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, 2004

                                       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 5, 2004, there were 23,130,594 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            14

Item 3.  Controls and Procedures                                              22

PART II - OTHER INFORMATION                                                   23

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                                                    24

Item 6.  Exhibits and Reports on Form 8-K                                     24

SIGNATURES                                                                    25


                                       2
<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

<TABLE>
<CAPTION>
<S>                                                                                          <C>
Condensed Balance Sheets June 30, 2004 (Unaudited) and
         December 31, 2003 (Audited)                                                         4
Statements of Operations (Unaudited) Three Months Ended June 30, 2004 and 2003 and
         Period from August 14, 1997 to June 30, 2004                                        5
Statements of Operations (Unaudited) Six Months Ended June 30, 2004 and 2003                 6
Statements of Cash Flows (Unaudited) Six Months Ended June 30, 2004 and 2003 and
         Period from August 14, 1997 to June 30, 2004                                        7
Notes to Financial Statements (Unaudited)                                                    8
</TABLE>


                                       3
<PAGE>

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                          (A Development Stage Company)
                            CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                   June 30, 2004      December 31, 2003
                                                                    (Unaudited)          (Audited)
                                                                   -------------      -----------------
<S>                                                                 <C>                  <C>
                                   Assets
Current Assets
  Cash and Cash Equivalents                                         $ 1,006,624          $   114,054
  Accounts Receivable, Less Allowance of $166,321                        45,414               29,444
  Note receivable - related party, less allowance of 20,496                  --                   --
  Inventory                                                             224,076              209,694
  Prepaid Expenses                                                      126,781               79,916
                                                                    -----------          -----------
        Total Current Assets                                          1,402,895              433,108
                                                                    -----------          -----------

Property and Equipment at Cost
  Property and Equipment                                                 61,597               58,235
  Leasehold Improvements                                                 13,877               13,760
  Accumulated Depreciation and Amortization                             (47,562)             (41,868)
                                                                    -----------          -----------
        Net Property and Equipment                                       27,912               30,127
                                                                    -----------          -----------

Other Assets
  Prepaid Royalties                                                     511,859              511,859
  Deposits                                                                2,180                2,180
  Patents and Licenses (net of accumulated amortization of $922,395
    and $841,227, respectively)                                       1,627,805            1,708,973
                                                                    -----------          -----------
        Total Other Assets                                            2,141,844            2,223,012
                                                                    -----------          -----------

Total Assets                                                        $ 3,572,651          $ 2,686,247
                                                                    ===========          ===========

                    Liabilities and Stockholders' Equity
Current Liabilities
  Accounts Payable                                                  $    16,785          $    71,730
  Notes Payable                                                          39,500               39,500
  Accrued Liabilities                                                    32,352               32,588
                                                                    -----------          -----------
        Total Current Liabilities                                        88,637              143,818
                                                                    -----------          -----------


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, 19,602,594 & 16,899,194
    shares issued and outstanding respectively                           19,603               16,900
  Common stock subscribed                                             1,116,250              300,800
  Additional Paid in Capital                                          8,902,336            8,329,609
  Deficit Accumulated in Development Stage                           (6,529,175)          (6,079,880)
  Treasury Stock                                                        (25,000)             (25,000)
                                                                    -----------          -----------
        Total Stockholders' Equity                                    3,484,014            2,542,429
                                                                    -----------          -----------

Total Liabilities and Stockholders' Equity                          $ 3,572,651          $ 2,686,247
                                                                    ===========          ===========
</TABLE>

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


                                       4
<PAGE>

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                          (A Development Stage Company)
                       CONDENSED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                         Three Months Ended
                                                               June 30               Period from
                                                    ----------------------------  August 14, 1997 to
                                                        2004            2003        June 30, 2004
                                                    ------------    ------------  ------------------
<S>                                                 <C>             <C>             <C>
Sales                                               $     97,459    $     44,990    $  1,026,742

Cost of Sales                                             48,675          31,066         780,944
                                                    ------------    ------------    ------------

Gross Profit                                              48,784          13,924         245,798
                                                    ------------    ------------    ------------

Operation Expenses
  Selling, general, and administrative expenses          270,350         172,023       5,723,754
  Amortization                                            40,584          40,853         932,092
  Depreciation                                             2,889           2,805          72,531
                                                    ------------    ------------    ------------
        Total operating expense                          313,823         215,681       6,728,377
                                                    ------------    ------------    ------------

Net Earnings (Loss) from Operations                     (265,039)       (201,757)     (6,482,579)

Other Income
  Interest income                                            484             328          62,270
  Interest expense                                          (461)             --         (17,553)
  Royalty income                                              --           1,304              --
  Gain/Loss on Sale of Asset                                  --              --          (2,753)
  Miscellaneous                                             (164)             --          31,034
                                                    ------------    ------------    ------------
        Total other income (expense)                        (141)          1,632          72,998
                                                    ------------    ------------    ------------

Net Loss before Cumulative Effect of the
Change in Accounting Principle                          (265,180)       (200,125)     (6,409,581)
                                                    ------------    ------------    ------------

Cumulative effect on prior years of the change
in accounting principle, net of tax                           --              --        (119,594)
                                                    ------------    ------------    ------------

Net Loss                                            $   (265,180)   $   (200,125)   $ (6,529,175)
                                                    ============    ============    ============

Net Loss Per Share before Cumulative
Effect of the Change in Accounting Principle        $      (0.01)   $      (0.01)   $      (0.56)

Cumulative effect on prior years of the change in
accounting principle                                          --              --           (0.01)
                                                    ------------    ------------    ------------

