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EX-32 - CEO & CFO SECTION 906 CERTIFICATION - AMERICAN SOIL TECHNOLOGIES INCex32.txt
EX-31.1 - CEO SECTION 302 CERTIFICATION - AMERICAN SOIL TECHNOLOGIES INCex31-1.txt
EX-31.2 - CFO SECTION 302 CERTIFICATION - AMERICAN SOIL TECHNOLOGIES INCex31-2.txt

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

                For the quarterly period ended December 31, 2010

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

                        Commission File Number: 000-22855


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

           Nevada                                                95-4780218
(State or other jurisdiction of                                (IRS Employer
 incorporation or organization)                              Identification No.)

                   7745 Alabama Ave #9 Canoga Park, CA 91304
                    (Address of principal executive offices)

                                 (818) 899-4686
                          (Issuer's telephone number)

                                       N/A
              (Former name, former address and former fiscal year,
                         if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [ ]

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

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]                        Accelerated filer [ ]

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

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

As of February 18, 2011, the number of shares of common stock issued and
outstanding was 68,090,590.

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

INDEX Page Number ------ PART I - FINANCIAL INFORMATION Item 1. Consolidated Financial Statements (Unaudited) 3 Consolidated Balance Sheets - December 31, 2010 and September 30, 2010 3 Consolidated Statements of Operations - For the three months ended December 31, 2010 and 2009 4 Consolidated Statements of Cash Flows - For the three months ended December 31, 2010 and 2009 5 Consolidated Notes to Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 Item 3. Qualitative and Quantitative Disclosures About Market Risk 13 Item 4. Controls and Procedures 13 Item 4T. Controls and Procedures 13 PART II - OTHER INFORMATION Item 1. Legal Proceedings 14 Item 1A. Risk Factors 14 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 14 Item 3. Defaults Upon Senior Securities 14 Item 4. Submission of Matters to a Vote of Security Holders 14 Item 5. Other Information 15 Item 6. Exhibits 15 SIGNATURES 16 2
PART I - FINANCIAL INFORMATION ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) AMERICAN SOIL TECHNOLOGIES, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED) December 31, September 30, 2010 2010 ------------ ------------ Assets: Current assets Cash and cash equivalents $ 1,142 $ 2,045 Accounts receivable, net of allowance of $38,538 and $38,538 at December 31,2010 and September 30, 2010, respectively 15,671 6,010 Inventories 12,311 13,622 Prepaid expenses and other current assets 2,520 14,541 ------------ ------------ Total current assets 31,644 36,218 Property and equipment, net 4,791 15,014 Intangible assets 149,674 162,147 ------------ ------------ Total assets $ 186,109 $ 213,379 ============ ============ Liabilities and Stockholders' Deficit: Current liabilities Accounts payable $ 1,663,896 $ 1,625,758 Accrued liabilities 1,753,579 1,626,652 Notes payable 1,919,585 1,919,585 Capital lease obligations -- 3,527 Notes payable to related parties 1,104,866 1,101,866 ------------ ------------ Total current liabilities 6,441,926 6,277,388 ------------ ------------ Stockholders' deficit: Series A preferred stock, $0.50 stated value, 25,000,000 shares authorized, 2,763,699 shares issued and outstanding at December 31,2010 and September 30, 2010, respectively 1,381,849 1,381,849 Common stock, $0.001 par value, 100,000,000 shares authorized, 68,090,590 shares issued and outstanding at December 31, 2010 and September 30, 2010, respectively 68,091 68,091 Additional paid-in capital 19,804,992 19,796,056 Accumulated deficit (27,510,749) (27,310,005) ------------ ------------ Total stockholders' deficit (6,255,817) (6,064,009) ------------ ------------ Total liabilities and stockholders' deficit $ 186,109 $ 213,379 ============ ============ See accompanying Notes to Consolidated Financial Statements. 3
AMERICAN SOIL TECHNOLOGIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Montbs Three Montbs Ended Ended December 31, December 31, 2010 2009 ------------ ------------ Revenue $ 21,014 $ 10,258 Cost of goods sold (excluding amortization of intangible assets) 13,644 6,831 ------------ ------------ Gross profit 7,370 3,427 ------------ ------------ Operating expenses: General and administrative 167,622 299,571 Sales and marketing 75 317 Amortization of intangible assets 12,473 12,473 ------------ ------------ Total operating expenses 180,170 312,361 ------------ ------------ Loss from operations (172,800) (308,934) Other (income) expense Interest expense 26,744 26,567 Loss on sale of property and equipment 1,200 -- ------------ ------------ Loss before income taxes (200,744) (335,501) Provision for income taxes -- -- ------------ ------------ Net loss $ (200,744) $ (335,501) ============ ============ Net loss per share basic and diluted $ (0.00) $ (0.00) ============ ============ Weighted average common shares outstanding used in per share calculations 68,090,590 67,427,547 ============ ============ See accompanying Notes to Consolidated Financial Statements. 4
