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Registrant's telephone number,
including area code: (604)
790-8799
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par
value $0.01
Indicate by checkmark if registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No
[X]
Indicate by checkmark if registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No
[X]
Indicate by checkmark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate web site, if any, every
Interactive Data File required to be submitted and posted pursuant
to Rule 405 Regulation S-T (§ 232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes [X] No
[ ]
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
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-K or any amendment to this
Form 10-K. [X]
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, smaller reporting company, or an
emerging growth company. See the definitions of
“large accelerated filer,”“accelerated
filer,”“smaller reporting company,” and
“emerging growth company” in Rule 12b-2 of
the Exchange Act.
Large accelerated filer
☐
Accelerated filer
☐
Non-accelerated filer
☐ (Do not check if a
smaller reporting company)
Smaller reporting company
☒
Emerging growth company
☐
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the
extended transition period for complying with any new or revised
financial accounting standards provided pursuant to
Section 7(a)(2)(B) of the Securities
Act. ☐
Indicate by checkmark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Securities Act). Yes [ ] No
[X]
The aggregate market value of the voting and non-voting common
stock (par value $0.001 per share) held by non-affiliates on June30, 2019 (the last business day of our most recently completed
second fiscal quarter) was $63,526, using the closing price on June30, 2019.
As of
March 10, 2020, the registrant had 46,956,300 shares of common
stock, par value $0.001 per share, outstanding.
Certain
of the statements contained in this Annual Report on Form 10-K
include forward looking statements. All statements other than
statements of historical facts included in this Form 10-K 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 we believe that the expectations
reflected in these forward-looking statements are reasonable, we
cannot assure you that the expectations reflected in these
forward-looking statements will prove to be correct. Our actual
results could differ materially from those anticipated in
forward-looking statements as a result of certain factors,
including matters described in the section titled “Risk
Factors (Item1A. Risk Factors).” Forward-looking statements
include those that use forward-looking terminology, such as the
words “anticipate,”“believe,”“estimate,”“expect,”“intend,”“may,”“project,”“plan,”“will,”“shall,”“should,” and
similar expressions, including when used in the negative. Although
we believe that the expectations reflected in these forward-looking
statements are reasonable and achievable, these statements involve
risks and uncertainties and we cannot assure you that actual
results will be consistent with these forward-looking statements.
Important factors that could cause our actual results, performance
or achievements to differ from these forward-looking statements
include the following:
● the
availability and adequacy of our cash flow to meet our
requirements;
● economic,
competitive, demographic, business and other conditions in our
local and regional markets;
● changes
in our business and growth strategy;
● changes
or developments in laws, regulations or taxes in the entertainment
industry;
● actions
taken or not taken by third-parties, including our contractors and
competitors;
● the
availability of additional capital; and
● other
factors discussed elsewhere in this Annual
Report.
All forward-looking statements attributable to us are expressly
qualified in their entirety by these and other factors. We
undertake no obligation to update or revise these forward-looking
statements, whether to reflect events or circumstances after the
date initially filed or published, to reflect the occurrence of
unanticipated events or otherwise unless required by applicable
law.
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 still in the development phase, and has
not conducted any operations or generated any revenue since its
inception.
The
Company continues to investigate and develop technologies, which
the Company believes have great market potential. The first
technology is an automated personal waste collection and cleaning
machine Haruka (formerly "Heartlet"), developed by Nanomax
Corporation in Japan. The Haruka is a machine used in retirement
homes, hospitals, and even in private residences. The Haruka allows
the patient maximum comfort. The Haruka lowers the burden on the
caretaker with an automated cleaning system. This machine is the
only machine in its class to have a 90% government rebate, which
the company believes makes the technology, extremely competitive
even in the current global economic crisis. The company obtained
sales and manufacturing rights to the Haruka brand and is now
seeking manufacturing partners.
The
second technology is Thoughts Routine Mechanism
(“RUNE”) developed by the Company. We plan to develop
this operating software to be used on electronic devices, such as
smart phones, PC’s and gaming machines. We have secured
technology and human resources that extend this technology to other
applications outside the gaming sector. The Company has developed
an alliance with Valhalla Game Studios (“VGS”) to
jointly conduct game development and application development on
“fate diagnosis based statistical theory, and “fate
diagnosis” game service on mobile phones, smart phones, and
tablets. We believe the collaboration between the Company and VGS
may contribute to the future growth of the Company. Currently, Mr.
Maki offers a wide range of advice as a special advisor, and this
business continues to be evaluated and developed. In addition,
cartoons, movies and games play a large role and influence world
views and we believe that this technology be a very effective tool
in this area.
3
PART I
ITEM 1. BUSINESS (continued)
Overview and History
The
Company remains in the development stage 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 rights to the Company, and the Company
succeeded to the exclusive, worldwide rights. Atsushi Maki, a
director and officer 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,
raising funds, 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.
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 decided to discontinue business relations with
Evader, and abandon the electric scooter project; however, the
Company still holds the related patents.
In
place of the electric scooter, other projects including a
cooperative effort 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. 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 1,000 times more sensitive than
even a dog’s 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'
sensor is able to detect these scent profiles and display the
digitized scent data.
