UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549 

 

FORM 10-Q

 

☒

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

 

For the quarterly period ended: June 30, 2022

 

☐

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

 

Commission File Number: 001-31261

 

AMANASU TECHNO HOLDINGS CORPORATION

(Exact name of registrant as specified in its charter)

 

Nevada

 

98-0351508

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

244 Fifth Avenue, 2nd Floor

New York, NY 10001

(Address of principal executive offices)

 

(604) 790-8799

(Registrant’s telephone number, including area code)

 

Title of each class

 

Trading

 Symbol(s)

 

Name of each exchange

 on which registered

N/A

 

N/A

 

N/A

 

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

Common Stock $.001 par value

(Title of class)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files. Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated Filer

☒

Smaller reporting company

☒

 

 

Emerging growth company

☐

 

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

 

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

 

As of August 10, 2022, there were 46,956,300 shares outstanding of the registrant’s common stock.

 

 

 

 

AMANASU TECHNO HOLDINGS CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FOR THE PERIOD ENDED JUNE 30, 2022

 

TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION

 

 

 

 

 

Item 1.

Financial Statements (unaudited).

 

3

 

 

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

10

 

 

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

 

14

 

 

 

 

 

 

Item 4.

Controls and Procedures.

 

14

 

 

 

 

 

 

PART II - OTHER INFORMATION

 

 

 

 

 

Item 1.

Legal Proceedings.

 

15

 

 

 

 

 

 

Item 1

Risk Factors.

 

15

 

 

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

 

15

 

 

 

 

 

 

Item 3.

Defaults Upon Senior Securities.

 

15

 

 

 

 

 

 

Item 4.

Mine Safety Disclosures.

 

15

 

 

 

 

 

 

Item 5.

Other Information.

 

15

 

 

 

 

 

 

Item 6.

Exhibits.

 

16

 

 

 

 

 

 

Signatures

 

17

 

 

 
2

Table of Contents

 

PART I

 

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

 

AMANASU TECHNO HOLDINGS CORPORATION

CONSOLIDATED BALANCE SHEETS

 (Unaudited)

 

 

 

June 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

ASSETS

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash

 

$276

 

 

$269

 

Due from affiliate

 

 

57,454

 

 

 

39,166

 

 

 

 

 

 

 

 

 

 

Total current assets

 

 

57,730

 

 

 

39,435

 

 

 

 

 

 

 

 

 

 

Operating lease right-of-use assets

 

 

18,139

 

 

 

25,084

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$75,869

 

 

$64,519

 

 

 

 

 

 

 

 

 

 

LIABILITIES & STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accrued expenses – stockholders and officers

 

$308,462

 

 

$287,498

 

Operating lease liabilities – current

 

 

14,421

 

 

 

14,065

 

Deposit on stock purchase

 

 

61,030

 

 

 

61,030

 

Loans from stockholders and officers

 

 

544,220

 

 

 

499,350

 

 

 

 

 

 

 

 

 

 

Total current liabilities

 

 

928,133

 

 

 

861,943

 

 

 

 

 

 

 

 

 

 

Operating lease liabilities

 

 

3,718

 

 

 

11,019

 

 

 

 

 

 

 

 

 

 

Total Liabilities

 

 

931,851

 

 

 

872,962

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ Deficit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock: authorized 100,000,000 shares of $0.001 par value;46,956,300 shares issued and outstanding

 

 

46,956

 

 

 

46,956

 

Additional paid in capital

 

 

1,552,891

 

 

 

1,552,891

 

Accumulated deficit

 

 

(2,455,829 )

 

 

(2,408,290 )

 

 

 

 

 

 

 

 

 

Total stockholders’ deficit

 

 

(855,982 )

 

 

(808,443 )

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders’ Deficit

 

$75,869

 

 

$64,519

 

 

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

 

 
3

Table of Contents

 

AMANASU TECHNO HOLDINGS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

 (Unaudited)

 

 

 

Three Month Periods

Ended June 30,

 

 

Six Month Periods

Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$-

 

 

$-

 

 

$-

 

 

$-

 

Cost of goods sold

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Gross profit

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses

 

 

15,482

 

 

 

10,518

 

 

 

35,947

 

 

