3
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                         _______________________________

                                   FORM 10-KSB

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

                   For the Fiscal Year Ended December 31, 2002

                           COMMISSION FILE NO. 0-23920


                        AMANASU ENVIRONMENT CORPORATION
                        ---------------------------------
           (Name of small business issuer as specified in its charter)

           NEVADA                                    98 - 0347883
           ------                                     ------------
(State or other jurisdiction of incorporation)       (IRS Employer
                                                     Identification No.)

                 701 FIFTH AVENUE, 36TH FLOOR, SEATTLE, WA 98109
                 -----------------------------------------------
                    (Address of principal executive offices)
                    ----------------------------------------

                                  206-262-8188
                                  ------------
                           (Issuer's telephone number)
                           ---------------------------

    Securities registered pursuant to Section 12(b) of the Exchange Act: NONE

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

       Title of each class:         Name of each Exchange on which registered:
       --------------------         ------------------------------------------
       Common Stock, no par value              OTC Bulletin Board


Check  whether  the issuer (1) filed all reports required to be filed by Section
13  or  15(d) of the Exchange Act during the past 12 months (or for such shorter
period  that the registrant was required to file such reports), and (2) has been
subject  to  such  filing  requirements  for  the  past  90  days.
     [  X  ]  Yes   [  ]   No

Check  if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B
is  not contained in this form, and no disclosure will be contained, to the best
of  the  registrant's  knowledge,  in definitive proxy or information statements
incorporated  by  reference  in part III of this form 10-KSB or any amendment to
this  Form  10-KSB.  [  ]

State  the  issuer's  revenues  for  its  most  recent  fiscal  year:  $680.00.

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<PAGE>

The  aggregate  market  value  of the voting stock held by non-affiliates of the
registrant  on  March  10, 2003, computed by reference to the price at which the
stock  was  sold  on  that  date:  $2,058,811.

The number of shares outstanding of the registrant's Common Stock, no par value,
as  of  March  10,  2003  was  41,950,816  common  shares.

Documents  incorporated  by  reference:  See  Exhibits.

Transitional  Small  Business  Disclosure  Format  (Check one):  Yes ( ) No (X).


                                        3
<PAGE>

                         AMANASU ENVIRONMENT CORPORATION
                         -------------------------------
                                   FORM 10-KSB
                                TABLE OF CONTENTS

PART  I3
-------
ITEM  1.   DESCRIPTION  OF  BUSINESS                                           3
GENERAL                                                                        3
BUSINESS  OF  THE  COMPANY  AND  PRODUCTS                                      4
Overview  and  History                                                         4
MARKETING                                                                      6
PATENTS,  TRADEMARKS,  LICENCES,  FRANCHISES,  CONCESSIONS,  ROYALTY
AGREEMENTS, LABOR  CONTRACTS,  INCLUDING  DURATION                             7
RISK  FACTORS                                                                  7
GOVERNMENT  REGULATIONS                                                       10
DEPENDENCE  ON  CERTAIN  CUSTOMERS                                            10
RESEARCH  AND  DEVELOPMENT                                                    10
COSTS  AND  EFFECTS  OF  COMPLIANCE  WITH  ENVIRONMENTAL  LAWS                10
NUMBER  OF  TOTAL  EMPLOYEES  AND  NUMBER  OF  FULL-TIME  EMPLOYEES           11
ITEM  2.   DESCRIPTION  OF  PROPERTY                                          11
ITEM  3.   LEGAL  PROCEEDINGS                                                 11
ITEM  4.   SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS        11
PART  II                                                                      11
ITEM  5.   MARKET  FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDER MATTERS     11
           DIVIDEND  POLICY                                                   12
           RECENT  SALES  OF  UNREGISTERED  SECURITIES                        12
ITEM  6:   MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OR PLAN OF OPERATIONS     12
           LIQUIDITY  AND  CAPITAL  RESOURCES                                 13
ITEM  7.   FINANCIAL  STATEMENTS                                              14
ITEM  8.   CHANGES  IN  AND  DISAGREEEMENTS  WITH  ACCOUNTANTS ON
           ACCOUNTING AND FINANCIAL  DISCLOSURE                               14
PART  III                                                                     14
ITEM  9.   DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROL
           PERSONS; COMPLIANCE  WITH  SECTION  16  (a)  OF  THE
           EXCHANGE  ACT.                                                     14
ITEM  10.  EXECUTIVE  COMPENSATION                                            15
ITEM  11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT     18
ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS                 19
ITEM  13(a).  EXHIBITS.                                                       19
ITEM  13(b).  REPORTS  ON  FORM  8-K.                                         20
SIGNATURES                                                                    21

                                        4
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THIS  ANNUAL  REPORT  ON  FORM  10-KSB,  INCLUDING  EXHIBITS  THERETO,  CONTAINS
FORWARD-LOOKING  STATEMENTS  WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934,
AS  AMENDED.  THESE  FORWARD-LOOKING  STATEMENTS ARE TYPICALLY IDENTIFIED BY THE
WORDS  "ANTICIPATES",  "BELIEVES",  "EXPECTS",  "INTENDS", "FORECASTS", "PLANS",
"FUTURE",  "STRATEGY",  OR WORDS OF SIMILAR MEANING. VARIOUS FACTORS COULD CAUSE
ACTUAL  RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN THE FORWARD-LOOKING
STATEMENTS,  INCLUDING THOSE DESCRIBED IN "RISK FACTORS" IN THIS FORM 10-KSB. WE
ASSUME  NO  OBLIGATION  TO  UPDATE  THESE  FORWARD-LOOKING STATEMENTS TO REFLECT
ACTUAL  RESULTS,  CHANGES IN ASSUMPTIONS, OR CHANGES IN OTHER FACTORS, EXCEPT AS
REGULATED  BY  LAW.

PART  I

ITEM  1.   DESCRIPTION  OF  BUSINESS

GENERAL

Amanasu  Environment  Corporation  ("Company")  was incorporated in the State of
Nevada  on February 22, 1999 under the name of Forte International Inc. On March
27,  2001,  we  changed our name to Amanasu Energy Corporation.  On November 13,
2002,  our  name  was  changed  to  Amanasu  Environment  Corporation.

On  June  8,  2000, we obtained the exclusive, worldwide license to a technology
that  disposes  of  toxic  and  hazardous  wastes  through  a  proprietary, high
temperature  combustion  system,  known  as the Amanasu Furnace. The rights were
obtained  pursuant  to an exclusive licensing agreement with the inventor of the
technology  for  a  period  of  30  years.  The  combustion system is a low cost
methodology of generating extremely high temperatures in excess of 2,000 degrees
Celsius.  Waste  matter  exposed  to the extreme temperature system is instantly
decomposed  to  a  gaseous matter and a magna-like liquid.  The process leaves a
1-2% residue of an inert, carbon substance and oxygen which is vented out of the
system.  The  process  produces no toxins, smoke, ash, or soot.  We will require
further  financing  to  advance  our  business  model.

Effective  September  30,  2002,  we entered into a license agreement with Sanyo
Kogyo  Kabushiki  Gaisha  and  Ever  Green  Planet Corporation (collectively the
"Licensors"),  both  Japanese  companies,  whereby  we were granted a worldwide,
exclusive license for the production and marketing of certain products currently
produced  and  marketed  by the Licensors.  These products consist of a state of
the  art  hot  water  boiler.  Its function is to extract heat energy from waste
tires.  It  is  a  safe,  non-polluting  and  highly efficient boiler used for a
variety  of  uses.

Our  principal  offices are located at 701 Fifth Avenue, 36th Floor, Seattle, WA
98109.  Our telephone number is (206) 262-8188 and our facsimile number is (206)
262-8199.  We  do  not  have  a  website.

                                        5
<PAGE>

BUSINESS  OF  THE  COMPANY  AND  PRODUCTS

Overview  and  History

We  have the exclusive, worldwide license to a technology that disposes of toxic
and  hazardous  wastes  through  a  proprietary,  high  temperature  combustion
system,  known  as  the  Amanasu  Furnace.  The  combustion system is a low cost
methodology of generating extremely high temperatures in excess of 2,000 degrees
Celsius.  Waste  matter  exposed  to the extreme temperature system is instantly
decomposed  to  a  gaseous matter and a magna-like liquid.  The process leaves a
1-2% residue of an inert, carbon substance and oxygen which is vented out of the
system.  The  process  produces no toxins, smoke, ash, or soot.  We will require
further  financing  to  advance  our  business  model.

Background  of  Technology.

The  technology,  known  as  the  Amanasu Furnace, is a process that disposes of
toxic  and  hazardous  waste, through a proprietary, high temperature combustion
system.  The combustion system is a low cost methodology of generating extremely
high  temperatures  is  excess  of  2,000  Celsius.  Waste matter exposed to the
extreme  temperature  system  is  instantly decomposed to a gaseous matter and a
magna-like  liquid.  The  process  leaves  a  1-2%  residue  of an inert, carbon
substance  and  oxygen  which  vented out of the system. The process produces no
toxins,  smoke,  ash,  or  soot.

Mr.  Masaichi  Kikuchi,  the  inventor of the technology and a consultant to the
Company,  constructed  the  first  and only Amanasu furnace in 1996. The unit is
located on the island of Hokkaido, Japan, and has been operating since 1996 at a
capacity  of  five  tons  per  day.


Description  of  the  Amanasu  Furnace.

