SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

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

                  For the fiscal year ended September 30, 2010
                                       or

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

        For the transition period from _______________ to ______________

                        Commission file number: 000-22855

                        AMERICAN SOIL TECHNOLOGIES, INC.
           (Name of Small Business Issuer as specific in its Charter)

           Nevada                                                95-4780218
(State or Other Jurisdiction of                               (I.R.S. Employer
 Incorporation or Organization)                              Identification No.)

12224 Montague Street, Pacoima, California                         91331
(Address of Principal Executive Offices)                         (Zip Code)

         Issuer's telephone number, including area code: (818) 899-4686

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $.001 par value
                                (Title of Class)

Indicate by check mark if the  registrant is a well-known  seasoned  issuer,  as
defined in Rule 405 the Securities Act. Yes [ ] No [X]

Indicate  by  check  mark if the  registrant  is not  required  to file  reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

Indicate by check mark whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter periods that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted  electronically  and
posted on its corporate Web site, if any, every  Interactive  Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter)  during the  preceding 12 months (or for such shorter  period that
the registrant was required to submit and post such files). Yes [ ] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained herein, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. Yes [ ] No [X]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer [ ]                       Accelerated filer [ ]
Non-accelerated filer  [ ]                        Smaller reporting company  [X]
(Do not check if a smaller reporting company)

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

For the fiscal year ended September 30, 2010, our revenue was $117,052

As of January 12, 2011, the number of shares of common stock outstanding was
68,090,590. As of January 12, 2011, the aggregate market value of our common
stock held by non-affiliates was approximately $249,515 (based upon 24,951,469
shares at $0.01 per share).
<PAGE>
                       DOCUMENTS INCORPORATED BY REFERENCE

The following documents are incorporated herein by reference: (i) Registration
Statement on Form SB-2, filed on July 2, 1997, as amended (Registration No.
333-30583); (Form 10-QSB for the quarterly period ended September 30, 2005,
filed on November 14, 2005; (vii) Form 10-KSB for the fiscal year ended
September 30, 2006, filed on April 3, 2006; (viii) Form 10-QSB for the quarterly
period ended March 30, 2006, filed on May 17, 2006 ; (ix) Form 10-QSB for the
quarterly period ended June 30, 2006, filed on August 14, 2006; (x) Form 10-QSB
for the quarterly period ended September 30, 2006, filed on November 14, 2006;
and (xi) Form 10-KSB for the fiscal year ended December 31, 2006, filed on April
18, 2007; and (xii) Form 8-K disclosing a change in Registered Certifying
Accounts, filed on May 15, 2007; and (xiii) Form 10-QSB for the quarterly period
ended March 31, 2007 filed on May 21, 2007 and filed as amended on June 8, 2007;
and (xiv) Form 10-QSB for the quarterly period ended June 30, 2007 and filed on
August 20, 2007; and (xv) Form 10KT a Transition Report for the period January
1, 2007 to September 30, 2007 and filed on February 15, 2008 and amended and
filed on February 25, 2008; and (xvi) an S-8 Registration Statement filed on
February 29, 2008; and (xvii) Form 10-QSB for the quarterly period ended March
31, 2008 filed on May 20, 2008; and (xviii) Form 10-QSB for the quarterly period
ended June 30, 2008 are incorporated in Part III, Item 13; Form 10Q for the
quarterly period ended December 31, 2009 filed on February 23, 2009; and (xviv;)
Form 10Q for the quarterly period ended March 31, 2009 filed on June 22, 2009;
and (xvv) Form 10Q for the quarterly period ended June 30, 2009 filed on August
14, 2009, Form 10K for the fiscal year ended September 30, 2009 filed on January
13, 2010; Form 10Q for the quarterly period ended December 31, 2009 filed on
March 23, 2010; Form 10Q for the quarterly period ended March 30, 2010 filed on
May 17, 2010; Form 10Q for the quarterly period ended June 30, 2010 filed on
August 23, 2010.
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                                                                            Page
                                                                            ----

ITEM 1    DESCRIPTION OF BUSINESS..........................................   1

ITEM 2    DESCRIPTION OF PROPERTY..........................................   5

ITEM 3    LEGAL PROCEEDINGS................................................   5

ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..............   6

ITEM 5    MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.........   6

ITEM 6    SELECTED FINANCIAL DATA..........................................   8

ITEM 7    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
          AND RESULTS OF OPERATIONS........................................   8

ITEM 8    FINANCIAL STATEMENTS.............................................  16

ITEM 9    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
          AND FINANCIAL DISCLOSURE.........................................  16

ITEM 9A   CONTROLS AND PROCEDURES..........................................  16

ITEM 9B   OTHER INFORMATION................................................  17

ITEM 10   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT................  17

ITEM 11   EXECUTIVE COMPENSATION...........................................  18

ITEM 12   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
          AND RELATED STOCKHOLDER MATTERS..................................  23

ITEM 13   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...................  24

ITEM 14   PRINCIPAL ACCOUNTANT FEES AND SERVICES...........................  25

ITEM 15   EXHIBITS ........................................................  25

SIGNATURES.................................................................  30
<PAGE>
                                     PART I

ITEM 1. BUSINESS

DEVELOPMENT OF BUSINESS

American Soil Technologies, Inc., formerly Soil Wash Technologies, Inc., was
incorporated in California on September 22, 1993 in the soil remediation
business. In May 2002, we discontinued the soil remediation business.

BUSINESS OF ISSUER

We develop, manufacture on an outsourced basis and market cutting-edge
technology that decreases the need for water and improves the soil in the "Green
Industry" consisting of agriculture, turf and horticulture. Our products enhance
growing environments and reduce the environmental damage caused by common
growing practices.

We manufacture on an outsourced basis three primary products: Agriblend(R), a
patented soil amendment developed for agriculture; Soil Medic, a patented slow
release liquid fertilizer; and NutrimoistL(R), developed for homes, parks, golf
courses and other turf related applications.

We market our products primarily in the United States. We are continually
attempting to add sales representatives and distributors in both the agriculture
and turf industries. The following table shows the current distributors and
sales representatives of our products and products we license from others:

Distributor/Sales
 Representative                Product                   Territory
 --------------                -------                   ---------
Gigot Aqua Services         Agriblend(R)          Kansas, Oklahoma, Nebraska,
                            Nutrimoist(R)         Colorado, northern Texas,
                            Extend(TM)            northern New Mexico
                            Sircle Saver Sacks(R)

The Pacific Tree Company    Agriblend(R)          Exclusive distributor of our
                            Soil Medic            products for the Paulownia
                            Nutrimoist(R)         Megafolia  Tree in the United
                                                  States

Turf Masters                Soil Medic(TM)        San Diego and Orange Counties
                            Soil Therapy(TM)      California and Northern Mexico

Reinke Pasco, Inc.          Agriblend(R)          Washington
                            Nutrimoist(R)
                            Extend(TM)
                            Dust Contain
                            Sircle Saver Sack(R)

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The Kern Company            Agriblend(R)          Washington
                            Nutrimoist(R)
                            Extend(TM)
                            Canal Seal
                            Dust Contain
                            Anchor MP
                            Sircle Saver Sack(R)
                            Hydromulch

We also act as a distributor for products manufactured by others as follows:

 Manufacturer                  Product                      Territory
 ------------                  -------                      ---------
JT Water Management LLC     Extend(TM), a liquid      Western United States
                            linear polymer, and
                            Contain, a dust
                            control technology

Richard Roos                Sircle Saver Sack(R)      Exclusive Worldwide
                            Soil Saver Sack(TM)

Midwest Industrial          Soil-Sement(R)and         Those areas where the
Supply, Inc.                Envirokleen(R),           manufacturer does not
                            environmentally           already have an exclusive
                            certified dust and        dealer or distributor
                            erosion control products

On July 7, 2006, we acquired Smart World Organics, Inc. ("Smart World") as a
wholly-owned subsidiary. Smart World is a "C" corporation located in Hudson,
Florida. Smart World has developed organic and sustainable products through a
unique research approach both in the field and with Universities and
agricultural schools in Florida. The products are sold directly to the end user
and through distributors in the United States

Smart World provides next-generation organic and sustainable fertilizers to
commercial and residential customers worldwide. Smart World also provides
advanced, custom-formulated products built to suit unusual growing conditions
and environments. The product line includes homogenized fertilizers, non-toxic
insect controls, plant protectants, seed, soil and silage inoculants.

We issued 2,300,000 shares of common stock to the shareholders of Smart World in
exchange for 100% of the shares of common stock of Smart World and assumed
approximately $400,000 in notes and trade payables.

On December 20, 2006, we entered into an Intellectual Property Purchase
Agreement with Ray Nielsen whereby we purchased from Mr. Nielsen any and all
intellectual property of Mr. Nielsen, including all formulas developed by Mr.
Nielsen over the past 30 years, including but not limited to all formulas and
intellectual property used in the business of Smart World, including all
graphics and logos; all domain names and URL's; any proprietary software and its

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source code; all existing content and HTML files; all branding and trademarks;
all trade names; all services marks; all copywritten material; all patents; and
all products and proceeds of the foregoing, in any form whatsoever and
wheresoever located (collectively the "Intellectual Property"), in exchange for
a convertible debenture in the amount of $1,500,000, bearing an interest rate of
8% per annum (the "Convertible Debenture"). The Convertible Debenture was
convertible at the option of Mr. Nielsen at any time prior to the maturity date
into shares of our common stock at a conversion price equal to the closing price
of our common stock for the day immediately preceding the date of conversion.
The Debenture is deemed no longer convertible due to the expiration of the
conversion rights.

The Debenture is secured by the Intellectual Property. The principal of the
Debenture and any unpaid accrued interest thereon was due and payable on January
19, 2008. We were to make quarterly interest payments until the maturity date. A
dispute has arisen between Mr. Nielsen and us regarding the Convertible
Debenture and the uniqueness and value of the Intellectual Property. See "Legal
Proceedings."

COMPETITION

To the best knowledge of our management, there is no direct competition for our
Agriblend(R) product, however, earlier polymer based technology was very
expensive and the remembrance of its cost has a negative effect on marketing
Agriblend(R). Accordingly, educating the end user regarding the benefits of
using Agriblend(R) and gaining general acceptance of the new "micro grain"
technology are obstacles to marketing the product.

There is some competition to our straight polymer products by companies that
have been in business for a number of years.

There is some competition for Extend(TM), however, we have not as yet found a
higher quality liquid linear polymer product.

We are not aware of any competition to Nutrimoist(R) L other than from our
manufacturer(s) who would have to use our polymer to manufacture the product
pursuant to our agreement.

The newly acquired slow release fertilizer Soil Medic does not seem to have
competition at this time.

There is some competition for the organic products that we distribute and
manufacture through Smart World.

                                       3
<PAGE>
SOURCES AND AVAILABILITY OF RAW MATERIAL AND PRINCIPAL SUPPLIERS

Our products are proprietary blends that include cross-linked micro grain
polymer in the blend. Cross-linked polymer is manufactured by several chemical
companies that include Stockhausen, BASF; Ciba Specialties; and Floerger. All
other components of our products are readily available commercially throughout
the world. Agriblend(R) products are custom blended in accordance with our
specifications at a blending facility located near Truth or Consequences, New
Mexico. Our warehouse facilities are located in Phoenix, Arizona and Pacoima,
California. Nutrimoist(R) is blended by us through contract blenders and is a
combination of different formulations, which include our polymer products. Two
licensees under our patent manufacture our liquid slow release fertilizer.
Custom blending of Soil Medic, as needed, is performed by us through independent
blenders. Our organic products were manufactured at our Smart World plant in
Hudson, Florida which is now dormant until funding can be secured. The Agro
Tower is manufactured for us by Make-It Manufacturing in Paso Robles,
California.

DEPENDENCE ON MAJOR CUSTOMERS

We are not dependent on any one customer for a substantial portion of our sales
of any product.

INTELLECTUAL PROPERTY

We have six patents on the M-216 Polymer Injector machine designed to install
our Nutrimoist(R) product into mature turf.

On March 21, 2006, we acquired the U.S. patent on a slow release liquid
fertilizer through our acquisition of Advanced Fertilizer Technologies, Inc.

We have exclusive worldwide manufacturing/marketing rights to patented super
absorbent cross-linked polymer application technology. The underlying patents
include United States Patent number 5,649,495 and 5,868,087, commonly known and
described as "Agricultural Retention Mixture and Application Technique."

We have exclusive worldwide marketing rights to the patent pending linear
polymer product known as the Sircle Saver Sack(TM).

We own registered trademarks on the names, Agriblend(R), Nutrimoist(R),
Hydroganic(R) and Prosper(R).

We have world wide marketing rights to a patented product known as the Agro
Tower.

We own the right to numerous formulas used to manufacture organic and
sustainable soil amendments, fertilizers and insecticides.

GOVERNMENT APPROVAL

Agriblend(R) and our other polymers are subject to regulatory standards
developed by the Environmental Protection Agency ("EPA") that are applicable to

                                       4
<PAGE>
maximum monomer concentrations in polymers. Polymer products cannot exceed
monomer concentrations of 200 mg/kg. All of the polymers we use are well below
the maximum monomer standard.

Many of our products are organically approved through the National Organic
Program ("NOP") and registered under EPA section 25B.

RESEARCH AND DEVELOPMENT COSTS

We have not spent material amounts for research and development during the years
ended September 30, 2010 and September 30, 2009.

COST AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS AND REGULATIONS

We provide Material Safety Data Sheets on all components of our product line and
comply with labeling requirement for our products. In addition, we comply with
EPA regulations applicable to monomer content in its polymer additives (no
greater than five-hundredths percent (0.05%)). We believe that our operations
currently comply in all material respects with applicable federal, state and
local laws, rules, regulations and ordinances regarding the discharge of
materials into the environment. We do not believe that such compliance will have
a material impact on our capital expenditures, future earnings and competitive
position. No material capital expenditures for environmental control equipment
presently are planned.

EMPLOYEES

As of the date hereof, we have three full-time employees. We hire independent
contractors on an "as needed" basis only. We have no collective bargaining
agreements with our employees. We believe that our employee relationships are
satisfactory.

ITEM 1A. NON APPLICABLE

ITEM 1B. NON APPLICABLE

ITEM 2. DESCRIPTION OF PROPERTY

On April 1, 2004, we entered into a Sublease Agreement to sublet 923.50 square
feet located at a facility in Pacoima, California. The majority shareholder of
the sublessor is a related party to us. All of our operations are conducted from
this facility, which requires monthly rental payments of approximately $554. The
Sublease Agreement expired on December 31, 2008 and we continued to rent the
facilities through December 2010. In January 2011, we moved offices to a
location in Canoga Park and sublease the space from a related party. The new
lease is month to month. We also rent storage space in Tucson and Phoenix,
Arizona for approximately $200 per month.

