10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549 

FORM 10-Q 

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

For the quarterly period ended: September 30, 2021

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

Commission File Number: 000-32905

AMANASU ENVIRONMENT CORPORATION

(Exact name of registrant as specified in its charter)

Nevada	98-0347883
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

224 Fifth Avenue, 2nd Floor

New York, NY 10022

(Address of principal executive offices)

(604) 790-8799

(Registrant’s telephone number, including area code)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

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

Common Stock $.001 par value

(Title of class)

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 past 12 months, and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒   No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) 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, smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐ 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐   No ☒

As of November 12, 2021, there were 44,100,816 shares outstanding of the registrant’s common stock.

AMANASU ENVIRONMENT CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FOR THE PERIOD ENDED SEPTEMBER 30, 2021

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements (unaudited).	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	15
Item 4.	Controls and Procedures.	15
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings.	16
Item 1A.	Risk Factors.	16
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	16
Item 3.	Defaults Upon Senior Securities.	16
Item 4.	Mine Safety Disclosures.	16
Item 5.	Other Information.	16
Item 6.	Exhibits.	17
Signatures		18

2

PART I

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

AMANASU ENVIRONMENT CORPORATION

CONSOLIDATED BALANCE SHEETS

 (Unaudited)

	September 30, 2021			December 31, 2020
ASSETS
Current Assets:
Cash	$	282		$	47
Total current assets		282			47
Operating lease right-of-use assets		-			11,019
Total Assets	$	282		$	11,066
LIABILITIES & STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable and accrued expenses	$	11,081		$	11,165
Accrued expenses – related parties		128,387			108,312
Accrued interest – stockholders and officers		107,807			92,766
Taxes payable		29,634			32,668
Operating lease liabilities – current		-			11,019
Due to affiliate		31,836			11,338
Loans from stockholders and officers		449,625			441,622
Total current liabilities		758,370			708,890
Total Liabilities		758,370			708,890
Commitments and contingencies
Stockholders' Deficit:
Common Stock: authorized 100,000,000 shares of $.001 par value;44,100,816 shares issued and outstanding		44,101			44,101
Additional paid in capital		4,793,552			4,793,552
Accumulated deficit		(5,600,580	)		(5,539,235	)
Accumulated other comprehensive income		5,099			4,115
Total Amanasu Environment Corporation stockholders' deficit		(757,828	)		(697,467	)
Non-controlling interest in subsidiary		(260	)		(357	)
Total stockholders’ deficit		(758,088	)		(697,824	)
Total Liabilities and Stockholders' Deficit	$	282		$	11,066

The accompanying notes are an integral part of these consolidated financial statements.

3

AMANASU ENVIRONMENT CORPORATION

  CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

 (Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Revenue	$	-		$	-		$	-		$	-
Cost of revenue		-			-			-			-
Gross profit		-			-			-			-
General and administrative expenses		15,137			12,054			46,304			46,404
Operating loss		(15,137	)		(12,054	)		(46,304	)		(46,404	)
Other Expense:
Interest expense - stockholders		(5,088	)		(5,032	)		(15,041	)		(14,956	)
Net loss before income taxes		(20,225	)		(17,086	)		(61,345	)		(61,360	)
Income taxes		-			-			-			-
Net loss		(20,225	)		(17,086	)		(61,345	)		(61,360	)
Net loss attributable to non-controlling interest		-			-			-			-
Net loss attributable to Amanasu Environment Corporation Stockholders		(20,225	)		(17,086	)		(61,345	)		(61,360	)
Other comprehensive income (loss):
Foreign currency translation adjustment		258			(258	)		1,081			(327	)
Total comprehensive loss		(19,967	)		(17,344	)		(60,264	)		(61,687	)
Comprehensive income (loss) attributable to non-controlling interest		23			(23	)		97			(29	)
Less Comprehensive loss attributable to Amanasu Environment Corporation Stockholders	$	(19,990	)	$	(17,321	)	$	(60,361	)	$	(61,658	)
Net loss per share – basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted average number of shares outstanding		44,100,816			44,100,816			44,100,816			44,100,816

The accompanying notes are an integral part of these consolidated financial statements.

4

AMANASU ENVIRONMENT CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

(Unaudited)

	Common Stock				Paid In		Accumulated			Comprehensive		Non-controlling
	Shares		Amount		Capital		Deficit			Income		Interest			Total
Balance July 1, 2021		44,100,816	$	44,101	$	4,793,552	$	(5,580,355	)	$	4,864	$	(283	)	$	(738,121	)
Net loss								(20,225	)							(20,225	)
Other comprehensive income											235		23			258
Balance September 30, 2021		44,100,816	$	44,101	$	4,793,552	$	(5,600,580	)	$	5,099	$	(260	)	$	(758,088	)

	Common Stock				Paid In		Accumulated			Comprehensive			Non-controlling
	Shares		Amount		Capital		Deficit			Income			Interest			Total
Balance July 1, 2020		44,100,816	$	44,101	$	4,793,552	$	(5,500,695	)	$	4,573		$	(311	)	$	(658,780	)
Net loss								(17,086	)								(17,086	)
Other comprehensive income											(235	)		(23	)		(258	)
Balance September 30, 2020		44,100,816	$	44,101	$	4,793,552	$	(5,517,781	)	$	4,338		$	(334	)	$	(676,124	)

The accompanying notes are an integral part of these consolidated financial statements.