 

31,146

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

 

 

(15,482 )

 

 

(10,518 )

 

 

(35,947 )

 

 

(31,146 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense – stockholders and officers

 

 

(5,989 )

 

 

(5,206 )

 

 

(11,592 )

 

 

(10,103 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

 

(21,471 )

 

 

(15,724 )

 

 

(47,539 )

 

 

(41,249 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$(21,471 )

 

$(15,724 )

 

$(47,539 )

 

$

(41,249 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per share - Basic and Diluted

 

$(0.00 )

 

$(0.00 )

 

$(0.00 )

 

$(0.00 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding – Basic and Diluted

 

 

46,956,300

 

 

 

46,956,300

 

 

 

46,956,300

 

 

 

46,956,300

 

 

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

 

 
4

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AMANASU TECHNO HOLDINGS CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(Unaudited)

 

 

 

Common Stock

 

 

Additional Paid In

 

 

Accumulated

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Total

 

Balance, April 1, 2022

 

 

46,956,300

 

 

$46,956

 

 

$1,552,891

 

 

$(2,434,358 )

 

$(834,511 )

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(21,471 )

 

 

(21,471 )

Balance, June 30, 2022

 

 

46,956,300

 

 

$46,956

 

 

$1,552,891

 

 

$(2,455,829 )

 

$(855,982 )

 

 

 

Common Stock

 

 

Additional Paid In

 

 

Accumulated

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Total

 

Balance, April 1, 2021

 

 

46,956,300

 

 

$46,956

 

 

$1,552,891

 

 

$(2,353,845 )

 

$(753,998 )

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(15,724 )

 

 

(15,724 )

Balance, June 30, 2021

 

 

46,956,300

 

 

$46,956

 

 

$1,552,891

 

 

$(2,369,569 )

 

$(769,722 )

 

 

 

Common Stock

 

 

Additional Paid In

 

 

Accumulated

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Total

 

Balance, January 1, 2022

 

 

46,956,300

 

 

$46,956

 

 

$1,552,891

 

 

$(2,408,290 )

 

$(808,443 )

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(47,539 )

 

 

(47,539 )

Balance, June 30, 2022

 

 

46,956,300

 

 

$46,956

 

 

$1,552,891

 

 

$(2,455,829 )

 

$(855,982 )

 

 

 

Common Stock

 

 

Additional Paid In

 

 

Accumulated

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Total

 

Balance, January 1, 2021

 

 

46,956,300

 

 

$46,956

 

 

$1,552,891

 

 

$(2,328,320 )

 

$(728,473 )

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(41,249 )

 

 

(41,249 )

Balance, June 30, 2021

 

 

46,956,300

 

 

$46,956

 

 

$1,552,891

 

 

$(2,369,569 )

 

$(769,722 )

 

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

 

 
5

Table of Contents

 

AMANASU TECHNO HOLDINGS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

Six Months

Ended

 June 30,

2022

 

 

Six Months

Ended

 June 30,

2021

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net loss

 

$(47,539 )

 

$(41,249 )

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accrued expenses – stockholders and officers

 

 

20,964

 

 

 

15,248

 

Accrued expenses – other

 

 

-

 

 

 

(2,500)

Net Cash Used In Operating Activities

 

 

(26,575)

 

 

(28,501)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Increase in amounts due from affiliate

 

 

(18,288 )

 

 

(13,586 )

Proceeds from loans from stockholders and officers

 

 

44,870

 

 

 

42,450

 

Net Cash Provided By Financing Activities

 

 

26,582

 

 

 

28,864

 

 

 

 

 

 

 

 

 

 

Net change in cash

 

 

7

 

 

 

363

 

 

 

 

 

 

 

 

 

 

Cash balance, beginning of period

 

 

269

 

 

 

859

 

 

 

 

 

 

 

 

 

 

Cash balance, end of period

 

$276

 

 

$1,222

 

 

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$-

 

 

$-

 

Cash paid for income taxes

 

$-

 

 

$-

 

 

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

 

 
6

Table of Contents

 

AMANASU TECHNO HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022

(Unaudited)

 

1. BASIS OF PRESENTATION

 

The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position of the Company as of June 30, 2022, the results of operations for the three and six months ended June 30, 2022 and 2021, and cash flows for the six months ended June 30, 2022 and 2021. These results are not necessarily indicative of the results to be expected for the full year or any other period. The December 31, 2021 balance sheet included herein was derived from the audited financial statements included in the Company’s Annual Report on Form 10-K as of that date. Accordingly, the financial statements included herein should be reviewed in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as filed with the Securities and Exchange Commission (“SEC”) on April 5, 2022.

