AMANASU ENVIRONMENT CORP - Quarter Report: 2008 September (Form 10-Q)
UNITED STATES
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 September 30, 2008
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period from July 1, 2008 to September 30, 2008
Commission File Number: 001-31261
AMANASU ENVIRONMENT CORPRATION
(Exact name of registrant as specified in its charter)
| Nevada | 98-0351508 | |
| (State of other jurisdiction of incorporation or organization) | (I.R.S. Eployer Identification No.) |
115 East 57th Street, 11th Floor New York, NY 10022
(Address of principal executive offices)
646-274-1274
(Issuer's telephone number)
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (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 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 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 copany" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | Accelerated filer | |||
| Non-accelerated filer | (Do not check if a smaller reporting company) | Smaller reporting company | X |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
| Yes | No | X |
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all docments and reports required to be filed by sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
| Yes | No |
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practiable date: 44,000,816 as of November 18, 2008
Amanasu Environment Corporation
Quarterly Report on Form 10-Q
For The Three Months Ended September 30, 2008
TABLE OF CONTENTS
| 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 | 14 |
| Item 6 | Exhibits | 14 |
| Signatures | 15 |
Part I - Financial Information
Item 1. Financial Statements
General
The Company's unaudited financial statements for the nine and three months ended September 30, 2008 are included with this Form 10-Q. The unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the nine, and three months ended September 30, 2008 are not necessarily indicative of the results that can be expected for the fiscal year ending December 31, 2008.
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Amanasu Environment Corporation and SUBSIDIARIES
Balance Sheets
September 30, 2008 December 31, 2007
| ASSETS | September 30, 2008 (Unaudited) | December 31, 2007 (Audited) | ||
| Current Assets: | ||||
| Cash | $ | 423 | $ | 18,293 |
| Certificate Of Deposit | 721,000 | 771,000 | ||
| Accounts and Notes Receivables | 164,210 | 76,672 | ||
| Raw Materials | 599 | 566 | ||
| Advance to Vendor | 94,000 | 94,000 | ||
| Accrued Interest Receivables | 11,405 | 16,185 | ||
| Total Current Assets | 991,637 | 976,716 | ||
| Fixed Assets: | ||||
| Machinery and Equipment | 272,760 | 263,681 | ||
| Less, accumulated depreciation | (133,400) | 132,512 | ||
| Net Fixed Assets | 139,360 | 131,169 | ||
| Other Assets: | ||||
| Investments | 332,362 | 290,875 | ||
| Prepaid Expenses | 76,426 | 72,222 | ||
| Security Deposit | 21,835 | 21,835 | ||
| Miscellaneous Receivables | 187,236 | 175,501 | ||
| Employee Advances | - | 44,504 | ||
| Total Other Assets | 617,859 | 604,937 | ||
| Total Assets | 1,748,856 | 1,712,822 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
| Current Liabilities: | ||||
| Accounts Payable | $ | 38,212 | $ | 24,520 |
| Advances From Customers | 43,141 | - | ||
| Accrued Expenses | 204,593 | 91,685 | ||
| Payroll and Other Taxes Payable | 5,534 | 26,109 | ||
| Stockholders' Advances | 61,223 | 24,033 | ||
| Total Current Liabilities | 352,703 | 166,347 | ||
| Bank Loan Payable | 90,622 | 84,548 | ||
| Minority Interest | 384,822 | 387,414 | ||
| Stockholders' Equity | ||||
| Common stock: authorized 100,000,000 shares of $.001 par value; 44,000,816 issued and outstanding | 44,001 | 44,001 | ||
| Additional Paid-In-Capital | 4,257,039 | 4,257,039 | ||
| Retained Deficit | (3,441,391) | (3,279,954) | ||
| Accumulated Other Comprehensive Income | 61,060 | 53,427 | ||
| Total Stockholders' Equity | 920,709 | 1,074,513 | ||
| Total Liabilities and Stockholders' Equity | $ | 1,748,856 | $ | 1,712,822 |
| The accompanying notes are an integral part of these financial statements. | ||||
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Amanasu environment Corporation and subsidiaries
Statements of Operations and Deficit
(UnAUDITED)
| For the Nine Months Ended | ||||
| September 31, 2008 | September 31, 2007 | |||
| Sales | $ | 227,603 | $ | 439,837 |
