SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

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

                     FOR THE FISCAL YEAR ENDED JUNE 30, 2001

                                       or

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

                        Commission File Number 000-22855


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


                Nevada                                          86-0671974
    (State or other jurisdiction of                          (I.R.S. Employer
     incorporation or organization)                       Identification Number)


        215 N. Marengo, Suite 110
           Pasadena, California                                   91101
(Address of principal executive offices)                        (Zip code)


                                 (619) 521-8547
                (Issuer's telephone number, including area code)


           Securities Registered Pursuant to Section 12(b) of the Act:
                                     (None)

           Securities Registered Pursuant to Section 12(g) of the Act:
                     Common Stock, par value $.001 per share

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

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
the Form 10-KSB. [X]

Registrant's revenues for its fiscal year ended June 30, 2001, were $1,309,306.

As of July 31, 2001, Registrant had 9,021,585 shares of its $.001 par value
Common Stock issued and outstanding with an aggregate market value of the common
stock held by non-affiliates of $1,602,666. This calculation is based upon the
closing sales price of $0.69 per share on September 24, 2001.

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

The following documents are incorporated herein by reference: Registration
Statement on Form SB-2, filed on July 2, 1997, as amended (Registration No.
333-30583); Form 10-KSB for the fiscal year ended June 30, 1998, filed on
September 15, 1998 (File No. 000-22855); Report on Form 10-QSB for the quarter
ended March 30, 2001, filed on May 15, 2001; and Form 10-KSB for the fiscal year
ended June 30, 2000, filed on September 27, 2000 (File No. 000-22855) are
incorporated in Part IV, Item 13(a).
<PAGE>
                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
PART I

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                5

PART II

Item 5.    Market for Common Equity and Related Stockholder Matters           6

Item 6.    Management's Discussion and Analysis of Financial Condition
           and Results of Operations                                          7

Item 7.    Financial Statements                                              11

Item 8.    Changes in and Disagreements with Accountants on Accounting
           and Financial Disclosure                                          11

PART III

Item 9.    Directors, Executive Officers, Promoters and Control Persons;
           Compliance with Section 16(a) of the Exchange Act                 12

Item 10.   Executive Compensation                                            14

Item 11.   Security Ownership of Certain Beneficial Owners and Management    15

Item 12.   Certain Relationships and Related Transactions                    15

PART IV

Item 13.   Exhibits and Reports on Form 8-K                                  16

                                       i
<PAGE>
                                     PART I

ITEM 1. BUSINESS

A. BUSINESS DEVELOPMENT

     1.   FORM AND YEAR OF ORGANIZATION

     American Soil Technologies, Inc., formerly Soil Wash Technologies, Inc.,
(the "Company") was incorporated in California on September 22, 1993. Effective
December 31, 1999 the Company completed the reverse acquisition and acquisition
described herein and changed its name from Soil Wash Technologies, Inc. to
American Soil Technologies, Inc. and changed its state of domicile to Nevada.
During 1999 and 1998, the Company operated as Soil Wash Technologies, Inc.

     2.   ANY BANKRUPTCY, RECEIVERSHIP OR SIMILAR PROCEEDING

     Not Applicable.

     3.   ANY MATERIAL RECLASSIFICATION, MERGER, CONSOLIDATION, OR PURCHASE OR
          SALE OF A SIGNIFICANT AMOUNT OF ASSETS NOT IN THE ORDINARY COURSE OF
          BUSINESS

     On November 24, 1999, the Company entered into an exchange agreement for
the reverse acquisition of New Directions Manufacturing, Inc. ("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. Under the agreement, New
Directions would sell to one of its directors the operating subsidiary in
exchange for the cancellation of options and the shareholders of New Directions
would receive one share of the Company for each fifteen shares of New
Directions. The existing officers and directors of New Directions resigned and
officers and directors nominated by the Company were appointed. The Company's
fiscal year end was changed to June 30.

     In addition, effective as of the close of business on December 31, 1999,
the Company acquired in exchange for 2,360,323 shares of stock all of the assets
and certain liabilities of Polymers, Plus LLC ("Polymers"). The Company acquired
the operating assets of the Polymers, including its licenses, patents and
contracts.

B. BUSINESS OF ISSUER

     1.   PRINCIPAL PRODUCTS AND THEIR MARKET

     American Soil Technologies, Inc. develops, manufactures and markets
cutting-edge technology that decreases the need for water in dry land farming,
irrigated farming and other plant growing environments while increasing crop
yield and reducing the environmental damage caused by common farming practices.
In addition, the Company holds exclusive rights to a soil washing technology
that removes hydrocarbon (petroleum) products from contaminated soil and
recycles the soil for commercial use.

     The Company's Soil Wash division is primarily engaged in nonhazardous soil
and water remediation for commercial business and its Agriblend(R) division is
primarily engaged in manufacturing and marketing agriculture soil amendments.

                                       1
<PAGE>
     The Company has suspended operations of its Soil Wash division because, in
April 2001, the Company was informed that the landlord for its Soil Wash site
was not renewing its lease and that the Company was forced to remediate and
vacate the property. In conjunction with this notice, the Company sold its
client list and remaining book of business to another company. The contingent
sales price was $1 million, subject to volume adjustments by the buyer. $500,000
has been paid to date and the balance is expected to be paid in January 2002.
The Company retained the equipment and machinery and has not decided on the
future redeployment of the assets. Remediation of the site is complete and
closure is expected to be approved by the San Diego Regional Quality Control
Board at their regularly scheduled meeting in October 2001.

     The Agriblend(R) division of American Soil Technologies manufactures and
markets two primary products: Agriblend(R), a patented soil amendment developed
for agriculture and Nutrimoist(TM) developed for homes, parks, golf courses and
other turf related applications.

     2.   DISTRIBUTION

     The Agriblend(R) division markets primarily in the western United States
and Mexico. In August 2000, the Company entered into an exclusive distribution
agreement with UAP (United Agri Products, a division of Con Agra) to distribute
Agriblend(R) in Texas, New Mexico, and Oklahoma. In June 2000, the Company
signed an Exclusive Distribution Agreement with Sunpride, Inc. (a division of
the Gerber Goldschmidt Group) to distribute Agriblend(R) in Mexico. And on
September 1, 2000, the Company signed an exclusive Distribution Agreement with
Agriblend(R) of Australia. The Company is presently negotiating a distribution
agreement with another party for the territory of India and hopes to complete
this agreement by the end of the year. The Company also distributes its products
in California, Arizona, Idaho, Oregon, and Colorado through non-exclusive
distributors.

     3.   STATUS OF ANY PUBLICLY ANNOUNCED NEW PRODUCT

     On August 14, 2001, the Company announced that its Agriblend(R) division
had successfully developed a process to load its existing proprietary blend with
plant nutrients. The new blend reduces the need for water while supplying all
the required nutrients for healthy growth. The new blend, primarily developed
for the turf market, will be known as Nutrimoist(TM). Installations using a
Seeda-Vator, which forces the product into the root zone, have been made on
three golf courses in Tucson, Arizona and Chula Vista and Bakersfield,
California. A marked improvement in turf quality was noted in all three
installations. In La Mesa, California, Hanson Aggregates installed
Nutrimoist(TM) in a sports park. The Company expects to staff up during this
quarter after final selection of the installation equipment is completed.

     On August 21, 2001, the Company announced that it reached an agreement with
BioPlusNutrients L.L.C. of Grace, Idaho, to blend the Company's polymer with
their proprietary nutrients. This agreement allows each entity to co-market the
combined product to each other's customers.

                                       2
<PAGE>
     4.   COMPETITION

     There is no direct competition for the Company's Agriblend(R) division,
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.

     5.   SOURCES AND AVAILABILITY OF RAW MATERIAL AND PRINCIPAL SUPPLIERS

     The Company's 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 Stockenhousen, Ciba Specialties, and
Floerger. All other components of the blends are mineral products that are
readily available commercially throughout the world. Agriblend(R) products are
custom blended in accordance with the Company's specifications at a blending
facility located near Truth or Consequences, New Mexico. Warehouse facilities
are located in Tucson, Arizona.