Net Earnings (Loss) per Share                       $      (0.01)   $      (0.01)   $      (0.57)
                                                    ============    ============    ============

Weighted Average Shares                               19,283,608      16,301,778      11,491,233
</TABLE>

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


                                       5
<PAGE>

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                          (A Development Stage Company)
                       CONDENSED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                          Six Months Ended
                                                              June 30
                                                    ---------------------------
                                                        2004            2003
                                                    ------------   ------------

Sales                                               $    139,487   $     87,671

Cost of Sales                                             66,368         48,047
                                                    ------------   ------------

Gross Profit                                              73,119         39,624
                                                    ------------   ------------

Operation Expenses
  Selling, general, and administrative expenses          432,704        328,106
  Amortization                                            81,168         81,706
  Depreciation                                             5,694          5,610
                                                    ------------   ------------
        Total operating expense                          519,566        415,422
                                                    ------------   ------------

Net Earnings (Loss) from Operations                     (446,447)      (375,798)

Other Income
  Interest income                                            557            904
  Interest expense                                        (1,152)            --
  Royalty income                                              --          1,956
  Miscellaneous                                           (2,253)            --
                                                    ------------   ------------
        Total other income (expense)                      (2,848)         2,860
                                                    ------------   ------------

Net Loss before Cumulative Effect of the
Change in Accounting Principle                          (449,295)      (372,938)
                                                    ------------   ------------

Cumulative effect on prior years of the change
in accounting principle, net of tax                           --             --
                                                    ------------   ------------

Net Loss                                            $   (449,295)  $   (372,938)
                                                    ============   ============

Net Loss Per Share before Cumulative
Effect of the Change in Accounting Principle        $      (0.02)  $      (0.02)

Cumulative effect on prior years of the change in
accounting principle                                          --             --
                                                    ------------   ------------

Net Earnings (Loss) per Share                       $      (0.02)  $      (0.02)
                                                    ============   ============

Weighted Average Shares                               18,730,383     16,081,999


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


                                       6
<PAGE>

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                          (A Development Stage Company)
                       CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                               Six Months Ended
                                                                   June 30              Period from
                                                          -------------------------- August 14, 1997 to
                                                             2004           2003       June 30, 2004
                                                          -----------    -----------    -----------
<S>                                                       <C>            <C>            <C>
Cash Flows from Operating Activities
  Net loss                                                $  (449,295)   $  (372,938)   $(6,529,175)
  Adjustments to reconcile net loss to cash
  used in operating activities
    Amortization                                               81,168         81,706        932,092
    Bad debt expense                                               --             --        200,778
    Provision for inventory losses                                                          364,485
    Cumulative effect of change in accounting principle            --             --        119,594
    Depreciation                                                5,694          5,610         72,531
    Gain on sale of assets                                         --             --          2,753
    Recission of Lady Burd asset purchase agreement                --             --         50,000
    Common stock issued for services                           58,130         25,700        527,204
    Change in assets and liabilities
      Accounts receivable                                     (15,970)        (4,219)      (261,927)
      Inventory                                               (14,382)        28,610       (683,006)
      Prepaid expenses and deposits                           (46,865)            --       (546,375)
      Accounts payable                                        (54,945)           728         16,785
      Accrued liabilities                                        (236)        (2,858)        32,352
                                                          -----------    -----------    -----------
        Net cash used in operating activities                (436,701)      (237,661)    (5,701,909)
                                                          -----------    -----------    -----------

Cash Flows from Investing Activities
  Acquisition of property and equipment                        (3,479)        (1,136)       (90,200)
  Organization costs                                               --             --       (129,291)
  Acquisition of licenses/patents                                  --             --       (110,000)
  Proceeds from sale of equipment                                  --             --         47,440
                                                          -----------    -----------    -----------
        Net cash used in investing activities                  (3,479)        (1,136)      (282,051)
                                                          -----------    -----------    -----------

Cash Flows from Financing Activities
  Loan proceeds                                                    --             --         46,054
  Loan principal repayments                                        --             --        (66,990)
  Loan principal repayments - related party                        --             --       (134,265)
  Proceeds from sale of stock                               1,332,750        178,000      7,145,785
                                                          -----------    -----------    -----------
        Net cash provided by financing activities           1,332,750        178,000      6,990,584
                                                          -----------    -----------    -----------

Net Increase (Decrease) in Cash                               892,570        (60,797)     1,006,624

Cash - Beginning of Period                                    114,054        195,762             --
                                                          -----------    -----------    -----------

Cash - End of Period                                      $ 1,006,624    $   134,965    $ 1,006,624
                                                          ===========    ===========    -----------

Supplemental cash flow information
  Noncash investing and financing activities
    Issuance of 360,000 shares of common stock at
      $0.32 per share for marketing rights                $        --    $   115,200    $   115,200
</TABLE>

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


                                       7
<PAGE>

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)

The balance sheet of Summit Environmental Corporation, Inc., the "company", at
December 31, 2003 has been taken from the company's audited financial statements
at that date. The balance sheet at June 30, 2004, the statement of operations
for the three months and the six months ended June 30, 2004, the three months
and the six months ended June 30, 2003 and the period from August 14, 1997 to
June 30, 2004, and the statement of cash flows for the six months ended June 30,
2004, the six months ended June 30, 2003 and the period from August 14, 1997 to
June 30, 2004 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 and six months ended June 30, 2004 are not
necessarily indicative of the results, which may be expected for the fiscal year
ended December 31, 2004. The interim financial statements should be read in
conjunction with the audited financial statements of the company for the year
ended December 31, 2003.

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

      Revenues from sales of materials and products are recorded at the time the
      goods are shipped or when title passes.

