SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-KSB/A
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES ACT OF 1934
For
the
Fiscal Year Ended December 31, 2004
COMMISSION
FILE NO. 0-49719
AMANASU
TECHNOLOGIES CORPORATION
(Name
of
small business issuer as specified in its charter)
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NEVADA
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98-0351508
|
|
| |
(State
or other jurisdiction of incorporation)
|
|
(IRS
Employer
|
|
| |
|
|
Identification
No.)
|
|
701
FIFTH
AVENUE, 42nd FLOOR, SEATTLE, WA 98104
(Address
of principal executive offices)
206-262-8188
(Issuer's
telephone number)
Securities
registered pursuant to Section 12(b) of the Exchange Act: NONE
Securities
registered pursuant to Section 12(g) of the Exchange Act:
Title
of
each class:
Common
Stock, no par value
Check
whether the issuer (1) filed all reports required to be filed by Section
13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter
period
that the registrant was required to file such reports), and (2) has been
subject
to such filing requirements for the past 90 days.
x Yes o No
x Yes o No
Check
if
disclosure of delinquent filers pursuant to Item 405 of Regulation S-B is
not
contained in this form, and no disclosure will be contained, to the best
of the
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in part III of this form 10-KSB or any amendment
to
this Form 10-KSB. x
State
the
issuer's revenues for its most recent fiscal year: $-0-.
The
aggregate market value of the voting stock held by non-affiliates of the
registrant on March 15, 2005,
computed by reference to the price at which the stock was sold on that date:
-0-
The
number of shares outstanding of the registrant's Common Stock, no par value,
as
of March 15, 2005
was
46,506,300 common shares.
PART
I
Item
1. Description
Of Business.
General
Amanasu
Technologies Corporation ("Company") was incorporated in the State of Nevada
on
December 1, 1997 under the name of Avani Manufacturing (China) Inc. The Company
changed its name to Genesis Water Technology on August 17, 1999, and to Supreme
Group International, Inc. on December 24, 2000. On June 7, 2001, it changed
its
name to Amanasu Technologies Corporation. The Company is a development stage
company, and has not conducted any operations and generated any revenues
since
its inception.
The
Company’s principal offices are located at 701 Fifth Avenue, 42nd Floor,
Seattle, Washington 98104,
and its
telephone number is (206) 262-8188. The Company also maintains an office
at
1-3-38,
Roppongi, Minato-ku, Tokyo, 106-0032, Japan.
Overview
and History.
The
Company is a development stage company and significant risks exist with respect
to its business (see “Cautionary
Statements”
below).
The Company received the exclusive, worldwide rights to a high efficiency
electrical motor and a high powered magnet both of which are used in connection
with an electrical motor scooter. The technologies were acquired under a
sub-license agreement with Amanasu Corporation, formerly Family Corporation.
Amanasu Corporation, a Japanese company and the Company’s largest shareholder,
acquired the rights to the technologies under a licensing agreement with
the
inventors. Mr. Atsushi Maki, a director of the Company, is the sole shareholder
of Amanasu Corporation. At this time, the Company is not engaged in the
commercial sale of any of its licensed technologies. Its operations to date
have
been limited to acquiring the technologies, constructing four proto-type
motor
scooters and various testing of the technologies and the motor scooter.
License
Agreement.
Effective
February 10, 2000, Amanasu Corporation obtained the exclusive, worldwide
rights
to a high efficiency electrical motor and a high powered magnet pursuant
to a
licensing agreement with its inventors. Amanasu Corporation paid the inventors
the sum of $160,000, and transferred to the one of the inventors’ 1,000,000
shares of common stock of the Company that it later received when it
sub-licensed the technology to the Company, as described below. The term
of the
licensing agreement is 30 years, and is subject to a two percent royalty
payable
to the inventors on the gross receipts from the sale of products using the
licensed technology. The agreement is assignable by Amanasu Corporation,
provided that, the assignee assumes the other terms and conditions of the
license agreement, including the payment of the two percent gross royalty
to the
licensors. The inventors may terminate the agreement if the licensees or
its
assigns fail to cure any default within 90 days after receiving notice of
such
default from the licensors.
Sub-license
Agreement.
Effective
March 10, 2000, Amanasu Corporation sub-licensed to the Company the exclusive,
worldwide rights to the technologies, subject to the terms of the underlying
license agreement. As required under the sub-license agreement, the
Company:
- issued
to
Amanasu Corporation 17,000,000 shares of common stock and an option to acquire
20,000,000 shares of common stock at $0.02 per share, which was exercised
by
Amanasu Corporation in October 2001.
- agreed
to
pay Amanasu Corporation the sum of $160,000, of which $100,000 has been paid
and
the balance has been characterized as a capital contribution to the
Company.
- issued
an
additional 6,350,000 shares of its common stock, valued at $6,350 to third
parties. These shares consisted of: 1,000,000 shares to each of Wanxuan Lei,
Shiyang Lei, and Jufang Zhang; 100,000 shares to Tokuo Goshima, 500,000 shares
to Takashi Yamaguchi, and 50,000 shares to Machiaki Iwasaka; and 2,700,000
shares to Mr. Atsushi Maki.
The
shares issued to Wanxuan Lei, Shiyang Lei, and Jufang Zhang were issued in
exchange for product marketing services to be performed by these parties
for the
Company in respective countries of China, Korea, and Taiwan, as further
described in Item 1 section Markets and Marketing below. None these individuals
are affiliated with the inventors or Amanasu Corporation.
The
shares issued to Takashi Yamaguchi were as required under the sub-license
agreement, however, not for any future services to be performed by these
parties
to the Company. Takashi Yamaguchi is a consultant of a Y.T. Magnet Corporation,
a company owned by the principal inventor.
The
shares issued to Tokuo Goshima and Machiaki Iwasaka, were originally issued
in
December 2001 for marketing and technical services. The above noted shareholders
did not perform these services and at the request of these shareholders,
the
Company canceled the shares in January 2003. No consideration was paid to
these
shareholders.
The
shares issued to Mr. Maki were issued in exchange for product marketing services
to be performed by Mr. Maki in Japan, as further described in Item 1 section
Markets and Marketing below.
The
sublicense agreement subjects the Company to the terms and conditions of
the
original license agreement, and as a result, it is required to pay the inventors
a royalty of two percent of the gross receipts from the sale of products
using
the technology. The term of the sub-license agreement is 30 years from the
date
of the agreement between the Amanasu Corporation and the inventors. However,
if
the Company fails to comply with any provision of the agreement after a 90-day
notice period, the licensors may terminate the agreement. The Company has
valued
the sub-license agreement at $160,000, which equals the cash amount paid
by
Amanasu Corporation to the inventors.
The
Company intends to use the technologies to produce a lightweight, electrical
motor scooter to compete in the emerging, light electric vehicle industry.
Background
of Technology.
The
high
efficiency electrical motor and the high powered magnet technologies were
developed by the principal inventor, Yasunori Takahashi. Mr. Takahashi
subsequently transferred the rights to the technologies to his son, Yoshiaki
Takahashi. Yoshiaki Takahashi patented the motor technology in the United
States
on January 19, 1999 (Patent #5,861,693) and in Canada on February 20, 2001
(Patent #2,164,745), and patented the magnet technology in the United States
on
November 24, 1998 (Patent # 5,480,133).
In
the
first half of 1996, the principal inventor entered into a distribution
arrangement with a former business associate located in Taiwan, who agreed
to
market the scooter in Taiwan. Based on this arrangement, the inventor produced
approximately 20,000 scooters at his manufacturing facility located in Japan
using earlier versions of the technologies. The scooters were shipped directly
to the distributor in Taiwan on a consignment basis. However, the distributor
failed to pay the inventor for the delivered scooters and also failed to
return
the scooters. Consequently, the arrangement was terminated in late 1996.
As of
result of the actions of the Taiwan distributor, the inventor lacked sufficient
working capital to continue to produce and market the scooter, and his
operations ceased in late 1996. Following the cessation of operation until
February 2000 when he entered into the licensing agreement with Amanasu
Corporation as discussed above, no operations were conducted by the inventor
other than to further refine the technologies.