     6.   DEPENDENCE ON MAJOR CUSTOMERS

     The Company believes that an exclusive distribution relationship with major
national distributors in each country (or territory) in which the Company
markets its Agriblend(R) products will provide expertise in distribution and
sales support needed to successfully market a new high tech agricultural product
such as Agriblend(R). However, this will ultimately lead to dependence on major
distributors for product distribution.

     7.   INTELLECTUAL PROPERTY

     a. PATENTS. The Company holds no patents, however, the Company has
exclusive world manufacturing/marketing rights to patented super absorbent
cross-linked polymer 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."

     b. TRADEMARKS. The Company has trade marked the following names:
Moisturerich(R), Fertilemoist(R), and Agriblend(R). The Company has a trademark
application pending for Nutrimoist(TM).

     8.   GOVERNMENT APPROVAL

     The Agriblend(R) division is subject to regulatory standards developed by
the EPA that are applicable to maximum monomer concentrations in polymers.
Polymer products cannot exceed monomer concentrations of 200 mg/kg. All polymers
used by the Company are well below the maximum monomer standard.

     9.   EFFECT OF ANY EXISTING OR PROPOSED GOVERNMENT REGULATIONS

     Not applicable, see discussion in Paragraph 8, Government Approval above.

                                       3
<PAGE>
     10.  RESEARCH AND DEVELOPMENT COSTS.

     Beginning in 2000, we began an investigative study at the Acres Research
Facility in Cedar Falls, Iowa to determine the benefits of Agriblend(R) Plus on
dry land farming of corn, the most predominate crop in the State of Iowa. We saw
no significant differences in yield between control and treated but did notice a
significant difference in the dryness of the corn at harvest. Corn is normally
harvested in the 14% to 16% moisture range and then dried in huge gas or
electrical heated dryers to lower the moisture level to below 14% for storage to
prevent internal combustion of the grain in prolonged storage. The corn
harvested in the Agriblend(R) Plus portion of the test fields was of moisture
content ready for storage. To verify these results, the Acres Research Facility
is running this same test in 2001 under the direction of the Agriculture
Research Department of Iowa State University. If this less moisture content
without sacrificing yield can be demonstrated again this year it could save corn
farmers millions of dollars in drying costs.

     The Acres Research Facility also conducted a test showing the benefits of
Nutrimoist(TM) turf. Nutrimoist(TM) turf was used prior to seed plant and
demonstrated approximately a 300% increase in root mass and turf quality over
the untreated samples.

     Colorado State University Extension Service through their Irrigation
Specialist, Jim Valliant, is conducting a series of tests in the Arkansas River
Valley to determine the benefits of Agriblend(R) Plus and Bio Plus Nutrients of
overcoming the degradation of high salinity soils. The Arkansas River Valley was
once a prime vegetable production area but is now losing that capability because
of the dramatic increase in soil salts which severely restrict crop production.
This is a test which will not be completed until November 2001 but potential
results are looking favorable.

     A great amount of effort has been expended in the Company research
facility, in conjunction with Bio Plus Nutrients, L.L.C., creating and testing
for a repeatable product "Nutrimoist(TM) L". This is the product that will be
used exclusively in the Nutrimoist(TM) Injection System. The Company hopes that
a minor modification of this liquefied polymer will also be able to be sold in
the retail market.

     A great amount of in house effort has and is being expended to produce a
consistent "nutrimoist-turf" and a "nutrimoist-garden" to generate the dual
benefits of water savings and nutrient application with a dry product.

     A turf research project is pending with the University of George to
demonstrate the benefits of various machine injections of the Company's products
to improve the turf, lower watering costs, and reduce sports injuries due to
excessive soil compaction.

     The Company spent $14,893 on outside research and development in the fiscal
year ended June 30, 2001 as compared to $2,500 spent on research and development
in the fiscal year ended June 30, 2000.

                                       4
<PAGE>
     11.  COST AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS AND REGULATIONS

     The Agriblend(R) division provides Material Safety Data Sheets on all
components of its Agriblend(R) product line and complies with labeling
requirement for its products. In addition, the Company complies with
Environmental Protection Agency regulations applicable to monomer content in its
polymer additives (maximum of 200 mg/kg).

     The Company believes that its 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. The
Company does not believe that such compliance will have a material impact on its
capital expenditures, future earnings and competitive position. No material
capital expenditures for environmental control equipment presently are planned.

     12.  EMPLOYEES

     As of the date hereof, the Company has approximately 10 full-time employees
and 3 part-time employees. While the Company does anticipate a small increase in
its number of employees, it does not anticipate that it will hire more than 10
to 20 additional employees during calendar year 2002. The Company hires
independent contractors on an "as needed" basis only. The Company has no
collective bargaining agreements with its employees. The Company believes that
its employee relationships are satisfactory.

ITEM 2. PROPERTIES

     The Company leases approximately 2,600 square feet located at a facility in
Pasadena, California, which includes office and storage space. All of the
Company's accounting operations are conducted from this facility. The lease
expires August 2, 2002 and requires monthly payments of approximately $3,394.

     The Agriblend(R) division leases approximately 432 square feet of office
space located in Phoenix, Arizona. The lease expires on March 15, 2002, and
requires monthly payments of approximately $1,058. The Company rents storage
space in Tucson, Arizona for approximately $350 per month.

ITEM 3. LEGAL PROCEEDINGS

     Polymers Plus and the Company were named in an arbitration brought by
Blaine Vince in which the claimant alleged damages of approximately $50,000. The
Company reached settlement with Blaine Vice and the conditions of the Settlement
Agreement have been fully satisfied.

     To the best knowledge of management, there are no other legal proceedings
pending or threatened against the Company.

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

     None.

                                       5
<PAGE>
                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     (a) MARKET INFORMATION

     The Company's Common Stock is currently quoted on the Over-The-Counter
Bulletin Board under the Symbol "SOYL." The Company's Common Stock was quoted on
the Over-the-Counter Bulletin Board under the symbol "NDMI" until January 2000.
Set forth below is the trading history of the Company's Common Stock without
retail mark up, mark-down or commissions:

          1999                                          HIGH         LOW
          ----                                        -------      -------
     Quarter ended:
       March 31                                       $0.2344      $0.1875
       June 30                                         0.2031       0.1562
       September 30                                    0.1562       0.1562
       December 31                                     0.2031       0.1406

          2000
          ----
     Quarter ended:
       March 31                                       $    13      $0.1875
       June 30                                              8       3.8125
       September 30                                      4.75         4.37
       December 31                                       4.75         1.25

          2001
          ----
     Quarter ended
       March 31                                          2.75        1.125
       June 30                                         1.1875         0.68

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

     (b) STOCKHOLDERS

     As of July 31, 2001 there were 157 shareholders holding certificated
securities and approximately 98 shareholders currently listed in the Depository
Trust Company as holding shares in brokerage accounts.

     The Company's transfer agent is Atlas Stock Transfer, 5899 South State,
Murray, Utah 84107.

     (c) DIVIDENDS

     The Company has not paid any dividends on its Common Stock. The Company
currently intends to retain any earnings for use in its business, and therefore
does not anticipate paying cash dividends in the foreseeable future.

                                       6
<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

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

FORWARD-LOOKING STATEMENTS

THIS ANNUAL REPORT ON FORM 10-KSB CONTAINS STATEMENTS RELATING TO FUTURE RESULTS
OF THE COMPANY (INCLUDING CERTAIN PROJECTIONS AND BUSINESS TRENDS) THAT ARE
"FORWARD-LOOKING STATEMENTS" AS DEFINED IN THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED AS
A RESULT OF CERTAIN RISKS AND UNCERTAINTIES, INCLUDING BUT NOT LIMITED TO
CHANGES IN POLITICAL AND ECONOMIC CONDITIONS; DEMAND FOR AND MARKET ACCEPTANCE
OF NEW AND EXISTING PRODUCTS, AS WELL AS OTHER RISKS AND UNCERTAINTIES DETAILED
FROM TIME TO TIME IN THE FILINGS OF THE COMPANY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

     (a) OVERVIEW

     American Soil Technologies, Inc. began business as Soil Wash Technologies,
Inc. in September 1993 to develop and provide nonhazardous soil remediation
services to businesses and developers in southern California. On December 31,
1999, the Company acquired the patents and operating rights to certain polymer
based soil enhancements designed to increase production and reduce costs to the
agriculture industry. Prior to this acquisition, there was no infrastructure for
sales, marketing and distribution of the polymer product. During the fiscal year
ended June 30, 2001, the Company devoted substantial resources, including
executive time and money, to the development of strategic relationships and
contracts for the marketing and distribution of its polymer products both
nationally and world-wide.