With
uncertainty in the amount of time taken to obtain approval from the
FDA for various technologies by Seems Inc., the Company 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; however, due to personal reasons unrelated to the Company,
Mr. Yoshino stepped down as President as of May 11, 2009, with the
Chairman Mr. Atsushi Maki assuming the position of Principal
Executive Officer.
The
Company was incorporated on February 22, 1999, and remains in the
development stage. Presently, the Company is in the initial stages
of licensing the necessary patents/technologies in order obtain
exclusive sales and manufacturing rights to the Haruka, automatic
personal waste disposal system. The company is also in negotiations
for a licensing agreement for the Biomonitec Glaze (a food microbe
testing apparatus that shortens testing times from days to minutes)
from NMG Inc. 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 to meet its ongoing
operating requirements. Once the Haruka technology has been
established in eastern Asia, the company plans to market the
product in North America which will require FDA, and Health Canada
approval. Even though the initial market approval is not capital
intensive, additional pre-market approvals are. The Company intends
to raise the capital through a woprivate or public financing of
debt or equity. Presently, the Company has no commitment for any
such funding, however, is negotiating with potential partners to
acquire funding. The Company cannot 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 effect on the Company and its ability
to develop and commercial sell the products.
Ability to Develop Commercial Product
The
majority of the Company's partners reside in Japan, and with that,
the Company must pass through different government regulatory
departments. The Company's upcoming Haruka product to the United
States will require FDA Pre-market approval in order to maximize
the Company's ability to market. FDA approval is required due to
the nature of the Haruka product, which are considered medical
devices in the United States. Certain principal marketing
statements may also require FDA approval; however, will not be used
in the initial sale stages.
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 cannot or will not be overcome by
technological advances by competitors rendering the Company's
technologies obsolete or non-competitive.
Lack of Established Distribution Channels
The
Company does not have an established channel of distribution for
any of its products at present. The Company is currently
researching and contacting possible channels of distribution. The
main focus is on chain organizations: restaurant, hotel, and
hospital chains. The Company will also focus on establishing a
network of designated dealers in targeted markets in Japan and
South East Asia. The Company cannot 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. Atsushi Maki, the Company's
Chairman and Principal Executive Officer. Accordingly, shareholders
must be willing to entrust all aspects of the business affairs of
the Company to its current management. Further, the loss of Mr.
Atsushi Maki could have a material adverse impact on its continued
operation.
Control Exercised By Management
The current officers and directors control approximately 86% of the
shareholder votes, based on ownerships of March 24, 2020.
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.
There is a risk associated with COVID-19
The
Company’s operations may be affected by the recent and
ongoing outbreak of the coronavirus disease 2019 (COVID-19) which
in March 2020 was declared a pandemic by the World Health
Organization. The ultimate disruption which may be caused by the
outbreak is uncertain; however it may result in a material adverse
impact on the Company’s financial position, operations and
cash flows. Possible areas that may be affected include, but are
not limited to, disruption to the Company’s potential
customers, unavailability of products and supplies used in
operations, and the unavailability of capital.
5
ITEM 1A. RISK FACTORS (continued)
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 officers 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, 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.
6
ITEM 1A. RISK FACTORS (continued)
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.
Going Concern
The
accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As
shown in the consolidated financial statements, the Company had a
working capital deficiency of $662,360 and an accumulated deficit
of $2,248,142 at December 31, 2019, and a record of continuing
losses. These factors, among others, raise substantial doubt about
the ability of the Company to continue as a going concern. The
consolidated financial statements do not include any adjustments
that might result from the outcome of this
uncertainty.
The
Company's present plans, the realization of which cannot be
assured, to overcome these difficulties include, but are not
limited to, a continuing effort to investigate business
acquisitions and joint ventures. The Company will also continue to
investigate and develop technologies, which the Company believes
have great market potential. As such, the Company may need to
pursue additional sources of financing. There can be no assurances
that the Company can secure additional financing.
The
Company's executive offices are located at 244 Fifth Avenue 2nd
Floor New York, NY10001, and Vancouver, British Columbia. The
total premises in Vancouver are 2,000 square feet and are leased at
a monthly rate of $2,500 under a lease agreement between the
Company and the Secretary of the Company which expired October 1,2019. The Company entered into a new lease with the Secretary of
the Company at a monthly rate of $2,500, which expires October 1,2021. The Company shares the space with Amanasu Environment
Corporation (“AEC”), a reporting company under the
Securities Exchange Act of 1934. Our major shareholder and officer
own approximately 81% of AEC’s outstanding shares of common
stock. AEC is responsible for 50% of the rent. The office in New
York is rented at the rate of $392 each year and shares with AEC.
In addition, the Company maintains an office at Suite 905, 1-6-1
Senzoku Taito-Ku Tokyo Japan, and no rent is paid by the
Company.
ITEM 5. MARKET FOR REGISTRANT'S COMMON
EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES
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 $0.005 and $2.00 per share since that
date.
The
following table sets forth the high and low closing 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.
Quarter
Ended
Mar.
31
Jun.
30
Sep.
30
Dec.
