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, 2002

                                       or

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

    For the transition period from ______________ to ___________________

                        Commission file number: 000-22855

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

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

215 N. Marengo, Suite 110, Pasadena, California                    91101
   (Address of Principal Executive Offices)                      (Zip Code)

         Issuer's telephone number, including area code: (626) 793 2435

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

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

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

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

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

For the fiscal year ended June 30, 2002, the Company's revenue was $203,139.

As of September 25, 2002, the number of shares of Common Stock  outstanding  was
9,258,782.  The  aggregate  market value of the  Company's  Common Stock held by
non-affiliates  of the  registrant  as of September  25, 2002 was  approximately
$465,965 (based upon 3,584,344 shares at $0.13 per share).

                       DOCUMENTS INCORPORATED BY REFERENCE

The following documents are incorporated  herein by reference:  (i) Registration
Statement  on Form SB-2,  filed on July 2, 1997,  as amended  (Registration  No.
333-30583);  (ii) Form 10-KSB for the fiscal year ended June 30, 2000,  filed on
September  27, 2000 (File No.  000-22855);  and (iii) Form 10-KSB for the fiscal
year ended June 30,  2001,  filed on October 11, 2001 (File No.  000-22855)  are
incorporated in Part IV, Item 13(a).
<PAGE>
                                TABLE OF CONTENTS
                                                                            PAGE
                                                                            ----

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

ITEM 2.  DESCRIPTION OF PROPERTY..............................................4

ITEM 3.  LEGAL PROCEEDINGS....................................................4

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

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
         STOCKHOLDER MATTTERS.................................................4

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS............................................5

ITEM 7.  FINANCIAL STATEMENTS.................................................8

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

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

ITEM 10. EXECUTIVE COMPENSATION..............................................10

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT......11

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS......................12

ITEM 13. EXHIBITS AND REPORTS ON FORM 8K.....................................12

ITEM 14. CONTROLS AND PROCEDURES.............................................13

SIGNATURES...................................................................14

                                       i
<PAGE>
                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS.

DEVELOPMENT OF BUSINESS

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 1998 and 1999, the Company operated as Soil Wash Technologies, Inc.

ANY BANKRUPTCY, RECEIVERSHIP OR SIMILAR PROCEEDING

Not Applicable.

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.

In June 2001, the Company sold its book of business for soil remediation in San
Diego, California. In May 2002, the Company decided not to pursue relocation and
startup of a new location for the soil remediation business. The Company's soil
remediation business was conducted through its Soil Wash division. In connection
with the discontinuance of this segment of the business in the year ended June
30, 2002, the Company incurred a charge of $369,601 related to the write-down to
estimated net market value of the idle plant assets. The disposition of the soil
remediation operations represents the disposal of a business segment under SFAS
144 Accounting for Impairment or Disposal of Long-lived Assets. Accordingly,
results of this operation have been classified as discontinued, and prior
periods have been restated, including the allocation of overhead charges.

BUSINESS OF ISSUER

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 discontinued 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 sales price was $1 million,
which has been fully paid. The Company retained the equipment and machinery and
has decided to sell these assets. Remediation of the site is complete and
closure has been approved by the San Diego Regional Quality Control Board.

                                       1
<PAGE>
American Soil Technologies manufactures 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. The Company
has entered into marketing and distribution agreements with Stockhausen, Inc,
Bentonite Performance Minerals and JT Water Management.

The Company is adding sales representatives and distributors in both the
agriculture and turf industries. 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.

DISTRIBUTION

The Company 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. However, this contract expired and the Company
does not intend to renew. 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. On April 22, 2002 the contract was
cancelled for non-performance. Sunpride may still operate on behalf of the
Company in Mexico on a non-exclusive basis. On September 1, 2000, the Company
signed an exclusive Distribution Agreement with Agriblend(R) of Australia. This
agreement has been dormant primarily because of the rate of exchange. The
Company was unable to negotiate a distribution agreement for the country of
India as previously reported.

On June 27, 2002, the Company announced that it entered into a distribution
agreement with Ag Specialties, LLC. Ag Specialties is located in Portland,
Oregon with offices in Harrisburg Oregon, Woodland, Washington, and Orlando,
Florida. The focus of Ag Specialties is the niche agriculture market. It is the
exclusive distributor for many foreign suppliers and represents many domestic
products. Their major product line includes fertilizers, crop protection
products, animal feed ingredients, soil conditioners, seeds and industrial
chemicals. Ag Specialties has launched new products into the agriculture market
including their own private label materials under the Iron Man brand. The term
of the agreement is five (5) years and can be cancelled by either party with 30
days written notice. Ag Services is very aggressively marketing our products and
is producing revenues for our Company.

On August 20, 2002, the Company announced that it had entered into an agreement
with Stockhausen, Inc. This agreement granted to the Company the exclusive
rights in the Western United States to distribute the Stockhausen products,
which are of the highest quality cross-link and linear polymer products
available for water and nutrient retention in the Agricultural industry. The
Company has numerous distributors and sales representatives selling the products
throughout the territory.

On August 26, 2002, Bentonite Performance Minerals a Product and Service Line of
Halliburton Energy Services, Inc., a subsidiary of the Halliburton Company,
entered into an agreement with the Company to distribute its proprietary product
known as Baraclear(TM) P80 in the aquaculture and agriculture industries in the
United States, Canada and Mexico. Baraclear(TM) P80 is a first generation
time-release water clarification and contaminant removal product that allows
livestock and fish farmers, golf course superintendents and private pond owners
to remove phosphates as well as suspended organic and inorganic colloidal
material in water bodies up to 50 feet deep. It is a product that complements
our existing products in the agriculture and turf industries.

On September 20, 2002 the Company entered into an exclusive Distributorship
Agreement with JT Water Management LLC allowing the Company to distribute a
water-based liquid linear polymer known as Extend(TM) in the western United
States. The is a new and unique product intended for soil application, which
improves irrigation efficiency, reduces soil sodium levels, and greatly reduces
nutrient leaching and runoff. The product will be sold through our Distributors
and Sales Representatives.

