----

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-KSB/A

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

For the Fiscal Year Ended December 31, 2007

 COMMISSION FILE NO. 0-32905

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.) |

115 East 57th Street 11th Floor, New York, NY 10022

(Address of principal executive offices)

646-274-1274

(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:

Common Stock, no par value

                   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 [o] No                    [x] Yes [o] 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. [x]                    State the issuer's revenues for its most recent fiscal year: $-0-.                   The aggregate market value of the voting stock held by non-affiliates of the                   registrant on January 1, 2007 computed by reference to the price at which the stock was sold on that date:                   $2,442,694.80.                   The number of shares outstanding of the registrant's Common Stock, no par value, as of April 15,2007 was 44,000,816 common shares.                 

1

## 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, the Company's name was changed to Amanasu Energy Corporation, and                    on November 13, 2002, its name was changed to Amanasu Environment Corporation.                

                    It has acquired the exclusive, worldwide license rights to a high temperature furnace, a hot                    water boiler, and ring-tube desalination methodology. At this time, the Company                    is not engaged in the commercial sale of any of its licensed technologies. Its                    operations to date have been limited to acquiring the technologies, conducting                    limited product marketing, and testing the technologies for commercial sale.                    For each such technology, proto-type or demonstrational units have been                    constructed by each licensor or inventor of the technology. The Company has                    conducted various internal tests on these units to determine the commercial                    viability of the underlying technologies. As a result of such testing, the Company                    believes that the products are not commercially ready for sale, and that product                    refinements are necessary with respect to each of the technologies.                    In addition, the Company may seek joint venture or other affiliations with                    companies competitive in each respective product market whereby the Company                    can capitalize on the existing infrastructure of such other companies, such                    as product design and engineering, marketing and sales, and warranty and                    post-warranty service and repair. The Company believes that its marketing                    efforts to sell any of its products will be limited until such time as it can complete                    the refinements of its technologies. The Company can not predict whether                    it will be successful in developing commercial products, or establishing affiliations                    with any operating company.                

                    On  June  8,  2000, the Company 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 a license agreement with                    Masaichi Kikuchi, the inventor of the technology, for a period of 30 years.                    The Company issued 1,000,000 share of common stock to the inventor and                    200,000 shares of common stock to a director of the inventor's company. Under the                    licensing agreement; the Company is required to pay the licensor a royalty of                    two percent of the gross receipts from the sale of products using the technology.                    If the Company fails to comply with any provision of the agreement after a 90-day                    notice period, the licensor may terminate the agreement.                

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

                    On June 30, 2003, the Company acquired the exclusive worldwide rights to produce                    and market a patented technology that purifies seawater, and removes hazardous                    pollutants from wastewater.  The rights were obtained pursuant to a license                    agreement with Etsuro Sakagami, the inventor, for a period of 30 years.                    As consideration for obtaining the license, the Company issued 1,000,000 shares                    to the inventor, and 50,000 shares to a finder. The licensor is entitled to receive                    a two percent royalty on the gross receipts from the sale of the products related                    to the technology. If the Company fails to comply with any provision of the                    agreement after a 90-day notice period, the licensor may terminate the agreement.                

2

#### Current

                    The Company's current business plan is the result of recent operational results                    during the fiscal year of 2007 and may change due to the amount of risk accompanied by the                    nature of its business. The Company's business is run through four  branches, with each respective                    branch focused on a particular environmental market: Amanasu Echo Frontier is involved in waste management technologies;                    Amanasu Energy, formerly Felice, is involved in solar panel technology;                    Amanasu Shinwa, formerly Shinwa Yosetsu, is involved in water purification; and finally as of September 21st 2006                    a newly formed Amanasu Water which is involved                    in drinking water. All 4 branches are at various ownership levels managed through a 91% controlled holdings                    company, Amanasu Holdings established in December 2005.                

                    The Company's principal offices are located at 115 East 57th Street 11th Floor New York, NY 10022, and its telephone number is (212) 939-7278.                    The Company also maintains an office at 1-3-38 Roppongi, Minatoku, Tokyo, 106-0032, Japan.