The  Amanasu  furnace  is  a  waste  disposal system that safely and efficiently
disposes  of  toxic  and hazardous wastes in a cost efficient manner. The system
has  three  general  features;  the  proprietary  combustion burner, the furnace
compartment,  and  the  gas  processing  compartment.

The  proprietary  aspect  of the Amanasu furnace is the unique combustion system
that  generates  abnormally high temperatures in excess of 2,000 degrees Celsius
within  the  furnace compartment. A proprietary formula of low cost metals, such
as  powered  aluminum and iron, is combined with an air pressurized, hydrocarbon
flame creating a superheated hydrogen combustion flame. A spray nozzle or burner
injects  the  flame  into  the furnace compartment where the flame is irradiated
with  microwaves  to  create  an  ionized  flame  reaching  a  heat  conversion
temperature  of  18,000  C but an actual measured temperature of 2 1,800-2,300 C
inside  the  furnace compartment. By contrast, an ordinary burner, neutral flame
reaches  temperatures  between 800 to 1,600 C. In order to raise the temperature
to  the  1,800  to  2,300 degrees C range, large amounts of additional energy is
required,  typically,  electricity.  The cost of this energy source is expensive
and  would  be  cost  prohibitive to the operation of the furnace. The Company's
proprietary  system reaches these temperatures using approximately 20 gallons of
kerosene  or light oil per hour for each one ton of daily capacity. For example,
a  five  ton  daily capacity unit requires five times as much hydrocarbon use or
100  gallons,  per hour. The furnace reaches maximum temperatures within four to

                                        6
<PAGE>

five  hours after flame ignition. The resultant effect is a low cost methodology
of generating extremely high temperatures within a confined furnace compartment.

The  inner  walls of furnace and the combustion burner itself are protected from
the extreme heat by magnetrons and tokomak. Magnetrons are circular magnets that
deflect  the  gaseous  ions from the furnace walls to the center of the furnace.
Tokomak  is an insulating material that further protects the furnaces walls from
the  extreme  heat. Waste matter enters a feed dump where a conveyor or overhead
grapple continuously feeds the waste to the furnace compartment. Once inside the
high temperature furnace compartment, the chemical compounds of waste matter are
instantly  ionize  or disintegrated into gaseous matter and a magna-like liquid.
The  magna-like liquid is water cooled to form a dense, inert carbon matter. The
combustion gases resulting from the ionization first receive a light irradiation
process  to  prevent  recombination.  A primary high speed water dousing process
follows  whereby  the gas is cooled to 1,300 C. A series of two to four reaction
tanks,  similar to water shower units, further cool the gases, and sulfuric acid
and  nitric acid are removed through processing. Finally, the cooled gas, in the
form  of  oxygen, is filtered and vented from the system as warm air at below 60
degrees C. The process is unlike conventional waste incinerators, as it produces
no  toxins,  smoke, ash, or soot. The vented oxygen has dioxin levels below 0.01
nanogram  and  dibenzoflan  levels below 0.001 nanogram. The inert carbon matter
produced in the form of pellets is no more than 2% of the original mass, and can
be  used  for  roadway  surfaces  or  disposed  of  in  landfills.

Furnaces  will be sold in daily disposal capacities of; one-half ton to one ton,
two  tons  to  five  tons,  and  greater  than  five  tons.

Units  with  daily  capacities of one-half ton to one ton will be priced between
$200,000 to $800,000. These units will measure approximately up to seven feet in
length,  four  feet  in  width,  and  eight  feet  in height. These units can be
manufactured  as  stationary  or  portable.  Portable  units can be mounted on a
portable chassis, which can be hauled by a mid-sized truck to desired locations.

Units  with  daily  capacities  of  two  to  five  tons  will  be priced between
$1,200,000  to  $2,000,000. These stationary units will measure approximately up
to  fourteen  feet  in  length,  five  feet  in width, and eight feet in height.

Units  with  daily  capacities  of  greater  than five ton, including plants for
municipalities,  will  require specific plant design based upon the requirements
of  each user. The pricing and size of each unit will be subject to the specific
design  and  user  requirements.

The  outer  housing  of  the Amanasu furnace is constructed of fabricated steel.
Ancillary  equipment, other than as described above, includes feed hoppers, pipe
conveyors,  fuel polarization equipment, air polarization equipment, turbo fans,
and  an  air compression system for the burner. The Company believes the furnace
will  have  an estimated useful life of approximately 15 years. This estimate is
based  upon  the  Hokkaido,  Japan  unit  that  has  been  operating since 1996.

COMPETITION

Generally,  the  waste disposal industry is highly competitive. This industry is
populated  by  many  national  or  international  companies,  with significantly
greater resources than that of the Company. Many of these competitors dispose of

                                        7
<PAGE>

toxic waste in tradition methods such as landfills, and incinerator use. Despite
the  fact  that  these  methods  may  not  be environmentally friendly, they are
nonetheless  in  compliance with governing regulations, and therefore, represent
significant  competition  to  the Company. In addition, competition will include
other  waste  disposal  systems  that  handle toxic and environmental waste in a
non-pollutant  manner.  Despite  this  competition,  the  Company  believes  it
maintains  certain  competitive  advantages  in  its  market. In particular, the
Company  believes  that  its  system disposes of toxic and hazardous waste in an
environmentally  safe  and  cost  effective  manner.  Consequently,  the Company
believes  due  to  its  competitive  advantages,  it will be able to effectively
compete  in  this  market.

Manufacturing  And  Suppliers.

The proprietary combustion system of the Amanasu furnace will be manufactured by
the  inventor at his factory located on the island of Hokkaido, Japan. All other
components  of  the  furnace will be manufactured or supplied by various vendors
located in the Hokkaido area in collaboration with the Company. The Company also
will  subcontract  the  assembly  and  production of the furnaces to one or more
manufacturing  companies  in  the  Hokkaido area. It believes these arrangements
will  be  sufficient  to meet the Company's production needs for the foreseeable
future.  While  the  Company  may maintain single sources for the manufacture or
supply of various components, other than the combustion system, it believes that
other  sources  for such components are available if necessary. The Company will
rely  solely upon the inventor for the manufacture of the proprietary combustion
system,  however,  the  Company  has  the  technical know how to manufacture the
combustion  system,  if  necessary.

MARKETING

Markets  and  Marketing.

Hazardous  and  toxic  waste  generally consists of a large number of chemicals,
metals,  pesticides,  biological agents, toxic pollutants, and other substances.
The  treatment  of  toxic and hazardous waste worldwide is a growing and diverse
industry.  Significant  legislation  and regulation worldwide has contributed to
the  growth  of  this industry. These regulations are directed at protecting the
environment  by requiring originating parties to be responsible for managing the
hazardous  wastes  that  they  generate.  Although  the  Company's  proprietary
furnace disposes of various forms of waste, the Company will seek to promote its
product  as  a  toxic  and  hazardous  waste  disposal  system. This position is
premised upon the higher disposal fees for hazardous and toxic compared with the
disposal  fees  of  non-toxic  or  hazardous  waste.

During  the  second  quarter of 2001, the Company's has initiated contact with a
number  of  municipalities and private corporations for purposes of commercially
selling  its  proprietary  furnace.  However,  no  contracts  have  arisen  from
these  negotiations.  At  the  end  of  June  2001, the Company in collaboration
with  Mr.  Kikuchi,  the  inventor,  conducted a demonstration at  the  Hokkaido
facility  to  approximately  350  prospective  customers  from  Japan and  other
Pacific  Rim  countries.  The  Company  cannot  predict  whether  any sales will
result  from  the  demonstration  or  the  efforts  of  the Company's president.

The  Company  expects  to  establish of a network of distributors throughout the
Pacific  Rim.  It  is  contemplated  that distributors will be granted exclusive
distribution rights to a designated territory and will be compensated based on a
negotiated  percentage  of  sales.  It  is  expected  that  distributors will be
required  to  reach minimum sales levels in order maintain exclusive territorial
distribution  rights.

                                        8
<PAGE>

PATENTS,  TRADEMARKS,  LICENCES,  FRANCHISES,  CONCESSIONS,  ROYALTY AGREEMENTS,
LABOR  CONTRACTS,  INCLUDING  DURATION

Pursuant  to  the  license agreement with the inventor, Mr. Kikuchi, the Company
obtained  the world-wide rights to the Amanasu furnace for a period of 30 years.
The  Company  considers  its  waste  treatment  technologies  and  know-how  as
proprietary  and  will  use  a  combination  of  trade  secrets,  non disclosure
agreements,  license  agreements,  and  patent  laws  to protect its proprietary
rights.  In  1996,  Mr.  Kikuchi,  the inventor and a consultant to the Company,
received a patent in Japan for the combustion technology, which expires in 2016.
The  Company  anticipates  that  it  will  file  for  patent protection in other
countries  prior  to  any  marketing  efforts  in  such  country.

RISK  FACTORS

You  should  carefully consider the following risks and the other information in
this Report and our other filings with the SEC before you decide to invest in us
or  to  maintain  or  increase  your  investment.

The  risks  and  uncertainties  described below are not the only ones facing us.
Additional  risks  and  uncertainties  may  also adversely impact and impair our
business. If any of the following risks actually occur, our business, results of
operations,  or  financial  condition  would  likely  suffer.  In such case, the
trading price of our common stock could decline, and you may lose all or part of
your  investment.