| Cost of Goods Sold | 191,766 | 336,623 | ||
| Gross Profit | 35,837 | 103,214 | ||
| Expenses | 216,094 | 365,002 | ||
| Operating Loss | (180,257) | (261,788) | ||
| Other Income (Expense) | ||||
| Interest Income | 15,409 | 37,504 | ||
| Equity in Losses Of Investee Companies | - | (57,089) | ||
| Other Income | 3,190 | 4,654 | ||
| Interest Expense | (2,371) | (529) | ||
| Loss Before Minority Interest | (164,029) | (277,248) | ||
| Minority Interest in Loss of Subsidiary | 2,592 | 42,033 | ||
| Net Loss | (161,437) | (235,215) | ||
| Other Comprehensive Income (Loss): | ||||
| Gain on Foreign Currency Conversion | 7,633 | 2,700 | ||
| Total Comprehensive Loss | (153,804) | (232,515) | ||
| Loss Per Share - Basic and Diluted | $ | - | $ | - |
| Weighted Average Number of Shares Outstanding | 44,000,816 | 44,000,816 | ||
| The accompanying notes are an integral part of these financial statements. | ||||
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Amanasu environment Corporation and subsidiaries
Statements of Operations and Deficit
(UNAUDITED)
| For the Three Months Ended | ||||
| September 31, 2008 | September 31, 2007 | |||
| Sales | $ | 156,773 | $ | 202,819 |
| Cost of Goods Sold | 108,689 | 167,024 | ||
| Gross Profit | 48,084 | 35,795 | ||
| Expenses | 78,704 | 207,995 | ||
| Operating Loss | (30,620) | (172,200) | ||
| Other Income (Expense) | ||||
| Interest Income | 4,787 | 13,438 | ||
| Equity in Losses Of Investee Companies | - | (79,058) | ||
| Other Income | 1,935 | 1,661 | ||
| Interest Expense | (1,310) | (263) | ||
| Loss Before Minority Interest | (25,208) | (236,422) | ||
| Minority Interest in Loss of Subsidiary | 2,592 | 39,332 | ||
| Net Loss | (161,437) | (197,090) | ||
| Other Comprehensive Income (Loss): | ||||
| Gain on Foreign Currency Conversion | 7,633 | 2,198 | ||
| Total Comprehensive Loss | (153,804) | (194,892) | ||
| Loss Per Share - Basic and Diluted | $ | - | $ | - |
| Weighted Average Number of Shares Outstanding | 44,000,816 | 44,000,816 | ||
| The accompanying notes are an integral part of these financial statements. | ||||
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Amanasu EnVironment Corporation and subsidiaries
Statements of Cash Flows
| For the Nine Months Ended | ||||||
| September 31, 2008 | September 31, 2007 | |||||
| Cashflows From Operating Activities | ||||||
| Net Loss - Adjustments to reconcile net loss to net cash consumed by operating activities | $ | (161,437) | $ | (235,215) | ||
| Depreciation and Amortization | 6,426 | 50,057 | ||||
| Equity In Results of Investee | - | 57,089 | ||||
| Minority Interest In Subsidiary Loss | (2,592) | (42,033) | ||||
| Changes in assets and liabilities: | ||||||
| Increase in accounts and notes receivable | (87,538) | (18,234) | ||||
| Increase n inventory | (33) | (2,602) | ||||
| Increase in accrued e xpenses | 112,908 | 77,518 | ||||
| Decrease in accrued interest receivable | 4,780 | 347 | ||||
| Increase in advances to employees | 44,504 | - | ||||
| Increase (decrease) in payrool and other taxes payable | (20,574) | 12,545 | ||||
| Increase in accounts payable | 13,692 | 10,769 | ||||
| Decrease (increase) in prepaid expenses | (4,204) | 12,309 | ||||
| Decrease (Increase) in other receivables | (11,735) | 893 | ||||
| Increase in deposit liability | - | 4,512 | ||||
| Increase in advances from customers | 43,141 | - | ||||
| Net Cash Consumed By Operating Activities | (62,663) | (72,045) | ||||
| CASHFLOWS FROM INVESTING ACTIVITIES: | ||||||
| Increases in investments | (47,025) | (84,307) | ||||
| Redemption of certificate of deposit | 50,000 | - | ||||
| Reduction of long term loans | - | 105,090 | ||||
| Advance to affiliate | - | 12,427 | ||||
| Net Cash Provided (Consumed) By Investing Activities | 2,975 | 33,210 | ||||
| CASHFLOWS FROM FINANCING ACTIVITIES | ||||||
| Increase in short term loan | 37,190 | - | ||||
| Increase in Bank Loan | 6,074 | - | ||||
| Net Cash Provided By Financing Activities | 43,264 | - | ||||
| Exchange on Cash of Exchange Rate Changes | (1,446) | 2,700 | ||||
| Net Change in Cash Balances | (17,870) | (36,135) | ||||
| Cash balance, beginning of period | 18,293 | 102,763 | ||||
| Cash balance, end of period | $ | 423 | $ | 66,628 | ||
| The accompanying notes are an integral part of these financial statements. | ||||||
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Amanasu Environment Corporation and Subsidiaries
