UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

**FORM 10-K/A**

**[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934**

For the fiscal year ended December 31, 2009

**[     ] TRANSITION REPORT PURSUANT TOSECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the transition period from ______________ to ________________

Commission File Number: 000-32905

AMANASU ENVIRONMENT CORPRATION

(Exact name of registrant as specified in its charter)
| Nevada                                                          |   | 98-0347883                          |
|-----------------------------------------------------------------|--------|-------------------------------------|
| (State of other jurisdiction of  incorporation or organization) |   | (I.R.S. Eployer Identification No.) |

445 Park Avenue Center 10th Floor New York, NY 10022

(Address of principal executive offices)

212-836-4727

(Registrant's telephone number, including area code)

Securities registeredpursuant to Section 12(b) of the Act:
| Title of each class | ** ** | Name of each exchange on which  registered |
|---------------------|------------|--------------------------------------------|
| COMMON STOCK        |       | OTC-BB                                     |

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

(Title of class)

(Titleof class)

Indicateby check mark if the registrant is a well-known seasoned issuer, as defined inRule 405 of the Securities Act.
| Yes |   |   | No | X |
|-----|--------|--------|----|---|

Indicateby check mark if the registrant is not required to file reports pursuant toSection 13 or Section 15(d) of the Act.
| Yes |   |   | No | X |
|-----|--------|--------|----|---|

Indicateby check mark whether the registrant (1) has filed all reports required to befiled by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. 
| Yes | X |   | No |   |
|-----|---|--------|----|--------|

Indicateby check mark if disclosure of delinquent filers pursuant to Item 405 ofRegulation S-K(229.405 of this chapter) is not contained herein, and will notbe contained, to the best of registrant's knowledge, in definitive proxy orinformation statements incorporated by reference in Part III of this Form 10-Kor any amendment to this Form 10-K. 
| Yes |   |   | No | X |
|-----|--------|--------|----|---|

Indicateby check mark whether the registrant is a large accelerated filer, anaccelerated filer, a non-accelerated filer, or a smaller reporting company. Seethe definitions of "large accelerated filer," "acceleratedfiler" and "smaller reporting company" in Rule 12b-2 of the ExchangeAct. 
| Large  accelerated filer |   |                                           | Accelerated  filer         |   |
|--------------------------|--------|------------------------------------------------|----------------------------|--------|
| Non-accelerated  filer   |   | (Do  not check if a smaller reporting company) | Smaller  reporting company | X      |

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2 of theExchange Act).
| Yes |   |   | No | X |
|-----|--------|--------|----|---|

**APPLICABLE ONLY TO ISSUERSINVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:**

Indicate by check markwhether the registrant has filed all documents and reports required to be filedby sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequentto the distribution of securities under a plan confirmed by a court. 
| Yes |   |   | No |   |
|-----|--------|--------|----|--------|

**APPLICABLE ONLY TO CORPORATEISSUERS:**

Indicatethe number of shares outstanding of each of the issuers classes of commonstock, as of the latest practiable date: 44,000,816 as of March 31, 2010. 

 

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**EXPLANATORY NOTE**

 

 

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| ***The purpose of this Amendment No. 2 on    Form 10-K/A is to respond to comments received by Amanasu Environment    Corporation.,from the Securities and Exchange Commission's Division of    Corporation Finance in a letter dated December 29, 2010 ("Comment    Letter") regarding our previously filed Annual Report on Form 10-K/A for    the year ended December 31, 2009, filed with the Securities and Exchange Commission    on April 15, 2010 ("Form 10-K/A"). In accordance with the suggestions made    in the Comment letter, in this amendment, Item 9a. "Controls and    Procedures," beginning on page 20 of this Amendment, has been    revised. Similarly, there has been a revision to Management's Annual Report    on Internal Control Over Financial Reporting, which also appears on page 20    of this Amendment.***

***Furthermore, there are several  corrections to the financial statements, which are described in Note 2 to the  financial statements.***

***There are no changes to the Original  Form 10-K/A other than those outlined above. Except as required to reflect  the changes noted above, this Amendment No. 2 on Form 10-K/A does not attempt  to modify or update any other disclosures set forth in our Original Form 10-K/A.  Furthermore, this Amendment No. 2 on Form 10-K/A does not purport to provide  a general update or discussion of any other developments of Amanasu  Environment Corporation to the filing of the Original Form 10-K.*** |

 

 

**AMANASU ENVIRONMENT CORPORATIONANNUAL REPORT ON FORM 10-K/AFOR FISCAL YEAR ENDED DECEMBER 31, 2009TABLE OF CONTENTS**
| **Reference** | **Section Name**                                                                                                | **Page** |
|---------------|-----------------------------------------------------------------------------------------------------------------|----------|
| PART  I       |                                                                                                                 | 1        |
| Item  1.      | Business                                                                                                        | 1        |
| Item  1A.     | Risk Factors                                                                                                    | 3        |
| Item  1B.     | Unresolved Staff Comments                                                                                       | 5        |
| Item  2.      | Properties                                                                                                      | 5        |
| Item  3.      | Legal Proceedings                                                                                               | 5        |
| Item  4.      | Submission of  Matters to a Vote of Security Holders                                                            | 5        |
| PART  II      |                                                                                                                 | 5        |
| Item  5.      | Market  for Registrant's Common Equity, Related Stockholder Matters, and Issuer  Purchases of Equity Securities | 5        |
| Item  6.      | Selected Financial Data                                                                                         | 6        |
| Item  7.      | Management's  Discussion and Analysis of Financial Condition and Results of Operations                          | 6        |
| Item  7A.     | Quantitative  and Qualitative Disclosures about Market Risk                                                     | 7        |
| Item  8.      | Financial Statements and  Supplementary Data                                                                    | 8        |
|               | Accountant's Audit Report                                                                                       | 8        |
|               | Consolidated Balance Sheets                                                                                     | 9        |
|               | Consolidated Statements of  Operations                                                                          | 10       |
|               | Consolidated  Statements of Changes in Stockholder's Equity                                                     | 11       |
|               | Consolidated Statements of Cash  Flows                                                                          | 12       |
|               | Notes to Consolidated  Financial Statements                                                                     | 13       |
| Item  9.      | Changes  in and Disagreements with Accountants on Accounting and Financial Disclosure                           | 20       |
| Item  9A.     | Controls and Procedures                                                                                         | 20       |
| Item  9B.     | Other Information                                                                                               | 20       |
| PART  III     |                                                                                                                 |          |
| Item  10.     | Directors, Executive  Officers and Corporate Governance                                                         | 21       |
| Item  11.     | Executive Compensation                                                                                          | 21       |
| Item  12.     | Security  Ownership of Certain Beneficial Owners and Management and Related Stockholder  Matters                | 22       |
| Item  13.     | Certain  Relationships and Related Transactions, and Director Independence                                      | 23       |
| Item  14.     | Principal Accounting Fees and  Services                                                                         | 24       |
| PART  IV      |                                                                                                                 |          |
| Item  15.     | Exhibits and Financial  Statement Schedules                                                                     | 25       |
|               | Signatures                                                                                                      | 25       |

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Forward LookingStatements. Certain of the statements contained in this Annual Report on Form10-K include forward looking statements. All statements other than statementsof historical facts included in this Form 10-K regarding the Company'sfinancial position, business strategy, and plans and objectives of managementfor future operations and capital expenditures, and other matters, are forwardlooking statements. These forward looking statements are based uponmanagement's expectations of future events. Although the Company believes theexpectations reflected in such forward looking statements are reasonable, therecan be no assurances that such expectations will prove to be correct.Additional statements concerning important factors that could cause actualresults to differ materially from the Company's expectations ("Item 1A.Risk Factors") are disclosed below in the Item 1A. Risk Factors section and elsewhere in this Form 10-K. All written and oral forward looking statementsattributable to the Company or persons acting on behalf of the Companysubsequent to the date of this Form 10-K are expressly qualified in theirentirety by the Cautionary Statements. 

**Part I**

**Item 1. Business**

**General**

Amanasu EnvironmentCorporation (herein after the "Company") principle business is incomplete development of Environmental Technologies to improve the quality oflife for the future of the planet. The Company is involved in all aspects ofenvironmental technology development: research & development, marketing,sales. It also produces and acquires environmental technology and relatedpatents. Environmental technologies that the Company has been apart of rangefrom water filtration systems, industrial/medical waste incinerators, solarpanels, to name a few. The Company chose to have its headquarters in the UnitedStates in order to bridge environmental technology development internationally,with particular attention to leading innovations in Japan. The Company's parentcompany Amanasu Corporation, is a Japanese Corporation. The Company hopes toutilize existing associations and partnerships in order to bring environmentaltechnologies from the United States and market them in Japan and other surroundingcountries.

**Current**

During the fiscal yearended December 31, 2008, Chairman & Chief Executive Officer Atsushi Maki,set a 2 year capital raising goal of $30,000,000 to increase the Company'spotential by entering into the NASDAQ global market. The Company's mainobjective has not changed for the coming fiscal year ending December 31, 2010. 

Aside from capitalraising efforts, the company continues to support Amanasu Maritech Corporation,in development and required regulatory approval for Commercial Cargo ShipBallast Water Purification System. The Company and Amanasu Maritech Corporationare currently working through the approval process of this type of product withthe Japanese regulatory bodies. Also required documentation, and translationsare being prepared for additional approval by the main global governing bodyfor marine technologies, IMO the International Marine Organization. The Companyalso continues to look for partners and interested parties to further developexisting business' and technolgies acquired by Amanasu Maritech Corporation,the Company's child company. 

The Company'sprincipal offices were relocated on April 1, 2010 from 115 East 57th Street11th Floor New York, NY 10022, to 445 Park Avenue Center 10th floor New York,NY 10022 Telephone: 212-836-4727. The Tokyo branch has relocated from 1-3-38Roppongi, Minatoku, Tokyo, 106-0032, Japan to 1-7-10 Motoakasaka Building 9thFloor Motoakasaka Minato-Ku Tokyo Telephone: 03-5413-7322. 

As of April 27th, 2009Amanasu Maritech Corporation (formerly Amanasu Holdings Corporation)transferred its shares of Amanasu Water Corporation to its sister CompanyAmanasu Techno Holdings Corporation. Amanasu Techno Holdings plans to utilizethe Amanasu Water Corporation's existing resources to enter into the Health,and Medical Devices industry. In exchange Amanasu Holdings Corporation received200,000 shares of Amanasu Techno Holdings. 

