Degree and is a Corporate Management Accountant from the University of Calgary.

         We are  completing  our second  order of  FLAMEOUT(R)  to be shipped to
Taiwan for its nuclear  facility.  The initial sale was completed  last November
through  Darley Pumps Odin Foam  Division when  FLAMEOUT(R)  was included as the
Class B Foam for a compressed air foam system by Odin Foam.

         We  completed  the  process  for  ABS  (American  Bureau  of  Shipping)
certification for international maritime sales. The ABS Certification will clear
the way for our distributor in Poland Fire Dam. The type classification obtained
for  FlameOut(R) is of a class that has  heretofore  been achieved for foam base
product certification.

         Our new  FlameOut(R)  Aerosol  Fire  Extinguisher,  the twin  sister to
Firepower(TM), initially appeared on retail shelves over the 4th of July weekend
at the 311 Big 5 Sporting  Goods  Store  primarily  in the  Western  part of the
United  States.  The third  quarter of 2005 will see  FlameOut(R)  appear on the
shelves at Target Stores beginning  September 4, 2005. Target will focus on five
products,  one of which is FlameOut(R),  in a home security section at the front
of the  stores.  Additional  retail  store  introductions  will occur in CVS and
Brooks  Pharmacies in August and September.  We have completed vendor agreements
for Albertson's, BosCov, and Rite Aid for deliveries in Q4 2005.


                                       16
<PAGE>

         The Yellow Stone Club, a custom  residential  development near Big Sky,
MT which features 8,000-square-foot-minimum residences, was the site of extended
demonstrations  of FLAMEOUT(R)  on May 18, 2005. We are currently  working on an
order for The  Yellowstone  Club which will consist of FlameOut(R)  Concentrate,
Compress Air Foam Systems from Intelagard and extinguishers  like we sell in the
logging industry.  Steve Hauck, Fire Chief of the Yellow Stone Club has become a
spokesperson  for  FlameOut(R).  More about Steve  Hauck's  recommendations  for
FlameOut(R)  are covered in the following  paragraph  regarding  media relations
with Steinreich Communications.

         In June we entered into an agreement with Steinreich Communications for
media  relations.  Stan Steinreich  previously had been a section editor for the
New York Times and former co-producer of ABC 20/20. Over the 4th of July weekend
Mr.  Steinreich  organized  appearances  and morning talk shows in San Diego for
Keith Parker,  CEO and Steve Hauck,  Fire Chief at the Yellow Stone Club, on the
4th of July.  They were live on NBC, Fox News and UPN conducting  demonstrations
using  FlameOut(R)  aerosols and referring to the introduction at Big 5 Sporting
Goods.  On July 5th,  they were  interviewed  by KABC in Los Angeles by consumer
products advocate Rick Romero. His show aired on July 28, 2005. We were again on
television  in  Sacramento  (NBC) and Reno (ABC) on the 10th and 11th of August,
respectively,  again  conducting  live  demonstrations  and  referring  to Big 5
Sporting Goods.

         We executed the final agreement with Government Services Administration
receiving our Federal Supply Number under Solicitation  Number  7FC1-L3-03-0084B
on August 10, 2005.  Possession  of an FSN could lead to large supply  contracts
with U.S. Government  institutions,  U.S. Forestry,  State Forestry departments,
Bureau of Land Management,  and U.S. Parks and Wildlife.  GSA Awards'  marketing
arm,  GSA  BizOps,  will be acting  as our  marketing  sales  agent  through  an
agreement  in  which  GSA  Awards  pre-qualifies  U.S.  Government   procurement
requisitions  where our products and securities  will satisfy the  requirements.
The GSA approval and FSN supply  number make our product and the  requisition  a
match.  GSA Awards does not represent  another client with products that compete
with FLAMEOUT(R) or FIREPOWERTM.  FIREPOWERTM and FLAMEOUT(R) are now carried in
W.S. Darley  Company's most recent fire products  catalog  published in February
2005.  This  catalog goes to every fire  department  in the U.S. and a number of
fire departments in 23 foreign countries.