The
inventor conducted his prior operation in compliance will all governmental
rules
and regulations. In this regard, the inventor received approvals from the
Japanese Regional Land and Transportation Bureau, and the Taiwanese Department
of Finance in the Ministry of Economic Development. He also received approval
from the local prefecture (government) in Tokyo for his assembly operations.
Description
of Technology.
The
technologies sub-licensed by the Company consist of a high efficiency electric
motor and a high powered magnet. Both technologies have been patented by
the
inventor under separate patent filings in the United States. The motor
technology also was patented in Canada. The Company expects to manufacture
and
sell a proprietary electric motor scooter which incorporates the advantages
of
the two technologies. Management believes the competitive advantages of the
electric motor scooter are its ability to travel longer distances between
each
battery recharge, as well as a significantly shorter battery recharge time
than
other electric motor scooters in the market. The belief of management is
premised upon the comparison of results between independent tests conducted
by
Sanwa Electronics Co., Inc., on behalf of the Company, with respect to its
electric scooter and data published by Honda regarding its electric scooter.
This comparison is discussed in “Description of Products” below.
Conventional
electric motors convert electric energy received from a power source such
as a
battery to mechanical energy for use in the desired motorized application.
However, the conversion efficiency, that is, the amount of energy actually
converted to mechanical energy generally is reduced due to a number of factors
such as motor friction and vibration, and electro-magnetic loss. This
inefficient use of energy, or energy deficit, depletes the energy supply
stored
in the battery causing motor stoppages. Therefore, frequent battery recharging
is required to maintain successive operation of a conventional electrical
motor.
The proprietary motor to be used by the Company supports longer motor usage
intervals between battery re-charges. It also accomplishes this operation
on a
significantly shorter battery re-charge time. The properties of this brushless
motor, exclusive of the high-powered magnet, are such that it generates
electricity with the first power supply, storing it in a regenerative condenser
and recycling it as electrical power. By connecting parallel condensers,
it
reduces consumption of electrical power. The patented magnet is a low cost,
glass bonded magnet that has a magnetic force 10 times greater than a
conventional ferrite magnet resulting is a substantially lower electro-magnetic
loss during operation. The electric motor to be manufactured by the Company
employing the combined technologies is expected to exhibit greater operational
efficiencies than other conventional electric motors. The Company, in marketing
its product, expects to leverage upon the operational efficiencies of its
technologies, as well as to capitalize upon the growing trend towards
environmentally friendly vehicles.
Description
of Products.
The
Company intends to participate in the emerging electric vehicle market by
using
its sub-licensed technologies to design, manufacture, and sell lightweight,
electric motor scooters. The
Company is planning to provide its own technology of battery charging system
to
Evader Motorcycle, Inc. and develop better and advanced product of electric
scooter in cooperation. The Company may aim to open the market in Japan and
mainly in Southeast Asia.
The
Company's principal product will be a lightweight motor scooter that features
the Company's proprietary electric motor. The one passenger scooter also
will
feature a step less transmission, an electromotive brake, and is expected
to
weigh 107 kg. The Company will use an otherwise standard leaded battery.
Due to
the unique features of the licensed technologies, the scooter is expected
to
deliver improved operational efficiencies over competitive products. On December
26, 2001, Sanwa Electronics Co., Inc. performed two independent tests on
one of
the Company's scooters. The test results indicated that the motor scooter
can
travel 65 to 85 km on a full battery charge, at an average running speed
of 30
km/hour. The battery charge time to travel these distances approximated 2
hours.
Sanwa Electronics conducted the tests on a relatively flat road grade with
limited traffic density. These results contrast with Honda's electric scooter
(Year 2001-Model #A-AF36). According to product literature published by Honda,
the scooter travels approximately 60 km at 30 km/hour, and a full recharge
requires approximately 8 hours. Conditions, such as road grade and travel
density, regarding the scooter were not contained in the Honda information.
The
Company recognizes there have been major barriers to widespread adoption
of
electric motor scooters. These barriers include higher retail pricing of
electric motor scooters compared to gas-powered versions. In addition, electric
motor scooters have labored under its operational limitations, such as limited
travel range and lengthy battery charge time. The Company believes that its
product will favorably respond to these barriers. The Company expects to
competitively price its scooter with others in the marketplace. For example,
despite the unique features of its motor, the Company expects its motor scooter
to retail slightly higher than gas powered versions, however, at discount
of
between 20% to 30% to the Honda model identified above. It believes that
the
operational efficiencies of its scooter, that is its longer travel range
and
shorter charge time, will overcome some of the operational limitations that
have
plagued other electric scooters.
Gas
powered scooters while generally an inexpensive mode of transportation,
typically are powered by two-stroke engines fueled by an oil and gasoline
mixture. These engines are small with compressed power, and therefore ideally
suited for scooter use. However, two stroke engines are commonly identified
by
clouds of oily smoke trailing the engine, which evidences its major
disadvantages. Two stroke engines use fuel inefficiently and, more importantly,
have high pollution emissions. They generate pollution from two sources;
the
combustion of oil in the fuel, and the leaking of fuel through the exhaust
port
during engine use. In promoting its product to its targeted markets, the
Company
will seek to capitalize on its strong operational efficiencies of the technology
compared with other electric scooters, while championing its product's
environmental advantages to gas powered versions.
Competition.
The
Company expects to confront intense competition in electric vehicle market.
The
major manufacturers in the electrical bicycle/scooter market are Honda, Suzuki,
Sanyo and Yamaha which sell their products principally in the Far East and
Europe. In addition, other smaller manufacturers exist in this market throughout
the world. Despite the robust competition, the Company believes that it maintain
certain competitive advantages in this market. Specifically, it believes
that
its scooter’s ability to travel longer distances on an existing charge as well
the shorter charge time are important competitive advantages. In addition,
the
Company expects to sell its scooter at prices ranging from 20 to 30% less
than a
comparable product manufactured by the major manufacturers. Consequently,
the
Company believes due to these competitive advantages, it will be able to
effectively compete in this market.
Manufacturing
And Suppliers.
Market
place of electric scooter has become intensely competitive. Offering shorter
recharging time and more economical sales price are the primal keys. The
Company
conducted a procedure of manufacturing the product in China due to cutting
down
on the cost, and hoped it would work through to meet the Company’s expectation.
However the significant issue which was difficulty of protecting the proprietary
technology unwillingly emerged. Additionally there were some major concerns
which were securing follow-ups, warrant and maintenance of the product due
to
safety and protection of incidents from the result of its deficiency, and
handling and managing such matters perfectly is overwhelming. To solve the
2
major issues, the Company has come to the potential solution in connection
with
making a revenue and profit, which is cooperation with a company who has
already
produced complete product of electric scooter in successful marketing condition.
The Company has encountered Evader Motorcycle, Inc. (U.S.A) who has commercially
produced their electric scooters and sold it in 20 countries. The Company
considers Evader as a prospective company that the Company might share its
technology with and create more improved and advanced technology of electric
scooter which would make a strong impact to the market. The Company may pursue
the exclusive right to Evader’s already existing product to open the market in
Japan for the first step
Markets
And Marketing.
Motor
scooters have been one of the primary modes of transportation worldwide for
many
years with particular widespread use in congested cities of Europe and the
Far
East. Recently, motor scooter use has descended upon many cities in the United
States. Scooter use in these geographical areas initially has been gas-powered
models, however, in recent years electrical powered scooters have been
introduced to these areas. The growth of the market for electric vehicles
in the
United States has been led by federal, state, and local laws aimed at reducing
pollution levels from conventional gas powered vehicles, including two-stroke
vehicles like motorcycles and scooters. The U.S. Energy Policy Act of 1992
provides that federal, state and public utility fleets must begin to purchase
alternative fuel vehicles in 1993 with major acceleration of these purchases
to
begin in 1998. The State of California has mandated that 10% of all new car
sales in the state must be zero emission vehicles by the year 2003, and other
states have enacted similar directives. In addition, municipalities in
California and Colorado are offering $250 rebates to buyers of electric
vehicles. Globally, a similar effort is underway. The Republic of China
seemingly has embraced electric vehicle usage. China gives buyers of electric
scooters a rebate equivalent to $200 (US). During 1999, it sponsored a $12
million program to put three to five thousand electric vehicles on the road
by
2000. Finally, it recently banned the licensing of new gas-powered bicycles
in
the cities of Shanghai and Beijing. In Europe, France has agreed to provide
rebates of the additional cost of electric vehicles over conventional vehicles
and is providing free parking to electric vehicles in Paris. The Company
believes that the its plan of operations of manufacturing and selling electric
scooters will benefit from these legislative efforts.