 

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 $870,403 and an accumulated deficit of $2,455,829 at June 30, 2022, 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 or will have to rely on loans from stockholders and officers to support operations. There can be no assurances that the Company can secure additional financing.

 

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

 

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

New Accounting Pronouncements

 

During the three and six months ended June 30, 2022, there have been no material changes in the Company’s significant accounting policies to those previously disclosed in the Annual Report.

 

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

 

 
7

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AMANASU TECHNO HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022

(Unaudited)

 

4. RELATED PARTY TRANSACTIONS AND BALANCES

 

The Company receives periodic loans from its principal stockholders and officers based upon the Company’s cash flow needs. There is no written loan agreement between the Company and stockholders and officers. All loans 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.

 

During the six months ended June 30, 2022 and 2021, the Company borrowed $44,870 and $42,450, respectively, from a stockholder.

 

During the three months ended June 30, 2022 and 2021, the Company borrowed $29,220 and $23,400, respectively, from a stockholder.

 

The balances due as of June 30, 2022 and December 31, 2021 were $544,220 and $499,350, respectively.

 

Interest expense associated with these loans were $5,989 and $11,592 for the three and six months ended June 30, 2022 as compared to $5,206 and $10,103 for the three and six months ended June 30, 2021, respectively. Accrued interest on these loans were $144,244 and $132,652 at June 30, 2022 and December 31, 2021, 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 June 30, 2022 and December 31, 2021, amounts due to the stockholder were $75,000 and $70,000, respectively.

 

The Company leases its office in Vancouver Canada from a stockholder of the Company at a monthly rate $2,500 under a lease agreement that expires October 1, 2023. At June 30, 2022 and December 31, 2021, amounts due to the stockholder were $86,320 and $81,096, respectively including rent and other expenses. The Company shares the space with Amanasu Environmental Corporation (“AEC”), a reporting company under the Securities Exchange Act of 1934. AEC is responsible for 50% of the rent.

 

The office in New York is rented at the rate of approximately $360 each year and is also shared with AEC. In addition, the Company maintains an office at Suite 905, 1-6-1 Senzoku Taito-Ku Tokyo Japan. The net balances due from AEC as of June 30, 2022 and December 31, 2021 were $57,454 and $39,166, respectively.

 

5. INCOME TAXES

 

In accordance with the current tax laws in the U.S., the Company is subject to a corporate tax rate of 21% on its taxable income. No provision for taxes is made for U.S. income tax for the three and six months ended June 30, 2022 and 2021 as it has no taxable income in the U.S.

 

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 (“NOL”) carryforwards. The Company has experienced losses since its inception. As a result, it has incurred no Federal income tax. 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 NOLs for every period because it is more likely than not that all of the deferred tax assets will not be realized.

 

The Company had NOL carryforwards of approximately $1.53 million at June 30, 2022. Approximately $1.23 million will expire in the years 2022 through 2037, and $0.30 million can be carried forward indefinitely.

 

 
8

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AMANASU TECHNO HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022

(Unaudited)

 

6. OPERATING LEASE LIABILITY

 

The Company’s executive offices are located at 244 Fifth Avenue 2nd Floor New York, NY 10001 and Vancouver, British Columbia. The total premises in Vancouver are 2,000 square feet and are leased at a monthly rate of $2,500 under a lease agreement between the Company and the Secretary of the Company’s board of directors who is also the stockholder of the Company, which expires October 1, 2023. The Company shares the space with AEC, a reporting company under the Securities Exchange Act of 1934. Our major stockholder 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 $360 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.

 

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 uses an incremental borrowing rate of 5% for operating leases.

 

On October 1, 2019, the Company commenced a lease with a stockholder from October 1, 2019 to September 30, 2021 with a monthly payment of approximately $1,250. As such, the Company recorded $28,492 of right-of-use assets and related operating leases liabilities on October 1, 2019. This asset was fully amortized as of September 30, 2021.

