SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES ACT OF 1934
For the Fiscal Year Ended December 31, 2007
COMMISSION FILE NO. 0-49719
AMANASU TECHNO HOLDINGS CORPORATION
(Name of small business issuer as specified in its charter)
NEVADA | 98-0351508 | |
(State or other jurisdiction of incorporation) | (IRS Employer Identification No.) |
115 East 57th Street 11th Floor, New York, NY 10022
(Address of principal executive offices)
212-939-7278
(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 February 13, 2007,
computed by reference to the price at which the stock was sold on that date:
$854,364.
The number of shares outstanding of the registrant's Common Stock, no par value, as of April 14, 2007 was 46,506,300 common shares.
1
Amanasu Techno Holdings 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. It changed its name again on December 21, 2007 to Amanasu Techno Holdings 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 115 East 57th 11th Floor Street New York, NY 10022, and its telephone number is (212) 939-7278. 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 initially acquired under a 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. Amanasu Corporation subsequently transferred the right to Amanasu Technologies Corporation, and the Company succeeded to the exclusive, worldwide rights. 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.
The market place for electric scooters has become intensely competitive, thus offering rapid battery recharge time and more economical sale prices are prerequisites to compete successfully. To meet the economical sale price requirement the Company planned to conducted their manufacturing in China to reduce cost, and hoped it would meet the Company's expectations; however, significant difficulty with protecting the Company's proprietary technology unwillingly emerged. In addition to proprietary issues, there were major concerns in secure customer service follow-ups (i.e. product warranty, maintenance, etc). The Company realized that with minimal control of the manufacturing standards in China, the result of safety related incidents, if not managed appropriately, would prove to be an overwhelming liability for the Company. To solve the two major issues, the Company decided to initiate a cooperative with a company that already produces completed electric scooters in a successful marketing condition. Evader Motersports, Inc. ("Evader"), an electric motorcycle producer, entered into an International Distributor Agreement, whereby the Company is appointed as an exclusive distributor of Evader products. Evader, in turn, would manage customer-service concerns. The Company was granted the exclusive rights for the motorcycle retail industry in Japan, with the right to include other marketing channels provided that it was agreed upon by both parties. The Company also considered Evader as a prospective company to share its technology with to create improved and more advanced electric scooters. The Company believed that with a combined effort using both companies' resources and technology, the resulting product would make a stronger impact on the market.
Further marketing research was carried out comparing current electric scooters on the market and Evader's scooters. The research concluded that further refinement in several areas were required. First the retail price of the Evader scooters was too high to be competitive in the Japanese market. The research also found that a new company recently began importing electric scooters from China to Japan directly. The quality of their product is unclear; however, the retail price of the new company's product effectively competes in the Japanese market. The refinements needed to make the Evader scooters competitive economically would take too much time, thus the Company has decided to discontinue business relations with Evader, and put its electric scooter project on hold until the Company is able to attain more resources.
In place of the electric scooter, other projects including a cooperative with Seems Inc., formerly introduced as Pixen Inc and their breakthrough "Bio-scent technology" are in development. Seems Inc. is a Pioneer in the newly developed bio-scent technology industry. Bio-scent technology involves the application of "scent data transmission", a digitized form of scents, in various industries such as biotechnology, medical care, environment, security, etc in addition to common aroma therapy. Due to its revolutionary technologies, Seems has been able to become a multi-million dollar company in less than 6 years and is expected to become public by early 2007. Its DAA (Defensive Aromatic Air) is its current flagship product. In addition to being an air purifying system, Seems' DAA effectively removes up to 91% of air pollutants such as ammonia, and by products of cigarette smoke. It also provides odor neutralization , and air-borne anti-bacterial effects. Seems has also developed a scent-particle sensor, which is programmable to detect certain scent particles. This sensor is 1000 times more sensitive than even a dogs sense of smell. This scent detection system can be applied in fields such cancer detection. All diseases carry a scent profile that is undetectable by the human senses. Seems's sensor is able to detect these scent profiles and display the digitized scent data. Amanasu Technology and Seems, are finalizing a Sales and Manufacturing agreement for all Seems products in the United States in early 2007.
With uncertainty in the amount of time taken to obtain approval from the FDA for various technologies by Seems Inc, the Company has decided to begin a new project in the Food/Beverage industry, specifically Franchise management under the new leadership of Yukinori Yoshino, who was appointed President of the Company as of October 16th, 2007.