         We will be featuring the new FLAMEOUT(R) aerosol fire extinguisher in a
one-minute  television  commercial  test market to be  conducted  by Media Corp.
Worldwide which will begin airing in 2005.

         OUTLOOK

         The  statements  made in this  Outlook  are based on current  plans and
expectations.  These statements are forward looking, and actual results may vary
considerably from those that are planned.

         Regular programming on QVC of our FIREPOWERTM aerosol fire extinguisher
began in January 2005. On the first airing in January,  11,000 cans were sold in
8.5 minutes. On March 2, 2005, 13,000 cans were sold in 10 minutes.  Airings are
scheduled  throughout  2005.  As of  March  18,  2005 we had  recorded  sales of
$256,917  through QVC since  2002.  On March 23,  2005,  we shipped QVC an order
worth  $94,800  for  airings  in the  second  quarter  2005.  We  began in a new
programming  venue on QVC on August 8, 2005 on a show  called  Summer  Specials,
resulting  in  sales  of  8,800  cans.  We  anticipate  selling  50,000  cans of
Firepower(TM) on QVC in Q3 and Q4, 2005.


                                       17
<PAGE>

         We are completing the preparations for retail sales of FLAMEOUT(R) also
as an aerosol-rated fire extinguisher.  FLAMEOUT(R) aerosol fire extinguisher is
the twin sister to  FIREPOWERTM.  FLAMEOUT(R) is offered  primarily to franchise
and mass marketing  companies.  A TV commercial scheduled to begin August 19-30,
2005 on the HGTV and Oxygen networks will feature FLAMEOUT(R). The commercial is
being produced as order fulfillment by Media Corporation Worldwide.  FLAMEOUT(R)
aerosol was introduced through Big 5 Sporting Goods 311 Stores on the weekend of
July 4, 2005.  FLAMEOUT(R) aerosol fire extinguishers will be introduced through
major retailers  beginning in August 2005. We have completed  vendor  agreements
with Target, CVS, Brooks Pharmacy Rite Aid,  Albertson's,  BosCov and Big 5. The
first orders for Target and Brooks  Pharmacies were filed on August 17, 2005 and
are being shipped on August 19 and 22,  respectively.  Both  retailers will have
this product on store shelves September 4, 2005. Purchase orders through the end
of 2005 are projected to be in excess of $1,500,000.

         FLAMEOUT(R) and FIREPOWERTM aerosol fire extinguishers contain the same
surfactant,  FlameOut(R).  FLAMEOUT(R) is sold in concentrate  form. The logging
industry is endorsing  FLAMEOUT(R) more and more on its insured heavY equipment.
Three  insurance  companies  -  Bituminous,  Lloyds of London  and  Santee - now
require  FLAMEOUT(R) or A product like  FLAMEOUT(R) to be on all insured logging
equipment for renewal  purposes of existing fire coverage oR on new equipment in
order to bind fire  coverage.  There is no other  product  that has the  various
government  approvals  FLAMEOUT(R) has, is non-toxic,  is  non-corrosive  and is
rapidly  biodegradable.  As of March 18, 2005, wE have recorded sales of $35,290
to the  logging  industry.  Bituminous  Insurance  referred  us into its insured
market of paving and asphalt  contractors  during the first  quarter of 2004. On
February 10, 2005 Keith  Parker,  Summit CEO,  was the  featured  speaker at the
Marion  County Road Builders  Association  hosted by Steven Counts Paving Co. in
Ocala, FL. We secured orders from other companies in attendance.  The orders for
Steven Counts Paving are being handled through a new distribution established as
a  result  of  the  presentation  and  demonstration  of  the  FLAMEOUT(R)  Fire
Suppressant and FIREPOWERTM.

         We executed  cross-over  marketing  agreements  with Intelagard in July
2005. We will sell Intelagard  Compressed Air Foam Systems while Intelagard will
sell  FlameOut(R)  with  their  CAF  Systems.  Intelagard  Director  oF  Product
Development,  John  Breedlove  attended our  demonstrations  to the Yellow Stone
Club. Intelagard's CAF Systems are part of our purchase orders being prepared at
the Yellow Stone Club  currently.  In June,  FlameOut(R)  accompanied  160 McCaw
Backpack  CAF  Systems  that went to the U.S.  Army in Mosul,  Iraq.  More about
Intelagard can be found at www.intelagard.com.