Developmental Stage Company.  We were incorporated on February 22, 1999.  We are
a development stage company.  In a development stage company, management devotes
most  of  its  activities  to  establishing  a  new  business. Planned principal
activities  have  not  yet  produced  significant  revenues and we have suffered
recurring  operating  losses  as is normal in development stage companies. These
factors  raise  substantial  doubt  about  our  ability  to  continue as a going
concern.  Our  ability  to emerge from the development stage with respect to our
planned  principal business activity is dependent upon our successful efforts to
raise  additional  equity  financing,  receive  funding  from  affiliates  and
controlling  shareholders,  and  develop  a  market  for  our  products.

Ability  to  develop  product.  We  have  no  assurance  at  this  time  that  a
commercially  feasible  design will ever be perfected, or if it is, that it will
become  profitable.  Our profitability and survival will depend upon our ability
to  develop  a  technically  and  commercially  feasible  product  which will be
accepted  by  end  users.  Our  products  which  we  are  developing  must  be
technologically  superior  or  at  least  equal  to  other similar products that
competitors  offer  and  must  have  a  competitive  price/performance  ratio to
adequately  penetrate  its potential markets. If we are not able to achieve this
condition  or  if  we  do  not  remain  technologically  competitive,  we may be
unprofitable  and our investors could lose their entire investment. There can be
no assurance that we or potential licensees will be able to achieve and maintain
end  user  acceptance.

Need  for  Additional  Capital.  We rely on our ability to raise capital through
the  sale  of  our  securities.  Our  the  ultimate success will depend upon our
ability  to raise additional capital or to have other par-ties bear a portion of
the  required  costs  to further develop or exploit the potential market for our
products.

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Dependence  on  Consultants  and  Outside  Manufacturing  Facilities.  Since our
present  plans  do  not  provide  for  a  significant  technical  staff  or  the
establishment  of  manufacturing  facilities,  we will be primarily dependent on
others  to  perform  these functions and to pro-vide the requisite expertise and
quality control. There is no assurance that such persons or institutions will be
available  when  needed  at  affordable prices. It will likely cost more to have
independent  companies do research and manufacturing than for us to handle these
resources.

Product/Market  Acceptance.  Our profitability and survival will depend upon our
ability to develop a technically and commercially feasible product which will be
accepted by end users.  Our furnace must be technologically superior or at least
equal  to other waste disposal furnaces which our competitors may offer and must
have a competitive price/performance ratio to adequately penetrate our potential
markets.  If  we  are  not able to achieve this condition or if we do not remain
technologically competitive, we may be unprofitable and our investors could lose
their  entire  investment.  There  can  be no assurance that we or our potential
licensees  will  be  able  to  achieve  and  maintain end user acceptance of our
furnace.

Competition.  Generally, the waste disposal industry is highly competitive. This
industry  is  populated  by  many  national  or  international  companies,  with
significantly  greater  resources  than  that  of  the  Company.  Many  of these
competitors  dispose  of toxic waste in tradition methods such as landfills, and
incinerator  use. Despite the fact that these methods may not be environmentally
friendly,  they  are  nonetheless  in compliance with governing regulations, and
therefore,  represent  significant  competition  to  the  Company.  In addition,
competition  will  include  other  waste  disposal systems that handle toxic and
environmental  waste  in  a  non-pollutant manner. There is no assurance that we
will  be successful in meeting or over-coming our current or future competition.

Protection  of Intellectual Property.  Our business depends on the protection of
our  intellectual property and may suffer if we are unable to adequately protect
our intellectual property. Currently, we have been granted a patent in Japan for
the  combustion  technology,  which expires in 2016. We cannot provide assurance
that  our  patents will not be invalidated, circumvented or challenged, that the
rights granted under the patents will give us competitive advantages or that our
patent  applications  will  be  granted.

History  of  Losses.  We  have a history of operating losses, and an accumulated
deficit,  as of December 31, 2002, of $354,913. Our ability to generate revenues
and profits is subject to the risks and uncertainties encountered by development
stage  companies.

Our  future  revenues  and profitability are unpredictable. We currently have no
signed  contracts that will produce revenue and we do not have an estimate as to
when  we  will  be  entering into such contracts. Furthermore, we cannot provide
assurance  that  management  will  be  successful in negotiating such contracts.

Rapid  Technological Changes could Adversely Affect Our Business. The market for
our  furnaces is characterized by rapidly changing technology, evolving industry
standards  and changing customer demands. Accordingly, if we are unable to adapt
to  rapidly  changing technologies and to adapt our product to evolving industry
standards,  our  business  will  be  adversely  affected.

Management  and  Conflicts of Interest.  Our present officers and directors have
other  unrelated full-time positions or part-time employment.  Some officers and
directors  will  be  available  to  participate  in  management  decisions  on a

                                       10
<PAGE>

part-time  or  as-needed  basis  only.  Our  management may devote time to other
companies  or  projects  which  may  compete  directly  or  indirectly  with us.

Need  for  Additional  Key  Personnel.  At  the present, we employ one full time
employees.  Our  success  will  depend, in part, upon the ability to attract and
retain qualified employees. We believe that we will be able to attract competent
employees,  but  no  assurance  can  be given that we will be successful in this
regard.  If  we  are  unable  to  engage and retain the necessary personnel, our
business  would  be  materially  and  adversely  affected.

Indemnification  of  Officers  and  Directors  for  Securities Liabilities.  The
Company's  By-Laws  eliminates  personal liability in accordance with the Nevada
Revised  Statutes.  Section  78.7502  of the NRS provides that a corporation may
eliminate personal liability of an officer or director to the corporation or its
stockholders  for  breach  of  fiduciary duty as an officer or director provided
that  such indemnification is limited if such party acted in good faith and in a
manner which he reasonably believed to be in or not opposed to the best interest
of  the  corporation.

In  so  far  as indemnification for liability arising from the Securities Act of
1933 may be permitted to Directors, Officers or persons controlling the Company,
it  has  been  informed  that  in  the  opinion  of  the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and  is,  therefore,  unenforceable.

General  Factors.  Our  areas  of  business may be affected from time to time by
such  matters  as  changes  in  general economic conditions, changes in laws and
regulations,  taxes,  tax laws, prices and costs, and other factors of a general
nature  which  may  have  an  adverse  effect  on  our  business.

Limited  Public  Market for the Common Stock.  At present, only a limited public
market  exists  for  the  Common  Stock  on  the over-the-counter bulletin board
maintained  by  the  National  Association of Securities Dealers and there is no
assurance that a more active trading market will develop, or, if developed, that
it  will  be  sustained.

Estimates  and  Financial  Statements.  The  information  in  this  Form  10-KSB
consists  of  and relies upon evaluation and estimates made by management.  Even
though  management  believes  in  good faith that such estimates are reasonable,
based  upon  market  studies  and data provided by sources knowledgeable in the
field, there can be no assurance that such estimates will ultimately be found to
be  accurate  or  even  based  upon  ac-curate  evaluations.

No  Foreseeable  Dividends.  We have not paid dividends on our Common Stock and
do  not  anticipate  paying  dividends  on  our  Common Stock in the foreseeable
future.

Possible Volatility of Securities Prices.  The market price for our Common Stock
traded  on the over-the-counter bulletin board has been highly volatile since it
began  trading  and  will  likely  to  continue  to behave in this manner in the
future.  Factors such as our operating results and other announcements regarding
our  development  work  and business operations may have a significant impact on
the  market price of our securities.  Additionally, market prices for securities
of  many  smaller  companies  have experienced wide fluctuations not necessarily
related  to  the  operating  performance  of  the  companies  themselves.

                                       11
<PAGE>

GOVERNMENT  REGULATIONS

Generally,  the  Company  will  be  required to receive regulatory approval from
various  governmental  agencies  to  conduct  its  operations.  These regulatory
approvals  will  require  the Company to obtain and retain numerous governmental
permits  to  conduct  various  aspects  of  its  operations, any of which may be
subject  to  revocation,  modification  or  denial.  Extensive  and  evolving
environmental protection laws and regulations have been adopted worldwide during
recent decades in response to public concern over the environment. The Company's
operations  and those of its future customers are subject to these evolving laws
and  regulations.  The requirements of these laws and regulations 4 could impose
substantial  potential  liabilities  to  the  Company  and its customers. If the
operations of the Company's furnace result in a toxic spill or other mishap, the
Company  and  its customers could be subject to substantial fines, suspension of
operation, or other significant penalties. The Company makes a continuing effort
to  anticipate  regulatory,  political,  and legal developments in its principal
markets  in  the  Pacific  Rim  that  might affect its operations, but it is not
always  able  to  do  so.  The  Company  cannot  predict the extent to which any
legislation or regulation that may be enacted, amended, repealed, reinterpreted,
or  enforced  in  the  future  may  affect  its  operations.  Such actions could
adversely  affect  the  Company's  operations  or  impact  its  future financial
condition  or  earnings.  The  Company  however does expect that its proprietary
furnace  will  comply  with all governing regulations in those countries that it
intends  to  sell  its  product.  This  premise  is based upon the fact that the
furnace  is  not  an  incinerator  and  produces no toxins, smoke, ash, or soot.
Moreover,  the  Hokkaido  facility  received  a  permit  from  a division of the
Japanese  Ministry  of  Labor  in 1996 and since that time has been operating in
compliance  with  the  governing  laws  and  regulations  without  incident.

DEPENDENCE  ON  CERTAIN  CUSTOMERS

Although  we  have  no  key customers at the present time, we expect that if our
development  work  is  successful,  we  will  likely  become dependent, at least
initially, upon one or very few key customers. Such dependence could prove to be
risky in the event that one or more such potential customers were to be lost and
not  replaced.