5

AMANASU ENVIRONMENT CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

(Unaudited)

	Common Stock				Paid In		Accumulated			Comprehensive		Non-controlling
	Shares		Amount		Capital		Deficit			Income		Interest			Total
Balance January 1, 2021		44,100,816	$	44,101	$	4,793,552	$	(5,539,235	)	$	4,115	$	(357	)	$	(697,824	)
Net loss								(61,345	)							(61,345	)
Other comprehensive income											984		97			1,081
Balance September 30, 2021		44,100,816	$	44,101	$	4,793,552	$	(5,600,580	)	$	5,099	$	(260	)	$	(758,088	)

	Common Stock				Paid In		Accumulated			Comprehensive			Non-controlling
	Shares		Amount		Capital		Deficit			Income			Interest			Total
Balance January 1, 2020		44,100,816	$	44,101	$	4,793,552	$	(5,456,421	)	$	4,636		$	(305	)	$	(614,437	)
Net loss								(61,360	)								(61,360	)
Other comprehensive income											(298	)		(29	)		(327	)
Balance September 30, 2020		44,100,816	$	44,101	$	4,793,552	$	(5,517,781	)	$	4,338		$	(334	)	$	(676,124	)

The accompanying notes are an integral part of these consolidated financial statements.

6

AMANASU ENVIRONMENT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended September 30, 2021			Nine Months Ended  September 30, 2020
CASH FLOWS FROM OPERATIONS
Net loss	$	(61,345	)	$	(61,360	)
Changes in assets and liabilities:
Accounts payable and accrued expenses		374			(3,282	)
Accrued expenses – related parties		20,812			20,813
Accrued interest – stockholders and officers		15,041			14,956
Net Cash Used in Operating Activities		(25,118	)		(28,873	)
CASH FLOWS FROM FINANCING ACTIVITIES
Loans from stockholders		4,855			2,930
Due to affiliate		20,498			25,803
Net Cash Provided by Financing Activities		25,353			28,733
Net Change In Cash		235			(140	)
Cash balance, beginning of period		47			211
Cash balance, end of period	$	282		$	71
Supplemental disclosures of cash flow information:
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

The accompanying notes are an integral part of these consolidated financial statements.

7

AMANASU ENVIRONMENTAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

1. BASIS OF PRESENTATION

The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position of the Company as of September 30, 2021, the results of operations for the three and nine months ended September 30, 2021 and 2020, and cash flows for the nine months ended September 30, 2021 and 2020. These results are not necessarily indicative of the results to be expected for the full year or any other period. The December 31, 2020 balance sheet included herein was derived from the audited financial statements included in the Company’s Annual Report on Form 10-K as of that date.  Accordingly, the financial statements included herein should be reviewed in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the Securities and Exchange Commission (“SEC”) on March 30, 2021.

2. GOING CONCERN UNCERTAINTY

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the financial statements, the Company had a working capital deficiency of $758,088 and an accumulated deficit of $5,600,580 at September 30, 2021, and a record of continuing losses. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include adjustments that might result from the outcome of this uncertainty.

The Company’s operations to date have been limited to conducting various tests on its technologies and seeking financing. The Company will continue to develop and market its technologies, which the Company believes have great market potential. As such, the Company continues to pursue additional sources of financing. Currently the company is exploring various potential investment partners in Japan, as well as China. There can be no assurances that the Company can secure additional financing. . The present plans, the realization of which cannot be assured, to overcome these difficulties also include, but are not limited to, a continuing effort to investigate business acquisitions and joint ventures. 

The Company’s operations may be affected by the recent and ongoing outbreak of the coronavirus disease 2019 (COVID-19) which in March 2020, was declared a pandemic by the World Health Organization. The ultimate disruption which may be caused by the outbreak is uncertain; however, it may result in a material adverse impact on the Company’s financial position, operations and cash flows. Possible areas that may be affected include, but are not limited to, disruption to the Company’s ability to obtain funding and performing further research on certain projects.

8

AMANASU ENVIRONMENTAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

New Accounting Pronouncements

During the nine months ended September 30, 2021, there have been no other material changes in the Company’s significant accounting policies to those previously disclosed in the Annual Report.

No recently issued accounting pronouncements had or are expected to have a material impact on the Company’s consolidated financial statements.

4. RELATED PARTY TRANSACTIONS

The Company receives periodic loans from its principal stockholders and officers based upon the Company’s cash flow needs. There is no written loan agreement between the Company and the stockholders and officers. All loans bear interest at 4.45% and no repayment terms have been established. As a result, the amount is classified as a current liability. During the nine months ended September 30, 2021, the Company borrowed $4,855 from a stockholder. The balances due as of September 30, 2021 and December 31, 2020 were $398,955 and $394,100, respectively. Interest expense associated with these loans were $4,520 and $13,354 for the three and nine months ended September 30, 2021 as compared to $4,464 and $13,263 for the three and nine months ended September 30, 2020. Accrued interest on these loans were $92,640 and $79,286 at September 30, 2021 and December 31, 2020, respectively.