                                       2
<PAGE>
STATUS OF ANY PUBLICLY ANNOUNCED NEW PRODUCT

None.

COMPETITION

There is no direct competition for the Company's Agriblend(R) product, however,
earlier polymer based technology was very expensive and the remembrance of its
cost has a negative effect on marketing Agriblend(R). Accordingly, educating the
end user regarding the benefits of using Agriblend(R) and gaining general
acceptance of the new "micro grain" technology are obstacles to marketing the
product. There is some competition to our straight polymer products by companies
that have been in business for a number of years. However, the Stockhausen
polymers are of consistent quality and performance. There is some competition
for the Baraclear product by the companies selling the older pond clearing
procedure which is more time consuming and accordingly more expensive. There is
some competition for Extend(TM) however the Company has not as yet found a
water-based linear polymer product. The competition is all oil-based. The
Company is not aware of any competition to Nutrimoist(TM) other than from our
manufacturer who would have to use our polymer to manufacture the product
pursuant to our agreement.

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, our exclusive supplier, 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. Nutrimoist(TM) is
blended either by the Company or through contract blenders in dry or liquid form
and is a combination of bio nutrients and our polymer products.

DEPENDENCE ON MAJOR CUSTOMERS

The Company is not dependent on any one customer for a substantial portion of
its sales of any product.

INTELLECTUAL PROPERTY

PATENTS

The Company owns 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."

TRADEMARKS

The Company owns a registered trademark on the name, Agriblend(R). The Company
has a trademark application pending for the name Nutrimoist(TM).

GOVERNMENT APPROVAL

Agriblend(R) is subject to regulatory standards developed by the Environmental
Protection Agency ("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.

EFFECT OF ANY EXISTING OR PROPOSED GOVERNMENT REGULATIONS

Not applicable, see "Government Approval" above.

RESEARCH AND DEVELOPMENT COSTS

The Company spent $29,076 on outside research and development in the fiscal year
ended June 30, 2002 as compared to $14,893 spent on research and development in
the fiscal year ended June 30, 2001.

                                       3
<PAGE>
COST AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS AND REGULATIONS

The Company provides Material Safety Data Sheets on all components of its
product line and complies with labeling requirement for its products. In
addition, the Company complies with EPA 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.

EMPLOYEES

As of the date hereof, the Company has six full-time employees and two 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 five to ten
additional employees during calendar year 2003. 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 operations are conducted from this facility. The lease expires August
2, 2003 and requires monthly payments of approximately $3,420. The Company rents
storage space in Tucson, Arizona for approximately $350 per month.

ITEM 3. LEGAL PROCEEDINGS

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

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

None.

                                     PART II


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

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:

                                                         HIGH          LOW
                                                         ----          ---
     2000
          First Quarter............................    $12.50        $0.19
          Second Quarter...........................      8.00         3.38
          Third Quarter............................      6.50         4.00
          Fourth Quarter...........................      4.75         1.25

     2001
          First Quarter............................      2.75         1.13
          Second Quarter...........................      1.19         0.68
          Third Quarter............................      1.30         0.36
          Fourth Quarter...........................      0.77         0.40

     2002
          First Quarter............................      0.42         0.30
          Second Quarter...........................      0.30         0.15

On September 24, 2002, the closing sale price was $0.13.

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.

                                       4
<PAGE>
HOLDERS

As of September 25, 2002, there were 170 shareholders holding certificated
securities and approximately 339 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.

DIVIDENDS

The Company has not paid any dividends on its Common Stock since its inception
and does not anticipate or contemplate paying cash dividends in the foreseeable
future.

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.

THE FOLLOWING INFORMATION CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS OF
MANAGEMENT OF THE COMPANY. FORWARD-LOOKING STATEMENTS ARE STATEMENTS THAT
ESTIMATE THE HAPPENING OF FUTURE EVENTS AND ARE NOT BASED ON HISTORICAL FACT.
FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY THE USE OF FORWARD-LOOKING
TERMINOLOGY, SUCH AS "MAY," "SHALL," "WILL," "COULD," "EXPECT," "ESTIMATE,"
"ANTICIPATE," "PLAN," "PREDICT," "PROBABLE," "POSSIBLE," "SHOULD," "CONTINUE,"
OR SIMILAR TERMS, VARIATIONS OF THOSE TERMS OR THE NEGATIVE OF THOSE TERMS. THE
FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION HAVE BEEN
COMPILED BY OUR MANAGEMENT ON THE BASIS OF ASSUMPTIONS MADE BY MANAGEMENT AND
CONSIDERED BY MANAGEMENT TO BE REASONABLE. OUR FUTURE OPERATING RESULTS,
HOWEVER, ARE IMPOSSIBLE TO PREDICT AND NO REPRESENTATION, GUARANTY, OR WARRANTY
IS TO BE INFERRED FROM THOSE FORWARD-LOOKING STATEMENTS.

OVERVIEW

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 discontinued operations of its soil remediation
business. During the fiscal year ended June 30, 2002, 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 worldwide.