The Chairman and Chief Executive Officer Atsushi Maki, has set a goal to enter into the NASDAQ global market in 2 years time. The Company meets all requirements except one. The Company's main focus for the next 12 months will be to raise $30,000,000, and acquire public companies in both the United States and Japan.

***Echo Frontier.***                    Population growth, and ever decreasing land mass, have been key factors in the research and development of                    waste management methodologies. The primary technology used in many Asian countries today is                    the waste incinerator. Conventional incinerators, though effective in reducing the amount of space                    waste occupies, still leave environmentally harmful and unusable by-products.                    Amanasu Echo Frontier was established by Amanasu Environment and former employees of Kogure in December 2005                    and is located at 1-24-8 Iwagami-cho, Maebashi, Gunma, Japan.                    Its operations consist of the sale and manufacturing of general and industrial waste incinerators,                    and medical waste treatment plants using the                    6 proprietary technology rights purchased from Kogure. Its Rotary Kiln incineration system has two levels of                    waste processing that effectively reduce waste size in a cost effective manner. The ash by-product from the                    Rotary Kiln system can be further processed using Amanasu Echo Frontier's Swing Melter Incinerator.                    The Swing Melter's resulting residue which is primarily carbon pellets, can be recycled to be used for raw building materials involved                    in foundation construction due to the carbon pellets strong molecular structure.                

***Energy Development.***                    Energy Development, formerly Felice, was renamed on September 21st 2006 as a subsidiary of Amanasu Holdings.                    As the name suggests, Energy Development is focused on technologies that produce energy                    through environmentally friendly means. The leading technology in this arena is the photovoltaic cell,                    or more commonly known as Solar panels.                    The Solar  panel industry due to recent technological developments                    has never been more lucrative. With the recent advancements of residential                    unit powering modules, the demand of solar panels in the residential market                    will only continue to increase. With increased demand, costs of production have                    been reduced in recent years. The Company believes with the current market conditions,                    it is a good point in time to pursue the Solar power movement.                

                    Sanyo is a world leader in Solar panel technology, with over 30 years of experience                    in the industry. Sanyo is regarded as one of the world's top Solar power technology                    provider. In 2003, Sanyo's 200W photovoltaic module proved to have the world's                    highest conversion efficiency marketed (cell conversion efficiency of 19.5% and                    module efficiency of 17.0%). Sanyo's HIT (Heterojunction with Intrinsic Thin layer)                    solar modules have more power generating capacity per area, and perform better at                    higher temperatures. We believe that Sanyo's product has the required elements                    for success in the residential market. Thus, Energy Development will be primarily involved in the sale                    of Sanyo's Solar panel product line on a commission basis in Japan.                

***Amanasu Shinwa.***                    Amanasu Shinwa, was formerly a subcontractor for the Company, under the name Shinwa Yosetsu. Originally, Shinwa Yosetsu was                    to refine and manufacture the Ring-Tube Desalinization technology held by Amanasu Environment; however, with                    lack of commercial viability Shinwa Yosetsu was fully acquired by Amanasu Environment under Amanasu Holdings                    and Shinwa Yosetsu's existing operations were put into priority. Amanasu Shinwa is primarily involved in                    manufacturing water purification plants for use in pools, fitness centres etc, and seawater to fresh water                    purification plants.                

***Amanasu Water.***                    Keeping in line with the Company's goal of creating a cleaner and healthier future, a big part of the earth's future is water.                    Water is likely the single most important part of our daily lives. Amanasu Water will be involved in the sale of Amanasu Sui-So-Sui, or Amanasu Hydrogen-ion water.                    Hydrogen-ion water is a new product and is said to have effective and efficient anti-oxidant properties.                    Even when compared with well know anti-oxidants such as Vitamin C, Vitamin E, Co-enzyme Q10,                    is much more effective due to Hydrogen-ion water's unique ability to enter into the cell's mitochondria, the cell's power plant.                    There it acts as an anti-oxidant, without interfering with the bodies normal oxidation reactions.                

3

#### Amanasu Environment's Business Overview

#### PRODUCTS

#### Amanasu Environment

##### Amanasu Furnace

                    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 generating extremely high                    temperatures in 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 is vented out of the system. The process produces no toxins, smoke,                    ash, or soot.                