         In April 2005 we made a first  sale of  FLAMEOUT(R)  to a  customer  in
India. The halted production of thE Fire Suppression Agent AFFF in 2001 has made
our product  one of the most  attractive  alternates  to replace the market need
created by AFFF. Monsanto halted production of AFFF in December 2001. One of the
reasons was the toxicity of AFFF.  FLAMEOUT(R)  is non-toxic.  AFFF was designed
for Class B (fuel) fire  suppression.  FLAMEOUT(R) is UL listed for Class B fire
and also possesses UL 162 certification for  emulsification and encapsulation of
hydrocarbons thereby preventing  reignition of fires once extinguished.  Our new
customers in India supply fire  suppression  agents for the oil and gas refining
industry.


                                       18
<PAGE>

         In May we were approached by one of our European distributors regarding
the approval of FlameOut for the use on marine vessels, specifically for vessels
that were "classified" by the American Bureau of Shipping, or ABS. ABS is one of
world's leading marine Class Societies that is recognized as a worldwide  leader
in engineering and technology related to marine and offshore industries with 150
offices  in 70  countries  worldwide.  ABS states  its  mission  is "to  protect
mariners,  vessels and the  aquatic  environment  of the world's  ocean ways and
rivers."

         Class  Societies set standards to facilitate  the  acceptance of a ship
registered  in one country to be in the waters and ports of another,  and in the
general  furtherance of safety at sea and protection of the  environment.  These
standards cover three distinct areas: (1) ship design and structural  integrity,
(2)  accident  prevention  including   navigational  aids,  pollution  and  fire
prevention,  and (3)  post-accident  situations  (fire and  flooding)  including
containment and escape.

         Class  Societies are empowered to require  repairs or other  corrective
actions to vessels  that they have  assigned a class,  or to ships  within their
flag state's ports.

         FlameOut was submitted to ABS for "Type Approval," a voluntary  program
that tests the product  extensively  to verify that it will perform  reliably in
the marine and offshore environment in compliance with product specifications.

         Upon issuance,  Type Approval is the  pre-approval of a product for use
on a variety of ABS class vessels and reduces the  turnaround  time for approval
on a specific  vessel.  Technical staff can verify that the product,  as already
approved,  is  suitable  for the  intended  use and  will  not  require  further
documentation from Summit.

         We are pleased to report  that on July 29,  2005 we  received  our Type
Approval  from  ABS,  the only  product  listed by ABS as a Type  Approved  fire
fighting agent. Our marketing plan is now to contact the owners and operators of
ABS classed vessels and identify to them that FlameOut is the only  pre-approved
fire suppressant within their Classification Society.

         Using our unique aerosol technology, a new product sold under the brand
name SAFETREE(R) for use witH Christmas Trees.  Sprayed on the tree, it not only
guards  against  fire but extends the period when the needles  stay green and do
not drop. We have developed an alliance with Noble  Mountain Tree Farms,  one of
the world's  premier  Christmas  tree growers and suppliers to companies such as
Wal-Mart,  Home Depot and Lowe's. It also sells trees through a network of Noble
Tree lots.  During the fourth quarter of 2004 Noble supplied  two-can samples of
SAFETREE(R)  to more than 50 major  retailers in the U.S.  that yearly sell more
than 6 million Noble trees anD wreaths.  This  initiative  with Noble was kicked
off at a meeting in Chicago in March and will be  introduced  at future shows in
Las Vegas in May 2005.  SAFETREE(R)  was  introduced to Target Stores by Mr. Rob
Heggie, one of thE members of AmBiz Association, in April 2005. Initial response
was favorable.