RESULTS OF OPERATIONS

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

                                               YEAR ENDED            YEAR ENDED
                                             JUNE 30, 2002         JUNE 30, 2001
                                             -------------         -------------
                                               (AUDITED)             (AUDITED)
STATEMENT OF OPERATIONS DATA:
Revenue                                      $   203,450            $   80,432
Loss From Continuing Operations               (1,154,267)             (849,548)
Loss From Discontinued Operations               (877,646)              212,366
(Net Loss)                                    (2,031,913)             (637,182)
(Continuing Operations Loss) Per Share             (0.12)                (0.10)
(Discontinued Operations) Loss Per Share           (0.10)                 0.03
(Net Loss) Per Share                               (0.22)                 (.07)

BALANCE SHEET DATA:
Current Assets                                  $287,919              $992,761
Total Property & Equipment, Net                   27,583               573,906
Patents, Net                                     579,332               619,286
Deferred Tax Asset                             2,306,000             2,346,000
Total Assets                                   3,214,582             4,534,966
Total Current Liabilities                        870,449                95,891
Accumulated Deficit                           (6,279,985)           (4,248,072)
Stockholders' Equity                             855,133             2,775,328

                                       5
<PAGE>
FISCAL YEAR ENDED JUNE 30, 2002 (AUDITED) COMPARED TO FISCAL YEAR ENDED
JUNE 30, 2001 (AUDITED)

REVENUES

Revenues for the year ended June 30, 2002 were $203,450 compared to $80,432 for
the same period in 2001. Revenue from the Soil Wash division decreased from
$1,229,092 to $1,500 as a result of the cessation of operations of that division
due to the non-renewal of its lease. Accordingly, results of this operation have
been classified as discontinued, and prior periods have been restated, including
the allocation of overhead charges.

COST OF SALES

Cost of goods sold decreased from $276,297 for the fiscal year ended June 30,
2001 to $191,013 for the fiscal year ended June 30, 2002.

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
as necessary to accommodate increases in sales, provide for timely delivery and
maintain an efficient supply process.

OPERATING EXPENSES

Operating expenses increased less than 1% over the same period in 2001. These
increases are due to interest charges and more research and development
expenses. On an annual basis, the Company expects that costs will increase based
on three quarters of operating under our new distribution agreements but these
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 in that
the Company has more products and two distinct markets to administer,
agriculture and turf. It is also anticipated that costs associated with public
companies will increase. 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 carry forward and therefore reduced cash outlay for
taxes in future periods. For the current year the company recorded a valuation
reserve of $779,000 to fully reduce the tax benefit for this year. With the
disposition of a major segment of the business, the Company believes that
deferral of the recognition of any additional benefit of the net operating loss
carryforward until its remaining revenue sources are determined to be sufficient
to generate income to offset the already recorded benefit.

NET LOSS

For the reasons detailed above, the Company experienced losses in its last two
fiscal years. The Company expects that as a result of its efforts during the
last half of fiscal year 2002 and the first half of fiscal 2003 to develop
strategic alliances, marketing agreements, and distribution networks, sales
volume in subsequent periods should increase. Revenue from the sale of
agricultural products increased from $80,432 during the Company's prior fiscal
year to $201,950 in its current fiscal year. 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 20031. However, given the gross
margins on the Company products, future operating results should be improved.

                                       6
<PAGE>
SEASONALITY

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

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents totaled $43,155 and $36,412 at June 30, 2002 and 2001,
respectively. Net cash used by operations was $679,699 for the year ended June
30, 2002 compared to net cash used by operations of $985,009 for the comparable
year ended June 30, 2001.

In March 2000, the Company authorized the issuance of an aggregate of $1,325,000
of convertible debentures with interest payable quarterly at 10% per annum. The
convertible debentures are convertible to common stock of the Company at a rate
of one share for each three dollars converted. The debentures mature in the
first calendar quarter of 2002. All of the debentures were subscribed and at
June 30, 2002 and 2001 the outstanding balances of the debt was $825,000 and
$1,075,000, respectively. During 2001, $250,000 of debentures were converted
into 83,334 shares of stock and during 2002 the Company redeemed $500,000 of
debentures and issued $250,000 of debentures. At June 30, 2002 debentures
consisted of $575,000 of 8% per annum convertible debentures at a rate of $0.50
per share and $250,000 of 10% per annum convertible at a rate of $3.00 per
share. If the remaining debt is converted, the Company would issue an additional
1,233,333 shares. Interest expense for the year ended June 30, 2002 and 2001 was
$112,705 and $118,572, respectively.

The Company has a deficit in working capital (current assets less current
liabilities) of $(582,530) as of June 30, 2002 compared to working capital of
$896,870 as of June 30, 2001. This deficit is due primarily to the current
payable status of the debentures which is $825,000.

As shown in the accompanying financial statements, the Company has incurred an
accumulated deficit of $6,279,985 and has a deficit in working capital as of
June 30, 2002. The ability of the Company to continue as a going concern is
dependent on obtaining additional capital and financing and operating at a
profitable level. The Company intends to seek additional capital either through
debt or equity offerings and to increase sales volume and operating margins to
achieve profitability. 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's working capital and other
capital requirements during the next fiscal year and thereafter will vary based
on the sales revenue generated by the recent accumulation of additional products
and the distribution and sales network the Company has created and will continue
to grow.

                                       7
<PAGE>
The Company will consider both the public and private sale of securities and or
debt instruments for expansion of its operations if such expansion would benefit
the overall growth and income objectives of the Company. Should sales growth not
materialize, the Company may look to these public and private sources of
financing. There can be no assurance, however, that the Company can obtain
sufficient capital on acceptable terms, if at all. Under such conditions,
failure to obtain such capital likely would at a minimum negatively impact the
Company's ability to timely meet its business objectives.

ITEM 7. FINANCIAL STATEMENTS.

The financial statements required to be filed pursuant to this Item 7 begin on
page F-1 of this report.

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

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).

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

                                       8
<PAGE>
                                    PART III

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

The directors and executive officers of the Company are as follows:

       Name             Age                       Position
       ----             ---                       --------
   Carl P. Ranno        63      Director, Chief Executive Officer, President
   Ken Lew              45      Director, Chief Financial Officer
   Neil C. Kitchen      56      Director, Vice President
   Diana Visco          44      Secretary
   Louie Visco          86      Chairman of the Board of Directors
   Scott Baker          46      Director

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

MR. KEN LEW, DIRECTOR, CHIEF FINANCIAL OFFICER, 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. Lew has been a business consultant since 1997.

MR. NEIL C. KITCHEN, DIRECTOR, VICE PRESIDENT, has over 20 years experience in
business management in the environmental sector including management of
companies involved in general engineering, toxicology, and environmental
cleanup. Prior to joining 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.