 

On October 1, 2021, the Company commenced a new lease with the same stockholder from October 1, 2021 to September 30, 2023 with a monthly payment of approximately $1,250. As such, the Company recorded $28,492 of right-of-use assets and related operating leases liabilities on October 1, 2021. For the three and six months ended June 30, 2022, the Company amortized $3,495 and $6,945 of right-of-use assets as compared to $3,673 and $7,300 for the three and six months ended June 30, 2021 , respectively.

 

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 June 30, 2022:

 

2022 – remaining six months

 

$7,500

 

2023

 

 

11,250

 

Total undiscounted future minimum lease payments

 

 

18,750

 

Less: Difference between undiscounted lease payments and discounted lease liabilities

 

 

(611 )

Total operating lease liabilities

 

 

18,139

 

Less current portion

 

 

(14,421 )

Long-term lease liabilities

 

$3,718

 

 

Total rent expense under operating leases for the three and six months ended June 30, 2022 was $3,750 and $7,500, as compared to $3,750 and $7,500 for the three and six months ended June 30, 2021, respectively.

 

7. COMMITMENTS AND CONTINGENCIES

 

From time to time, the Company may be involved in litigation relating to claims arising out of its operations in the normal course of business. There are no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of its operations and there are no proceedings in which any of the Company’s directors, officers, or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to the Company’s interest.

 

8. SUBSEQUENT EVENTS

 

The Company evaluated subsequent events, which are events or transactions that occurred after June 30, 2022 through the issuance of the accompanying financial statements and determined that no significant subsequent event need to be recognized or disclosed.

 

 
9

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

This quarterly report on Form 10-Q and other reports filed by Amanasu Techno Holdings Corporation and its wholly owned subsidiaries, collectively the “Company”, “we”, “our”, and “us”) from time to time with the U.S. Securities and Exchange Commission (the “SEC”) contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks contained in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as filed with the Securities and Exchange Commission (“SEC”) on April 5, 2022 (the “Annual Report”), relating to the Company’s industry, the Company’s operations and results of operations, and any businesses that the Company may acquire. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

 

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

 

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

 

The accompanying 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 $870,403 and an accumulated deficit of $2,455,829 at June 30, 2022, 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 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, 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 or will have to rely on loans from stockholders and officers to support operations. There can be no assurances that the Company can secure additional financing.

 

Company Overview

 

The Company was incorporated in the State of Nevada 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. The Company’s principal offices are at 244 Fifth Avenue, 2nd Floor, New York, NY 10001 Telephone: 604-790-8799. The Tokyo branch is located at Suite 905, 1-6-1 Senzoku Taito-Ku Tokyo Japan. Telephone: 03-5808-3663.

 

 
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

 

General

 

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

 

Plan of 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’s present plans, the realization of which cannot be assured, to overcome its 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 or will have to rely on loans from stockholders and officers to support operations. There can be no assurances that the Company can secure additional 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 stockholder.

 

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

 

 
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

 

Results of Operations

 

There were no revenues for the three and six months ended June 30, 2022 and 2021.

 

General and administrative expenses increased $4,964 (47.2%) and $4,801 (15.4%) to $15,482 and $35,947 for the three and six months ended June 30, 2022, as compared to $10,518 and $31,146 for the three and six months ended June 30, 2021 primarily as a result of higher professional fees and travel expenses.

 

As a result of the above, the Company incurred losses from operations of $15,482 and $35,947 for the three and six months ended June 30, 2022 as compared to losses from operations of $10,518 and $31,146 for the three and six months ended June 30, 2021.

 

For the three and six months ended June 30, 2022, interest expense increased $783 and $1,489 to $5,989 and $11,592, respectively, as compared to $5,206 and $10,103 for the three and six months ended June 30, 2021, as a result of the increased interest associated with additional loans from stockholders.

 

As a result of the above, the Company incurred net losses of $21,471 and $47,539 for the three and six months ended June 30, 2022 as compared to $15,724 and $41,249 for the three and months ended June 30, 2021.