AMERICAN SOIL TECHNOLOGIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Montbs Three Montbs Ended Ended December 31, December 31, 2010 2009 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (200,744) $ (335,501) Adjustments to reconcile net loss to net cash Loss on disposal of assets 1,200 -- Depreciation and amortization 18,496 20,125 Stock-based compensation 8,936 136,936 Changes in operating assets and liabilities: Accounts receivable (6,661) 9,633 Inventory 1,312 1,202 Prepaids and other current assets -- 762 Accounts payable 38,137 (32,149) Accrued expenses 138,948 145,416 ---------- ---------- Net cash used in operating activities (376) (53,576) ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from related party notes 3,000 48,500 Payments on capital lease obligations (3,527) (4,524) Repayments on notes payable -- (2,181) ---------- ---------- Net cash provided by (used in) financing activities (527) 41,795 ---------- ---------- Net decrease in cash and cash equivalents (903) (11,781) NONCASH INVESTING & FINANCING ACTIVITIES: Cash and cash equivalents at beginning of period 2,045 13,604 ---------- ---------- Cash and cash equivalents at end of period $ 1,142 $ 1,823 ========== ========== See accompanying Notes to Consolidated Financial Statements. 5
AMERICAN SOIL TECHNOLOGIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2010 (UNAUDITED) 1. BUSINESS The Company is primarily engaged in the marketing of polymer and other soil amendments to the agricultural turf and horticulture industries. The Company's products are used to decrease water usage, increase nutrient retention in soil, enhance seed germination and sprout emergence, clarify ponds and increase the effectiveness of chemical fertilizers and biological additives. In 2006, the Company acquired the patent to a slow release fertilizer. The Company also has exclusive license rights to the use of patented polymer application techniques, as well as numerous patents on a unique machine designed to inject polymer and other liquid products into existing turf and some crops. The Company also expanded to provide next-generation and sustainable fertilizers thru the acquisition of Smart World Organics, Inc. ("Smart World") on December 20, 2006. Simultaneously, the Company entered into an Intellectual Property Purchase Agreement with the founder of Smart World, Ray Nielsen ("Nielsen") that included certain formulas originally believed to be proprietary and intellectual properties used in the business of Smart World. The formulas acquired from Nielsen were deemed not to be proprietary and subsequently deemed to have little or no value. Smart World sells homogenized fertilizers, non-toxic insect controls, plant protectants, seed, and soil and silage inoculants. Smart World also provides advanced, custom-formulated products built to suit unusual growing conditions and environments. Due to losses incurred in 2008, management terminated Smart World employees and seeks to operate through commission-based sales representatives. Additionally, the Company has several debt obligations that are past the contractual maturity date or are due and payable due to non payment of interest. 2. GOING CONCERN AND MANAGEMENT'S PLAN The Company has sustained significant losses and has an accumulated deficit of $27,510,749 and negative working capital of $6,410,282 as of December 31, 2010. The ability of the Company to continue as a going concern is dependent upon obtaining additional capital and financing, and ultimately generating positive cash flows from operations. Management intends to seek additional capital either through debt or equity offerings. Due to the current economic environment and the Company's current financial condition, management cannot be assured there will be adequate capital available when needed and on acceptable terms. These factors raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern. 6
3. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The consolidated financial statements of the Company are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, pursuant to the rules and regulations of the Securities and Exchange Commission. Notes to the consolidated financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year 2010 as reported in the Company's Form 10-K have been omitted. The results of operations for the three month periods ended December 31, 2010 and 2009 are not necessarily indicative of the results to be expected for the full year. In the opinion of management, the consolidated financial statements include all adjustments, consisting of normal recurring accruals, necessary to present fairly the Company's financial position, results of operations and cash flows. These statements should be read in conjunction with the financial statements and related notes which are part of the Company's Annual Report on Form 10-K for the year ended September 30, 2010. CONCENTRATION OF CREDIT RISK Accounts receivable from individual customers representing 10% or more of the net accounts receivable balance consists of the following as of December 31: 2010 ---- Percent of accounts receivable 76% Number of customers 2 Sales from individual customers representing 10% or more of sales consist of the following customers for the three months ended December 31: 2010 2009 ---- ---- Percent of sales 95% 85% Number of customers 4 4 As a result of the Company's concentration of its customer base, the loss or cancellation of business from, or significant changes in scheduled deliveries of product sold to the above customers or a change in their financial position could materially and adversely affect the Company's consolidated financial position, results of operations and cash flows. NET LOSS PER SHARE Basic net loss per share is calculated by dividing net loss by the weighted average common shares outstanding during the period. Diluted net loss per share reflects the potential dilution to basic net loss per share that could occur 7