The
Company's strategic focus was to establish a distribution network in North
America and Japan, subject to the Company raising sufficient working capital
for
its operations. The Company would use independent marketing representatives
to
identify prospective distributors and other potential users such as local
and
regional governments within designated territories. Wanxuan Lei, Shiyang
Lei,
and Jufang Zhang were the Company’s independent marketing representatives for
the territories of China, Korea, and Taiwan respectively. In North America,
the
President and an independent consultant would lead the marketing efforts
in
North America.
However,
the Company has come to the point where it might enter a contract with Evader
Motorcycle, Inc. for a business cooperation, which may result in skipping
some
process of having a foundation for production line and after-care service
line,
and leaping widely toward actual commercial sale and distribution. Therefore
Wanxuan Lei, Shiyang Lei, and Jufang Zhang are considered to be finished
with
their supports for the Company and have started focusing on their individual
pursuits. The Company will remain the relationship with them and will seek
for
their supports as the need arises. The Company estimates the cost approximately
$100,000 on the promotion for the Evader’s electric scooter. Once an arrangement
is formalized with Evader Motorcycle, Inc., the marketing representative
of the
Company will make sales directly to the distributors in Japan. As the number
of
sales result increased, the Company will enter discussion of a new project
which
is expansion of its market place in other Asian countries.
Each
distributor for the Company likely will be an existing distributor of motor
scooters in Japan, and will be granted a designated territory on an exclusive
or
non-exclusive basis. In order to maintain exclusivity, each distributor will
be
required to purchase a minimum number of scooters according to the agreement
which in discussion at present. The Company believes that these principal
markets are attractive because of the high demand for motor scooters coupled
with the growing worldwide effort to limit emissions from gas-powered vehicles.
The Company will seek to leverage its operating advantages to sell Evader’s
electric scooter to existing scooter distributors in Japan.
Proprietary
Rights.
Pursuant
to the sub-license agreement with the Amanasu Corporation, the Company obtained
the exclusive world-wide rights to the proprietary motor and magnet technologies
for a period of 30 years. The Company considers the technologies and know-how
as
proprietary and will use a combination of trade secrets, non-disclosure
agreements, license agreements, and patent laws to protect its licensed
proprietary rights.
Although
the Company received the exclusive worldwide rights under the sub-licensing
agreement, the technology is patented only in the United States and Canada.
The
magnet technology was patented by the inventor in the United States in November
1998 (Patent #: 5,840,133-filed February 7, 1997) and motor technology was
patented by the inventor in the United States in January 1999 (Patent #:
5,861,693-filed November 17, 1995) and in Canada in February 2001 (Patent
#:
2,164,745-filed December 8, 1995). The patents expire in both the United
States
and Canada 20 years from the respective original filing date. The Company
anticipates that it will file for patent protection in other countries prior
to
any marketing efforts in such country, and no other patents regarding the
technologies are pending or planned.
Government
Regulations
Generally,
the Company will be required to receive regulatory approval from various
governmental agencies to conduct its operations. These regulatory approvals
will
require the Company to obtain and retain numerous governmental permits to
conduct various aspects of its operations, any of which may be subject to
revocation, modification or denial. The Company makes a continuing effort
to
anticipate regulatory, political, and legal developments in its principal
markets in the Asian, North and South American markets that might affect
its
operations, but it is not always able to do so. The Company cannot predict
the
extent to which any legislation or regulation that may be enacted, amended,
repealed, reinterpreted, or enforced in the future may affect its operations.
Such actions could adversely affect the Company's operations or impact its
future financial condition or earnings. The Company however does expect that
its
scooter will comply with all governing regulations in those countries that
it
intends to sell its product.
Employees.
As
of
December 31, 2004,
the
Company has no full time employees. During 2004,
the
Secretary of the Company has rendered consulting services to the Company
in the
amount of $42,000.
Item
2. Description Of
Property.
The
Company's executive offices are located at 701 Fifth Avenue, 42nd Floor,
and
Seattle, Washington 98104. The premises are 1,500 square feet and are subleased
at a monthly rate of $1,550
from Amanasu Environment Corporation, a reporting company under the Securities
Exchange Act of 1934, and a company controlled by the Company’s majority
shareholder. The underlying lease expires September 30, 2005. The Company
sub-leases a Seattle apartment from Amanasu Environment Corporation for a
monthly rental of $1,000. The underlying lease expires October 15, 2005.
The
rental amounts for both premises are shared equally with Amanasu Environment
Corporation. In addition, the Company maintains an office at 1-3-38, Roppongi,
Minato-ku, Tokyo, 106-0032, Japan.. The premises are 1,000 square feet and
are
leased on a month to month basis at a monthly rental of $2,500 per month.
Amanasu Environment Corporation occupies the same premises and pays the same
rental amount. The Company believes additional lease space at this location
will
be available to support its future growth.
The
above
agreements between the Company and Mr. Maki are oral arrangements. Other
than as
indicated, no other rental expenses will be charged to the Company by Mr.
Maki
for such periods. The conditions of both premises are good.
Item
3. Legal
Proceedings.
None.
Item
4. Submission Of
Matters To A Vote Of Security Holders.
None
PART
II
Item
5. Market For Common
Equity And Related Stockholder Matters.
There
is
no public market for the Company's equity securities. The Company intends
to
establish a public market for its common stock in the United States. The
Company
will seek a market maker to file a Form 211 application with the NASD in
order
for its common stock to be quoted on the over the counter bulletin board
of the
NASD. The application will be subject to the review and approval of NASD.
As of
December 31, 2004,
(i)
there are no outstanding warrants or options to purchase, or securities
convertible into common stock of the Company and (ii) 45,989,650 shares of
common stock can be sold pursuant to Rule 144, of which 5,446,600 shares
can be
sold pursuant to Rule 144 (k). The remaining shares are held by control person
and, as such, are subject to the other limitations of Rule 144, including
the 1%
limitation discussed below. Under Rule 144, shareholders whose restricted
shares
meet the rule's one year holding provisions, including persons who may be
deemed
affiliates of the Company, may resell restricted securities in broker's
transactions or directly to market makers, provided the number of shares
sold by
such holder in any three month period is not more than the greater of 1%
of the
total shares of common stock then outstanding or the average weekly trading
volume for the four calendar week period immediately prior to each such sale.
After a non affiliated shareholder meets the two year holding period of the
rule, restricted securities may be resold without regard to the above
restrictions. Restricted securities held by affiliates must continue, even
after
the two year holding period, to meet the resale limitations discussed
above.
If
and
when the Company's securities are traded, the securities may likely be deemed
a
"penny stock". The Securities and Exchange Commission had adopted Rule 15g-9
which establishes the definition of a "penny stock," for purposes relevant
to
the Company, as any equity security that has a market price of less than
$5.00
per share or with an exercise price of less than $5.00 per share, subject
to
certain exceptions. For any transaction involving a penny stock, unless exempt,
the rules require: (i) that a broker or dealer approve a person's account
for
transactions in penny stocks and (ii) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity
and
quantity of the penny stock to be purchased. In order to approve a person's
account for transactions in penny stocks, the broker or dealer must: (i)
obtain
financial information and investment experience and objectives of the person
and
(ii) make a reasonable determination that the transactions in penny stocks
are
suitable for that person and that person has sufficient knowledge and experience
in financial matters to be capable of evaluating the risks of transactions
in
penny stocks. The broker or dealer must also deliver, prior to any transaction
in a penny stock, a disclosure schedule prepared by the Commission relating
to
the penny stock market, which, in highlight form, (i) sets forth the basis
on
which the broker or dealer made the suitability determination and (ii) that
the
broker or dealer received a signed, written agreement from the investor prior
to
the transaction. Disclosure also has to be made about the risks of investing
in
penny stocks in both public offerings and in secondary trading, and about
commissions payable to both the broker-dealer and the registered representative,
current quotations for the securities and the rights and remedies available
to
an investor in cases of fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in penny
stocks.