ITEM 3. LEGAL PROCEEDINGS

On or about September 21, 2007, Stockhausen, Inc. ("Stockhausen") filed a
Complaint in the United States District Court, for the Middle District of North
Carolina, against us seeking damages. The parties entered into a settlement

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<PAGE>
agreement on June 2, 2010. Under the settlement agreement, we agreed to pay
Stockhausen $250,000 on or before June 23, 2010 as a compromise to Stockhausen's
claims that currently total $603,921. We further agreed that we would consent to
the entry of a Judgment against us in favor of Stockhausen in the amount of
$603,92 if we failed to make complete and timely payment as agreed. The company
was unable to make the agreed upon payment and on July 8, 2010 Stockhausen
entered a judgment for the above stated amount against the company.

On or about October 4, 2007, Raymond J. Nielsen and Cheryl K. Nielsen
(collectively, "Plaintiffs"), filed a Complaint in the Circuit Court in the
Sixth Judicial District of Pasco County, Florida, against us and Smart World
(collectively "Defendants") seeking damages, declaratory, and injunctive relief.
Plaintiffs allege that Defendants failed to pay interest when due on the
Convertible Debenture from Defendants to Plaintiffs and, thus, the entire amount
of the Convertible Debenture is accelerated and Plaintiffs are seeking a
judgment in the amount of $1,500,000 plus interest. On December 29, 2009, the
matter was settled for $400,000 and the Company had 60 days in which to remit
the amount or a judgment in the entire amount claimed will be entered against
us. The Company was not able to meet the terms of the settlement and have been
actively communicating with the Plaintiffs to extend the terms of the
settlement.

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

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

None.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER
        PURCHASES OF EQUITY SECURITES

MARKET FOR COMMON EQUITY

Our common stock is currently quoted on the Over-The-Counter Bulletin Board
under the Symbol "SOYL." Set forth below is the trading history of our common
stock without retail mark-up, mark-down or commissions:

                                                 High           Low
                                                 ----           ---
2009
       First Quarter ......................      0.03           0.01
       Second Quarter .....................      0.01           0.01
       Third Quarter ......................      0.01           0.01
       Fourth Quarter .....................      0.05           0.01

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2010
       First Quarter ......................      0.03           0.01
       Second Quarter .....................      0.01           0.01
       Third Quarter ......................      0.01           0.01
       Fourth Quarter .....................      0.05           0.01

On January 12, 2011, the closing stock price was $0.01.

The above quotations are inter-dealer quotations from market makers of our
common stock. At certain times the actual closing or opening quotations may not
represent actual trades that took place.

HOLDERS

As of January 12, 2011, there were 283 shareholders holding certificated
securities and approximately 545 shareholders currently listed in the Depository
Trust Company as holding shares in brokerage accounts. Our transfer agent is
Standard Registrar & Transfer Company 1528 South 1840 East, Draper, Utah 84020.

DIVIDENDS

We have paid no dividends on our common stock since inception and do not
anticipate or contemplate paying cash dividends in the foreseeable future.

RECENT SALES OF UNREGISTERED SECURITIES

On September 2, 2009, Valerie Sarofim purchased a Convertible Debenture for
$125,000 , which on October 8, 2009, she converted into 3,125,000 shares of
common stock at the conversion price of $0.04 per share. We believe that Ms
Sarofim is an "accredited investor" under Rule 501 Regulation D of the Act and
had adequate access to information about us.

On October 8, 2009, the Board of Directors granted 1,000,000 shares of common
stock to each of its Directors Carl Ranno, Neil Kitchen, Scott Baker and to
Diana Visco. The grant was made because of each respective recipients
contribution to the Company. We believe that these individuals are "accredited
investor" under Rule 501 Regulation D of the Act and had adequate access to
information about us.

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<PAGE>
ITEM 6 SELECTED FINANCIAL DATA

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

                                        Fiscal Year Ended     Fiscal Year Ended
                                        September 30, 2010    September 30, 2009
                                        ------------------    ------------------
                                            (Audited)             (Audited)
STATEMENT OF OPERATIONS DATA:
Revenue                                   $    117,052          $    236,954
Loss From Continuing Operations               (963,620)           (2,717,529)
(Net Loss)                                  (1,488,300)           (2,837,215)
(Continuing Operations) Loss Per Share    $      (0.02)         $      (0.05)
(Net Loss) Per Share                      $      (0.02)         $      (0.05)

BALANCE SHEET DATA:
Current Assets                            $     36,218          $    120,068
Property & Equipment, net                       15,014                78,824
Intangible Assets; net                         162,147               212,038

Total Assets                                   213,379               411,186
Total Current Liabilities                   (6,277,388)           (5,147,112)
Accumulated Deficit                        (27,310,005)          (25,821,705)
Stockholders' Deficit                     $ (6,064,009)         $ (4,864,453)

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

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

THE FOLLOWING INFORMATION CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS OF OUR
MANAGEMENT. FORWARD-LOOKING STATEMENTS ARE STATEMENTS THAT ESTIMATE THE
HAPPENING OF FUTURE EVENTS AND ARE NOT BASED ON HISTORICAL FACT. FORWARD-LOOKING
STATEMENTS MAY BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY, SUCH AS
"MAY," "COULD," "EXPECT," "ESTIMATE," "ANTICIPATE," "PLAN," "PREDICT,"
"PROBABLE," "POSSIBLE," "SHOULD," "CONTINUE," OR SIMILAR TERMS, VARIATIONS OF
THOSE TERMS OR THE NEGATIVE OF THOSE TERMS. THE FORWARD-LOOKING STATEMENTS

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SPECIFIED IN THE FOLLOWING INFORMATION HAVE BEEN COMPILED BY OUR MANAGEMENT ON
THE BASIS OF ASSUMPTIONS MADE BY MANAGEMENT AND CONSIDERED BY MANAGEMENT TO BE
REASONABLE. OUR FUTURE OPERATING RESULTS, HOWEVER, ARE IMPOSSIBLE TO PREDICT AND
NO REPRESENTATION, GUARANTY, OR WARRANTY IS TO BE INFERRED FROM THOSE
FORWARD-LOOKING STATEMENTS.

OVERVIEW

We develop, manufacture and market cutting-edge technology that decreases the
need for water and improves the soil in the "Green Industry" consisting of
agriculture, turf and horticulture.

RESULTS OF OPERATIONS

YEAR ENDED SEPTEMBER 30, 2010 COMPARED TO SEPTEMBER 30, 2009

REVENUES

Revenues for the fiscal year-ended September 30, 2010 were $117,052 compared to
$236,954 for the fiscal year ended September 30, 2009, a decrease of 51 %. This
decrease in revenue is directly related to severe economic conditions, which
necessitated a reduction in our sales and marketing staff and competition from a
former employee, as well as a lack of liquidity to sell or license our products.

COST OF SALES

Cost of goods sold decreased to $90,654 for the fiscal year ended September 30,
2010 from $110,483 for the fiscal year ended September 30, 2009. The decrease in
the cost of sales is the result of the decrease in revenues during this period.
Our gross margins were 23 % and 53% for the years ended September 30, 2010 and
September 30, 2009, respectively. The decrease in our gross margins was caused
by an impairment of our inventory which created an increase in our cost of
goods.

OPERATING EXPENSES

Operating expenses decreased approximately 65 % for the fiscal year ended
September 30, 2010. This decrease in operating expenses is a result of many
factors.

General and administrative expenses decreased approximately 23 % for the fiscal
year ended September 30, 2010 due to a reduction in staff and general
operational expenses.

Sales and marketing expenses decreased approximately 97% as we eliminated the
trade shows we normally attend and reduced our sales force.

Research and development costs have been eliminated because we have basically
completed our research and development on our existing products.

The amortization expense of intangible assets was $49,891 and $346,131 for the
year ended September 30, 2010 and 2009, respectively.

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INTEREST EXPENSE

Interest expense decreased 14.5% for the fiscal year ended September 30, 2010
from the period ended September 30, 2009. The decrease resulted from the
elimination of higher average debt balances and non-cash interest expense
relating to the amortization of a debt discount as reported in the prior audited
period.

NET LOSS

For the reasons detailed above, we experienced reduced losses in the year ended
September 30, 2010 compared to the year ended September 30, 2009. We expect that
as a result of our efforts during the last three years to develop strategic
alliances, marketing agreements, and distribution networks, sales volume in
subsequent periods should increase. However, since these arrangements are new
and untested and we do not have the funds to promote these programs, it is
uncertain whether these actions will be sufficient to produce net operating
income for the fiscal year ending September 30, 2011. Given the gross margins of
our turf products as well as a renewed interest in consumer organic products for
the retail market future operating results should improve.

SEASONALITY

Our efforts in the United States have focused on the southern states and
therefore generally experience year round growing cycles, with the sale of the
agricultural products preceding the growing cycle of various crops.
International sales have not been sufficient enough or the geographic
distribution of sales concentrated enough to determine if a seasonal trend
exists although the initial indication is that our markets will become diverse
and therefore not indicate significant seasonal variations. As we expand into
the residential and commercial segments nationally, we will experience some
seasonal declines in sales during the fall and winter quarters in less temperate
climates.

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents totaled $2,045 and $13,604 at September 30, 2010 and
September 30, 2009, respectively. Net cash used by operations was $89,442 for
the year ended September 30, 2010 as compared to $154,823 for the year ended
September 30, 2009. We have historically relied upon one of our officers and
significant shareholders to provide cash to meet short term operating cash
requirements.

In March 2000, we authorized the issuance of an aggregate of $1,325,000 of
convertible debentures with interest payable quarterly at 10% per annum. The
convertible debentures were convertible to our common stock at a rate of one
share for each three dollars converted. The debentures matured in the first
calendar quarter of 2002. All of the debentures were subscribed and at September
30, 2010, the outstanding balance of all notes payable totaled $1,892,024. At
September 30, 2010, debentures consisted of one $1,500,000 of 8% debenture which
is currently in default and in dispute among the parties, $50,000 of 8% per

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annum debentures at a rate of $0.50 per share, $60,000 of 8% debenture
convertible at $0.10 per share, $30,000 of 8% per annum debentures at a rate of
$0.25 per share, $75,000 of 8% per annum debentures at a rate of $0.19 per
share, and $177,024 of 10% per annum convertible at a rate of $3.00 per share
All of the above mentioned convertible debentures are beyond their due dates and
as such are no longer convertible unless the company and the holders agree on
each debenture.

As of September 30, 2010 we had a working capital deficit of $6,241,170 (current
assets less current liabilities) of compared to a deficit of $ $5,027,044 as of
September 30, 2009. The increase in the working capital deficit has been caused
by an increase in our current liabilities.

As shown in the accompanying financial statements, we have incurred an
accumulated deficit of $27,310,005 and a working capital deficit of $6,241,170
as of September 30, 2010. Our ability to continue as a going concern is
dependent on obtaining additional capital and financing and operating at a
profitable level. We intend to seek additional capital either through debt or
equity offerings and to increase sales volume and operating margins to achieve
profitability. Our working capital and other capital requirements during the
next fiscal year and thereafter will vary based on the sales revenue generated
by the recent accumulation of additional products and the distribution and sales
network we have created and will continue to grow.

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

CRITICAL ACCOUNTING POLICIES

Our consolidated financial statements are prepared in accordance with accounting
principles generally accepted in the U.S., which requires us to make estimates
and assumptions in certain circumstances that affect amounts reported. In
preparing these financial statements, management has made its best estimates and
judgments of certain amounts, giving due consideration to materiality. We
believe that of our significant accounting policies (more fully described in
notes to the consolidated financial statements), the following are particularly
important to the portrayal of our results of operations and financial position
and may require the application of a higher level of judgment by our management,
and as a result are subject to an inherent degree of uncertainty.

ESTIMATES

Our discussion and analysis of our financial condition and results of operations
are based on our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the consolidated

                                       11
<PAGE>
financial statements and the reported amounts of revenues and expenses during
the reporting period. By their nature, these estimates and judgments are subject
to an inherent degree of uncertainty. We review our estimates on an on-going
basis, including those related to the allowance for doubtful accounts,
inventories and related reserves, long-lived assets, income taxes, litigation
and stock-based compensation. We base our estimates on our historical
experience, knowledge of current conditions and our beliefs of what could occur
in the future considering available information. Actual results may differ from
these estimates, and material effects on our operating results and financial
position may result. We believe the following critical accounting policies
involve our more significant judgments and estimates used in the preparation of
our consolidated financial statements.

REVENUE RECOGNITION

We generate our revenues from the sale of products and services and recognize
revenue when the following fundamental criteria are met:

     *    persuasive evidence that an arrangement exists;

     *    the products and services have been delivered;

     *    selling prices are fixed and determinable and not subject to refund or
          adjustment; and

     *    collection of amounts due is reasonably assured.

Delivery occurs when goods are shipped and title and risk of loss transfer to
the customer, in accordance with the terms specified in the arrangement with the
customer. Revenue recognition is deferred in all instances where the earnings
process is incomplete. We provide for sales returns and allowances in the same
period as the related revenues are recognized. We base these estimates on our
historical experience or the specific identification of an event necessitating a
reserve. To the extent actual sales returns differ from our estimates; our
future results of operations may be affected. Should changes in conditions cause
management to determine that these criteria are not met for certain future
transactions, revenue recognized for any reporting period could be adversely
affected.

ACCOUNTS RECEIVABLE

We perform ongoing credit evaluations of our customers and adjust credit limits
based upon payment history and the customer's current credit worthiness, as
determined by our review of their current credit information. We continuously
monitor collections and payments from our customers and maintain an allowance
for doubtful accounts based upon our historical experience and any specific
customer collection issues that we have identified. While our credit losses have
historically been within our expectations and the allowance established, we may
not continue to experience the same credit loss rates as we have in the past.
Our accounts receivable are concentrated in a relatively few number of
customers. Therefore, a significant change in the liquidity or financial
position of any one customer could make it more difficult for us to collect our
accounts receivable and require us to increase our allowance for doubtful
accounts, which could have a material adverse impact on our consolidated
financial position, results of operations and cash flows.

                                       12
<PAGE>
INVENTORIES

We seek to purchase and maintain raw materials at sufficient levels to meet lead
times based on forecasted demand. If forecasted demand exceeds actual demand, we
may need to provide an allowance for excess or obsolete quantities on hand. We
also review our inventories for changes in the market prices of our products and
provide reserves as deemed necessary. If actual market conditions are less
favorable than those projected by management, additional inventory reserves may
be required. We state our inventories at the lower of cost, using the first-in,
first-out method on an average costs basis, or market.