                                       7
<PAGE>
     (b) RESULTS OF OPERATIONS

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

                                              YEAR ENDED            YEAR ENDED
                                             JUNE 30, 2001         JUNE 30, 2000
                                             -------------         -------------
                                               (AUDITED)             (AUDITED)
     Statement of Operations Data
       Revenue                                $ 1,309,306           $ 1,961,325
       (Net Loss)                                (637,182)             (511,298)
       (Net Loss) per share                          (.07)                 (.07)

     Balance Sheet Data
       Current Assets                         $   992,761           $ 1,088,123
       Total Property & Equity, Net               573,906               697,778
       Patents, Net                               619,286               659,060
       Deferred Tax Asset                       2,346,000             2,022,000

     Total Assets                             $ 4,534,966           $ 4,498,964
       Total Current Liabilities                   95,891               412,430
       Accumulated Deficit                     (4,248,072)           (3,610,890)
       Stockholder's Equity                   $ 2,775,328           $ 2,966,410

FISCAL YEAR ENDED JUNE 30, 2001 (AUDITED) COMPARED TO FISCAL YEAR ENDED JUNE 30,
2000 (AUDITED)

REVENUES

     Revenues for the year ended June 30, 2001 were $1,309,306 compared to
$1,961,325 for the same period in 2000. Revenue from the Soil Wash division
decreased from $1,793,417 to $1,229,092 as a result of the suspension of
operations of the Soil Wash division due to the non-renewal of its lease. Sales
for the year ended June 30, 2001 by the Agriblend(R) division was $80,214 and
$62,804 for the prior year.

COST OF SALES

     Cost of goods sold for the Soil Wash division decreased from $1,321,160 for
the fiscal year ended June 30, 2000 to $1,146,408 for the fiscal year ended June
30, 2001, due to suspension of its operations and the remediation of the
underlying property. Cost of good sold by the Agriblend(R) division for the year
ended June 30, 2001 was $74,331 and $19,544 for the year ended June 30, 1999.

                                       8
<PAGE>
INVENTORY

     The Company believes that adequate supplies of raw materials are available
to meet its current and anticipated requirements without disruption of its
delivery chain. The Company intends to add additional storage and distribution
facilities to the Agriblend(R) division as necessary to accommodate increases in
sales, provide for timely delivery and maintain an efficient supply process.

OPERATING EXPENSES

     Operating expenses increased 43.3% over the same period in 2000. These
increases are due to the Company's efforts in putting in place sales
representatives, employees and agents for the Agriblend(R) division to expand
its sales base, legal fees related to expanding its patent rights, and increased
costs, including employees, of operating a multi-site, multi-disciplined
business. These increases began in the second quarter as the Company explored
the acquisition related to the Agriblend(R) business, and increased during the
third and fourth quarters as the Company was establishing its base sales
network. Part of the increase in expenses was $140,053 market value of the
Company's common stock issued to service providers for services rendered. This
stock issuance did not require the expenditure of cash funds by the Company. On
an annual basis, the Company expects that costs will increase based on a full
year of operations of the Agriblend(R) division but the relationship as a
percentage of sales should decline as the expected sales volume increases
annually. Likewise, on an annual basis the administrative costs are expected to
increase as a full year of operations are experienced for the two divisions and
costs associated with public companies are incurred. Interest expense is
expected to increase in the next year as a result of the interest on the
convertible debentures and other debt of the Company.

INCOME TAXES

     The Company has recognized an income tax benefit of its current and prior
operating losses based on the Company's expectation that it will realize
sufficient income in the future, the next twenty years, to utilize the benefits
of the net operating loss carryforward and therefore reduced cash outlay for
taxes in future periods.

NET LOSS

     For the reasons detailed above, the Company experienced losses in the two
years ended June 30, 2001. The Company expects that as a result of its efforts
during the last half of fiscal year and the first quarter of fiscal 2001 to
develop strategic alliances, marketing agreements, and distribution networks,
sales volume in subsequent periods should increase. Since these arrangements are
new and untested, it is uncertain whether these actions will be sufficient to
produce net operating income for the fiscal year 2001. However, given the gross
margins on the Agriblend(R) division, future operating results should be
improved.

                                       9
<PAGE>
SEASONALITY

     The efforts of the Agriblend(R) division in the United States have focused
on the southern states and therefore generally experience year round growing
cycles, with the sale of the Agriblend(R) product preceding the growing cycle of
various crops. International sales have not been sufficient enough or the
geographic distribution of sales concentrated enough to determine if a seasonal
trend exists although the initial indication is that the Company's markets will
become diverse and therefore not indicate significant seasonal variations. As
the Company expands into the residential and commercial markets nationally, it
is expected that the Company will experience some seasonal declines in sales
during the fall and winter quarters in less temperate climates.

LIQUIDITY AND CAPITAL RESOURCES

     Cash and cash equivalents totaled $36,412 and $124,352 at June 30, 2001 and
2000, respectively. Net cash used by operations was $985,009 for the year ended
June 30, 2001 compared to net cash used by operations of $932,847 for the
comparable year ended June 30, 2000. In preparing for distribution of its
products in foreign countries, the Company expended approximately $30,000 for
patent registrations and related legal work.

     In March 2000, the Company authorized the issuance of an aggregate of
$1,325,000 of convertible debentures with interest payable quarterly at 10
percent per annum. The convertible debentures are convertible to common stock of
the Company at a rate of one share for each three dollars converted. The
debentures mature in the first calendar quarter of 2002. All of the debentures
are subscribed and paid. At June 30, 2001 the outstanding balance of the debt is
$1,075,000 after the election by one holder in February 2001 to convert $250,000
face amount of the convertible debentures to 83,334 shares of common stock. If
the remaining holders elect to convert the debt the Company would issue 358,333
shares. Interest expense for the year ended June 30, 2001 was $118,572. The
Company has working capital (current assets less current liabilities) of
$896,870 as of June 30, 2001 compared to working capital of $675,693 as of June
30, 2000.

     To date, the Company has financed its operations principally through the
sales activities of the Soil Wash division and the placement of Convertible
Debentures. The Company believes that it has and will have sufficient cash flow
to continue its operations through June 30, 2002. The Company will consider both
the public and private sale of securities and or debt instruments for expansion
of its operations if such expansion would benefit the overall growth and income
objectives of the Company. Should sales growth not materialize, the Company may
look to these public and private sources of financing. There can be no
assurance, however, that the Company can obtain sufficient capital on acceptable
terms, if at all. Under such conditions, failure to obtain such capital likely
would affect adversely the Company's ability to continue as a going concern, or
at a minimum negatively impact the Company's ability to timely meet its business
objectives.

                                       10
<PAGE>
     The Company's working capital and other capital requirements during the
next fiscal year and thereafter will vary based on a number of factors,
including: 1) the sales revenue generated by the Agriblend(R) division; 2) the
level of sales and marketing activities related to domestic sales from the
Agriblend(R) division; and 3) the level of distributor support related to
development of international sales associated with the Agriblend(R) division.

     There can be no assurance that additional public or private financing,
including debt or equity financing, will be available as needed, or, if
available, on terms favorable to the Company. Any additional equity financing
may be dilutive to shareholders and such additional equity securities may have
rights, preferences or privileges that are senior to those of the Company's
existing common stock. Furthermore, debt financing, if available, will require
payment of interest and may involve restrictive covenants that could impose
limitations on the operating flexibility of the Company. The failure of the
Company to successfully obtain additional future funding may jeopardize the
Company's ability to continue its business and operations.