MS. DIANA VISCO, SECRETARY, Diana Visco, Secretary, has worked with Soil Wash
Technologies, Inc. since January 1999. Prior to that she worked for 21 years
with the Americana Leadership College, Inc. traveling to all of its offices and
conferences across the USA/Caribbean in addition to Australia, New Zealand,
Canada and Europe. Ms Visco spent several years as a traveling administrator and
spent her final years as International Administrator handling all aspects of
finance, administration as well as marketing and promotion in addition to being
assistant to the President of the company. She is the daughter of Mr. Louie
Visco.

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.

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

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

                                       9
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
directors and certain officers of the Company, as well as persons who own more
than 10% of a registered class of the Company's equity securities, ("Reporting
Persons") to file reports of ownership and changes in ownership on Forms 3, 4
and 5 with the Securities and Exchange Commission. The Company believes that all
Reporting Persons have complied on a timely basis with all filing requirements
applicable to them.

ITEM 10. EXECUTIVE COMPENSATION.

SUMMARY COMPENSATION TABLE

Set forth below is a summary of compensation for the Company's officers for
fiscal years 2002, 2001 and 2000. 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.

<TABLE>
<CAPTION>
                                     ANNUAL COMPENSATION                    LONG TERM COMPENSATION
                             -----------------------------------  --------------------------------------
                                                                            Awards             Payouts
                                                                  --------------------------- ---------
                                                                  Restricted   Securities
                                                   Other Annual     Stock($)   Underlying        LTIP        All Other
                     Year    Salary($)  Bonus($)  Compensation($)   Awards    Options/SARs(#)  Payouts($)  Compensation($)
                     ----    ---------  --------  ---------------   ------    ---------------  ----------  ---------------
<S>                 <C>      <C>        <C>        <C>              <C>       <C>              <C>           <C>
Carl P. Ranno, CEO, 2002(1)  $58,200      $0            $0          $ 2,050        --             $0            $0
President

Ken Lew, CFO        2002(2)  $     0      $0            $0          $11,400                       $0            $0
                    2001     $     0      $0            $0          $     0                       $0            $0
                    2000     $     0      $0            $0          $     0                       $0            $0

Neil C. Kitchen,    2002(3)  $79,484      $0            $0          $     0                       $0            $0
Vice President      2001     $79,484      $0            $0          $     0                       $0            $0
                    2000     $39,742      $0            $0          $     0                       $0            $0

Diana Visco,        2002(4)  $39,264      $0            $0          $     0                       $0            $0
Secretary
</TABLE>

----------
1.   Appointed Chief Executive Officer and President on May 2, 2002.
2.   Secretary from 2000 through May 1, 2002 and appointed Chief Financial
     Officer on May 2, 2002.
3.   President from July 2000 through May 1, 2002 and appointed Vice President
     on May 2, 2002.
4.   Appointed Secretary on May 2, 2002.

EMPLOYMENT AND RELATED 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 4, 2001 through January 3, 2003 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."

                                       10
<PAGE>
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.

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 were authorized for issuance
pursuant to stock options granted under the Plan and 445,000 stock options were
issued under the Plan. However, the Plan was not presented to the Shareholders
for approval within twelve months from the date of its approval by the Directors
in accordance with the Internal Revenue Code. Therefore, the Company cancelled
the Plan and the options issued were voluntarily waived by the optionees after
June 30, 2002. A new Stock Option Plan has been approved by the Board of
Directors and will be submitted to the shareholders for approval.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth certain information regarding the shares of the
Company's outstanding Common Stock beneficially owned as of the date hereof by
(i) each of the Company's directors and executive officers, (ii) all directors
and executive officers as a group, and (iii) each other person who is known by
the Company to own beneficially more than 5% of the Company's Common Stock based
upon 9,258,782 issued common shares.

                                            Amount and Nature of        Percent
Name and Address of Beneficial Owners(1)   Beneficial Ownership(2)     Ownership
----------------------------------------   -----------------------     ---------
Carl P. Ranno, Director, CEO, President             12,500                  *
Ken Lew, Director, CFO                              24,700                  *
Neil C. Kitchen, Director, Vice President        1,376,855               14.8
Diana Visco, Secretary                                   0                  0
Louie Visco, Chairman(3)                         4,130,565               44.6
Scott Baker, Director                              129,818                  *
All executive officers and directors
 as a group (6 persons)                          5,674,438               61.3
The Benz Group                                   4,130,565
Ron and Kathy Salestrom                            876,272                9.4

----------
* Less than 1%.
1.   c/o the Company's address unless otherwise noted.
2.   Except as otherwise indicated, we believe that the beneficial owners of
     Common Stock listed above, based on information furnished by such owners,
     have sole investment and voting power with respect to such shares, subject
     to community property laws where applicable. Beneficial ownership is
     determined in accordance with the rules of the SEC and generally includes
     voting or investment power with respect to securities. Shares of Common
     Stock subject to options or warrants currently exercisable, or exercisable
     within 60 days, are deemed outstanding for purposes of computing the
     percentage of the person holding such options or warrants, but are not
     deemed outstanding for purposes of computing the percentage of any other
     person.
3.   Includes 4,130,565 shares held in the name of The Benz Group, a company in
     which Mr. Visco owns a majority interest.

                                       11
<PAGE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Neil C. Kitchen, a Director and Vice President, 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.