Notes to Financial Statements
September 30, 2008
1. BASIS OF PRESENTATION
The unaudited interim consolidated financial statements of Amanasu Environment Corporation and Subsidiaries ("the Company") as of September 30, 2008 and for the nine and three month periods ended September 30, 2007 and 2008 have been prepared in accordance with accounting principles generally accepted in the United State of America. In the opinion of management, such information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of such periods. The results of operations of the nine and three month periods ended September 30, 2008 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2008.
Certain information and disclosures normally included in the notes to financial statements have been condensed or omitted as permitted by the rules and regulations of the Securities and Exchange Commission, although the Company believes the disclosure is adequate to make the information presented not misleading. The accompanying unaudited financial statements should be read in conjunction with the financial statements of the Company included in the annual report on Form 10-KSB for the year ended December 31, 2007.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
This Form 10Q contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "may," "future," "plan" or "planned," "will" or "should," "expected," "anticipates," "draft," "eventually" or "projected." You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a companies' annual report on Form 10-KSB and other filings made by such company with the United States Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements.
The following discussion should be read in conjunction with the Company's Financial Statements, including the Notes thereto, appearing elsewhere in this Quarterly Report and in the Annual Report for the year ended December 31, 2007.
Company Overview
The Company was organized February 22, 1999. Its operations to date have been limited to obtaining exclusive licensing rights for technologies, conducting preliminary marketing efforts, and conducting product testing.
As of August 4th, 2005, Kogure's six proprietary rights (See "Patents" below) to the license of the technologies and parts in connection with constructing the rotary kiln and its title w ere transferred to Amanasu Environment Corporation, and the amount of $290,000 that the Company previously funded to Kogure for marketing and promotion purposes replaced in as transfer fee. As a result, the Company possesses the exclusive worldwide right to the product, and can receive royalties from the sales of the rotary kiln by other companies including MINMETAL.
The Company business is in developing and marketing technologies in various environmental industries such as waste management, water purification , heat and energy production, and will continue to expand into other environmental technology markets. Initially we began by acquiring the exclusive, worldwide license rights to a high temperature furnace, a hot water boiler, and ring-tube desalinization methodology. At present, the Company is not engaged in the commercial sale of any of these licensed technologies. Our operations to date have been limited to acquiring different technologies, conducting limited product marketing, and testing the technologies for commercial sale. For each such technology, proto-type or demonstrational units have been constructed by each licensor or inventor. The Company has conducted various internal tests on these units to determine their commercial viability. With the result of such testing, the Company believes that the products are not commercially ready for sale, and that product refinements are necessary with respect to each of the technologies. In addition, the Company may seek joint venture or other affiliations with companies competitive in each respective product market whereby we can capitalize on the existing infrastructure of such other companies: product design and engineering, marketing and sales, and warranty and post-warranty service and repair to name a few. The Company believes that the marketing efforts to sell any of our products will be limited until such time as we can complete the refinements of its technologies. The Company can not predict whether it will be successful in developing commercial products, or establishing affiliations with any operating company.