upon conversion or exercise of securities, options or other such items to common shares using the treasury stock method, based upon the weighted average fair value of our common shares during the period. For each period presented, basic and diluted net loss per share amounts are identical as the effect of potential common shares is antidilutive. The following is a summary of outstanding securities which have been excluded from the calculation of diluted net loss per share because the effect would have been antidilutive for the three months ended December 31: 2010 2009 ---------- ---------- Series A convertible preferred stock 2,763,699 2,763,699 ---------- ---------- 2,763,699 2,763,699 ========== ========== 4. INVENTORIES Inventories consist of the following at: December 31, September 30, 2010 2010 -------- -------- Unaudited Raw materials $ 7,767 $ 9,167 Finished goods 4,544 4,455 -------- -------- $ 12,311 $ 13,622 ======== ======== 5. ACCRUED EXPENSES Accrued expenses consist of the following at: December 31, September 30, 2010 2010 -------- -------- Unaudited Interest $ 336,876 $ 325,434 Interest to related parties 163,320 150,675 Compensation and related 1,253,383 1,150,543 ---------- ---------- $1,753,579 $1,626,652 ========== ========== 6. NOTES PAYABLES AND RELATED PARTY TRANSACTIONS RELATED PARTY TRANSACTIONS During the quarter ended December 31, 2010, The Louie Visco Estate loaned the Company an additional $3,000. This note was consolidated with a note issued in August 2000 for $85,000, and accordingly the previous note has been superceeded. The new note is for a total of $88,000. The principal is due on August 31, 2011. Interest is payable monthly based upon the prime rate. 8
7. STOCKHOLDERS' DEFICIT STOCK OPTIONS As of December 31, 2010, there were 1,976,000 stock options outstanding with a weighted average exercise price of $0.19 and a remaining contractual life of 1.75 years. Stock option expense for the quarters ending December 31, 2010 and 2009 was $8,936 and $8,936, respectively which is included in general and administrative expenses in the accompanying Statement of Operations. COMMON STOCK On October 8, 2009, the Company issued 3,125,000 shares of common stock for settlement of a note. On October 9, 2009, the Company issued 4,000,000 shares of common stock at $0.032 per share to officers and directors for services rendered. The shares were immediately vested and accordingly, the Company valued the shares based on the Company's stock price on the date of grant. 8. LITIGATION On or about September 21, 2007, Stockhausen, Inc. ("Stockhausen") filed a Complaint in the United States District Court, for the Middle District of North Carolina, against us seeking damages. The parties entered into a settlement agreement on June 2, 2010. Under the settlement agreement, we agreed to pay Stockhausen $250,000 on or before June 23, 2010 as a compromise to Stockhausen's claims that currently total $603,921. We further agreed that we would consent to the entry of a Judgment against us in favor of Stockhausen in the amount of $603,921 if we failed to make complete and timely payment as agreed. The Company was unable to make the agreed upon payment and on July 8, 2010 Stockhausen entered a judgment for the above stated amount against the Company. On or about October 4, 2007, Raymond J. Nielsen and Cheryl K. Nielsen (collectively, "Plaintiffs"), filed a Complaint in the Circuit Court in the Sixth Judicial District of Pasco County, Florida, against us and Smart World (collectively "Defendants") seeking damages, declaratory, and injunctive relief. Plaintiffs allege that Defendants failed to pay interest when due on the Convertible Debenture from Defendants to Plaintiffs and, thus, the entire amount of the Convertible Debenture is accelerated and Plaintiffs are seeking a judgment in the amount of $1,500,000 plus interest. On December 29, 2009, the matter was settled for $400,000 and the Company had 60 days in which to remit the amount or a judgment in the entire amount claimed will be entered against us. The Company was not able to meet the terms of the settlement and have been actively communicating with the Plaintiffs to extend the terms of the settlement. On January 21, 2011, we agreed to pay interest on the settlement amount at 4%, per annum. To the best knowledge of our management, there are no other legal proceedings pending against us. 