The Company has an arrangement with Lina Maki, a stockholder of the Company, for her management consulting time. The agreement is not written, and no payment terms have been established. The fee is $10,000 annually. As of September 30, 2021 and December 31, 2020 amounts due to the stockholder were $47,500 and $40,000, respectively.

The Company leases its office space in Vancouver from a stockholder of the Company at a monthly rate of $2,500 under a lease agreement which expires October 1, 2021.  At September 30, 2021 and December 31, 2020 amounts due to the stockholder were $72,183 and $60,371, respectively. The Company shares the space with Amanasu Techno Holdings Corp, a reporting company under the Securities Exchange Act of 1934. Amanasu Techno Holdings Corp is responsible for 50% of the rent.

9

AMANASU ENVIRONMENTAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

4. RELATED PARTY TRANSACTIONS (continued)

The office in New York is rented at the rate of approximately $360 each year and is also shared with Amanasu Techno Holdings Corp. In addition, the Company maintains an office at Suite 905, 1-6-1 Senzoku Taito-Ku Tokyo Japan.

Amanasu Corp. is the principal stockholder of the Company. The balance due to Amanasu Corp. was $50,000 and $50,000 at September 30, 2021 and December 31, 2020, respectively. Interest expense associated with this loan were $569 and $1,687 for the three and nine months ended September 30, 2021, as compared to $569 and $1,693 for the three and nine months ended September 30, 2020, respectively.  No terms for repayment have been established. As a result, the amount is classified as a current liability in due to related parties. Accrued interest on this loan were $15,167 and $13,480 at September 30, 2021 and December 31, 2020, respectively.

5. INCOME TAXES

In accordance with the current tax laws in the U.S., the Company is subject to a corporate tax rate of 21% on its taxable income. No provision for taxes is made for U.S. income tax for the three and nine months ended September 30, 2021 and 2020 as it has no taxable income in the U.S. The Company can carry forward net operating losses (NOL's) to be applied against future profits for a period of twenty years in the U.S. and 80% of the NOL can be carried forward for three years in Japan.

The Company had NOL carryforwards of approximately $3.80 million in the U.S. at September 30, 2021.Approximately $3.5 million in the U.S. will expire in the years 2021 through 2037, and $0.30 million can be carried forward indefinitely. 

Deferred income taxes are recorded to reflect the tax consequences or benefits to future years of any temporary differences between the tax basis of assets and liabilities, and of net operating loss carryforwards. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets us dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against all of the deferred tax assets relating to the NOL’s for every period because it is more likely than not that all of the deferred tax assets will not be realized.

6. OPERATING LEASE LIABILITY

The Company's executive offices are located at 244 Fifth Avenue 2nd Floor New York, NY 10001 and Vancouver, British Columbia. The total premises in Vancouver are 2,000 square feet and are leased at a monthly rate of $2,500 under a lease agreement between the Company and the Secretary of the Company which expires October 1, 2021. The Company shares the space with ATH, a reporting company under the Securities Exchange Act of 1934. Our major stockholder and officer own approximately 86% of ATH’s outstanding shares of common stock. ATH is responsible for 50% of the rent or $1,250 each month.

10

AMANASU ENVIRONMENTAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

6. OPERATING LEASE LIABILITY (continued)

The Company's lease does not provide an implicit rate, and therefore the Company uses an estimated incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease. The Company used incremental borrowing rate of 5% for the calculation of operating leases liabilities.

Total rent expense under operating leases for the three and nine months ended September 30, 2021 was $3,750 and $11,250, as compared to $3,750 and $11,250 for the three and nine months ended September 30, 2020.

7. COMMITMENTS AND CONTINGENCIES

The Company is involved in various legal proceedings, claims and litigation arising in the ordinary course of business. The Company does not believe that the disposition of matter that are pending will have a material effect on its condensed consolidated financial statements.

8. SUBSEQUENT EVENTS

The Company evaluated subsequent events, which are events or transactions that occurred after September 30, 2021 through the issuance of the accompanying financial statements and determined that no significant subsequent event need to be recognized or disclosed.

11

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This quarterly report on Form 10-Q and other reports filed by Amanasu Environmental Corporation and its wholly owned subsidiaries, collectively the “Company”, “we”, “our”, and “us”) from time to time with the U.S. Securities and Exchange Commission (the “SEC”) contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management.  Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof.  When used in the filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements.  Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks contained in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the Securities and Exchange Commission (“SEC”) on March 30, 2021 (the “Annual Report”), relating to the Company’s industry, the Company’s operations and results of operations, and any businesses that the Company may acquire.  Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements.  Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made.  These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our consolidated financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result.  The following discussion should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this report.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the financial statements, the Company had a working capital deficiency of $758,088 and an accumulated deficit of $5,600,580 at September 30, 2021, and a record of continuing losses. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include adjustments that might result from the outcome of this uncertainty.

The Company's present plans, the realization of which cannot be assured, to overcome these difficulties include, but are not limited to, a continuing effort to investigate business acquisitions and joint ventures. The Company will also continue to investigate and develop technologies, which the Company believes have great market potential. As such, the Company may need to pursue additional sources of financing. There can be no assurances that the Company can secure additional financing.