                    The Company believed that the prior pricing structure for its furnaces                    was not competitive, and was seeking ways to lower its manufacturing                    costs. The Company was attempting                    to locate alternate suppliers that were more cost effective than currently identified                    ones. At the same time the Company also attempted to re-design certain components of the furnace                    so as to reduce the manufacturing cost per component. The aim was to                    alter the function of the original furnace, which managed daily waste to one that managed                    specific waste (i.e. industrial, and/or medical waste); however, the Company was confronted                    with several difficulties and started to reconsider the alteration.                    At the same time, the Company was also seeking affiliations with companies competitive in the furnace market in Japan.                    Kogure Works, had an established infrastructure, manufacturing more developed furnaces, comparatively lower in cost.                

                    The Company then entered into an agreement with Kogure Works Co sharing its technologies and marketing resources,                    while making use of Kogure's manufacturing expertise.                    The pricing of the product to be developed was $100,000/t and eventually reducing the price by 20% was ideal.                

                    As discussed above, the Company expected to alter the function of the Amanasu                    Furnace in order to specify its market place; however, there has not been                    a strong demand for their product due to the cost of manufacturing a unit.                    The Company did not reach the successful and                    complete refinement and cost reduction as they had planned; therefore,                    no further production and investment on this technology has been determined,                    and there is no further business relation with Kogure Works Co., Ltd. ("Kogure")                    on this project. The Company does not know whether the project will continue into the future;                    however, the exclusive rights of manufacturing and sales of the Amanasu Furnace will remain with the Company.                

##### Fire Bird Boiler

                    The Fire Bird Boiler technology is a patented process, which incinerates                    whole waste tires in a non-polluting manner emitting heat or steam in the                    incineration process.  The Fire Bird Boiler provides combustion efficiency                    and seeks to minimize dioxin generation which is generally a by-product of                    imperfect combustion.                

                    The Company believes that the Fire Bird Boiler is an effective dual purpose technology                    for incinerating waste tires and generating heat; however, the Company                    has recognized that the supply of waste tires in certain markets, including the                    United States, has been greatly reduced due to the effect of recent efforts to recycle                    waste tires. Thus, the reduction in the available supply of waste tires in these markets                    has limited the market potential of the boiler. As a result, the Company has been                    confronted with severe marketing difficulties for Fire Bird at present, and will seek                    to refine the boiler to accept other forms of waste, such as hazardous waste.                

                    Even though the Company decided to seek refinement to the boiler to accept other                    forms of waste, to be flexible in the market,                    the Company has determined no further production and/or investment on this                    technology. The estimated refinement time was not feasible for the Company, thus                    no further business relations will continue with Kogure on this project. The                    Company does not know whether the project will continue into the future; however,                    the exclusive rights of manufacturing and sales for the Fire Bird Boiler will                    still remain with the Company.                

##### Ring-tube Desalinization Equipment

                    The Ring-Tube technology is used as a filter to purify seawater into drinking                    water and also treats sewage and waste water, by removing pollutants and bacteria.                    The equipment filters bacteria and other impurities through its fine rings                    and comb type filter and reduces the presence of inhibiting scales on the                    equipment.  The impurities are then destroyed by the high pressure and                    temperature in the ring-tube.  The Company believes that its technology is                    more cost efficient to construct and operate than conventional RO equipment.                    Its fresh water recovery rate is 95% compared with the less than 40% for a RO method.                    Moreover, water produced from the Company's technology retains a certain                    amount of salt and minerals and does not required a pH adjustment. RO filtration                    removes all minerals and salt, requiring minerals to be added to improve flavor,                    and an adjustment to reduce pH levels.  The reject brine resulting from RO                    filtration is discharged in the ocean creating higher salt concentrations in                    such areas, however, the by-product from the Company's  technology is sufficiently                    condensed allowing it to be sold as a salt product.                

                    The Company believes that the existing capacity of the Ring-Tube Desalination                    equipment is commercially insufficient for its targeted markets because                    the equipment is hand-manufactured, which leads to high cost production.                    There are many similar production companies, which promote water                    purification systems in Japan therefore reducing the cost of manufacturing                    is the key to succeed in the competitive market.  Consequently, the Company                    entered into an agreement with Shinwa Yosetsu, a subcontract manufacturing                    company which could manage Sakagami's technology under instructions to lower production cost.    			