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this Report. FORWARD-LOOKING STATEMENTS The following information contains certain forward-looking statements. Forward-looking statements are statements that estimate the happening of future events and are not based on historical fact. Forward-looking statements may be identified by the use of forward-looking terminology, such as "may," "could," "expect," "estimate," "anticipate," "plan," "predict," "probable," "possible," "should," "continue," or similar terms, variations of those terms or the negative of those terms. The forward-looking statements specified in the following information have been compiled by our management on the basis of assumptions made by management and considered by management to be reasonable. Our future operating results, however, are impossible to predict and no representation, guaranty, or warranty is to be inferred from those forward-looking statements. OVERVIEW We develop, manufacture and market cutting-edge technology that decreases the need for water and improves the soil in the "Green Industry" consisting of agriculture, turf and horticulture. RESULTS OF OPERATIONS The following table sets forth, for the periods indicated, our selected financial information: Three Months Ended Three Months Ended December 31, 2010 December 31, 2009 ----------------- ----------------- (Unaudited) (Unaudited) STATEMENT OF OPERATIONS DATA: Revenue $ 21,014 $ 10,258 Net Loss (200,744) (335,501) Net Loss per Share $ (0.00) $ (0.00) December 31, 2010 September 30, 2010 ----------------- ------------------ (Unaudited) BALANCE SHEET DATA: Current Assets $ 31,644 $ 36,218 Total Property & Equipment, Net 4,791 15,014 Intellectual Property, Net 149,674 162,147 Total Assets 186,109 213,379 Total Current Liabilities 6,441,926 6,277,388 Accumulated Deficit $(27,510,749) $(27,310,005) 10
THREE MONTHS ENDED DECEMBER 31, 2010 (UNAUDITED) COMPARED TO THREE MONTHS ENDED DECEMBER 31, 2009 (UNAUDITED) REVENUES Revenues for the three months ended December 31, 2010 were $21,014, compared to $10,258 for the three months ended December 31, 2009, an increase of 105%. This increase in revenue is a direct result of repeat customers that now have the ability to purchase more product because of the economic improvements in the industry. COST OF SALES Cost of goods sold increased to $13,644 for the three months ended December 31, 2010 from $6,831, for the three months ended December 31, 2009. The increase in the cost of sales is the result of the increased revenues during this period. Our gross margins were 35% and 33% for the three months ended December 31, 2010 and 2009, respectively. The increase in our gross margins was due to an increase in sales in relation to our costs of sale during three months ending December 31, 2010. OPERATING EXPENSES Operating expenses decreased 42% to $180,170 from $312,361 for the three month period ended December 31, 2010 and 2009, respectively. This decrease in operating expenses was a result in decreased operations. Our general and administrative expenses decreased to $167,622 for the three months ended December 31, 2010 from $299,571 for the three months ended December 31, 2009 due to the continued reduction in compensation and other administrative costs. NET LOSS We experienced a net loss from operations of $200,744 for the three months ended December 31, 2010 as compared to a net loss of $335,501 for the three months ended December 31, 2009. Our general and administrative expense decreased from $299,571 in the three months ended December 31, 2009 to $167,622 for the three months ended December 31, 2010. The decrease in the net loss is directly related to a reduction in certain staff, reduced operations, and an increase in revenue noted above. SEASONALITY Our efforts in the United States have focused on the southern states and therefore generally experience year round growing cycles, with the sale of the agricultural products preceding the growing cycle of various crops. International sales have not been sufficient enough or the geographic 11
distribution of sales concentrated enough to determine if a seasonal trend exists although the initial indication is that our markets will become diverse and therefore not indicate significant seasonal variations. As we expand into the residential and commercial segments nationally, we will experience some seasonal declines in sales during the fall and winter quarters in less temperate climates. As we expand into the hydroponics organic market, we should experience a significant lessening of seasonal variations. LIQUIDITY AND CAPITAL RESOURCES Cash and cash equivalents totaled $1,142 and $2,045 at December 31, 2010 and September 30, 2010, respectively. Net cash used in operations was $376, for the period ended December 31, 2010 compared to net cash used in operations of $53,576 for the comparable period ended December 31, 2009. We have historically relied upon one of our officers and significant shareholders to provide cash to meet short term operating cash requirements. At December 31, 2010, the outstanding balance of notes payable was $3,024,451. These debentures consisted of: a) $1,500,000, 8% per annum debenture at which is currently in default and in dispute; (b) various debentures totaling $419,585 with interest per annum from 8-10%; (c) a loan from an officer and shareholder for $789,842 bearing interest at prime; (d) various loans from related parties totaling $315,024 bearing interest from prime to 12%. Interest expense for the three months ended December 31, 2010 and 2009 was $26,744 and $26,567, respectively. We have a working capital deficit $6,410,282 as of December 31, 2010 compared to working capital deficit of $6,241,170 as of