The Company isconcentrating its efforts into Amanasu Maritech Corporation, and as a resultwill not put further resources into Amanasu Maritech Corporation's childcompanies Amanasu Echo Frontier, Amanasu Energy, Petstyle, Amanasu ProjectSupport, and BJSS during the fisical year ending December 31, 2010. 

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**History**

Amanasu EnvironmentCorporation ("Company") was incorporated in the State of Nevada onFebruary 22, 1999 under the name of Forte International Inc. On March 27, 2001,the Company's name was changed to Amanasu Energy Corporation, and on November13, 2002, its name was changed to Amanasu Environment Corporation.

It has acquired theexclusive, worldwide license rights to a high temperature furnace, a hot waterboiler, and ring-tube desalination methodology. At this time, the Company isnot engaged in the commercial sale of any of its licensed technologies. Its operationsto date have been limited to acquiring the technologies, conducting limitedproduct marketing, and testing the technologies for commercial sale. For eachsuch technology, proto-type or demonstrational units have been constructed byeach licensor or inventor of the technology. The Company has conducted variousinternal tests on these units to determine the commercial viability of theunderlying technologies. As a result of such testing, the Company believes thatthe products are not commercially ready for sale, and that product refinementsare necessary with respect to each of the technologies. In addition, theCompany may seek joint venture or other affiliations with companies competitivein each respective product market whereby the Company can capitalize on theexisting infrastructure of such other companies, such as product design andengineering, marketing and sales, and warranty and post-warranty service andrepair. The Company believes that its marketing efforts to sell any of itsproducts will be limited until such time as it can complete the refinements ofits technologies. The Company can not predict whether it will be successful indeveloping commercial products, or establishing affiliations with any operatingcompany.

On June 8, 2000, the Companyobtained the exclusive, worldwide license to a technology that disposes oftoxic and hazardous wastes through a proprietary, high temperature combustionsystem, known as the Amanasu Furnace. The rights were obtained pursuant to alicense agreement with Masaichi Kikuchi, the inventor of the technology, for aperiod of 30 years. The Company issued 1,000,000 share of common stock to theinventor and 200,000 shares of common stock to a director of the inventor'scompany. Under the licensing agreement; the Company is required to pay thelicensor a royalty of two percent of the gross receipts from the sale ofproducts using the technology. If the Company fails to comply with anyprovision of the agreement after a 90-day notice period, the licensor may terminatethe agreement.

Effective September30, 2002, the Company obtained the exclusive, worldwide license to a hot waterboiler technology that incinerates waste tires in a safe and non-pollutingmanner and extracts heat energy from the incineration process. The rights wereobtained pursuant to a license agreement with Sanyo Kogyo Kabushiki Gaisha andEver Green Planet Corporation, both Japanese companies, for a period of 30years. As consideration for this acquisition, the Company paid the licensors$250,000, of which the Company's President paid $95,000, issued to them 600,000shares of common stock, and issued to an affiliate of the licensors 50,000shares of common stock. The licensors are entitled to receive a two percentroyalty on the gross receipts from the sale of the products related to thetechnology. If the Company fails to comply with any provision of the agreementafter a 90-day notice period, the licensor may terminate the agreement.

On June 30, 2003, theCompany acquired the exclusive worldwide rights to produce and market apatented technology that purifies seawater, and removes hazardous pollutantsfrom wastewater. The rights were obtained pursuant to a license agreement withEtsuro Sakagami, the inventor, for a period of 30 years. As consideration forobtaining the license, the Company issued 1,000,000 shares to the inventor, and50,000 shares to a finder. The licensor is entitled to receive a two percentroyalty on the gross receipts from the sale of the products related to thetechnology. If the Company fails to comply with any provision of the agreementafter a 90-day notice period, the licensor may terminate the agreement.

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**Item 1A. Risk Factors**

**AbilityTo Develop Commercial Product**

The Company presentlymaintains rights to three different technologies. At this time, proto-typeversions of products for each of the three technologies have been developed,however, none of the products are commercially ready for sale. In order toreach a stage of commercial sales for the products, the Company prefers to putemphasis on joint venturing and funding a company who has advancedtechnological knowledge and progressed sales history of the same field for thepurpose of cooperation. The Company can not predict that it will be successfulin developing commercially ready products for any of the technologies in thenear future or at any time.

**RapidTechnological Changes**

The industries inwhich the Company intends to compete with are subject to rapid technologicalchanges. No assurances can be given that the technological advantages which maybe enjoyed by the Company in respect of their technologies can not or will notbe overcome by technological advances in the respective industries renderingthe Company's technologies obsolete or non-competitive.

**Lackof Indications Of Product Acceptability**

The success of theCompany will be dependent upon its ability to develop commercially acceptableproducts and to sell such products in quantities sufficient to yield profitableresults. To date, the Company has received no indications of the commercialacceptability of any of its proposed products. Accordingly, the Company can notpredict whether its products can be marketed and sold in a commercial manner.

**Management**

The ability of theCompany to successfully conduct its business affairs will be dependent upon thecapabilities and business acumen of current management including Mr. AtsushiMaki, the Company's President. Accordingly, shareholders must be willing toentrust all aspects of the business affairs of the Company to its currentmanagement. Further, the loss of any one of the Company's management team couldhave a material adverse impact on its continued operation.

**ControlExercised By Management**

As of March 15, 2006,the existing officers and directors, and aff iliates will control approximately78.80% of the shareholder votes. Consequently, management will control the voteon all matters brought before shareholders, and holders of common stock mayhave no power in corporate decisions usually brought before shareholders.

**Conflictsof Interest**

The officers of theCompany are not full time employees. Presently, the Company does not have aformal conflicts of interest policy governing its officers and directors. Inaddition, the Company does not have written employment agreements with itsofficers. Its officers intend to devote sufficient business time and attentionto the affairs of the Company to develop the Company's business in a prudentand business-like manner. However, the principal officer is engaged in otherbusinesses related and unrelated to the business of the Company, and in thefuture, will engage in other business ventures. As a result, the principalofficer and other officer of the Company may have a conflict of interest inallocating their respective time, services, and future resources, and inexercising independent business judgment with respect to their other businessesand that of the Company.

**Relianceupon Third Parties**

The Company does notintend on maintaining a significant technical staff nor does it intend onmanufacturing 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 availablewhen needed at affordable prices.

3

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**Competition**

Although managementbelieves its products, if developed, will have significant competitiveadvantages to other products in their respective industries, with respect tosuch products, the Company will be competing in industries, such as theindustrial waste industry, where enormous competition exists. Competitors inthese industries have greater financial, engineering and other resources thanthe Company. No assurances can be given that any advances or developments madeby such companies will not supersede the competitive advantages of theCompany's products.

**ProtectionOf Intellectual Property**

The success of theCompany will be dependent, in part, upon the protection of its proprietary ofits various technologies from competitive use. Certain of its technologies arethe subject of various patents in varying jurisdictions (See " Descriptionof Business - Proprietary Rights"). In addition to the patentapplications, the Company relies on a combination of trade secrets,nondisclosure agreements and other contractual provisions to protect itsintellectual property rights. Nevertheless, these measures may be inadequate tosafeguard the Company's underlying technologies. If these measures do notprotect the intellectual property rights, third parties could use the Company'stechnologies, and its ability to compete in the market would be reducedsignificantly. In addition, if the sale of the Company's product extends toforeign countries, the Company may not be able to effectively protect itsintellectual property rights in such foreign countries.

In the future, theCompany may be required to protect or enforce its patents and patent rightsthrough patent litigation against third parties, such as infringement suits orinterference proceedings. These lawsuits could be expensive, take significanttime, and could divert management's attention from other business concerns.These actions could put the Company's patents at risk of being invalidated orinterpreted narrowly, and any patent applications at risk of not issuing. Indefense of any such action, these third parties may assert claims against theCompany. The Company cannot provide any assurance that it will have sufficientfunds to vigorously prosecute any patent litigation, that it will prevail inany of these suits, or that the damages or other remedies awarded, if any, willbe commercially valuable. During the course of these suits, there may be publicannouncements of the results of hearings, motions and other interim proceedingsor developments in the litigation, which could result in the negativeperception by investors, which could cause the price of the Company's commonstock to decline dramatically.

**Indemnificationof Officers and Directors for Securities Liabilities**

The Company's By-Lawseliminates personal liability in accordance with the Nevada Revised Statutes(NRS). Section 78.7502 of the NRS provides that a corporation may eliminatepersonal liability of an officer or director to the corporation or itsstockholders for breach of fiduciary duty as an officer or director providedthat such indemnification is limited if such party acted in good faith and in amanner which he reasonably believed to be in or not opposed to the bestinterest of the corporation. In so far as indemnification for liability arisingfrom the Securities Act of 1933 ("Act") may be permitted todirectors, officers or persons controlling the Company, it has been informedthat in the opinion of the Securities and Exchange Commission suchindemnification is against public policy as expressed in the Act and is,therefore, unenforceable.

**PennyStock Regulation**

The Company's commonstock 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 marketprice of less than $5.00 per share, subject to certain exceptions. Theseregulations impose additional sales practice requirements on any broker/dealerwho sell such securities to other than established investors and accreditedinvestors. For transactions covered by this rule, the broker/dealer must makecertain suitability determinations and must receive the purchaser's writtenconsent prior to purchase. Additionally, any transaction may require the deliveryprior to sale of a disclosure schedule prescribed by the Commission. Disclosurealso is required to be made of commissions payable to the broker/dealer and theregistered representative, as well as current quotations for the securities.Finally, monthly statements are required to be sent disclosing recent priceinformation for the penny stock held in the account of the customers andinformation on the limited market in penny stocks. These requirements generallyare considered restrictive to the purchase of such stocks, and may limit themarket liquidity for such securities.

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**Item 1B. Unresolved Staff Comments**

None.

**Item 2. Properties**

The Company'sexecutive offices are located at 445 Park Avenue Center 10th Floor New York, NY10022 and Vancouver, British Columbia. The total premises are 2,000 square feetand are subleased at a monthly rate of $2,500 under a lease agreement whichexpires September 30, 2007. The Company shares the space with AmanasuTechnologies Corporation, a reporting company under the Securities Exchange Actof 1934.In addition, the Company maintains an office at 1-7-10 MotoakasakaBuilding 9th Floor Motoakasaka Minato-Ku Tokyo Japan. 

**Item 3. Legal Proceedings**

None.

**Item 4. Submission of Matters to a Vote of SecurityHolders**

None.

**Part II**

**Item 5. Market for Registrant's Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities**

The Company's commonstock has traded on the NASDAQ OTC Bulletin Board since October 2002 under thesymbol "AMSU".