31
Year
Fiscal
Year 2019
Common stock price
per share
High
$0.012
$0.020
$0.015
$0.020
$0.020
Low
$0.005
$0.001
$0.005
$0.005
$0.001
Fiscal
Year 2018
Common stock price
per share
High
$0.026
$0.010
$0.010
$0.120
$0.026
Low
$0.010
$0.010
$0.010
$0.005
$0.005
Information
provided by the Nasdaq.com. The quotations reflect inter-dealer
prices, without retail mark-up, markdown, or commission and may not
represent actual transactions.)
Holders
As of December 31, 2019, the Company has approximately 80 holders
of its common Stock. This figure does not take into account those
shareholders whose certificates are held in the name of
broker-dealers or other nominees.
Dividend Policy
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. 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
-0-
-0-
-0-
Equity compensation
plans not approved by security holders
ITEM 7. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Forward Looking Statements
This report and other reports filed by our Company from time to
time with the United States Securities and Exchange Commission
(collectively the “Filings”) contain or may contain
forward-looking statements and information that are based upon
beliefs of, and information currently available to, our management
as well as estimates and assumptions made by our management.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which are only predictions and speak
only as of the date hereof. When used in the filings, the words
“anticipate,”“believe,”“estimate,”“expect,”“future,”“intend,”“plan,” or the negative of these
terms and similar expressions as they relate to us or our
management identify forward-looking statements. Such statements
reflect our current view with respect to future events and are
subject to risks, uncertainties, assumptions, and other factors,
including those set forth in the Risk Factors on page 7. Should one
or more of these risks or uncertainties materialize, or should the
underlying assumptions prove incorrect, actual results may differ
significantly from those anticipated, believed, estimated,
expected, intended, or planned.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance, or achievements.
Except, as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the
forward-looking statements to conform these statements to actual
results.
Our financial statements are prepared in accordance with accounting
principles generally accepted in the United States
(“GAAP”). These accounting principles require us to
make certain estimates, judgments and assumptions. We believe that
the estimates, judgments and assumptions upon which we rely are
reasonable based upon information available to us at the time that
these estimates, judgments and assumptions are made. These
estimates, judgments and assumptions can affect the reported
amounts of assets and liabilities as of the date of the financial
statements as well as the reported amounts of revenues and expenses
during the periods presented. Our financial statements would be
affected to the extent there are material differences between these
estimates and actual results. In many cases, the accounting
treatment of a particular transaction is specifically dictated by
GAAP and does not require management’s judgment in its
application. There are also areas in which management’s
judgment in selecting any available alternative would not produce a
materially different result. The following discussion should be
read in conjunction with our consolidated financial statements and
notes thereto appearing elsewhere in this report.
Please
note the consolidated financial statements for the fiscal years
ending December 31, 2019 and 2018 have been prepared assuming that
the Company will continue as a going concern. As shown in the
consolidated financial statements the Company had a working capital
deficiency of $662,360 as well as an accumulated deficit of
$2,248,142. These factors, among other things discussed in Note 2
to the consolidated financial statements, raise substantial doubt
about its ability to continue as a going concern. The consolidated
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.
Company Overview
The
Company was organized on December 1, 1997. Its operations to date
have been limited to obtaining the license to various environmental
and other technologies, conducting preliminary marketing efforts
and seeking financing.
9
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND
RESULTS
OF OPERATIONS (continued)
Plan of Operations
The
Company is a development stage corporation. It has not commenced
its planned operations of manufacturing and
marketing. Its operations to date have been limited to
conducting various tests on its technologies and seeking
financing.
The
Company will continue to investigate and develop technologies,
which the Company believes have great market potential. The first
technology is an automated personal waste collection and cleaning
machine Haruka (formerly "Heartlet"), developed by Nanomax
Corporation in Japan. The Haruka is a machine used in retirement
homes, hospitals, and even in private residences. The Haruka allows
the patient maximum comfort. The Haruka lowers the burden on the
caretaker with an automated cleaning system. This machine is the
only machine in its class to have a 90% government rebate, which
the company believes makes the technology, extremely competitive
even in the current global economic crisis. The company obtained
sales and manufacturing rights to the Haruka brand and is now
seeking, manufacturing partners.
The
second technology is Thoughts Routine Mechanism
(“RUNE”) developed by the Company. We plan to develop
this operating software to be used on electronic devices, such as
smart phones, PC’s and gaming machines. We have secured
technology and human resources that extend this technology to other
applications outside the gaming sector. The Company has developed
an alliance with Valhalla Game Studios (“VGS”) to
jointly conduct game development and application development on
“fate diagnosis based statistical theory, and “fate
diagnosis” game service on mobile phones, smart phones, and
tablets. We believe the collaboration between the Company and VGS
may contribute to the future growth of the Company. Currently, Mr.
Maki offers a wide range of advice as a special advisor, and this
business continues to be evaluated and developed. In addition,
cartoons, movies and games play a large role and influence world
views and we believe that this technology be a very effective tool
in this area.
The
Company will also be concentrating its efforts on capital raising
efforts to fund the development and marketing of these
technologies.
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 $150,000, it may not be
able to complete its plan of expanding operations as discussed
above.
The
company is expecting to gain the capital from issuing and selling
the shares of the Company. The Company has been able to fund its
existing operations from the proceeds of loans from a
shareholder.