ITEM 7. FINANCIAL STATEMENTS

     The Financial Statements that constitute Item 7 are included at the end of
this report beginning on Page F-1.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

     (a) DISMISSAL OF PRINCIPAL ACCOUNTANTS

     The Company dismissed Evers & Company, Certified Public Accountants ("Evers
& Company") as its principal accountants on January 3, 2001. The principal
accountant's report on the financial statements for either of the past two years
contained no adverse opinion or a disclaimer of opinion, nor was qualified nor
modified as to uncertainty, audit scope, or accounting principles other than a
going concern opinion. The decision to change principal accountants of the
Company was approved by the Board of Directors of the Company.

     During the Company's two most recent fiscal years preceding the change and
any subsequent interim period preceding such dismissal, there were no
disagreements with the former accountants on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or procedure.
There is nothing further to report under Item 304(a)(1) or (iv)(B) through (E).

     (b) ENGAGEMENT OF NEW PRINCIPAL ACCOUNTANTS

     The Company engaged James C. Marshall, CPA, P.C., Scottsdale, Arizona on
January 3, 2001 as its principal accountants. Neither the Company nor anyone on
its behalf has consulted James C. Marshall, CPA, P.C., during the two most
recent past fiscal years preceding the change regarding any matter for which
reporting is required under Regulation S-B, Item 304(a)(2)(i) or (ii) and the
related instructions. The decision to engage James C. Marshall, CPA, P.C. was
approved by the Board of Directors.

                                       11
<PAGE>
                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT

     (a) DIRECTORS AND EXECUTIVE OFFICERS

     The following table sets forth the names and ages of the current directors
and executive officers of the Company and the principal offices and positions
with the Company held by each person. The executive officers of the Company are
elected annually by the Board of Directors. Each year, the stockholders elect
the board of directors. The executive officers serve terms of one year or until
their death, resignation or removal by the Board of Directors. There was no
arrangement or understanding between any executive officer and any other person
pursuant to which any person was elected as an executive officer.

NAME                     AGE        POSITION
----                     ---        --------
Neil C. Kitchen           54        President, Chief Executive Officer, Director
Sean Lee                  60        Chief Financial Officer
Louie Visco               84        Director
Ken Lew                   43        Secretary, Director
Scott Baker               44        Director

     MR. NEIL C. KITCHEN, PRESIDENT, CHIEF EXECUTIVE OFFICER, DIRECTOR, 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 Soil Wash Technologies, Inc. in 1994, he
was Vice President of a publicly-held environmental cleanup company with annual
sales of over 20 million. 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.

     MR. SEAN LEE, CHIEF FINANCIAL OFFICER, joined the Agriblend(R)division of
American Soil Technologies in January 2001. Prior to that, beginning in 1998, he
was President and CEO of New Directions Manufacturing Inc. He served as founder
and president of Infopak from January 1990 until its sale to Dimensional Visions
in 1996. Mr. Lee also served as CEO of Grace Home Centers, Home Base, and
Builders Express.

     MR.  LOUIE  VISCO,  DIRECTOR,  has served as  Chairman  of the Board of the
Company since 2000. He is principal  owner of the Benz Group,  a privately  held
holding company founded in 1934. Mr. Visco founded Universal By-Products,  Inc.,
the first  publicly-held  solid waste company in the United States.  The company
was acquired by Waste  Management  Inc.,  the world's  largest waste  management
company,  in 1972.  Over the past 50 years,  Mr. Visco has served as Chairman of
the Board of privately and publicly held companies.

                                       12
<PAGE>
     MR. KEN LEW, DIRECTOR, COMPANY SECRETARY, has served as a Director of the
Company since 2000. He holds an M.B.A. in Business Finance, a B.A. in Cell
Biology, and a B. Sc. in Chemistry from the University of Washington. Mr. Lew
has produced and edited two financial books and has written numerous technical
publications dealing with chemical interactions associated with polymer and
non-polymer substrates.

     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.

     (b) COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of the
Company's Common Stock, to file reports of ownership and changes in ownership
with the Securities and Exchange Commission ("SEC"). Officers, directors and
greater than ten percent stockholders are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file. Based solely on
its review of the copies of such forms received by it, or written
representations from certain reporting persons, the Company believes that during
its 2000 fiscal year, all such filing requirements applicable to its officers,
directors, and greater than 10% beneficial owners were complied with.

                                       13
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION

     (a) SUMMARY COMPENSATION

     Set forth below is a summary of compensation for the Company's officers for
fiscal years 2001, 2000 and 1999. There are no annuity, pension or retirement
benefits proposed to be paid to officers, directors or employees of the Company
in the event of retirement at normal retirement date pursuant to any presently
existing plan provided or contributed to by the Company or its subsidiary.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                     Annual Compensation                    Long Term Compensation
                            -------------------------------------  ----------------------------------------
                                                                              Awards              Payouts
                                                                   ----------------------------  ----------
Name and                                                           Restricted     Securities
Principal                                          Other Annual      Stock        Underlying       LTIP        All Other
Position           Year     Salary($)   Bonus($)  Compensation($)  Award(s)($)  Options/SARs(#)  Payouts($)  Compensation($)
--------           ----     ---------   --------  ---------------  -----------  ---------------  ----------  ---------------
<S>                <C>       <C>          <C>          <C>            <C>              <C>          <C>           <C>
Neil C. Kitchen,   2001      $39,742      $-0-         $-0-           $-0-            -0-           $-0-          $-0-
President          2000 (1)  $39,742      $-0-         $-0-           $-0-            -0-           $-0-          $-0-
                   1999      $48,392      $-0-         $-0-           $-0-            -0-           $-0-          $-0-

Sean Lee, C.F.O.   2001      $36,000      $-0-         $-0-           $-0-            -0-           $-0-          $-0-
                   2000 (2)  $36,000      $-0-         $-0-           $-0-            -0-           $-0-          $-0-
                   1999          -0-      $-0-         $-0-           $-0-            -0-           $-0-          $-0-
</TABLE>

----------
(1)  From July through December, 2000
(2)  From January through June, 2000

     (b) EMPLOYMENT AGREEMENTS

     The Company has an Employment Agreement with Mr. Ron Salestrom, patent
holder of patents underlying the Agriblend(R) product line. The term of the
Agreement is from January 1, 2001 through December 31, 2002 and is automatically
renewed unless either party wishes to terminate. Mr. Salestrom's salary under
the Agreement is $75,000 per year and he is entitled to all benefits established
by the Company that are accorded to "similarly situated employees of the
Company."

     (c) COMPENSATION OF DIRECTORS

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

                                       14
<PAGE>
     (d) STOCK OPTION PLAN

     During the fiscal year ended June 30, 2001, the Company enacted a stock
option plan (the "Plan") to provide additional incentives to selected employees,
directors, and consultants. One million shares are authorized for issuance
pursuant to stock options granted under the Plan. As of June 30, 2001, 445,000
stock options have been issued under the Plan.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of the date of this Report by: (i)
each stockholder known by the Company to be the beneficial owner of more than
five percent of the outstanding Common Stock, (ii) each director of the Company
and (iii) all directors and officers as a group.

     Except as otherwise indicated, the Company believes 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 Securities and Exchange
Commission 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.

             Name of                   Number of Shares        Percent of Total
         Beneficial Owner             Beneficially Owned      Shares Outstanding
         ----------------             ------------------      ------------------
     Neil C. Kitchen (1)                   1,376,855                 15.1%
     Sean Lee (1)                            163,370                  1.8%
     Louie Visco (1)                       4,130,565 (2)             45.5%
     Ken Lew (1)                              72,000                    *
     Scott Baker (1)                         129,818                  1.4%
     All officers and directors
       as a group (6 persons)              5,872,608                 64.7%
     The Benz Group (1)                    4,130,565                 45.5%
     Ron & Kathy Salestrom (1)               876,272                  9.6%

----------
(1)  C/o the Company's address: 215 N. Marengo, Suite 110, Pasadena, CA 91101.
(2)  Includes 4,130,565 shares held in the name of The Benz Group, a company in
     which Mr. Visco owns a majority interest.

* Less than one percent (1%).

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Neil C. Kitchen,  CEO/President,  Director has a $25,000 Debenture with the
Company which is convertible  at $3.00 per share with interest at 10%,  maturing
in the third calendar quarter of 2002.