      Cash

      The company maintains cash balances at financial institutions located in
      Longview, Texas, which


                                       8
<PAGE>

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)

      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 of 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.

      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.

      Income Taxes

      Deferred income taxes are determined using the liability method under
      which deferred tax assets and liabilities are determined based upon
      differences between financial accounting and tax bases of assets and
      liabilities.

      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.


                                       9
<PAGE>

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (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
      $18,332 and $3,805 for the second quarters of 2004 and 2003, 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.

      Per Share Information

      Per share information is based on the weighted average number of common
      stock and common stock equivalent shares outstanding. Only basic earnings
      per share are shown, as there are no dilutive items.

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 cash payments of $500,000 and 875,000 shares of common
      stock of the company to be issued and delivered to BioGenesis Enterprises,
      Inc.

3.    LICENSES

      Licenses for exclusive marketing rights to various products have been
      acquired for fees totaling $175,200 from related parties. The company is
      the manufacturer/supplier of the products.


                                       10
<PAGE>

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)

      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.

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 $12,666 and $12,816 for the second quarters of 2004 and 2003,
      respectively.

5.    COMMON STOCK

      Private Placement

      During the first quarter of 2004, 640,000 shares of common stock were sold
      in a private placement at $0.20 per share. During the second quarter of
      2004, the company sold 621,250 shares of common stock at $0.20 per share
      in a private placement and 1,000,000 shares of common stock at $0.50 per
      share in a private placement.

      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 number of shares subject to the 2004 Plan is 1,000,000.

      At June 30, 2004, there were 395,000 options to purchase shares of common
      stock outstanding pursuant to the Plan.

      Warrants

      There were 2,256,500 warrants outstanding at December 31, 2003, all of
      which were exercisable at $0.25 per share through June 11, 2004. During
      the first quarter of 2004, warrants were issued to acquire 640,000 shares
      of common stock for $0.50 per share through January 30, 2005 in connection
      with a private placement offering. During the second quarter of 2004, the
      company issued 1,000,000 warrants to purchase shares at $1.00 per share,
      expiring May 7, 2005 and


                                       11
<PAGE>

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)

      621,250 warrants to purchase shares at $0.50 per share, expiring January
      30, 2005 in connection with two private placements. There were 2,258,500
      warrants exercised at $0.25 per share during the second quarter. Currently
      there are 843,000 warrants exercisable at $0.50 per share expiring
      September 10, 2004, and 416,250 warrants exercisable at $1.00 expiring
      November 9, 2004.

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). 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 $511,859
      as of both December 31, 2003 and June 30, 2004.

7.    CONCENTRATIONS

      Approximately 67 percent of the sales in the second quarter of 2004 were
      made to two customers and 66 percent of the sales in the second quarter of
      2003 were made to five customers.

8.    INCOME TAXES

      Deferred tax assets and liabilities are determined based on the
      differences between the financial statement and tax bases of assets and
      liabilities as measured by the currently enacted tax rates. Deferred tax
      expense or benefit is the result of the changes in deferred tax assets and
      liabilities.

      Deferred income taxes and liabilities arise principally from the temporary
      differences between financial statement and income tax recognition of
      depreciation and amortization, bad debts and net operating losses.

9.    AGREEMENTS

      On February 6, 2002, Summit executed a Distribution Agreement with 614575
      Alberta Limited of Calgary, Alberta, Canada. Alberta Limited manufactures
      a series of home fire extinguishing


                                       12
<PAGE>

                     SUMMIT ENVIRONMENTAL CORPORATION, INC.
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)

      systems which feature FlameOut(R) as part of each system. 614575 has
      changed their trade name to Just-In Case Fire Limited. Summit and Just-In
      Case Fire executed a bi-lateral exclusive agreement during the second
      quarter of 2002. The company sells FlameOut(R) to Just-In Case Fire
      exclusively for their mobile fire extinguishing systems. Summit will
      receive a royalty on the sale of each unit for the granting of said
      exclusivity.

      In late January 2004, Summit finalized an agreement with BioCoP
      International B.V. for a blending facility in The Netherlands. This will
      allow for BioCoP to begin blending completed (finished) products from
      chemical concentrates that Summit will sell to BioCoP. The line of
      products will range from industrial or commercial products to consumer
      oriented products. In addition to the blending of finished chemical
      products, BioCoP will begin production of an aerosol product similar to
      FirePower(TM). In establishing the blending facilities, Summit will be
      paid royalties on all manufactured and produced goods. In addition, Summit
      will be a 25% partner in the Summit Products' sector of BioCoP
      International B.V. During December 2003 and January 2004, BioCoP made
      their initial presentations to contacts in The Netherlands, Germany and
      the Czech Republic. The scope of the entire agreement includes marketing
      in over fifty countries in Europe and Asia.

      On April 5, 2004, Summit executed a marketing services agreement with
      AMBIZ Associates, LLC, a company that provides marketing and other
      services to client companies. AMBIZ, operating as an outsource sales and
      marketing team, will assist Summit with developing marketing channels in
      mass retail, military and commercial aviation and with governmental
      agencies, for Summit's patented fire suppressant technology.


                                       13
<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 three-month
period ended June 30, 2004 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 2004 Compared to Second Quarter
      of 2003

      Summit Environmental's sales for Q2 2004 were 216.6 percent of Q2 2003 -
$97,459 in Q2 2004 compared to $44,990 in Q2 2003. Gross margin was 50.1 percent
for Q2 2004 compared to 30.9 percent for Q2 2003. Sales have not reached a level
to generate consistent gross margin percentages.

      Operating expenses increased 45.5 percent during Q2 2004 over Q2 2003.
Operating expenses increased by $98,142 from $215,681 in Q2 2003 to $313,823 in
Q2 2004.