The table below setsforth the high and low bid prices of the Common stock of the Company asreported by NASDAQ. The quotations reflect inter-dealer prices, without retailmark-up, mark-down, or commissions and may not necessarily represent actualtransactions. There is an absence of an established trading market for theCompany's common stock, as the market is limited, sporadic and highly volatile.The absence of an active market may have an effect upon the high and low pricedas reported. 
| **Quarter  Ended**             | **Mar. 31** | **Jun. 30** | **Sep. 30** | **Dec. 31** | **Year** |
|--------------------------------|-------------|-------------|-------------|-------------|----------|
| Fiscal  Year 2009              |             |             |             |             |          |  |  |  |  |  |
| Common  stock price per share: |             |             |             |             |          |  |  |  |  |  |
| High                           | $           | 0.20        | $           | 0.20        | $        | 0.19 | $ | 0.19 | $ | 0.20 |
| Low                            | $           | 0.20        | $           | 0.10        | $        | 0.18 | $ | 0.10 | $ | 0.10 |
| Fiscal  Year 2008              |             |             |             |             |          |  |  |  |  |  |
| Common  stock price per share  |             |             |             |             |          |  |  |  |  |  |
| High                           | $           | 0.34        | $           | 0.35        | $        | 0.30 | $ | 0.30 | $ | 0.35 |
| Low                            | $           | 0.25        | $           | 0.25        | $        | 0.25 | $ | 0.20 | $ | 0.20 |

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**CompensationPlan Information**
| **Equity  Compensation Plan Information**                       |
|-----------------------------------------------------------------|
| **Plan category**                                               | **Number of  securities to be issued upon exercise of outstanding options, warrants and  rights  (a)** | **Weighted-average  exercise price of outstanding options, warrants and rights   (b)** | **Number of  securities remaining available for future issuance under equity compensation  plans (excluding securities reflected in column (a))  (c)** |
| Equity  compensation plans approved by security holders (1)     | -0- | -0- | -0- |
| Equity  compensation plans not approved by security holders (2) | -0- | -0- | -0- |
| **Total**                                                       | -0- | -0- | -0- |

During the quarterended June 30, 2003, 20,000 shares were allotted to Reraise Corporation, aprivate Japanese company, at a price of $4.99 per share for total considerationof $99,900. As of the date hereof, the shares have not been issued due topending documentation needed to affect a new share issuance. As a result, the$99,900 consideration received should be considered a liability, as opposed toa capital contribution, until the shares have been issued. In July 2005, theCompany made the repayment of the amount of $100,000 to Reraise Corporation thus ending the Company's liability. 

**Private Placement**

During the 2005 fiscalyear, the Company issued 1,000,000 shares of common stock, realizing cashproceeds of $3,500,000. These sales were exempt under Regulation S under theSecurities Act of 1933, as amended, due to the foreign nationality of therelevant purchasers. 

**Item 6. Selected Financial Data**

Not Applicable.

**Item 7. Management's Discussion and Analysis ofFinancial Condition and Results of Operations**

**PlanOf Operations**

**AmanasuEnvironment Corporation**

The Company has 2 mainobjective's during the fiscal year ending December 31, 2010. The Company willcontinue in its goal to meet the capital objective of $30,000,000 by the end of2010. Currently the company is exploring various potential investment partnersin Japan, as well as China. The Company cannot predict whether it will besuccessful with its objective. 

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Secondly the companywill support Amanasu Maritech Corporation's efforts on entering into marinetechnologies. The Company will assist an approximately 24 month design, andapproval process for the product from at least 2 regulatory bodies: theJapanese Government, and the IMO (International Marine Organization). Thisapproval process requires capital for additional product testing,documentation, and documentation translations. The Company believes thatAmanasu Maritech Corporation's most significant hurdle will be in capitalraising. The Company has already initiated documentation and applicationprocesses, and is now looking for capital to fund the project. The Companycannot predict whether it will be successful with its capital raising efforts. 

**Resultsof Operations**

TotalCurrent Assets for the fiscal year ended December 31, 2009 was $546,567compared to $703,583 for the same period of 2008. Thedecrease is due primarily to transfers of funds from Certificate of Deposits toExpense Accounts and use of those funds for operational expenses.

TotalCurrent Liabilities for the fiscal year ended December 31, 2009 was $39,122compared to $85,425 for the same period of 2008. Thedecrease is due primarily to transfers of funds from Certificate of Deposits toExpense Accounts and use of those funds for operational expenses.

Sales for the fiscalyear ended December 31, 2009 were $ 0.  Althoughthe sales of the year ended December 31, 2008 are reported as zero, there aresales of $225,697 included in the calculation of Loss from DiscontinuedOperations.  These are sales of Amanasu Shinwa Corporation, which was soldduring 2008.   

Gross Profit for theyears ended December 31, 2009 and 2008 was $ 0.  The amount of gross profit included in the calculation of Loss fromDiscontinued Operations was $33,931. 

Expensefor the year ended December 31, 2009 was $ (280,510) compared to $(610,114) forthe same period of 2008. The decrease is due primarily to the absence ofAmanasu Water Corporation and Amanasu Shinwa Corporation. 

Impairment of fixedassets for the fiscal year ended December 31, 2009 was $ 0 compared to$(66,285) for the same period of 2008.  Therewere no fixed assets impaired during 2009. 

Impairment ofinvestments for the year ended December 31, 2009 was $ 0 compared to $(79,703)for the same period of 2008.  There wereno investments impaired during 2009. 

**Liquidityand Capital Resources**

Cash requirements forthe next 12 months are estimated to be $165,000. This amount is comprised ofthe following estimate expenditures; $100,000 in annual salaries for officepersonnel, office expenses and travel, $30,000 for rent, $20,000 forprofessional fees, and $15,000 for miscellaneous expenses. The Company hassufficient cash on hand to support its overhead for the next 12 months but nomaterial commitments for capital at this time other than as described above.The Company and/or Amanasu Holdings will need to issue and sell shares to gaincapital for operations. 

**Item 7A. Quantitative and Qualitative DisclosuresAbout Market Risk**

Not Applicable.

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**Item 8. Financial Statements and Supplementary Data**

**AMANASU ENVIRONMENTCORPORATION**

**(A Development Stage Company)CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2009**

**Reportof Independent Registered Public Accounting Firm**

Board of DirectorsAmanasu Environment Corporation 

We have audited theaccompanying consolidated balance sheets of Amanasu Environment Corporation andSubsidiaries (A Development Stage Company) as of December 31, 2009 and 2008 andthe related consolidated statements of operations, changes in Stockholders'equity, and cash flows for the years ended December 31, 2009 and 2008. Thesefinancial statements are the responsibility of the Company management. Ourresponsibility is to express an opinion on these financial statements based onour audit. 

We conducted the auditin accordance with the standards of the Public Company Accounting OversightBoard (United States). Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the financial statements arefree of material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basisfor our opinion. 

As detailed in Note 2to the financial statements, factors were discovered which caused restatementsof the financial statements for the years ended December 31, 2009 and December31, 2008, and for the periods January 1, 2009 (date of commencement ofdevelopment stage) to December 31, 2009 

In our opinion, thefinancial statements referred to above present fairly, in all materialrespects, the consolidated financial position of Amanasu EnvironmentCorporation and Subsidiaries (A Development Stage Company) as of December 31,2009 and 2008 and the results of its operations and its cash flows for theyears ended December 31, 2009 and 2008 in conformity with U.S. generallyaccepted accounting principles. 

/s/ Robert G. JeffreyROBERT G. JEFFREY, Certified Public AccountantsFebruary 18, 2011Wayne, New Jersey 

8

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**AMANASU ENVIRONMENTCORPORATION and SUBSIDIARIES**

**(A Development StageCompany)CONSOLIDATED BALANCE SHEETSDecember 31, 2009 and 2008**

**(Restated)**
|                                                              |                    

2009 |        |                      

2008 |
|--------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------|
| ASSETS                                                       |                                                                                                           |   |                                                                                                                  |
| **Current  Assets:**                                         |                                                                                                           |   |                                                                                                                  |
| Cash                                                         | $    8,467                                                                                      |   | $    7,583                                                                                             |
| Certificates  of deposit                                     | 536,000                                                                                                        |   | 696,000                                                                                                               |
| Prepaid  expense                                             | 2,100                                                                                                     |        |           -                                                                   |
|       Total current assets               | 546,567                                                                                                        |   | 703,583                                                                                                               |
|                                                         |                                                                                                           |   |                                                                                                                  |
| **Fixed  Assets:**                                           |                                                                                                           |   |                                                                                                                  |
| Automotive  equipment                                        | 25,859                                                                                                         |   | 25,859                                                                                                                |
| Less,  accumulated depreciation                              | 21,560                                                                                                         |   | 19,785                                                                                                                |
|       Net fixed assets                   | 4,299                                                                                                          |   | 6,074                                                                                                                 |
|                                                         |                                                                                                           |   |                                                                                                                  |
| **Other  Assets:**                                           |                                                                                                           |   |                                                                                                                  |
| Investments                                                  | -                                                                                                              |   | 92,604                                                                                                                |
| Employee  advances                                           | 50,000                                                                                                         |   | 50,000                                                                                                                |
| Due  from affiliate                                          | 37,944                                                                                                         |   | 38,724                                                                                                                |
|       Total other assets                 | 87,944                                                                                                         |   | 181,328                                                                                                               |
|                                                         |                                                                                                           |   |                                                                                                                  |
| **Total  Assets**                                            | $ 638,810                                                                                                      |   | $ 890,985                                                                                                             |
|                                                         |                                                                                                           |   |                                                                                                                  |
| LIABILITIES  AND Stockholders'EQUITY                         |                                                                                                           |   |                                                                                                                  |
|                                                         |                                                                                                           |   |                                                                                                                  |
| **Current  Liabilities:**                                    |                                                                                                           |   |                                                                                                                  |
| Accounts  payable                                            | $ 5,524                                                                                                        |   | $ 45,762                                                                                                              |
| Accrued  expenses                                            | 21,206                                                                                                         |   | 6,775                                                                                                                 |
| Payroll  and other taxes payable                             | 10,332                                                                                                         |   | 8,547                                                                                                                 |
| Loans  from affiliate                                        | 2,060                                                                                                          |   | 24,341                                                                                                                |
|       Total current liabilities          | 39,122                                                                                                         |   | 85,425                                                                                                                |
|                                                         |                                                                                                           |   |                                                                                                                  |
| **Stockholders'  Equity:**                                   |                                                                                                                |        |                                                                                                                       |
| Common  stock: authorized 100,000,000 shares of .001 par     |                                                                                                                |        |                                                                                                                       |
|      value; 44,000,816 issued and outstanding | 44,001                                                                                                         |   | 44,001                                                                                                                |
|                                                              |                                                                                                                |        |                                                                                                                       |
| Additional  paid in capital                                  | 4,693,652                                                                                                      |   | 4,634,223                                                                                                             |
| Accumulated  deficit                                         | (4,140,655)                                                                                                    |   | (3,879,122)                                                                                                           |
| Other  comprehensive income                                  | (348)                                                                                                          |   | 1,130                                                                                                                 |
|                                                         |                                                                                                           |   |                                                                                                                  |
| Total  Amanasu Environment Corporation Stockholders'equity   | 596,650                                                                                                        |   | 800,232                                                                                                               |
| Non  controlling interest                               | 3,038                                                                                                     |   | 5,328                                                                                                            |
|                                                              |                                                                                                                |        |                                                                                                                       |
|       Total Stockholders'equity          | 599,688                                                                                                        |        | 805,560                                                                                                               |
| **Total  Liabilities and Stockholders'Equity**               | $ 638,810                                                                                                      |   | $ 890,985                                                                                                             |

The accompanying notes are an integral part of these financialstatements.