Mr. Yoshino's has extensive experience in restaurant chain management, developing Baltic Systems from the ground up to a successful multi-million dollar corporation nearing its public debut. Mr. Yoshino has also been in charge of Wayochu Gasshukoku Corporation, a restaurant chain management company in Japan managing 19 different food chains nationally. Mr. Yoshino will be taking his expertise in the food chain industry and bring the Company into the same industry utilising its global business networks. Mr. Yoshino will be concentrating on expansion to China, with various different chains including the following: Japanese Tapas restaurants, and Japanese curry restaurant chains.
The chairman Mr. Maki and President Mr. Yoshino goal for the next 2 years is to enter into the NASDAQ global market.
Employees.
As of December 31, 2006, the Company has no full time employees. During 2006, the Secretary of the Company has rendered consulting services to the Company in the amount of $10,500.
The Company's executive offices are located at 115 East 57th Street 11th Floor New York, NY 10022 USA and a branch office in Vancouver, British Columbia. The total premises are 2,000 square feet and are subleased 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 lease is on a month to month basis at a rate of $1250. 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 an agreement which expires December 31, 2007 at $1,700 (200,000 Yen) per month. An apartment at 1-3-40 Roppongi, Minato-ku, Tokyo was leased at $10,000 (1,250,000 yen) per month under a lease agreement which expired December 31, 2006. Amanasu Environment Corporation occupies the same premises and co-pays the rental amount. The Company believes additional lease space at this location will be available to support its future growth.
None.
None
2
There is a limited public market for our Common Stock which currently trades on the OTC Bulletin Board under the symbol "ANSU" where it has been traded since September 9, 2005. The Common Stock has traded between $0.05 and $2.00 per share since that date.
The following table sets forth the high and low prices for our Common Stock as reported on the Bulletin Board for the quarters presented. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions, and may not reflect actual transactions.
2007 | Low Bid | High Bid | |
---|---|---|---|
1st Quarter Ending March 31, 2007 | $ | 0.05 | 0.16 |
2nd Quarter Ending June 30, 2007 | 0.05 | 0.08 | |
3rd Quarter Ending September 30, 2007 | 0.04 | 0.05 | |
4th Quarter Ending December 31, 2007 | 0.05 | 0.65 |
2006 | Low Bid | High Bid | |
---|---|---|---|
Fiscal Year Ending December 31, 2006 | $ | 0.05 | 0.76 |
The Company commenced trading on the Over the Counter Bulletin Board on September 9, 2005.
Information provided by The Over The Counter Bulletin Board. The quotations reflect inter-dealer prices, without retail mark-up, markdown, or commission and may not represent actual transactions.)
As of March 15, 2007, there were 46,506,300 shares of Common Stock outstanding, held by 51 shareholders of record.
To date we have not paid any dividends on our Common Stock and do not expect to declare or pay any dividends on our Common Stock in the foreseeable future. Payment of any dividends will be dependent upon future earnings, if any, our financial condition, and other factors as deemed relevant by our Board of Directors.
As of April 14, 2008, 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 | |||
---|---|---|---|
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- |
None
The following discussion should be read in conjunction with the Company's Financial Statements, including the Notes thereto, appearing elsewhere in this Annual Report.
The Company was organized on December 1, 1997. Its operations to date have been limited to obtaining the license to the technology described below, and conducting preliminary marketing efforts.
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.
Pixen under went a name change and is now known as Seems Inc. Seems Inc. will retain the name Pixen as a brand name for its products. The project with Seems has hit two barriers. Seems has collected sufficient funds and attained the requirements to become public in Japan; however, the company analysis has taken longer than expected and Seems has been informed that it may take another 6-12 months before it can be listed. Secondly, the United States does not recognize Japanese health certifications, and Seems' products must be reapproved by the FDA. Amanasu Technologies as taken the initial steps and received the MDUFMA Small Business Qualification in order to reduce cost for pre-market approval, and is currently collecting product data and translating it into english to submit its first PMA. The cost of this project is taken into account in the estimated expenditures for the 2007 fiscal year ending December 31, 2007. The approval of the DAA is believed to take no more than 8-12 months; however, the scent scenor is believed to be a FDA Class 3 medical device, which may take longer.
With uncertainty in the time taken for an FDA approval the Company has decided to enter into the restaurant chain management industry, under the new leadership of President Yukinori Yoshino. The Chairman Mr. Maki and President Mr. Yoshino have set a goal to enter into the NASDAQ Global Market in two years time. The focus for the fiscal year ending December 31, 2008 will be for Mr. Yoshino, to utilise the Company's global networks to establish Curry restaurants, fine dining restaurants, and Japanese Tapas restaurants in China.