Results of Operations
General
and administrative expenses decreased $5,370 (7.5%) for the year
ended December 31, 2019 to $66,293 as compared to $71,663 for the
year ended December 31, 2018 primarily as a result of lower travel
and automobile expenses as well as lower professional
fees.
Interest
expense increased $1,490 (10.8%) to $15,283 for the year ended
December 31, 2019 as compared to $13,793 for the year ended
December 31, 2018.
As a
result of the above, the Company incurred a net loss of $81,576 for
the year ended December 31, 2019 as compared to a net loss of
$85,456 for the year ended December 31, 2018.
10
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND
RESULTS
OF OPERATIONS (continued)
Liquidity and Capital Resources
Total
assets as of December 31, 2019 were $33,299, compared to $1,544
as of December 31, 2018. Total
liabilities as of December 31, 2019 were $681,594 compared to
$568,263 at December 31, 2018. The increase is primarily due to
operating lease liabilities, advances from stockholders and
officers, accrued interest and accrued expenses due to stockholders
and officers of the Company.
The Company intends to raise additional funds in the near future
through private placements of its common stock. The Company
received $50,000 for stock sales in 2013. During 2015, the Company
received $61,030 for a deposit for the purchase of common stock,
this amount is classified as a current liability in the
accompanying balance sheets as of December 31, 2019 and 2018.
The proceeds from such private placements were allocated for
administrative salaries, office expenses and travel, product
development and testing.
The Company's minimum cash requirements for the next twelve months
are estimated to be $50,000. This amount is primarily for rent,
interest and professional fees. The Company does not have
sufficient cash on hand to support its overhead for the next twelve
months and there are no material commitments for capital at this
time other than as described above. The Company will need to issue
and sell shares to gain capital for operations or arrange for
additional shareholder or related party loans. There is
no current commitment for either of these fund
sources.
During the year ended December 31, 2019, the Company had a net
increase in cash of $6,671. The Company’s principal sources
and uses of funds were as follows:
Cash used in operating activities. For the year ended December 31, 2019,
the Company used $62,571 in cash for operations as compared to
$47,288 in cash for the year ended December 31, 2018. This increase in cash used in operations is
primarily attributed to the change in accrued
expenses.
Cash provided by financing activities. Net
cash provided by financing activities for the year ended December31, 2019 was $69,242 as compared to $43,818 for the year ended
December 31, 2018. This increase is primarily the result of the
increase in advances from stockholders.
Off-Balance Sheet Arrangements
The
Company has no off-balance sheet arrangements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
Not
Applicable.
11
ITEM 8. FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of Independent Registered
Public Accounting Firm
To the
Board of Directors and Stockholders of
Amanasu
Techno Holdings Corporation
Opinion on the Financial Statements
We have
audited the accompanying consolidated balance sheets of Amanasu
Techno Holdings Corporation (the “Company”) as of
December 31, 2019 and 2018, and the related consolidated statements
of operations, changes in stockholders’ deficit, and cash
flows for each of the two years in the period ended December 31,2019, and the related notes (collectively referred to as the
“financial statements”). In our opinion, the financial
statements present fairly, in all material respects, the financial
position of the Company as of December 31, 2019 and 2018, and the
results of its operations and its cash flows for each of the two
years in the period ended December 31, 2019, in conformity with
accounting principles generally accepted in the United States of
America.
Going Concern
The
accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As described in Note
2 to the financial statements, the Company had a working capital
deficit of $662,360, and accumulated deficit of $2,248,142 at
December 31, 2019, and a record of continuing losses. These
factors, among others, raise substantial doubt about the
Company’s ability to continue as a going concern.
Management’s plans in regards to these matters are described
in Note 2 to the financial statements. The financial statements do
not include any adjustments that might result from the outcome of
this uncertainty.
Basis for Opinion
These
financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on the
Company’s financial statements based on our audits. We are a
public accounting firm registered with the Public Company
Accounting Oversight Board (United States) (PCAOB) and are required
to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the
PCAOB.
We
conducted our audits in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements
are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting.
As part of our audits, we are required to obtain an understanding
of internal control over financial reporting, 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.
Our
audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those
risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as
well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis
for our opinion.
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 or generated any revenue since its
inception.
On
January 4, 2008, the Company invested $1,837 for a 100% interest in
a newly formed subsidiary, Amanasu Techno Holdings Japan
Corporation (Japan), which is located in Tokyo. This subsidiary is
inactive since inception.
Business
The
Company continues to investigate and develop technologies, which
the Company believes have great market potential.
2. GOING CONCERN
The
accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As
shown in the consolidated financial statements, the Company had a
working capital deficiency of $662,360 and an accumulated deficit
of $2,248,142 at December 31, 2019, and a record of continuing
losses. These factors, among others, raise substantial doubt about
the ability of the Company to continue as a going concern. The
consolidated financial statements do not include any adjustments
that might result from the outcome of this
uncertainty.