9

----

**AMANASU ENVIRONMENTCORPORATION and SUBSIDIARIES**

**(A Development StageCompany)CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICITACCUMULATED DURING DEVELOPMENT STAGEFor the Years Ended December 31, 2009 and 2008**

**(Restated)**

** **
|                                                                     |     

 

 

 

 

 

2009 |   |    

 

 

 

 

 

 2008 |   | January 1, 2009 (Date of Commencement  of Development Stage) to December 31, 2009 |
|---------------------------------------------------------------------|-------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------|
| Expenses                                                            | $(280,509)                                                        |   | $(610,114)                                                        |   | $(280,509)                                                                        |
| Impairment  of fixed assets                                         | -                                                                 |   | (66,285)                                                          |   | -                                                                                 |
| Impairment  of investments                                          | -                                                                 |   | (79,703)                                                          |   | -                                                                                 |
| Operating  loss                                                     | (280,509)                                                         |   | (756,102)                                                         |   | (280,509)                                                                         |
|                                                                     |                                                              |   |                                                              |   |                                                                              |
| Other  Income:                                                      |                                                              |   |                                                              |   |                                                                              |
|    Interest income                                             | 10,120                                                            |   | 28,671                                                            |   | 10,120                                                                            |
|    Profit on sale of subsidiary                                | -                                                                 |   | 99,509                                                            |   | -                                                                                 |
| Miscellaneous  revenue                                              | -                                                                 |   | 1,315                                                             |   | -                                                                                 |
| Total  other income                                                 |  10,120                                                      |   | 129,495                                                           |   | 10,120                                                                            |
|                                                                     |                                                                   |   |                                                                   |   |                                                                              |
| Loss  from continuing operations                                    | (270,389)                                                         |   | (626,607)                                                         |   | (270,389)                                                                         |
| Loss  from discontinued operations                                  |        -                                 |   |    (30,883)                                             |   | -                                                                                 |
|     Net loss                                              | (270,389)                                                         |   | (657,490)                                                         |   | (270,389)                                                                         |
|     Net loss attributable to noncontrolling               |                                                                   |   |                                                              |        |                                                                              |
|          interest                | 8,856                                                             |   | 28,874                                                            |        | 8,856                                                                             |
|     Net loss attributable to Amanasu                      |                                                                   |   |                                                              |        |                                                                              |
|          Environment Corporation | (261,533)                                                         |   | (628,616)                                                         |        | (261,533)                                                                         |
| Other       Comprehensive Income – Gain on foreign exchange   |                                                              |   |                                                              |   |                                                                              |
|          conversion              |    6,232                                                |   | 28,022                                                            |   | 6,252                                                                             |
| Total  comprehensive loss                                           | $(255,301)                                                        |   | $(600,594)                                                        |   | $(255,301)                                                                        |
|                                                                     |                                                              |   |                                                              |   |                                                                              |
| Net  loss per share –basic and diluted                        | ($.01)                                                            |   | ($.01)                                                            |   |                                                                              |
|                                                                     |                                                              |   |                                                              |   |                                                                              |
| Average  number of shares     outstanding       | 44,000,816                                                        |   | 44,000,816                                                        |   |                                                                              |

The accompanying notes are an integral part of these financialstatements.

10

----

**AMANASU ENVIRONMENTCORPORATION and SUBSIDIARIES**

**(A Development StageCompany)CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITYFor the Years Ended December 31, 2009 and 2008**

**(Restated)**

** **
|                                 |            |         |                                  |              |                 |               | Accumulated    |     |       |
|---------------------------------|------------|---------|----------------------------------|--------------|-----------------|---------------|----------------|----------|-------|
|                                 |            |         |                                  |              | Additional      |               | Other          |     |       |
|                                 |            |         | Common Stock                     | Paid In      | Accumulated     | Comprehensive | Noncontrolling |          |
|                                 |            |         |       Shares | Amount       | Capital         | Deficit       | Income         | Interest | Total |
| Balance,  December 31, 2007     | 44,000,816 | $44,001 | $4,634,223                       | $(3,250,506) | $109            | $34,100       | $1,461,927     |
| Net  loss for period            | -          | -       | -                                | (628,616)    |            | (28,874)      | (657,490)      |
| Transfer  on sale of subsidiary |            |         |                                  |              |   (27,001) | (2,700)       | (29,701)       |
| Other  comprehensive income     | -          | -       | -                                | -            | 28,022          | 2,802         | 30,824         |
|                                 |       |    |                             |         |            |          |           |
| Balance,  December 31, 2008     | 44,000,816 | 44,001  | 4,634,223                        | (3,879,122)  | 1,130           |   5,328  | 805,560        |
|    Net loss for period     |       |    |                             | (261,533)    |            | (8,856)       | (270,389)      |
| Transfer  on sale of subsidiary |            |         |                                  |              | 6,232           | 623           | 6.855          |
| Other  comprehensive income     |       |    | 59,429                           |         |  (7,710)   | 5,943         | 57,662         |
|                                 |       |    |                             |         |            |          |           |
| Balance,  December 31, 2009     | 44,000,816 | $44,001 | $4,693,652                       | $(4,140,655) | $(348)          | $3,038        | $599,688       |

The accompanying notes are an integral part of these financialstatements.

11

----

**AMANASU ENVIRONMENTCORPORATION and SUBSIDIARIES**

**(A Development StageCompany)CONSOLIDATED STATEMENTS OF CASH FLOWSFor the Years Ended December 31, 2009 and 2008**

**(Restated)**
| ** **                                                    | 2009                            |        | 2008                      |   | January 1, 2009

(Date of Commencement of Development  Stage) To December 31, 2009 |
|---------------------------------------------------------------|---------------------------------|--------|---------------------------|--------|------------------------------------------------------------------------------------|
| CASH  FLOWS FROM OPERATIONS                                   |                                 |   |                           |   |                                                                                    |
| Net  loss                                                     | $(270,389)                 |   | $(657,490)           |   | $(270,389)                                                                         |
| Adjustments  to reconcile net loss to net cash                |                            |   |                      |   |                                                                               |
|      consumed by operating activities:         |                            |   |                      |   |                                                                               |
| Charges  and credits not involving use of cash:               |                            |   |                      |   |                                                                               |
|      Depreciation and amortization             | 1,775                      |   | 39,138                    |   | 1,775                                                                              |
|      Write down of machinery                   |                                 |   | 66,285                    |   | -                                                                                  |
|      Write down of investments                 | -                               |        | 85,785                    |   | -                                                                                  |
|      Write offs of bad debts                   | 86,031                     |   | 211,594                   |   | 86,031                                                                             |
|      Profit on sale of subsidiary              | -                          |   | (99,509)                  |   | -                                                                                  |
|                                                               |                            |   |                      |   |                                                                               |
| Changes  in current assets and                                |                                 |        |                           |   |                                                                               |
| liabilities:                                                  |                            |   |                      |   |                                                                               |
|      Decrease (increase) in notes and          |                                 |        |                           |   |                                                                               |
|         accounts receivable     | -                          |   | 76,672                    |   | -                                                                                  |
|      Decrease (increase) in prepaid            |                                 |        |                           |   |                                                                                    |
|          expenses          | (2,100)                         |        | 69,115                    |   | (2,100)                                                                            |
|    Decrease  in raw materials                  | -                          |   | 566                       |   | -                                                                                  |
|     Increase in accounts payable                    | 5,443                           |        | 21,242                    |   | 5,443                                                                              |
|     Increase (decrease) in payroll                  |                                 |        |                           |   |                                                                                    |
|         and other taxes payable | 3,958                           |        | (17,562)                  |   | 3,958                                                                              |
|     Increase (decrease) in accrued                  |                                 |        |                           |   |                                                                                    |
|         expenses                | 14,408                          |        | (84,910)                  |   | 14,408                                                                             |
|                                                |                                 |        |                           |   |                                                                               |
| Net  Cash Consumed By                                         |                                 |        |                           |   |                                                                               |
|      Operating Activities                      | (160,874)                  |   | (289,074)                 |   | (160,874)                                                                          |
|                                                               |                            |   |                      |   |                                                                               |
| CASH  FLOWS FROM INVESTING ACTIVITIES                         |                            |   |                      |   |                                                                               |
|    Redemptions of certificates of deposit                | 160,000                    |   | 75,000                    |   | 160,000                                                                            |
| Cash  received on sale of subsidiary                          | -                          |   | 148,898                   |   | -                                                                                  |
| Cash  transferred on sale of subsidiary                       | (270)                           |        | -                         |   | (270)                                                                              |
|                                                               |                            |   |                      |   |                                                                               |
| Net  Cash Provided By Investing Activities                    | 159,730                    |   | 223,898                   |   | 159,730                                                                            |
|                                                               |                            |   |                      |   |                                                                               |
| CASH  FLOWS FROM FINANCING ACTIVITIES                         |                            |   |                      |   |                                                                               |
| Proceeds  of shareholder loan                                 | 855                        |   | -                         |   | 855                                                                                |
| Advances  from affiliate                                      | 1,175                      |   | 23,642                    |   | 1,175                                                                              |
|                                                               |                            |   |                      |   |                                                                               |
| Net  Cash Provided By Financing Activities                    | 2,030                      |   | 23,642                    |   | 2,030                                                                              |
|                                                               |                            |   |                      |   |                                                                               |
| Exchange  Rate Effect on Cash                                 | (2)                        |   | 30,824                    |   | (2)                                                                                |
| Net  Change in Cash Balances                                  | 884                             |   | (10,710)                  |   | 884                                                                                |
| Balance,  beginning of period                                 | 7,583                           |   | 18,293                    |   | 7,583                                                                              |
|                                                               |                            |   |                      |   |                                                                               |
| Balance,  end of period                                       | $     8,467 |   | $    7,583 |   | $         8,467                                 |

The accompanying notes are an integral part of these financialstatements.