     Louie Visco, Director, is the majority owner of FLD Corporation, the holder
of a $250,000  Debenture  convertible  at $3.00 per share with  interest at 10%,
maturing in the third calendar quarter of 2002.

                                       15
<PAGE>
                                     PART IV

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) 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 (2)
     3.3    Amendment to Articles of Incorporation of New Directions
            Manufacturing, Inc., dated January 4, 2001 (3)
     3.4    Bylaws of New Directions Manufacturing, Inc., dated May 29, 1997 (4)
     3.5    Amended and Restated Bylaws of New Directions Manufacturing, Inc.,
            dated July 20, 1998 (1)
     4.1    Convertible Debenture - Lump Sum Contribution (Form) (2)
     4.2    Convertible Debenture - Incremental (Form) (3)
     10.1   License Agreement between Ron Salestrom, American Soils
            Technologies, Inc., and Polymers Plus, L.L.C. Dated January 4,
            2001 (4)
     10.2   Client Service Agreement between Continental Capital & Equity
            Corporation and American Soil Technologies, Inc., dated February 17,
            2001 and Addendum, dated August 29, 2001 (9)
     10.3   Distributorship Agreement between American Soil Technologies, Inc.
            and Sunpride, Inc. dated May 10, 2001 (10)
     10.4   Distribution Agreement between UAP Southwest and with Agriblend(R),
            a division of American Soil Technologies Inc., dated August 16,
            2001 (11)
     10.5   Employment Agreement with Ronald Salestrom, dated January 4,
            2001 (12)
     10.6   Licensing Agreement between Soil Wash Technologies, Inc. and Site
            Remediation Services Limited, dated June 24, 2000 (13)
     10.7   Distributorship Agreement with BioPlusNutrients, L.L.C., dated July
            19, 2001 **
     10.8   Non-Disclosure and Non-Circumvent Agreement with BioPlusNutrients,
            L.L.C, dated July 25, 2001 **
     10.9   Distributorship Agreement with Agriblend(R) Australia P.T.Y., Ltd.,
            dated September 1, 2000 **

----------
**   Filed herewith.
(1)  Incorporated by reference to Exhibit 3.1 to the Company's Registration
     Statement on Form SB-2, filed on July 2, 1997, as amended (Registration No.
     333-30583) (the "1997 SB-2").
(2)  Incorporated by reference to Exhibit 3.2 to the 1997 SB-2.
(3)  Incorporated by reference to Exhibit 3.3 to the Company's Form 10-KSB for
     the fiscal year ended June 30, 2000, filed on September 27, 2000 (File No.
     000-22855) (the "2000 10-KSB").
(4)  Incorporated by reference to Exhibit 3.3 to the 1997 SB-2.
(5)  Incorporated by reference to Exhibit 3.2 to the Company's Form 10-KSB for
     the fiscal year ended June 30, 1998, filed on September 15, 1998 (File No.
     000-22855).
(6)  Incorporated by reference to Exhibit 4.1 to the Company's Form 10-QSB for
     the quarter ended March 30, 2001 filed on May 15, 2001 (the "March 30, 2001
     10-QSB").
(7)  Incorporated by reference to Exhibit 4.2 to the March 30, 2001 10-QSB.
(8)  Incorporated by reference to Exhibit 10.1 to the 2000 10-KSB.
(9)  Incorporated by reference to Exhibit 10.2 to the 2000 10-KSB.
(10) Incorporated by reference to Exhibit 10.3 to the 2000 10-KSB.
(11) Incorporated by reference to Exhibit 10.4 to the 2000 10-KSB.
(12) Incorporated by reference to Exhibit 10.5 to the 2000 10-KSB.
(13) Incorporated by reference to Exhibit 10.6 to the 2000 10-KSB.

(b) REPORTS ON FORM 8-K

     None.

                                       16
<PAGE>
                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") the Registrant caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.


AMERICAN SOIL TECHNOLOGIES, INC.


/s/ Neil C. Kitchen
-------------------------------------------------
By:  Neil C. Kitchen
Its: Chief Executive Officer, President, Director

     In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.

SIGNATURE                             TITLE                           DATE
---------                             -----                           ----

/s/ Neil C. Kitchen          President, Chief Executive          October 9, 2001
------------------------     Officer, Director                   ---------------
Neil C. Kitchen


/s/ Sean Lee                 Chief Financial Officer             October 9, 2001
------------------------                                         ---------------
Sean Lee


/s/ Louie Visco              Director                            October 9, 2001
------------------------                                         ---------------
Louie Visco


/s/ Ken Lew                  Director                            October 9, 2001
------------------------                                         ---------------
Ken Lew


/s/ Scott Baker              Director                            October 9, 2001
------------------------                                         ---------------
Scott Baker

                                       17
<PAGE>
                        AMERICAN SOIL TECHNOLOGIES, INC.
                             JUNE 30, 2001 AND 2000

                          INDEX TO FINANCIAL STATEMENTS

                                                                      PAGE
                                                                      ----

REPORT OF INDEPENDENT AUDITORS .....................................  F-2

BALANCE SHEET AS OF JUNE 30, 2001 ..................................  F-3

STATEMENTS OF OPERATIONS FOR THE YEARS ENDED
JUNE 30, 2001 and 2000 .............................................  F-4

STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE
YEARS ENDED JUNE 30, 2001 and 2000 .................................  F-5

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED
JUNE 30, 2001 and 2000 .............................................  F-6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS .........................  F-7 - F-14

                                      F-1
<PAGE>
                        Report of Independent Accountants


To the Board of Directors
American Soil Technologies, Inc.
Pasadena, California


We have audited the  accompanying  balance sheet of American Soil  Technologies,
Inc.  as  of  June  30,  2001,   and  the  related   statements  of  operations,
stockholders'  equity  and  cash  flows  for the two  years  then  ended.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of American Soil  Technologies,
Inc. as of June 30, 2001,  and the results of operations  and its cash flows for
the two years  then  ended in  conformity  with  generally  accepted  accounting
principles.

As discussed in Note 10 to the financial  statements,  an error  resulting in an
overstatement  of  previously  reported  income tax benefits for the years ended
June 30, 2000 and prior was discovered during the current year. Accordingly, the
financial  statements  have been restated and an adjustment has been made to the
June 30,  2000  statement  of  operations  and an  adjustment  has been  made to
accumulated deficit as of July 1, 1999 to correct the error.


                                        /s/ James C. Marshall, CPA, P.C.

Scottsdale, Arizona
September 27, 2001

                                       F-2
<PAGE>
                        AMERICAN SOIL TECHNOLOGIES, INC.
                                  BALANCE SHEET

                                                                      June 30,
                                                                        2001
                                                                    -----------
                                     ASSETS
CURRENT ASSETS
  Cash and cash equivalents                                         $    36,412
  Accounts and notes receivable                                         649,082
  Deposits and prepaid expenses                                          86,930
  Inventory                                                             220,337
                                                                    -----------
       TOTAL CURRENT ASSETS                                             992,761
                                                                    -----------

Property, plant and equipment, net of accumulated depreciation          573,906
Patents, net of amortization                                            619,286
Deferred income tax asset                                             2,346,000
Other assets                                                              3,013
                                                                    -----------
       TOTAL ASSETS                                                 $ 4,534,966
                                                                    ===========

                      LIABILITIES and STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                                                  $    82,237
  Accrued expenses                                                       13,654
                                                                    -----------
       TOTAL CURRENT PAYABLE                                             95,891

  Note Payable                                                           38,076
  Notes payable employees                                                25,671
  Debentures payable                                                  1,075,000
  Notes payable affiliate                                               525,000
                                                                    -----------
       TOTAL LIABILITIES                                              1,759,638

STOCKHOLDERS' EQUITY
  Common stock                                                            9,022
  Additional paid-in capital                                          7,014,378
  Accumulated deficit                                                (4,248,072)
                                                                    -----------

       TOTAL STOCKHOLDERS' EQUITY                                     2,775,328
                                                                    -----------
       TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                   $ 4,534,966
                                                                    ===========

              See accompanying notes to these financial statements.