As
of
March 15, 2005,
there
are 91
shareholders of record of the Company's common stock. . Although there are
no
restrictions on the Company's ability to declare or pay dividends, the Company
has not declared or paid any dividends since its inception' and does not
anticipate paying dividends in the future.
Equity
Compensation Plan Information.
|
Equity
Compensation Plan Information
|
|
Plan
category
|
Number
of securities to be issued upon exercise of outstanding options,
warrants
and rights
(a)
|
Weighted-average
exercise price of outstanding options, warrants and
rights
(b)
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
(c)
|
|
Equity
compensation plans approved by security holders (1)
|
-0-
|
-0-
|
-0-
|
|
Equity
compensation plans not approved by security holders (2)
|
-0-
|
-0-
|
-0-
|
|
Total
|
-0-
|
-0-
|
-0-
|
Recent
Sales Of Unregistered Securities
During
the quarter ended June 30, 2003, 20,000 shares were allotted to Reraise
Corporation, a private Japanese company, at a price of $4.99 per share for
total
consideration of $99,900. As of the date hereof, the shares have not been
issued
due to pending documentation needed to affect a new share issuance. As a
result,
the $99,900 capital contribution should be considered a liability until such
shares have been issued. This transaction was previously recorded as a capital
transaction in error.
Item
6: Management's
Discussion And Analysis Or Plan Of Operations.
The
following discussion should be read in conjunction with the Company's Financial
Statements, including the Notes thereto, appearing elsewhere in this Annual
Report.
Company
Overview
The
Company was organized on December 1, 1997. Its operations to date have been
limited to obtaining the sub-license to the technology described below, and
conducting preliminary marketing efforts.
Plan
Of Operations
The
Company is a development stage corporation. It has not commenced its planned
operations of manufacturing and marketing a lightweight electrical motor
scooter. Its operations to date have been limited to conducting various tests
on
its technologies.
The
Company’s plan of operations for the next 12 months is to consider providing its
patented fast battery charging technology adopting Evader’s existing electric
scooter and develop and improve Evader’s scooter to be competitive, rather than
only working on the Company’s product struggling with raising capital and delay
of its commercial production. Because, compare to other electric scooters,
the
electric scooter produced by Evader Motorcycle, Inc. is relatively systemized
fast battery charging time, and most of all, Evader already has its production
line and establishes the after-care- service management. Cooperating with
Evader
may benefit the Company that the Company may just focus on marketing and
sales
promotion. The Company considers opening the market in Japan for the next
12
months and then the countries of Southeast Asia, which may be the main market
place of the improved Evader’s scooter in the future. The sales price of the
scooter will be $1,300-1,850/unit and sales quantity will be 2,000units.
The
Company will primarily invest $150,000 for the marketing and sales promotion
of
Evader’s electric scooter. The Company is expecting a profit of $400,000
($200/unit (profit) X 2,000 units (prospective sales)) for next 12 months.
The
Company has also encountered an opportunity to consider marketing healthy
food
productions such as cheese, butter, salad dressing, mayonnaise, bread, beverage,
processed with soy bean. The Company is estimating $350,000 of investment
for
this project whether investing existing company for cooperation or establishing
a new company which produces healthy products.
The
Company's cash requirements for the next 12 months are estimated to be $500,000.
This amount is comprised of the following estimate expenditures; $100,000
in
annual salaries for office personnel, office expenses and travel, $60,000
for
rent, $20,000 for professional fees, and $10,000 for miscellaneous
expenses.
As
stated
above, the Company cannot predict whether or not it will be successful in
its
capital raising efforts, and, thus, be able to satisfy its cash requirements
for
the next 12 months. If the Company is unsuccessful in raising at least
$500,000,
it
may not be able to complete its plan of operations as discussed
above.
During
the fiscal 2004
and
2004, the
Company spent $-0- and $-0- respectively on research and
development.
Liquidity
And Capital Resources
In
October 2001, the Company received $46,000 from four investors and $400,000
resulting from
the
exercise of stock options for 20,000,000 shares of common stock by the Company's
principal shareholder. During the 2003 period, the Company raised $100,000
should be considered a liability until such shares have been issued. The
Company
intends to raise
additional funds in the near future through private placements of its common
stock. The proceeds from such private placements will be allocated for
administrative salaries, office expenses and travel, product development
and
testing, and parts inventory, as discussed below.
Total
assets as of December 31, 2004 were $167,425 representing a decrease of $20,179
from total assets of $187,604 as of December 31, 2003.
Forward
Looking Statements.
Certain
of the statements contained in this Annual Report on Form 10-KSB include
forward
looking statements. All statements other than statements of historical facts
included in this Form 10-KSB regarding the Company's financial position,
business strategy, and plans and objectives of management for future operations
and capital expenditures, and other matters, are forward looking statements.
These forward looking statements are based upon management's expectations
of
future events. Although the Company believes the expectations reflected in
such
forward looking statements are reasonable, there can be no assurances that
such
expectations will prove to be correct. Additional statements concerning
important factors that could cause actual results to differ materially from
the
Company's expectations ("Cautionary Statements") are disclosed below in the
Cautionary Statements section and elsewhere in this Form 10-KSB. All written
and
oral forward looking statements attributable to the Company or persons acting
on
behalf of the Company subsequent to the date of this Form 10-KSB are expressly
qualified in their entirety by the Cautionary Statements.
Cautionary
Statements.
Certain
risks and uncertainties are inherent in the Company's business. In addition
to
other information contained in this Form 10-KSB, the following Cautionary
Statements should be considered when evaluating the forward looking statements
contained in this Form 10-KSB:
Developmental
Stage Company. The
Company was
incorporated on February 22, 1999, and is a development stage company.
Presently, it has acquired certain technologies relating to an electrical
motor
scooter, however, the Company scooter is not available for commercial sale.
As a
development stage enterprise, the Company may be subject to the many pitfalls
commonly associated with development stage enterprises, such as testing and
proving technologies. These risks are in addition to normal business risks.
The
Company’s ability to emerge from the development stage with respect to its
planned principal business activity is dependent upon a number of factors,
including product development of existing technologies and successfully raising
additional financing to meet its working capital needs.
Need
For Additional Capital. The
Company
will
require additional capital and long term to meet its ongoing operating
requirements. Compare to other electric scooters, the electric scooter produced
by Evader Motorcycle, Inc. is relatively systemized fast battery charging
time.
The Company is considering to providing its patented fast battery charging
technology adopting Evader’s existing electric scooter, and cooperate with
Evader to open the market in Japan and the countries of Southeast Asia. Evader
already has its production line and establishes the after-care-service
management; therefore the Company may be able to just focus on marketing
and
sale promotion. In the future, the need includes funds for marketing promotion
of the improved scooter. The Company intends to raise the capital through
a
private or public financing of debt or equity. Presently, the Company has
no
commitment for any such funding. The Company can not predict whether it will
be
successful in obtaining such financing on terms acceptable to the Company
or on
any terms. The inability to obtain such financing will have a material adverse
affect on the Company and its ability to develop and commercial sell the
products.
Ability
To Develop Commercial Product. The
Company presently
maintains proto-type versions of its scooter. The
Company must undertake limited product development with respect its product
in
order for it to be commercially available for sale. The Company estimates
that
approximately $100,000
will be needed in marketing
promotion,
and
other expenditures. The Company can not predict that even with such
expenditures, it will be successful in developing ca product ready for
commercial sale in the near future or at any time.
Rapid
Technological Changes. The
industry in which the
Company intends to compete is subject to rapid technological changes. No
assurances can be given that the any technological advantages which may be
enjoyed by the Company in respect of its technologies can not or will not
be
overcome by technological advances by competitors rendering the Company’s
technologies obsolete or non-competitive.