12

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

General

Management’s discussion and analysis of results of operations and financial condition is intended to assist the reader in the understanding and assessment of significant changes and trends related to the results of operations and financial position of the Company together with its subsidiary. This discussion and analysis should be read in conjunction with the consolidated financial statements and accompanying financial notes, and with the Critical Accounting Policies noted below.

Plan of Operation

The Company has three main objectives. Firstly, the Company will continue in its goal to meet the capital objective of $30,000,000. Currently the company is exploring various potential investment partners in Japan, as well as China. The Company cannot predict whether it will be successful with its objective. Second the Company will continue to support Amanasu Maritek Corporation's efforts on entering into marine technologies. The Company will assist for another 2 years in the design, and approval process for the product from at least two regulatory bodies: the Japanese Government, and the IMO (International Marine Organization). This approval process requires capital for additional product testing, documentation, and documentation translations. The Company believes that Amanasu Maritek Corporation's most significant hurdle will be in capital raising. The Company has already initiated documentation and application processes, and is now looking for capital to fund the project. The Company cannot predict whether it will be successful with its capital raising efforts. Third, the Company is making plans to enter the reforestation industry in Japan, through Amanasu Maritek Corporation. The Company must first reach an agreement with the relevant government agencies in Japan. The Company intends to focus on the prefectures of Miyagi, Iwate and Niigata and begin operations within two years. The Company cannot predict whether it will be successful with its objective.

The Company’s operations may be affected by the recent and ongoing outbreak of the coronavirus disease 2019 (COVID-19) which in March 2020, was declared a pandemic by the World Health Organization. The ultimate disruption which may be caused by the outbreak is uncertain; however, it may result in a material adverse impact on the Company’s financial position, operations and cash flows. Possible areas that may be affected include, but are not limited to, disruption to the Company’s ability to obtain funding and performing further research on certain projects.

Results of Operations

There were no revenues for the three and nine months ended September 30, 2021 and 2020.

General and administrative expenses increased $3,083 (25.6%) for the three months ended September 30, 2021 to $15,137 as compared to $12,054 for the three months ended September 30, 2020. This increase is primarily attributed to higher professional fees. General and administrative expenses decreased $100 (0.2%) for the nine months ended September 30, 2021 to $46,304 as compared to $46,404 for the nine months ended September 30, 2020.

As a result of the above, the Company incurred a losses from operations of $15,137 and $46,304 for the three and nine months ended September 30, 2021 as compared to a losses from operations of $12,054 and $46,404 for the three and nine months ended September 30, 2020.

For the three and nine months ended September 30, 2021, interest expense increased $56 and $85 to $5,088 and $15,041, respectively, as compared to $5,032 and $14,956 for the three and nine months ended September 30, 2020.

As a result of the above, the Company incurred a net losses of $20,225 and $61,345 for the three and nine months ended September 30, 2021, respectively, as compared to $17,086 and $61,360 for the three and nine months ended September 30, 2020, respectively.

13

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

LIQUIDITY AND CAPITAL RESOURCES

Total current assets at September 30, 2021 were $282 as compared to $47 at December 31, 2020. This increase is the result of a slightly higher cash balance. Total current liabilities as of September 30, 2021 were $758,370 as compared to $708,890 at December 31, 2020.This increase is primarily due to increases in accrued expenses to related parties and accrued interest to stockholders and officers and due to affiliate.

The Company's minimum cash requirements for the next twelve months are estimated to be $60,000, including rent, audit and professional fees. The Company does not have sufficient cash on hand to support its overhead for the next twelve months and there are no material commitments for capital at this time other than as described above. The Company will need to acquire debt or issue and sell shares to gain capital for operations or arrange for additional stockholder or related party loans.  There is no current commitment for either of these fund sources.

Our working capital deficit increased $49,245 to $758,088 at September 30, 2021 as compared to $708,843 at December 31, 2020 primarily due to increases in accrued expenses to related parties, accrued interest to stockholders and officers and due to affiliate.

During the nine months ended September 30, 2021, the Company had a net increase in cash of $235. The Company’s principal sources and uses of funds were as follows:

Cash used in operating activities. For the nine months ended September 30, 2021, the Company used $25,118 in cash for operations as compared to using $28,873 in cash for the three months ended September 30, 2020, primarily as a result of the increase in accounts payable.

Cash provided by financing activities. Net cash providing by financing activities for the nine months ended September 30, 2021 was $25,353 as compared to providing $28,733 for the nine months ended September 30, 2020 primarily as a result of the decrease in amounts due from affiliates.

OFF-BALANCE SHEET ARRANAGEMENTS

The Company has no off-balance sheet arrangements.

CRITICAL ACCOUNTING POLICIES

The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America. Preparing financial statements in accordance with generally accepted accounting principles requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reported period.

Our critical accounting policies are described in the Notes to the Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on March 30, 2021 (the “Annual Report”). There have been no changes in our critical accounting policies. Our significant accounting policies are described in our notes to the 2020 consolidated financial statements included in our Annual Report.