RESEARCH  AND  DEVELOPMENT

We  plan  to  contract  with  outside individuals, institutions and companies to
perform  any  additional  research  and  development  work which we may require.

During  the  last  two fiscal years, we spent $0 on research and development and
$44,000  on  equipment  testing.

COSTS  AND  EFFECTS  OF  COMPLIANCE  WITH  ENVIRONMENTAL  LAWS

At  the present time there is no direct financial or competitive effect upon our
business  as  a  result  of  any need to comply with any federal, state or local
provisions  which  have  been  enacted  or  adopted  regulating the discharge of
materials  into  the environment, or otherwise relating to the protection of the
environment.

                                       12
<PAGE>

NUMBER  OF  TOTAL  EMPLOYEES  AND  NUMBER  OF  FULL-TIME  EMPLOYEES

As  of December 31, 2002, the Company had one employee. In addition, the Company
has  entered  into  a consulting agreement with Mr. Kikuchi, the inventor of the
technology  to receive a royalty based on sales arising from his technology. The
Company  has no collective bargaining agreements with its employees and believes
its  relations  with  its  employees  are  good.

ITEM  2.   DESCRIPTION  OF  PROPERTY

We  own  no properties. The Company's executive offices are located at 701 Fifth
Avenue,  36th  Floor,  Seattle, WA 98109. The premises are 1,500 square feet and
are  subleased  from  the  Company's  president  on  a month to month basis at a
monthly rental amount of $1,500. The Company leases a Seattle apartment under an
operating  least  that  expires  August  31,  2003.  In  addition,  the  Company
maintains  an  office  at  2-18  Kyobashi  Chuo-ku,  Tokyo,  Japan 104-0031. The
premises  are  2,000  square  feet  and  approximately  600  square  feet  are
subleased  by  the  Company  from  its  president  rent  free  on  a  month  to
month  basis.

ITEM  3.   LEGAL  PROCEEDINGS

We are not a party to any legal proceedings or litigation, nor are we aware that
any  litigation  is presently being threatened or contemplated against us or any
officer,  director  or  affiliate.

ITEM  4.   SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS

There  was  no  matter  submitted  to  a vote by our security holders during the
fourth  quarter  of  our  fiscal  year  ended  December  31,  2002,  through the
solicitation  of  proxies  or  otherwise.

PART  II

ITEM  5.   MARKET  FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDER  MATTERS

There  is a limited public market for our Common Stock which currently trades on
the  OTC  Bulletin  Board under the symbol "AMSU" where it has been traded since
September  11,  2002.  The  Common  Stock has traded between $1.05 and $0.12 per
share  since  that  date.

The  following  table sets forth the high and low prices for our Common Stock as
reported  on  the  Bulletin  Board  for the quarters presented. These quotations
reflect  inter-dealer  prices, without retail mark-up, mark-down or commissions,
and  may  not  reflect  actual  transactions.

<TABLE>
<CAPTION>

                                         Bid Price     Asked Price
                                      High  $  Low $  High $  Low $
<S>                                   <C>      <C>    <C>     <C>
Quarter Ended September 30, 2002 (1)       .0     .0      .0     .0
Quarter Ended December 31, 2002          1.25    .11    4.00    .27
</TABLE>


(1)  The  Company  commenced  trading  on the Over the Counter Bulletin Board on
     September  11,  2002.  There  were  no  trades  until  October,  2002.

                                       13
<PAGE>

(Information  provided  by  The Over The Counter Bulletin Board.  The quotations
reflect inter-dealer prices, without retail mark-up, markdown, or commission and
may  not  represent  actual  transactions.)

As  of  February  28,  2003,  there  were  41,950,816  shares  of  Common  Stock
outstanding,  held  by  51  shareholders  of  record.

DIVIDEND  POLICY

To  date we have not paid any dividends on our Common Stock and do not expect to
declare  or  pay  any  dividends  on our Common Stock in the foreseeable future.
Payment  of  any  dividends  will be dependent upon future earnings, if any, our
financial  condition,  and  other  factors  as  deemed  relevant by our Board of
Directors.

RECENT  SALES  OF  UNREGISTERED  SECURITIES

Set  forth  below  is  information  regarding  the  issuance  and  sales  of our
securities  without  registration  during  the  last fiscal year.  No such sales
involved  the  use  of  an  underwriter.  See  Note  1 and Note 2 to our audited
financial  statements  for  the  fiscal  year  ended  December 31, 2002 for more
information  on  recent  sales  of  unregistered  securities.

License  Acquisition

On  September  30,  2002  the Company acquired the exclusive worldwide rights to
produce  and market a patented product known as Firebird PD 5000, which is a hot
water  boiler  that  collects  heat from waste tires.  As consideration for this
acquisition,  the  Company  is  obligated  to  pay $250,000 and to issue 650,000
shares  of  common  stock.  A copy of the agreement is attached as an exhibit to
this  10-KSB  filing.  These  shares  were  paid  personally  by  Mr.  Maki, our
President.  The shares were issued on October 17, 2002.  These sales were exempt
under  Regulation  S  under  the  Securities Act of 1933, as amended, due to the
foreign  nationality  of  the  relevant  purchasers.

Private  Placement

During  the  year,  the  Company  issued  53,000  shares  of  common  stock,
realizing  cash  proceeds  of  $265,000.  These  sales  were  exempt  under
Regulation  S  under  the Securities Act of 1933, as amended, due to the foreign
nationality  of  the  relevant  purchasers.

ITEM  6:   MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION AND
RESULTS  OF  OPERATIONS.

The  following  discussion  should  be  read  in  conjunction with the Company's
Financial  Statements,  including the Notes thereto, appearing elsewhere in this
Annual  Report.

Company  Overview
-----------------

The  Company  was organized February 22, 1999.  Its operations to date have been
limited  to  obtaining  licensing  for  the production and sale of two products,
conducting  preliminary marketing efforts, and conducting testing for one of the
products.

                                       14
<PAGE>

Plan  Of  Operations
--------------------

The  Company  is  a  development  stage  corporation.  It  has not commenced its
planned  operations  of  manufacturing  and  selling  two products:  a toxic and
hazardous  waste  disposal  system,  and  a  hot  water  boiler.

During the year 2001, the Company obtained a license to manufacture and sell the
Amanasu  furnace,  a  toxic  waste  disposal  system.  On  September 30, 2002 it
obtained  a license to manufacture and sell a state of the art hot water boiler,
which  derives  its  energy in a nonpolluting chemical process from waste tires.

The  Company  raised  $274,540  during  the year 2001, and $265,000 during 2002,
through  the  issuance  of  common  stock.  The Company intends to raise another
$300,000  during  2003  through  the private placement of its common stock.  The
proceeds of such private placements will be used to continue the development and
market  planning  of  its  two  products,  and for other general working capital
needs.

The  Amanasu  furnace  has undergone rigorous testing and adjustments to meet UL
and  EPA  requirements, as well as requirements of specific potential customers.
Additional  research  is  also  being conducted in Japan by the inventor of this
product.

The  hot  water  boiler  system  will  be  marketed  throughout  North  America.
Particular  attention  is  being  focused on Mexico.  A complete system has been
shipped to Mexico to undergo testing for compliance with government regulations.
A  formal  agreement  for  marketing  this  product  in Mexico is expected to be
executed  upon  completion  of  this  testing.

The  Company  has  entered  into  discussions with a number of private investors
concerning the private placement of its common stock.  At this time, however, it
has  not  received  commitments  from  any  source.  Although  the  Company  is
encouraged  by  its discussions, it cannot predict whether it will be successful
in  raising  capital,  which  capital  is  essential  to its plan of operations.

The  results  of operations during the year 2002 was a loss of  $76,387 compared
with a loss of $224,737 in the comparable 2001 period.  Significant expenses for
consulting  and  testing  of  the  Amanasu  furnace  were  not repeated in 2002.

LIQUIDITY  AND  CAPITAL  RESOURCES

During  2002,  we  financed  our  operations  mainly  through  the  issuance  of
53,000  shares  of  common  stock,  which  yielded  proceeds  of  $265,000.  The
loss  for  the  year  of  $76,387  included  $9,532  of  non-cash  items.

As  at  December  31,  2002,  we  had  a  cash  balance  of $78,432, and current
liabilities  of  $95,100.

                                       15
<PAGE>

ITEM  7.   FINANCIAL  STATEMENTS

Our  consolidated  financial  statements  are  included  and  begin  immediately
following  the  signature  page  to  this report.  See Item 13 for a list of the
financial  statements  and  financial  statement  schedules  included.

ITEM  8.   CHANGES  IN  AND  DISAGREEEMENTS  WITH  ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL  DISCLOSURE

None.

PART  III

ITEM  9.   DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROL  PERSONS;
COMPLIANCE  WITH  SECTION  16  (a)  OF  THE  EXCHANGE  ACT.

Directors  and  Executive  Officers  of  the  Registrant

The  following  table  sets  forth  the  name,  age  and position of each of our
Executive  Officers  and  Directors:

<TABLE>
<CAPTION>
Name                          Age     Position
<S>                           <C>     <C>
Atsushi Maki (1)              56      Chairman, President, CFO and Director
Lina Lei (1)                  43      Secretary
Takahashi Yamaguchi (1)       70      Director
<FN>

(1)  Member  of  the  Audit  Committee
</TABLE>

BUSINESS  EXPERIENCE  AND  PRINCIPAL OCCUPATION OF DIRECTORS, EXECUTIVE OFFICERS
AND  SIGNIFICANT  EMPLOYEES

Atsushi Maki has been the President, Chairman and Chief Financial Officer of the
Company  since  November  10,  1999.  All  officers  currently  devote part-time
services  to  our  operations.