The Company will also be concentrating its efforts
on capital raising efforts to enter into the NASDAQ Global Market. The Company satisfies all entry requirements, except for investment capital. The Company's target in the next two years is to raise $30,000,000.
Other than the provision of alternating business planning costs discussed above, the Company's cash requirements for the next 12 months are estimated to be $165,000. This amount is comprised of the following estimate expenditures; $100,000 in annual salaries for office personnel, office expenses and travel, $30,000 for rent, $20,000 for professional fees, and $15,000 for miscellaneous expenses.
As stated above, the Company can not 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 $300,000, it may not be able to complete its plan of operations as discussed above.
The company is expecting to gain the capital from issuing and selling the shares of the Company.
During the fiscal 2007 and 2006, the Company spent $-0- and $-0- respectively on research and development.
3
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 $99,900 and should be considered a liability. 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, 2007 were $7,412, representing a increase of $5,911 from total assets of $1,501 as of December 31, 2006. This increase is primarily due to increased cash from shareholder advances made during 2007.
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.
4
Name
|
Age |
Position |
Atsushi
Maki |
60 |
Chairman, Director |
Lina
Lei |
47 |
Secretary |
Yukinori Yoshino |
44 |
President, and Chief Financial
Officer |
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 |
Officers
and Directors, as a group (3 persons) |
40,443,700 |
86.8% |
||
- |
As
of August 6th, 2001, Amanasu Corporation paid $250,000 out of the sum of
$400,000 to the Company for the common stock of 20,000,000
shares. |
- |
As
of October 12th, 2001, Amanasu Corporation paid the balance of $150,000 to
the Company. |
LICENSED TO PRACTICE
IN NEW YORK AND NEW JERSEY
MEMBER OF AICPA
PRIVATE COMPANIES PRACTICE SECTION
MEMBER CENTER FOR PUBLIC COMPANY AUDIT FIRMS
REGISTERED PUBLIC ACCOUNTING FIRM WITH
PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD
TEL: 973-628-0022
FAX: 973-696-9002
E-MAIL: rgjcpa@optonline.net
Board of Directors Amanasu Techno Holdings Corporation
We have audited the accompanying balance sheet of Amanasu Techno Holdings Corporation (a development stage company) as of December 31, 2007, 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, 2007 and 2006. These financial statements are the responsibility of the Company management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted the audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we 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 were we engaged to perform, an audit of its internal control over financial reporting. Our 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, we 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. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Amanasu Techno Holdings Corporation as of December 31, 2007, and the results of its operations and its cash flows for the years ended December 31, 2007 and 2006 in conformity with U. S. generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, at December 31, 2007, the Company had a working capital deficiency of $240,564 as well as an accumulated deficit of $777,964. These factors, among other things discussed in Note 2 to the financial statements, raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts or classification of liabilities that might be necessary should the Company be unable to continue in operation.
/s/ Robert G. Jeffrey
ROBERT G. JEFFREY
March 28, 2007
Wayne, New Jersey
1
Current Assets | ||
---|---|---|
Cash | $ | 5,575 |
Employee Advances | 1,837 | |
Total Current Assets | 7,412 | |
Fixed Assets | ||
Automobile | 1,500 | |
Less, Accumulated Depreciation | 1,500 | |
Net Fixed Assets | - | |
Total Assets | $ | 7,412 |
Liabilities And Stockholders' Equity | ||
Current Liabilities | ||
Accrued Expenses | $ | 5,962 |
Rent Payable | 3,750 | |
Advances from shareholders | 138,400 | |
Other Advances | ||
99,900 | ||
Total Current Liabilities | 247,976 | |
Stockholders' Equity: | ||
Common Stock: authorized 100,000,000 shares of $0.01 par value; 46,506,300 issued and outstanding | ||
Additional Paid in capital | 490,894 | |
Deficit accumulated during development stage | (777,964) | |
Total Stockholders' Deficit | (240,564) | |
Total Liabilities and Stockholders' Equity | $ | 7,412 |