RECENTLY ISSUED ACCOUNTING STANDARDS

No recently issued accounting pronouncements had or are expected to have a material impact on the Company’s condensed consolidated financial statements.

14

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEM 4. MANAGEMENT'S REPORT ON DISCLOSURE CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in the reports we file pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our Principal Executive Officer (“PEO”) and Principal Accounting Officer (“PAO”), to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide a 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.  Management designed the disclosure controls and procedures to provide reasonable assurance of achieving the desired control objectives.

We carried out an evaluation, under the supervision and with the participation of our management, including our PEO and PAO, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based upon that evaluation, the PEO and PAO concluded that the Company’s disclosure controls and procedures were ineffective for the reasons discussed below. In addition, management identified the following material weaknesses in its assessment of the effectiveness of disclosure controls and procedures as of September 30, 2021.

The Company did not effectively segregate certain accounting duties due to the small size of its accounting staff. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis. Notwithstanding the determination that our internal control over financial reporting was not effective, as of September 30, 2021, and that there was a material weakness as identified in this Quarterly Report, we believe that our financial statements contained in this Quarterly Report fairly present our financial position, results of operations and cash flows for the years covered hereby in all material respects.

We plan on increasing the size of our accounting staff at the appropriate time for our business and its size to ameliorate our concern that we do not effectively segregate certain accounting duties, which we believe would resolve the material weakness in disclosure controls and procedures, but there can be no assurances as to the timing of any such action or that we will be able to do so.

(b) Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

15

PART II

ITEM 1. LEGAL PROCEEDINGS

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

ITEM 1A. RISK FACTORS

Not applicable to smaller reporting companies.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There were no unregistered sales of the Company’s equity securities during the quarter ended September 30, 2021 other than those previously reported in a Current Report on Form 8-K.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

16

ITEM 6. EXHIBITS

Furnish the Exhibits required by Item 601 of Regulation S-K (229.407 of this chapter).

Exhibit 31.1	Certification of the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).*Certification Pursuant To Section 302 Of The Sarbanes-Oxley Act Of 2002.
Exhibit 31.2	Certification of the Principal Accounting Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).*
Exhibit 32.1	Certification of the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
Exhibit 32.2	Certification of the Principal Accounting Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101 INS	XBRL Instance Document*
101 SCH	XBRL Schema Document*
101 CAL	XBRL Calculation Linkbase Document*
101 DEF	XBRL Definition Linkbase Document*
101 LAB	XBRL Labels Linkbase Document*
101 PRE	XBRL Presentation Linkbase Document*

* filed herewith

17

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 Environmental Corporation
Date: November 15, 2021	By:	/s/  Atsushi Maki
		Atsushi Maki
		Principal Executive Officer
		Principal Accounting Officer

18

EX-31.1

Exhibit 31.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Atsushi Maki, certify that:

1.	I have reviewed this Form 10-Q of Amanasu Environment Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit 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 report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;
4.	Along with the Principal Accounting Officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 15, 2021

By:	/s/ Atsushi Maki
	Atsushi Maki
	Principal Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE PRINCIPAL ACCOUNTING OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Atsushi Maki, certify that:

1.	I have reviewed this Form 10-Q of Amanasu Environment Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit 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 report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;
4.	Along with the Principal Executive Officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 15, 2021

By:	/s/ Atsushi Maki
	Atsushi Maki
	Principal Accounting Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

 PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report of Amanasu Environment Corporation. (the “Company”), on Form 10-Q for the quarter ended September 30, 2021, as filed with the U.S. Securities and Exchange Commission on the date hereof, I, Atsushi Maki, Principal Executive Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	Such Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in such Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 15, 2021

By:	/s/ Atsushi Maki
	Atsushi Maki
	Principal Executive Officer

EX-32.2

Exhibit 32.1

CERTIFICATION OF THE PRINCIPAL ACCOUNTING OFFICER

 PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report of Amanasu Environment Corporation. (the “Company”), on Form 10-Q for the quarter ended September 30, 2021, as filed with the U.S. Securities and Exchange Commission on the date hereof, I, Atsushi Maki, Principal Accounting Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	Such Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in such Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 15, 2021

By:	/s/ Atsushi Maki
	Atsushi Maki
	Principal Accounting Officer

XML

Cover - shares	9 Months Ended
	Sep. 30, 2021	Nov. 12, 2021
Cover [Abstract]
Entity Registrant Name	AMANASU ENVIRONMENT CORPORATION
Entity Central Index Key	0001142801
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	true
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Sep. 30, 2021
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2021
Entity Common Stock Shares Outstanding		44,100,816
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	000-32905
Entity Incorporation State Country Code	NV
Entity Tax Identification Number	98-0347883
Entity Address Address Line 1	224 Fifth Avenue
Entity Address Address Line 2	2nd Floor
Entity Address City Or Town	New York
Entity Address State Or Province	NY
Entity Address Postal Zip Code	10022
City Area Code	604
Local Phone Number	790-8799
Security 12g Title	Common Stock $.001 par value
Entity Interactive Data Current	Yes