Lack
Of Indications Of Product Acceptability. The
success of the Company will
be dependent upon its ability to develop commercially acceptable advanced
products adopting its technology to Evader’s existing product, and to sell such
products in quantities sufficient to yield profitable results. To date, the
Company has received no indications of the commercial acceptability of any
of
its scooter. Accordingly, the Company can not predict whether its products
can
be marketed and sold in a commercial manner.
Lack
Of Established Distribution Channels. The
Company does not have
an established channel of distribution for any of its scooter at present.
However Evader Motorcycle, Inc. has already its own distribution channels
in
Europe and thorough warranty system established for their scooter. If the
Company enters cooperation with Evader, and if the Company just provide its
patented technology of advanced battery system to Evader to improve the
efficiency of the existing product, the Company can just focus on establishing
a
network of designated dealers in targeted markets in Japan and South East
Asia
at such time as it has completed the product development and the scooter
is
ready for commercial sale. The Company can not predict whether it will be
successful in establishing its intended dealer network in Japan.
Management. The
ability of the Company to
successfully conduct its business affairs will be dependent upon the
capabilities and business acumen of current management including Mr.
Hideyuki
Shiraishi, the
Company's President. Accordingly, shareholders must be willing to entrust
all
aspects of the business affairs of the Company to its current management.
Further, the loss of any one of the Company's management team could have
a
material adverse impact on its continued operation.
Control
Exercised By Management. As
of March 15, 2005,
the
existing officers and directors, and affiliates will control approximately
87%
of the shareholder votes. Consequently, management will control the vote
on all
matters brought before shareholders, and holders of common stock may have
no
power in corporate decisions usually brought before shareholders.
Conflicts
of Interest. The
officers of the Company are
not full time employees. Presently, the Company does not have a formal conflicts
of interest policy governing its officers and directors. In addition, the
Company does not have written employment agreements with its officers. Its
officers intend to devote sufficient business time and attention to the affairs
of the Company to develop the Company’s business in a prudent and business-like
manner. However, the principal officer is engaged in other businesses related
and unrelated to the business of the Company, and in the future, will engage
in
other business ventures. As a result, the principal officer and other officer
of
the Company may have a conflict of interest in allocating their respective
time,
services, and future resources, and in exercising independent business judgment
with respect to their other businesses and that of the Company.
Reliance
upon Third Parties. The
Company does not
intend on maintaining a significant technical staff nor does it intend on
manufacturing its products. Rather it will rely heavily on consultants,
contractors and manufacturers to design, develop and manufacture its products.
Accordingly, there is no assurance that such third parties will be available
when needed at affordable prices.
Competition. Although
management believes
its product has significant competitive advantages to other products in the
industry. However, the Company will be competing in industries where enormous
competition exists. Competitors in these industries have greater financial,
engineering and other resources than the Company. No assurances can be given
that any advances or developments made by such companies will not supersede
the
competitive advantages of the Company's products.
Protection
Of Intellectual Property.
The
success of the Company will be dependent, in part, upon the protection of
its
proprietary of its various technologies from competitive use. Certain of
its
technologies are the subject of various patents in varying jurisdictions
(See
“Description of Business - Proprietary Rights”). In addition to the patent
applications, the Company relies on a combination of trade secrets,
nondisclosure agreements and other contractual provisions to protect its
intellectual property rights. Nevertheless, these measures may be inadequate
to
safeguard the Company’s underlying technologies. If these measures do not
protect the intellectual property rights, third parties could use the Company’s
technologies, and its ability to compete in the market would be reduced
significantly. In addition, if the sale of the Company’s product extends to
foreign countries, the Company may not be able to effectively protect its
intellectual property rights in such foreign countries.
In
the
future, the Company may be required to protect or enforce its patents and
patent
rights through patent litigation against third parties, such as infringement
suits or interference proceedings. These lawsuits could be expensive, take
significant time, and could divert management's attention from other business
concerns. These actions could put the Company’s patents at risk of being
invalidated or interpreted narrowly, and any patent applications at risk
of not
issuing. In defense of any such action, these third parties may assert claims
against the Company. The Company cannot provide any assurance that it will
have
sufficient funds to vigorously prosecute any patent litigation, that it will
prevail in any of these suits, or that the damages or other remedies awarded,
if
any, will be commercially valuable. During the course of these suits, there
may
be public announcements of the results of hearings, motions and other interim
proceedings or developments in the litigation which could result in the negative
perception by investors, which could cause the price of the Company’s common
stock to decline dramatically.
Indemnification
of Officers and Directors for Securities Liabilities.
The
Company's By-Laws eliminates personal liability in accordance with the Nevada
Revised Statutes (NRS). Section 78.7502 of the NRS provides that a corporation
may eliminate personal liability of an officer or director to the corporation
or
its stockholders for breach of fiduciary duty as an officer or director provided
that such indemnification is limited if such party acted in good faith and
in a
manner which he reasonably believed to be in or not opposed to the best interest
of the corporation. In so far as indemnification for liability arising from
the
Securities Act of 1933 (“Act”)may be permitted to Directors, Officers or persons
controlling the Company, it has been informed that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy
as expressed in the Act and is, therefore, unenforceable.
Penny
Stock Regulation.
The
Company's common stock may be deemed a "penny stock" under federal securities
laws. The Securities and Exchange Commission has adopted regulations that
define
a "penny stock" generally to be any equity security that has a market price
of
less than $5.00 per share, subject to certain exceptions. These regulations
impose additional sales practice requirements on any broker/dealer who sell
such
securities to other than established investors and accredited investors.
For
transactions covered by this rule, the broker/dealer must make certain
suitability determinations and must receive the purchaser's written consent
prior to purchase. Additionally, any transaction may require the delivery
prior
to sale of a disclosure schedule prescribed by the Commission. Disclosure
also
is required to be made of commissions payable to the broker/dealer and the
registered representative, as well as current quotations for the securities.
Finally, monthly statements are required to be sent disclosing recent price
information for the penny stock held in the account of the customers and
information on the limited market in penny stocks. These requirements generally
are considered restrictive to the purchase of such stocks, and may limit
the
market liquidity for such securities.
Item
7. Financial
Statements.
The
Financial Statements that constitute Item 7 of this Annual Report on Form
10-KSB
are included immediately following Item 14 below.
Item
8. Changes In And
Disagreements With Accountants On Accounting And Financial
Disclosure.
None.
Item
8A. Controls and
Procedures.
Within
the 90-day period prior to the filing of this annual report on Form 10-KSB,
the
Company carried out an evaluation of the effectiveness of the Company’s
disclosure controls and procedures (as defined by Rule 13a-14(c) 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. 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 those officers the information
necessary whether:
(i)
this
annual report on Form 10-KSB 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 annual report on Form 10-KSB, and(ii)
the
financial statements, and other financial information included in this annual
report on Form 10-KSB, 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 annual report on Form 10-KSB.
There
have been no significant changes in the Company's internal controls or in
other
factors since the date of the Chief Executive Officer's and Principal Financial
Officer's evaluation that could significantly affect these internal controls,
including any corrective actions with regards to significant deficiencies
and
material weaknesses.
PART
III
Item
9. Directors,
Executive Officers, Promoters And Control Persons.
The
directors and executive officers of the Company, their ages, and the positions
they hold are set forth below. The directors of the Company hold office until
the next annual meeting of stockholders of the Company and until their
successors in office are elected and qualified. All officers serve at the
discretion of the Board of Directors.
|
Name
|
Age
|
Position
|
|
Atsushi
Maki
|
57
|
Director
|
|
Lina
Lei
|
44
|
Secretary
|
|
Hideyuki
Shiraishi
|
46
|
Chairman,
President, and Chief Financial Officer
|
Atsushi
Maki has
been
the a Director of the Company since June 1, 2001. During the past ten years,
Mr.
Maki has been an independent businessman involved mainly in real estate
development projects in Japan. In 1995, he served as a Director of the
Japan-Korea Cooperation Committee along with the former Prime Minister of
Japan
who acted as the Chairman of the committee. In 1999, he was responsible for
establishing the Japan-China Association, a foundation for fostering better
relations between the two nations. He served as a director of the association,
along with the Chairman of Sony Corporation and the Honorary Chairman of
Toyota
Motor Corporation. Mr. Maki is the husband of Lina Lei, the Secretary of
the
Company. Mr. Maki also is a director of Amanasu Environment Corporation,
a
reporting company under the federal securities laws.