Mr.  Maki and Ms. Lei are husband and wife.  Other than that relationship, there
are  no  family  relationships between any director or executive officer and any
other  director  or  executive  officer.

The  present  and  principal occupations of our directors and executive officers
during  the  last  five  years  are  set  forth  below:

Atsushi  Maki  has  been  the  President,  Chief Financial Officer, Chairman and
Director  of the Company since November 10, 1999. During the past ten years, Mr.
Maki  has  been  an  independent  businessman  involved  mainly  in  real estate
development  projects  in  Japan.  In  1995,  he  served  as  a  Director of the
Japan-Korea  Cooperation Committee along with the former Prime Minister of Japan
who  acted  as  the  Chairman  of the committee. In 1999, he was responsible for
establishing  the  Japan-China  Association,  a  foundation for fostering better
relations  between  the two nations. He served as a director of the association,

                                       16
<PAGE>

along  with the Chairman of Sony Corporation and the Honorary Chairman of Toyota
Motor  Corporation.  Mr.  Maki  is  the husband of Lina Lei, the Secretary and a
director  of  the  Company.

Lina  Lei has been the Secretary of the Company since November 10, 1999. Ms. Lei
was  appointed a director in November 1999 and resigned from the board on August
21,  2002.  From  May  1990  to  November  1999, Ms. Lei was employed by Thunder
Company  Ltd,  Tokyo,  Japan,  in  various  capacities including as its managing
director.  Ms.  Lei completed her university studies in Shanghai, China in 1982,
and  obtained  a  master's degree from Hitotsubashi University in Tokyo in 1990.
Ms.  Lei is the wife of Atsushi Maki, the Chairman and President of the Company.

Takashi  Yamaguchi  has  been  a  Director of the Company since October 1, 2001.
During the past ten years, Mr. Yamaguchi has been involved mainly in real estate
development  projects in Japan. Between 1988 and 1998 he served as a director of
the  Tokyo  Bay  Hilton,  Inc.  During the same period, he was also an inspector
with  Nihon BCG Production Inc.  Between 1991 and 1998 he served as an inspector
with  Toyo  Futo  Inc.  Mr.  Yamaguchi received a Liberal Arts degree from Tokyo
University  in  1952  and  graduated  with a law degree from Tokyo University in
1958.

Section  16(a)  Beneficial  Ownership  Reporting  Compliance

Based  solely  upon  a  review  of  Forms  3,  4 and 5 furnished to us, we might
determine that none of our officers, directors or beneficial owners of more than
ten  percent  of  the  Common  Stock  failed  to  file on a timely basis reports
required to be filed by Section 16(a) of the Exchange Act during the most recent
fiscal  year.

However,  we  have  knowledge  that  the  following person failed to timely file
reports  required  to  be  filed  by  Section  16(a)  as  follows:

Number  of  late  reports:
Each  of  Messrs.  Maki  and  Yamaguchi and Ms. Lei failed to file a Form 3 on a
timely  basis  upon the Company becoming a reporting company on October 1, 2001.
However, each of Ms. Lei, Mr. Maki and Mr. Yamaguchi have now filed a Form 3 and
a  Form  5.

Number  of  transactions  that  were  not  reported  on  a  timely  basis:

The  number  of  transactions  which were not reported on a time basis was 2 for
each  of  Ms.  Lei,  Mr.  Maki  and  Mr.  Yamaguchi.

As  at  the  date  of  this  report,  all  Forms  3,  4  and  5  are  current.

Audit  Committee  Financial  Expert

Our  board of directors has determined that we have at least one audit committee
financial  expert  serving  on our audit committee.  In particular, Messrs. Maki
and  Yamaguchi  have  experience  overseeing  or  assessing  the  performance of
companies  or  public  accountants  with respect to the preparation, auditing or
evaluation  of  financial  statements.

                                       17
<PAGE>

ITEM  10.  EXECUTIVE  COMPENSATION

No executive officer had an annual salary and bonus in excess of $100,000 during
the  past  fiscal  year.

<TABLE>
<CAPTION>

                                Annual Compensation                  Long Term Compensation
                                                              Awards               Payouts
                                                                             Securities
                                                                             Under-
                                                                             lying
                                             Other Annual  Restricted Stock  Options/    LTIP (2)  All Other
Name and Principal         Salary    Bonus   Compensation  Award(s)          SARs        Payout   Compensation
Position             Year  ($) (3)    ($)         ($)        (#)             (1)(#)        ($)       ($)
<S>                 <C>    <C>       <C>       <C>          <C>              <C>         <C>       <C>

Atsushi Maki,       2002   Nil       Nil       Nil          Nil              Nil         Nil        Nil
President and CEO   2001   14,769    Nil       Nil          Nil              Nil         Nil        Nil
                    2000   14,769    Nil       Nil          Nil              Nil         Nil        Nil

</TABLE>

(1)  "SARS"  or  "stock  appreciation  right"  means  a  right granted by US, as
     compensation  for  services  rendered,  to  receive a payment of cash or an
     issue  or  transfer of securities based wholly or in part on changes in the
     trading  price  of  our  publicly  traded  securities.

(2)  "LTIP"  or  "long  term  incentive  plan"  means  any  plan  which provides
     compensation intended to serve as incentive for performance to occur over a
     period longer than one financial year, but does not include option or stock
     appreciation  right  plans  or  plans  for  compensation through restricted
     shares  or  restricted  share  units.

(3)  Mr.  Maki  received  salary compensation in the form of 3,200,000 shares of
     common  stock  of  the  Company  for  the period from November 1999 through
     fiscal 2001. The shares were valued at $0.01 per share. Of the total amount
     of  shares, 246,200 shares were allocated for fiscal 1999, with the balance
     allocated  equally  between  2000  and  2001.

The  Company  and its officers have agreed that the officers of the Company will
not  receive  any  other  compensation  beyond  year 2001 until such time as the
Company  reaches  profitability for a full fiscal quarter. The terms of any such
compensation  arrangement  have  not been determined at this time. Other than as
indicated above, the Company did not have any other form of compensation payable
to  its  officers  or  directors,  including  any  stock  option  plans,  stock
appreciation  rights,  or long term incentive plan awards for the periods during
the  fiscal  years  2002  and  2001.

The  Company's  directors  received no fees for their services in such capacity,
however,  they  will  be  reimbursed for expenses incurred by them in connection
with  the  Company's  business.  Our President will receive a salary if and when
the  company's  operations  become  profitable.

We  may  in the future create retirement, pension, profit sharing, insurance and
medical  reimbursement plans covering our Officers and Directors. At the present
time,  no such plans exist. No advances have been made or are contemplated by us
to any of our Officers or Directors. Directors receive no compensation for their
service  as  such.  Compensation  of officers and directors is determined by our
Board  of  Directors  and  is  not  subject  to  shareholder  approval.

The  following  table  sets  forth  certain  information with respect to options
exercised  during the fiscal year ended December 31, 2002 by our Chief Executive
Officer,  and  with  respect  to unexercised options held by our Chief Executive
Officer  at  the  end  of  fiscal  2002.

                                       18
<PAGE>

AGGREGATED  OPTION  EXERCISES  IN  LAST  FISCAL  YEAR AND YEAR END OPTION VALUES

<TABLE>
<CAPTION>

                                                     Number of
                                                     Unexercised    Value of
                                                     Options at     Unexercised
                                                     Years End      Options at Year End
              Shares Acquired                        Exercisable /  Exercisable /
Name          On Exercise (#)    Value realized ($)  Unexercisable  Unexercisable
------------  ----------------  --------------------  -------------  -------------
<S>           <C>               <C>                   <C>            <C>

Atsushi Maki    -0-                   -0-              -0-            -0-
</TABLE>

We  do  not  have  any  Long  Term  Incentive  Plans.

We do not have any employment contracts, termination of employment and change of
control  arrangements.

ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND  MANAGEMENT

The  following  table  will  identify,  as  of December 31, 2002, the number and
percentage  of  outstanding  shares  of common stock of the Company owned by (i)
each  person  known  to  the  Company  who  owns  more  than five percent of the
outstanding common stock, (ii) each officer and director, and (iii) and officers
and directors of the Company as a group. The following information is based upon
41,950,816  shares  of  common  stock  of  the  Company  which  are  issued  and
outstanding  as  of  December 31, 2002. The address for each individual below is
701  Fifth  Avenue,  36th  Floor, Seattle, WA 98109, the address of the Company.

<TABLE>
<CAPTION>

Title of Security           Name and Address of    Amount and Nature of
                            Beneficial Owner       Beneficial Ownership (1)  Percent of Class
<S>                        <C>                     <C>                       <C>

                           Amanasu Corporation(2)
                           #902 Ark Towers,
                           1-3-40
                           Roppongi, Minatoku
Common Stock               Tokyo, Japan              33,000,000              78.66%
Common Stock               Atsushi Maki(3)(4)        35,496,000              84.61%
Common Stock               Lina Lei(4)                  362,500                 *%
Common Stock               Takashi Yamaguchi            210,000
                           Officers and Directors
                            as a Group (3 persons)   36,068,500              85.98%
</TABLE>

*  Less  than  one  percent.