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2021	Dec. 31, 2020
Current Assets:
Cash	$ 282	$ 47
Total current assets	282	47
Operating lease right-of-use assets	0	11,019
Total Assets	282	11,066
Current Liabilities:
Accounts payable and accrued expenses	11,081	11,165
Accrued expenses - related parties	128,387	108,312
Accrued interest - stockholders and officers	107,807	92,766
Taxes payable	29,634	32,668
Operating lease liabilities - current	0	11,019
Due to affiliate	31,836	11,338
Loans from stockholders and officers	449,625	441,622
Total current liabilities	758,370	708,890
Total Liabilities	758,370	708,890
Stockholders' Deficit:
Common Stock: authorized 100,000,000 shares of $.001 par value;44,100,816 shares issued and outstanding	44,101	44,101
Additional paid in capital	4,793,552	4,793,552
Accumulated deficit	(5,600,580)	(5,539,235)
Accumulated other comprehensive income	5,099	4,115
Total Amanasu Environment Corporation stockholders' deficit	(757,828)	(697,467)
Non-controlling interest in subsidiary	(260)	(357)
Total stockholders' deficit	(758,088)	(697,824)
Total Liabilities and Stockholders' Deficit	$ 282	$ 11,066

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2021	Dec. 31, 2020
CONSOLIDATED BALANCE SHEETS
Common stock shares authorized	100,000,000	100,000,000
Common stock shares par value	$ 0.001	$ 0.001
Common stock shares issued	44,100,816	44,100,816
Common stock shares outstanding	44,100,816	44,100,816

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Revenue	$ 0	$ 0	$ 0	$ 0
Cost of revenue	0	0	0	0
Gross profit	0	0
General and administrative expenses	15,137	12,054	46,304	46,404
Operating loss	(15,137)	(12,054)	(46,304)	(46,404)
Other Expense:
Interest expense - stockholders	(5,088)	(5,032)	(15,041)	(14,956)
Net loss before income taxes	(20,225)	(17,086)	(61,345)	(61,360)
Net loss	(20,225)	(17,086)	(61,345)	(61,360)
Net loss attributable to Amanasu Environment Corporation Stockholders	(20,225)	(17,086)	(61,345)	(61,360)
Other comprehensive income (loss):
Foreign currency translation adjustment	258	(258)	1,081	(327)
Total comprehensive loss	(19,967)	(17,344)	(60,264)	(61,687)
Comprehensive income (loss) attributable to non-controlling interest	23	(23)	97	(29)
Less Comprehensive loss attributable to Amanasu Environment Corporation Stockholders	$ (19,990)	$ (17,321)	$ (60,361)	$ (61,658)
Net loss per share - basic and diluted	$ (0.00)	$ (0.00)	$ (0.00)	$ (0.00)
Weighted average number of shares outstanding	44,100,816	44,100,816	44,100,816	44,100,816

XML

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (Unaudited) - USD ($)	Total	Common Stock	Additional Paid-In Capital	Retained Earnings (Accumulated Deficit)	Accumulated other comprehensive loss	Noncontrolling Interest
Balance, shares at Dec. 31, 2019		44,100,816
Balance, amount at Dec. 31, 2019	$ (614,437)	$ 44,101	$ 4,793,552	$ (5,456,421)	$ 4,636	$ (305)
Net loss	(61,360)			(61,360)
Other comprehensive income	(327)				(298)	(29)
Balance, shares at Sep. 30, 2020		44,100,816
Balance, amount at Sep. 30, 2020	(676,124)	$ 44,101	4,793,552	(5,517,781)	4,338	(334)
Balance, shares at Jun. 30, 2020		44,100,816
Balance, amount at Jun. 30, 2020	(658,780)	$ 44,101	4,793,552	(5,500,695)	4,573	(311)
Net loss	(17,086)			(17,086)
Other comprehensive income	(258)				(235)	(23)
Balance, shares at Sep. 30, 2020		44,100,816
Balance, amount at Sep. 30, 2020	(676,124)	$ 44,101	4,793,552	(5,517,781)	4,338	(334)
Balance, shares at Dec. 31, 2020		44,100,816
Balance, amount at Dec. 31, 2020	(697,824)	$ 44,101	4,793,552	(5,539,235)	4,115	(357)
Net loss	(61,345)			(61,345)
Other comprehensive income	1,081				984	97
Balance, shares at Sep. 30, 2021		44,100,816
Balance, amount at Sep. 30, 2021	(758,088)	$ 44,101	4,793,552	(5,600,580)	5,099	(260)
Balance, shares at Jun. 30, 2021		44,100,816
Balance, amount at Jun. 30, 2021	(738,121)	$ 44,101	4,793,552	(5,580,355)	4,864	(283)
Net loss	(20,225)			(20,225)
Other comprehensive income	258				235	23
Balance, shares at Sep. 30, 2021		44,100,816
Balance, amount at Sep. 30, 2021	$ (758,088)	$ 44,101	$ 4,793,552	$ (5,600,580)	$ 5,099	$ (260)