Lina
Lei
has been
the Secretary of the Company since 2001. Ms. Lei was appointed a director
in
November 1999 and resigned from the board on August 21, 2002. From May 1990
to
November 1999, Ms. Lei was employed by Thunder Company Ltd, Tokyo, Japan,
in
various capacities including as its managing director. Ms. Lei completed
her
university studies in Shanghai, China in 1982, and obtained a master's degree
from Hitotsubashi University in Tokyo in 1990. During the past five years,
Ms.
Lei’s work involvement has been limited to activities of the Company and that
of
Amanasu Technologies Corporation. Ms. Lei is the wife of Atsushi Maki, the
Chairman and President of the Company.
Hideyuki
Shirai has
been
Chairman, President, and Chief Financial Officer since November 12, 2004
after
the resignation of Masafumi Hata, the previous Chairman, President, and Chief
Financial Officer of the Compnay. From
1997
throughout 1999, Mr. Shiraishi held the post of Trustee of the Japan Council
of
Shopping Centers (the "Council").
The Council is a member of the International Council of Shopping Centers
and is the global trade association of the shopping center industry. From
March 1999 through June 2000, Mr. Shiraishi became the Representative Director
of Sephora AAP Japan and launched 6 stores in Ginza, Shinsaibashi, Shibuya,
Shinjuku, Ikebukuro, and Laraport. From July 2000 through May 2003, Mr.
Shiraishi became the Director of Real Estate and Property Development at
LVMH
Moet Hennessy Louis Vuitton Japan, a parent company of Sephora, where he
launched several stores in Japan for companies such as Chaumet and Christian
Dior. From June 2003 to present, Mr. Shiraishi has held the position Chief
Project Leader for the Institute for Eco and Economic Systems (the "Institute").
The Institute's main objective is to develop environmentally friendly
products for used in all areas of commerce. As Chief Project Leader, Mr.
Shiraishi is responsible in heading the department of New Product Development.
Item
10. Executive
Compensation.
Ms.
Lina
Lei,
an officer of the Company, received $42,000 in exchange for consulting services
rendered to the Company. No other form of compensation or remuneration was
paid
to any officer or director during fiscal 2004. Future
services
to be rendered by Ms. Lei will be subject to the approval of the Board of
Directors. Other than as indicated above, the Company did not have any other
form of compensation payable to its officers or directors, including any
stock
option plans, stock appreciation rights, or long term incentive plan awards
for
the periods during the above fiscal years.
The
officers of the Company are not full time employees. Presently, the Company
does
not have a formal conflicts of interest policy governing its officers and
directors. In addition, the Company does not have written employment agreements
with its officers. Its officers intend to devote sufficient business time
and
attention to the affairs of the Company to develop the Company’s business in a
prudent and business-like manner. However, the principal officer is engaged
in
other businesses related and unrelated to the business of the Company, and
in
the future, will engage in other business ventures.
Item
11. Security Ownership Of Certain Beneficial Owners And
Management.
The
following table will identify, as of March 15, 2005,
the
number and percentage of outstanding shares of common stock of the Company
owned
by (i) each person known to the Company who owns more than five percent of
the
outstanding common stock, (ii) each officer and director, and (iii) and officers
and directors of the Company as a group. The following information is based
upon
46,506,300 shares of common stock of the Company which are issued and
outstanding as of March 15, 2005.
The
address for each individual below is 701 Fifth Avenue, 42nd Floor, Seattle,
Washington 98104 the
address
of the Company.
|
Title
of
Security
|
Name
and Address of Beneficial Owner
|
Amount
and nature Beneficial Ownership(1)
|
Percent
of Class
|
|
|
|
|
|
|
Common
Stock
|
Amanasu
Corporation(2)
#902
Ark Towers, 1-3-40,
Roppongi, Minatoku, Tokyo, Japan
|
35,000,000
|
|
75.3%
|
|
| |
|
|
|
|
Common
Stock
|
Atsushi
Maki(3)
|
40,373,700
|
|
86.8%
|
|
| |
|
|
|
|
Common
Stock
|
Lina
Lei(4)
|
40,373,700
|
|
86.8%
|
|
| |
|
|
|
|
Common
Stock
|
Hideyuki
Shiraishi
|
70,000
|
|
<1%
|
|
| |
|
|
|
| |
Officers
and Directors, as a group (3 persons)
|
40,443,700
|
|
86.8%
|
|
(1).
“Beneficial ownership" means having or sharing, directly or indirectly (i)
voting power, which includes the power to vote or to direct the voting, or
(ii)
investment power, which includes the power to dispose or to direct the
disposition, of shares of the common stock of an issuer. The definition of
beneficial ownership includes shares underlying options or warrants to purchase
common stock, or other securities convertible
into common stock,
that currently are exercisable or convertible or that will become exercisable
or
convertible within 60 days. Unless otherwise indicated, the beneficial owner
has
sole voting and investment power.
(2).
Mr.
Atsushi Maki, a director of the Company, is the sole shareholder of Amanasu
Corporation and is deemed the beneficial owner of such shares.
(3).
Includes 40,443,700
shares
of common stock held individually by Mr. Maki, 35,000,000 shares of common
stock
held by Amanasu Corporation, and 500,000 shares of common stock held by Mr.
Maki’s wife, Lina Lei. Mr. Maki disclaims beneficial ownership of the shares
held by his wife.
(4).
Includes 500,000 shares of common stock held individually by Ms. Lei, and
39,873,700 shares of common stock beneficially owned by Ms. Lei’s husband,
Atsushi Maki. Ms. Lei disclaims beneficial ownership of the shares held by
her
husband.
ITEM
12.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Effective
February 10, 2000, Amanasu Corporation, formerly Family Corporation, the
Company’s largest shareholder, obtained the exclusive, worldwide rights to the
technologies pursuant to a licensing agreement with its inventors. Amanasu
Corporation paid the inventors the sum of $160,000, and transferred to the
inventors 1,000,000 shares of common stock of the Company that it later received
when it sub-licensed the technology to the Company.
Thereafter,
on March 10, 2000, Amanasu Corporation sub-licensed to the Company the
exclusive, worldwide rights to the technologies, subject to the terms of
the
underlying license agreement. As required under the sub-license agreement,
the
Company:
- issued
to
Amanasu Corporation 17,000,000 shares of common stock and an option to acquire
20,000,000 shares of common stock at $0.02 per share.
- agreed
to
pay Amanasu Corporation the sum of $160,000.
- issued
an
additional 6,350,000 shares of its common stock, valued at $6,350
to
third
parties. These shares consisted of: 2,700,000 shares to Mr. Atsushi Maki,
3,000,000 shares to three persons to perform marketing services for the Company,
and 650,000 shares to three technical consultants of a company owned by the
principal inventor.
In
October 2001, Amanasu Corporation exercised its option to acquire 20,000,000
shares of common stock of the Company and paid the sum of $400,000 to the
Company. In connection with the $160,000 amount due Amanasu Corporation under
the sub-license agreement, $100,000 has been paid and the balance has been
characterized as a capital contribution to the Company. The amount is due
on
demand. Mr. Atsushi Maki is a director and a majority shareholder of the
Company
and the sole shareholder of Amanasu Corporation. The Company has valued the
sub-license agreement at $160,000, which equals the cash amount paid by Amanasu
Corporation to the inventors.
During
2004,
Lina
Lei, an officer of the Company, received $10,000 in exchange for performing
consulting services for the Company.
The
Company shares office space for its Seattle and Tokyo offices and shares
an
apartment in Seattle with Amanasu Environment Corporation, a reporting company
under the Securities Exchange Act of 1934, and a company controlled by Atsushi
Maki, a director of the he Company (See “Part I - Item 2 Description of
Property”).
Item
13. Exhibits and Reports on Form 8-K.
Exhibit Description
3(i)(a) Articles
of Incorporation
of the Company. (Incorporated by reference to the Company's
Form 10-SB/A filed on June 21, 2002).