We account of inventory costs in accordance with Accounting Standards
Condification ("ASC") No. 310, "Current Assets". Abnormal amounts of idle
facility expense, freight, handling costs, and wasted materials (spoilage)are
recognized as current-period charges. Fixed production overhead is allocated to
the costs of conversion into inventories based on the normal capacity of the
production facilities. We utilize an expected normal level of production units,
based on our plant capacity. To the extent we do not achieve a normal expected
production levels, we charge such under-absorption of fixed overhead to
operations.

LONG-LIVED ASSETS

The Company reviews its fixed assets and certain identifiable intangibles for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset
to the future undiscounted operating cash flow expected to be generated by the
asset. If such assets are considered to be impaired, the impairment to be
recognized is measured by the amount by which the carrying amount of the asset
exceeds the fair value of the asset. Long-lived assets to be disposed of are
reported at the lower of carrying amount or fair value less costs to sell.

Based on analysis of the carrying value of goodwill as of September 30, 2009
relating to Smart World Organics, the fair value did not exceeded the carrying
amount. As a result we fully impaired goodwill in the amount of $364,600, which
is reflected in the statement of operations.

We evaluated the Soil Medic and as of September 30, 2009 partially impaired the
intangible asset in the amount of $177,000, which is reflected in the statement
of operations. No impairment was necessary for the year ended September 30, 2010
and the intangible had a remaining value of approximately $162,000.

During the year ended September 30, 2009 we evaluated the Smart World intangible
assets, consisting of the formulas, trade secrets and goodwill, aggregating
$1,036,984, net of accumulated amortization. We evaluated undiscounted cash
flows for definite lived intangible assets and fair value related to goodwill.
Based on the lack of capital to implement our business plan we have been unable
to enter the retail market with a major retailer, we fully impaired the Smart

                                       13
<PAGE>
World intangible assets and goodwill in the amount of $1,036,984, based on
future expected cash flows, which is reflected in the statement of operations.

ACCOUNTING FOR INCOME TAXES

We account for income taxes under the provisions of ASC NO. 740, "Income Taxes".
Under this method, we determine deferred tax assets and liabilities based upon
the difference between the financial statement and tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to affect taxable income. The tax consequences of most
events recognized in the current year's financial statements are included in
determining income taxes currently payable. However, because tax laws and
financial accounting standards differ in their recognition and measurement of
assets, liabilities, equity, revenues, expenses, gains and losses, differences
arise between the amount of taxable income and pre-tax financial income for a
year and between the tax bases of assets or liabilities and their reported
amounts in the financial statements. Because it is assumed that the reported
amounts of assets and liabilities will be recovered and settled, respectively, a
difference between the tax basis of an asset or a liability and its reported
amount on the consolidated balance sheet will result in a taxable or a
deductible amount in some future years when the related liabilities are settled
or the reported amounts of the assets are recovered. We then assess the
likelihood that our deferred tax assets will be recovered from future taxable
income and unless we believe that recovery is more likely than not, we must
establish a valuation allowance.

Effective September 30, 2007, the Company adopted ASC No. 740 Topic 10, Income
Taxes, General ("ASC 740.10"). ASC 740.10 prescribes, among other things, a
recognition threshold and measurement attributes for the financial statement
recognition and measurement of uncertain tax positions taken or expected to be
taken in a company's income tax return. The Company utilizes a two-step approach
for evaluating uncertain tax positions. Step one or recognition, requires a
company to determine if the weight of available evidence indicates a tax
position is more likely than not to be sustained upon audit, including
resolution of related appeals or litigation processes, if any. Step two or
measurement, is based on the largest amount of benefit, which is more likely
than not to be realized on settlement with the taxing authority.

We have provided a full valuation allowance against our U.S federal and state
deferred tax assets. If sufficient evidence of our ability to generate future
U.S federal and/or state taxable income becomes apparent, we may be required to
reduce our valuation allowance, resulting in income tax benefits in our
statement of operations. We evaluate the realizability of our deferred tax
assets and assess the need for a valuation allowance quarterly.

STOCK-BASED COMPENSATION

We account for stock-based compensation in accordance with ASC No. 718,
Compensation, Stock Compensation ("ASC 718"). ASC 718 requires that we account
for all stock-based compensation transactions using a fair-value method and
recognize the fair value of each award as an expense, generally over the service
period. The fair value of stock options is based upon the market price of our
common stock at the grant date. We estimate the fair value of stock option
awards, as of the grant date, using the Black-Scholes option-pricing model. The

                                       14
<PAGE>
use of the Black-Scholes model requires that we make a number of estimates,
including the expected option term, the expected volatility in the price of our
common stock, the risk-free rate of interest and the dividend yield on our
common stock. If our expected option term and stock-price volatility assumptions
were different, the resulting determination of the fair value of stock option
awards could be materially different and our results of operations could be
materially impacted.

ACCOUNTING FOR NON-EMPLOYEE STOCK-BASED COMPENSATION

We measure compensation expense for its non-employee stock-based compensation
under ASC No. 505 Topic 50, "Equity-Based Payments to Non-Employees". The fair
value of the option issued or expected to be issued is used to measure the
transaction, as this is more reliable than the fair value of the services
received. The fair value is measured at the value of our common stock on the
date that the commitment for performance by the counterparty has been reached or
the counterparty's performance is complete. In the case of the issuance of stock
options, we determine the fair value using the Black-Scholes option pricing
model. The fair value of the equity instrument is charged directly to
stock-based compensation expense and credited to additional paid-in capital.

ACCOUNTING FOR CONVERSION FEATURES AND WARRANTS ISSUED WITH CONVERTIBLE DEBT

Our derivative financial instruments consisted of embedded derivatives related
to the issuance of our $1.5 million convertible note payable to Ray Nielsen.
These embedded derivatives included a conversion feature that was not
considered conventional as defined in ASC No. 815, "Derivatives and Hedging".
The accounting treatment of derivative financial instruments required that we
record the derivative at its fair value and record it at fair value as of each
subsequent balance sheet date. Changes in fair value was recorded as
non-operating, non-cash income or expense at each reporting date. The
derivative was valued using the Black-Scholes Option Pricing Model.

RECENT ACCOUNTING PRONOUNCEMENTS

In January 2010, the FASB amended authoritative guidance for improving
disclosures about fair-value measurements. The updated guidance requires new
disclosures about recurring or nonrecurring fair-value measurements including
significant transfers into and out of Level 1 and Level 2 fair-value
measurements and information on purchases, sales, issuances, and settlements on
a gross basis in the reconciliation of Level 3 fair-value measurements. The
guidance also clarified existing fair-value measurement disclosure guidance
about the level of disaggregation, inputs, and valuation techniques. The
guidance became effective for interim and annual reporting periods beginning on
or after December 15, 2009, with an exception for the disclosures of purchases,
sales, issuances and settlements on the roll-forward of activity in Level 3
fair-value measurements. Those disclosures will be effective for fiscal years
beginning after December 15, 2010 and for interim periods within those fiscal
years. The Company does not expect that the adoption of this guidance will have
a material impact on the financial statements.

                                       15
<PAGE>
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT FINANCIAL RISKS

Not Applicable

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements required to be filed pursuant to this Item 8 begin on
page F-1 of this report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

In connection with the reorganization of McKennon, Wilson & Morgan LLP (the
"Former Auditors") in which certain of its audit partners resigned from the
Former Auditors and have joined dbbmckennon. The Former Auditors resigned as the
independent auditors of American Soil Technologies, Inc. (the "Company"),
effective May 4, 2009.

The Former Auditors had been the Company's auditor since September 21, 2007.

The Company's Board of Directors (the "Board") approved the resignation of
McKennon, Wilson & Morgan LLP on May 4, 2009.

Effective May 4, 2009, the Board appointed dbbmckennon (the "New Auditors") as
the Company's new independent auditors.

During the Company's two most recent fiscal years and subsequent interim period
on or prior to May 4, 2009, the Company has not consulted with the New Auditors
regarding either i) the application of accounting principles to a specific
completed or contemplated transaction, or the type of audit opinion that might
be rendered on the Company's financial statements or (ii) any matter that was
either the subject of a disagreement or event identified in response to
(a)(1)(iv) of Item 304 of Regulation S-K.

ITEM 9A. CONTROLS AND PROCEDURES

Our President and Chief Financial Officer (the "Certifying Officers") is
responsible for establishing and maintaining our disclosure controls and
procedures. The Certifying Officer have designed such disclosure controls and
procedures to ensure that material information is made known to him,
particularly during the period in which this report was prepared. The Certifying
Officer has evaluated the effectiveness of our disclosure controls and
procedures and has determined that our projections and impairment analysis need
to be improved. We will retain a financial expert to assist us in improving our
disclosure controls and procedures as needed. We believe that the changes to be
implemented will enable the Company to improve its timely reporting of the
required impairment analysis.

                                       16
<PAGE>
ITEM 9A(T). CONTROLS AND PROCEDURES

Not Applicable

ITEM 9B. OTHER INFORMATION

None.

                                    PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS

Our directors and executive officers are as follows:

Name                      Age                     Position
----                      ---                     --------

Carl P. Ranno             70       Director, Chief Executive Officer, President,
                                   Chief Financial Officer

Neil C. Kitchen           62       Director, Vice President

Diana Visco               52       Secretary

Scott Baker               52       Director

MR. CARL P. RANNO, DIRECTOR, CHIEF EXECUTIVE OFFICER, PRESIDENT, CHIEF FINANCIAL
OFFICER, received a degree in Economics from Xavier University in Cincinnati,
Ohio and his Juris Doctor from the University of Detroit School of Law. Mr.
Ranno became a Director in September 2001 and Chief Executive Officer and
President in May 2002. For the five years prior to becoming the President/CEO of
the Company, he has acted as an advisor in strategic planning, mergers and
acquisitions and as a securities attorney to numerous public companies. He has
served as president and CEO of public and private companies. He is also a member
of the board of directors of Central Utilities Production Company.

MR. NEIL C. KITCHEN, DIRECTOR, VICE PRESIDENT, has over 20 years experience in
business management in the environmental sector including management of
companies involved in general engineering, toxicology, and environmental
cleanup. Prior to joining us in 1994, he was Vice President of a publicly-held
environmental cleanup company. He holds a B.S. in Business Management from San
Diego State University and a class "A" General Engineering license with
Hazardous Material Certification from the State of California.

MS. DIANA VISCO, SECRETARY, Diana Visco, Secretary, has worked with us since
January 1999. Prior to that, she worked for 21 years with the Americana
Leadership College, Inc., traveling to all of its offices and conferences across
the USA and Caribbean in addition to Australia, New Zealand, Canada and Europe.

                                       17
<PAGE>
Ms Visco spent several years as a traveling administrator and as International
Administrator handling all aspects of finance, administration as well as
marketing and promotion in addition to being assistant to the President of that
company. She is the daughter of Mr. Louie Visco, a former director who passed
away on January 3, 2008

MR. SCOTT BAKER, DIRECTOR, has practiced law in Arizona for the past 19 years.
He graduated from the University of Arizona with a B.S. in business in 1978 and
obtained his J.D. from the University of Arizona in 1981. As a general
practitioner, he has appeared before the U.S. District Tax Court and the U.S.
District Court.

Directors serve until the next annual meeting or until their successors are
qualified and elected. Officers serve at the discretion of the Board of
Directors.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our
directors and certain officers, as well as persons who own more than 10% of a
registered class of our equity securities, ("Reporting Persons") to file reports
of ownership and changes in ownership on Forms 3, 4 and 5 with the Securities
and Exchange Commission.

Based solely upon a review of the copies of such forms, we believe that all
Reporting Persons have complied on a timely basis with all filing requirements
applicable to them, except that Louie Visco filed one late report on Form 4
disclosing his conversion of debt to equity.

ITEM 11. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

Set forth below is a summary of compensation for our principal executive officer
and our two most highly compensated officers other than our principal executive
officer (collectively, the "named executive officers") for our last two fiscal
years. There have been no annuity, pension or retirement benefits ever paid to
our officers, directors or employees.

With the exception of reimbursement of expenses incurred by our named executive
officers during the scope of their employment and unless expressly stated
otherwise in a footnote below, none of the named executive officers received
other compensation, perquisites and/or personal benefits in excess of $10,000.

                                       18
<PAGE>
<TABLE>
<CAPTION>
      Name and                                                                  Non-Equity
      Principal                                           Stock     Option    Incentive Plan     All Other
      Position         Year    Salary ($)(1)  Bonus($)   Awards($)  Awards($)  Compensation($)  Compensation($)  Total($)
      --------         ----    ----------     --------   ---------  ---------  ---------------  ---------------  --------
<S>                     <C>    <C>           <C>       <C>         <C>           <C>              <C>          <C>

Carl P. Ranno,         2010    $200,000         $0       $32,000       $0            $0              $0          $232,000
CEO, President, CFO    2009    $180,000         $0       $     0       $0            $0              $0          $180,000
(Principal Executive
Officer)

Neil C. Kitchen,       2010    $134,500         $0       $32,000       $0            $0              $0          $166,500
Vice President         2009    $120,746         $0       $     0       $0            $0              $0          $120,746

Diana Visco            2010    $ 85,000         $0       $32,000       $0            $0              $0          $117,000
Secretary              2009    $ 76,750         $0       $     0       $0            $0              $0          $ 76,750
</TABLE>

----------
(1) Accrued but unpaid.

During the year ended September 30, 2010 we issued each of the listed
individuals 1,000,000 shares of common stock, value based on the closing stock
price of the Company on the date of the grant ($0.032).

                          GRANTS OF PLAN-BASED AWARDS

We did not grant any plan-based awards during this fiscal year ended September
30, 2010.

                  OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

The following  table sets forth  information  for the named  executive  officers
regarding  the number of shares  and  underlying  shares  both  exercisable  and
unexercisable stock options, as well as the exercise prices and expiration dates
thereof, as of September 30, 2010.