The
Company's present plans, the realization of which cannot be
assured, to overcome these difficulties include, but are not
limited to, a continuing effort to investigate business
acquisitions and joint ventures. The Company will also continue to
investigate and develop technologies, which the Company believes
have great market potential. As such, the Company may need to
pursue additional sources of financing. There can be no assurances
that the Company can secure additional financing.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation:
The consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the
United States, and include the Company and its wholly-owned
subsidiary. All significant inter-company accounts and transactions
have been eliminated.
Use of Estimates:
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires that management make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Development Stage Company:
The
Company is considered to be in the development stage as defined in
ASC 915 “Development Stage
Entities.” The Company is devoting substantially all
of its efforts to the development of its business plans. The
Company has elected to adopt early application of Accounting
Standards Update No. 2014-10, Development Stage Entities (Topic
915): Elimination of Certain Financial Reporting Requirements; and
does not present or disclose inception-to-date information and
other remaining disclosure requirements of Topic 915.
18
AMANASU TECHNO HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
Cash and Cash Equivalents:
For
purposes of the statements of cash flows, the Company considers all
short term debt securities purchased with an original maturity of
three months or less to be cash equivalents.
Fair Value of Financial Instruments:
The
Company has adopted the provisions of ASC Topic 820, Fair Value
Measurements and Disclosures”, which defines the fair value
as used in numerous pronouncements, establishes a framework for
measuring fair value and expands disclosure of fair value
measurements. ASC 820 defines fair value as the exchange price that
would be received for an asset or paid to transfer a liability (an
exit price) in the principal or most advantageous market for the
asset or liability in an orderly transaction between market
participants on the measurement date. ASC 820 also establishes a
fair value hierarchy, which requires an entity to maximize the use
of observable inputs and minimize the use of unobservable inputs
when measuring fair value. ASC 820 describes three levels of inputs
that may be used to measure fair value:
Level 1 – quoted prices in active markets for identical assets or liabilities.
Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable.
Level 3 – inputs that are unobservable (for example cash flow modeling inputs based on assumptions).
The
estimated fair value of certain financial instruments, including
cash, accrued expenses and advances from stockholder and officers
are carried at historical cost basis, which approximates fair
values because of the short-term maturing of these instruments. We
have no financial assets or liabilities measured at fair value on a
recurring basis.
Income Taxes:
The Company accounts for income taxes under the provisions of FASB
ASC Topic 740, “Income Tax,” which requires recognition
of deferred tax assets and liabilities for the expected future tax
consequences of events that have been included in the consolidated
financial statements or tax returns. Deferred tax assets and
liabilities are recognized for the future tax consequence
attributable to the difference between the tax bases of assets and
liabilities and their reported amounts in the financial statements.
Deferred tax assets and liabilities are measured using the enacted
tax rate expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that
includes the enactment date. The Company establishes a valuation
when it is more likely than not that the assets will not be
recovered.
ASC Topic 740.10.30 clarifies the accounting for uncertainty in
income taxes recognized in an enterprise’s financial
statements and prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement
of a tax position taken or expected to be taken in a tax return.
ASC Topic 740.10.40 provides guidance on derecognition,
classification, interest and penalties, accounting in interim
periods, disclosure, and transition. We have no material uncertain
tax positions for any of the reporting periods
presented.
Recently Adopted Accounting Pronouncements:
In February 2016, the FASB established Topic 842, Leases, by
issuing Accounting Standards Update (ASU) No. 2016-02, which
requires lessees to recognize leases on-balance sheet and disclose
key information about leasing arrangements. Topic 842 was
subsequently amended by ASU No. 2018-01, Land Easement Practical
Expedient for Transition to Topic 842; ASU No. 2018-10,
Codification Improvements to Topic 842, Leases; and ASU No.
2018-11, Targeted Improvements. The new standard establishes a
right-of-use model (ROU) that requires a lessee to recognize a ROU
asset and lease liability on the balance sheet for all leases with
a term longer than 12 months. Leases will be classified as finance
or operating, with classification affecting the pattern and
classification of expense recognition in the income statement. The
new standard is effective on January 1, 2019. A modified
retrospective transition approach is required, applying the new
standard to all leases existing at the date of initial application.
An entity may choose to use either (1) its effective date or (2)
the beginning of the earliest comparative period presented in the
financial statements as its date of initial application. If an
entity chooses the second option, the transition requirements for
existing leases also apply to leases entered into between the date
of initial application and the effective date. The entity must also
recast its comparative period financial statements and provide the
disclosures required by the new standard for the comparative
periods.
19
AMANASU TECHNO HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Company adopted the new standard on January 1, 2019 and used
the effective date as the date of initial application.
Consequently, financial information was not updated and the
disclosures required under the new standard was not provided for
dates and periods before January 1, 2019. The new standard provides
a number of optional practical expedients in transition. The
Company elects the ‘package of practical expedients’,
which permits the Company not to reassess under the new
standard prior conclusions about lease identification, lease
classification and initial direct costs. The Company
determined that this standard has a material effect on the
Company’s financial statements. While the Company continues
to assess all of the effects of adoption, the Company currently
believes the most significant effects relate to the recognition of
new ROU assets and lease liabilities on the Company’s balance
sheet for the Company’s real estate operating leases. On
adoption, the Company recognized an operating lease liability of
$38,845 with corresponding ROU assets of the same amount based on
the present value of the remaining minimum rental payments under
current leasing standards for existing operating leases (see Note
6).