3(i)(b) Certificate
of Amendment
to Articles of Incorporation. (Incorporated by reference to the Company's
Form
10-SB/A filed on June 21, 2002).
3(i)(c) Certificate
of Amendment
to Articles of Incorporation. (Incorporated by reference to the Company's
Form
10-SB/A filed on June 21, 2002).
3(i)(d) Certificate
of Amendment
to Articles of Incorporation. (Incorporated by reference to the Company's
Form
10-SB/A filed on June 21, 2002).
3(ii)(a) Amended
and Restated By -
Laws of the Company. (Incorporated by reference to the Company's Form 10-SB/A
filed on June 21, 2002).
10(i) License
agreement
between the Company and Yasunori Takahashi, Yoshiaki Takahashi and Y.T. Magnet
Corporation, dated February 10, 2000. (Incorporated by reference to the
Company's Form 10-SB/A filed on June 21, 2002).
10(ii) Agreement
between Family
Corporation and the Company dated March 10, 2000. (Incorporated
by reference to the Company's Form 10-SB/A filed on June 21, 2002).
Consultation
Agreement between Lina Lei and the Company made on May 12, 2002. (Form 10KSB
filed on March 31, 2003)
Consultation
Agreement between Lina Lei and the Company made on May 12, 2002. (Form 10KSB/A
filed on July 21, 2003)
(b).
Reports on Form 8-K.
Resignation
of Charlie Lan as Chairman, President, Chief Financial Officer, Director,
Secretary and Treasurer on May 15, 2003. (filed on May 21, 2003)
Resignation
of Masafumi Hata as Chairman, President, Chief Financial Officer, Director,
Secretary and Treasurer on November 12, 2004. (filed on November 16,
2004)
Item
14. Principal Accountant Fees and Services.
(1).
Audit fees for 2004 were $8,585 and for 2003 were $8,470.
(2)
Audit
Related Fees for 2004 and 2003 were $0.
(3)
Tax
Fees for 2004 were $0 and 2003 were $0.
(4)
All
Other Fees were $0.
(5)
N/A
(6)
Not
greater than 50% for 2004 and 2003.
AMANASU
TECHNOLOGIES CORPORATION
(A
Development Stage Company)
FINANCIAL
STATEMENTS
DECEMBER
31, 2004
CERTIFIED
PUBLIC ACCOUNTANT
61
BERDAN AVENUE
WAYNE,
NEW JERSEY 07470
|
LICENSED
TO PRACTICE
|
|
TEL:
973-628-0022
|
|
IN
NEW YORK AND NEW JERSEY
|
|
FAX:
973-696-9002
|
|
MEMBER
OF AICPA
|
|
E-MAIL:
rgjcpa@optonline.net
|
PRIVATE
COMPANIES PRACTICE SECTION
MEMBER
CENTER FOR PUBLIC COMPANY AUDIT FIRMS
REGISTERED
PUBLIC ACCOUNTING FIRM WITH
PUBLIC
COMPANY ACCOUNTING OVERSIGHT BOARD
Board
of
Directors
Amanasu
Technologies Corporation
I
have
audited the accompanying balance sheet of Amanasu Technologies Corporation
(a
development stage company) as of December 31, 2004, and the related statements
of operations and deficit accumulated during development stage, changes in
stockholders’ equity, and cash flows for the years ended December 31, 2004 and
2003 and the period of February 22, 1999 (inception) to December 31, 2004.
These
financial statements are the responsibility of the Company management. My
responsibility is to express an opinion on these financial statements based
on
my audit.
I
conducted the audit in accordance with the standards of Public Company
Accounting Oversight Board (United States). Those standards require that
I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required
to
have, nor was I engaged to perform, an audit of its internal control over
financial reporting. My audit included consideration of internal control
over
financial reporting as a basis for designing audit procedures that are
appropriate under the circumstances, but not for the purpose of expressing
an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, I express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the
overall financial statement presentation. I believe that my audit provides
a
reasonable basis for my opinion.
In
my
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Amanasu Technologies Corporation
as
of December 31, 2004, and the results of its operations and its cash flows
for
the years ended December 31, 2004 and 2003 in conformity with U. S. generally
accepted accounting principles.
/s/Robert
G. Jeffrey
ROBERT
G.
JEFFREY
March
30,
2005
Wayne,
New Jersey
AMANASU
TECHNOLOGIES CORPORATION
(A
Development Stage Company)
December
31, 2004
|
ASSETS
|
|
|
|
| |
|
|
|
|
Current
Assets:
|
|
|
|
|
|
Cash
|
|
$
|
44,560
|
|
| |
|
|
|
|
|
Total
current assets
|
|
|
44,560
|
|
| |
|
|
|
|
|
Fixed
Assets:
|
|
|
|
|
|
Automobile
|
|
|
1,500
|
|
|
Less,
accumulated depreciation
|
|
|
987
|
|
|
Net
fixed assets
|
|
|
513
|
|
| |
|
|
|
|
|
Other
Assets:
|
|
|
|
|
|
Licensing
agreement
|
|
|
160,000
|
|
|
Less,
accumulated amortization
|
|
|
37,648
|
|
|
Total
other assets
|
|
|
122,352
|
|
| |
|
|
|
|
|
Total
Assets
|
|
$
|
167,425
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
| |
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
Advance
from affiliates
|
|
$
|
1,525
|
|
|
Total
current liabilities
|
|
|
1,525
|
|
| |
|
|
|
|
|
Stockholders’
Equity:
|
|
|
|
|
|
Common
stock: authorized 100,000,000 shares of $.001 par value; 46,676,400
issued
and outstanding
|
|
|
46,676
|
|
|
Additional
paid in capital
|
|
|
650,624
|
|
|
Deficit
accumulated during development stage
|
|
|
(531,400
|
)
|
| |
|
|
|
|
|
Total
stockholders’ equity
|
|
|
165,900
|
|
| |
|
|
|
|
|
Total
Liabilities and Stockholders’ Equity
|
|
$
|
167,425
|
|
The
accompanying notes are an integral part of these financial
statements.
AMANASU
TECHNOLOGIES CORPORATION
(A
Development State Company)
ACCUMULATED
DURING DEVELOPMENT STAGE
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
Year
2004
|
|
Year
2003
|
|
December
1, 1997
(Date
of Inception) To
December 31, 2004
|
|
| |
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
91,912
|
|
$
|
-
|
|
$
|
91,912
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
$
|
113,653
|
|
$
|
279,322
|
|
|
626,734
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
|
(21,741
|
)
|
|
(279,322
|
)
|
|
(534,822
|
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
Other
Income-interest
|
|
|
37
|
|
|
524
|
|
|
3,422
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Loss
accumulated during development stage
|
|
$
|
(21,704
|
)
|
$
|
(278,798
|
)
|
$
|
(531,400
|
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
Net
loss per share - Basic and Diluted
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Average
number of shares outstanding
|
|
|
46,676,400
|
|
|
46,646,400
|
|
|
|
|
The
accompanying notes are an integral part of these financial
statements.
AMANASU
TECHNOLOGIES CORPORATION
(A
Development Stage Company)
For
the Periods Ended December 31, 2004 and 2003
| |
|
Common
Stock
|
|
|
|
|
|
|
|
| |
|
Shares
|
|
Amount
|
|
Additional Paid
in Capital
|
|
Deficit
Accumulated During Development Stage
|
|
Total
|
|
|
Balance,
January 1, 2003
|
|
|
46,436,400
|
|
$
|
46,436
|
|
$
|
405,964
|
|
$
|
(230,898
|
)
|
$
|
221,502
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for services
|
|
|
150,000
|
|
|
150
|
|
|
14,850
|
|
|
|
|
|
15,000
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued to investors
|
|
|
90,000
|
|
|
90
|
|
|
169,810
|
|
|
|
|
|
169,900
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholder
capital contribution
|
|
|
-
|
|
|
-
|
|
|
60,000
|
|
|
|
|
|
60,000
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for period
|
|
|
|
|
|
|
|
|
|
|
|
(278,798
|
)
|
|
(278,798
|
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
December 31, 2003
|
|
|
46,676,400
|
|
|
46,676
|
|
|
650,624
|
|
|
(509,696
|
)
|
|
187,604
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for period
|
|
|
|
|
|
|
|
|
|
|
|
(21,704
|
)
|
|
(21,704
|
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
December 31, 2004
|
|
|
46,676,400
|
|
$
|
46,676
|
|
$
|
650,624
|
|
$
|
(531,400
|
)
|
$
|
165,900
|
|
The
accompanying notes are an integral part of these financial
statements.