<TABLE>
<CAPTION>
                                                Option Awards                                           Stock Awards
                -------------------------------------------------------------------------  -----------------------------------
                                                                                                                      Equity
                                                                                                                    Incentive
                                                                                                                       Plan
                                                                                                         Equity       Awards
                                                                                                        Incentive     Market
                                                                                                          Plan          or
                                                                                                         Awards:      Payout
                                               Equity                                                  Number of     Value of
                                             Incentive                                       Market     Unearned     Unearned
                                            Plan Awards:                        Number of   Value of     Shares,      Shares,
                Number of      Number of     Number of                          Shares of    Shares     Units or     Units of
               securities     securities     Securities                          Units of   or Units      other       other
               Underlying     Underlying     Underlying                           Stock     of Stock     rights       rights
               Unexercised    Unexercised    Unexercised   Option     Option    that have     that      that have      that
                 Options(#)    Options(#)     Unearned    Exercise  Expiration     not      have not       not       have not
Name           Exercisable   Unexercisable   Options(#)   Price($)     Date      vested(#)  vested($)    vested(#)   vested($)
----           -----------   -------------   ----------   --------     ----      ---------  ---------    ---------   ---------
<S>              <C>               <C>            <C>        <C>        <C>     <C>        <C>          <C>         <C>
Carl P. Ranno,   150,000             0           0         $0.50      6/30/12        0          0            0           0
CEO, President,  352,500       117,500           0         $0.11      9/27/12        0          0            0           0
CEO (Principal
Executive
Officer)

Neil C. Kitchen, 150,000           0             0         $0.50      6/30/12        0           0           0           0
Vice President   322,500       107,500           0         $0.11      9/27/12        0           0           0           0
</TABLE>

                                       19
<PAGE>
EMPLOYMENT AGREEMENTS

We have an employment agreement Carl P. Ranno as our Chief Executive Officer and
President. The Agreement is for a term of five years, commencing on May 23, 2008
and expiring on May 22, 2013 with automatic one-year extensions unless either
the Company or Mr. Ranno provides written notice of their intention not to renew
the Agreement at least 30 days prior to the expiration of the then current term.
The Agreement provides that, in addition to receiving paid vacation in
accordance with the Company's policies as well as other customary benefits and
provisions, Mr. Ranno shall receive an annual base salary of $200,000. If, at
any time during the term of the Agreement, Mr. Ranno is terminated "without
cause," he will be entitled to receive a cash payment equal to the aggregate
compensation payable to Mr. Ranno during the remaining term of the Agreement.
The compensation is is being accrued.

On May 23, 2008 the Company entered into an Employment Agreement with Neil C.
Kitchen to act as the Company's Vice President and Chief Technical Officer (the
"Agreement"). The Agreement is for a term of five years, commencing on May 23,
2008 and expiring on May 22, 2013 with automatic one-year extensions unless
either the Company or Mr. Kitchen provides written notice of their intention not
to renew the Agreement at least 30 days prior to the expiration of the then
current term. The Agreement provides that, in addition to receiving paid
vacation in accordance with the Company's policies as well as other customary
benefits and provisions, Mr. Kitchen shall receive an annual base salary of
$130,000. If, at any time during the term of the Agreement, Mr. Kitchen is
terminated "without cause," he will be entitled to receive a cash payment equal
to the aggregate compensation payable to Mr. Kitchen during the remaining term
of the Agreement. The compensation is being accrued.

On May 23, 2008, and effective the same date, the Company entered into an
Employment Agreement with Diana Visco to act as the Company's Secretary and
Administrative Assistant to the President (the "Agreement").The Agreement is for
a term of five years, commencing on May 23, 2008 and expiring on May 22, 2013
with automatic one-year extensions unless either the Company or Ms. Visco
provides written notice of their intention not to renew the Agreement at least
30 days prior to the expiration of the then current term. The Agreement provides
that, in addition to receiving paid vacation in accordance with the Company's
policies as well as other customary benefits and provisions, Ms. Visco shall
receive an annual base salary of $85,000. If, at any time during the term of the
Agreement, Ms. Visco is terminated "without cause," she will be entitled to
receive a cash payment equal to the aggregate compensation payable to Ms. Visco
during the remaining term of the Agreement. The compensation is being accrued.

2002 STOCK OPTION PLAN

Our shareholders adopted a Stock Option Plan on November 8, 2002 (the "2002
Plan"). Under the 2002 Plan, 2,000,000 shares of common stock have been
authorized for issuance as Incentive Stock Options or Nonstatutory Stock
Options. Under the 2002 Plan, options may be granted to our key employees,
officers, directors or consultants. The purchase price of the common stock
subject to each Incentive Stock Option shall not be less than the fair market
value (as determined in the 2002 Plan), or in the case of the grant of an
Incentive Stock Option to a principal stockholder, not less that 110% of fair

                                       20
<PAGE>
market value of such common stock at the time such option is granted. The
purchase price of the common stock subject to each Nonstatutory Stock Option
shall be determined at the time such option is granted, but in no case less than
100% of the fair market value of such shares of common stock at the time such
option is granted.

The 2002 Plan shall terminate ten years from the date of its adoption by our
shareholders, and no option shall be granted after termination of the 2002 Plan.
Subject to certain restrictions, the 2002 Plan may at any time be terminated and
from time to time be modified or amended by the affirmative vote of the holders
of a majority of the outstanding shares of our capital stock present, or
represented, and entitled to vote at a meeting duly held in accordance with the
applicable laws of the State of Nevada.

As of the date hereof, 1,310,000 options have been issued pursuant to the 2002
Plan.

2005 STOCK OPTION/STOCK ISSUANCE PLAN

GENERAL

On January 31, 2005, our Board of Directors adopted our 2005 Stock Option/Stock
Issuance Plan (the "2005 Plan") and directed that it be presented to the
stockholders for their approval and adoption.

The 2005 Plan provides for the issuance of up to 10,000,000 shares of common
stock to our directors, officers, employees and consultants in the form of stock
options and shares of common stock.

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

The 2005 Plan has two separate components: the option grant program and the
stock issuance program. To date, 4,010,840 shares of common stock have been
issued pursuant to the 2005 Plan.

OPTION GRANT PROGRAM

Incentive stock options (those stock options that qualify under Section 422 of
the Internal Revenue Code of 1986 ("the "Code")) may be granted to any
individual who is, at the time of the grant, our employee. Non-qualified stock
options (those options that do not qualify under Section 422 of the Code) may be
granted to employees and other people, including our directors and officers.

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

                                       21
<PAGE>
Each option is to have a maximum term of ten years, subject to earlier
termination in the event the optionee leaves our service. The optionee will have
up to a three month period following termination of service (for reasons other
than death or disability) in which to exercise the option. This period will be
extended to 12 months if the optionee's service terminates by reason of
disability, and in the event of the optionee's death, the personal
representative of the optionee's estate (or the person inheriting the option)
will have up to a 12 month period following the optionee's death in which to
exercise the option.

To exercise the option, the optionee must execute a stock purchase agreement and
pay the exercise price for the purchased shares. Payment is to be made in cash;
however, the Plan Administrator may also permit the optionee to deliver a
full-recourse interest-bearing promissory note for the purchased shares payable
in one or more installments. Provided that our shares remain publicly traded,
the exercise price may be paid in shares of common stock or, alternatively,
through the optionee's participation in a same-day sale program. Under such
program, the option shares are sold immediately following the exercise of the
option, and a portion of the sale proceeds is applied to the payment of the
exercise price and all applicable withholding taxes.

In the event we are acquired by merger or asset sale, the option shares will
immediately vest, and the option may be exercised for any or all of those vested
shares prior to the effective date of such acquisition. However, such
accelerated vesting will not occur if our repurchase rights with respect to the
unvested option shares are assigned to the acquiring entity. The Plan
Administrator will have the discretion to structure one or more option grants
under the Plan so that the shares subject to those options will immediately vest
in the event the optionee's service is involuntarily terminated within 18 months
following an acquisition in which our repurchase rights are so assigned, and the
optionee would then have a one-year period to exercise the accelerated options
for fully-vested shares. It is anticipated that this special vesting
acceleration provision would be made available only on a limited case-by-case
basis.

The stock purchase agreement will provide us with the right to repurchase, at
the original exercise price paid per share, any unvested shares held by the
optionee at the time of his or her termination of service. The applicable
vesting schedule will be set forth in the Notice of Grant. Full and immediate
vesting of all the option shares will occur upon an acquisition by merger or
asset sale, unless the repurchase right applicable to those shares is assigned
to the successor company. One or more repurchase rights outstanding under the
Plan may be structured so that those rights will subsequently lapse (and the
option shares will immediately vest) upon an involuntary termination of the
optionee's service within 18 months following the effective date of an
acquisition in which the repurchase rights are assigned to the successor
company.

STOCK ISSUANCE PROGRAM

Shares of common stock may be issued to employees and other people, including
our directors and officers.

                                       22
<PAGE>
The stock issuance program allows eligible persons to purchase shares of common
stock at fair market value or at a discount of up to 15% of fair market value.
The shares may be fully vested when issued or may vest over time as the
recipient provides services or as specified performance objectives are attained.
In addition, shares of common stock may be issued as bonus awards in recognition
of services rendered, without any cash outlay required of the recipient.

The stock issuance component is structured as a stock purchase transaction, with
the purchase price for the shares to be paid in cash or by promissory note at
the time of issuance of the shares. The same repurchase rights summarized above
for the "Stock Purchase Agreement" under the option grant program will apply to
the purchased shares, namely, our right to repurchase, at the original purchase
price, any unvested shares held by the participant at the time of his or her
termination of service.

It is anticipated that any issued shares will vest either immediately or in a
series of installments over the participant's period of service. Full and
immediate vesting of all the shares will occur upon an acquisition by merger or
asset sale, unless the repurchase right applicable to those shares is assigned
to the successor company. The assigned repurchase rights may be structured so
that they will subsequently lapse (and the shares will immediately vest) upon an
involuntary termination of the participant's service within 18 months following
the effective date of the acquisition.

COMPENSATION OF DIRECTORS

Our Directors do not receive any cash compensation, but are entitled to
reimbursement of their reasonable expenses incurred in attending directors'
meetings.

We do not have any audit, nominating, compensation or other committee of our
Board of Directors.

Scott Baker is our only independent director.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS

The following table sets forth certain information regarding our shares of
outstanding common stock beneficially owned as of the date hereof by (i) each of
our directors and executive officers, (ii) all directors and executive officers
as a group, and (iii) each other person who is known by us to own beneficially
more than 5% of our common stock based upon 68,090,590 issued shares of common
stock.

                                       23
<PAGE>
<TABLE>
<CAPTION>
   Name and Address                               Amount and Nature of         Percent
 of Beneficial Owners (1)                         Beneficial Ownership       Ownership (2)
 ------------------------                         --------------------       -------------
<S>                                                <C>                       <C>
Carl P. Ranno, CEO, President, CFO, Director           4,072,900 (3)              6.0%

Neil C. Kitchen, Vice President, Director              3,981,455 (4)              5.9%

Diana Visco, Secretary                                 4,383,428 (6)              6.4%

Scott Baker, Director                                  1,504,818 (5)              2.2%

All executive officers and directors
 as a group (5 persons)                               10,092,601                 20.5%

The Benz Group                                         2,819,061 (6)              4.1%

FLD Corporation                                       17,907,003 (7)             26.2%
</TABLE>

----------
1.   C/o our address,  12224 Montague Street Pacoima, CA 91331, unless otherwise
     noted.
2.   Except as otherwise  indicated,  we believe that the  beneficial  owners of
     common stock listed above,  based on information  furnished by such owners,
     have sole investment and voting power with respect to such shares,  subject
     to  community  property  laws where  applicable.  Beneficial  ownership  is
     determined in accordance  with the rules of the SEC and generally  includes
     voting or  investment  power with respect to  securities.  Shares of common
     stock subject to options or warrants currently exercisable,  or exercisable
     within 60 days,  are deemed  outstanding  for  purposes  of  computing  the
     percentage  of the person  holding such  options or  warrants,  but are not
     deemed  outstanding  for purposes of computing the  percentage of any other
     person.
3.   Includes  options to purchase 150,000 shares of common stock at an exercise
     price of $0.50 expiring June 30, 2012 and 470,000 shares of common stock at
     an exercise price of $0.11 expiring September 27, 2012
4.   Includes  options to purchase 150,000 shares of common stock at an exercise
     price of $0.50 expiring June 30, 2012 and 430,000 shares of common stock at
     an exercise price of $0.11 expiring September 27, 2012
5.   Includes  options to purchase 150,000 shares of common stock at an exercise
     price of $0.50 expiring June 30, 2012 and 150,000 shares of common stock at
     an exercise price of $0.11 expiring September 27, 2012
6.   The Visco family which  includes the  Secretary of the Company  Diana Visco
     owns the controlling shares of FLD.
7.   The Visco family which  includes the  Secretary of the Company  Diana Visco
     owns the controlling shares of Benz Group

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Visco Family is an owner and director of FLD Corporation, owns 17,907,003
shares of common stock.

The Visco Family is an owner and director of Benz Group, the holder of 2,819,061
shares of common stock and 2,763,699 shares of Preferred Stock.

Note payable to Diana Visco for $789,842 bearing interest at prime rate of 3.25%
at September 30, 2010 and 2009, respectively with interest payable monthly. The
note is unsecured and was due in January 2011.

On April 1, 2004, we entered into a Sublease Agreement to sublet 923.50 square
feet located at a facility in Pacoima, California. The majority shareholder of
the sublessor is a related party to us. All of our operations were conducted
from this facility, which required monthly rental payments of approximately
$554. In January 2011, the Company moved corporate offices to Canoga Park, which
it share with the same related party. The lease is month to month.

                                       24
<PAGE>
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

dbbmckennon

dbbmckennon, a registered public accounting firm, was our independent auditor
and examined our financial statements to September 30, 2010 and performed the
services listed below.

AUDIT FEES

dbbmckennon fees for professional services rendered for the audit of our annual
financial statements included in this Form 10-K and for the reviews of the
financial statements included in our quarterly reports on Form 10-QSB during
this period was $42,000.

AUDIT RELATED FEES

dbbmckennon was not paid additional fees during that period for assurance and
related services reasonably related to the performance of the audit or review of
our financial statements.

TAX FEES

Tax filings have not been completed for the 2010 or 2009 fiscal year, thus no
fees were paid.

ALL OTHER FEES

None

AUDIT COMMITTEE

We do not have an audit committee.

