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EX-31 - 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 March 31, 2013

[ ] 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 [X] 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 May 13, 2013, 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 - March 31, 2013 and September 30, 2012 3 Consolidated Statements of Operations - For the three and six months ended March 31, 2013 and 2012 4 Consolidated Statements of Cash Flows - For the six months ended March 31, 2013 and 2012 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 Item 3. Qualitative and Quantitative Disclosures About Market Risk 14 Item 4. Controls and Procedures 14 Item 4T. Controls and Procedures 14 PART II - OTHER INFORMATION Item 1. Legal Proceedings 15 Item 1A. Risk Factors 15 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 15 Item 3. Defaults Upon Senior Securities 15 Item 4. Mine Safety Disclosures 16 Item 5. Other Information 16 Item 6. Exhibits 16 SIGNATURES 17 2
PART I - FINANCIAL INFORMATION ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) AMERICAN SOIL TECHNOLOGIES, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED) March 31, 2013 September 30, 2012 -------------- ------------------ Assets: Current assets Cash and cash equivalents $ 1,273 $ 3,846 Accounts receivable, net of allowance of $38,088 at March 31, 2013 and September 30, 2012, respectively 6,357 387 Inventories 5,141 5,144 Prepaid expenses and other current assets 676 1,235 ------------ ------------ Total current assets 13,447 10,612 Property and equipment, net 147 219 Intangible assets 31,085 51,808 ------------ ------------ Total assets $ 44,679 $ 62,639 ============ ============ Liabilities and Stockholders' Deficit: Current liabilities Accounts payable $ 1,497,642 $ 1,678,065 Accrued liabilities 2,984,188 2,708,576 Notes payable 1,919,585 1,919,585 Notes payable to related parties 1,198,866 1,149,866 ------------ ------------ Total liabilities 7,600,281 7,456,092 ------------ ------------ Stockholders' deficit: Series A preferred stock, $0.50 stated value, 25,000,000 shares authorized, 2,763,699 shares issued and outstanding at March 31, 2013 and September 30, 2012, 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 March 31, 2013 and September 30, 2012, respectively 68,091 68,091 Additional paid-in capital 19,831,800 19,831,800 Accumulated deficit (28,837,342) (28,675,193) ------------ ------------ Total stockholders' deficit (7,555,602) (7,393,453) ------------ ------------ Total liabilities and stockholders' deficit $ 44,679 $ 62,639 ============ ============ See accompanying Notes to Consolidated Financial Statements. 3
AMERICAN SOIL TECHNOLOGIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Three Months Six Months Six Months Ended Ended Ended Ended March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012 -------------- -------------- -------------- -------------- Revenue $ 11,353 $ 31,949 $ 22,249 $ 41,103 Cost of goods sold (excluding amortization of intangible assets) 1,010 10,779 3,021 13,041 ------------ ------------ ------------ ------------ Gross profit 10,343 21,170 19,228 28,062 ------------ ------------ ------------ ------------ Operating expenses: General and administrative 121,688 128,689 250,481 272,969 Sales and marketing 75 25 150 232 Amortization of intangible assets 10,362 10,362 20,723 20,723 ------------ ------------ ------------ ------------ Total operating expenses 132,125 139,076 271,354 293,924 ------------ ------------ ------------ ------------ Loss from operations (121,782) (117,906) (252,126) (265,862) Other (income) expense Interest expense 25,747 25,531 52,083 51,796 Gain on extinguishment of liabilities -- -- (142,060) -- ------------ ------------ ------------ ------------ Loss before income taxes (147,529) (143,437) (162,149) (317,658) Provision for income taxes -- -- -- -- ------------ ------------ ------------ ------------ Net loss $ (147,529) $ (143,437) $ (162,149) $ (317,658) ============ ============ ============ ============ Net loss per share basic and diluted $ (0.00) $ (0.00) $ (0.00) $ (0.00) ============ ============ ============ ============ Weighted average common shares outstanding used in per share calculations 68,090,590 68,090,590 68,090,590 68,090,590 ============ ============ ============ ============ See accompanying Notes to Consolidated Financial Statements. 4
AMERICAN SOIL TECHNOLOGIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Six Months Ended Six Months Ended March 31, 2013 March 31, 2012 ---------- ---------- Cash flows from operating activities: Net loss $ (162,149) $ (317,658) Adjustments to reconcile net loss to net cash Gain on extinguishment of liabilities (142,060) -- Depreciation and amortization 20,795 20,994 Changes in operating assets and liabilities: Accounts receivable (5,970) 2,081 Inventory 3 3 Prepaid expenses and other assets 559 344 Accounts payable (38,363) 1,817 Accrued expenses 275,612 274,515 ---------- ---------- Net cash used in operating activities (51,573) (17,904) ---------- ---------- Cash flows from financing activities: Proceeds from related party notes 49,000 17,000 ---------- ---------- Net cash provided by financing activities 49,000 17,000 ---------- ---------- Net decrease in cash and cash equivalents (2,573) (904) Cash and cash equivalents at beginning of period 3,846 4,356 ---------- ---------- Cash and cash equivalents at end of period $ 1,273 $ 3,452 ========== ========== Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 3,000 $ 3,811 ========== ========== Cash paid during the period for income taxes $ -- $ -- ========== ========== See accompanying Notes to Consolidated Financial Statements. 5