                                       19
<PAGE>

         We work  closely  with  American  Business  Associates  (AmBiz).  AmBiz
assists with  introductions  into  military,  homeland  security  and  emergency
management  venues,  with retail  development and  introductions for some of our
products and with  development  and financing for future retail  projects.  More
about AmBiz can be found at www.americanbusinessassociates.com.  Through AmBiz's
efforts,  we submitted  FLAMEOUT(R) and  FLAMEOUT(R)  Foam to ThE U.S. Air Force
chemical  testing  center at Tyndal  Air Force  Base in  Florida.  The series of
testing involves the protocol to find a new agent to suppress  ground-based fuel
fires.  Our FLAMEOUT(R)  Foam (AFFF  Replacement)  anD FLAMEOUT(R)  will undergo
continued  toxicity  testing  and  efficacy  tests  during  2005.  We also  will
introducE  FlameOut(R)  to the U.S.  Air Force  testing  center at Little  Rock,
Arkansas  for use in the Air  Force  fleet of C-130  tankers  in early  2005 for
wildland,  wildfire  applications.  AmBiz is working in conjunction  with us and
Noble Mountain Tree Farms for the sale of FLAMEOUT(R)  Aerosol Fire Extinguisher
and SAFETREE(R) for 2005.

         FLAMEOUT(R)  is  not  just  a  fire   suppressant.   It  is  non-toxic,
biodegradable  and has  significanT  encapsulation  features  that  surround and
smother   particles  it  contacts.   We  demonstrated  its   fire-fighting   and
fire-retardant qualities before FEMA, Homeland Security, Arizona State Emergency
Management, the Office of Emergency Management and the Bureau of Land Management
in July 2004.  The  demonstration  consisted of using  Evergreen  Aviation's 747
Supertanker to disperse  FLAMEOUT(R) as a compressed-air foam over a path 100 to
125 feeT wide for 20,000 feet.  The success of the  demonstration  has led us to
consider  FLAMEOUT(R) as the carrying agenT for additional products that address
environmental  issues.  Dr.  Amiran,  one of our  directors  and the inventor of
FLAMEOUT(R),  is  addressing  this  expanded use of  FLAMEOUT(R)  - uses such as
treating toxic spills or chemiCaL exposure, cleaning the air of free radicals in
the event of terrorist attacks,  and a fire retardant sealant to be sprayed on a
structure  prior to  evacuating  an area  threatened  by a wildfire.  We have no
revenues yet from such an expanded use of  FLAMEOUT(R).  Our  relationship  with
Evergreen Aviation is not yet the subject of an executeD contract.

ULTIMATE CLEANTM PRODUCTS.

         Working  with  our  distributor  for  ULTIMATE  CLEANTM  chemicals  and
cleaners, Asah Terra, a Washington-based bioremediation contractor, we expect we
will sell  significant  amounts of our  chemicals  and  cleaners  in the heavily
contaminated  petroleum  production  areas of  Nigeria.  Asah Terra has  ordered
products for a new cleanup  project with the city of Seattle  scheduled for May.
According to Asah Terra several  other  municipalities  are being  instructed to
ensure the cleanup and odor elimination at a sewage treatment plant in Seattle.

         Asah Terra is working  with the  Nigerian  Government  and Shell Oil of
Nigeria in providing  consultation  and products with specific  applications for
what is estimated at up to ten years of existing clean-up of contamination.  One
of the first  sites  that we will be  cleaning  is a stagnate  lake that  allows
bacteria to grow.  When it rains,  the overflow  provides such a large amount of
toxic  residue  that this site has been  linked to being a leading  cause of the
deaths of infants and young  children in Nigeria.  The  contract for the initial
site has been received by Asah Terra. The value of our initial chemical sale for
this project is $87,000.  We are working in conjunction  with BioGenesis and Dr.
Amiran to begin this work for Asah Terra on the first two  contracts.  There are
reported by Asah Terra to be thousands of these sites in Nigeria. They have been
mandated by the Nigerian Government for environmental cleanup.


                                       20
<PAGE>

         Asah Terra sells some of our other ULTIMATE  CLEANTM  products to clean
the grease traps at restaurants, primarily in the Northwest United States.