                                       F-3
<PAGE>
                        AMERICAN SOIL TECHNOLOGIES, INC.
                            STATEMENTS OF OPERATIONS


                                                  For the years ended June 30,
                                                 ------------------------------
                                                    2001               2000
                                                 -----------        -----------
REVENUE
   Soil and water treatment                      $ 1,248,674        $ 1,837,694
   Hauling and miscellaneous sales                    57,555             89,631
   Other revenue                                       3,077             34,000
                                                 -----------        -----------
       GROSS REVENUE                               1,309,306          1,961,325
                                                 -----------        -----------
COST OF OPERATIONS
  Materials and supplies                             437,911            554,489
  Labor and payroll costs                            293,948            349,660
  Facility costs                                     184,417            153,347
  Equipment and maintenance                          440,175            287,467
  Depreciation and amortization                      143,448            127,620
  Miscellaneous operating costs                       15,902              6,715
                                                 -----------        -----------
       TOTAL COST OF OPERATIONS                    1,515,801          1,479,298
                                                 -----------        -----------

GROSS PROFIT (LOSS)                                 (206,495)           482,027

Sales & marketing costs                               66,855            245,105
Depreciation and amortization                          8,066              8,066
General & administrative costs                     1,510,904            904,202
Interest expense                                     125,178             16,859
Research and development                              14,894              2,500
                                                 -----------        -----------
       SALES AND ADMINISTRATIVE COSTS              1,725,897          1,176,732
                                                 -----------        -----------

Net loss from operations                          (1,932,392)          (694,705)

Interest income                                        1,210              2,407
Gain on sale of San Diego location                   970,000
                                                 -----------        -----------
                                                     971,210              2,407
                                                 -----------        -----------

Net loss before benefit of income taxes             (961,182)          (692,298)

Income tax credit                                    324,000            181,000
                                                 -----------        -----------

NET (LOSS)                                       $  (637,182)       $  (511,298)
                                                 ===========        ===========
Loss per share:
  Basic loss per common share                    $     (0.07)       $     (0.07)
                                                 ===========        ===========

  Weighted average shares outstanding              8,889,307          7,154,389
                                                 ===========        ===========

              See accompanying notes to these financial statements.

                                       F-4
<PAGE>
                        AMERICAN SOIL TECHNOLOGIES, INC.
                       STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                          Common Stock           Additional
                                   --------------------------      Paid-in     Accumulated
                                     Shares         Amount         Capital       Deficit         Total
                                   -----------    -----------    -----------   -----------    -----------
<S>                                <C>            <C>            <C>           <C>            <C>
Balance at July 1, 1999              5,507,420    $     5,507    $ 5,936,739   $(3,099,592)   $ 2,842,654

Stock acquisitions                   3,286,438          3,287        624,267                      627,554
Exercise of stock options                7,500              7          7,493                        7,500
Net loss                                                                          (511,298)      (511,298)
                                   -----------    -----------    -----------   -----------    -----------

Balance at June 30, 2000             8,801,358          8,801      6,568,499    (3,610,890)     2,966,410
                                   -----------    -----------    -----------   -----------    -----------

Stock issued for services              136,893            137        195,963                      196,100
Conversion of debenture to stock        83,334             84        249,916                      250,000
Net loss                                                                          (637,182)      (637,182)
                                   -----------    -----------    -----------   -----------    -----------

Balance at June 30, 2001             9,021,585    $     9,022    $ 7,014,378   $(4,248,072)   $ 2,775,328
                                   ===========    ===========    ===========   ===========    ===========
</TABLE>

              See accompanying notes to these financial statements.

                                       F-5
<PAGE>
                        American Soil Technologies, Inc.
                             Statements of Cash Flow

<TABLE>
<CAPTION>
                                                                 For the years ended June 30,
                                                                 ----------------------------
                                                                    2001              2000
                                                                 ----------        ----------
<S>                                                             <C>               <C>
CASH FLOW FROM OPERATING ACTIVITIES

NET LOSS                                                        $  (637,182)      $  (511,298)
Adjustments to reconcile net loss to net cash
 used by operating activities:
  Deferred compensation                                                                29,577
  Stock compensation                                                140,052
  Amortization and depreciation                                     151,514           135,686
  Benefit on income tax credit                                     (324,000)         (181,000)
Change in assets and liabilities:
  Accounts receivable                                              (128,002)         (259,846)
  Deposits and prepaid expenses                                      97,760             1,999
  Inventory                                                          81,975          (142,313)
  Other assets                                                       28,990               261
  Accounts payable                                                 (283,074)          (41,632)
  Accrued expenses                                                    3,815               232
  Deferred compensation                                             (29,577)
  Reserve for remediation                                           (50,000)
  Deferred income                                                   (37,280)           35,487
                                                                -----------       -----------
      Net Cash Flow Used by Operating Activities                   (985,009)         (932,847)

CASH FLOW USED BY INVESTING ACTIVITIES
  Addition of property, plant & equipment                                             (26,530)
  Disposition of property, plant & equipment                         12,313
                                                                -----------       -----------
      Total Cash Flow Used by Investing Activities                   12,313           (26,530)

CASH FLOW FROM FINANCING ACTIVITIES
  Exercise of stock option                                                              7,500
  Proceeds from notes payable                                        75,303
  Issuance of debentures                                            325,000         1,000,000
  Net borrowings on notes payable affiliates                        484,453            40,547
                                                                -----------       -----------
      Total Cash Flow from Financing Activities                     884,756         1,048,047
                                                                -----------       -----------

Net increase (decrease) in cash                                     (87,940)           88,670
Cash at Beginning of Period                                         124,352            35,682
                                                                -----------       -----------
Cash at End of Period                                           $    36,412       $   124,352
                                                                ===========       ===========
Supplemental disclosure of cash flow information:
  Cash payments during the period for:
    Interest                                                    $   125,178       $    16,859
Supplemental schedule of non-cash activities:
  Stock issued for services                                     $   196,100
  Conversion of debentures                                      $   250,000
</TABLE>

         See accompanying notes to these financial statements.

                                       F-6
<PAGE>
                        AMERICAN SOIL TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 1 - THE COMPANY

American Soil Technologies,  Inc.,  formerly Soil Wash Technologies,  Inc., (the
"Company")  was  incorporated  in California  on September  22, 1993.  Effective
December 31, 1999 the Company completed the reverse  acquisition and acquisition
described  herein and  changed  its name from Soil Wash  Technologies,  Inc.  to
American  Soil  Technologies,  Inc. and changed its state of domicile to Nevada.
Until January 1, 2000 the Company operated as Soil Wash Technologies, Inc.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The  summary  of  significant  accounting  policies  is  presented  to assist in
understanding the Company's financial  statements.  The financial statements and
notes are representations of the Company's management. Management is responsible
for their  integrity.  These accounting  policies conform to generally  accepted
accounting  principles and have been consistently  applied in the preparation of
the financial statements.

LINE OF BUSINESS

The Company is primarily engaged in non-hazardous soil and water remediation for
commercial  business and as of January 1, 2000 the  production  and sale of soil
enhancement  products  of  the  agricultural  community.  In  2001  the  Company
suspended  its sole soil and  water  remediation  business  and sold its book of
business. The sale is recognized in the year ended June 30, 2001.

REVENUE RECOGNITION

For remediation products revenue is recognized upon completion of the processing
cycle and freight  upon  shipment by the  independent  trucking  company or upon
completion of the services and is fully earned.  Revenue is recognized  from the
soil  enhancement  products  upon  sale and  shipment,  or if the sale  includes
installation, upon completion of the installation process.

ACCOUNTS RECEIVABLE

The  Company  provides   allowances  against  accounts  receivable  to  maintain
sufficient reserves to cover anticipated losses.

INVENTORY

Inventory is stated at the lower of cost or market,  generally being  determined
on a first-in,  first-out basis. Inventory consists of materials consumed in the
soil and water remediation  process, and finished products and raw materials for
sale by the agricultural division.