      Summit had a net loss from operations of $265,180 for Q2 2004, up from a
net loss of $200,125 for Q2 2003, a $65,055 or a 32.5 percent increase.

      Results of Operations - First Two Quarters of 2004 Compared to First Two
      Quarters of 2003

      Sales from operations were $139,487 for the first two quarters of 2004
compared to sales of $87,671 for the first two quarters of 2003, a 59.1 percent
increase. Gross margin on these sales was 52.4 percent in the first two quarters
of 2004 and 45.2 percent in the first two quarters of 2003.

      Operating expenses were up to $519,566 for the first two quarters of 2004
compared to $415,422 for the first two quarters of 2003, an increase of $104,144
or 25.1 percent.

      We experienced a net loss of $449,295 in the first two quarters of 2004,
up 20.5 percent from the $372,938 loss of the first two quarters of 2003. The
loss per share of common stock was $0.02 for the first two quarters of 2004 and
$0.02 for the same period of 2003.

      Some balance sheet items that reflect significant changes from December
31, 2003 to June 30, 2004 are: cash, up to $1,006,624 from $114,054; accounts
receivable, up to $45,414 from $29,444; common stock subscribed, up to
$1,116,250 from $300,800; and additional paid in capital, up to $8,902,336 from
$8,329,609.

      The net loss of $449,295 in the first two quarters of 2004 was financed by
the cash proceeds of the exercise of warrants for shares of common stock.


                                       14
<PAGE>

      OVERVIEW - RECENT DEVELOPMENTS

      During the first quarter of 2004, several of our markets for FlameOut(R)
continued to develop. Key was the listing, after 32 months of testing, of
FlameOut(R) on the QPL 5100-307 on May 5, 2003 by the United States Forestry
Service for application in the fighting of wildfires. The listing for
FlameOut(R) gives the firefighting industry a product with the capabilities to
fight all types of fires using FlameOut(R) more efficiently and economically
than with any other product while accomplishing these tasks in a totally
environmentally risk-free environment.

      FlameOut(R) was successfully used in forest and wildland fires in
California in late 2003 by the crews of Western Fire. The fast-acting
capabilities of FlameOut(R) supported the marketing efforts of Western Fire with
other crew bosses and product cache leaders. One of the most significant
observations was that of the reduction and, in many cases, the prevention of
re-ignition of fires in areas where FlameOut(R) was used.

      FlameOut(R)'s performance positioned Western Fire to be called out early
in 2004 on several smaller fires. During June and July 2004, Western Fire had
four crews on the Nuttals and Mt. Graham fires in Arizona. We shipped truckload
orders to Western Fire. Western Fire, whose corporate headquarters are located
at the Evergreen Aviation Air Base in Arizona, is using storage facilities at
Evergreen Aviation for storing FlameOut(R) in order to fill the orders coming
from area product caches in California, Arizona, Nevada, New Mexico and
Colorado.

      Just-In Case Fire manufactures the Fire Caddy(TM), a portable mobile fire
extinguishing system built on the concept of a physical appearance of a
two-wheeled freight dolly. We executed a bi-lateral exclusive marketing
agreement with Just-In Case in 2002. The agreement sets out that Just-In Case
manufactures their system exclusively with FlameOut(R) while Summit agrees not
to sell FlameOut(R) to mobile systems like the Fire Caddy(TM). Just-In Case
compensates us for their exclusive arrangement with royalties on each Fire
Caddy(TM) unit.

      A project in New Zealand initiated by the use of a Fire Caddy(TM) with
FlameOut(R) to extinguish a 13.5-foot-tall tire on a mining truck which was on
fire is progressing toward completion. This extraordinary accomplishment opened
the doors of communications and negotiations between Just-In Case Fire and BHP
Mining of Australia. Continued negotiations have resulted in the notification to
Just-In Case Fire that BHP Mining has made the decision to equip all of their
trucks and equipment with FlameOut(R) and the Fire Caddy(TM). BHP has 153 mines
in Australia and New Zealand. The information received by Summit from Just-In
Case Fire is for an annual supply contract of 500 tons of FlameOut(R) or 135,000
gallons. The resulting sales to us will amount to approximately $1,500,000.

      In June, several demonstrations were held in California and Nevada by
management for the purpose of establishing dealers for marketing home safety
systems utilizing all of our fire suppression products. The concept to be
marketed by new dealers is the preparation of property owners to fight fires by
having FirePower(TM) cans within the home, Hose Caddys(TM) on the garden hose,
and a Fire Caddy(TM) for the dwellings and perimeter property protection using
FlameOut(R) in all places of someone's property specifically in Reno, Lake
Tahoe, Squaw Valley and Truckee, Nevada.


                                       15
<PAGE>

      In August 2003, we executed a master distribution agreement with Western
Fire Inc. of Casa Grande, Arizona. for the purpose of marketing FlameOut(R) to
the various state and federal forestry services. Western has its own fleet of
specialty equipment trucks that get called into action by the various incident
commanders in the event of wildfire. In September 2003, Western introduced
Summit to its customer, Evergreen International Aviation. We were invited to
participate in a new project, a field testing program to determine if
FlameOut(R) would be compatible in a new delivery system utilizing a converted
Boeing 747 aircraft. It is. This aircraft utilizes a large compressed air foam
system carrying 24,000 gallons of FlameOut(R) within its payload. The Evergreen
Super Tanker is capable of dispensing a single foam blanket 100 feet wide for
25,000 feet or segmented drops if needed. FlameOut(R) is the only non-toxic
product approved by the United States Forestry Service. A demonstration drop of
FlameOut(R) from the Supertanker can be viewed by going to the Summit website,
www.summitenvironmental.com. From the homepage, click on "Links" and then click
"Evergreen" from the links page.