         Our  future  results  of  operations  and  the  other   forward-looking
statements   contained   in  this   Outlook   involve  a  number  of  risks  and
uncertainties.  Among the  factors  that could  cause  actual  results to differ
materially  are the  following:  the  inability of the company to obtain  needed
additional capital,  loss of personnel,  particularly chief executive officer B.
Keith Parker,  as a result of accident or for health reasons,  interruptions  in
the supply of inventory from manufacturers of the inventory,  the development of
a competing fire  suppressant by a  well-capitalized  competitor  that either is
able to develop a new product with the same  attributes as our fire  suppressant
or is able to discover the  additives to our fire  suppressant  that give it its
unique and superior qualities,  and an accident involving life or serious bodily
harm that fairly or unfairly  would bring into  question the safety of using the
company's fire suppressant products.

ITEM 3.  CONTROLS AND PROCEDURES

         Evaluation  of  disclosure  controls  and  procedures.   The  Company's
management,  with the participation of the Company's Chief Executive Officer and
Chief  Financial  Officer,  has  evaluated  the  effectiveness  of the Company's
disclosure  controls  and  procedures  as  of  June  30,  2005.  Based  on  this
evaluation,  the Company's Chief Executive  Officer and Chief Financial  Officer
concluded that the Company's disclosure controls and procedures are effective.

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         In March 2005,  under  advisement of our corporate  legal  counsel,  we
accepted a cash  payment  settlement  agreement  of  $52,000 in our suit  styled
Summit vs. Graff.

         In March 2003 we were sued by Lady Burd Exclusive  Cosmetics,  Inc. for
$43,000 in a collection lawsuit,  Lady Burd Exclusive  Cosmetics,  Inc v. Summit
Environmental Corporation, Case No. 104268/03, Supreme Court of the State of New
York, County of New York. We filed a cross-petition against Lady Burd for breach
of contract and unpaid commissions, in the amount of $45,000.

         In  March,  2003,  we filed  an  action  against  Lady  Burd  Exclusive
Cosmetics,  Inc.,  Case Number  2003-589-A in the 188th  District  Court,  Gregg
County, Texas, for fraud and misrepresentation regarding our earlier purchase of
patent rights to a "permanent"  lipstick we sell under the name "Sugar Kiss Lip"
collection.  After paying $50,000 and 500,000 shares of our common stock to Lady
Burd we  discovered  that Lady Burd had never filed for a patent.  The two suits
are being  settled  with the Company  obtaining  ownership  of the formula  (not
patented) for a purchase price of 500,000 shares of stock and $62,000 instead of
500,000 shares of stock and $350,000.

         There have been no material  developments in legal proceedings  earlier
reported.


                                       21
<PAGE>

         No  director,  officer or  affiliate  of the  company,  and no owner of
record or beneficial  owner of more than 5.0% of the  securities of the company,
or any  associate of any such  director,  officer or security  holder is a party
adverse  to the  company or has a material  interest  adverse to the  Company in
reference to any litigation.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES

         Set forth  below are the sales of our  common  stock  since  January 1,
2005,  that  have  not  been  earlier  reported,  in  transactions  exempt  from
registration pursuant to the provisions of Regulation D, Rule 506:

<TABLE>
<CAPTION>

----------------- -------------------- ----------- ------------ --------------------------------------
                                       NO. OF      PRICE        TYPE OF
DATE              PERSON               SHARES      PER SHARE    CONSIDERATION
----------------- -------------------- ----------- ------------ --------------------------------------
<S>               <C>                  <C>          <C>         <C>
6-30-05           Keith Parker         22,500      $0.40        Services as Chief Executive Officer
----------------- -------------------- ----------- ------------ --------------------------------------
6-30-05           Paula Parker         15,000      $0.40        Services as Vice President
----------------- -------------------- ----------- ------------ --------------------------------------
6-30-05           Chris Dellinges      15,000      $0.40        Services as Chief Financial Officer
----------------- -------------------- ----------- ------------ --------------------------------------
</TABLE>

         All of the  persons  purchasing  shares of common  stock  were known to
management,  they were all  accredited  investors and had access to all material
information concerning the issuer.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(A)      EXHIBITS

         The following  exhibits are filed, by  incorporation  by reference,  as
part of this Form 10-QSB:

         2.1      Agreement  of  Merger  of  July  14,  1998,   between   Summit
                  Environmental  Corporation,   Inc.  and  Summit  Technologies,
                  Inc.**