                    With the acquisition of Shinwa Yosetsu, Amanasu Shinwa now has furnace technology,                    as well as maintenance management businesses and welding businesses, and                    maintain the top level of operation in Japan. With current developments the                    Company has decided to discontinue the Ring-Tube Desalination project, and                    in 2006, the Company will focus only on producing and marketing water                    purification systems and seawater desalination systems utilizing and                    employing new technologies under the management of Amanasu Shinwa.				

4

#### Echo Frontier

##### Rotary Kiln

                    Echo Frontier's Rotary Kiln is an environmentally friendly general and industrial waste incineration system.                    They system has an advanced                    General or industrial waste is first shred and crushed into smaller pieces and piled in a waste pit.                    A ceiling crane then loads the dry waste onto a conveyer, where it is delivered into the Rotary Kiln injector device.                    The injector device contains two parts: Injector screw and injector shoot. These two devices protect the Rotary Kiln                    burn chamber from outside temperature influence, and also prevents gas reflux from the Rotary Kiln chamber itself.                    The injector device is also protected by a cooling jacket to regulate the extreme temperature effects of the Rotary Kiln.                    The shredded and crushed waste is then injected into the Rotary Kiln burn chamber where it is incinerated at 1400 C.                    The Rotary Kiln rotates to better distribute and equalize the incineration process. The Rotary Kiln itself has a                    patented coating in its interior to shield it from the extreme temperatures. After the initial incineration process,                    the waste is delivered into a second burn chamber tower, where further incineration is done. The remaining ash                    is cooled to 180 C in a cooling tower and dioxins, and carbon monoxide are filtered and the remaining smoke                    is released through a smoke stack. The resulting ash is 1/10 of its original volume and can be further processed                    with the Swing Melter to be used as an ingredient for construction materials. The entire Rotary Kiln system has an advanced cooling system that makes it possible                    to run 24 hours a day. Besides the initial shredding process, temperature regulation and waste delivery is almost                    entirely automated.				

##### Swing Melter

                    Echo Frontier's Swing Melter is a incineration system specifically for pre-incinerated ash, such as the                    resulting ash from the Rotary Kiln incineration system. Like the Rotary Kiln, the waste, in this case ash,                    is loaded and delivered via a conveyer to a grinding chamber, where the ash is reduced to less than 5 mm grains.                    While being delivered on another conveyer, the ground ash passes a magnet removing any metallic elements.                    The metal free ash is then lifted via a bucket elevator into another hopper and is then injected into                    the Swing melter burn chamber via an injector device similar to that of the Rotary Kiln. The ash is                    slowly injected over a period of 45 minutes in order to maintain the Swing Melter's internal temperature.                    The Swing Melter chamber constantly rotates from left to right to fully incinerate the injected ash.                    Because of this consistent 45 minute injection process, the cooling process is much more efficient,                    reducing the amount of damage to the Swing Melter, and thus reducing the amount of maintenance needed. The                    resulting by-product is molecularly strong carbon pellets which can be recycled to be used as an ingredient                    in concrete and foundational construction. The Swing Melter system hourly capacity is 150 kg/hour making its daily                    capacity 50 t /day.            	

#### Energy Development

##### Sanyo HIT (Heterojunction with Intrinsic Thin Layer) Photovoltaic Panel

                    Energy Development will place its efforts in marketing in Japan the industry leading HIT solar panel by Sanyo.                    HIT solar cells are composed of thin mono-crystalline silicon wafers, surrounded by ultra-thin                    amorphous silicon layers. The proprietary solar cell configuration by Sanyo is said to improve                    boundary characteristics and reduce power generation losses. The HIT solar panel has the highest                    module efficiency (17%) in the world, even at higher temperatures effectively giving the consumer                    more energy conversion per unit area. Sanyo has also made its HIT solar panels pre-equipped                    with plug-n-play connectors, touch safe junction boxes, and other features that make installation                    and maintenance relatively simple. The HIT solar panels are subjected to strict inspections and                    maintain top industry standards, which is why Sanyo backs its product by a 20 year power out-put warranty,                    and a 2 year workmanship warranty.                