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
CASH FLOWS FROM OPERATIONS
Net loss	$ (61,345)	$ (61,360)
Changes in assets and liabilities:
Accounts payable and accrued expenses	374	(3,282)
Accrued expenses - related parties	20,812	20,813
Accrued interest - stockholders and officers	15,041	14,956
Net Cash Used in Operating Activities	(25,118)	(28,873)
CASH FLOWS FROM FINANCING ACTIVITIES
Loans from stockholders	4,855	2,930
Due to affiliate	20,498	25,803
Net Cash Provided by Financing Activities	25,353	28,733
Net Change In Cash	235	(140)
Cash balance, beginning of period	47	211
Cash balance, end of period	282	71
Supplemental disclosures of cash flow information:
Cash paid for interest	0	0
Cash paid for income taxes	$ 0	$ 0

XML

BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2021

BASIS OF PRESENTATION

1. BASIS OF PRESENTATION

1. BASIS OF PRESENTATION

The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position of the Company as of September 30, 2021, the results of operations for the three and nine months ended September 30, 2021 and 2020, and cash flows for the nine months ended September 30, 2021 and 2020. These results are not necessarily indicative of the results to be expected for the full year or any other period. The December 31, 2020 balance sheet included herein was derived from the audited financial statements included in the Company’s Annual Report on Form 10-K as of that date.  Accordingly, the financial statements included herein should be reviewed in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the Securities and Exchange Commission (“SEC”) on March 30, 2021.

XML

GOING CONCERN AND UNCERTAINTY

9 Months Ended

Sep. 30, 2021

GOING CONCERN AND UNCERTAINTY

2. GOING CONCERN AND UNCERTAINTY

2. GOING CONCERN UNCERTAINTY

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the financial statements, the Company had a working capital deficiency of $758,088 and an accumulated deficit of $5,600,580 at September 30, 2021, and a record of continuing losses. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include adjustments that might result from the outcome of this uncertainty.

The Company’s operations to date have been limited to conducting various tests on its technologies and seeking financing. The Company will continue to develop and market its technologies, which the Company believes have great market potential. As such, the Company continues to pursue additional sources of financing. Currently the company is exploring various potential investment partners in Japan, as well as China. There can be no assurances that the Company can secure additional financing. . The present plans, the realization of which cannot be assured, to overcome these difficulties also include, but are not limited to, a continuing effort to investigate business acquisitions and joint ventures. 

The Company’s operations may be affected by the recent and ongoing outbreak of the coronavirus disease 2019 (COVID-19) which in March 2020, was declared a pandemic by the World Health Organization. The ultimate disruption which may be caused by the outbreak is uncertain; however, it may result in a material adverse impact on the Company’s financial position, operations and cash flows. Possible areas that may be affected include, but are not limited to, disruption to the Company’s ability to obtain funding and performing further research on certain projects.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2021

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

New Accounting Pronouncements

During the nine months ended September 30, 2021, there have been no other material changes in the Company’s significant accounting policies to those previously disclosed in the Annual Report.

No recently issued accounting pronouncements had or are expected to have a material impact on the Company’s consolidated financial statements.

XML

RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2021

RELATED PARTY TRANSACTIONS

4. RELATED PARTY TRANSACTIONS

4. RELATED PARTY TRANSACTIONS

The Company receives periodic loans from its principal stockholders and officers based upon the Company’s cash flow needs. There is no written loan agreement between the Company and the stockholders and officers. All loans bear interest at 4.45% and no repayment terms have been established. As a result, the amount is classified as a current liability. During the nine months ended September 30, 2021, the Company borrowed $4,855 from a stockholder. The balances due as of September 30, 2021 and December 31, 2020 were $398,955 and $394,100, respectively. Interest expense associated with these loans were $4,520 and $13,354 for the three and nine months ended September 30, 2021 as compared to $4,464 and $13,263 for the three and nine months ended September 30, 2020. Accrued interest on these loans were $92,640 and $79,286 at September 30, 2021 and December 31, 2020, respectively.

The Company has an arrangement with Lina Maki, a stockholder of the Company, for her management consulting time. The agreement is not written, and no payment terms have been established. The fee is $10,000 annually. As of September 30, 2021 and December 31, 2020 amounts due to the stockholder were $47,500 and $40,000, respectively.

The Company leases its office space in Vancouver from a stockholder of the Company at a monthly rate of $2,500 under a lease agreement which expires October 1, 2021.  At September 30, 2021 and December 31, 2020 amounts due to the stockholder were $72,183 and $60,371, respectively. The Company shares the space with Amanasu Techno Holdings Corp, a reporting company under the Securities Exchange Act of 1934. Amanasu Techno Holdings Corp is responsible for 50% of the rent.

4. RELATED PARTY TRANSACTIONS (continued)

The office in New York is rented at the rate of approximately $360 each year and is also shared with Amanasu Techno Holdings Corp. In addition, the Company maintains an office at Suite 905, 1-6-1 Senzoku Taito-Ku Tokyo Japan.

Amanasu Corp. is the principal stockholder of the Company. The balance due to Amanasu Corp. was $50,000 and $50,000 at September 30, 2021 and December 31, 2020, respectively. Interest expense associated with this loan were $569 and $1,687 for the three and nine months ended September 30, 2021, as compared to $569 and $1,693 for the three and nine months ended September 30, 2020, respectively.  No terms for repayment have been established. As a result, the amount is classified as a current liability in due to related parties. Accrued interest on this loan were $15,167 and $13,480 at September 30, 2021 and December 31, 2020, respectively.