AMERICAN SOIL TECHNOLOGIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2013 (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 has a wholly owned subsidiary, Smart World Organics, Inc. (Smart World) which has insignificant operations. 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 $28,837,342 and negative working capital of $7,586,834 as of March 31, 2013. 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 consolidated 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. 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 2012 as reported in the Company's Form 10-K have been omitted. The 6
results of operations for the three and six month periods ended March 31, 2013 and 2012 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, 2012. USE OF ESTIMATES The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The Company's significant estimates made in connection with the preparation of the accompanying financial statements include the carrying value of the intangible assets. CONCENTRATION OF CREDIT RISK Accounts receivable from individual customers representing 100% or more of the net accounts receivable balance consists of the following as of March 31: 2013 2012 ---- ---- Percent of accounts 100% 88% Number of customers 1 2 Sales from individual customers representing 10% or more of sales consist of the following customers for the three months ended March 31: 2013 2012 ---- ---- Percent of sales 100% 100% Number of customers 1 2 Sales from individual customers representing 10% or more of sales consist of the following customers for the six months ended March 31: 2013 2012 ---- ---- Percent of sales 100% 100% Number of customers 1 2 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 customer or a change in their financial position could materially and adversely affect the Company's consolidated financial position, results of operations and cash flows. 7
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 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 and six months ended March 31: 2013 2012 --------- --------- Series A convertible preferred stock 2,763,699 2,763,699 --------- --------- 2,763,699 2,763,699 ========= ========= In addition, the company excluded zero and 1,976,000 options from the computation as of March 31, 2013 and 2012, respectively, as the option exercise prices were in excess of the average market price of the Company's common stock during the respective periods. NEW ACCOUNTING PRONOUNCEMENTS The FASB issues ASUs to amend the authoritative literature in ASC. There have been a number of ASUs to date that amend the original text of ASC. The Company believes those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to the Company or (iv) are not expected to have a significant impact on the Company. 4. INVENTORIES Inventories consist of the following at: March 31, 2013 September 30, 2012 -------------- ------------------ Finished goods $ 5,141 $ 5,144 -------- -------- $ 5,141 $ 5,144 ======== ======== 5. DEBT MITIGATION PROGRAM The Company has significant liabilities that have been incurred due to continued operating losses and the acquisition of Smart World in 2006. In order to attract 8
potential capital, the Company has conducted analysis on past due obligations to creditors. We determined that the statute of limitations for certain of our creditors to enforce collection of any amounts they might be owed has now elapsed. Based on our determinations and findings, during the six months ended March 31, 2013, we have eliminated $142,060 in creditor liabilities which were all previously included in accounts payable in the accompanying balance sheet. The Company will continue to conduct analysis on creditor obligations to determine when and if they are no longer enforceable. 6. ACCRUED EXPENSES Accrued expenses consist of the following at: March 31, 2013 September 30, 2012 -------------- ------------------ Interest $ 438,499 $ 415,861 Interest to related parties 278,530 252,086 Compensation and related 2,267,159 2,040,629 ---------- ---------- $2,984,188 $2,708,576 ========== ========== 7. NOTES PAYABLES AND RELATED PARTY TRANSACTIONS RELATED PARTY TRANSACTIONS During the three months ended March 31, 2013, the Company's secretary, Ms. Visco loaned the Company an additional $11,000 for working capital. The previous note for $872,842 was amended to increase the principal due to $883,842. The principal is due in February 2014 and interest is payable monthly, at prime rate. The note is currently in default for non-payment of interest. 8. COMMON STOCK STOCK OPTIONS All stock options expired in September and November 2012. There were no issuances of common stock, options or warrants during the period presented in fiscal 2012. 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 9
$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 February 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 significant legal proceedings pending against us. 9. SUBSEQUENT EVENTS On May 8, 2013, Ms. Visco loaned the Company an additional $15,000. The new note for $898,842 is due on May 1, 2014, and carries the same terms as the loan outlined in Note 7. 10
