UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended MARCH 31, 2002
[ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act
of 1934
For the transition period from __________ to __________
Commission File Number 0-32905
AMANASU ENERGY CORPORATION
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(Exact name of Small Business Issuer as specified in its charter)
NEVADA 98 - 0347883
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(State or other jurisdiction of (IRS Employer
incorporation) Identification No.)
701 FIFTH AVENUE, 36TH FLOOR, SEATTLE, WA 98109
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(Address of principal executive offices)
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206-262-8188
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(Issuer's telephone number)
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_________________________________________________________________
(Former name, former address and former fiscal year if changed since last
report)
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 41,247,816 SHARES OF COMMON STOCK
ISSUED AND OUTSTANDING AS OF MARCH 31, 2002.
**Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
2
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GENERAL
The Company's unaudited financial statements for the three months ended March
31, 2002 are included with this Form 10-QSB. The unaudited financial statements
have been prepared in accordance with the instructions to Form 10-QSB and,
therefore, do not include all information and footnotes necessary for a complete
presentation of financial position, results of operations, cash flows, and
stockholders' equity in conformity with generally accepted accounting
principles. In the opinion of management, all adjustments considered necessary
for a fair presentation of the results of operations and financial position have
been included and all such adjustments are of a normal recurring nature.
Operating results for the three months ended March 31, 2002 are not necessarily
indicative of the results that can be expected for the fiscal year ending
December 31, 2002.
3
AMANASU ENERGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
MARCH 31, 2002
C O N T E N T S
Page
----
Balance Sheet 1
Statement of Operations and Deficit 2
Statement of Cash Flows 3
Notes to Financial Statements 4
4
AMANASU ENERGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
(UNAUDITED)
March 31, 2002 December 31, 2001
---------------- ------------------
ASSETS
- ------
Current Assets:
Cash. . . . . . . . . . . . . . . $ 32,595 $ 35,287
Prepaid expenses . . . . . . . . . . . . . . 2,700 -
-------------- --------------
Total current assets . . . . . . . . . . . 35,295 35,287
Fixed Assets:
Automotive equipment . . . . . . . . . . . . 25,859 25,859
Less accumulated depreciation. . . . . . 4,285 3,060
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Net fixed assets . . . . . . . . . 21,574 22,799
Other Assets:
Rent deposit . . . . . . . . . . . . . . . 8,028 8,028
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Total Assets . . . . . . . . . . . $ 64,897 $ 66,114
=============== ==============
LIABILITIES AND STOCKHOLDERS EQUITY
- -----------------------------------
Current liabilities
Stockholder advance. . . . . . . . . . .. $ 100 $ 100
--------------- --------------
Total current liabilities. . . . 100 100
Stockholders' Equity:
Common stock: authorized 100,000,000 shares
of $.001 par value; 41,247,816 issued and
outstanding. . . . . . . . . . . . . . . . . 27,048 27,048
Additional paid in capital . . . . . . . . . 317,492 317,492
Deficit accumulated during development stage (279,743) (278,526)
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Total stockholders' equity. . . . . 64,797 66,014
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Total Liabilities and Stockholders Equity $ 64,897 $ 66,114
- --------------------------------------------- =============== =============
These statements should be read in conjunction with the year-end financial
statements.
5
AMANASU ENERGY CORPORATION
(A DEVELOPMENT STATE COMPANY)
STATEMENTS OF OPERATIONS AND DEFICIT
ACCUMULATED DURING DEVELOPMENT STAGE
(UNAUDITED)
FEBRUARY 22, 1999
QUARTERS ENDED MARCH 31, (DATE OF INCEPTION)
2002 2001 TO MARCH 31, 2002
-------------------------- ------------------
REVENUE:
INTEREST INCOME. . . . . $ 28 $ - $ 2,286
EXPENSES. . . . . . . . . 1,245 4,053 282,029
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LOSS ACCUMULATED
DURING DEVELOPMENT STAGE $ (1,217) $ (4,053) $ (279,743)
============ ========= =================
LOSS PER SHARE -
BASIC AND DILUTED. . . . $ - $ -
- ------------------------- ============ ==========
These statements should be read in conjunction with the year-end financial
statements.
6
AMANASU ENERGY CORPORATION
(A DEVELOPMENT STATE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
February 22, 1999
Three Month Period (Date of Inception)
2002 2001 To March 31, 2002
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CASH FLOWS FROM OPERATIONS:
Net Loss. . . . . . . . . . . . . . . . . $ (1,217) $ (4,053) $ (279,743)
Charges Not Requiring the Outlay of Cash:
Depreciation . . . . . . . . . . . . . . 1,225 - 4,285
Services provided for common stock . . . - 4,053 70,000
Changes in Assets and Liabilities:
Increase in prepaid expenses . . . . . . (2,700) - (2,700)
------------ ---------- -------------
NET CASH CONSUMED BY
OPERATING ACTIVITIES . . . . . . . . . (2,692) - (208,158)
------------ ----------- --------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of automobile. . . . . . . . . . - - (25,859)
Rent deposit for warehouse lease. . . . . - - (8,028)
------------ ----------- --------------
NET CASH CONSUMED BY
INVESTING ACTIVITIES . . . . . . . . . . - - (33,887)
------------- ----------- --------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Sales of common stock . . . . . . . . . . - - 274,540
Advances received in anticipation of
common stock sales . . . . . . . . . . . - - 100
------------ ----------- ------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES . . . . . . . . . . - - 274,640
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Net change in cash. . . . . . . . . . . . (2,692) - 32,595
Cash balance, beginning of period . . . . 35,287 - -
------------ ---------- -------------
Cash balance, end of period . . . . . . . $ 32,595 $ - $ 32,595
============ ========== =============
These statements should be read in conjunction with the year-end financial
statements.