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(a)
     3.2    Amendment to Articles of Incorporation of New Directions
            Manufacturing, Inc., a Nevada corporation, dated May 29, 1997(a)
     3.3    Amendment to Articles of Incorporation of New Directions
            Manufacturing, Inc., dated January 4, 2001(b)
     3.4    Bylaws of New Directions Manufacturing, Inc., dated May 29, 1997(a)
     3.5    Amended and Restated Bylaws of New Directions Manufacturing, Inc.,
            dated July 20, 1998(a)
     4.1    Convertible Debenture - Lump Sum Contribution (Form) (a)
     4.2    Convertible Debenture - Incremental (Form) (b)
     10.1   License Agreement between Ron Salestrom, American Soils
            Technologies, Inc., and Polymers Plus, L.L.C. Dated January 4,
            2001(a)
     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(b)
     10.3   Distributorship Agreement between American Soil Technologies, Inc.
            and Sunpride, Inc. dated May 10, 2001(b)
     10.4   Distribution Agreement between UAP Southwest and with Agriblend(R),
            a division of American Soil Technologies Inc., dated August 16,
            2001(b)
     10.5   Employment Agreement with Ronald Salestrom, dated January 4, 2001(b)
     10.6   Licensing Agreement between Soil Wash Technologies, Inc. and Site
            Remediation Services Limited, dated June 24, 2000(b)
     10.7   Distributorship Agreement with BioPlusNutrients, L.L.C., dated July
            19, 2001(c)
     10.8   Non-Disclosure and Non-Circumvent Agreement with BioPlusNutrients,
            L.L.C, dated July 25, 2001(c)
     10.9   Distributorship Agreement with Agriblend(R) Australia P.T.Y., Ltd.,
            dated September 1, 2000(c)
     10.10  Distributorship Agreement with Ag Specialties, LLC, dated June 27,
            2002**
     10.11  Distributorship Agreement with Stockhausen, Inc. dated August 20,
            2002**
     10.12  Distributorship Agreement with Bentonite Performance Minerals, dated
            August 26, 2002**
     10.13  Distributorship Agreement with J T Water Management, dated September
            20, 2002**
     99.1   Certification of Chief Executive Officer Pursuant to the Securities
            Exchange Act of 1934, Rules 13a-14 and 15d-14, as adopted pursuant
            to Section 302 of the Sarbanes-Oxley Act of 2002
     99.2   Certification of Chief Financial Officer Pursuant to the Securities
            Exchange Act of 1934, Rules 13a-14 and 15d-14, as adopted pursuant
            to Section 302 of the Sarbanes-Oxley Act of 2002

----------
**   Filed herewith.
(a)  Incorporated by reference from the Company's Registration Statement on Form
     SB-2, filed on July 2, 1997, as amended (Registration No. 333-30583).
(b)  Incorporated by reference from the Company's Form 10-KSB for the fiscal
     year ended June 30, 2000, filed on September 27, 2000 (File No. 000-22855).
(c)  Incorporated by reference from the Company's Form 10-KSB for the fiscal
     year ended June 30, 2001, filed on October 11, 2001 (File No. 000-22855).

                                       12
<PAGE>
(b) REPORTS ON FORM 8-K

During the quarterly period ended June 30, 2002, we filed the following Current
Reports on Form 8-K with the SEC:

            Date of Filing              Description
            --------------              -----------
            May 6, 2002       Resignations of certain officers

ITEM 14  CONTROLS AND PROCEDURES

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

                                       13
<PAGE>
                                   SIGNATURES

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

                                  AMERICAN SOIL TECHNOLOGIES, INC.


DATED: September 27, 2002         By: /s/ Carl P. Ranno
      -------------------            -------------------------------------------
                                      Carl P. Ranno
                                      Director, Chief Executive Officer, and
                                      President (Principal Executive Officer)


DATED: September 27, 2002         By: /s/ Ken Lew
      -------------------            -------------------------------------------
                                      Ken Lew
                                      Director, Chief Financial Officer
                                      (Principal Financial Officer and Principal
                                      Accounting Officer)


DATED: September 27, 2002         By: /s/ Neil C. Kitchen
      -------------------            -------------------------------------------
                                      Neil C. Kitchen
                                      Director, Vice President

                                       14
<PAGE>
                        AMERICAN SOIL TECHNOLOGIES, INC.
                             JUNE 30, 2002 and 2001
                          INDEX TO FINANCIAL STATEMENTS

                                                                      PAGE
                                                                      ----

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

BALANCE SHEET AS OF JUNE 30, 2002 ..................................  F-3

STATEMENTS OF OPERATIONS FOR THE YEARS ENDED
JUNE 30, 2002 and 2001 .............................................  F-4

STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE
YEARS ENDED JUNE 30, 2002 and 2001 .................................  F-5

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED
JUNE 30, 2002 and 2001 .............................................  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,  2002,  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.

     The accompanying  financial statements have been prepared assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 1 to the
financial statements,  the Company has suffered recurring losses from operations
and has a deficit working capital that raise substantial doubt about its ability
to continue as a going  concern.  Management's  plans in regard to these matters
are also  described  in Note 1. The  financial  statements  do not  include  any
adjustments that might result from the outcome of this uncertainty.


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

Scottsdale, Arizona
September 27, 2002

                                      F-2
<PAGE>
                        American Soil Technologies, Inc.
                                 Balance Sheets
                                  June 30, 2002

ASSETS

CURRENT  ASSETS
  Cash and cash equivalents                                         $    43,155
  Accounts and notes receivable                                         105,592
  Deposits and prepaid expenses                                          25,000
  Inventory                                                              85,513
  Assets held for sale                                                   28,660
                                                                    -----------
      TOTAL CURRENT ASSETS                                              287,919
                                                                    -----------
Property, plant and equipment, net of
 accumulated depreciation                                                27,583
Patents, net of amortization                                            579,332
Deferred income tax asset                                             2,306,000
Other assets                                                             13,748
                                                                    -----------
      TOTAL ASSETS                                                  $ 3,214,582
                                                                    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT  LIABILITIES
  Accounts  payable                                                 $    38,087
  Accrued expenses                                                        7,362
  Debentures payable                                                    825,000
                                                                    -----------
      TOTAL CURRENT LIABILITIES                                         870,449
                                                                    -----------

  Notes payable affiliate                                             1,489,000
                                                                    -----------
      TOTAL LIABILITIES                                               2,359,449
                                                                    -----------
STOCKHOLDERS' EQUITY
  Common Stock                                                            9,259
  Additional paid-In capital                                          7,125,859
  Accumulated deficit                                                (6,279,985)
                                                                    -----------
      TOTAL  STOCKHOLDERS' EQUITY                                       855,133
                                                                    -----------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                    $ 3,214,582
                                                                    ===========

See accompanying notes to these financial statements.