 

Liquidity and Capital Resources

 

Total assets as of June 30, 2022 were $75,869, compared to $64,519 as of December 31, 2021. The increase is primarily due to an increase in amounts due from affiliate. Total liabilities as of June 30, 2022 were $931,851 compared to $872,962 at December 31, 2021, primarily as a result of an increase in loans from stockholders and officers and accrued expenses - stockholders and officers of the Company.

 

The Company’s minimum cash requirements for the next twelve months are estimated to be $60,250, including rent, audit fees, office expenses, 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 stockholder or related party loans. There is no current commitment for either of these fund sources.

 

Our working capital deficit increased $47,895 to $870,403 at June 30, 2022 as compared to $822,508 at December 31, 2021 primarily due to an increase in loans from stockholders and officers and accrued expenses-stockholders and officers.

 

On June 30, 2022, the Company had a cash balance of $276. The Company’s principal sources and uses of funds were as follows:

 

Cash used in operating activities. For the six months ended June 30, 2022, the Company used $26,575 in cash for operations as compared to using $28,501 in cash for operations for the six months ended June 30, 2021, primarily as a result of the higher net loss offset partially by the increase in accrued expenses – stockholders and officers.

 

Cash provided by financing activities. Net cash provided by financing activities for the six months ended June 30, 2022 was $26,582 as compared to $28,864 for the six months ended June 30, 2021 primarily as a result of the increase in proceeds from loans from stockholders and officers offset partially by the increase in amounts due from affiliate.

 

 
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

 

OFF-BALANCE SHEET ARRANAGEMENTS

 

The Company has no off-balance sheet arrangements.

 

CRITICAL ACCOUNTING POLICIES

 

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

 

Our critical accounting policies are described in the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on April 5, 2022 (the “Annual Report”). There have been no changes in our critical accounting policies.

 

RECENTLY ISSUED ACCOUNTING STANDARDS

 

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

 

 
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not Applicable.

 

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

 

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

 

We carried out an evaluation, under the supervision and with the participation of our management, including our PEO and PAO, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based upon that evaluation, the PEO and PAO concluded that the Company’s disclosure controls and procedures were ineffective for the reasons discussed below. In addition, management identified the following material weaknesses in its assessment of the effectiveness of disclosure controls and procedures as of June 30, 2022.

 

The Company did not effectively segregate certain accounting duties due to the small size of its accounting staff. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis. Notwithstanding the determination that our internal control over financial reporting was not effective, as of June 30, 2022, and that there was a material weakness as identified in this Quarterly Report, we believe that our financial statements contained in this Quarterly Report fairly present our financial position, results of operations and cash flows for the periods covered hereby in all material respects.

 

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

 

(b) Changes in Internal Control over Financial Reporting

 

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

 

 
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PART II

 

ITEM 1. LEGAL PROCEEDINGS

 

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

 

ITEM 1A. RISK FACTORS

 

Not applicable to smaller reporting companies.

 

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

 

There were no unregistered sales of the Company’s equity securities during the quarter ended June 30, 2022.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

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

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

None.

 

 
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ITEM 6. EXHIBITS

 

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

 

Exhibit 31.1

 

Certification of the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).*Certification Pursuant To Section 302 Of The Sarbanes-Oxley Act Of 2002.

 

 

 

Exhibit 31.2

 

 Certification of the Principal Accounting Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).*

 

 

 

Exhibit 32.1

 

Certification of the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

 

 

 

Exhibit 32.2

 

Certification of the Principal Accounting Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

 

 

 

101 INS

 

XBRL Instance Document*

 

 

 

101 SCH

 

XBRL Schema Document*

 

 

 

101 CAL

 

XBRL Calculation Linkbase Document*

 

 

 

101 DEF

 

XBRL Definition Linkbase Document*

 

 

 

101 LAB

 

XBRL Labels Linkbase Document*

 

 

 

101 PRE

 

XBRL Presentation Linkbase Document*

 

* filed herewith

 

 
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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused his report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

Amanasu Techno Holdings Corporation

 

 

 

 

 

Date: August 10, 2022

By:

/s/ Atsushi Maki

 

 

 

Atsushi Maki

 

 

 

Principal Executive Officer

 

 

 

Principal Accounting Officer

 

 

 
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