(1). "Beneficial  ownership" means having or sharing, directly or indirectly (i)
     voting  power, which includes the power to vote or to direct the voting, or
     (ii) investment power, which includes the power to dispose or to direct the
     disposition,  of shares of the common stock of an issuer. The definition of
     beneficial  ownership  includes  shares  underlying  options or warrants to
     purchase  common  stock, or other securities convertible into common stock,
     that  currently  are  exercisable  or  convertible  or  that  will  become
     exercisable  or convertible within 60 days. Unless otherwise indicated, the
     beneficial  owner  has  sole  voting  and  investment  power.

                                       19
<PAGE>

(2). Mr.  Atsushi  Maki,  the  Company's  Chairman  and  President,  is the sole
     shareholder  of Amanasu Corporation (formerly named Family Corporation, the
     name  was changed during fiscal 2002) and is deemed the beneficial owner of
     such  shares.

(3). Includes 2,496,000 shares of common stock held individually by Mr. Maki and
     33,000,000  shares  of  common  stock  held  by  Amanasu  Corporation.

(4). Atsushi  Maki  and  Lina  Lei  are  husband and wife. Each spouse disclaims
     beneficial  ownership  of  the  shares  of  the  other  spouse.

ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

On  December  15,  1999,  the  Company  entered  into  an agreement with Amanasu
Corporation,  a  Japanese corporation, under which Amanasu Corporation agreed to
arrange  the  grant  of a license to Amanasu Furnace to the Company. In exchange
for  obtaining  the  license  to  the Technology, the Company agreed to issue to
Amanasu  Corporation  13,000,000  shares  of its common stock and stock purchase
options  to  acquire  another  20,000,000  shares of common stock at a price per
share of $0.01. In addition under the terms of the agreement, the Company agreed
to issue 1,000,000 shares of common stock to the inventor of the technology, and
200,000 shares of common stock to the executive director of the inventor. In May
2001,  Amanasu  Corporation exercised its option to acquire 20,000,000 shares of
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 president and sole
shareholder  of  Amanasu  Corporation.

Mr.  Maki received salary compensation in the form of 3,200,000 shares of common
stock  of the Company for the period from November 1999 through fiscal 2001. The
shares  were  valued  at $0.01 per share or a total of $32,000. Ms. Lei received
salary compensation in the form of 312,500 shares of common stock of the Company
for the 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, the Company entered into an exclusive licensing agreement with
the  inventor of the Amanasu Furnace. Under the licensing agreement, the Company
obtained  the worldwide production and marketing rights of the Technology for 30
years,  and the Company is required to pay the inventor a royalty of 2% on gross
sales  of  the  Technology.

ITEM  13(a).  EXHIBITS.

<TABLE>
<CAPTION>

Number  Description
<C>     <S>                                                                             <C>
   3.1    Articles of Incorporation of the Company                                      (1)
   3.2    Certificate of Amendment to Articles of Incorporation                         (1)
   3.3    Amended and Restated By - Laws of the Company                                 (1)
   3.4    Certificate of Amendment to Articles of Incorporation                         (3)
  10.1    Agreement between Family Corporation and the Company dated December
          15, 1999                                                                      (1)
  10.2    License agreement between Masaichi Kikuchi and the Company dated June 8,
          2000                                                                          (1)
  10.3    Technical Consulting Agreement the Company and Masaichi Kikuchi dated
          June 9, 2001                                                                  (1)
  10.4    License Agreement dated June 8, 2000                                          (2)
  10.5    License Agreement made as of September 30, 2002                               (3)

                                       20
<PAGE>

  10.6    Addendum to September 30, 2002 License Agreement made as of November
          18, 2002                                                                      (3)
  99.1    Certification of Atsushi Maki, Chairman, President, Secretary, Chief Financial
          Officer (Principal Executive Officer), pursuant to 18 U.S.C. Section 1350, as
          adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002             (3)
</TABLE>

(1)  Incorporated by reference from Form 10-SB Registration Statement filed June
     20,  2001.
(2)  Incorporated  by  reference  from  Form  10-KSB  filed  April  15,  2002.
(3)  Filed  herein.

Independent  Auditor's  Report
Independent  Auditor's  Report
Balance  Sheets
Statements  of  Operations
Statement  of  Stockholders'  Equity
Statements  of  Cash  Flows
Notes  to  the  Financial  Statements


ITEM  13(b).  REPORTS  ON  FORM  8-K.

None.

ITEM  14.  CONTROLS  AND  PROCEDURES

The Company's Chief Executive Officer and Chief Financial Officer have evaluated
the  Company's  disclosure  controls  and procedures within 90 days prior to the
date  of  filing of this Annual Report on Form 10-KSB.  Management believes that
the  Company's  current  internal  controls  and  procedures  are  effective and
designed  to  ensure that information required to be disclosed by the Company in
its  perioiodic  reports is recorded, processed, summarized and reported, within
the  appropriate time periods specified by the SEC, and that such information is
accumulated  and  communicated  to  the  Company's CEO and CFO as appropriate to
allow  timely  decisions  to  be  made  regarding  required  disclosure.

As  of  February 28, 2003, there were no significant corrective actions taken by
the Company or other changes made to these internal controls.  Management of the
Company  does  not  believe  there  were  changes  in  other  factors that could
significantly  affect  these  controls subsequent to the date of the evaluation.

                                       21
<PAGE>

SIGNATURES

In  accordance  with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the  Registrant  has  duly  caused  this report or amendment to be signed on its
behalf  by  the  undersigned,  thereunto  duly  authorized.

                                             AMANASU  ENVIRONMENT  CORPORATION


                                          By:  /s/  Atsushi  Maki
                                          -----------------------
                                          Atsushi  Maki,  Chairman,  President
                                          and  Director


Dated:  March  21,  2003

In  accordance  with  the  Securities Exchange Act of 1934, this report has been
signed  by  the  following  persons  on  behalf  of  the  Registrant  and in the
capacities  and  on  the  dates  indicated  below.

Signature                              Title                         Date

/s/  Atsushi  Maki
------------------
Atsushi Maki                           President, Chairman, Chief  3 / 21 / 03
                                       Officer and Director


                  CERTIFICATION BY PRINCIPAL EXECUTIVE OFFICER
                  --------------------------------------------
                         AND PRINCIPAL FINANCIAL OFFICER
                         -------------------------------

I,  Atsushi  Maki,  certify  that:

1.   I  have  reviewed  this annual report on Form 10-KSB of Amanasu Environment
     Corporation;

2.   Based  on  my  knowledge,  this  annual  report does not contain any untrue
     statement  of a material fact or omit to state a material fact necessary to
     make  the  statements  made, in light of the circumstances under which such
     statements  were made, not misleading with respect to the period covered by
     this  quarterly  report;

3.   Based  on  my  knowledge,  the  financial  statements,  and other financial
     information  included in this annual report, fairly present in all material
     respects  the  financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officers  and  I  are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in  Exchange  Act  Rules  13a-14  and  15d-14) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures  to  ensure that
          material  information  relating  to  the  registrant,  including  its
          consolidated  subsidiaries, is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is  being  prepared;

     b)   evaluated  the  effectiveness  of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this  annual  report  (the  "Evaluation  Date");  and

     c)   presented  in  this  quarterly  report  my  conclusions  about  the
          effectiveness  of  the disclosure controls and procedures based on our
          evaluation  as  of  the  Evaluation  Date;

5.   The  registrant's  other certifying officers and I have disclosed, based on
     our  most  recent  evaluation,  to  the registrant's auditors and the audit
     committee  of  registrant's  board  of directors (or persons performing the
     equivalent  functions):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which  could  adversely  affect  the registrant's ability to

                                       22
<PAGE>

          record,  process,  summarize  and  report  financial  data  and  have
          identified  for  the  registrant's auditors any material weaknesses in
          internal  controls;  and

     b)   any  fraud, whether or not material, that involves management or other
          employees  who  have  a  significant role in the registrant's internal
          controls;  and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether  or  not there were significant changes in internal
     controls  or  in  other  factors  that  could significantly affect internal
     controls  subsequent  to  the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:  March  21,  2003

/s/  Atsushi  Maki
------------------
Atsushi  Maki
Chairman,  President  and  Chief  Financial  Officer



                                       23
<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>

Number  Description
<C>     <S>                                                                             <C>
   3.1    Articles of Incorporation of the Company                                      (1)
   3.2    Certificate of Amendment to Articles of Incorporation                         (1)
   3.3    Amended and Restated By - Laws of the Company                                 (1)
   3.4    Certificate of Amendment to Articles of Incorporation                         (3)
  10.1    Agreement between Family Corporation and the Company dated December
          15, 1999                                                                      (1)
  10.2    License agreement between Masaichi Kikuchi and the Company dated June 8,
          2000                                                                          (1)
  10.3    Technical Consulting Agreement the Company and Masaichi Kikuchi dated
          June 9, 2001                                                                  (1)
  10.4    License Agreement dated June 8, 2000                                          (2)
  10.5    License Agreement made as of September 30, 2002                               (3)
  10.6    Addendum to September 30, 2002 License Agreement made as of November
          18, 2002                                                                      (3)
  99.1    Certification of Atsushi Maki, Chairman, President, Secretary, Chief Financial
          Officer (Principal Executive Officer), pursuant to 18 U.S.C. Section 1350, as
          adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002             (3)
</TABLE>

(1)  Incorporated by reference from Form 10-SB Registration Statement filed June
     20,  2001.
(2)  Incorporated  by  reference  from  Form  10-KSB  filed  April  15,  2002.
(3)  Filed  herein.