The Company does not expect any other recently issued
pronouncements to have a significant effect on the Company’s
results of operations, financial position or cash
flows.
4. RELATED PARTY TRANSACTIONS
The
Company receives periodic advances from its principal stockholders
and officers based upon the Company’s cash flow needs. There
is no written loan agreement between the Company and stockholders
and officers. All advances bear interest at 4.45% and due on
demand. No terms for repayment have been established. As a result,
the amount is classified as a current liability.
The
balances due as of December 31, 2019 and 2018 were $370,835 and
$313,630, respectively.
Interest
expense associated with these loans were $15,283 and $13,793 for
the years ended December 31, 2019 and 2018, respectively. Accrued
interest on these loans were $93,196 and $77,913 at December 31,2019 and 2018, respectively.
The
Company has an arrangement with Lina Maki, a stockholder of the
Company, for her management consulting time. The agreement is not
written and no payment terms have been established. The fee is
$10,000 annually. As of December 31, 2019 and 2018 amounts due to
the stockholder were $50,000 and $40,000,
respectively.
The
Company also leases it office space from a stockholder of the
Company. At December 31, 2019 and 2018, amounts due to the
stockholder were $3,630. For the
most part, lease payments are made by the Company’s
affiliate. As such, when the lease payments are made by the
Company’s affiliate or the lease payments are made by the
Company on behalf of the affiliate, such amounts are shown as a
reduction in or addition to the amount due from affiliate in the
accompanying balance sheets (see Note 6).
20
AMANASU TECHNO HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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 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 carry forward and apply against
future profits for a period of twenty years.
In assessing the realization of deferred tax assets, management
considers whether it is more likely than not that some portion or
all of the deferred tax assets will be realized. The ultimate
realization of deferred tax assets is dependent upon the generation
of future taxable income during the periods in which those
temporary differences become deductible. Management considers the
scheduled reversal of deferred tax liabilities, projected future
taxable income and tax planning strategies in making this
assessment. Based on the assessment, management has established a
full valuation allowance against all of the deferred tax asset
relating to NOL’s for every period because it is more likely
than not that all of the deferred tax asset will not be
realized.
On December 22, 2017, legislation commonly known as the Tax Cuts
and Jobs Act, or the Tax Act, was signed in to law. The Tax Act,
among other changes, reduces the U.S. federal corporate tax rate
from 35% to 21%, requires taxpayers to pay a one-time transition
tax on earnings of certain foreign subsidiaries that were
previously tax deferred and creates new taxes on certain foreign
sourced earnings. The Company did not have any earnings from
foreign subsidiaries, and, as such, the international aspects of
the Tax Act are not applicable.
The Company had NOL carryforwards of approximately $1.4 million at
December 31, 2019. Approximately $1.23 million will expire in the
years 2020 through 2037, and $0.17 million can be carried forward
indefinitely.
The tax
return for the years 2016, 2017 and 2018 are subject to audit by
the Internal Revenue Service.
The
reconciliation of income tax expense at the U.S. statutory rate of
21% to the Company’s effective tax rate is as
follows:
2019
2018
Income tax expense
at statutory rate
21%
21%
Change in valuation
allowance
(21%)
(21%)
Income tax
expense
-
-
The tax
effects of temporary differences that give rise to the
Company’s net deferred tax assets as of December 31, 2019 and
2018 are as follows:
2019
2018
Net Operating Loss
Carryforwards
$293,888
$276,817
Valuation
Allowance
(293,888)
(276,817)
Deferred Tax
Asset
$-
$-
21
AMANASU TECHNO HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The
Company's executive offices are located at 244 Fifth Avenue 2nd
Floor New York, NY10001 and Vancouver, British Columbia. The total
premises in Vancouver are 2,000 square feet and are leased at a
monthly rate of $2,500 under a lease agreement between the Company
and the Secretary of the Company which expired October 1, 2019. The
Company entered into a new lease with the Secretary of the Company
at a monthly rate of $2,500, which expires October 1, 2021. The
Company shares the space with AEC, a reporting company under the
Securities Exchange Act of 1934. Our major shareholder and officer
own approximately 81% of AEC’s outstanding shares of common
stock. AEC is responsible for 50% of the rent or $1,250 each month.
The office in New York is rented at the rate of $392 each year and
shares with AEC. In addition, the Company maintains an office at
Suite 905, 1-6-1 Senzoku Taito-Ku Tokyo Japan, and the Company pays
no rent.
Upon
adoption of ASC 842, Leases, on January 1, 2019the Company
recorded $10,353 of right-of-use assets and related operating
leases liabilities. This asset was fully amortized as of September30, 2019.
The
Company's lease does not provide an implicit rate, and therefore
the Company uses an estimated incremental borrowing rate as the
discount rate when measuring operating lease liabilities. The
incremental borrowing rate represents an estimate of the interest
rate the Company would incur at lease commencement to borrow an
amount equal to the lease payments on a collateralized basis over
the term of a lease. The Company used incremental borrowing rate of
5% as of January 1, 2019 for operating leases that commenced prior
to that date.