12

----

**AMANASU ENVIRONMENTCORPORATION and SUBSIDIARIES**

**(A Development StageCompany)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2009**

**(Restated)**

**1.ORGANIZATION AND BUSINESS**

**Organizationof Company**

The Company is aNevada Corporation, formed February 22, 1999, as Forte International, Inc. Thename was changed to Amanasu Energy Corporation on March 27, 2001, and toAmanasu Environment Corporation on October 18, 2002.

**Business**

On October 19, 2004,the Company invested $100,000 for a 100% interest in a newly formed subsidiary,Amanasu Shinwa Corporation (Shinwa), which is located in Gunma, Japan. OnDecember 16, 2005, a second 100% owned subsidiary was formed, Amanasu Holdings,Inc. (Holdings), which is located in Tokyo, Japan. Holdings made investments infive other Japanese companies during 2005, including an $84,288 investment inShinwa. The investee companies were involved in a variety of businesses. Shinwaperformed fabricating services, principally welding, on stainless steel piping;it has also developed, and continues development of, systems for cleaning thewaters of rivers, streams and lakes.

Investments in thefive companies mentioned above have either been repaid, written off by theabsorption of accumulated losses, or written off because of abandonment. In addition to the investments, advances had been made to two of thesecompanies.  These advances had been guaranteed by a company controlled bythe Company president.  This guarantee was withdrawn during 2009 and writeoffs were made totaling $86,031.

On September 21, 2006,Soae Corporation, a Japanese electronics manufacturer, invested $426,014 for a9% interest in Holdings. Also on September 21, 2006, Holdings formed anothersubsidiary, named Amanasu Water Corporation (Water). Water's plan of operationwas to market a new type of water called "Hydrogen-ion water".Hydrogen-ion water is believed to have effective anti-oxidant properties.

On July 1, 2008, theCompany sold its equity interest in Shinwa to the president of Shinwa for cash.On the same day, Holdings sold its equity interest in Shinwa to the presidentof Shinwa for a cash payment of $56,655 and the right to collect a $37,780 debtthat was owed to Shinwa by a corporation controlled by the Company president.The Company realized a profit on these transactions of $99,509.

In March 2005, theCompany made a $290,000 equity investment in Kogure Susakusho Ltd., (Kogure), aJapanese company which held patents for an industrial incinerator, called theSwing Melter. The original intention was that the Company would receive 20% ofthe profits on sales of the incinerator. In April 2005, the Company purchased,for $400,000, a demonstration model of the Swing Melter for use in attractingcustomers. Subsequently, Kogure ceased doing business and the Company exchangedits investment for the Kogure patents. In October 2005, a new company, nownamed Echo Frontier Corp., was formed by former employees of Kogure to producethe Swing Melter. On December 16, 2005, the

13

----

**1.ORGANIZATION AND BUSINESS (CONT'D) Business (CONT'D)**

Company made a$143,187 investment in the new company. In addition to its equity interest inthe new company, the Company was to receive patent royalties on sales of theSwing Melter. During 2006, 2007, and 2008, the values of the investment and thedemonstration model were reviewed and in each case impairment was found to haveoccurred, and write downs were made. The remaining balances of these investmentswere written off in 2008.

In September 2006 anew Japanese subsidiary, Amanasu Water Corporation (Water) was formed byHoldings to package and sell bottled water in the Far East.  Water was100% owned by Holdings.  It was sold on April 27, 2009 to a corporationcontrolled by the Company president.

**Basisof Consolidation**

The consolidatedfinancial statements include the accounts of the Company and its subsidiaries;the operating results of Shinwa and Water are included up to the dates of theirsales. All significant intercompany balances and transactions have beeneliminated in consolidation.

The equity interest ineach of the five investee companies mentioned above was not more than 50% andthe companies were not consolidated in these financial statements; they wereaccounted for by the equity method of accounting.

 

** **

14

----

**2. RESTATEMENTS**

On May 20, 2010, theCompany determined that a restatement of its financial statements for the yearended December 31, 2009 was necessary to properly report the balance sheet,statement of operations and statement of cash flows as at December 31, 2009 andfor the year then ended.  A series of mistakes occurred in the preparationof these financial statements.  The effects of these restatements on thefinancial statements previously issued are presented below.
| **Balance Sheet**                             |
|-----------------------------------------------|
| **Year Ended December 31, 2009**              |
|                                          |   |   |   |
|                                          | Previously |   |   |
|                                          | Reported | Adjustments | As Restated |
| Accrued Expenses                              | $      31,206 | $(10,000)(A) | $       21,206 |
| Total current  liabilities                    |       49,122 |     (10,000) |        39,122 |
| Additional paid in  capital                   | 4,707,483 | (13,831)(C) | 4,693,652 |
| Accumulated deficit                           | (4,228,816) | 88,161(D) | (4,140,665) |
| Other comprehensive  income                   | 75,507 | (75,855)(E) | (348) |
| Total Amanasu  Environment                    |   |   |   |
|      Corporation Stockholders' |   | _________ |   |
|      equity                    | 598,175 | (1,525) | 596,650 |
| Noncontrolling  interest                      |      (8,487) |   11,525(B) |        3,038 |
| Total Stockholders'equity                     |    589,688 |       10,000 |    599,688 |
| Total Liabilities  and Stockholders'Equity    | $   638,810 | $                 - | $   638,810 |

 
| **Statement of Operations**                               |
|-----------------------------------------------------------|
| **Year Ended December 31, 2009**                          |
|                                                      |   |   |   |
|                                                      | Previously |   |   |
|                                                      | Reported | Adjustments | As Restated |
| Expenses                                                  | $(290,510) | $  10,001(A) | $(280,509) |
| Operating loss                                            | (290,510) | 10,001 | (280,509) |
| Loss from  continuing operations                          | (280,389) | 10,000 | (270,389) |
| Minority interest  in loss                                | 8,856 |  (8,856)(B) | - |
| Net loss                                                  | (271,533) | 1,144 | (270,389) |
| Net loss  attributable to noncontrolling interest         | - |    8,856(B) | 8,856 |
| Net loss  attributable to Amanasu Environment Corporation | (271,533) | 10,000 | (261,533) |
| Other comprehensive  income                               |      20,957 | (14,725)(E) |      6,232 |
|                                                      | $(250,576) | $      (4,725) | $(255,301) |

**Statement of Operations**

**January 1, 2009 (Date of Commencement of Development Stage) toDecember 31, 2009.**

This statement waserroneously omitted from the original filing.  It has now been included.

 
| **Statement of Operations**                               |
|-----------------------------------------------------------|
| **Year Ended December 31, 2008**                          |
|                                                      |   |   |   |
|                                                      | Previously |   |   |
|                                                      | Reported | Adjustments | As Restated |
| Sales                                                     | $   225,697 | $(225,697)(F) | $                 - |
| Cost of goods sold                                        | (191,766) | 191,766(F) | - |
| Gross profit                                              | 33,931 | (33,931)(F) | - |
| Expenses                                                  | (675,755) | 65,641(F) | (610,114) |
| Operating loss                                            | (787,812) | 31,710 | (756,102) |
| Interest income                                           | 28,682 | (11)(F) | 28,671 |
| Miscellaneous  revenue                                    | 4,502 | (3,187)(F) | 1,315 |
| Interest expense                                          | (2,371) |     2,371(F) | - |
| Total other income                                        | 130,322 |          (827) | 129,495 |
| Net loss before  minority interest                        | (657,490) | 30,883(F) | (626,607) |
| Loss from  discontinued operations                        | - | (30,883)(F) | (30,883) |
| Minority interest  in net loss                            | 28,874 | (28,874)(B) | - |
| Net loss                                                  | (628,616) | (28,874) | (657,490) |
| Net loss  attributable to noncontrolling interest         | - | 28,874(B) | 28,874 |
| Net loss  attributable to Amanasu Environment Corporation | (628,616) | - | (628,616) |
| Other comprehensive  income                               | 30,824 | (2,802)(E) |     28,022 |
| Total comprehensive  income                               | $   597,792 | $      (2,802) | $(600,594) |

 

 
| **Changes in Stockholders' Equity** |
|-------------------------------------|
| **Year Ended December 31, 2008**    |
|                                |   |   |   |
|                                | Previously |   |   |
|                                | Reported | Adjustments | As Restated |
| Accumulated  Deficit:               |  |  |  |
|      Opening balance | $(3,298,967) | $48,461(D) | $(3,250,506) |
|      Ending balance  | $(3,927,583) | $(48,461) | $(3,879,122) |

 
| **Changes in Stockholders' Equity**                  |
|------------------------------------------------------|
| **Year Ended December 31, 2008**                     |
|                                                 |   |   |   |
|                                                 | Previously |   |   |
|                                                 | Reported | Adjustments | As Restated |
| Comprehensive  Income:                               |  |  |  |
|      Opening balance                  | $  53,427 | $(53,318)(E) | $       109 |
|      Provision of 2008                | 30,824 | (2,802)(E) | 28,022 |
|      Transfer upon sale of subsidiary | (29,701) |    2,700(B) | (27,001) |
|      Error in addition                | 29,700 | (29,700) |  |
|      Ending balance                   | $  84,250 | $(83,120) | $    1,130 |

 
| **Changes in Stockholders' Equity**   |
|---------------------------------------|
| **Year Ended December 31, 2009**      |
|                                  |   |   |   |
|                                  | Previously |   |   |
|                                  | Reported | Adjustments | As Restated |
| Additional Paid in  Capital:          |  |  |  |
|      Opening balance   | $  4,634,223 | $                - | $4,634,223 |
|      Provision of 2009 | $       73,260 | $13,831(C) | $     59,429 |
|      Ending balance    | $(4,707,483) | $  (13,831) | $4,693,652 |