                    Sanyo also provides customers with a user friendly 3 piece system, which regulates energy generated.                    The HIT solar panels first collects energy from the sun, a 100% emission free process, which accumulate in                    an energy junction box. This junction box then transfers stored energy to power conditioners                    which regulate power throughout the house. The unused power is then stored in an energy reserve unit.                    later use, or the consumer has the option of selling the power                    back to power companies. All of the activities of the system can be easily monitored by a control panel                    directly connected to the power conditioners. The control panel features an EL-packlight illuminated                    viewing screen, which displays power generation statistics ,and reduction of greenhouse gas emissions values.				

					The use of HIT solar panels saves the consumer a considerable amount of energy costs in the long run,					and also effectively reduces greenhouse gas emissions by 40%.				

#### Amanasu Shinwa

##### Kijimuna Water Purifier

                 	Amanasu Shinwa's Kijimuna is an industrial strength water purifier that uses an automated mineral fortification system                     to effectively clean small bodies of water. Kijimuna's unique design allows it to be used with various bodies of water; and                     in cases where a body of water has at least 3 meters depth, Kijimuna has no need for                     a water pump. The resulting purified water has a mineral content between 50 ppm and 200 ppm, with no                     PH balancing required.                 

#### Amanasu Water

##### Amanasu Hydrogen-ion Water (Sui-So-Sui)

                    Amanasu Water's principle product is a soon to be launched drinking water called "Sui-So-Sui",					or Hydrogen-ion water. Amanasu Hydrogen-ion water will be primarily marketed through					fitness clubs, and professional sports arenas, and pachinko parlors across Japan, with future plans to expand its operation					into North America. Processing and packing will be done by utilizing BMD Co,					facilities in Japan.				

					Hydrogen-ion water greatly reduces harmful activated oxygen ( free radicals ) in the  body system,					thus, maintaining healthy cells and cellular activity. The patented process dissolves large amounts					of hydrogen into the water and stabilizes it to create an oxidation reduction electric potential					of up to -500mv. The negative values indicate the potential for the reduction of free radicals caused					by oxidation.				

					Hydrogen-ion water has various applications apart from normal consumption. It can					be used as a hair tonic after showering, an eye rinse, and for other daily uses. Amanasu Hydrogen-ion Water					will be sold in 300 ml pouches starting November 2006.				

5

##### MARKETING OF TECHNOLOGIES.

                    The Company does not expect to continue the marketing and sale of its                    Amanasu Furnace, FireBird Boiler, and Ring-Tube Desalination                    equipment until a contract ca be made with a third-party                    who sub-licenses the technologies or there is a potential opportunity and solid                    business plan to restart or commence a new production line in regard to the three technologies.                

##### COMPETITION.

                    Generally, the industries in which the Company expects to compete in, namely                    waste disposal and desalination, are highly competitive. These industries are                    populated by many national or international companies, with significantly greater                    resources than that of the Company. In the waste industry, many of these                    competitors dispose of toxic waste in tradition methods such as landfills, and                    incinerators. 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. Desalination equipment,                    which has been used extensively in the Middle East and elsewhere, represents                    significant competition to the Company's technology.                

##### PROPRIETARY RIGHTS.

                    The Company obtained the exclusive world-wide rights to the Amanasu Furnace for a                    period of 30 years commencing June 8, 2000 pursuant to the licensing agreement                    with Mr. Kikuchi, the inventor. In 1996, Mr. Kikuchi, the inventor, 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.                

                    The Company obtained the exclusive world-wide rights to the Fire-Bird Boiler for a                    period of 30 years commencing September 30, 2002 pursuant to the licensing                    agreement with the owner of such rights. In November 2001, the inventor of the                    Fire-Bird Boiler received a patent in the United States (#6,321,665 filed                    October 3, 2000). The patent expires 20 years from the date of original filing.                

                    The Company obtained the exclusive world-wide rights to the Ring-Tube Desalination                    technology for a period of 30 years commencing June 30, 2003 pursuant to the                    licensing agreement with the owner of such rights. The inventor of the                    technology has filed patents in Japan for various aspects of the technology. The                    patents were filed in July 2002, and the patents expire 20 years from the filing                    date.                