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: Six Months Ended Six Months Ended March 31, 2013 March 31, 2012 -------------- -------------- (Unaudited) (Unaudited) STATEMENT OF OPERATIONS DATA: Revenue $ 22,249 $ 41,103 Net Loss (162,149) (317,658) Net Loss per Share $ (0.00) $ (0.00) March 31, 2013 September 30, 2012 -------------- ------------------ (Unaudited) BALANCE SHEET DATA: Current Assets $ 13,447 $ 10,612 Total Property & Equipment, Net 147 219 Intellectual Property, Net 31,085 51,808 Total Assets 44,679 62,639 Total Current Liabilities 7,600,281 7,456,092 Accumulated Deficit $(28,837,342) $(28,675,193) 11
SIX MONTHS ENDED MARCH 31, 2013 COMPARED TO SIX MONTHS ENDED MARCH 31, 2012 REVENUES Revenues for the six months ended March 31, 2013 were $22,249 compared to $41,103 for the six months ended March 31, 2012, a decrease of 46%. This decrease in revenue is a direct result of the temporary loss of sales of all but one of our proprietary products. Lack of funds reduces are efforts in sales and marketing. COST OF SALES Cost of goods sold decreased to $3,021 for the six months ended March 31, 2013 from $13,041, for the six months ended March 31, 2012. The decrease in the cost of sales is the result of a decrease in revenue during this period. Our gross margins were 86.4% and 68.3% for the six months ended March 31, 2013 and 2012, respectively. The increase in our gross margins was due to an increase in the proportion of revenues from royalties as opposed to sales of product in the current period. Revenues associated with royalties have relatively minor costs when compared to the costs of product sales. OPERATING EXPENSES Operating expenses decreased 7.7% to $271,354 from $293,924 for the six month period ended March 31, 2013 and 2012, respectively. This decrease in operating expenses was a result of decreased operations. Our general and administrative expenses decreased to $250,481 for the six months ended March 31, 2013 from $272,969 for the six months ended March 31, 2012 due to the continued reduction in rent and certain administrative costs. NET LOSS We experienced a net loss from operations of $162,149 for the six months ended March 31, 2013 as compared to a net loss of $317,658 for the six months ended March 31, 2012. The decrease in net loss was primarily a result of the gain realized in the amount of $142,060 for the extinguishment of liabilities. As part of our debt mitigation program, we reviewed our long outstanding liabilities for, among other things, the expiration of the Statute of Limitations for creditors to make claims on amounts owed. The analysis was based on on applicable law in the state where the liability originated. The Company will continue to analyze past due payables in future periods. LIQUIDITY AND CAPITAL RESOURCES Cash and cash equivalents totaled $1,273 and $3,846 at March 31, 2013 and September 30, 2012, respectively. Net cash used in operating activities was $51,573 for the period ended March 31, 2013 compared to $17,904 during the 12
period ended March 31, 2012. Net cash provided by financing activities was $49,000, for the period ended March 31, 2013 compared to$17,000 for the comparable period ended March 31, 2012. We have historically relied upon one of our officers and significant shareholders to provide cash to meet short term operating cash requirements. At March 31, 2013, the outstanding balance of notes payable was $3,118,451. These convertible debentures consisted of: a) $1,500,000, 8% per annum convertible debentures at the closing price on the day immediately preceding the day of conversion 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 $883,842 bearing interest at prime; (d) various loans from related parties totaling $315,024 bearing interest from prime to 12%. Interest expense for the six months ended March 31, 2013 and 2012 was $52,083 and $51,796, respectively. We have a working capital deficit $7,586,834 as of March 31, 2013 compared to working capital deficit of $7,445,480 as of September 30, 2012. Our increase in current liabilities is directly related to an increase in our notes payable and accrued liabilities. As shown in the accompanying financial statements, we have incurred an accumulated deficit of $28,837,342 and a working capital deficit of approximately $7,586,834 as of March 31, 2013. 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. 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, 2012. 13
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. Our President and Chief Financial Officer (the "Certifying Officers") Is responsible for establishing and maintaining our disclosure controls and procedures. The Certifying Officer has designed such disclosure controls and procedures to ensure that material information is made known to him particularly during the period in which this report was prepared. The Certifying Officer has evaluated the effectiveness of our disclosure controls and procedures and has determined that they are effective. 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 14
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. 15
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. 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 101 Interactive data files pursuant to Rule 405 of Regulation S-T 16
SIGNATURES In accordance with the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, duly authorized. DATED: May 13, 2013 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