 
| **Changes in Stockholders' Equity**     |
|-----------------------------------------|
| **Year Ended December 31, 2009**        |
|                                    |   |   |   |
|                                    | Previously |   |   |
|                                    | Reported | Adjustments | As Restated |
| Accumulated  Deficit:                   |  |  |  |
|      Opening balance     | $(3,927,583) | $       48,461 | $(3,879,122) |
|      Net loss for period | (271,533) |   10,000(A) | (261,533) |
|      Error in addition   | (29,000) |        29,000 | - |
|      Ending balance      | $(4,228,116) | $       87,461 | $(4,140,655) |
|                          |  |  |  |

 
| **Changes in Stockholders' Equity**                |
|----------------------------------------------------|
| **Year Ended December 31, 2009**                   |
|                                               |   |   |   |
|                                               | Previously |   |   |
|                                               | Reported | Adjustments | As Restated |
| Other Comprehensive  Income:                       |  |  |  |
|      Opening balance                | $       84,250 | $(83,120)(E) | $  1,130 |
|      Gain for the period            | 20,957 | (14,725)(E) | 6,232 |
|      Transfer on sale of subsidiary |                   - |   (7,710)(B) |        (7,710) |
|      Correction of addition error   | (29,700) |        29,700 | - |
|      Ending balance                 | $       75,507 | $    (75,855) | $  (348) |
|                                                    |  |  |  |

 
| **Changes in Stockholders' Equity**                                                               |
|---------------------------------------------------------------------------------------------------|
| **Years Ended December 31, 2009 and 2008**                                                        |
|      Noncontrolling interest                                                       |
| This statement was erroneously omitted from the original  filing.  It has now been included. |

 
| **Statement of Cash Flows**               |
|-------------------------------------------|
| **Year Ended December 31, 2009**          |
|                                      |   |   |   |
|                                      | Previously |   |   |
|                                      | Reported | Adjustments | As Restated |
| Net loss                                  | $(271,533) | $ 1,144 | $(270,389) |
| Profit on sale of  subsidiary             | (8,856) |   8,856 | - |
| Decrease (increase)  in prepaid expense   | 5,568 | (7,668) | (2,100) |
| Increase in other  payables               | 4,772 | (4,772) | - |
| Increase in taxes  payable                | 3,957 | 1 | 3,958 |
| Increase in  accounts payable             | - | 5,443 | 5,443 |
| Increase in accrued  expenses             | 16,469 | (2,061) | 14,408 |
| Increase in  deposits                     | 671 |    (671) | - |
| Cash consumed by  operating activities    | (161,146) |      272 | (160,874) |
| Cash transferred on  sale of subsidiary   | - |   (270) | (270) |
| Net cash provided  by investor activities |   160,000 |   (270) |  159,730 |
| Exchange rate  effect on cash             |                - |       (2) |           (2) |
| Net change in cash  balance               | $         884 | $         - | $        884 |

 
| **Statement of Cash Flows**                |
|--------------------------------------------|
| **Year Ended December 31, 2008**           |
|                                       |   |   |   |
|                                       | Previously |   |   |
|                                       | Reported | Adjustments | As Restated |
| Net loss                                   | $(628,616) | $ (28,874)(B) | $(657,490) |
| Minority interest  in losses               | (28,874) |   28,874(B) | - |
| Net cash consumed  by operating activities | $(289,074) | $       58,461 | $  289,074 |

 
| **Statement of Cash Flows**                                                                       |
|---------------------------------------------------------------------------------------------------|
| **January 1, 2009 (Date of Commencement of Development Stage) To  December 31, 2009**             |
|                                                                                              |
| This statement was erroneously omitted from the original  filing.  It has now been included. |

 

(A)  An errorwas made in the calculation of accrued expenses.

(B)  Incompliance with a recent pronouncement of the Financial Accounting StandardsBoard (FASB), the minority interest has been reclassified as noncontrollinginterest.  In addition, the amount of the noncontrolling interest has beenrecalculated to be in compliance with the new standard.

(C)  The sale ofcommon stock to a noncontrolling interest was incorrectly recorded.  Thataccounting has now been corrected.

(D)  Correctionof the accounting for the noncontrolling interest (See (B), above) affected theaccumulated deficit account.  In addition, the correction of the amount ofaccrued expenses caused a reduction in the balance of this account.

(E)  Thisaccount was also affected by the correction of the accounting for thenoncontrolling interest.  In addition, there was an error in recording the2009 sale of Amanasu Water Corporation which affected this account.

(F)  AmanasuShinwa was sold in an arms length transaction during 2008.  The results ofits 2008 operations up to the date of sale have been treated as a discontinuedoperation in the restatements.  Thus, sales, cost of sales, and grossprofit have been eliminated, as have other income and expenses attributable tothe sold company.  These have been combined and presented as loss fromdiscontinued operations.

**3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Cash**

For purposes of the statements of cash flows, the Companyconsiders all short term debt securities purchased with a maturity of threemonths or less to be cash equivalents. 

**Concentrationsof Credit Risk**

Financial instruments which potentially subject the Company toconcentrations of credit risk consist primarily of cash and cash equivalents,miscellaneous receivables, and miscellaneous payables. The Company does notbelieve that it is subject to unusual credit risk beyond the normal credit riskassociated with commercial banking relationships. 

**FixedAssets**

Fixed assets are recorded at cost. Depreciation is computed usingthe Modified Accelerated Cost Recovery System, with lives of five years for vehicles, seven years for machinery andequipment, ten years for tools, and fifteen years for buildingimprovements.  Use of this method has produced results that are notsignificantly different than the resultsthat would be achieved by use of another acceptable method. 

**IncomeTaxes**

Deferred income taxes are recorded to reflect the tax consequencesor benefits to future years of any temporary differences between the tax basesand the book values of assets and liabilities, and of net operating losscarryforwards. 

**RecognitionOf Revenue**

Revenue has been realized from sales of products and services.Recognition occurs upon delivery. In determining recognition, the followingcriteria are considered: persuasive evidence exists that there is anarrangement between the buyer and seller; delivery has occurred; the salesprice is fixed or determinable; and collectability is reasonably assured. 

**UseOf Estimates**

The preparation offinancial statements in conformity with generally accepted accountingprinciples requires management to make estimates and assumptions that affectcertain reported amounts and disclosures of contingent assets and liabilitiesat the date of the financial statements and the reported amounts of revenuesand expenses during the reporting periods. Actual results could differ fromthose estimated.

15

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**AMANASU ENVIRONMENTCORPORATION and SUBSIDIARIES**

**(A Development StageCompany)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2009**

**(Restated)**

**2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)**

**ForeignCurrency Translation**

Substantial Companyassets are located in Japan. These assets and related liabilities are recordedon the books of the Company in the currency of Japan (Yen), which is thefunctional currency. They are translated into US dollars as follows:

a. Assets andliabilities at the rates of exchange in effect at balance sheet dates;b. Equity accounts at the exchange rates prevailing at the time of the transactionsthat established the equity accounts; andc. Revenues and expenses, at the average rates of exchange for each reportingperiod.

**OtherComprehensive Income**

The Company reports asother comprehensive income revenues, expenses, and gains and losses that arenot included in the determination of net income. Principal among these has beenunrealized gains and losses from exchange rate fluxuation.

**AdvertisingCosts**

The Company willexpense advertising costs when an advertisement occurs. There were no expendituresfor advertising  during either of the periods reported.

**SegmentReporting**

Management treats theoperations of the Company as one segment.

**FairValue of Financial Instruments**

The carrying amountsof the Company's financial instruments, which include cash and certificates ofdeposit, approximate their fair values at December 31, 2009.

**NetIncome (Loss) Per Share**

The Company computesnet income (loss) per common share in accordance with pronouncements of theFinancial Accounting Standards Board (FASB) and SEC Staff Accounting BulletinNo. 98 ("SAB 98"). Under these pronouncements, basic and diluted netincome (loss) per common share are computed by dividing the net income (loss)available to common shareholders for each period by the weighted average numberof shares of common stock outstanding during the period. Accordingly, thenumber of weighted average shares outstanding as well as the amount of netincome (loss) per share are presented for basic and diluted per sharecalculations for all periods reflected in the accompanying consolidatedfinancial statements.

**RecentAccounting Pronouncements**

**SUBSEQUENTEVENTS**

** **

InMay 2009, the FASB issued a pronouncement which established general standardsof accounting for and disclosure of events that occur after the balance sheetdate but before financial statements are issued or are available to beissued.  The Company included the requirements of this guidance in thepreparation of the accompanying consolidated financial statements, andconcluded its review on the date of issuance of these financial statements.

** **

The Company does notanticipate the adoption of other recently issued accounting pronouncement willhave a significant effect on the Company's results of operations, financialposition or cash flows.

16

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**AMANASU ENVIRONMENTCORPORATION and SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2009**

**(Restated)**

**3.RELATED PARTY TRANSACTIONS**

The Company presidentmade an advance to Holdings during 2009 of $867.  This advance is due ondemand and does not bear interest.  A corporation controlled by theCompany president (Affiliate) made advances to the Company in 2007, 2008 and2009 that totaled $6,614.  Part of the proceeds of the sale of Shinwa (seeNote 1) was the right to collect a $43,365 advance that had been made toAffiliate by Shinwa. Thus, at December 31, 2009, Affiliate was indebted to theCompany for $35,884. These advances is due on demand and do not bear interest.

Affiliate also madeadvances to Water of $6,638 during 2007 and $17,702 during 2008. Thus, $24,341was owed to Affiliate by Water at the date of the sale of Water; theseobligations were eliminated by the sale of Water. These advances were due ondemand and did not bear interest.

The Company sharesoffice space in Vancouver, New York, and Tokyo with a company that iscontrolled by the Company president. This arrangement is on a month to monthbasis. Until 2006, the two companies shared the cost of operating theseoffices. There has been no cost sharing since 2006, as the other company islargely inactive.

The president ofShinwa and two of his sons received advances from Shinwa totaling $44,504.These advances did not bear interest and were being repaid by monthlyinstallments of $1,259. These advances were eliminated with the sales of theequity interests of Shinwa.

**4. SALE OF SUBSIDIARY**

On April 27, 2009,the Company sold its 100% ownership interest in Water to a corporation which iscontrolled by the Company president.  Consideration for the sale was200,000 shares of the common stock of the buyer, Amanasu Techno HoldingsCorporation (valued at approximately $10,000).  Since the transaction waswith a company under common control, it was not accounted for as a sale, asprovided by a pronouncement of the FASB.  Since the liabilities of Waterexceeded its assets, the prescribed accounting for this transaction caused anincrease in stockholders' equity of $57,662.