The
following table reconciles the undiscounted future minimum lease
under the non-cancelable operating leases with terms of more than
one year to the total lease liabilities recognized on the
consolidated balance sheet as of December 31, 2019:
2020
$15,000
2021
11,250
Total
undiscounted future minimum lease payments
26,250
Less:
Difference between undiscounted lease payments and discounted lease
liabilities
(1,163)
Total
operating lease liabilities
25,084
Less
current portion
(14,065)
Long-term
lease liabilities
$11,019
Total
rent expense under operating leases for the year ended December 31,2019 was $15,948 as compared to $16,034 for the year ended December31, 2018.
7. DEPOSIT ON STOCK PURCHASE
During 2015, the Company received $61,030 for a deposit for the
purchase of common stock, this amount is classified as a current
liability in the accompanying balance sheet as of December 31, 2019
and 2018. No shares have been issued for these deposits as of
December 31, 2019.
8. SUBSEQUENT EVENT
The Company evaluated all events subsequent to December 31, 2019
through the date of issuance of the financial statements and
concluded the following subsequent event need to be
disclosed.
The
Company’s operations may be affected by the recent and
ongoing outbreak of the coronavirus disease 2019 (COVID-19) which
in March 2020 was declared a pandemic by the World Health
Organization. The ultimate disruption which may be caused by the
outbreak is uncertain; however it may result in a material adverse
impact on the Company’s financial position, operations and
cash flows. Possible areas that may be affected include, but are
not limited to, disruption to the Company’s potential
customers, unavailability of products and supplies used in
operations, and the unavailability of capital.
22
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
We
carried out an evaluation required by Rule 13a-15 of the Securities
Exchange Act of 1934 (Exchange Act) under the supervision and with
the participation of our management, including our Principal
Executive Officer and Principal Accounting Officer, of the
effectiveness of our disclosure controls and procedures over
financial reporting.
Disclosure
controls and procedures are designed with the objective of ensuring
that (i) information required to be disclosed in an issuer's
reports filed under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the
SEC rules and forms and (ii) information is accumulated and
communicated to management, including our Principal Executive
Officer and Principal Accounting Officer, as appropriate to allow
timely decisions regarding required disclosures.
The
evaluation of our disclosure controls and procedures included a
review of our objectives and processes and effect on the
information generated for use in this Report. This type of
evaluation is done quarterly so that the conclusions concerning the
effectiveness of these controls can be reported in our periodic
reports filed with the SEC.
We have
implemented the required processes and compensatory controls to
minimize the risk of any recurrence and we will continue to develop
processes that will be necessary as the business grows, and
financial reporting becomes more complex. We intend to maintain
these controls as processes that may be appropriately modified as
circumstances warrant.
Based
on their evaluation, our Principal Executive Officer and Principal
Accounting Officer have concluded that our disclosure controls and
procedures were not effective in timely alerting them to material
information which, is required to be included in our periodic
reports filed with the SEC as of the filing of this
Report.
Management's Report on Internal Control over Financial
Reporting
Our
management is responsible for establishing and maintaining adequate
internal control over financial reporting, as such term is defined
in Exchange Act Rule 13a-15. Under the supervision and with the
participation of our management, including our Principal Executive
Officer and Principal Financial Officer, we conducted an evaluation
of the effectiveness of the design and operation of the company's
internal control over financial reporting pursuant to Exchange Act
rule 13a - 15 and based on the criteria set forth in Internal
Control - Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission. Based on our
evaluation under the criteria set forth in Internal Control -
Integrated Framework, our Principal Executive Officer and Principal
Accounting Officer concluded that our internal controls and
procedures over financial reporting were ineffective as of December31, 2019.
However,
a control system, no matter how well conceived and operated, can
provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Management necessarily
applied its judgment in assessing the benefits of controls relative
to their costs. Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance
that all control issues and instances of fraud, if any, within the
company have been detected. The design of any system of controls is
based in part upon certain assumptions about the likelihood of
future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future
conditions, regardless of how remote. Because of the inherent
limitations in a control system, misstatements due to error or
fraud may occur and may not be detected.
This
Annual Report does not include an attestation report of our
independent registered public accounting firm regarding internal
control over financial reporting. We were not required to have, nor
have we engaged our independent registered public accounting firm
to perform, an audit on our internal control over financial
reporting pursuant to the rules of the Securities and Exchange
Commission that permit us to provide only management's report in
this Annual Report.
23
Changes in internal controls over financial reporting
There
have been no significant changes in the Company's internal controls
or in other factors since the date of the Principal Executive
Officer's and Principal Accounting Officer's evaluation that could
significantly affect these internal controls, including any
corrective actions with regards to significant deficiencies and
material weaknesses.
ITEM 10. DIRECTORS, EXECUTIVE
OFFICERS AND CORPORATE GOVERNANCE
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
66
Chairman,
Principal Executive Officer, Director
Atsushi
Maki has been the Director of the Company since June 1, 2001. Mr.
Maki was appointed Chairman October 16th, 2007. 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 also is a
director of Amanasu Environment Corporation, a reported company
under the federal securities laws.
The
officers of the Company are not full time employees. They do not
currently receive compensation. 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.