AMANASU
TECHNOLOGIES CORPORATION
(A
Development State Company)
| |
|
|
|
|
|
December
1, 1997
(Date of Inception) To December 31,2004
|
|
| |
|
|
|
|
|
|
|
|
CASH
FLOWS FROM OPERATIONS:
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(21,704
|
)
|
$
|
(278,798
|
)
|
$
|
(531,400
|
)
|
|
Charges
not requiring the outlay of cash:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
of Amortization
|
|
|
9,754
|
|
|
9,982
|
|
|
38,635
|
|
|
Services
provided for common stock
|
|
|
-
|
|
|
15,000
|
|
|
21,300
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Changes
in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Increase
in advance from affiliate
|
|
|
1,525
|
|
|
|
|
|
1,525
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Consumed By Operating Activities
|
|
|
(10,425
|
)
|
|
(253,816
|
)
|
|
(469,940
|
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING
|
|
|
|
|
|
|
|
|
|
|
|
ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
Purchase
of automobile
|
|
|
-
|
|
|
-
|
|
|
(1,500
|
)
|
|
Payments
of amount due for licensing agreement
|
|
|
-
|
|
|
(60,000
|
)
|
|
(160,000
|
)
|
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Consumed By Investing Activities
|
|
|
-
|
|
|
(60,000
|
)
|
|
(161,500
|
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING
|
|
|
|
|
|
|
|
|
|
|
|
ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Issuances
of common stock to investors
|
|
|
-
|
|
|
99,900
|
|
|
546,000
|
|
|
Shareholder
deposits for common stock
|
|
|
-
|
|
|
-
|
|
|
70,000
|
|
|
Shareholder
capital contribution
|
|
|
|
|
|
60,000
|
|
|
60,000
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided By Financing Activities
|
|
|
-
|
|
|
159,900
|
|
|
676,000
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Net
Change In Cash Balance
|
|
|
(10,425
|
)
|
|
(153,916
|
)
|
|
44,560
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Cash
balance, beginning of period
|
|
|
54,985
|
|
|
208,901
|
|
|
-
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Cash
balance, end of period
|
|
$
|
44,560
|
|
$
|
54,985
|
|
$
|
44,560
|
|
The
accompanying notes are an integral part of these financial
statements.
AMANASU
TECHNOLOGIES CORPORATION
(A
Development Stage Company)
December
31, 2004
|
1.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING
POLICIES
|
Organization
of Company
The
Company was formed December 1, 1997, as Avani Manufacturing (China), Inc.
The
name was changed to Genesis Water Technologies, Inc. on August 17, 1999,
and to
Supreme Group International, Inc. on December 24, 2000. The present name
was
adopted May 30, 2001.
Business
The
Company has acquired worldwide licensing rights for certain patented magnetic
and power generating technology. It is the intention of the Company to license
these rights for use by others.
Development
Stage Accounting
The
Company is a development stage company, as defined in Financial Accounting
Standards (FAS) Statement No. 7. Generally accepted accounting principles
that
apply to established operating enterprises govern the recognition of revenue
by
a development stage enterprise and the accounting for costs and expenses.
From
inception to December 31, 2004, the Company has been in the development stage
and all its efforts have been devoted to obtaining worldwide licensing rights
to
the technology, which is described above, and planning for marketing its
products. Except for an unrelated consulting fee received during 2004, no
revenue had been realized through December 31, 2004.
Basis
Of Presentation
The
Company has incurred losses from inception to December 31, 2004 of $531,400.
Capital was raised in the amount of $446,100 in 2001 through the issuance
of
20,036,400 shares of common stock. Additional capital totaling $229,900 was
raised during 2002 and 2003 through the issuance of 90,000 shares and a capital
contribution from a major shareholder. These funds are expected to provide
adequate financing to allow the Company to begin using its licensing
rights.
Cash
For
purposes of the statements of cash flows, the Company considers all short
term
debt securities purchased with a maturity of three months or less to be cash
equivalents.
Fixed
Assets
Fixed
assets are recorded at cost. Depreciation is computed using accelerated methods,
with lives of seven years for furniture and equipment and five years for
computers and automobiles.
AMANASU
TECHNOLOGIES CORPORATION
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
December
31, 2004
| 1. |
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONT’D)
|
Intangible
Assets
Intangible
assets are recorded at cost. Amortization is provided by straight line methods,
using a life of 17 years for the sub-licensing agreement, which is based
on the
life of the underlying patent.
Licensing
Agreement
During
the year 2000, the Company acquired the world-wide licensing rights for certain
patented magnetic and power generating technology from a corporation which
is
the majority owner of Company stock, at a cost of $160,000.
Income
Taxes
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.
Use
Of Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that
affect certain reported amounts and disclosures of contingent assets and
liabilities at the date of the financial statements and the reported amounts
of
revenues and expenses during the reporting periods. Actual results could
differ
from those estimated.
Advertising
Costs
The
Company will expense advertising costs when an advertisement occurs. There
has
been no spending thus far on advertising.
Segment
Reporting
Management
will treat the operations of the Company as one segment.
AMANASU
TECHNOLOGIES CORPORATION
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
December
31, 2004
|
2.
|
RELATED
PARTY TRANSACTIONS
|
During
the year 2003, the majority shareholder made a $60,000 capital contribution
by
paying a Company obligation.
The
Company has a contractual arrangement for administrative services with the
wife
of the president of a corporation which owns a majority of the outstanding
Company stock. Compensation for these services is $3,500 per month.
Expenses
consist primarily of consulting services ($54,400), professional fees ($16,183),
rent ($16,006), and amortization of the sub-licensing agreement
($9,412).
The
Company has experienced losses since its inception which have totaled $531,400.
As a result, it has incurred no Federal income tax. The Internal Revenue
Code
allows net operating losses (NOL’s) to be carried forward and applied against
future profits for a period of twenty years. The potential benefit of these
NOL’s has been recognized on the books of the Company, but it has been offset
by
a valuation allowance. If not used, the NOL carryforward will expire in the
years 2021, through 2004.
Under
Statement of Financial Accounting Standards No. 109, recognition of deferred
tax
assets is permitted unless it is more likely than not that the assets will
not
be realized. The Company has recorded noncurrent deferred tax assets as
follows:
|
Deferred
Tax Assets
|
|
$
|
180,676
|
|
|
Valuation
Allowance
|
|
|
180,676
|
|
|
Balance
Recognized
|
|
$
|
-
|
|
AMANASU
TECHNOLOGIES CORPORATION
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
December
31, 2004
|
5.
|
RENTALS
UNDER OPERATING LEASES
|
The
Company has made its offices in quarters which are rented on a month to month
basis. Rent expense totaled $16,006 during 2004 and $49,869 during
2003.
|
6.
|
SUPPLEMENTAL
DISCLOSURES OF CASH FLOWS
INFORMATION
|
There
was
no cash paid for interest or income taxes during either of the periods
presented.
There
were no non-cash investing or financing activities during 2004. There also
were
no noncash investing activities during 2003. The following non-cash financing
activity occurred during the year 2003. Seventy thousand shares were purchased
by a shareholder for cash in 2002, but not issued until 2003.
SIGNATURES
In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Amanasu
Technologies Corporation
/s/
Hideyuki
Shiraishi
__________________
Hideyuki
Shiraishi July
25,
2005
President
And
Principal Accounting Officer
In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on
the
dates indicated.
/s/
Atsushi
Maki
___________________
July
25,
2005
Atsushi
Maki
Director
/s/
Hideyuki
Shiraishi
___________________ July
25,
2005
Hideyuki
Shiraishi
Director