September 30, 2010. Our increase in current liabilities is directly related to an increase in our notes payable, accounts payable and accrued liabilities. As shown in the accompanying financial statements, we have incurred an accumulated deficit of $27,510,749 and a working capital deficit of approximately $6,410,282 as of December 31, 2010. Our ability to continue as a going concern is dependent on obtaining additional capital and financing and operating at a profitable level. We intend to seek additional capital either through debt or equity offerings and to increase sales volume and operating margins to achieve profitability. Our working capital and other capital requirements during the next fiscal year and thereafter will vary based on the sales revenue generated. We will consider both the public and private sale of securities and/or debt instruments for expansion of our operations if such expansion would benefit our overall growth and income objectives. Should sales growth not materialize, we may look to these public and private sources of financing. There can be no assurance, however, that we can obtain sufficient capital on acceptable terms, if at all. Under such conditions, failure to obtain such capital likely would at a minimum negatively impact our ability to timely meet our business objectives. 12
Our auditors issued an explanatory paragraph regarding substantial doubt about the Company's ability to continue as a going concern in our most recent 10-K for the year ended September 30, 2010. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable ITEM 4. CONTROLS AND PROCEDURES We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and in reaching a reasonable level of assurance management necessarily was required to apply its judgment in evaluating the cost benefit relationship of possible controls and procedures. As required by Rule 13a-15(b) of the Exchange Act, we carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. For the year ended September 30, 2010, the Chief Executive Officer had evaluated the effectiveness of our disclosure controls and procedures and had determined that asset recoverability analysis needs to be improved. In response to this deficiency, we hired a financial expert to assist us in improving our disclosure controls and procedures. We believe that the changes implemented enabled the Company to improve its timely reporting of the required assessment analysis and related disclosures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2010. There has been no other change in our internal controls over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting. ITEM 4T. CONTROLS AND PROCEDURES Not applicable 13
PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS On or about September 21, 2007, Stockhausen, Inc. ("Stockhausen") filed a Complaint in the United States District Court, for the Middle District of North Carolina, against us seeking damages. The parties entered into a settlement agreement on June 2, 2010. Under the settlement agreement, we agreed to pay Stockhausen $250,000 on or before June 23, 2010 as a compromise to Stockhausen's claims that currently total $603,921. We further agreed that we would consent to the entry of a Judgment against us in favor of Stockhausen in the amount of $603,921 if we failed to make complete and timely payment as agreed. The company was unable to make the agreed upon payment and on July 8, 2010 Stockhausen entered a judgment for the above stated amount against the company. On or about October 4, 2007, Raymond J. Nielsen and Cheryl K. Nielsen (collectively, "Plaintiffs"), filed a Complaint in the Circuit Court in the Sixth Judicial District of Pasco County, Florida, against us and Smart World (collectively "Defendants") seeking damages, declaratory, and injunctive relief. Plaintiffs allege that Defendants failed to pay interest when due on the Convertible Debenture from Defendants to Plaintiffs and, thus, the entire amount of the Convertible Debenture is accelerated and Plaintiffs are seeking a judgment in the amount of $1,500,000 plus interest. On December 29, 2009, the matter was settled for $400,000 and the Company had 60 days in which to remit the amount or a judgment in the entire amount claimed will be entered against us. The Company was not able to meet the terms of the settlement and have been actively communicating with the Plaintiffs to extend the terms of the settlement. To the best knowledge of our management, there are no other legal proceedings pending against us. ITEM 1A. RISK FACTORS Not applicable. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS None ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. 14
ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS The following Exhibits are filed herein: No. Title --- ----- 31.1 Certification of Chief Executive Officer Pursuant to the Securities Exchange Act of 1934, Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of Chief Financial Officer Pursuant to the Securities Exchange Act of 1934, Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 15
SIGNATURES In accordance with the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, duly authorized. DATED: February 22, 2011 AMERICAN SOIL TECHNOLOGIES, INC. By: /s/ Carl P. Ranno ------------------------------------------ Carl P. Ranno Its: President, Chief Executive Officer, Chief Financial Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) 1