ITEM 15. EXHIBITS

3.1      Articles of Incorporation of New Directions Manufacturing, Inc., a
         Nevada corporation, dated January 9, 1997 (1)
3.2      Amendment to Articles of Incorporation of New Directions Manufacturing,
         Inc., a Nevada corporation, dated May 29, 1997 (1)
3.3      Amendment to Articles of Incorporation of New Directions Manufacturing,
         Inc., dated January 4, 2000 (2)
3.4      Amendment to Articles of Incorporation of American Soil Technologies,
         Inc., dated August 4, 2003 (3)
3.4      Bylaws of New Directions Manufacturing, Inc., dated May 29, 1997 (1)
3.5      Amended and Restated Bylaws of New Directions Manufacturing, Inc.,
         dated July 20, 1998 (4)
3.6      Amendment to Articles of Incorporation, dated November 30, 2006
4.1      Convertible Debenture - Lump Sum Contribution (Form) (5)
4.2      Convertible Debenture - Incremental (Form) (5)
10.1     License Agreement between Ron Salestrom, American Soil Technologies,
         Inc., and Polymers Plus, L.L.C., dated January 4, 2000 (2)
10.2     Sublease Agreement with The Customized Box Company, dated April 1, 2004
         (6)
10.8     Employment Contract with Donette Lamson, dated January 18, 2006 (7)
10.12    Acquisition Agreement for Smart World Organics, dated July 7, 2006 (8)

                                       25
<PAGE>
10.14    Intellectual Property Purchase Agreement with Ray Nielsen, dated
         December 20, 2006 (9)
10.15    Security Agreement with Ray Nielsen, dated December 22, 2006 (9)
10.16    Purchase and Sale Agreement and Joint Escrow Instructions for Silver
         Terrace Nurseries, dated November 27, 2007 (12)
10.17    Employment Contract with Carl Ranno, dated May 23, 2008 (13)
10.18    Employment Contract with Neil Kitchen, dated May 23, 2008 (13)
10.19    Employment Contract with Diana Visco, dated May 23, 2008 (13)
10.21    Subsidiaries: Smart World Organics Inc. a Florida corporation
31.1     Certification of Chief Executive Officer Pursuant to the Securities
         Exchange Act of 1934, Rules 13a-14 and 15d-14, as adopted pursuant to
         Section 302 of the Sarbanes-Oxley Act of 2002
31.2     Certification of Chief Financial Officer Pursuant to the Securities
         Exchange Act of 1934, Rules 13a-14 and 15d-14, as adopted pursuant to
         Section 302 of the Sarbanes-Oxley Act of 2002
32       Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
         to Section 906 of the Sarbanes Oxley Act of 2002

----------
1.   Incorporated by reference from our Registration Statement on Form SB-2,
     filed on July 2, 1997, as amended (Registration No. 333-30583).
2.   Incorporated by reference from our Form 10-KSB for the fiscal year ended
     June 30, 2000, filed on September 27, 2000 (File No. 000-22855).
3.   Incorporated by reference from our Form 10-KSB for the fiscal year ended
     December 31, 2005, filed on April 3, 2006.
4.   Incorporated by reference from our Form 10-KSB for the fiscal year ended
     June 30, 1998, filed on September 16, 1998.
5.   Incorporated by reference from our Form 10-QSB for the quarterly period
     ended March 31, 2000, filed on May 15, 2000.
6.   Incorporated by reference from our Form 10-QSB for the quarterly period
     ended March 31, 2004, filed on May 5, 2004.
7.   Incorporated by reference from our Form 10-QSB for the quarterly period
     ended March 31, 2006, filed on May 17, 2006. . 8 Incorporated by reference
     from our Form 10-QSB for the quarterly period ended June 30, 2006, filed on
     August 14, 2006.
9.   Incorporated by reference from our Form 10-KSB for the fiscal year ended
     December 31, 2006, filed on April 18, 2007.
10.  Incorporated by reference from our Form 10-KSB for the fiscal year ended
     December 31, 2006, filed on April 18, 2007.
11.  Incorporated by reference from our Form 10-KSB for the fiscal year ended
     December 31, 2006, filed on April 18, 2007.
12.  Incorporated by reference from our Form 10-KSB for the transition period
     ended September 30, 2007, filed on February 15, 2008.
13.  Incorporated by reference from our Form 10-K for the period ended September
     30, 2008, filed on January 13, 2009

                                       26
<PAGE>
                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, duly
authorized.

                           AMERICAN SOIL TECHNOLOGIES, INC.


DATED: January 13, 2011    By: /s/ Carl P. Ranno
                               -------------------------------------------------
                               Carl P. Ranno
                               Director, Chief Executive Officer, President,
                               and Chief Financial Officer
                               (Principal Executive Officer, Principal Financial
                               Officer and Principal Accounting Officer)

                                       27
<PAGE>
             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
American Soil Technologies, Inc.

We have audited the  accompanying  consolidated  balance sheets of American Soil
Technologies,  Inc. and subsidiary  (the "Company") as of September 30, 2010 and
2009, and the related statements of operations,  stockholders' deficit, and cash
flows for the years then ended. These consolidated  financial statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audit  to  obtain  reasonable  assurance  about  whether  the
consolidated financial statements are free of material misstatement. The Company
is not  required  to  have,  nor were we  engaged  to  perform,  an audit of its
internal control over financial reporting.  Our audits included consideration of
internal  control  over  financial  reporting  as a basis  for  designing  audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the  effectiveness  of the company's  internal  control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the financial  statements,  assessing the  accounting  principles
used and  significant  estimates made by  management,  as well as evaluating the
overall financial statement  presentation.  We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  financial  position of American  Soil
Technologies,  Inc and  subsidiary  as of September  30, 2010 and 2009,  and the
results of their  operations  and their cash flows for the year then  ended,  in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying  consolidated  financial statements have been prepared assuming
the Company  will  continue as a going  concern.  As  discussed in Note 1 of the
consolidated  financial  statements,  the  Company  incurred  losses  in  recent
history,  and has significant  working capital and accumulated  deficits.  These
factors raise  substantial  doubt about the  Company's  ability to continue as a
going  concern.  Management's  plans  with  respect  to these  matters  are also
discussed in Note 1. The  consolidated  financial  statements do not include any
adjustments that might result from the outcome of this uncertainty.

/s/ dbbmckennon
--------------------------

Newport Beach, California
January 13, 2011

                                      F-1
<PAGE>
                        American Soil Technologies, Inc.
                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                     September 30,          September 30,
                                                                         2010                   2009
                                                                     ------------           ------------
<S>                                                                  <C>                    <C>
Assets:
  Current assets
    Cash and cash equivalents                                        $      2,045           $     13,604
    Accounts receivable, net of allowance of $38,538
     at September 30, 2010 and 2009                                         6,010                 16,648
    Inventories                                                            13,622                 70,227
    Prepaid expenses and other current assets                              14,541                 19,589
                                                                     ------------           ------------
      Total current assets                                                 36,218                120,068

  Property and equipment, net                                              15,014                 78,824
  Deposits and other assets                                                    --                    256
  Intangible assets                                                       162,147                212,038
                                                                     ------------           ------------
Total assets                                                         $    213,379           $    411,186
                                                                     ============           ============
Liabilities and Stockholders' Deficit:
  Current liabilities
    Accounts payable                                                 $  1,625,758           $  1,120,307
    Accrued liabilities                                                 1,626,652              1,080,031
    Notes payable                                                       1,919,585              1,924,039
    Capital lease obligations                                               3,527                 19,261
    Notes payable to related parties                                    1,101,866              1,003,474
                                                                     ------------           ------------
      Total current liabilities                                         6,277,388              5,147,112

Capital lease obligations                                                      --                  3,527
Notes payable                                                                  --                125,000
                                                                     ------------           ------------
Total liabilities                                                       6,277,388              5,275,639
                                                                     ------------           ------------
Stockholders' deficit:
  Series A preferred stock, $0.50 stated value,
   25,000,000 shares authorized, 2,763,699 shares
   issued and outstanding at September 30, 2010 and 2009                1,381,849              1,381,849
  Common stock, $0.001 par value, 100,000,000 shares authorized,
   68,090,590 and 60,965,590 shares issued and outstanding at
   September 30 2010 and 2009, respectively                                68,091                 60,966
  Additional paid-in capital                                           19,796,056             19,514,437
  Accumulated deficit                                                 (27,310,005)           (25,821,705)
                                                                     ------------           ------------
      Total stockholders' deficit                                      (6,064,009)            (4,864,453)
                                                                     ------------           ------------
Total liabilities and stockholders' deficit                          $    213,379           $    411,186
                                                                     ============           ============
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                      F-2
<PAGE>
                        American Soil Technologies, Inc.
                      Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                                       Year Ended             Year Ended
                                                                      September 30,          September 30,
                                                                          2010                   2009
                                                                      ------------           ------------
<S>                                                                   <C>                    <C>
Revenue                                                               $    117,052           $    236,954
Cost of goods sold (excluding amortization of intangible assets)            90,654                110,483
                                                                      ------------           ------------
Gross profit                                                                26,398                126,471
                                                                      ------------           ------------
Operating expenses:
  General and administrative                                               905,765              1,172,179
  Sales and marketing                                                        1,411                 44,206
  Impairment of property and equipment                                      32,951                     --
  Impairment of tooling                                                         --                 67,500
  Amortization of intangible assets                                         49,891                346,131
  Impairment of intangible assets                                               --              1,213,984
                                                                      ------------           ------------
Total operating expenses                                                   990,018              2,844,000
                                                                      ------------           ------------

Loss from operations                                                      (963,620)            (2,717,529)

Other (income) expense
  Interest expense                                                         111,345                129,894
  Change in fair value of derivative liability                                  --                (11,580)
  Litigation loss provision                                                415,741                     --
  (Gain)loss on sale of equipment                                           (3,206)                   572
                                                                      ------------           ------------
Loss before income taxes                                                (1,487,500)            (2,836,415)
Provision for income taxes                                                     800                    800
                                                                      ------------           ------------

Net loss                                                              $ (1,488,300)          $ (2,837,215)
                                                                      ============           ============

Net loss per share basic and diluted                                  $      (0.02)          $      (0.05)
                                                                      ============           ============

Weighted average common shares outstanding used
 in per share calculations                                              67,923,467             60,965,590
                                                                      ============           ============
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                      F-3
<PAGE>
                        American Soil Technologies, Inc.
                Consolidated Statements of Stockholders' Deficit

<TABLE>
<CAPTION>
                                                    Series A Preferred              Common Stock
                                                  -----------------------          -------------------
                                                  Shares           Amount          Shares       Amount
                                                  ------           ------          ------       ------
<S>                                             <C>           <C>              <C>           <C>

Balance at September 30, 2008                     2,763,699     $  1,381,849     60,965,590     $ 60,966
  Stock compensation expense                             --               --             --           --
  Net loss                                               --               --             --           --
                                                -----------     ------------    -----------     --------
Balance at September 30, 2009                     2,763,699        1,381,849     60,965,590       60,966
  Conversion of debt into common stock                   --               --      3,125,000        3,125
  Stock issued employees expense                         --               --      4,000,000        4,000
  Stock compensation expense                             --               --             --           --
  Net loss                                               --               --             --           --
                                                -----------     ------------    -----------     --------
Balance at September 30, 2010                     2,763,699     $  1,381,849     68,090,590     $ 68,091
                                                ===========     ============    ===========     ========

                                                  Paid-in        Accumulated
                                                  Capital          Deficit         Total
                                                  -------          -------         -----

Balance at September 30, 2008                   $19,473,603     $(22,984,490)   $(2,068,072)
  Stock compensation expense                         40,834               --         40,834
  Net loss                                               --       (2,837,215)    (2,837,215)
                                                -----------     ------------    -----------
Balance at September 30, 2009                    19,514,437      (25,821,705)    (4,864,453)
  Conversion of debt into common stock              121,875               --        125,000
  Stock issued employees expense                    124,000               --        128,000
  Stock compensation expense                         35,744               --         35,744
  Net loss                                               --       (1,488,300)    (1,488,300)
                                                -----------     ------------    -----------
Balance at September 30, 2010                   $19,796,056     $(27,310,005)   $(6,064,009)
                                                ===========     ============    ===========
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                      F-4
<PAGE>
                        American Soil Technologies, Inc.
                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                Year Ended          Year Ended
                                                                               September 30,       September 30,
                                                                                   2010                2009
                                                                               -----------         -----------
<S>                                                                            <C>                 <C>
Cash flows from operating activities:
  Net loss                                                                     $(1,488,300)        $(2,837,215)
  Adjustments to reconcile net loss to net cash
    Loss (gain) on disposal of assets                                               (3,206)                572
    Impairment of tooling                                                               --              67,500
    Impairment of goodwill                                                              --             364,600
    Impairment of intangible assets                                                     --             849,384
    Impairment of property and equipment                                            32,951                  --
    Reserve for inventory                                                           40,000                  --
    Depreciation and amortization                                                   80,750             418,463
    Stock-based compensation                                                       163,744              40,834
    Change in derivative liabilities                                                    --             (11,580)
    Amortization of debt discount                                                       --               4,811
  Changes in operating assets and liabilities:
    Accounts receivable                                                             10,638              34,306
    Inventory                                                                       16,605              69,097
    Prepaid expenses and other assets                                                5,304             166,534
    Accounts payable                                                               505,451             126,944
    Accrued expenses                                                               546,621             550,927
                                                                               -----------         -----------
       Net cash used in operating activities                                       (89,442)           (154,823)
                                                                               -----------         -----------
Cash flows from investing activities:
  Proceeds from sale of assets                                                       3,206                  --
                                                                               -----------         -----------
       Net cash provided by investing activities                                     3,206                  --
                                                                               -----------         -----------
Cash flows from financing activities:
  Proceeds from related party notes                                                 98,392              91,450
  Proceeds from the issuance of convertible debt                                        --             125,000
  Payments on capital lease obligations                                            (19,261)            (16,358)
  Repayments on related party notes payable                                             --              (5,587)
  Repayments on notes payable                                                       (4,454)            (32,364)
                                                                               -----------         -----------
       Net cash provided by financing activities                                    74,677             162,141
                                                                               -----------         -----------
Net decrease in cash and cash equivalents                                          (11,559)              7,318
Cash and cash equivalents at beginning of year                                      13,604               6,286
                                                                               -----------         -----------
Cash and cash equivalents at end of year                                       $     2,045         $    13,604
                                                                               ===========         ===========
Supplemental disclosure of cash flow information:
  Cash paid during the year for interest                                       $    19,012         $    32,969
                                                                               ===========         ===========
  Cash paid during the year for income taxes                                   $        --         $       800
                                                                               ===========         ===========
Supplemental disclosure of non-cash investing and financing activities:
  Conversion of debt and accrued interest into common stock                    $   125,000         $        --
                                                                               ===========         ===========
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                      F-5
<PAGE>
                        American Soil Technologies, Inc.
                   Notes to Consolidated Financial Statements

1. ORGANIZATION AND BASIS OF PRESENTATION

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

The  Company is  primarily  engaged in the  marketing  of polymer and other soil
amendments to the agricultural turf and horticulture  industries.  The Company's
products are used to decrease water usage,  increase nutrient retention in soil,
enhance seed  germination and sprout  emergence,  clarify ponds and increase the
effectiveness  of chemical  fertilizers and biological  additives.  In 2006, the
Company acquired the patent to a slow release  fertilizer.  The Company also has
exclusive license rights to the use of patented polymer application  techniques,
as well as numerous  patents on a unique machine  designed to inject polymer and
other liquid products into existing turf and some crops.