      On April 23, 2004, we went to the Evergreen testing facility for an
additional demonstration of the Supertanker, accompanied by former United States
Air Force Chief of Staff, General Mike Ryan. The purpose for our trip was to
begin forming a mutual marketing alliance between Evergreen and Summit. The
design of the alliance will be for the delivery of a WMD (biohazard nuclear
exposure) platform. On July 27, 2004, Western Fire, Evergreen and Summit
participated in a joint presentation held at Western's Corporate offices located
on the Evergreen Air Base in Marana, Arizona. The meeting focused on
presentations of response capabilities (Western), broad based applications
(Evergreen) and problem solution (Summit) to representatives of FEMA, Homeland
Security, Office of Energy Management, Arizona State Energy Management, Bureau
of Land Management and local and forest firefighting crews. Presented at the
meeting were two new additive products which utilize FlameOut(R) as its carrying
agent. The two new additives are for bio-hazard decontamination, and for toxic
spill remediation.

      Our first chemical blending facility agreement was negotiated in November
2003 with BioCoP International B.V. in the Netherlands. In March 2003, our
customer FireDam in Poland began making the transition to be supplied products
for Europe from BioCoP. Tecno Supplies in Norway will be introduced to BioCoP as
soon as aerosol capabilities for filling one liter cans can be achieved. Dr.
Amiran traveled to Italy and The Netherlands the first week of May 2004 to
establish the chemical concentrate facility for our base chemicals in Italy. In
Amsterdam, he inspected blending facilities in order to satisfy our requirements
for beginning the blending of FlameOut(R) in Europe.

      During the first week of March 2004, we attended the International
Association of Fire Chief's Wildland/Wildfire Conference in Reno, Nevada. Our
product was showcased by two of our distributors at separate locations in the
Exhibits Hall.

      Just-In Case Fire of Calgary, Alberta operated out of the Summit exhibit
space showcasing Fire Caddy(TM), the new DC Caddy(TM), Hose Caddy(TM),
FirePower(TM) and FlameOut(R) concentrate. Just-In Case Fire was assisted in
their presentations by several members of the Canadian Forestry Service, who had
actual experience using FlameOut(R) during the end of the fire season of 2003.


                                       16
<PAGE>

      Western Fire, our wildland/wildfire distributor in Arizona, represented us
and exhibited FlameOut(R) in its booth with Darley Pumps. Darley Pumps Company
is the largest manufacturer of pumps for firefighting equipment in the world. As
a result of Western Fire's experience with compressed air foam systems and the
introduction of FlameOut(R) into those systems, we began discussions with Darley
Pumps for the purpose of private labeling FlameOut(R) for them.

      Several members of AmBiz Associates accompanied Keith Parker, our CEO, to
the conference in order to get a perspective of FlameOut(R) and its potential
impact within the Wildland/Wildfire arena.

      Additional marketing shows were attended in Arkansas (Arkansas Timber
Producers Association and Arkansas Forestry Service) and Virginia (Southern
Forest Association). The focuses were apprising the forestry departments of the
Southeastern United States of the successful use of FlameOut(R) in California
during November 2003 and the Evergreen Supertanker.

      In the last quarter of 2002, we began marketing FlameOut(R) to the logging
industry. This venue was initiated when we were contacted by Bituminous
Insurance Company, the oldest and largest underwriter of fire insurance coverage
for equipment used in the logging industry. With insured equipment ranging from
$275,000 to $650,000, Bituminous now takes the position that a product like
FlameOut(R) must be present in extinguishers on insured equipment, or the logger
will face a non-renewal status. For new equipment, the same requirement would be
required for binding of coverage. We expanded the sale of FlameOut(R) to these
customers from five gallon containers of FlameOut(R) concentrate to include 2
1/2 gallon and 6 liter extinguishers and brackets to mount the extinguishers. We
began to package topper bottles (pre-measured bottles of FlameOut(R)) to be used
to complete the fill of extinguishers out on the logging line. During 2003, we
added endorsements from Santee Insurance Company and Lloyd's of London for
marketing FlameOut(R) to their insureds. These companies now discount premiums
from 15% to 25% when FlameOut(R) is installed on their insured equipment. We
provide marketing materials to the senior underwriters of the insurance
companies. They hold regional marketing meetings and disburse the materials to
their field agents. The marketing directly of our products to a logging customer
is handled mostly through the logger's insurance agent or local equipment
suppliers we have set up as dealers. In April 2004, we attended the Arkansas
Timber Producers Association meeting held on the grounds of International Paper.
We demonstrated extinguishing fires (tire, diesel fuel, and hydraulic fluid)
with the equipment which is currently recommended to the operators by Bituminous
Insurance. We also introduced the Fire Caddy DC(TM), powered by a rechargeable
battery and the Hose Caddy(TM). We also demonstrated the new FirePower(TM),
which had been introduced on QVC on April 3, 2004. Logging supply dealers
established in Virginia, South Carolina, and Alabama in 2003 have seen increased
sales during the second quarter of 2004.

      Due to stiff regulatory guidelines with regards to portable fire
extinguishers, the approval of our aerosol can fire extinguisher prompted our
competitors to create a myriad of road blocks, attempting to prevent us from
competing in some of our target venues. One of our initial venues was to market
FirePower (TM) on QVC. In order to complete this targeted goal, we accomplished
the following:

            o     Completed the NFPA 10 certification tests for both chemical
                  contents (ANSI/UL 711) and the container (ANSI/UL 8).