7
7
AMANASU ENERGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 2002
1. BASIS OF PRESENTATION
The unaudited interim financial statements of Amanasu Energy Corporation ("the
Company") as of March 31, 2002 and for the three month periods ended March 31,
2002 and 2001, have been prepared in accordance with generally accepted
accounting principles. In the opinion of management, such information contains
all adjustments, consisting only of normal recurring adjustments, necessary for
a fair presentation of the results for such periods. The results of operations
for the quarters ended March 31, 2002 are not necessarily indicative of the
results to be expected for the full fiscal year ending December 31, 2002.
Certain information and disclosures normally included in the notes to financial
statements have been condensed or omitted as permitted by the rules and
regulations of the Securities and Exchange Commission, although the Company
believes the disclosure is adequate to make the information presented not
misleading. The accompanying unaudited financial statements should be read in
conjunction with the financial statements of the Company for the year ended
December 31, 2001.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The following discussion should be read in conjunction with the Company's
Financial Statements, including the Notes thereto, appearing elsewhere in this
Quarterly Report and in the Annual Report for the year ended December 31, 2001.
COMPANY OVERVIEW
The Company was organized February 22, 1999. Its operations to date have been
limited to obtaining the license to the technology, conducting preliminary
marketing efforts, and conducting preliminary testing of the equipment.
PLAN OF OPERATIONS
The Company is a development stage corporation. It has not commenced its
planned operations of manufacturing and selling a toxic and hazardous waste
disposal system.
During the year 2001, the Company raised $274,540 through the issuance of common
stock, $200,000 of which was the result of the exercise of 20,000,000 stock
purchase options by the Company's president and principal shareholder. It did
not raise any additional funds during the quarter ended March 31, 2002. The
Company intends to raise approximately $2,000,000 to $3,000,000 in the near
future through the private placement of its common stock. The proceeds of such
private placements will be used to construct two demonstrational units, a
one-half ton daily capacity unit and a one ton daily capacity unit, to fully
launch the marketing and sale of its licensed proprietary Amanasu furnace, and
for other general working capital needs. The Company's activities over the next
twelve months will be entirely devoted to the construction of a limited number
of demonstrational units, the hiring of a limited staff to conduct its business,
and the commencement of marketing activities. The Company has entered into
discussions with a number of private investors concerning the private placement
of its common stock. At this time, however, it has not received commitments
from any source. Although the Company is encouraged by its discussions, it
cannot predict whether it will be successful in raising capital, which capital
is essential to its plan of operations.
The Company expects to outsource the construction and fabrication of its units
to third parties, including the proprietary combustion system which will be
manufactured by the inventor of the furnace at his factory in Hokkaido, Japan.
The Company expects the production cycle of its product to be three to six
months. The Company believes that it can manufacture as many as thirty units
per month using currently available manufacturing and assembly resources and it
believes the production and assembly resources of the third parties will be
sufficient to meet anticipated product demand of the next twelve months. Tests
are now being conducted of the furnace at a California facility which is
expected to be a primary source of manufacturing capability. Testing will
continue through the third quarter of the year 2002 and manufacturing is
expected to begin in the last quarter of the year.
9
The Company will require a minimum of $1,000,000 to satisfy its cash
requirements of the next twelve months. If the Company is successful in raising
this money, it will commence production and marketing of its units to
prospective customers in the Pacific Rim. If the Company in successful in
raising the projected $2,000,000 to $3,000.000 from sales of common stock,
management believes that this funding, along with bank borrowings and cash flow
from the sales of units, will enable the Company to commence the full scale
manufacture and sale of its product. The Company can not predict whether it
will be successful in its capital raising efforts. If the Company is not
successful in raising $1,000,000, it may not be able to complete its plan of
operations.
The results of operations during the first quarter of 2002 were a loss of
$1,217, compared with a loss of $4,053 in the comparable 2001 period. Testing
of the Amanasu furnace began in late 2001. A total of $44,000 was spent on this
testing during 2001. An additional $166,000 is expected to be spent during 2002
to complete this testing.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
NONE
Item 2. Changes in Securities and Use of Proceeds
NONE
Item 3. Defaults Upon Senior Securities:
NONE
Item 4. Submission of Matters to a Vote of Security Holders:
NONE
Item 5. Other Information:
NONE
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit - NONE
(b) Reports on Form 8-K: NONE
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: May 14, 2002
AMANASU ENERGY CORPORATION
By: /s/ Atsushi Maki
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Atsushi Maki, Chairman, President
and Chief Financial Officer