         3.1      Articles of Incorporation of Summit Environmental Corporation,
                  Inc.*

         3.1.1    Amendment to Articles of Incorporation of Summit Environmental
                  Corporation, Inc.**

         3.2      Bylaws of Summit Environmental Corporation, Inc.*

         10.1     1998  Stock  Option  Plan  adopted  by  Summit   Environmental
                  Corporation, Inc.*

         10.3     Limited  Exclusive   Marketing   Bilateral  Agreement  Between
                  Moonlighting    Distribution    Corporation-USA   and   Summit
                  Technologies,  Inc.  (Poder Sexual,  Ultimate  Stressex and/or
                  Poder 24)*


                                       22
<PAGE>

         10.4     Limited Exclusive Marketing Bilateral Agreement among B. Keith
                  Parker,  individually  and as Chairman of the Board and CEO of
                  Moonlighting Distribution Corporation-USA,  d/b/a Moonlighting
                  International,   and  Summit  Technologies,   Inc.  (FireKare,
                  FIREPOWER 911(TM), Super Cold Fire, and FLAME OUT(R))*

         10.6     Exclusive Marketing  Bilateral Agreement between  Moonlighting
                  Distribution  Corporation-USA  and Summit  Technologies,  Inc.
                  (Trim-Away)**

         10.7     November 2, 1998  Amendment to April 27, 1998 Letter of Intent
                  between BioGenesis Enterprises,  Inc. and Summit Technologies,
                  Inc., and April 27, 1998 Letter of Intent.***

         10.8     2004  Stock  Option  Plan  adopted  by  Summit   Environmental
                  Corporation, Inc.+

         14       Code of Ethics  for the Chief  Executive  officer  and  Senior
                  Financial Officers.*+

         16.1     Letter of November  24, 2004 of Lane  Gorman  Trubitt,  L.L.P.
                  agreeing  with  the  statements  made  in Form  8-K by  Summit
                  Environmental Corporation, Inc., concerning Summit's change of
                  principal independent accountants.++

         31       Certification of Chief Executive Officer pursuant to 18 U.S.C.
                  Section  1350,  as  adopted  pursuant  to  Section  302 of the
                  Sarbanes-Oxley Act of 2002.

         31.1     Certification of Chief Financial Officer pursuant to 18 U.S.C.
                  Section  1350,  as  adopted  pursuant  to  Section  302 of the
                  Sarbanes-Oxley Act of 2002.

         32       Certification of Chief Executive Officer pursuant to 18 U.S.C.
                  Section  1350,  as  adopted  pursuant  to  Section  906 of the
                  Sarbanes-Oxley Act of 2002.

         32.1     Certification of Chief Financial Officer pursuant to 18 U.S.C.
                  Section  1350,  as  adopted  pursuant  to  Section  906 of the
                  Sarbanes-Oxley Act of 2002.

         *        Previously filed with Form SB-2; Commission File No. 333-48675
                  incorporated herein.
         **       Previously filed with Amendment No. 1 to Form SB-2; Commission
                  File No. 333-48675 incorporated herein.
         ***      Previously filed with Amendment No. 5 to Form SB-2; Commission
                  File No. 333-48675 incorporated herein.
         ****     Previously  filed with Form 10-QSB  03-31-02;  Commission File
                  No. 333-48675 incorporated herein.
         +        Previously  filed with Form 10-KSB  12-31-03;  Commission File
                  No. 333-48675 incorporated herein.
         ++       Previously  filed with Form 8-K November 22, 2004;  Commission
                  File No. 333-48659 incorporated herein.
         *+       Previously  filed with Form 10-KSB  12-31-04,  Commission File
                  No. 333-48675 incorporated herein.


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<PAGE>

                                   SIGNATURES

         Pursuant  to  the  requirements  of  the  Exchange  Act  of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

Date:    August 22, 2005

                                    SUMMIT ENVIRONMENTAL CORPORATION, INC.


                                    By: /s/ B. Keith Parker
                                        ---------------------------------------
                                        B. Keith Parker, Chief Executive Officer



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