The accompanying notes are an integral part of these financial statements. |
2
Year 2007 | Year 2006 | December 1, 1997 (Date of Inception) to December 31, 2007 | ||||||
---|---|---|---|---|---|---|---|---|
Revenue | $ | - | $ | - | $ | 91,912 | ||
Expenses | 16,000 | 40,009 | 769,802 | |||||
Impairment Charge - write down of licensing agreement | - | 103,528 | 103,528 | |||||
Operating Loss | (16,000) | (143,537) | (781,418) | |||||
Other Income-expenses | - | 32 | 3,454 | |||||
Loss accumulated during development stage | (16,000) | (143,505) | (777,964) | |||||
Loss per share - Basic and Diluted | - | - | ||||||
Average number of shares outstanding | 46,506,300 | 46,506,300 | ||||||
The accompanying notes are an integral part of these financial statements. |
3
Common Stock | Additional | Deficit Accumulated During Development Stage | Total | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Shares | Amount | Paid in Capital | Deficit | |||||||||||||
Balance December 1, 1997, at inception of development stage | 3,000,000 | $ | 3,000 | $ | (1,600) | $ | (1,300) | $ | 100 | |||||||
Shares issued March 10, 2000, as partial consideration for licensing agreement | 17,000,000 | 17,000 | (17,000) | |||||||||||||
Shares issued during 2001, as fees connected with acquisition of licensing agreement | 6,350,000 | 6,350 | (6,350) | |||||||||||||
Shares issued during 2001, on exercise of option | 20,000,000 | 20,000 | 380,000 | 400,000 | ||||||||||||
Shares issued during 2001, to investors | 36,400 | 36 | 45,964 | 46,000 | ||||||||||||
Net loss of 2001 | (39,459) | (39,459) | ||||||||||||||
Shares issued during 2002, for services | 50,000 | 50 | 4,950 | 5,000 | ||||||||||||
Net loss of 2002 | (190,139) | (190,139) | ||||||||||||||
Shares issued during 2003, for services | 150,000 | 150 | 14,850 | 15,000 | ||||||||||||
Shares issued during 2003, on exercise of options | 70,000 | 70 | 69,930 | 70,000 | ||||||||||||
Shares canceled during 2003 | (150,100) | (150) | 150 | - | ||||||||||||
Net loss 2003 | (278,798) | (278,798) | ||||||||||||||
Net loss 2004 | (21,704) | (21,704) | ||||||||||||||
Net loss 2005 | (87,059) | (87,059) | ||||||||||||||
Balance, December 31, 2005 | 46,506,300 | 46,506 | 490,894 | (618,459) | (81,059) | |||||||||||
Net loss 2006 | (143,505) | (143,505) | ||||||||||||||
Balance, December 31, 2006 | 46,506,300 | 46,506 | 490,894 | (761,964) | (224,564) | |||||||||||
Net loss 2007 | (16,000) | (16,000) | ||||||||||||||
Balance, December 31, 2007 | 46,506,300 | 46,506 | 490,894 | (777,964) | (240,564) | |||||||||||
The accompanying notes are an integral part of these financial statements. |
4
Year 2007 | Year 2006 | December 1, 1997 (Date of Inception) To December 31,2007 | ||||||
---|---|---|---|---|---|---|---|---|
CASH FLOWS FROM OPERATIONS: | ||||||||
Net loss | $ | (16,000) | $ | (143,505) | $ | (777,964) | ||
Charges not requiring the outlay of cash: | ||||||||
Depreciation and Amortization | 144 | 9,567 | 57,972 | |||||
Impairment of Licensing Agreement | - | 103,528 | 103,528 | |||||
Common stock issued for services | - | - | 21,300 | |||||
Changes in assets and liabilities: | ||||||||
Increase in accrued expenses | 3,511 | 315 | 5,926 | |||||
Increase in rent payable | - | 3,750 | 3,750 | |||||
Advance to employee | (1,837) | - | (1,837) | |||||
Net Cash Consumed By Operating Activities | (14,182) | (26,336) | (587,325) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchase of automobile | - | - | (1,500) | |||||
Payments of amount due for licensing agreement | - | - | (160,000) | |||||
Net Cash Consumed By Investing Activities | - | - | (161,500) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Advance received | - | - | 99,900 | |||||
Issuances of common stock to investors | - | - | 446,100 | |||||
Shareholder deposits for common stock | - | - | 70,000 | |||||
Shareholder advances | 18,400 | 120,000 | 218,400 | |||||
Repayment of Shareholder advances | - | - | (80,000) | |||||
Advances from affiliate | - | - | 200,000 | |||||
Repayment of advances from affiliate | - | (100,000) | (200,000) | |||||
Net Cash Provided By Financing Activities | 18,400 | 20,000 | 754,000 | |||||
Net Change In Cash | 4,218 | (6,336) | 5,575 | |||||
Cash balance, beginning of period | 1,357 | 7,693 | - | |||||
Cash balance, end of period | 5,575 | 1,357 | 5,575 | |||||
The accompanying notes are an integral part of these financial statements. |
5
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, to Supreme Group International, Inc. on December 24, 2000, and to Amanasu Technologies Corporation on May 30, 2001. The present name was adopted October 16, 2007.