Independent  Auditor's  Report
Independent  Auditor's  Report
Balance  Sheets
Statements  of  Operations
Statement  of  Stockholders'  Equity
Statements  of  Cash  Flows
Notes  to  the  Financial  Statements

                                       F1
<PAGE>




                         AMANASU ENVIRONMENT CORPORATION
                         -------------------------------

                          (A DEVELOPMENT STAGE COMPANY)
                          -----------------------------

                              Financial Statements

                                DECEMBER 31, 2002
                                -----------------


                                       F2
<PAGE>








                         AMANASU ENVIRONMENT CORPORATION

                          (A DEVELOPMENT STAGE COMPANY)

                              FINANCIAL STATEMENTS

                                DECEMBER 31, 2002






                                    CONTENTS
                                    --------



                                                            Page
                                                            ----

Accountant's  Audit  Report                                    1

Balance  Sheets                                                2

Statements  of  Operations                                     3

Statements  of  Changes  in  Stockholder's  Equity             4

Statements  of  Cash  Flows                                    5

Notes  to  Financial  Statements                               6


                                       F3
<PAGE>



Board  of  Directors
Amanasu  Environment  Corporation

I  have  audited  the  accompanying  balance  sheets  of  Amanasu  Environment
Corporation  (a development stage company) as of December 31, 2002 and 2001, and
the  related statements of operations and deficit accumulated during development
stage,  changes  in  stockholders'  equity,  and  cash flows for the years ended
December  31,  2002,  2001,  and  2000.  These  financial  statements  are  the
responsibility  of  the  Company management.  My responsibility is to express an
opinion  on  these  financial  statements  based  on  my  audit.

I  conducted  the audit in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards  require that I plan and
perform  the  audit  to  obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial statement presentation.  I believe that my audit provides a reasonable
basis  for  my  opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial positions of Amanasu Environment Corporation as
of  December  31,  2002 and 2001, and the results of its operations and its cash
flows  for  the  years  ended December 31, 2002 and 2001, and 2000 in conformity
with  accounting  principles generally accepted in the United States of America.



/s/ Robert  G.  Jeffrey
ROBERT  G.  JEFFREY

March  29,  2003
Wayne,  New  Jersey



                                       F4
<PAGE>
                         AMANASU ENVIRONMENT CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                                 BALANCE SHEETS
                                  DECEMBER 31,

<TABLE>
<CAPTION>

                                                              2002        2001
                                                           ----------  ----------
ASSETS
-------
<S>                                                        <C>         <C>

Current Assets:

Cash                                                       $  78,432   $  35,287
                                                           ----------  ----------
TOTAL CURRENT ASSETS                                          78,432      35,287

Fixed Assets:
    Automotive equipment                                      25,859      25,859
        Less accumulated depreciation                          7,960       3,060
                                                           ----------  ----------
NET FIXED ASSETS                                              17,899      22,799

Other Assets:
    Rent deposit                                               8,028       8,028
    Licensing agreement, net of accumulated
       amortization of  $4,632                               310,368           -
                                                           ----------  ----------

TOTAL OTHER ASSETS                                           318,396       8,028
                                                           ----------  ----------

TOTAL ASSETS                                               $ 414,727   $  66,114
                                                           ==========  ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
--------------------------------------

Current Liabilities:
Shareholder advance                                        $     100   $     100
Amount due for licensing agreement                            95,000           -
                                                           ----------  ----------

TOTAL CURRENT LIABILITIES                                     95,100         100
                                                           ----------  ----------

Stockholders' Equity:

Common stock:  authorized 100,000,000 shares of $0.001
par value; 41,950,816 and 41,247,816 respectively, issued
and outstanding                                               27,751      27,048
Additional paid-in capital                                   646,789     317,492
Deficit accumulated during development stage                (354,913)   (278,526)
                                                           ----------  ----------

TOTAL STOCKHOLDERS' EQUITY                                   319,627      66,014
                                                           ----------  ----------

Total Liabilities and Stockholders' Equity                 $ 414,727   $  66,114
                                                           ==========  ==========
</TABLE>


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

                                       F5
<PAGE>
                         AMANASU ENVIRONMENT CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                      STATEMENTS OF OPERATIONS AND DEFICIT
                      ACCUMULATED DURING DEVELOPMENT STAGE

<TABLE>
<CAPTION>


                                                                                            February 22, 1999
                                                           Year        Year       Year      (Date of Inception)
                                                           2002        2001       2000      To December 31, 2002
                                                         ---------  ----------  ---------  ----------------------
<S>                                                      <C>        <C>         <C>        <C>

Revenue:
---------
        Interest income                                  $    680   $   2,258   $      -   $               2,938
Expenses                                                   77,067     226,995     51,086                 357,851
                                                         ---------  ----------  ---------  ----------------------

Loss accumulated
 during development stage                                 $(76,387)  $(224,737)  $(51,086)  $            (354,913)
                                                          =========  ==========  =========  ======================


Net loss per share -
   Basic and Diluted                                     $      -   $       -   $   (.01)
                                                         =========  ==========  =========

</TABLE>

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



                                       F6
<PAGE>

                         AMANASU ENVIRONMENT CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001, AND 2000
<TABLE>
<CAPTION>

                                                                                  Deficit
                                                                                  Accumulated
                                       Common Stock              Additional       During
                                        Shares       Amount    Paid in Capital    Development Stage     Total
                                      -----------  ----------  ----------------  -------------------  ---------
<S>                                   <C>          <C>         <C>               <C>                  <C>

Balance, December 31, 1999                     -   $       -   $              -  $           (2,703)  $ (2,703)

Shares issued as fees connected with
acquisition of licensing agreement    13,000,000

Shares issued as compensation          3,512,500       3,512             31,613                         35,125

Shares issued for services             3,487,500       3,488             31,387                         34,875

Net loss for period                                                                        (51,086)    (51,086)
                                                                                        -----------  ----------

Balance, December 31,2000             20,000,000       7,000             63,000             (53,789)    16,211

Sales of common stock                     47,816          48             74,492                         74,540

Shares issued on exercise of option   20,000,000      20,000            180,000                        200,000

Shares issued as fees connected with
acquisition of licensing agreement     1,200,000

Net loss of period                                                                        (224,737)   (224,737)
                                                                                        -----------  ----------

Balance, December 31, 2001            41,247,816      27,048            317,492            (278,526)    66,014

Sales of common stock                     53,000          53            264,947                        265,000

Shares issued as fees connected with
licensing agreement                      650,000         650             64,350                         65,000

Net loss for period                                                                        (76,387)    (76,387)
                                                                                        -----------  ----------

Balance, December 31, 2002            41,950,816   $  27,751   $        646,789  $        ( 354,913)  $319,627
                                      ===========  ==========  ================  ===================  =========
</TABLE>

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

                                       F7
<PAGE>
                         AMANASU ENVIRONMENT CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>


                                                                           February 22,
                                                                           1999 (Date  of
                                                                           Inception)
                                              Year         Year    Year    to December
                                              2002        2001     2000       31, 2002
                                           ----------  ----------
<S>                                        <C>         <C>         <C>           <C>

CASH FLOWS FROM OPERATIONS:

Net loss                                   $ (76,387)  $(224,737)  $   (51,086)  $(354,913)
Charges not requiring the outlay of cash:
    Depreciation and amortization              9,532       3,060        12,592
    Common stock issued for services               -      16,211        51,086      70,000
                                           ----------  ----------  ------------  ----------

             NET CASH CONSUMED BY
                 Operating Activities        (66,855)   (205,466)            -    (272,321)
                                           ----------  ----------  ------------  ----------

CASH FLOWS FROM INVESTING
ACTIVITIES:

Acquisition of licensing agreement          (155,000)          -             -    (155,000)
Purchase of automobile                             -     (25,859)            -     (25,859)
Rent deposit for warehouse lease                   -      (8,028)            -      (8,028)
                                           ----------  ----------  ------------  ----------

            NET CASH CONSUMED BY
                INVESTING ACTIVITIES        (155,000)    (33,887)            -    (188,887)
                                           ----------  ----------  ------------  ----------

CASH FLOWS FROM FINANCING
ACTIVITIES:

Issuances of common stock                    265,000     274,540             -     539,540
Advances received in anticipation of
common stock sales                                 -         100             -         100
                                           ----------  ----------  ------------  ----------

            NET CASH PROVIDED BY
                FINANCING ACTIVITIES         265,000     274,640             -     539,640
-----------------------------------------  ----------  ----------  ------------  ----------

NET CHANGE IN CASH BALANCES                   43,145      35,287             -      78,432
                                           ----------  ----------  ------------  ----------

Cash balance, beginning of period             35,287           -             -           -
                                           ----------  ----------  ------------  ----------

Cash balance, end of period                $  78,432   $  35,287   $         -   $  78,432
                                           ==========  ==========  ============  ==========
</TABLE>


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

                                       F8
<PAGE>

                         AMANASU ENVIRONMENT CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2002


1.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
Organization  of  Company
The  Company  is  a  Nevada  Corporation,  formed  February  22,  1999, as Forte
International, Inc.  The name was changed to Amanasu Energy Corporation on March
27,  2001,  and  to  Amanasu  Environment  Corporation  on  October  18,  2002.