                                       17
<PAGE>

            o     Obtained a validated listing number from Applied Research
                  Laboratories for listing FirePower(TM) as a legally tested,
                  certified, and insured product.

            o     Completed Quality Assurance at QVC.

            o     Secured programming approval at QVC.

            o     Obtained certification confirmation from United Parcel Service
                  on the shipping classification for FirePower(TM) as "aerosol
                  non-flammable". This allows FirePower(TM) to be shipped as any
                  other product and not as hazardous material.

            o     Secured the confirmation letter from the United States
                  Department of Transportation confirming FirePower(TM) for
                  shipping as ORM-D. This confirmation eliminates additional
                  shipping issues created about aerosols in the aftermath of
                  September 11, 2001.

            o     Obtained the right for George Foreman to be the national
                  spokesperson for FirePower(TM) when retail "roll-out" of the
                  product would become viable after initial branding on QVC.

FirePower(TM) successfully aired on QVC in April, May and June and on August 3,
2004.

      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.

      We are continuing our work with American Business Associates (AmBiz).
AmBiz is assisting us with introductions into military, homeland security and
emergency management venues, with retailing some of our products and with
development and financing for future special projects. More about AmBiz can be
found at www.americanbusinessassociates.com. With retired Air Force Chief of
Staff General Mike Ryan assisting with our efforts, we have submitted
FlameOut(R) and FlameOut(R) Foam to the United States Air Force chemical testing
center at Tyndal Air Force Base in Florida. Our FlameOut(R) Foam (AFFF
Replacement) and FlameOut(R) are now undergoing toxicity testing and efficacy
tests. Our plans for FlameOut(R) with US Air Force C-130 tankers for wildfires
will take us to the testing center at Little Rock, Arkansas during the third
quarter of 2004.

      Our FlameOut(R) was used in some of the fighting of wild fires in
California, Arizona, and Canada during 2003. We saw much more activity in May,
June and July 2004 in Arizona with FlameOut(R) being ordered by the product
caches to the front lines of the Nuttals fire and the Mt. Graham Observatory
fire. Western Fire ordered a large inventory of FlameOut(R) in order to
facilitate these emergency type orders which are occurring and will occur with
little or no warning.

      President Bush signed the Healthy Forest Initiative. We immediately met
with our US Congressman for the purpose of presenting FlameOut(R) as the answer
to the problems which have occurred from "pre burns". It is a given that one
will get out of control. It is just not known where. Our lobbying efforts focus
on the non-toxic and biodegradable benefits of FlameOut(R), as a politically
popular answer for the solution of these issues when they occur. We made
presentations to FEMA, Homeland Security, Arizona State Emergency Management,
Office of Emergency Management, and Bureau of Land Management representatives on
July 27, 2004, in conjunction with Western Fire and Evergreen Aviation. The
focus of the meeting was centered on emergency response to toxic spills and


                                       18
<PAGE>

biohazard potentials. The previous successful demonstration of the use of the
Evergreen Supertanker to disperse FlameOut(R) over a path 100 to 125 feet wide
for 20,000 feet has brought about the addition of our remediation formula for
spill response. We have also developed a decontamination additive to add to
FlameOut(R) to expand the encapsulation capabilities where FlameOut(R) Plus can
be expelled for remediation of toxic spills and decontamination of potential
biohazard exposure. Type 6 and Type 3 emergency response trucks, the Fire
Caddy(TM), and the new DC Caddies(TM) are also capable of effectively dispersing
FlameOut(R) plus its new additives.

      Western Fire, our distributor in Casa Grande, Arizona, has been holding
training classes for wildland fire fighting crews in Arizona, New Mexico,
Colorado, California and Nevada for the purpose of teaching fire fighting crews
how to use FlameOut(R) in the fighting of wildfires. New compressed-air foam
systems are now being introduced as fire fighting equipment. These systems
display properties of FlameOut(R) that were unknown until FlameOut(R) was
introduced through these types of systems. Western is the licensed procurement
office for several large municipal fire departments, even as far away from
Arizona as the District of Columbia. Western Fire began moving pallets of
FlameOut(R) on to the fire lines recently in fires in Arizona (June - July
2004). These newly trained and graduated fire crews - when separate from Western
Fire's crews - are now coming to wildfires asking for FlameOut(R) from the Fire
Cache.

      On April 22, 2004, Western Fire was dispatched for its first brush fire of
the season. A twenty-acre brush fire was reported at the Picacho Reservoir in
Pinal County, which reservoir has been a dry lake for a number of years due to
the prolonged drought in the southwest. Western Fire sent crews and Type 3 and
Type 6 compressed air foam (CAF) engines loaded with FlameOut(R) fire fighting
foam. Initial attack began early that evening using FlameOut(R) as a wetline to
flank the advancing brush fire. Because of FlameOut(R)'s unique ability to be
used as a retardant, the fire could not advance through the FlameOut(R) wetline
and was contained to a brush fire allowing Western Fire wildland firefighters to
begin mop up operations. The fire was in heavy brush and mesquite trees. Again
FlameOut(R) worked beyond everyone's expectations, especially in keeping the
fire contained instead of becoming a wildfire, and in putting out stumps'
underground root system fires that kept the crews working all night. By morning
the brush fire was completely out with no reported rekindling