The Company acquired worldwide licensing rights for certain patented magnetic and power generating technology. Until 2006, it was the intention of the Company to license these rights for use by others. The Company continues to pursue such licensing opportunities, but its primary efforts are now directed at other opportunities.
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, 2007, the Company has been in the development stage and, until 2007, all its efforts had been devoted to obtaining worldwide licensing rights to the technology, which is described above, and planning for marketing its products. Beginning in 2007 the Company has pursued other opportunities.
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 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.
Intangible assets are recorded at cost. Amortization is provided by straight line methods, using lives which are based on the lives of the underlying assets.
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. This asset has now been written off.
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.
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.
6
The Company will expense advertising costs when an advertisement occurs. There has been no spending thus far on advertising.
Management will treat the operations of the Company as one segment.
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 material working capital deficiency and an accumulated deficit at December 31, 2007, and a record of continuing losses. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue in operation.
The Company's present plans, the realization of which cannot be assured, to overcome these difficulties include but are not limited to the continuing effort to investigate business acquisitions and joint ventures.
During the year 2003, the principal company shareholder made a $60,000 advance to the Company by paying a Company obligation. An additional $20,000 was advanced by this shareholder during 2005. Later in 2005, the entire $80,000 so advanced was repaid. In 2006, the principal Company shareholder advanced $110,000 and a company controlled by the principal shareholder advanced $10,000. In 2007, the secretary of the Company, who is the wife of the principal shareholder, made advances which totaled $18,400. The $110,000 advance does not require interest; the other advances bear interest at 4.45%. All of these advances are due on demand.
An affiliated company advanced $100,000 to the Company during 2005. An additional $100,000 was advanced by that company in January 2006. These advances were originally intended for the purchase of common stock. Both of these advances were repaid in March 2006.
The Company had a contractual arrangement for administrative services with the wife of the principle shareholder of the corporation. This arrangement was terminated during 2006. Compensation for these services was $3,500 per month. In 2006, the Company paid $10,500 for these services.
Expenses consist primarily of professional fees ($11,095), transfer agent fees ($2,150), and filing fees ($1,005).
7
The Company has experienced losses since its inception. 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 available NOL's totaled $776,037 at December 31, 2007. 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 2027.
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 presented below. These deferred tax assets increased during 2007 by $2,400, the result of adding the potential benefit of 2007 losses.
Deferred Tax Assets | $ | 114,406 |
---|---|---|
Valuation Allowance | 114,406 | |
Balance Recognized | $ | - |
The Company has an investment totaling $160,000 in licensing rights for certain patented magnetic and power generating technology (see Note 1). During 2006, the value of these rights was reviewed and impairment was found to have occurred. As a result, the remaining unamortized cost of these rights was reduced to $-0- through a $103,528 loss provision.
The Company shares office space in Vancouver, New York and Tokyo with Amanasu Environment Corporation. This arrangement is on a month to month basis. Rent totaled $3,750 in 2006; there was no rent expense incurred in 2007.
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 either 2007 or 2006.
The Company does not anticipate the adoption of recently issued accounting pronouncements to have a significant effect on the Company's results of operations, financial position or cash flows.
On February 10, 2006, a law suit was commenced in which the Company, an affiliated company, and an officer of the Company were named as defendants. The lawsuit was settled in May 2007. Under the terms of the settlement, the Company, its affiliate, and the officer were obligated to pay $260,000 in monthly installments of $10,000 each. The Company does not expect to incur any expense as a result of this settlement, because the officer involved in the suit has agreed to take personal responsibility for the settlement.
Thusfar, payments totaling $220,000 have been made against this obligation. Management does not expect further payment to be required. The Company has not made any of these payments, and management does not expect that any payments will be required from the Company.
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/s/ Yukinori Yoshino
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Yukinori Yoshino
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April 13, 2007 | |
President
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And Principal Accounting Officer
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/s/ Atsushi Maki
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April 13, 2007
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Atsushi Maki
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Director & Chairman
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/s/ Yukinori Yoshino
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April 13, 2007
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Yukinori Yoshino
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Director
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