Business
During  the  year  2000,  the  Company  acquired  worldwide licensing rights for
nuclear  incinerator technology, known as "The Amanasu Furnace".  The Furnace is
a positive ion breeder incinerator process that converts domestic and industrial
wastes  to  ions  through  high  temperature  exposure.  The  resultant  residue
consists  of  oxygen  gas  and  inert  slag pellets.  On September 30, 2002, the
Company  was  granted  a  worldwide  exclusive  license  for  the production and
marketing  of  a  hot  water boiler which extracts heat energy from waste tires.

Development  Stage  Accounting
The Company is a development stage company, as defined in Statement of Financial
Accounting Standards No. 7.  Generally accepted accounting principles that apply
to  established  operating  enterprises  govern  the recognition of revenue by a
development  stage  enterprise  and the accounting for costs and expenses.  From
inception  to  December  31, 2002, the Company has been in the development stage
and  all  its  efforts  have  been  devoted to obtaining the worldwide licensing
rights  describe  above,  and  to  testing  the  related  equipment.  Except for
interest  on  bank  deposits  no  revenue had been realized through December 31,
2002.

Basis  Of  Presentation
The Company has incurred losses from inception to December 31, 2002 of $354,913.
Capital was raised during 2001 and 2002 in the amounts of $274,540 and $265,000,
respectively,  through  the  issuance  of  20,047,816  shares and 53,000 shares,
respectively,  of  common stock.  This is expected to provide adequate financing
to  allow  the  Company  to  begin  using  its  licensing  rights.

Cash
For  purposes  of  the statements of cash flows, the Company considers all short
term  debt  securities  purchased  with a maturity of three months or less to be
cash  equivalents.


                                       F9
<PAGE>

                         AMANASU ENVIRONMENT CORPORATION
                         -------------------------------
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2002


1.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONT'D)


Fixed  Assets
Fixed  assets  are recorded at cost.  Depreciation is computed using accelerated
methods,  with  lives  of seven years for furniture and equipment and five years
for  computers  and  automobiles.

Licensing  Agreement
During  the year 2000, the Company issued 13,000,000 shares of common stock to a
company  that  is wholly owned by the Company's president as a fee for arranging
for  the  acquisition  of  the  licensing  agreement for the nuclear incinerator
technology.  Another  1,200,000 shares was issued in 2001 in connection with the
acquisition  of  this  agreement.  No value has been assigned to this intangible
asset.

The license for the hot water boiler was acquired at a cost of $250,000 cash and
650,000  shares  of  common  stock.  The  stock  was  valued  at $.10 per share,
bringing  the  total cost to $315,000.  Amortization of this cost is provided by
the  straight  line  method  using  a life of 17 years, which is based on patent
life.

Income  Taxes
Deferred  income  taxes are recorded to reflect the tax consequences or benefits
to future years of any temporary differences between the tax basis of assets and
liabilities,  and  of  net  operating  loss  carryforwards.

Use  Of  Estimates
The  preparation  of  financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect  certain  reported  amounts  and  disclosures  of  contingent  assets and
liabilities  at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting periods.  Actual results could differ
from  those  estimated.

Advertising  Costs
The Company will expense advertising costs when the advertisement occurs.  There
has  been  no  spending  thus  far  on  advertising.

Segment  Reporting
Management  will  treat  the  operations  of  the  Company  as  one  segment.

                                      F10
<PAGE>

                         AMANASU ENVIRONMENT CORPORATION
                         -------------------------------
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTE TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2002


1.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONT'D)

Common  Stock
During  2000,  the  Company  issued  13,000,000  shares of its common stock to a
corporation wholly owned by the Company's president in connection with obtaining
a license of the nuclear incinerator technology.  An additional 1,200,000 shares
of  common  stock  was  issued  during  2001  in  connection  with obtaining the
agreement.  In  addition,  during  2000  the  Company issued 7,000,000 shares of
common  stock  as  compensation  for  salaries  to its officers and for services
provided  by  consultants.  Of  this  total, 3,512,500 shares were issued to two
officers  as  salaries for the period from November 1, 1999 to December 31, 2001
which  were  valued in the aggregate at $35,125.  Of this amount, 270,300 shares
($2,703)  were  allocated  to  the  1999 period, with the balance of such shares
allocated  equally  between  2000  and  2001.  The remaining 3,487,500 shares of
common  stock issued for services went to various consultants in connection with
services  rendered during the 2000 period.  These shares were valued at $34,875.

During  the  year  2002,  650,000  were  issued as part of the consideration for
obtaining  the  license  for the hot water boiler technology.  These shares were
valued  at  $65,000.

2.     RELATED  PARTY  TRANSACTIONS

A  total  of  13,000,000 shares was issued during the year 2000 to a corporation
which  is  controlled by the president of the Company.  These shares were issued
as compensation for arranging the acquisition of the licensing agreement for the
nuclear  incinerator  technology.  An  additional 3,512,500 shares was issued to
officers  of  the  Company  during  the year 2000 as compensation for the period
November  1,  1999  to  December  31,  2001.

An  option  for  an  additional  20,000,000 shares was issued to the corporation
which  is  controlled  by  the  president  of the Company in connection with the
acquisition  of  the licensing agreement.  The exercise price of this option was
$.01  per  share.  This  option  was  exercised  in  May  2001.


                                      F11
<PAGE>

                         AMANASU ENVIRONMENT CORPORATION
                         -------------------------------
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTE TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2002
                                -----------------

3.     INCOME  TAXES

The  Company  experienced  losses  during  2000,  2001,  and  2002 which totaled
$352,210.  As  a  result,  it  has incurred no Federal income tax.  The Internal
Revenue  Code  allows  net  operating  losses  (NOL's) to be carried forward and
applied  against  future  profits  for  a period of twenty years.  The potential
benefit  of  the NOL has been recognized on the books of the Company, but it has
been  offset  by  a  valuation  allowance.  If  not  used,  a portion of the NOL
carryforward  will  expire  each  year  during  the  years  2019  to  2022.

Under  Statement  of  Financial  Accounting  Standards  No.  109, recognition of
deferred  tax  assets  is  permitted  unless it is more likely than not that the
assets  will  not be realized.  The Company has recorded noncurrent deferred tax
assets  as  follows:

                   Deferred  Tax  Assets     $117,638
                   Valuation  Allowance       117,638
                                              -------
                   Balance  Recognized       $      -
                                              =======


4.     EARNINGS  PER  SHARE

Year  2002
<TABLE>
<CAPTION>

                      NET LOSS   AVERAGE SHARES OUTSTANDING   PER SHARE AMOUNT
<S>                  <C>         <C>                          <C>
LOSS ALLOCABLE TO
COMMON SHAREHOLDERS  $ (76,387)   41,401,483                 $               -
</TABLE>

Year  2001
<TABLE>
<CAPTION>

                      NET LOSS   AVERAGE SHARES OUTSTANDING   PER SHARE AMOUNT
<S>                  <C>         <C>                         <C>
LOSS ALLOCABLE TO
COMMON SHAREHOLDERS  $(224,737)                  35,581,866  $            (.01)
</TABLE>

Year  2000

<TABLE>
<CAPTION>

                      NET LOSS   AVERAGE SHARES OUTSTANDING   PER SHARE AMOUNT
<S>                  <C>         <C>                         <C>
LOSS ALLOCABLE TO
COMMON SHAREHOLDERS  $ (51,086)                   6,819,672  $            (.01)
</TABLE>


Options  to  purchase  common stock were outstanding at the end of 2000 but were
not  included  in  the  computation of earnings per share because such inclusion
would  have  an  antidilutive  effect.

                                      F12
<PAGE>

                         AMANASU ENVIRONMENT CORPORATION
                         -------------------------------
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTE TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2002

5.     RENTALS  UNDER  OPERATING  LEASES

The  Company conducts its operations from leased office and warehouse facilities
in  Seattle,  Washington  under  noncancelable  operating  leases  which  expire
September 30, 2003 and October 31, 2004, respectively.  In addition, the Company
leases  a  Seattle  apartment  under  an operating lease that expires August 31,
2003.

The following is a schedule of future minimum rental payments required under the
above  operating  leases  as  of  December  31,  2002.

<TABLE>
<CAPTION>

Year ending
December 31,           Amount
 -------------          ------
<S>                    <C>
2003                  $43,118
2004                   16,507
                      -------
                       59,625
                     --------
</TABLE>

6.     SUPPLEMENTAL  DISCLOSURES  OF  CASH  FLOWS  INFORMATION

There  was  no  cash paid for interest or income taxes during any of the periods
presented.

The  following  non-cash  financing  and  investing  activity  occurred:

     Shares  of  common  stock  were  issued  for services during the year 2000,
     totaling  20,000,000.  Of this total, 13,000,000 shares were treated as the
     cost  of  obtaining  the  nuclear  incinerator licensing agreement, and the
     remainder  were  treated  as  the  cost  of  other  services.

     An  additional  1,200,000 shares were issued during 2001 in connection with
     obtaining  the  licensing  agreement.

     During  the  year  2002,  650,000  shares  were  issued  in connection with
     obtaining  the  hot  water  boiler  licensing  agreement.  In addition, the
     Company  obligated  itself to pay $250,000 as part of the consideration for
     this  agreement.  As  of  December  31,  2002,  $95,000  had not been paid.