      Earlier the next afternoon Western Fire was dispatched for a mutual aid
call by the Northern Pinal Fire Department as a possible brush fire in an
unincorporated area of Pinal county. Once on scene, it was found to be a 40 foot
cargo container on fire on a homeowner's property in an urban interface area.
The homeowner had been welding on the metal cargo container setting off a fire
inside filled with Class A materials. The fire was burning so hot that paint was
melting on the outside. Again FlameOut(R) was deployed from a Western Fire Type
6 CAF engine to easily cool the outside of the container and then within minutes
extinguished the contents inside the cargo container. The combination of a
compressed air foam system and unique abilities of FlameOut(R) foam easily
mitigated the fire with minimal water damage. In early May 2004, we were asked
to furnish warehousing locations and central phone numbers by the United States
Forestry Service. Also, we were asked to supply a potential list of customers
who have been exposed to FlameOut(R). These exposures effects have been
completed by Western Fire and Just-In Case Fire and represent over 235 companies
and wildland fire fighting agencies and departments. Further locations were
provided for fires where FlameOut(R) has been used including


                                       19
<PAGE>

and since The Old Fire in California in November 2003. Western Fire crews
returned from the Nuttals and Mt. Graham fires on July 21, 2004. They were the
last crew to leave the fire lines. Reports coming from the Western Fire Crews
and others center around FlameOut(R) being the first product these crews have
used that successfully prevents re-ignition once the fires are extinguished. We
feel this will be one of the primary observations that will begin to produce
increased requests for FlameOut(R) by the fire crews to the fire caches.

      Just-In Case Fire introduced its Hose Caddy(TM) during the fourth quarter
of 2003. This devise connects to the end of a garden hose. It is similar to a
garden fertilizer/insecticide sprayer. The unit comes filled with 32 ounces of
FlameOut(R). Major retail marketing began in Canada at a spring garden show held
in January and February 2004.

      In January 2004, Just-In Case Fire introduced its FireCaddy DC(TM). This
is a portable fire extinguishing system in a tool box. Just-In Case has
confirmation letters for the purchase of 4,500 DC Caddy units. One confirmation
letter is for 2000 DC units from State Farm Insurance. The addition of the Hose
Caddy(TM) and the DC Caddy(TM) to Just-In Case Fire's line of products now
provides three fire extinguishing systems exclusively containing FlameOut(R).
Each of these units provides a royalty payable to Summit on each unit
manufactured when sold. Just-In Case Fire started the production of the first
2000 Fire Caddy DC(TM) units for State Farm Insurance in April 2004. These 2000
units require 5000 gallons of FlameOut(R) for the completed product.

      Through one of the associates of AmBiz, we presented the Fire Caddy DC(TM)
and the Hose Caddy(TM), along with the original Fire Caddy(TM), FlameOut(R) and
FirePower(TM) to representatives of USAA Insurance in May 2004. This resulted in
the preparation of these products for listing in the USAA members catalog.
Initial discussions were held on how to introduce the product to USAA's insured
policyholders, potentially discount premiums and the effects on tracking claim
experience. Though this is in its preliminary stages, we think that this will be
a coming venue in 2005. We successfully have entered the logging industry with
Bituminous Insurance and other insurers. Now, two years into the program, the
insurance companies are seeing loss reductions. In an effort to increase this
very profitable marketing effort, we hired an Executive Vice President -
Marketing beginning August 2, 2004. Mr. Joe Hoffman will begin working directly
with the Bituminous field representatives, the independent agencies writing
business for Bituminous, logging supply locations and some of the larger logging
companies. Mr. Hoffman's extensive manufacturing and oil field background has
led to Bituminous's request that we expand our efforts into the area of their
insured oil and petroleum exploration and production companies.

      During the first week of March 2004, members of AmBiz accompanied us to
the IAFC Wildland/Wildfire Conference in Reno, Nevada. During April 2004, AmBiz
partner, General Mike Ryan (retired United States Air Force, Chief of Staff -
September 2003) attended a demonstration drop of FlameOut(R) from the Evergreen
747 Supertanker, dispersing 10,000 gallons of FlameOut(R) mixed with water at a
6% solution. Weather computers were strategically stationed in areas of the drop
path. They registered significant decreases in temperature, heat indexes and
barometric pressure, with increasing humidity, surface wind speed and dew point.
We are planning a joint presentation to the U.S. Department of the Interior and
the U.S. Forestry Service featuring the life saving, property saving, quick


                                       20
<PAGE>

response and environmental advantages from dispersing FlameOut(R) over large
areas of wild fires from the Supertanker. We will be focusing on the
capabilities of FlameOut(R) to build fire breaks, prevent toxic exposure to
firefighters and the environment along with structure protection. In July 2004,
we met with additional AmBiz members for the purpose of preparing our strategy
for the development of an infomercial utilizing all of the fire safety devices
using FlameOut(R): FirePower(TM), Hose Caddy(TM), and Fire Caddy(TM), and the
retail roll-out of FlameOut(R) with a large retailer.

      Just-In Case estimates that it can sell 100,000 Caddy units during 2004
and 2005. This would provide sales of 250,000 to 500,000 gallons of FlameOut(R)
depending on the breakdown of each of the Fire Caddy Products. In late July
2004, Just-In Case ordered a large inventory of FlameOut(R) which will be
warehoused in Montana. This will give us two western United States locations to
disperse FlameOut(R) from as orders come from the Fire Cache leaders on the
front lines of wildfires.

      During the period March 3-5, 2004 our involvement with Evergreen Aviation,
through our distributor Western Fire, was introduced to the fire fighting
community at the NFPA Wildland Wildfire Conference in Reno, Nevada. Evergreen
has equipped a SuperTanker (a converted 747) with a large, compressed air foam
system. This system can disperse 24,000 gallons of FlameOut(R) mixed with water
along a path of foam 100 feet wide for 25,000 feet in a continuous drop - or in
segmented drops, if necessary. The largest aerial application currently in use
in the industry is capable of one continuous drop for only 2,080 feet. On July
27, 2004, a joint presentation of Western Fire, Evergreen, and Summit was made
to representatives from FEMA, Homeland Security, Office of Emergency Management,
Arizona Office of Emergency Management and others.