The Company also expanded to provide next-generation and sustainable fertilizers
thru the acquisition of Smart World Organics,  Inc.  ("Smart World") on December
20, 2006.  Simultaneously,  the Company  entered into an  Intellectual  Property
Purchase Agreement with the founder of Smart World, Ray Nielsen ("Nielsen") that
included certain formulas originally believed to be proprietary and intellectual
properties  used in the business of Smart  World.  The  formulas  acquired  from
Nielsen were deemed not to be proprietary and subsequently deemed to have little
or no value (see Note 5). Smart World sells homogenized  fertilizers,  non-toxic
insect controls, plant protectants,  seed, and soil and silage inoculants. Smart
World also provides advanced,  custom-formulated  products built to suit unusual
growing conditions and environments.  Due to losses incurred in 2008, management
terminated  Smart World employees and seeks to operate through  commission-based
sales  representatives.  Additionally,  the Company has several debt obligations
that are past the  contractual  maturity  date or are due and payable due to non
payment of interest.

GOING CONCERN AND MANAGEMENT'S PLANS
The Company has sustained  significant losses and has an accumulated  deficit of
$27,310,005 and negative working capital of $6,241,170 as of September 30, 2010.
The  ability of the Company to continue  as a going  concern is  dependent  upon
obtaining  additional capital and financing,  and generating positive cash flows
from operations.  The Company intends to seek additional  capital either through
debt or  equity  offerings  and is  attempting  to  increase  sales  volume  and
operating  margins  to  achieve  profitability.  Due  to  the  current  economic
environment and the Company's current financial condition,  management cannot be
assured there will be adequate  capital  available when needed and on acceptable
terms.  These factors  raise  substantial  doubt about the Company's  ability to
continue  as a going  concern.  The  financial  statements  do not  include  any
adjustments  relating to the recoverability and classification of asset carrying
amounts or the amount and classification of liabilities that might result should
the Company be unable to continue as a going concern.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION
The  consolidated  financial  statements  include the accounts of American  Soil
Technologies,  Inc, and its wholly-owned subsidiary,  Smart World Organics, Inc.
All   intercompany   balances  and   transactions   have  been   eliminated   in
consolidation.

USE OF ESTIMATES
The  preparation  of  consolidated   financial  statements  in  conformity  with
accounting  principles  generally  accepted  in the  United  States of  America,
requires  management to make estimates and assumptions  that affect the reported
amounts  of assets and  liabilities  and  disclosure  of  contingent  assets and

                                      F-6
<PAGE>
liabilities at the date of the financial  statements and the reported amounts of
revenues and expenses during the reporting periods.  Actual results could differ
from those  estimates.  The Company's  significant  estimates made in connection
with the  preparation  of the  accompanying  financial  statements  include  the
valuation of inventories,  impairment of property and equipment,  carrying value
of the intangible assets, and valuation of stock options.

CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes all short-term highly liquid investments that
are readily convertible to known amounts of cash and have original maturities of
three months or less.

ACCOUNTS AND NOTES RECEIVABLE
The Company utilizes the allowance method to provide a reserve for uncollectible
accounts.  The Company determines any required allowance by considering a number
of factors  including length of time trade accounts  receivable are past due and
the Company's  previous loss history.  The Company records a reserve account for
accounts receivable when they become  uncollectible,  and payments  subsequently
received  on  such  receivables  are  credited  to the  allowance  for  doubtful
accounts.

The Company  performs  ongoing credit  evaluations and continually  monitors its
collection of amounts due from its customers.  The Company adjusts credit limits
and payment terms granted to its  customers  based upon payment  history and the
customer's  current  creditworthiness.  The Company does not require  collateral
from its customers to secure amounts due from them.  Reserves for  uncollectible
amounts are provided  based on past  experience  and a specific  analysis of the
accounts which management believes is sufficient.

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

PROPERTY AND EQUIPMENT
Property  and  equipment  is  stated  at  cost  less  accumulated  depreciation.
Depreciation  is recorded on a  straight-line  basis over the  estimated  useful
lives of the assets  ranging from three to 15 years.  Betterments,  renewals and
extraordinary  repairs  that  extend the lives of the  assets  are  capitalized.
Repairs and  maintenance  costs are expensed as  incurred.  The cost and related
accumulated  depreciation  applicable to assets  disposed or retired are removed
from the  accounts,  and the gain or loss on  disposition  is  recognized in the
respective period.

LONG-LIVED ASSETS
The Company  reviews its fixed assets and certain  identifiable  intangibles for
impairment  whenever  events  or  changes  in  circumstances  indicate  that the
carrying amount of an asset may not be recoverable.  Recoverability of assets to
be held and used is measured by a comparison of the carrying  amount of an asset
to the future  undiscounted  operating cash flow expected to be generated by the
asset.  If such assets are  considered  to be  impaired,  the  impairment  to be
recognized  is measured by the amount by which the carrying  amount of the asset
exceeds  the fair value of the asset.  Long-lived  assets to be  disposed of are
reported at the lower of carrying amount or fair value less costs to sell.

GOODWILL AND INTANGIBLE ASSETS WITH INDEFINITE LIVES
ASC No. 805, "Business Combinations", requires that all business combinations be
accounted for under the purchase method. The statement further requires separate
recognition  of  intangible  assets  that meet  certain  criteria.  ASC No. 350,
requires that an acquired  intangible  asset meeting  certain  criteria shall be
initially  recognized,  and measured based on its fair value. The statement also
provides  that  goodwill  and  other  indefinite-lived   assets  should  not  be
amortized,  but shall be tested for impairment  annually or more frequently,  if
circumstances indicate potential impairment,  through a comparison of fair value
to their carrying amount.

In accordance with ASC No. 350,  "Intangible,  Goodwill and Other", the goodwill
impairment test has two steps.  The first step of the impairment test identifies
potential impairment by comparing the fair value with the carrying amount of the
reporting unit, including goodwill. If the carrying amount of the reporting unit

                                      F-7
<PAGE>
exceeds  its  fair  value,  the  second  step of the  impairment  test  shall be
performed to measure the amount of the impairment loss, if any. Intangibles with
indefinite  useful  lives are  measured  for  impairment  by the amount that the
carrying  value exceeds the  estimated  fair value of the  intangible.  The fair
value is calculated using the income approach.  Intangible  assets with definite
useful lives will continue to be amortized  over their  estimated  useful lives.
Any impairment is recorded at the date of determination.

ACCOUNTING FOR CONVERTIBLE DEBT
Convertible  debt is accounted for under the  guidelines  established by ASC No.
470 Topic 20, "Debt with Conversion and Other Options" and ASC No. 740,  "Income
Tax". The Company records a beneficial conversion feature ("BCF") related to the
issuance  of  convertible  debt  that  have  conversion  features  at  fixed  or
adjustable rates that are in-the-money when issued and records the fair value of
warrants issued with those instruments.  The BCF for the convertible instruments
is  recognized  and measured by allocating a portion of the proceeds to warrants
and as a reduction to the carrying amount of the convertible instrument equal to
the intrinsic  value of the conversion  features,  both of which are credited to
paid-in-capital.  The Company  calculates the fair value of warrants issued with
the convertible  instruments using the Black-Scholes valuation method, using the
same  assumptions used for valuing employee options for purposes of ASC No. 718,
"Compensation,  Stock  Compensation",  except that the  contractual  life of the
warrant is used. Under these guidelines,  the Company allocates the value of the
proceeds  received from a convertible  debt  transaction  between the conversion
feature and any other  detachable  instruments  (such as warrants) on a relative
fair value basis.  The  allocated  fair value is recorded as a debt  discount or
premium and is  amortized  over the  expected  term of the  convertible  debt to
interest expense.

DERIVATIVE FINANCIAL INSTRUMENTS
Derivative financial  instruments,  as defined in ASC No. 815,  "Derivatives and
Hedging",  consist of financial  instruments  or other  contracts that contain a
notional amount and one or more underlying (e.g.  interest rate,  security price
or other variable), require no initial net investment and permit net settlement.
Derivative  financial  instruments  may be  free-standing  or  embedded in other
financial instruments.  Further, derivative financial instruments are initially,
and subsequently, measured at fair value and recorded as liabilities or, in rare
instances, assets.

The Company does not use derivative financial  instruments to hedge exposures to
cash-flow,  market or foreign-currency  risks.  However,  the Company has issued
financial  instruments  including  convertible  debt  that  are  either  (i) not
afforded  equity  classification,  (ii)  embody  risks not  clearly  and closely
related to host contracts, or (iii) may be net-cash settled by the counterparty.
As required by ASC No. 815, in certain instances, these instruments are required
to be  carried  as  derivative  liabilities,  at fair  value,  in the  Company's
consolidated financial statements.

The Company  estimates the fair values of its  derivative  financial  instrument
using the  Black-Scholes  option valuation  technique because it embodies all of
the requisite  assumptions  (including trading  volatility,  estimated terms and
risk free rates)  necessary  to fair value these  instruments.  Estimating  fair
values  of  derivative   financial   instruments  requires  the  development  of
significant  and  subjective  estimates that may, and are likely to, change over
the duration of the  instrument  with  related  changes in internal and external
market  factors.  In addition,  option-based  techniques are highly volatile and
sensitive to changes in the trading market price of our common stock,  which has
a  high-historical  volatility.   Since  derivative  financial  instruments  are
initially  and  subsequently  carried at fair values,  the  Company's  operating
results reflect the volatility in these estimate and assumption  changes in each
reporting period.

INTELLECTUAL PROPERTY
Intellectual  property  includes the exclusive  licenses to the patented polymer
application  techniques  and certain  acquired  intellectual  property which are
being amortized  using the  straight-line  method over the respective  estimated
useful lives.

ADVERTISING
The Company expenses advertising costs as incurred. Advertising expense was $309
and $5,874, for the year ended September 30, 2010 and 2009, respectively.

                                      F-8
<PAGE>
REVENUE RECOGNITION
In accordance  with ASC No. 605,  "Revenue  Recognition",  revenue is recognized
when  products  are shipped to a customer and the risks and rewards of ownership
have passed  based on the terms of the sale.  Royalty  revenues  are  recognized
monthly based on customer usage as defined by individual agreements.

SHIPPING AND HANDLING COST
Shipping  and handling  fees  charged to customers  are included in net sales in
accordance with ASC No. 605,  "Revenue  Recognition".  The shipping and handling
costs incurred by the Company are included in cost of sales.

INCOME TAXES
Deferred  income taxes are determined  using the liability  method in accordance
with ASC No. 740,  Income Taxes.  The Company  records a valuation  allowance to
reduce its  deferred tax assets to the amount it expects is more likely than not
to be realized.  While the Company has considered  future taxable income and its
ongoing  tax  planning  strategies  in  assessing  the  need  for the  valuation
allowance, if it were to determine that it would be able to realize its deferred
tax assets in the future in excess of its net recorded amount,  an adjustment to
the deferred tax asset would  increase  income in the period such  determination
was made. Likewise, should the Company determine it would not be able to realize
all or part of its net deferred tax assets in the future,  an  adjustment to the
deferred tax asset would decrease  income in the period such  determination  was
made.

Effective  September 30, 2007, the Company adopted ASC No. 740 Topic 10, "Income
Taxes",  General ("ASC 740.10").  ASC 740.10  prescribes,  among other things, a
recognition  threshold and  measurement  attributes for the financial  statement
recognition  and  measurement of uncertain tax positions taken or expected to be
taken in a company's income tax return. The Company utilizes a two-step approach
for evaluating  uncertain tax  positions.  Step one or  recognition,  requires a
company  to  determine  if the  weight of  available  evidence  indicates  a tax
position  is  more  likely  than  not  to be  sustained  upon  audit,  including
resolution  of related  appeals or  litigation  processes,  if any.  Step two or
measurement,  is based on the largest  amount of  benefit,  which is more likely
than not to be realized on settlement with the taxing authority.

FAIR VALUE OF FINANCIAL INSTRUMENTS
On  October  1,  2009,  the  Company  adopted  ASC 820 ("ASC  820")  Fair  Value
Measurements  and  Disclosures.  The  Company  did not record an  adjustment  to
retained  earnings as a result of the  adoption of the  guidance  for fair value
measurements,  and the adoption did not have a material  effect on the Company's
results of operations.

Fair value is defined as the exit price, or the amount that would be received to
sell an asset or paid to transfer a liability in an orderly  transaction between
market  participants as of the measurement date. The guidance also establishes a
hierarchy  for inputs used in  measuring  fair value that  maximizes  the use of
observable inputs and minimizes the use of unobservable inputs by requiring that
the most observable inputs be used when available.  Observable inputs are inputs
market  participants  would  use in  valuing  the  asset  or  liability  and are
developed based on market data obtained from sources independent of the Company.
Unobservable inputs are inputs that reflect the Company's  assumptions about the
factors  market  participants  would use in valuing the asset or liability.  The
guidance  establishes  three  levels of inputs that may be used to measure  fair
value:

Level 1. Observable inputs such as quoted prices in active markets;
Level 2. Inputs,  other  than the  quoted  prices  in active  markets,  that are
         observable either directly or indirectly; and
Level 3. Unobservable  inputs in which there is little or no market data,  which
         require the reporting entity to develop its own assumptions.

As of  September  30,  2010,  the  Company  had no level  1, 2, or 3  assets  or
liabilities.

RESEARCH AND DEVELOPMENT EXPENSES
The Company expenses research and development costs as incurred.

                                      F-9
<PAGE>
CONCENTRATION OF CREDIT RISK
Accounts  receivable from individual  customers  representing 10% or more of the
net accounts receivable balance consists of the following as of September 30:

                                      2010           2009
                                      ----           ----
Percent of accounts receivable         46%            64%
Number of customers                     1              4

Sales from individual customers representing 10% or more of sales consist of the
following customers for the years ended September 30:

                                      2010           2009
                                      ----           ----
Percent of sales                       67%            64%
Number of customers                     3              3

As a result of the Company's  concentration  of its customer  base,  the loss or
cancellation of business from, or significant changes in scheduled deliveries of
product  sold to the above  customers  or a change in their  financial  position
could  materially  and  adversely  affect the Company's  consolidated  financial
position, results of operations and cash flows.

STOCK-BASED COMPENSATION
The Company accounts for equity based  compensation  under the provisions of ASC
No. 718,  "Compensation,  Stock  Compensation" ("ASC 718"). ASC 718 requires the
recognition of the fair value of equity-based  compensation  in net income.  The
fair  value  of  the  Company's  stock  option  awards  are  estimated  using  a
Black-Scholes  option valuation  model.  This model requires the input of highly
subjective  assumptions and elections  including expected stock price volatility
and  the  estimated  life  of  each  award.  In  addition,  the  calculation  of
equity-based compensation costs requires that the Company estimate the number of
awards  that will be  forfeited  during the  vesting  period.  The fair value of
equity-based  awards is amortized  over the vesting  period of the award and the
Company  elected to use the  straight-line  method for awards  granted after the
adoption of ASC 718.