                                      F-3
<PAGE>
                        American Soil Technologies, Inc.
                            Statements of Operations

                                                   For the years ended June 30,
                                                  -----------------------------
                                                     2002              2001
                                                  -----------       -----------

Revenue                                           $   203,450       $    80,432

Cost of sales                                         191,013           276,297
                                                  -----------       -----------

GROSS PROFIT (LOSS)                                    12,437          (195,865)

Sales & marketing costs                                24,203            66,383
Depreciation and amortization                          57,077           151,514
General & administrative costs                        852,173           843,218
Interest expense                                      164,175           122,433
Research and development                               29,076            14,894
                                                  -----------       -----------
      SALES AND ADMINISTRATIVE COSTS                1,126,704         1,086,882

Operating loss                                     (1,114,267)       (1,282,747)

Interest income                                            --             1,214
                                                  -----------       -----------

Loss before income tax provision                   (1,114,267)       (1,281,533)

Income tax credit (provision)                         (40,000)          431,986
                                                  -----------       -----------

Loss from continuing operations                    (1,154,267)         (849,548)

Discontinued operations:
  Loss from discontinued operations, net             (535,935)         (430,662)
  Gain (loss) on disposal of assets, net             (341,711)          643,028
                                                  -----------       -----------

NET (LOSS)                                        $(2,031,913)      $  (637,182)
                                                  ===========       ===========
Basic loss per share:
  Loss from continuing operations                 $     (0.12)      $     (0.10)
  Income (loss) from discontinued operations            (0.10)             0.03
                                                  -----------       -----------
  Net loss                                        $     (0.22)      $     (0.07)
                                                  ===========       ===========

Weighted average shares outstanding                 9,149,154         8,889,307
                                                  ===========       ===========

See accompanying notes to these financial statements.

                                      F-4
<PAGE>
                        American Soil Technologies, Inc.
                        Statement of Stockholders' Equity
                      For the two years ended June 30, 2002

<TABLE>
<CAPTION>
                                         Common Stock          Additional
                                     -------------------        Paid-In      Accumulated
                                     Shares       Amount        Capital        Deficit          Total
                                     ------       ------        -------        -------          -----
<S>                                <C>          <C>          <C>            <C>            <C>
Balance at July 31, 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

Issuance of stock for services        237,197          237       111,481                        111,718

Net loss                                                                     $(2,031,913)   $(2,031,913)
                                   ----------    ---------    ----------     -----------    -----------

Balance ay June 30, 2002            9,258,782    $   9,259    $7,125,859     $(6,279,985)   $   855,133
                                   ==========    =========    ==========     ===========    ===========
</TABLE>

See accompanying notes to these financial statements.

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

                                                  For the years ended June 30,
                                                  ----------------------------
                                                     2002            2001
                                                  -----------      -----------
CASH FLOW FROM OPERATING ACTIVITIES:

NET LOSS                                          $(2,031,913)     $  (637,182)
Adjustments to reconcile net loss to net cash
 used by operating activities:
  Stock compensation                                  111,719          140,052
  Amortization and depreciation                        84,967          151,514
  Benefit on income tax credit                         40,000         (324,000)
  Valuation of assets held for disposition            436,462               --
Change in assets and liabilities:
  Accounts receivable                                 543,490         (128,002)
  Deposits and prepaid expenses                        61,930           97,760
  Inventory                                           134,824           81,975
  Other assets                                        (10,735)          28,990
  Accounts payable                                    (44,151)        (283,074)
  Accrued expenses                                     (6,292)           3,815
  Deferred compensation                                    --          (29,577)
  Reserve for remediation                                  --          (50,000)
  Deferred income                                          --          (37,280)
                                                  -----------      -----------
Net Cash Flow Used by Operating Activities           (679,699)        (985,009)

CASH FLOW USED BY INVESTING ACTIVITIES:
  Addition of property, plant & equipment              (1,887)              --
  Disposition of property, plant & equipment               --           12,313
                                                  -----------      -----------
Total Cash Flow Used by investing activities           (1,887)          12,313

CASH FLOW FROM FINANCING ACTIVITIES:
  Loan repayments                                     (25,671)
  Proceeds from notes payable                          75,303
  Issuance of debentures                              250,000          325,000
  Redemption of debentures                           (500,000)
  Net borrowings on notes payable affiliates          964,000          484,453
                                                  -----------      -----------
Total Cash Flow from Financing Activities             688,329          884,756

                                                        6,743          (87,940)
Cash at Beginning of Period                            36,412          124,352
                                                  -----------      -----------
Cash at End of Period                             $    43,155      $    36,412
                                                  ===========      ===========

Supplemental disclosure of cash flow information:
Cash payments during the period for:
  Interest                                        $164,175         $122,433
Supplemental schedule of non-cash activities:
  Stock issued for services                       $111,719         $196,100
  Conversion of debentures                        $     --         $250,000

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.

GOING-CONCERN CONSIDERATIONS

As shown in the accompanying  financial statements,  the Company has incurred an
accumulated  deficit  of  $6,279,985  and has a deficit  in  working  capital of
approximately  $582,530  as of June 30,  2002.  The  ability  of the  Company to
continue as a going  concern is dependent on  obtaining  additional  capital and
financing  and  operating at a  profitable  level.  The Company  intends to seek
additional capital either through debt or equity offerings and to increase sales
volume and operating margins to achieve profitability.  The financial statements
do not include any adjustments  that might be necessary if the Company is unable
to continue as a going concern.