      The Evergreen Aviation SuperTanker can also be used to disperse
remediation products on oil spills. We own the exclusive marketing rights to a
remediation technology obtained from Dr. Mohsen Amiran in 2003. While all of our
successful testing has been centered on FlameOut(R) in the SuperTanker CAF
system, our remediation product is planned for usage on oil spills. During April
2004, three demonstration drops were conducted with the Supertanker. Each drop
consisted of 10,000 gallons of water/FlameOut(R) mix (6% FlameOut(R)) for the
purpose of showing how FlameOut(R) will blanket and cover the areas targeted by
the Supertanker. The drops revealed a complete saturation of all vegetation and
penetration of the canopy to completely cover the ground. During the drops, a
significant decrease in temperature was recorded on weather computers. At one of
the demonstrations, over 50 people representing the United States Forestry
Service, Bureau of Land Management, Arizona State Fire, Aire Tanker Operations,
and Hazardous Materials Departments were present. We are beginning an interface
phase with FlameOut(R) where the attributes of the products fire fighting and
environmental capabilities are being introduced into many various methodologies
of wildland fire fighting. The addition of our decontamination additive to
FlameOut(R) presents a solution for biohazard potential. In addition, these two
additives to FlameOut(R) for remediation and decontamination can be dispersed
for Type 3 and Type 6 emergency response trucks and the Fire Caddy(TM).

      We project logging-related sales in excess of $150,000 for 2004. In 2003
we established logging-related dealers in Texas, Louisiana, Mississippi,
Alabama, Georgia, South Carolina, North Carolina, Virginia, West Virginia,
Wisconsin and Minnesota. During the first week of May, we presented FlameOut(R)
and the Fire Caddy(TM) system to the Forest Resource Association at a joint


                                       21
<PAGE>

outdoor logging show held on the property of International Paper Company in
Arkansas. Specially established control burns using FlameOut(R) and Fire
Caddy(TM) systems were approved in order to enhance our presentations. We
attended Arkansas State Forestry and Southern Forestry Association meetings in
May and June respectively. The addition of our Executive Vice-President -
Marketing will begin to increase sales in all of these venues.

      On April 3, 2004, FirePower was introduced for the first time on QVC. We
performed live, on-air demonstrations of FirePower(TM)'s amazing capabilities.
FirePower(TM) has been approved for programming as "Today's Special Value" in
long term planning. This type of promotion involves conducting 8 to 10
appearances in a 24-hour period.

      We have experienced additional airings in May and June with the most
recent airing of FirePower(TM) being August 3, 2004, during QVC's fire
prevention show. We have submitted artwork and packaging to Home Shopping
Network for the airing of FirePower(TM). We met with representatives from AmBiz
for the purpose of a 30-minute infomercial involving FirePower(TM) utilizing the
Hose Caddy(TM) and Fire Caddy(TM).

      FirePower(TM) was approved for inclusion in the WW Grainger "red catalog"
for 2005 that went to press in May 2004. We anticipate the first order for
product late in the third quarter or early in the fourth quarter 2004.

Cosmetics

      We have two products at QVC under review for quality assurance - "Beach in
the Bag," featuring our Pannache Sunless Tanner, and the "Pampering Pail,"
featuring sugar scrubs and exfoliators for the feet and elbows. We will soon be
submitting a new product package to QVC each month.

      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, 2004. Based on this
evaluation, the Company's Chief Executive Officer and Chief Financial Officer
concluded that the


                                       22
<PAGE>

Company's disclosure controls and procedures are effective for gathering,
analyzing and disclosing the information the Company is required to disclose in
the reports it files under the Securities Exchange Act of 1934, within the time
periods specified in the SEC's rules and forms.

      Changes in internal controls. There were no significant changes in
internal controls or other factors that could significantly affect our internal
controls subsequent to the date of our evaluation.

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings

      On December 28, 2001, we filed a $46,000 collection lawsuit, Summit
Environmental Corporation, Inc. v. Harry Bachelder III, dba Performance
Marketing , Inc., Cause Number 2001-2667-B, 124th District Court, Gregg County,
Texas for non-performance on a guaranteed note payable and delinquent accounts.
We later amended the petition to include a cause for an alleged unlawful removal
of 21 pallets of FirePower 911(TM) from a bonded warehouse. We took a default
judgement for approximately $186,000, which default judgment was awarded on
November 8, 2002.

      In April 2002 we filed a $53,000 lawsuit, Cause Number 2002-93-B in the
124th District Court, Gregg County, Texas, against a former staff employee and
her spouse for credit card fraud and misappropriation of funds in the 124th
District Court in Longview, Gregg County, Texas. We were awarded $233,800 in
damages and attorney's fees but have been unable to collect any of the judgment
amount.

      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. Changes in Securities

      None.

Item 3. Defaults Upon Senior Securities

      None.

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

      None.


                                       23
<PAGE>

Item 5. Other Information

      None.

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)*

            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.+

            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


                                       24
<PAGE>

                        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.

(b)   Forms 8-K

      None

                                   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 10, 2004

                                      Summit Environmental Corporation, Inc.


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


                                       25
<PAGE>

                     Summit Environmental Corporation, Inc.
                          Commission File No. 333-48659

                                  EXHIBIT INDEX

                                   FORM 10-QSB
                       For the quarter ended June 30, 2004

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

    Exhibit No.                     Description
    -----------                     -----------

            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)*

            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.+

            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.


                                        1
<PAGE>

            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.


                                       2