**5. INCOME TAXES**

The Company hasexperienced losses since inception. As a result, it has incurred no Federalincome tax. The Internal Revenue Code allows net operating losses (NOL's) to becarried forward and applied against future profits for a period of twentyyears.  The Japanese Tax Code permits such carryforwards for a period ofseven years.  The total of these NOL's at December 31, 2009 was $1,385,694in Japan and $2,453,216 in the U.S. Thepotential benefit of these NOL's has been recognized on the books of theCompany, but it has been offset by valuation allowances.

Under provisions ofthe pronouncements of the FASB, recognition of deferred tax assets is permittedunless it is more likely than not that the assets will not be realized. TheCompany has recorded noncurrent deferred tax assets as presented below. Thesedeferred tax assets increased during 2009 by $25,946 in the U.S., and by$29,224 in Japan, the result of adding the potential benefit of 2009 losses. 
|                     |   | U.S.                                                                  |   | JAPAN   |
|---------------------|---|-----------------------------------------------------------------------|--------|---------|
| Deferred Tax Assets | $ | 433,566                                                               | $      | 415,708 |
| Valuation Allowance |   | 433,566                                                               |   | 415,708 |
| Balance Recognized  | $ |              - | $      | -       |

17

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**5.  INCOME TAXES (CONT'D)**

Ifnot used, these carryforwards will expire as follows:
|   |   | U.S.    |   | JAPAN   |
|--------|--------|---------|--------|---------|
| 2010   | $      | -       | $      | -       |
| 2011   |   | -       |   | -       |
| 2012   |   | -       |   | 302,911 |
| 2013   |   | -       |   | 454,366 |
| 2014   |   | -       |   | 240,805 |
| 2015   |   | -       |   | 290,197 |
| 2016   |   | -       |   | 97,415  |
| 2017   |   | -       |   | -       |
| 2018   |   | -       |   | -       |
| 2019   |   | 2,703   |   | -       |
| 2020   |   | 51,086  |   | -       |
| 2021   |   | 224,737 |   | -       |
| 2022   |   | 73,550  |   | -       |
| 2023   |   | 110,126 |   | -       |
| 2024   |   | 107,443 |   | -       |
| 2025   |   | 598,417 |   | -       |
| 2026   |   | 332,988 |   | -       |
| 2027   |   | 553,371 |   | -       |
| 2028   |   | 363,595 |   | -       |
| 2029   |   | 135,200 |   | -       |

 

**6.RENTALS UNDER OPERATING LEASES**

The Company conductsits operations from leased office facilities in Vancouver, British Columbia,New York City, and Tokyo, under month to month arrangements. During 2009 and2008, the Company incurred rent expense of $34,944 and $38,731, respectively.

**7.SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION**

Cash payments weremade for interest during 2008 of $2,371. There was no cash paid for incometaxes during those years, and there was no cash paid for interest during2009.  Except for the sale of Water (see Note 4) there were no non-cashfinancing or investing activity during these years.

**8.SUBSEQUENT EVENTS**

During the firstquarter of 2010 $36,760 was paid to relocate the Tokyo office.

18

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 (Blank Page)

19

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**Item 9. Changes in and Disagreements With Accountantson Accounting and Financial Disclosure**

None.

**Item 9A. Controls and Procedures**

As of the end of theperiod covered by this Annual Report on Form 10-K, an evaluation was performedunder the supervision and with the participation of our management, includingthe Chief Executive Officer and Chief Financial Officer, of the effectivenessof the design and operation of our disclosure controls and procedures (asdefined in Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934("Exchange Act"). For purposes of the foregoing, the term disclosurecontrols and procedures means controls and other procedures of an issuer thatare designed to ensure that information required to be disclosed by the issuerin the reports that it files or submits under the Exchange Act is recorded,processed, summarized and reported, within the time periods specified in therules and forms of the Securities and Exchange Commission ("SEC").Disclosure controls and procedures include, without limitation, controls andprocedures designed to ensure that information required to be disclosed by anissuer in the reports that it files or submits under the Exchange Act isaccumulated and communicated to the issuer's management, including itsprincipal executive and principal financial officer, or persons performingsimilar functions, and is appropriate to allow timely decisions regardingrequired disclosure. Based on that evaluation, the Chief Executive Officer andChief Financial Officer have concluded that these disclosure controls andprocedures are not effective. 

**Changesin Internal Control over Financial Reporting**

There  were no changes in our internal control over financial reporting (as such term  is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the  most recent fiscal quarter that have materially affected, or are reasonably  likely to materially affect, our internal control over financial reporting. However, shortly after December 31, 2009 we  made a change in our internal control which is intended to avoid the problems  necessitating this amended filing. There  will now be a more systematic coordination   between the Company and its independent accountants which will allow a  final review by the independent accountants before documents are filed with the  Securities and Exchange Commission.

**Management's  Annual Report on Internal Control over Financial Reporting**

Management isresponsible for establishing and maintaining adequate internal control overfinancial reporting, as such term is defined in Rule 13a-15 under the ExchangeAct, as amended. As of December 31, 2009, under the supervision and with theparticipation of management, including the Company's Chief Executive Officerand Chief Financial Officer, an evaluation was conducted of the effectivenessof the Company's internal control over financial reporting based on theframework in Internal Control - Integrated Framework issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). Based on thatevaluation, management of the Company, including the chief executive officerand the chief financial officer, concluded that the Company's internal controlover financial reporting was not effective as of December 31, 2009. 

Because of itsinherent limitations, a system of internal control over financial reporting canprovide only reasonable assurance and may not prevent or detect misstatements.Also, projections of any evaluation of effectiveness to future periods aresubject to the risk that controls may become inadequate because of changes inconditions, or that the degree of compliance with the policies or proceduresmay deteriorate. 

This Annual Reportdoes not include an attestation report of the Company's registered publicaccounting firm regarding internal controls over financial reporting.Management's Report was not subject to attestation by the Company's publicaccounting firm pursuant to temporary rules of the SEC that permit the Companyto provide only Management's Report in this Annual Report. 

**Item 9A (T). Controls and Procedures**

Not Applicable.

**Item 9B. Other Information**

Not Applicable.

20

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**Part III**

**Item 10. Directors, Executive Officers and CorporateGovernance**

The directors andexecutive officers of the Company, their ages, and the positions they hold areset forth below. The directors of the Company hold office until the next annualmeeting of stockholders of the Company and until their successors in office areelected and qualified. All officers serve at the discretion of the Board ofDirectors. 
| **Directors / Officers** |
|--------------------------|
| **Name**                 | **Age** | **Since** | **Position** |
| Atsushi Maki             | 62 | 1999 | Chairman & Chief Executive  Officert |
| Lina Lei                 | 49 | 1999 | Secretary |

Atsushi Maki has beenthe President, Chief Financial Officer, Chairman and Director of the Companysince November 10, 1999. During the past ten years, Mr. Maki has been anindependent businessman involved mainly in real estate development projects inJapan. In 1995, he served as a Director of the Japan-Korea CooperationCommittee along with the former Prime Minister of Japan who acted as theChairman of the committee. In 1999, he was responsible for establishing theJapan-China Association, a foundation for fostering better relations betweenthe two nations. He served as a director of the association, along with theChairman of Sony Corporation and the Honorary Chairman of Toyota MotorCorporation. 

Lina Lei has been theSecretary of the Company since November 10, 1999. Ms. Lei was appointed adirector in November 1999 and resigned from the board on August 21, 2002. FromMay 1990 to November 1999, Ms. Lei was employed by Thunder Company Ltd, Tokyo,Japan, in various capacities including as its managing director. Ms. Leicompleted her university studies in Shanghai, China in 1982, and obtained amaster's degree from Hitotsubashi University in Tokyo in 1990. During the pastfive years, Ms. Lei's work involvement has been limited to activities of theCompany and that of Amanasu Technologies Corporation. 

Takashi Yamaguchi wasa Director of the Company between October 1, 2001 and May 26, 2004. From 1999to June 2001, he was president of Daiichi Building Corporation, a constructioncompany located in Tokyo, Japan, and form June 2001 to June 2002, he acted as aconsultant for the same company. From June 2002 to the present, Mr. Yamaguchihas provided managerial consulting services to a variety of companies locatedin Japan, and he is an individual adviser of the Company at present. 

**Item 11. Executive Compensation**

The compensation forall directors and officers individually for services rendered to the Companyfor the fiscal years ended December 31,2009, 2008, 2007, and 2006 respectively:
| **Compensation  Summary**           |
|-------------------------------------|
| ** **                          | **Annual Compensation** |
| **Name  and Principle Position**    | **Year** | **Salary ($)** | **Bonus ($)** | **Other ($)** |
| Atsushi  Maki (Chairman, President) | 2009 | -0- | -0- | -0- |
|                                | 2008 | -0- | -0- | -0- |
|                                | 2007 | -0- | -0- | -0- |
|                                | 2006 | -0- | -0- | -0- |
|                                |   |   |   |   |
| Lina  Lei (Secretary, Treasurer)    | 2009 | -0- | -0- | -0- |
|                                | 2008 | -0- | -0- | -0- |
|                                | 2007 | -0- | -0- | -0- |
|                                | 2006 | -0- | -0- | 20,000 |

21

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 (2). Ms. Leireceived salary compensation in the form of 312,500 shares of common stock ofthe Company for the period from November 1999 through fiscal 2001. The shareswere valued at $0.01 per share. Of the total amount of shares, 24,100 shareswere allocated for fiscal 1999, with the balance allocated equally between 2000and 2001. In 2003, Ms. Lei received $10,000 in exchange for consulting servicesperformed for the Company. 

The officers of theCompany are not full time employees. Presently, the Company does not have aformal conflicts of interest policy governing its officers and directors. Inaddition, the Company does not have written employment agreements with itsofficers. Its officers intend to devote sufficient business time and attentionto the affairs of the Company to develop the Company's business in a prudentand business-like manner. However, the principal officer is engaged in otherbusinesses related and unrelated to the business of the Company, and in thefuture, will engage in other business ventures. A future arrangement will besubject to the approval of the Company's board of directors. Except for thearrangement with Ms. Lei, the Company and its officers have agreed that theofficers of the Company will not receive any other compensation until such timeas the Company reaches profitability for a full fiscal quarter. The terms ofany such employment arrangement have not been determined at this time. Otherthan as indicated above, the Company did not have any other form ofcompensation payable to its officers or directors, including any stock optionplans, stock appreciation rights, or long term incentive plan awards for theperiods during the above fiscal years. 

The Company'sdirectors received no fees for their services in such capacity; however, theywill be reimbursed for expenses incurred by them in connection with theCompany's business. 