ACCOUNTING FOR STOCK OPTIONS ISSUED TO CONSULTANTS
The  Company  measures  compensation  expense for its  non-employee  stock-based
compensation   under  ASC  No.   505  Topic  50,   "Equity-Based   Payments   to
Non-Employees". The fair value of the option issued or committed to be issued is
used to measure the transaction, as this is more reliable than the fair value of
the services received.  The fair value is measured at the value of the Company's
common stock on the date that the commitment for performance by the counterparty
has been reached or the counterparty's  performance is complete.  The fair value
of the equity instrument is charged directly to stock-based compensation expense
and credited to additional paid-in capital.

NET LOSS PER SHARE
Basic loss per share is calculated by dividing net loss by the weighted  average
common shares outstanding during the period. Diluted net loss per share reflects
the potential dilution to basic EPS that could occur upon conversion or exercise
of  securities,  options or other such items to common shares using the treasury
stock  method,  based upon the weighted  average fair value of our common shares
during the period.  For each period presented,  basic and diluted loss per share
amounts are identical as the effect of potential common shares is antidilutive.

The following is a summary of  outstanding  securities  which have been excluded
from the calculation of diluted net loss per share because the effect would have
been antidilutive for the following periods:

                                                      2010               2009
                                                   ----------         ----------
Convertible debt                                           --          3,125,000
Series A convertible preferred stock                2,763,699          2,763,699
                                                   ----------         ----------
                                                    2,763,699          5,888,699
                                                   ==========         ==========

LEGAL COSTS ASSOCIATED WITH LOSS CONTINGENCIES

The  Company  expenses  legal costs in  connection  with loss  contingencies  as
incurred and included in accounts payable.

                                      F-10
<PAGE>
RECENT ACCOUNTING PRONOUNCEMENTS

In  January  2010,  the  FASB  amended  authoritative   guidance  for  improving
disclosures  about fair-value  measurements.  The updated guidance  requires new
disclosures about recurring or nonrecurring  fair-value  measurements  including
significant   transfers  into  and  out  of  Level  1  and  Level  2  fair-value
measurements and information on purchases,  sales, issuances, and settlements on
a gross basis in the  reconciliation  of Level 3  fair-value  measurements.  The
guidance also clarified  existing  fair-value  measurement  disclosure  guidance
about  the  level of  disaggregation,  inputs,  and  valuation  techniques.  The
guidance became effective for interim and annual reporting  periods beginning on
or after December 15, 2009,  with an exception for the disclosures of purchases,
sales,  issuances and  settlements  on the  roll-forward  of activity in Level 3
fair-value  measurements.  Those  disclosures will be effective for fiscal years
beginning  after  December 15, 2010 and for interim  periods within those fiscal
years.  The Company does not expect that the adoption of this guidance will have
a material impact on the financial statements.

3. INVENTORIES

Inventories consist of the following at September 30:

                                       2010            2009
                                     --------        --------
Raw materials                        $  9,167        $ 64,818
Finished goods                          4,455           5,409
                                     --------        --------
                                     $ 13,622        $ 70,227
                                     ========        ========

4. PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following at September 30:

<TABLE>
<CAPTION>
                                              Estimated
                                             useful life
                                             (in years)        2010              2009
                                             ----------      ---------         ---------
<S>                                             <C>          <C>               <C>
Machinery                                       10           $ 583,323         $ 598,906
Vehicles                                         5                  --            44,615
Office furnishings, fixtures and equipment     3-5              28,962            46,330
                                                             ---------         ---------
                                                               612,285           689,851
Less accumulated depreciation                                 (597,271)         (611,027)
                                                             ---------         ---------
                                                             $  15,014         $  78,824
                                                             =========         =========
</TABLE>

Depreciation  expense for the year ended September 30, 2010 and 2009 was $30,859
and $72,332, respectively.

Management  assessed  property and equipment for impairment due to the decreased
revenue  streams from  operations  and  specifically  the lack of revenues being
generated  from the Smart World  subsidiary  and  Northern  California  business
segment.  The  majority of property  and  equipment  with  remaining  book value
consists of machinery and equipment and furniture and fixtures.  In  determining
if impairment was necessary, Management estimated the fair value of property and
equipment by comparing  other  similar  used assets being sold,  less  estimated
costs to sell.  Based on Management's  assessment,  impairment was necessary for
property  and  equipment as the fair value,  was less than the  carrying  value.
Impairment of property and  equipment for the year ended  September 30, 2010 and
2009 was $32,951 and zero,  respectively.  Of the total  impairment for the year
ended  September  30,  2010,  $21,218  related to Smart World and $11,733 to the
Northern California segment of American Soil.

                                      F-11
<PAGE>
5. INTANGIBLE ASSETS AND GOODWILL

The  following  table  summarizes  the  components  of  intangible  assets as of
September 30:

<TABLE>
<CAPTION>
                                        Polymer                                     Smart World
                                      application    Turf trade     Soil Medic      patents and
                                        patents        secrets        patent          formulas         Total
                                        -------        -------        ------          --------         -----
<S>                                        <C>             <C>      <C>             <C>            <C>
Balance at September 30, 2008          $ 207,665      $ 22,993      $ 480,576        $ 696,319       $1,407,553
  Additions                                   --            --             --               --               --
  Amortization                          (103,833)      (11,496)       (91,538)        (139,264)        (346,131)
  Impairment                            (103,832)      (11,497)      (177,000)        (557,055)        (849,384)
                                       ---------      --------      ---------        ---------       ----------
Balance at September 30, 2009          $      --      $     --      $ 212,038        $      --       $  212,038
  Additions                                   --            --             --               --               --
  Amortization                                --            --        (49,891)              --          (49,891)
  Impairment                                  --            --             --               --               --
                                       ---------      --------      ---------        ---------       ----------
Balance at September 30, 2010          $      --      $     --      $ 162,147        $      --       $  162,147
                                       =========      ========      =========        =========       ==========
Weighted average remaining life at:
  September 30, 2010                                                                                        3.2
  September 30, 2009                                                                                        4.2
</TABLE>

As of  September  30,  2009,  Management  evaluated  the  carrying  value of its
intangible  assets and goodwill.  Due to the lack of funding to execute  certain
business plans and the current state of the capital markets,  management reduced
its projected  future sales and resulting  cash flows  resulted in an impairment
charge of $849,384 related to intangible assets and $364,600 related to goodwill
during the year ended September 30, 2009.

As of  September  30,  2010,  Management  evaluated  the value of the  remaining
intangible asset and determined that the associated expected cash flow of future
revenues  exceeded the carrying  value of the asset.  Accordingly,  there was no
impairment necessary in fiscal 2010.

The amortization expense was $49,891 and $346,131 for the year ended September
30,  2010 and 2009,  respectively.  Amortization  is  expected to be $49,891 for
fiscal 2011, 2012, and 2013 and $12,474 for fiscal 2014.

6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable consisted of the following at September 30:

                                             2010                2009
                                          ----------          ----------
Accounts payable                          $  653,519          $  613,915
Accounts payable - related party             368,318             318,212
Accrued litigation                           603,921             188,180
                                          ----------          ----------
                                          $1,625,758          $1,120,307
                                          ==========          ==========

Accrued expenses consisted of the following at September 30:

                                             2010                2009
                                          ----------          ----------

Interest                                  $  325,434          $  282,349
Interest to related parties                  150,675             101,427
Compensation and related                   1,150,543             696,255
                                          ----------          ----------
                                          $1,626,652          $1,080,031
                                          ==========          ==========

                                      F-12
<PAGE>
7. NOTES PAYABLE

Notes payable consists of the following at September 30:

<TABLE>
<CAPTION>
                                                                  2010                  2009
                                                               -----------           -----------
<S>                                                           <C>                   <C>
Convertible  debenture  payable  to  a  related  party.             25,000                25,000
Original  balance of $25,000 bearing interest at 8% per
annum with interest payable quarterly. The principal is
convertible  into common stock at a conversion price of
$0.50 per share.

Convertible   debenture  payable  to  a  related  party             25,000                25,000
bearing  interest at 8% per annum with interest payable
quarterly.  The  principal is  convertible  into common
stock at a  conversion  price of $0.50 per  share.  The
principal was due February 1, 2008.

Note payable to a related  party,  original  balance of             85,000                85,000
$85,000 bearing interest at prime rate of 3.25% payable
monthly. Note is unsecured and was due August 31, 2009.

Note payable to Diana Visco  bearing  interest at the              789,842               691,450
prime  rate of 3.25% at September 30, 2010 and
2009, respectively with interest payable monthly. The
note is unsecured and was due in January 2011.

Convertible note payable to an unrelated party. The note               --                125,000
is unsecured, and was due March 2, 2010 bearing interest
at 8% per annum.  Converted to Stock October 2009.

Convertible  debenture  payable  to  a  related  party.            177,024               177,024
Original balance of $250,000 bearing interest at a rate
of  10%  per  annum.  Monthly  principal  and  interest
payments of $3,000 are due through  2014.   The note is
in  default for  non-payment.  Principal is convertible
into common  stock at a  conversion  price of $3.00 per
share. The note is unsecured.

Convertible  debenture  payable to Ray Nielsen  bearing          1,500,000             1,500,000
interest  at a  rate  of 8%  per  annum  with  interest
payable quarterly. The principal balance is convertible
at the  proceeding  day's  rate for one share of common
stock. The note is secured by the intellectual property
acquired from the note holder. The principal was due on
January 19, 2008.

Convertible  debenture  payable to an  unrelated  party             30,000                30,000
bearing  interest  at a  rate  of  8%  per  annum  with
interest payable  quarterly.  The principal  balance is
convertible  into  common  stock at a rate of $0.25 per
share.  The note is unsecured.  The principal was due on
October 1, 2008.

Convertible  debenture  payable to an  unrelated  party             30,000                30,000
bearing  interest  at a  rate  of  8%  per  annum  with
interest   payable   quarterly.    The   principal   is
convertible  into  common  stock at a rate of $0.10 per
share.  The note is unsecured and was due on October 1,
2008.

Convertible  debenture  payable to an  unrelated  party             30,000                30,000
bearing  interest  at a  rate  of  8%  per  annum  with
interest   payable   quarterly.    The   principal   is
convertible  into  common  stock at a rate of $0.10 per
share. Note is unsecured and was due October 1, 2008.
</TABLE>

                                      F-13
<PAGE>
<TABLE>
<CAPTION>
<S>                                                           <C>                   <C>
Note payable to finance  company,  original  balance of                 --                 4,455
$48,542  bearing  interest at a rate of 2.9% per annum.
Monthly  principal  and interest  payments of $736 are
due through 2009. The note is  collateralized  by
vehicle financed.

Notes  payable to  various  individuals  with  interest            254,585               254,584
rates  ranging from 6% to 20%. The notes are  currently
in default.

Convertible  debenture  to an unrelated  party  bearing             75,000                75,000
interest  at a rate  of 10%  per  annum  with  interest
payable  quarterly.  The principal is convertible  into
common stock at a conversion  price of $0.19 per share.
Note is unsecured and was due on July 18, 2009.
                                                               -----------           -----------
                                                                 3,021,450             3,052,513
Less: debt discounts                                                    --                    --
                                                               -----------           -----------
                                                                 3,021,450             3,052,513

   Current portion                                              (3,021,450)           (2,927,513)
                                                               -----------           -----------
   Long-term portion                                           $        --           $   125,000
                                                               ===========           ===========
</TABLE>

With the  exception of the note  payable to Diana Visco,  all other notes are in
default and are no longer convertible.  Subsequent to year end, Ms. Visco's note
also went into default.

CONVERTIBLE NOTES PAYABLE
On October  25,  2007,  the  Company  and  holders of an  aggregate  of $120,000
outstanding convertible notes agreed to extend the maturity of the outstanding
principal  balance one year for a reduction  in  conversion  from $0.30 to $0.10
while the market  price was $0.09 per share.  The  Company  also  granted to one
holder,  a warrant to purchase 100,000 shares of the Company's common stock. The
warrants vested  immediately had an exercise price of $0.10 per share and expire
two  years  from  the date of  issuance.  The fair  value  of the  warrants  was
approximately $6,267 as determined by the Black-Scholes option pricing model.

Since the notes had matured, the Company determined the extensions represent the
issuance  of  new  notes.  No  modification  or  extinguishment  accounting  was
required.  The proceeds were  allocated  between the  convertible  notes and the
warrant  based on their  relative  fair  values and  resulted  in $24,816  being
allocated  to the  convertible  notes  payable and $5,184 to the  warrants.  The
resulting  discount  related to the warrants was amortized  over the life of the
convertible notes.

On  September  2, 2009,  the Company  entered  into a  convertible  note payable
Agreement with a third party  investor for $125,000.  The note was unsecured and
due on March 2, 2010, bearing interest at 8% per annum. The note was convertible
in to common stock at the option of the holder at any time at a conversion price
of $0.04 per share. The note was converted into 3,125,000 shares of common stock
on October 8, 2009. The  conversion  price being equal to the stock price on the
date of issuance.

8% CONVERTIBLE DEBENTURE
On December 20, 2006, the Company  purchased  exclusive soil additive  formulas,
proprietary software, trademarks and patents. The Company funded the acquisition
through the issuance of $1,500,000  of 8%  Convertible  Debenture  ("Convertible
Note") to Raymond Nielsen ("Holder"). The Debenture was convertible into common
stock at the  option of the  Holder any time  prior to the  maturity  date.  The
conversion  price was equal to the closing price of the  Company's  common stock
for the day immediately preceding the date of the conversion.

The  Convertible  Note  contained  an  embedded  conversion  feature  ("ECF") as
prescribed in ASC No. 815. As a result of the ECF not being  convertible  into a
fixed  number  of  shares,  the  ECF  was  classified  as  derivative  financial
instruments under ASC No. 815. The accounting  treatment required the Company to
record the ECF as a derivative liability on the balance sheet at its fair values

                                      F-14
<PAGE>
as of each reporting date based on the  Black-Scholes  option pricing model. Any
change in the Company's stock price results in a change in the fair value of the
derivative  liability  and is  recorded  as  non-operating,  non-cash  income or
expense at each reporting  date in the  accompanying  consolidated  statement of
operations.

The conversion  feature ceased during the 2009 fiscal year and accordingly,  the
derivative  liability was eliminated as of September 30, 2009 with the remaining
decrease in fair value being shown in the statement of operations.