The Company's current business plan is the result of operational results during the fiscal year ending December 31, 2007 and may change due to the amount of risk accompanied by the nature of its business. The Company's main business objectives have not changed; however, new advances in technology and an accelerating environmental technology market is leading the Company into newer technologies. The Company is moving its focus to other technologies, and as a result will be putting up all of its current companies under Amanasu Holdings Corporation for Sale. The Company will be focusing on attaining Manufacturing and Sales rights to 3 technologies for the remainder of fiscal 2008:
The Company is exploring alternative fuels, particularly in Hydrogen based alternatives. Current technologies that produce Hydrogen, are relatively expensive, and inefficient compared to current petroleum based fuels. The Company has targeted a number of technologies that produce Hydrogen in a cost effective and efficient manner. The Company will be negotiating manufacturing and sales rights for a Hydrogen production system during the remainder of fiscal 2008.
The Company will also putting efforts towards recycling technologies, and businesses. The Company has began discussions with a company that developes a styrofoam recycling technology, which melts the styrofoam to a liquid form, which can be reshaped, and recycled for other uses.
The final technology the Company is looking to attain is a small in home composting technology that is odourless.
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Products
Amanasu Environment Corporation
Amanasu Furnace
The Company still holds patents with manufacturing and sales rights for the following technologies; however, they are not the main focus of the Company at this time, and are retained for further development at a later time, or integrated with newer technologies, or possible sold to a prospective buyer.
The technology, known as the Amanasu Furnace, is a process that disposes of toxic and hazardous waste, through a proprietary, high temperature combustion system. The combustion system is a low cost methodology generating extremely high temperatures in excess of 2,000 Celsius. Waste matter exposed to the extreme temperature system is instantly decomposed to a gaseous matter and a magna-like liquid. The process leaves a 1-2% residue of an inert, carbon substance and oxygen which is vented out of the system. The process produces no toxins, smoke, ash, or soot.
The Company believed that the prior pricing structure for its furnaces was not competitive, and was seeking ways to lower its manufacturing costs. The Company was attempting to locate alternate suppliers that were more cost effective than currently identified ones. At the same time the Company also attempted to re-design certain components of the furnace so as to reduce the manufacturing cost per component. The aim was to alter the function of the original furnace, which managed daily waste to one that managed specific waste (i.e. industrial, and/or medical waste); however, the Company was confronted with several difficulties and started to reconsider the alteration. At the same time, the Company was also seeking affiliations with companies competitive in the furnace market in Japan. Kogure Works, had an established infrastructure, manufacturing more developed furnaces, comparatively lower in cost. The Company then entered into an agreement with Kogure Works Co sharing its technologies and marketing resources, while making use of Kogure's manufacturing expertise. The pricing of the product to be developed was $100,000/t and eventually reducing the price by 20% was ideal.
As discussed above, the Company expected to alter the function of the Amanasu Furnace in order to specify its market place; however, there has not been a strong demand for their product due to the cost of manufacturing a unit. The Company did not reach the successful and complete refinement and cost reduction as they had planned; therefore, no further production and investment on this technology has been determined, and there is no further business relation with Kogure Works Co., Ltd. ("Kogure") on this project. The Company does not know whether the project will continue into the future; however, the exclusive rights of manufacturing and sales of the Amanasu Furnace will remain with the Company.
"Patents"
1. Rotary kiln (Patent number 3564012, as of July 2nd, 2005); 2. Rotary kiln-Taiwan (Patent number 131102, as of August 21st, 2001); 3. Gas lark (petition number 2000-358861, patent pending); 4. Ash melting furnace and incinerating system (petition number 2002-325560, patent pending); 5. The interior wall of the kiln (petition number 2004-208198, patent pending); and 6. The method of cooling down the kiln (petition number 2004-208199, patent pending)
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Fire Bird Boiler
The Fire Bird Boiler technology is a patented process, which incinerates whole waste tires in a non-polluting manner emitting heat or steam in the incineration process. The Fire Bird Boiler provides combustion efficiency and seeks to minimize dioxin generation which is generally a by-product of imperfect combustion.