                                       F-7
<PAGE>
                        AMERICAN SOIL TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

PROPERTY, PLANT AND EQUIPMENT

Depreciation  has  been  provided  on the  same  basis  for  tax  and  financial
accounting  purposes using the straight-line,  accelerated and declining balance
methods. The estimated useful lives of the assets are as follows:

     Production equipment                                        7-10 years
     Office equipment, furniture and fixtures                    5-10 years
     Vehicles                                                       3 years
     Leasehold improvements                                      3-10 years

PATENTS

Patents  acquired in the purchase  transaction  are being  amortized  over their
estimated useful lives of seventeen years on a straight-line basis.

INCOME TAXES

The Company  provides for income taxes in accordance with Statement of Financial
Accounting Standards No. 109 (SFAS 109), "Accounting for Income Taxes." SFAS 109
requires the recognition of deferred tax liabilities and assets for the expected
future tax consequences of temporary differences between the financial statement
carrying amounts and the tax basis of assets and liabilities.

ESTIMATES

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

IMPAIRMENT OF LONG-LIVED ASSETS

The Company  accounts for  impairment  of long-lived  assets in accordance  with
Statement  of  Financial  Accounting  Standards  No.  121,  "Accounting  for the
Impairment of  Long-Lived  Assets and for  Long-Lived  Assets to be Disposed Of"
("SFAS  121").  SFAS  121  requires  that  long-lived  assets  be  reviewed  for
impairment  whenever events or changes in  circumstances  indicate that the book
value of the asset may not be recoverable. The Company evaluates on each balance
sheet  date  whether  events or  circumstances  have  occurred  that  indicate a
possible  impairment.  In accordance with SFAS 121, the Company uses an estimate
of the future  undiscounted  net cash flows of the related  asset or asset group
over the remaining life in measuring whether the assets are recoverable.

                                       F-8
<PAGE>
                        AMERICAN SOIL TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In June 2001,  the FASB  issued  SFAS No. 142,  "Goodwill  and Other  Intangible
Assets." This  statement  establishes  accounting  and  reporting  standards for
goodwill and intangibles for years commencing  after December 15, 2001.  Whether
already  acquired or subsequently  acquired after the effective date,  companies
are required to identify intangibles with finite lives and those with indefinite
lives.  Those  intangibles  with  finite  lives  are to be  amortized  over  the
estimated  useful lives of the assets while those with indefinite  lives are not
to be amortized.  Goodwill is not to be amortized.  Each  intangible or goodwill
asset  should be analyzed at least  annually for  impairment  where the carrying
value is in excess  of the fair  value of the  intangibles  and in excess of the
implied fair value in the case of goodwill assets. The asset's carrying value is
to be reduced by a charge to income if the fair value is lower than the carrying
value.  The Company has not  determined  the effect of this new  standard  which
becomes effective for the Company on July 1, 2002; however, at June 30, 2001 the
Company has patent rights which are being amortized over the term of the patent.
The impact of implementation of SFAS No. 142 is not expected to be material.

NOTE 3 - PROPERTY, PLANT AND EQUIPMENT AND PATENTS

Depreciation  and  amortization  of property,  plant and equipment for the years
ended June 30, 2001 and 2000 is $111,560 and $115,529, respectively.

Property plant and equipment consist of the following:

                                                       June 30,        June 30,
                                                         2001            2000
                                                     -----------     -----------
    Production equipment                             $   902,744     $  920,051
    Office equipment, furniture and fixtures              70,474         65,480
    Vehicles                                              95,873         95,872
    Leasehold improvements                               528,793        528,793
                                                     -----------     ----------
                                                       1,597,884      1,610,196
    Less accumulated depreciation and amortization    (1,023,978)      (912,418)
                                                     -----------     ----------

                                                     $   573,906     $  697,778
                                                     ===========     ==========

Amortization  of  capitalized  patent costs since  acquisition  were $39,954 and
$19,977 for June 30, 2001 and 2000, respectively.

                                       F-9
<PAGE>
                        AMERICAN SOIL TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 4 - CONVERTIBLE DEBENTURES

In the quarter ended March 31, 2000,  the Company  authorized the issuance of an
aggregate  of  $1,325,000  of  convertible   debentures  with  interest  payable
quarterly at 10 percent per annum. Each debenture is convertible to stock of the
Company at a rate of one share for each three dollars converted.  The debentures
mature  in the  third  calendar  quarter  of 2002.  All of the  debentures  were
subscribed  and at June 30, 2001 and 2000 the  outstanding  balances of the debt
was $1,075,000  and  $1,000,000,  respectively,  after the conversion in 2001 of
$250,000 of  debentures  into 83,334 shares of stock.  If the remaining  debt is
converted,  the  Company  would issue an  additional  358,333  shares.  Interest
expense  for the year ended June 30,  2001 and 2000 was  $118,572  and  $16,028,
respectively.

NOTE 5 - COMMITMENT AND CONTINGENCIES

The  Company  has  contractual  obligations  for  ongoing  remediation  work for
businesses in its geographical area.

The  Company has various  operating  lease  obligations  which  require  monthly
payments.  The  Company  has  month to month  leases  for its  plant  sites  and
equipment.  During the years  ended June 30, 2001 and 2000 the  aggregate  lease
payments were $325,474 and $248,219,  respectively.  The Company has  terminated
the lease on its plant  site,  sold it book of  business in the area and removed
the  equipment  to a storage  facility  pending  its  decision  opening at a new
location.  The Company  estimates  that the current  market  value of the assets
approximates the net carrying value of those assets.

As part of the sale of the  Company's  remediation  business,  the Company has a
receivable  of  $500,000  due in  February  2002  based on the  buyer  achieving
specific  levels of business by that date.  The Company  believes that the buyer
will achieve or exceed these levels and therefore be entitled to the full amount
of the receivable.

In  conjunction  with  the  lease  of the land  associated  with  the  operating
facilities,  the Company was obligated to remediate the property to its original
condition. The Company has remediated the property to governmental standards and
expects to receive its final release on the property in October 2001.

NOTE 6 - INCOME TAXES

At June 30,  2001  and  2000,  the  Company  has  approximately  $6,484,000  and
$5,522,000 of net operating losses available to offset future federal income tax
liability and  $1,601,000  and 1,628,000 of net  operating  losses  available to
offset  future  state  income tax  liability.  The reserve for  remediation  was
recognized  in the year ended June 30,  2001.  There is no  certainty  as to the
timing of such  recognition  nor that the Company will be able to fully  utilize
these differences.

                                      F-10
<PAGE>
                        AMERICAN SOIL TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 6 - INCOME TAXES (continued)

Income tax  benefits  for the years  ended June 30,  2001 and 2000  include  the
following components:

                                                     June 30,         June 30,
                                                       2001             2000
                                                    ----------       ----------
    Income Taxes:
       Federal                                      $  327,000       $  202,000
       State                                            (3,000)         (21,000)
                                                    ----------       ----------
    Total income tax benefit                        $  324,000       $  181,000
                                                    ==========       ==========

The components of deferred tax assets and liabilities are as follows:

                                                     June 30,         June 30,
                                                       2001             2000
                                                    ----------       ----------
    Tax effects of reserves for doubtful
     accounts, deferred compensation and
     remediation                                    $       --       $   60,000
    Tax effects of carryforward benefits:
    Net operating loss carryforwards                 2,346,000        1,962,000
                                                    ----------       ----------
    Tax effects of carryforwards
    Tax effects of future taxable differences
     and carryforwards                               2,346,000        2,022,000
                                                    ----------       ----------
    Net deferred tax asset                          $2,346,000       $2,022,000
                                                    ==========       ==========

Realization of the net deferred tax assets is dependent on generating sufficient
taxable  income prior to the  expiration of the  respective  carryforwards.  Tax
effects are based on a 34.0% federal  income tax rate and an 8.84% on 50% or the
net operating loss  recognized  for state income tax purposes.  The combined net
rate of carryforwards is 38.4%. The provisions for state income tax benefit have
been reduced by the  expiration of state tax benefits of $45,000 and $47,000 for
the years ended June 30, 2001 and 2000. The realized net operating losses expire
over the next 20 years for federal and five years for state income tax purposes,
as follows:

                                      Federal                 State
         Expiration                    Amount                 Amount
         ----------                  ----------             ----------
             2002                            --             $  458,000
             2003                            --                255,000
             2004                            --                 78,000
             2005                            --                279,000
             2006                            --                481,000
             2008                    $  130,000                     --
             2009                     1,074,000                     --
             2010                     1,058,000                     --
             2011                     1,016,000                     --
             2012                       915,000                     --
             2018                       510,000                     --
             2019                       156,000                     --
             2020                       558,000                     --
             2021                       961,000                     --
                                     ----------             ----------
            Total                    $6,378,000             $1,551,000
                                     ==========             ==========

                                      F-11
<PAGE>
                        AMERICAN SOIL TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 6 - INCOME TAXES (continued)

Management  believes  that it is more  likely  than not that  the  Company  will
realize the  benefits of the deferred  tax credits  before each expires  through
2021;  therefore,  no valuation  reserve has been  provided for this against the
asset.