8. INCOME TAXES

The provision for income taxes is comprised of the following for the years ended
September 30:

                                                             2010         2009
                                                            ------       ------
Federal                                                     $   --       $   --
State                                                         (800)        (800)
                                                            ------       ------
Provision for income taxes                                  $ (800)      $ (800)
                                                            ======       ======

The provision for income taxes differs from the amount  computed by applying the
statutory  federal income tax rate to income before  provision for income taxes.
The differences  between the federal statutory tax rate of 34% and the effective
tax rates are primarily due to state income tax  provisions,  net operating loss
("NOL")  carry  forwards,   deferred  tax  valuation   allowance  and  permanent
differences as follows for the years ended September 30:

                                                            2010        2009
                                                           -------     -------

Statutory rate                                              (34.0)%     (34.0)%
Increase (decrease) in taxes resulting from the following:
  State income taxes, net of federal benefit                  5.64%        2.6%
  Amortization of debt discount                                0.0%        0.0%
  Derivative liability                                       (0.0)%     (0.14)%
  Change in valuation allowance                              28.36%      31.54%
                                                           -------     -------
                                                                --%         --%
                                                           =======     =======

Deferred  income  taxes  reflect  the net tax effects of  temporary  differences
between the carrying  value of assets and  liabilities  for financial  reporting
purposes and the amounts used for income tax purposes.

Significant  components  of the  Company's  deferred tax assets and  liabilities
consist of the following at September 30:

                                                     2010              2009
                                                  -----------       -----------
Deferred tax assets (liabilities):
Current:
  Reserves and accruals                           $   912,509       $   513,023
Non-current:
  Intangible assets                                   597,000           597,000
  Net operating losses                              7,325,707         7,306,182
  Other                                                86,960            56,032
  Valuation allowance                              (8,922,176)       (8,472,237)
                                                  -----------       -----------
                                                  $        --       $        --
                                                  ===========       ===========

At September 30, 2010 and 2009, the valuation allowance was increased by a total
of $449,939 and $2,086,542 respectively.  At September 30, 2010, the Company had
federal net operating  loss  carryforwards  of  approximately  $24,363,665  that
expire  from  2010  through  2030  and  state  net  operating  carryforwards  of
$9,290,652  expiring from 2010 through 2015.  These net operating  losses may be
suspended or limited due to changes in State and Federal legislation, as well as
a possible change in ownership as defined under Section 382 of the IRC.

The  Company  has not filed its state and  federal  income tax  returns  for the
fiscal year ended  September  30,  2009;  management  intends to comply with the
requirements to file the tax returns upon raising  capital.  Failure to file the
tax returns could result in penalties assessed against the Company.

                                      F-15
<PAGE>
10. COMMITMENTS AND CONTINGENCIES

OPERATING LEASES
During the year ended  September  30,  2010,  the Company  leased real  property
located in Pacoima,  California  from an entity owned by Ms. Visco.  The Company
currently  occupied this facility on a month-to-month  basis. Rent expense under
this lease for the year ended September 30, 2010 and 2009 was $7,061 and $7,061,
respectively.  Subsequent to year end, the Company moved its corporate  offices,
see Note 14.

In connection with the acquisition Smart World, the Company assumed leases for a
warehouse  and office  space which  expired on April 30, 2008 and  November  30,
2007,  respectively.  The  Company  is  currently  renting  this  facility  on a
month-to-month basis for $2,914 per month.

On  November  3,  2006,   the  Company   entered  into  an  agreement  to  lease
approximately  100 acres of land in San Mateo,  CA. for the purpose of obtaining
water rights to be used in operations.  This lease was  subsequently  terminated
after  management  determined  that the water rights were not as  represented to
them. Per the terms of the agreement,  lease payments were $100,000 per year for
a total of seven years or  $700,000.  The Company  paid the first year's rent in
advance of $100,000 and a security deposit of $100,000. Management made a demand
for return of the amounts paid,  without success.  Due to the lack of capital to
pursue the matter, management determined that it is unlikely the Company will be
able to recover such  amounts,  and  accordingly,  they recorded a provision for
loss on the  security  deposit in the amount of  $100,000  during the year ended
September 30, 2009. There is no additional  contingent liability related to this
transaction.

CAPITAL LEASES
The Company  leases  certain  equipment  under capital  leases.  Minimum  annual
required  lease  payments  under  the  lease  agreements  are as  follows  as of
September 30:

2011                                                   $  3,600
                                                       --------
Total minimum lease payments                              3,600
Less amount representing interest                           (73)
                                                       --------
Present value of future minimum lease payments         $  3,527
                                                       ========

Equipment  under capital leases included in machinery and equipment at September
30, 2010 are as follows:

Machinery and equipment                                $ 75,000
Less - accumulated depreciation                         (71,250)
                                                       --------
                                                       $  3,750
                                                       ========

PENDING  PROPERTY  ACQUISITION On November 27, 2007, the Company  entered into a
Purchase  and Sale  Agreement  and Joint  Escrow  Instructions  to acquire  real
property  in  Pescadero,  California  for a purchase  price of  $5,400,000.  The
property has been improved with approximately 700,000 square feet of greenhouses
and the  Company  plans to continue  to operate  the  property as a nursery.  In
connection  with the agreement,  the Company  deposited  $50,000 with the escrow
agent of which a $10,000  non-refundable deposit was released to the sellers. In
December 2007, per the terms of the agreement, the Company was to have deposited
an additional $100,000 into the escrow account on or before December 14, 2007 if
the Company's due diligence had been completed.  Said due diligence has not been
completed, therefore the deposit has not been made. The remaining $5,350,000 was
due by December 28, 2007,  the original  closing date,  and then extended to May
27, 2008 for additional  consideration  of $50,000.  In fiscal 2009, the company
determined  that  it was  unlikely  the  advanced  funds  would  be  able  to be
recovered,  and  recorded a  provision  for loss on the deposit in the amount of
$50,000.

                                      F-16
<PAGE>
LITIGATION

On or about  September  21,  2007,  Stockhausen,  Inc.  ("Stockhausen")  filed a
Complaint in the United States District Court,  for the Middle District of North
Carolina,  against us seeking  damages.  The parties  entered  into a settlement
agreement  on June 2, 2010.  Under the  settlement  agreement,  we agreed to pay
Stockhausen $250,000 on or before June 23, 2010 as a compromise to Stockhausen's
claims that currently total $603,921. We further agreed that we would consent to
the entry of a  Judgment  against  us in favor of  Stockhausen  in the amount of
$603,921 if we failed to make complete and timely payment as agreed. The Company
was  unable to make the  agreed  upon  payment  and on July 8, 2010  Stockhausen
entered a judgment for the above stated amount against the company.  The Company
has accrued  $603,921 and $188,180 related to the litigation as of September 30,
2010 and 2009,  respectively,  which is  included  in  accounts  payable  in the
accompanying balance sheets.

On or  about  October  4,  2007,  Raymond  J.  Nielsen  and  Cheryl  K.  Nielsen
(collectively,  "Plaintiffs"),  filed a Complaint  in the  Circuit  Court in the
Sixth  Judicial  District of Pasco County,  Florida,  against us and Smart World
(collectively "Defendants") seeking damages, declaratory, and injunctive relief.
Plaintiffs  allege  that  Defendants  failed  to pay  interest  when  due on the
Convertible Debenture from Defendants to Plaintiffs and, thus, the entire amount
of the  Convertible  Debenture  is  accelerated  and  Plaintiffs  are  seeking a
judgment in the amount of $1,500,000 plus interest.  We allege that jurisdiction
of this  matter  belongs  in the  California  court  system per the terms of the
documents.  We have filed a Motion to Dismiss the lawsuit which has been denied.
We have filed an answer and  affirmative  defenses.  It is our position that the
intellectual  property  we  purchased  from  the  Plaintiffs  is not what it was
represented to be.

11. PREFERRED STOCK

The Company has 10,000,000  preferred stock authorized of which 2,763,699 shares
of  $0.50  stated  value  Series  A  convertible   preferred  stock  ("Series  A
Preferred")  are issued and  outstanding  as of September 30, 2010 and 2009. The
Series A Preferred have the following characteristics:

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

CONVERSION
Each  holder  has the option to convert  each share of Series A  Preferred  into
common  stock at a rate of one share of common stock for each share of preferred
stock tendered.

VOTING
The holders have no voting rights.

LIQUIDATION PREFERENCE
Each holder is entitled to be paid the stated value of their holdings out of the
assets of the Company,  prior and in preference  to any payment or  distribution
out of the assets of the Company to the holders  common stock or any other class
or series of capital stock.

12. COMMON STOCK

On October 8, 2009, the Board of Directors  granted  1,000,000  shares of common
stock to each of its  Directors  Carl Ranno,  Neil  Kitchen,  Scott Baker and to
Diana  Visco.  The  grant  was  made  because  of  each  respective  recipient's
contribution  to the Company.  The stock was valued at $0.032 per share based on
the closing  stock price on the day of grant,  resulting  in stock  compensation
expense of $128,000.

                                      F-17
<PAGE>
STOCK OPTIONS
In November 2002,  the Company  enacted a stock option plan (the "2002 Plan") to
provide additional incentives to selected employees,  directors and consultants.
Two million shares were  authorized for grant.  The purchase price of the common
stock  subject to each  Incentive  Stock  Option shall not be less than the fair
market  value  or in the  case of a grant  of an  incentive  stock  option  to a
principal  shareholder,  not less  than  110% of the fair  market  value of such
common  stock at the time each option is granted.  The 2002 Plan  terminates  in

November 2012. The options are fully-vested when granted and are exercisable for
a period of ten years  from the date of grant and are  subject  to  cancellation
upon  termination  of  employment.  The Company has granted  options to purchase
1,010,000  shares and 300,000  shares with  exercise  prices of $0.50 and $0.25,
respectively.  The market price at the date of grant was $0.12. At September 30,
2010 and 2009,  450,000  and 690,000  stock  options  are  available  for grant,
respectively.

On January 6, 2005,  the Company  enacted the 2005 Stock  Option/Stock  Issuance
Plan  (the  "2005  Plan").  The 2005 Plan  provides  for the  issuance  of up to
10,000,000  shares of common stock to our  directors,  officers,  employees  and
consultants  in the form of stock options and shares of common  stock.  The 2005
Plan has two  separate  components:  the  option  grant  program  and the  stock
issuance program.

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

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

Upon stock option exercise, the Company issues new shares of common stock.

The  following  table  summarizes  stock option  activity  under the above stock
option plans:

<TABLE>
<CAPTION>
                                                                                 Remaining
                                          Number of     Weighted-Average      Contractual Term
                                           Shares       Exercise Price           (in years)
                                           ------       --------------           ----------
<S>                                     <C>                 <C>                    <C>
Outstanding at September 30, 2008         2,431,840          $0.18                   3.9
  Granted                                        --
  Exercised                                      --
  Cancelled                                (435,840)          0.11
                                        -----------
Outstanding at September 30, 2009         1,996,000           0.19                   3.0
  Granted                                        --
  Exercised                                      --
  Cancelled                                  20,000
                                        -----------
Outstanding at September 30, 2010         1,976,000          $0.20                   2.0
                                        ===========
</TABLE>

The fair value of stock  options  awarded  were  estimated  at the date of grant
using the  Black-Scholes  option-pricing  model.  The  expected  option term was
estimated based upon the contractual  term of the underlying  stock option.  The
expected  volatility of the Company's  stock price was based upon the historical
daily changes in the price of the Company's common stock. The risk-free interest
rate was based upon the current yield on U.S. Treasury  securities having a term
similar to the expected option term. Dividend yield is estimated at zero because
the Company does not  anticipate  paying  dividends in the  foreseeable  future.
There were no options issued during the years ended  September 30, 2010 and 2009
that required valuation.

                                      F-18
<PAGE>
<TABLE>
<CAPTION>
                                       Outstanding                                      Exercisable
                    ----------------------------------------------     -------------------------------------------
                                    Weighted      Weighted Average                   Weighted     Weighted Average
                                    Average          Remaining                       Average         Remaining
                    Number of       Exercise      Contractual Life     Number of     Exercise     Contractual Life
Exercise Prices       shares         Price           (in years)          shares       Price          (in years)
---------------       ------         -----           ----------          ------       -----          ----------
<S>                  <C>            <C>                 <C>             <C>          <C>               <C>
    $0.50             450,000        $0.50               2.1             450,000      $0.50             2.1
    $0.11           1,526,000        $0.11               2.0           1,144,500      $0.11             2.0
</TABLE>

At September 30, 2010,  total  unrecognized  estimated  compensation  expense of
$35,500 related to 381,500 non-vested stock options is expected to be recognized
over a  weighted-average  period of 1.0 year. The intrinsic  value of options is
zero as all options had an exercise  price above the closing  price of the stock
at September 30, 2010.

Stock based  compensation  expense was  $163,744 and $40,834 for the years ended
September 30, 2010 and 2009 respectively.

WARRANTS TO PURCHASE COMMON STOCK
The following  tables  summarize the issuances of warrants to purchase shares of
the Company's common stock:

                                                     Number of
                                                      Shares
                                                      -------
Outstanding at September 30, 2008                     884,000
  Granted                                                  --
  Exercised                                                --
  Cancelled                                           (100,00)
                                                      -------
Outstanding at September 30, 2009                     784,000
  Granted                                                  --
  Exercised                                                --
  Cancelled                                          (784,000)
                                                      -------
Outstanding at September 30, 2010                          --
                                                      =======

13. RELATED PARTY TRANSACTIONS

During the year ended  September  30,  2009,  Ms.  Visco  loaned the  Company an
additional $91,450. This note was consolidated with a note issued in August 2008
to Ms. Visco for $600,000, and accordingly the previous note was superseded. The
new note was for a total of $691,450.  The  principal  was due on September  30,
2010. Interest was payable monthly based upon the prime rate.

During the year ended  September  30,  2010,  Ms.  Visco  loaned the  Company an
additional
$98,392.  The Company  entered into a new note for $789,842 with Ms. Visco which
superseded  all  previous  notes.  The  principal  was due on January 12,  2011.
Interest is payable monthly based on Prime rate.

Rent expense incurred in connection with an entity  partially  controlled by Ms.
Visco was $7,061 for each of the years ended September 30, 2010 and 2009.

Interest expense incurred in connection with outstanding loans and notes payable
to Ms. Visco or entities  partially  controlled  was $24,781 and $25,145 for the
year ended September 30, 2010 and 2009, respectively.

14. SUBSEQUENT EVENTS

Subsequent to year end, the Company moved its corporate  offices to Canoga Park,
CA. The Company  shares office space with an entity owned by a related party and
does not pay rent.

                                      F-19