**Item 12. Security Ownership of Certain benficialOwners and Management and Related Stockholder Matters**

The following tablewill identify, as of March 15, 2006, the number and percentage of outstandingshares of common stock of the Company owned by (i) each person known to theCompany who owns more than five percent of the outstanding common stock, (ii)each officer and director, and (iii) and officers and directors of the Companyas a group. The following information is based upon 44,000,816 shares of commonstock of the Company which are issued and outstanding as of March 15, 2006. Theaddress for each individual below is 445 Park Avenue Center 10th Floor NewYork, NY 10022, 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 Minato-ku Tokyo Japan | 33,000,000                                         | 72.6%                |
| Common Stock          | Atsushi Maki (3) (4)                                                           | 35,858,500                                         | 78.80%               |
| Common Stock          | Lina Lei (4)                                                                   | 35,858,500                                         | 78.80%               |
| Common Stock          | Officers and Directors, as a group (2  persons)                                | 35,858,500                                         | 78.80%               |

(1). "Beneficialownership" means having or sharing, directly or indirectly (i) votingpower, which includes the power to vote or to direct the voting, or (ii)investment power, which includes the power to dispose or to direct thedisposition, of shares of the common stock of an issuer. The definition ofbeneficial ownership includes shares underlying options or warrants to purchasecommon stock, or other securities convertible into common stock, that currentlyare exercisable or convertible or that will become exercisable or convertiblewithin 60 days. Unless otherwise indicated, the beneficial owner has solevoting and investment power. 

(2). Mr. Atsushi Maki,the Company's Chairman and President, is the sole shareholder of AmanasuCorporation and is deemed the beneficial owner of such shares. 

(3). Includes1,496,000 shares of common stock held individually by Mr. Maki, 1,000,000shares of common stock deposited with a third party (see "Item 12"Certain Relationships and Related Transactions"), 33,000,000 sharesof common stock held by Amanasu Corporation, and 362,500 shares of common stockheld by Lina Lei. Mr. Maki disclaims beneficial ownership of the shares held byLina Lei. 

(4). Includes 362,500shares of common stock held individually by Ms. Lei, and 35,490,000 shares ofcommon stock beneficially owned by Atsushi Maki. Ms. Lei disclaims beneficialownership of the shares held by Atsushi Maki. 

22

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**Item 13. Certain Relationships and RelatedTransactions, and Director Independence**

On December 15, 1999,the Company entered into an agreement with Amanasu Corporation, a Japanesecorporation, under which Amanasu Corporation agreed to arrange a granting of alicense to the Amanasu Furnace, to the Company. In exchange for obtaining thelicense to the Technology, the Company agreed to issue Amanasu Corporation13,000,000 shares of its common stock and stock purchase options to acquireanother 20,000,000 shares of common stock at a price per share of $0.01. Inaddition under the terms of the agreement, the Company agreed to issue1,000,000 shares of common stock to the inventor of the technology, and 200,000shares of common stock to the executive director of the inventor's Company. InMay 2001, Amanasu Corporation exercised its option to acquire 20,000,000 sharesof common stock of the Company and paid the sum of $200,000 to the Company. Mr.Atsushi Maki, the Company's Chairman and President, is the sole shareholder ofAmanasu Corporation. 

Mr. Maki receivedsalary compensation in the form of 3,200,000 shares of common stock of theCompany for the period from November 1999 through fiscal 2001. The shares werevalued at $0.01 per share or a total of $32,000. Ms. Lei received salarycompensation in the form of 312,500 shares of common stock of the Company forthe period from November 1999 through fiscal 2001. The shares were valued at$0.01 per share or a total of $3,125. 

On June 8, 2000, theCompany entered into an exclusive licensing agreement with the inventor of theAmanasu Furnace. Under the licensing agreement, the Company obtained theworldwide production and marketing rights of the Technology for 30 years, andthe Company is required to pay the inventor a royalty of 2% on gross sales ofthe Technology. 

Effective September30, 2002, the Company entered into a license agreement with Sanyo KogyoKabushiki Gaisha and Ever Green Planet Corporation, both Japanese companies,whereby the Company received the worldwide, exclusive license for a term of 30years for the production and marketing of a hot water boiler, which incinerateswaste tires in a safe and non-polluting manner and extracts heat energy fromthe incineration process. As consideration for this acquisition, the Companypaid the licensors $250,000, of which the Company's President paid $95,000,issued to them 600,000 shares of common stock, and issued to an affiliate ofthe licensors 50,000 shares of common stock. The $95,000 paid by the Company'sPresident is a contribution of capital to the Company. The licensors areentitled to receive a two percent royalty on the gross receipts from the saleof the products related to the technology. 

On June 30, 2003, theCompany acquired the exclusive worldwide rights to produce and market apatented process that purifies seawater, and removes hazardous pollutants fromwastewater. The term of the license is 30 years from the date of the agreement.As consideration for obtaining the license, the Company issued 1,000,000 sharesto Etsuro Sakagami, the licensor, and 50,000 shares to a finder. The licensoris entitled to receive a two percent royalty on the gross receipts from thesale of the products related to the technology. 

On May 14, 2003, theCompany entered into a Stock Purchase Agreement to acquire from Jipangu Inc.("Jipangu"), a private, unaffiliated Japanese company, 10,000,000shares of Kyoei Reiki Industrial Corporation Ltd ("Kyoei"), apublicly traded company in Tokyo, Japan. The purchase price for the shares is$4,993,000. The agreement called for the payment of 20% of the purchase priceon May 31, 2003, and the balance was due on June 25, 2003. On or about May 31,2003, Atsushi Maki, the Company's President and controlling shareholder,deposited with Jipangu 1,000,000 shares of common stock of the Company owned byMr. Maki. However, the Stock Purchase Agreement with Jipangu stated that ifKyoei becomes bankrupt or is under receivership for bankruptcy before theremaining amount (80%) is due, Jipangu waives the right to collect the finalamount. On June 25, 2003, Kyoei was placed under receivership with TokyoDistrict Court. The Company believes that it is not required to pay Jipangu theremaining amount due under the Stock Purchase Agreement. The deposit of commonstock made to Jipangu by Mr. Maki was made on behalf of the Company. OnDecember 10, 2003, the Company transferred its rights under the agreement withJipangu to Mr. Maki, and Mr. Maki has released and indemnified the Company fromany obligation under the Jipangu agreement. 

23

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**Item 14. Principal Accounting Fees and Services**

1.      Audit Fees during 2009 and 2008 were $25,000.00 and $25,000.00respectively. 

2.      Audit Related Fees during 2009 and 2008 were $6,930.00 and$7,020.00 respectively. 

3.      Caption Tax Fees during 2009 and 2008 were $690.00 and $675.00respectively. 

4.      All Other Fees during 2009 and 2008 were $-0- and $-0-respectively. 

5.      N/A(i) Disclose the audit committee's pre-approval policies and proceduresdescribed in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X. (ii) Disclosethe percentage of services described in each of Items 9(e)(2) through 9(e)(4)of Schedule 14A that were approved by the audit committee pursuant to paragraph(c)(7)(i)(C) of Rule 2-01 of Regulation S-X. 

6.      Not greater than 50% for 2008 and 2007.If greater than 50 percent, disclose the percentage of hours expended on theprincipal accountant's engagement to audit the registrant's financialstatements for the most recent fiscal year that were attributed to workperformed by persons other than the principal accountant's full-time, permanentemployees. 

24

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**Part IV**

**Item 15. Exhibits Financial Statement Schedules**

a.      Financial Statements and SchedulesThe financial statements are set forth under Item 8 of this Annual Report onForm 10-K. Financial statement schedules have been omitted since they areeither not required, not applicable, or the information is otherwise included. 

b.      Exhibit Listing 

o    3(i)(a) Articles of Incorporation of the Company (Incorporated byreference to the Company's Form 10-SB filed on June 20, 2001).3(i)(b) Certificate of Amendment to Articles of Incorporation(Incorporated byreference to the Company's Form 10-SB filed on June 20, 2001).3(i)(c) Certificate of Amendment to Articles of Incorporation (Incorporated by referenceto the Company's Form 10-KSB filed on March 31, 2003).3(ii)(a) Amended and Restated By - Laws of the Company (Incorporated byreference to the Company's Form 10-SB filed on June 20, 2001).10(i) Agreement between Family Corporation and the Company dated December 15,1999. (Incorporated by reference to the Company's Form 10-SB filed on June 20,2001).10(ii) License agreement between the Company and Masaichi Kikuchi dated June 8,2000. (Incorporated by reference to the Company's Form 10-SB filed on June20,2001).10(iii) Technical Consulting Agreement the Company and Masaichi Kikuchi datedJune 9, 2001. (Incorporated by reference to the Company's Form 10-SB filed onJune 20, 2001).10(iv) Amendment No. 1 to Licensing Agreement dated July 30, 2001, however,effective June 8, 2000 by and between the Company and Masaichi Kikuchi.(Incorporated by reference to the Company's Form 10-SB/A filed on August 9,2001).10(v) License Agreement made as of September 30, 2002 by and between theCompany and Sanyo Kogyo Kabushiki Gaisha and Ever Green Planet Corporation.(Incorporated by reference to the Company's Form 10-KSB filed on March 31,2003).10(vi) Addendum to License Agreement made as of September 30, 2002 by andbetween the Company and Sanyo Kogyo Kabushiki Gaisha and Ever Green PlanetCorporation. (Incorporated by reference to the Company's Form 10-KSB filed onMarch 31, 2003).10(vii) Stock Purchase Agreement dated May 14, 2003 by and between the Companyand Jipangu, Inc.10(viii) Desalination License Agreement made as of May 30, 2003 by and betweenthe Company Etsuro Sakagami. (Incorporated by reference to the Company's Form10-QSB filed on August 13, 2003).31 Certification under Section 906 of the Sarbanes-Oxley Act.32 Certification under Section 906 of the Sarbanes-Oxley Act. 

**Signatures**

In accordance withSection 13 or 15(d) of the Securities Exchange Act of 1934, the registrant hasduly caused this report to be signed on its behalf by the undersigned,thereunto duly authorized. 

Amanasu Environment Corporation

/s/Atsushi MakiFebruary 18, 2011Chairman & Chief Executive OfficerChief Financial Officer 

In accordance with theExchange Act, this report has been signed below by the following persons onbehalf of the registrant and in the capacities and on the dates indicated. 

/s/Atsushi Maki

February 18, 2011Director 

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AMANASU ENVIRON 123109 RESTATED/Y