The Company believes that the Fire Bird Boiler is an effective dual purpose technology for incinerating waste tires and generating heat; however, the Company has recognized that the supply of waste tires in certain markets, including the United States, has been greatly reduced due to the effect of recent efforts to recycle waste tires. Thus, the reduction in the available supply of waste tires in these markets has limited the market potential of the boiler. As a result, the Company has been confronted with severe marketing difficulties for Fire Bird at present, and will seek to refine the boiler to accept other forms of waste, such as hazardous waste.
Even though the Company decided to seek refinement to the boiler to accept other forms of waste, to be flexible in the market, the Company has determined no further production and/ or investment on this technology. The estimated refinement time was not feasible for the Company, thus no further business relations will continue with Kogure on this project. The Company does not know whether the project will continue into the future; however, the exclusive rights of manufacturing and sales for the Fire Bird Boiler will still remain with the Company.
Ring-tube Desalinization
The Ring-Tube technology is used as a filter to purify seawater into drinking water and also treats sewage and waste water, by removing pollutants and bacteria. The equipment filters bacteria and other impurities through its fine rings and comb type filter and reduces the presence of inhibiting scales on the equipment. The impurities are then destroyed by the high pressure and temperature in the ring-tube. The Company believes that its technology is more cost efficient to construct and operate than conventional RO equipment. Its fresh water recovery rate is 95% compared with the less than 40% for a RO method. Moreover, water produced from the Company's technology retains a certain amount of salt and minerals and does not required a pH adjustment. RO filtration removes all minerals and salt, requiring minerals to be added to improve flavor, and an adjustment to reduce pH levels. The reject brine resulting from RO filtration is discharged in the ocean creating higher salt concentrations in such areas, however, the by-product from the Company's technology is sufficiently condensed allowing it to be sold as a salt product.
Amanasu Water
Amanasu Hydrogen-ion Water (Sui-So-Sui)
Amanasu Water's principle product is a soon to be launched drinking water called "Sui-So-Sui", or Hydrogen-ion water. Amanasu Hydrogen-ion water will be primarily marketed through fitness clubs, and professional sports arenas, and pachinko parlors across Japan, with future plans to expand its operation into North America. Processing and packing will be done by utilizing BMD Co, facilities in Japan.
Hydrogen ion water is said to have anti-oxidant properties that rival those of which have been scientifically established anti-oxidants. Vitamin C, Vitamin E, and Co-Enzyme Q10 are to name a few. Hydrogen-ion water, being water, has the ability to pass straight into the cell and into the mitochondria (the power plant of the cell). There it prevents disease promoting oxidation reactions , while leaving the 2% of oxidation reactions needed in daily life. Vitamin C and other minerals are not able to penetrate the cell wall. Vitamin E, and Co-enzyme Q10, are able to enter the cell wall, however, remain unable to enter the mitochondria.
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Plan Of Operation
Amanasu Environment Corporation
The Company main objective for the fiscal year ending December 31, 2008 has been to attain capital in the amount of $30,000,000 in order to prepare the Company to enter into the NASDAQ Global Market. In order to meet this objective the Company has decided to move a lot of its focus into other technologies besides the ones that it currently manages, and as a result will be putting up for sale share of companies currently in its posession. No more funds will be put into the operations of BJSS, Amanasu Energy, Petstyle, Amanasu Eco Frontier, and Amanasu Project Support. Amanasu Shinwa Corporation's shares have been bought back by Amanasu Shinwa Management, and the original capital put into Amanasu Shinwa by Amanasu Environment (10,000,000 Yen), and Amanasu Holdings (10,000,000 Yen) will be paid back. The Company will be focusing its resources on attaining manufacturing and sales rights to three new technologies: 1) A Hydrogen extraction process, currently being developed by a Japanese company, that requires only water, and a patented catalyst. This technology is far more efficient, and cost effective than current electrolysis, and bacteria based processes. 2) A Styrofoam recycling process that takes styrofoam into a liquid state without heat, for reprocessing back into Styrofoam or other materials. and 3) a small in home/kitchen odourless composting technology.
The Company believes that attaining the manufacturing and sales rights of these technologies is key in generating its capital objective.