NOTE 2 - DISCONTINUED OPERATIONS

In June, 2001, the Company sold its book of business for soil remediation in San
Diego,  California.  In May, 2002, the Company decided to not pursue  relocation
and startup of a new location.  In connection  with the  discontinuance  of this
segment of the  business in the year ended June 30, 2002 the Company  incurred a
charge of $369,601  related to the  write-down  to estimated net market value of
the idol  plant  assets.  The  disposition  of the soil  remediation  operations
represents  the disposal of a business  segment  under SFAS 144  Accounting  for
Impairment  or  Disposal  of  Long-lived  Assets.  Accordingly,  results of this
operation  have been  classified  as  discontinued,  and prior periods have been
restated, including the allocation of overhead charges.

Net sales and losses from discontinued operations are as follows:

                                                               June 30,
                                                      -------------------------
                                                         2002            2001
                                                      ---------      ----------
Net sales                                             $   1,500      $1,228,387
Pretax loss from discontinued operations               (535,935)       (649,648)
Pretax gain (loss) on disposal of business segment     (341,711)        643,028
Income tax benefit                                           --         107,986
                                                      ---------      ----------

Net income (loss) from discontinued operations        $(877,646)     $  212,366
                                                      =========      ==========

NOTE 3 - 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.

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


NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

LINE OF BUSINESS

The Company is primarily  engaged in 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

Revenue is recognized from the soil enhancement products upon sale and shipment,
or if the  sale  includes  installation,  upon  completion  of the  installation
process. During the year ended June 30, 2001, for the discontinued operations of
the soil  remediation  segment 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.


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 sold as finished
products and raw materials blended for sale by the agricultural division.

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

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.

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


NOTE 3- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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

During the year ended June 30,  2002,  the Company  accounts for  impairment  of
long-lived assets in accordance with Statement of Financial Accounting Standards
No. 144,  "Accounting  for the  Impairment  or Disposal of  Long-Lived  Assets,"
("SFAS 144") issued in October,  2001.  SFAS 144 requires that  entities  report
discontinued   operations   separately  from  continuing   operations  and  that
long-lived  assets to be  disposed of be valued at their fair value which is net
of cost of disposal.

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, 2002 the
Company only 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.

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


NOTE 4 - PROPERTY, PLANT AND EQUIPMENT AND PATENTS

Depreciation  and  amortization  of property,  plant and equipment for the years
ended June 30, 2002 and 2001 is $45,013 and $111,560 respectively.

Property plant and equipment consist of the following:

                                                      June 30,        June 30,
                                                        2001            2001
                                                      --------        --------

Production equipment                                  $  3,221      $   902,744
Office equipment, furniture and fixtures                29,100           70,474
Vehicles                                                    --           95,873
Leasehold improvements                                      --          528,793
                                                      --------      -----------
                                                        32,321        1,597,884
   Less accumulated depreciation and amortization       (4,738)      (1,023,978)
                                                      --------      -----------

                                                      $ 27,583      $   576,906
                                                      ========      ===========

Amortization  of capitalized  patent costs were $39,954 and $39,954 for June 30,
2002 and 2001, respectively.

 NOTE 5 - 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 and fourth calendar  quarters of 2002. All of the debentures
were  subscribed and at June 30, 2002 and 2001 the  outstanding  balances of the
debt was  $825,000  and  $1,075,000,  respectively.  During  2001,  $250,000  of
debentures  were  converted  into  83,334  shares of stock and  during  2002 the
Company  redeemed  $500,000 of debentures and issued $250,000 of debentures.  At
June 30, 2002  debentures  consisted  of  $575,000  of 8% per annum  convertible
debentures  at a  rate  of  $0.50  per  share  and  $250,000  of 10%  per  annum
convertible  at a rate of $3.00 per share.  If the remaining  debt is converted,
the Company would issue an additional 1,233,333 shares. Interest expense for the
year ended June 30, 2002 and 2001 was $112,705 and $118,572, respectively.

NOTE 6 - COMMITMENT AND CONTINGENCIES

The  Company has various  operating  lease  obligations  which  require  monthly
payments.  During the years  ended June 30,  2002 and 2001 the  aggregate  lease
payments were $71,719 and $325,474, respectively.

During the year ended June 30, 2001, the Company has terminated the lease on its
soil  remediation  plant site,  sold it book of business in the area and removed
the equipment to a storage  facility  pending its decision on  disposition.  The
Company,  subsequent to June 30, 2001, decided to dispose of this segment of its
business as discussed in Note 2.

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
received a final release on the property in October 2001.

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


NOTE 7 - INCOME TAXES

At June 30,  2002  and  2001,  the  Company  has  approximately  $8,410,000  and
$6,378,000 of net operating losses available to offset future federal income tax
liability and  $2,109,000  and 1,551,000 of net  operating  losses  available to
offset future state income tax liability. There is no certainty as to the timing
of such  recognition  nor that the Company will be able to fully  utilize  these
differences.  For financial purposes, a valuation allowance of $779,000 has been
recognized  to offset the deferred  tax assets  related to the federal and state
losses recorded for the year ended June 30, 2002.

Management of the Company reviewed recent operating results and projected future
operating  results.  At  the  end  of  each  year,  management  determined  that
substantially  all of the net  deferred  income  tax assets  would be  realized.
During  the year  ended June 30,  2002,  the  Company  increased  its  valuation
allowance  due to  disposition  of a  significant  segment of its  business  and
historical  operating losses. The amounts of net deferred income tax assets were
not  adjusted  for 2001.  The amount of the net  deferred  tax asset  considered
realizable  could be  further  reduced in the near term if  estimates  of future
taxable income during the carryforward period are reduced.