24
ITEM 12. SECURITY OWNERSHIP OF CERTAIN
BENFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
The
following table will identify, as of March 5, 2020, 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 46,956,300 shares of
common stock of the Company which are issued and outstanding as of
March 5, 2020. The address for each individual below is 244 Fifth
Avenue, 2nd floor New York, NY10001 the address of the
Company.
Title of
Security
Name and Address
of Beneficial Owner
Amount and
Nature of Beneficial Ownership (1)
Percent of
Class
Common
Stock
Amanasu
Corporation(2)
#902
Ark Towers, 1-3-40,
Roppongi,
Minatoku, Tokyo, Japan
35,000,000
74.54
%
Common
Stock
Atsushi
Maki(3)
40,373,700
86.
0%
Common
Stock
Lina
Lei(4)
40,373,700
86.
0%
Common
Stock
Officers
and Directors, as a group (3 persons)
40,373,700
86.0
%
1.
(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.
(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.
(3)
Includes 4,873,700 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 Lina Lei.
Mr. Maki disclaims beneficial ownership of the shares held by Lina
Lei.
4.
(4)
Includes 500,000 shares of common stock held individually by Ms.
Lei, and 39,873,700 shares of common stock beneficially owned by
Atsushi Maki, Ms. Lei's spouse. Ms. Lei disclaims beneficial
ownership of the shares held by Atsushi Maki.
25
ITEM 13. CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The
Company receives periodic advances from its principal stockholders
and officers based upon the Company’s cash flow needs. There
is no written loan agreement between the Company and stockholders
and officers. All advances bear interest at 4.45%.
The
balances due as of December 31, 2019 and 2018 were $370,835 and
$313,630, respectively.
Interest
expense associated with these loans were $15,283 and $13,793 for
the years ended December 31, 2019 and 2018, respectively. Accrued
interest on these loans were $93,196 and $77,913 at December 31,2019 and 2018, respectively. No terms for repayment have been
established. As a result, the amount is classified as a current
liability.
The
Company has an arrangement with Lina Maki, a stockholder of the
Company, for her management consulting time. The agreement is not
written and no payment terms have been established. The fee is
$10,000 annually. As of December 31, 2019 and 2018 amounts due to
the stockholder were $50,000 and $40,000,
respectively.
The
Company also leases it office space from a stockholder of the
Company. At December 31, 2019 and 2018, amounts due to the
stockholder were $3,630. For the
most part, lease payments are made by the Company’s
affiliate. As such, when the lease payments are made by the
Company’s affiliate or the lease payments are made by the
Company on behalf of the affiliate, such amounts are shown as a
reduction in or addition to the amount due from affiliate in the
accompanying balance sheets (see Note 6).
Paritz & Company, P.A. ("Paritz"), the independent registered
public accounting firm of Amanasu Techno Holdings
Corporation, (the "Company"), announced effective October 9,2018, that Paritz was acquired by a new auditing firm, Prager Metis
CPA’s LLC (“Prager”), and that all of the
employees and partners of Paritz were joining Prager.
As a result, effective October 9, 2018, Paritz resigned as the
Company's independent registered public accounting firm. The
Company's Board of Directors engaged Prager to serve as the
Company's independent registered public accounting firm effective
October 9, 2018.
The following table presents the aggregate fees for professional
audit services and other services rendered by Paritz, our
independent registered public accountants for the first two quarter
of 2018. Prager reviewed our 2018 third quarter financials and
performed the audit for the years ended December 31, 2018 and 2019.
Fees for the years ended December 31, 2019 and 2018 were as
follows:
2019
2018
Audit
Fees
$19,000
$20,000
Audit-Related
Fees
-
-
Total
Audit and Audit-Related Fees
19,000
20,000
Tax
Fees
-
-
All
Other Fees
-
-
Total
$19,000
$20,000
Audit
Fees. This category
includes the audit of the Company’s financial statements, and
reviews of the financial statements included in the Company’s
Quarterly Reports on Form 10-Q. It also includes advice
on accounting matters that arose during, or as a result of, the
audit or the review of interim financial statements, and services
which are normally provided in connection with regulatory filings,
or in an auditing engagement.
Audit Related Fees, tax and other fees. No other fees under these categories were paid to
Paritz and Prager in 2019 and 2018.
The financial
statements are set forth under Item 8 of this Annual Report on Form
10-K. Financial statement schedules have been omitted since they
are either not required, not applicable, or the information is
otherwise included.
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 file on June 21,2002).
Certification
Pursuant To Section 906 Of The Sarbanes-Oxley Act Of
2002.
101
INS
XBRL Instance
Document*
101
SCH
XBRL Schema
Document*
101
CAL
XBRL Calculation
Linkbase Document*
101
LAB
XBRL Labels
Linkbase Document*
101
PRE
XBRL Presentation
Linkbase Document*
101
DEF
XBRL Definition
Linkbase Document*
The
XBRL related information in Exhibit 101 of Section 18 of the
Securities Exchange Act of 1934, as amended, or otherwise subject
to liability of that section and shall not be incorporated by
reference into any filing or other document pursuant to the
Securities Act of 1933, as amended, except as shall be expressly
set forth by specific reference in such filing or
document.
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.
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.