NOTE 7 - COMMON STOCK

At June 30,  2000,  the  Company  has  8,801,358  shares  outstanding  after the
issuance of 3,286,438 shares on December 31, 1999 for the acquisitions described
herein,  5,507,420 shares outstanding as a result of the stock split at December
31, 1999 and exercise by the holder of 7,500 shares in May 2000. The Company has
25,000,000 shares  authorized.  The outstanding shares were increased by a stock
split of 45.90 for 1 to the original stockholders of the Company and the Company
changed the par value per share to $0.001.  In  accordance  with SFAS 128,  this
split has been  retroactively  recorded  as of July 1, 1999.  Additionally,  the
capitalization  of notes and advances payable to shareholders has  retroactively
been capitalized in the amount of $5,451,129 as part of that same transaction.

At June 30, 2001,  the Company has 9,021,585  shares  outstanding as a result of
the  conversion  of  debentures  into 83,334 shares of stock and the issuance of
136,893 shares of stock for services during the year. The weighted average price
of the stock based on the closing prices on the commitment dates was $1.4325.

NOTE 8 - STOCK OPTION PLAN

The Company  initiated  a stock  option plan during the year ended June 30, 2001
under which the Company  could grant up to one million  options.  Under the plan
all employees and  directors,  subject to  employment  terms,  have been granted
options to purchase  219,998 and 225,002 shares,  respectively.  The options are
exercisable  at $3.75  and  $4.13 per  share,  respectively.  At the time of the
grants the market price of the stock was $3.75, therefore,  219,998 options were
granted at the market price and 225,002 options were granted at 10% in excess of
the market price.  The options are vested when granted and are  exercisable  for
ten years from the date of the grant subject to cancellation upon termination of
employment. No options have been exercised.

NOTE 9 - LOSS PER COMMON SHARE

Loss per share of common stock has been computed  based on the weighted  average
number of shares outstanding. As of June 30, 2001 and 2000, the weighted average
number of shares  outstanding  was 8,889,307 and  7,154,389,  respectively.  The
outstanding  stock options are  anti-dilutive  and there were no other  dilutive
items outstanding; therefore, basic and diluted loss per share are the same.

                                      F-12
<PAGE>
                        AMERICAN SOIL TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 10 - PRIOR PERIOD ADJUSTMENT

The June 30, 2000 net loss, and the deferred income asset and retained  earnings
(deficit)  for as of June 30, 2000 and the opening  balances as of July 1, 1999,
have been adjusted to correct an error in the  calculation of income tax benefit
from state incomes to reflect  shorter net operating loss  carryforward  periods
and the reduced carryforward amounts available under California law. The effects
of these changes were as follows:

<TABLE>
<CAPTION>
                                                  Previously                           Adjusted
                                                   reported         Adjustment          balance
                                                  -----------       -----------       -----------
<S>                                              <C>               <C>               <C>
   JULY 1, 1999
     Deferred income tax asset                    $ 1,931,200       $   (90,200)      $ 1,841,000
                                                  -----------       -----------       -----------
     Total assets                                 $ 3,139,455       $   (90,200)      $ 3,049,255
                                                  ===========       ===========       ===========

     Retained earnings (deficit)                  $(3,009,392)      $   (90,200)      $(3,099,592)
                                                  -----------       -----------       -----------
     Total stockholders' equity                   $ 2,932,854       $   (90,200)      $ 2,842,654
                                                  ===========       ===========       ===========
   JUNE 30, 2000
     Deferred income tax asset                    $ 2,207,000       $  (185,000)      $ 2,022,000
                                                  -----------       -----------       -----------
     Total assets                                 $ 4,683,964       $  (185,000)      $ 4,498,964
                                                  ===========       ===========       ===========

     Retained earnings (deficit)                  $(3,425,890)      $  (185,000)      $(3,610,890)
                                                  -----------       -----------       -----------
     Total stockholders' equity                   $ 3,151,410       $  (185,000)      $ 2,966,410
                                                  ===========       ===========       ===========

     Net loss before benefit of income taxes      $  (692,298)                        $  (692,298)
     Income tax credit                                275,800       $   (94,800)          181,000
                                                  -----------       -----------       -----------
     Net (Loss)                                   $  (416,498)      $   (94,800)      $  (511,298)
                                                  ===========       ===========       ===========

     Loss per share                               $     (0.06)      $     (0.01)      $     (0.07)
                                                  ===========       ===========       ===========
</TABLE>

NOTE 11 - REORGANIZATION AND ACQUISITION

On November 24, 1999,  the Company  entered into an exchange  agreement  for the
reverse  acquisition of New Directions  Manufacturing,  Inc. ("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.  Under the  agreement,  New
Directions  would  sell to one of its  directors  the  operating  subsidiary  in
exchange for the  cancellation of options and the shareholders of New Directions
would  receive  one  share  of  the  Company  for  each  fifteen  shares  of New
Directions.  The existing officers and directors of New Directions  resigned and
officers and directors nominated by the Company were appointed.

                                      F-13
<PAGE>
                        AMERICAN SOIL TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 11 - REORGANIZATION AND ACQUISITION (continued)

In addition,  effective  as of the close of business on December  31, 1999,  the
Company  acquired in exchange for 2,360,323 shares of stock the operating assets
of the Polymers Plus, L.L.C.  ("Polymers")  including its licenses,  patents and
contracts.

The purchase method of accounting was performed on New Directions and the assets
and  liabilities of Polymers  based on the fair market value at the  transaction
date. The valuation of New Directions and Polymers,  including transaction costs
estimated  at  $100,000  was  $627,553 A summary  of the assets and  liabilities
acquired at December 31, 1999 were as follows:

     Assets:
       Inventory                                                 $  25,380
       Deposits and prepaid expenses                                 3,973
       Property, plant and equipment                                66,870
       Patents, licenses and rights                                676,435
       Other assets                                                  5,925
                                                                 ---------
          Total Assets                                             778,583
                                                                 ---------
     Liabilities:
       Current liabilities                                        (110,483)
       Long-term liabilities                                       (40,547)
                                                                 ---------
     Fair value of acquisitions                                  $ 627,553
                                                                 =========

In  conjunction  with these  acquisitions,  the Company  issued an  aggregate of
3,266,438  shares of its common stock to  shareholders  of New Directions and to
Polymers and to consultants and promoters.

As a result of the closing of these  acquisitions  on  December  31,  1999,  the
accompanying  financial  statements  do not include the results of operations of
the acquired  entities for any period.  The unaudited pro forma  financial  data
does not  purport  to  represent  what the  Company's  results  from  continuing
operations  would actually have been had the transactions in fact occurred as of
an earlier date, or project the results for any future date or period.

                                                                June 30,
     Pro Forma (unaudited)                                        2000
                                                               -----------

     Revenue                                                   $ 2,018,363
     Cost of goods sold                                          1,381,091
                                                               -----------
       Gross profit                                                637,272
     Expenses
       Selling, general and administrative                      (1,450,809)
       Interest expense                                            (20,066)
                                                               -----------
     Loss from Operations                                         (833,603)
     Tax Benefit                                                   275,800
                                                               -----------
     Net Income (Loss)                                         $  (557,803)
                                                               ===========
     Loss per share                                            $     (0.06)
                                                               ===========
     Weighted average number of shares                           8,797,608
                                                               ===========

                                      F-14