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

                                                   June 30,           June 30,
                                                     2002               2001
                                                  -----------        -----------
Tax effects of carryforward benefits:
  Net operating loss carryforwards                $ 3,085,000        $ 2,346,000
                                                  -----------        -----------
Net deferred income tax assets before:
  valuation allowance                               3,085,000          2,346,000
Less valuation allowance                             (779,000)         2,346,000
                                                  -----------        -----------
Net deferred tax asset                            $ 2,306,000        $ 2,346,000
                                                  ===========        ===========

Income tax  benefits  for the years  ended June 30,  2002 and 2001  include  the
following components:

                                                     June 30,          June 30,
                                                      2002              2001
                                                    ---------         ---------
Income Taxes:
   Federal                                          $ 690,000         $ 327,000
   State, net                                          49,000            (3,000)
                                                    ---------         ---------
Total                                                 739,000           324,000
Valuation reserve                                    (779,000)               --
                                                    ---------         ---------
Total income tax benefit or (provision)             $ (40,000)        $ 324,000
                                                    =========         =========

The  reconciliation  of income tax  computed  at  statutory  rates of income tax
benefit (provision) is as follows:

                                                     June 30,          June 30,
                                                      2002              2001
                                                    ---------         ---------

Statutory rate                                         34.0%             34.0%
State income tax rate, net                              2.4              (0.3)
Valuation reserve                                     (38.4)               --
                                                      -----             -----
                                                       (2.0)%            33.7%
                                                      =====             =====

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


NOTE 7 - INCOME TAXES (continued)

Tax effects are based on a 34.0% federal income tax rate and an 8.84% on 50% of
the net operating loss recognized for state income tax purposes. The provisions
for state income tax benefit have been reduced by the expiration of state tax
benefits of $40,000 and $45,000 for the years ended June 30, 2002 and 2001. 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
       ----------              ------                  ------
         2003                       --               $  255,000
         2004                       --                   78,000
         2005                       --                  279,000
         2006                       --                  481,000
         2007                       --                1,016,000
         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                       --
         2022                2,026,000                       --
                            ----------               ----------
         Total              $8,404,000               $2,109,000
                            ==========               ==========

NOTE 8 - COMMON STOCK

The Company has 25,000,000 shares authorized.  At June 30, 2002, the Company has
9,285,782 shares of $0.001 par value common stock  outstanding.  During the year
ended June 30,  2002,  the Company  issued  237,197  shares of common  stock for
services.

NOTE 9 - 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.  During the year ended June 2002 the  Company  issued an  additional
340,000  options to purchase  340,000  shares at a price of $0.50 per share.  No
options  have been  exercised.  Subsequent  to June 30,  2002,  all  outstanding
options have been surrendered by the holders and cancelled by the Company.

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


NOTE 10 - 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, 2002 and 2001, the weighted average
number of shares  outstanding  was 9,149,154 and  8,889,307,  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.

NOTE 11 - SELECTED QUARTERLY DATA (UNAUDITED)

<TABLE>
<CAPTION>
                                                 First        Second         Third        Fourth
                                                Quarter       Quarter       Quarter       Quarter        Total
                                                -------       -------       -------       -------        -----
<S>                                           <C>           <C>           <C>           <C>           <C>
YEAR ENDED JUNE 30, 2002
Revenues                                      $    2,995    $      266    $   17,797    $  181,323    $   203,450
Gross income (loss)                              (35,066)       16,121       (94,241)      125,623         12,437
Sales and administrative costs                   201,684       299,278       261,767       363,975      1,126,704
                                              ----------    ----------    ----------    ----------    -----------

Loss from continuing operations                 (236,750)     (283,157)     (356,008)     (278,352)    (1,154,267)
                                              ----------    ----------    ----------    ----------    -----------
Discontinued operations:
  Loss from operations                          (119,350)      (77,591)     (172,660)     (166,334)      (535,935)

  Gain (loss) on disposal of assets                   --            --      (420,875)       79,164       (341,711)
                                              ----------    ----------    ----------    ----------    -----------
Net Loss                                      $ (356,100)   $ (360,748)   $ (949,543)   $ (365,522)   $(2,031,913)
                                              ==========    ==========    ==========    ==========    ===========
Per Share:
  Loss from continuing operations             $    (0.03)   $    (0.03)   $    (0.04)   $    (0.03)
  Loss(income) from discontinued operations        (0.01)        (0.01)        (0.06)        (0.01)
                                              ----------    ----------    ----------    ----------
Net Loss                                      $    (0.04)   $    (0.04)   $    (0.10)   $    (0.04)
                                              ==========    ==========    ==========    ==========
Weighted average shares outstanding            9,071,585     9,083,585     9,184,892     9,258,782
                                              ==========    ==========    ==========    ==========

YEAR ENDED JUNE 30, 2001
Revenues                                      $   15,188    $    9,575    $  106,183    $  (50,514)   $   80,432
Gross income (loss)                              (15,765)        8,259        88,477      (276,836)     (195,865)
Sales and administrative costs                    70,640       437,996       172,168       406,078     1,086,882
                                              ----------    ----------    ----------    ----------    ----------

Income (loss) from continuing operations         (51,947)     (259,195)       29,735      (568,141)     (849,548)
                                              ----------    ----------    ----------    ----------    ----------
Discontinued operations
  Loss from operations                          (199,925)      (30,161)     (157,371)      (43,205)     (430,662)

  Gain (loss) on disposal of assets                   --            --            --       643,028       643,028
                                              ----------    ----------    ----------    ----------    ----------
Net Loss                                      $ (251,872)   $ (289,356)   $ (127,636)   $   31,682    $ (637,182)
                                              ==========    ==========    ==========    ==========    ==========
Per Share:
  Loss from continuing operations             $    (0.01)   $    (0.03)   $       --    $    (0.07)
  Loss(income) from discontinued operations        (0.02)           --         (0.01)         0.07
                                              ----------    ----------    ----------    ----------
Net Loss                                      $    (0.03)   $    (0.03)   $    (0.01)   $       --
                                              ==========    ==========    ==========    ==========
Weighted average shares outstanding            8,730,431     8,730,431     8,872,865     8,996,585
                                              ==========    ==========    ==========    ==========
</TABLE>

                                      F-13