Amanasu Holdings Corporation
With the Company moving in a slightly newer direction, Amanasu Holdings Corporation is facilitating the sale of BJSS, Amanasu Energy, Petstyle, Amanasu Eco Frontier, and Amanasu Project Support. While finding buyers, Amanasu Holdings will also continue its management support of Amanasu Water, and also assist the Company in generating the $30,000,000 capital objective. To assist in attaining the capital objective, Amanasu Holdings continues to meet with prospective investors within Japan, aswell as China, and South Korea.
Financial Results
Three Months Ended September 30, 2008
The Company's sales for the three months ended September 30, 2008 were $156,773 compared to $202,819 for the same period in 2007. The decrease in sales is due to reduced sales from Amanasu Water Corporation, delayed management payments from Amanasu Shinwa Corporation, and the halt of operations of Amanasu Eco Frontier Corporation.
Interest income for the three months ended September 30, 2008 was $4,787 compared to $13,438 for the same period in 2007. This decrease is due to the reduced investment in Certificate of Deposits and reduced interest rates.
Minority interest in loss of subsidiary for the three months ended September 30, 2008 were $764 compared to 39,332 for the same period in 2007. The decrease is principally due to the limited operations and sales in the quarter ending September 30, 2008.
Total expenses for the three months period ended September 30, 2008 was $78,704 compared to $207,995 for the same period of 2007. The decrease was due to the absense attorney's fees to settle a lawsuit in the third fiscal quarter ended September 30, 2007, and reduced operations of Amanasu Energy Corpration, and and halt of operations Amanasu Eco Frontier.
Cost of goods sold for the three months period ended September 30, 2008 was $108,689 compared to $167,024 for the same period of 2007. The decrease was due principally to the decreased production of water products from Amanasu Water Corporation.
Liquidity and Capital Resources
Other than the provision of alternating business planning costs discussed above under Plan of operation, the Company estimates that its operating overhead, which includes general and administrative charges, will be approximately $1,120,000 for the next 12 months. This amount is comprised of the following estimated costs; $375,000 in annual salaries for office personnel and consultants, $375,000 for rent, $150,000 for professional fees and $220,000 for miscellaneous expenses. The Company believes that the amount of liquidity and capital resources will be sufficient for the operation of the Company for the next 12 months. The Company has sufficient cash on hand to support its overhead for the next 12 months but no material commitments for capital at this time other than as described above. The Company and/or Amanasu Holdings will need to issue and sell shares to gain capital for operations.
Off-Balance Sheet Arranagements
The Company has no off-balance sheet arrangements.
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Item 4. Controls and Procedures
The Company carried out an evaluation of the effectiveness of the Company's disclosure controls and procedures (as defined by Rule 13a-15(e) under the Securities Exchange Act of 1934) under the supervision and with the participation of the Company's Chief Executive Officer and Chief Financial Officer as of a date within 90 days of the filings date of Form 10Q. Based on and as of the date of such evaluation, the aforementioned officers have concluded that the Company's disclosure controls and procedures have functioned effectively so as to provide information necessary whether:
(i) this quarterly report on Form 10 Q contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report on Form 10 Q, and (ii) the financial statements, and other financial information included in this quarterly report on Form 10 Q, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this quarterly report on Form 10 Q.
CHANGES IN INTERNAL CONTROLSThere have been no significant changes in the Company's internal controls or in other factors since the date of the Chief Executive Officer's, Chief Financial Officer's and Chief Accounting Officer's evaluation that could significantly affect these internal controls, including any corrective actions with regards to significant deficiencies and material weaknesses.
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Part II - Other Information
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
None.
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.
Item 5. Other Information
None.
Item 6. Exhibits
- Furnish the Exhibits required by Item 601 of Regulation S-K (229.407 of this chapter).
- Exhibit 31 - Certification Pursuant To Section 302 Of The Sarbanes-Oxley Act Of 2002.
- Exhibit 32 - Certification Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused his report to be signed on its behalf by the undersigned thereunto duly authorized.
Amanasu Environment Corporation
Date: November 18, 2008
/s/ Atsushi Maki
Atsushi Maki
Chief Executive Officer
Chief Financial Officer
Chief Accounting Officer
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