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INCOME TAXES

9 Months Ended

Sep. 30, 2021

INCOME TAXES

5. INCOME TAXES

5. INCOME TAXES

In accordance with the current tax laws in the U.S., the Company is subject to a corporate tax rate of 21% on its taxable income. No provision for taxes is made for U.S. income tax for the three and nine months ended September 30, 2021 and 2020 as it has no taxable income in the U.S. The Company can carry forward net operating losses (NOL's) to be applied against future profits for a period of twenty years in the U.S. and 80% of the NOL can be carried forward for three years in Japan.

The Company had NOL carryforwards of approximately $3.80 million in the U.S. at September 30, 2021.Approximately $3.5 million in the U.S. will expire in the years 2021 through 2037, and $0.30 million can be carried forward indefinitely. 

Deferred income taxes are recorded to reflect the tax consequences or benefits to future years of any temporary differences between the tax basis of assets and liabilities, and of net operating loss carryforwards. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets us dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against all of the deferred tax assets relating to the NOL’s for every period because it is more likely than not that all of the deferred tax assets will not be realized.

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OPERATING LEASE LIABILITY

9 Months Ended

Sep. 30, 2021

OPERATING LEASE LIABILITY

6. OPERATING LEASE LIABILITY

6. OPERATING LEASE LIABILITY

The Company's executive offices are located at 244 Fifth Avenue 2nd Floor New York, NY 10001 and Vancouver, British Columbia. The total premises in Vancouver are 2,000 square feet and are leased at a monthly rate of $2,500 under a lease agreement between the Company and the Secretary of the Company which expires October 1, 2021. The Company shares the space with ATH, a reporting company under the Securities Exchange Act of 1934. Our major stockholder and officer own approximately 86% of ATH’s outstanding shares of common stock. ATH is responsible for 50% of the rent or $1,250 each month.

6. OPERATING LEASE LIABILITY (continued)

The Company's lease does not provide an implicit rate, and therefore the Company uses an estimated incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease. The Company used incremental borrowing rate of 5% for the calculation of operating leases liabilities.

Total rent expense under operating leases for the three and nine months ended September 30, 2021 was $3,750 and $11,250, as compared to $3,750 and $11,250 for the three and nine months ended September 30, 2020.

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2021

COMMITMENTS AND CONTINGENCIES

7. COMMITMENTS AND CONTINGENCIES

7. COMMITMENTS AND CONTINGENCIES

The Company is involved in various legal proceedings, claims and litigation arising in the ordinary course of business. The Company does not believe that the disposition of matter that are pending will have a material effect on its condensed consolidated financial statements.

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SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2021

SUBSEQUENT EVENTS

8. SUBSEQUENT EVENTS

8. SUBSEQUENT EVENTS

The Company evaluated subsequent events, which are events or transactions that occurred after September 30, 2021 through the issuance of the accompanying financial statements and determined that no significant subsequent event need to be recognized or disclosed.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2021

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

New Accounting Pronouncements

During the nine months ended September 30, 2021, there have been no other material changes in the Company’s significant accounting policies to those previously disclosed in the Annual Report.

No recently issued accounting pronouncements had or are expected to have a material impact on the Company’s consolidated financial statements.

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GOING CONCERN AND UNCERTAINTY (Details Narrative)	Sep. 30, 2021 USD ($)
GOING CONCERN AND UNCERTAINTY
Working capital deficiency	$ (758,088)
Accumulated deficit	$ (5,600,580)

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RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Monthly rate			$ 2,500
Maturity date			Oct. 01, 2021
Stockholders and Officers
Proceeds from loans from stockholders and officers			$ 4,855
Due to related party	$ 398,955		398,955		$ 394,100
Interest expense	4,520	$ 4,464	$ 13,354	$ 13,263
Interest rate			4.45
Accrued interest	92,640		$ 92,640		79,286
Stockholder 2
Due to related party	72,183		72,183		60,371
Amanasu Corp.
Due to related party	50,000		50,000		50,000
Interest expense	569	$ 569	1,687	$ 1,693
Accrued interest	15,167		$ 15,167		13,480
Rent holiding in percentage			50
Lina Maki [Member]
Due to related party	$ 47,500		$ 47,500		$ 40,000
Annual fees			$ 10,000

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INCOME TAXES (Details Narrative) $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($)
INCOME TAXES
Net operating loss carryforward	$ 3,800
Corporate tax rate	21
U.S. NOL carried forward rate	80
NOL carryforwards Description	Approximately $3.5 million in the U.S. will expire in the years 2021 through 2037, and $0.30 million can be carried forward indefinitely.

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OPERATING LEASE LIABILITY (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
OPERATING LEASE LIABILITY
Rent expense	$ 3,750	$ 3,750	$ 11,250	$ 11,250
Incremental borrowing rate			5
Monthly leased rate			$ 2,500
Major stockholder and officer own percentage			86
Outstanding shares of common stock percentage			50
Rent per month			$ 1,250
Executive offices Description			The total premises in Vancouver are 2,000 square feet