                    The Company considers the rights to the three technologies proprietary, and intends                    to use a combination of trade secrets, non disclosure agreements, license                    agreements, and patent laws to protect its proprietary rights.                

##### 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 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 will make 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                    may not always be 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                    technologies will comply with all governing regulations in those countries that                    it intends to sell its products. This premise is based upon the results of                    operations of the proto-type units for each of the technologies.                

                    As of December 31, 2006, the Company has two employees, Shuichi Yamada,                    Izuo kato, located at its New York, Vancouver, and Tokyo offices, respectively, and a regulatory                    assistant in its Tokyo office. The Company has no collective bargaining                    agreements with its employees and believes its relations with its employees are good.                    The Company didn't have a consultant thus no payment was made to a consultant during 2006.                

### Item 2. Description Of Property

                The Company's executive offices are located at 115 East 57th Street 11th Floor New York, NY 10022 and Vancouver, British Columbia.                The total premises are 2,000 square feet and are subleased                at a monthly rate of $2,500 under a lease agreement which                expires September 30, 2007. The Company shares the space with Amanasu                Technologies Corporation, a reporting company under the Securities Exchange                Act of 1934.In addition, the Company maintains an office at 1-3-38 Roppongi, Minatoku, Tokyo,                106-0032, Japan. The premises are 1,000 square feet and are leased on an agreement                which expires December 31, 2006 at $1,700 (200,000 Yen) per month, and also an                apartment at 1-3-40 Roppongi, Minatoku, Tokyo at $10,000 (1,250,000 Yen) per month                under a lease agreement which expires August, 2006.                The Company believes additional lease space at these locations will be available to                support its future growth.           	

### Item 3. Legal Proceedings

None.

### Item 4. Submission Of Matters To A Vote Of Security Holders

None.

6

## PART II

### Item 5. Market For Common Equity And Related Stockholder Matters

                	The Company's common stock has traded on the NASDAQ OTC Bulletin Board since October            		2002 under the symbol "AMSU".            	

                    The table below sets forth the high and low bid prices of the Common stock of the Company                    as reported by NASDAQ. The quotations reflect inter-dealer prices, without                    retail mark-up, mark-down, or commissions and may not necessarily represent                    actual transactions. There is an absence of an established trading market for                    the Company's common stock, as the market is limited, sporadic and highly                    volatile. The absence of an active market may have an effect upon the high and                    low priced as reported.            	
| 2007                                  |   | Low Bid | High Bid |
|---------------------------------------|--------|---------|----------|
| 1st Quarter Ending March 31, 2007     | $      | 0.08    | 0.13     |
| 2nd Quarter Ending June 30, 2007      |   | 0.09    | 0.15     |
| 3rd Quarter Ending September 30, 2007 |        | 0.10    | 0.10     |
| 4th Quarter Ending December 31, 2007  |        | 0.13    | 0.75     |
| 2006                                 |   | Low Bid | High Bid |
|--------------------------------------|--------|---------|----------|
| Fiscal Year Ending December 31, 2007 | $      | 0.10    | 0.55     |

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

#### Equity Compensation Plan Information

| Equity Compensation Plan Information                           |
|----------------------------------------------------------------|
||
| Equity compensation plans approved by security holders (1)     | -0- | -0- | -0- |
| Equity compensation plans not approved by security holders (2) | -0- | -0- | -0- |
| Total                                                          | -0- | -0- | -0- |

#### Recent Sales Of Unregistered Securities - Deposits for Common Stock

                    The most recent  sale of unregistered  securities was during the quarter ended June 30, 2003, 20,000 shares were allotted to Reraise                    Corporation, a private Japanese company, at a price of $4.99 per share for total                    consideration of $99,900. In July 2005,  the Company  made the repayment of  the amount of $ 100,000 to Reraise and                    completed the liability.        		

#### Private  Placement

                    During  the  2005 fiscal year,  the  Company  issued  1,000,000  shares  of  common  stock,                    realizing  cash  proceeds  of  $3,500,000.  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.        		

#### Fiscal Year Ended December 31, 2007

The Company's sales for the fiscal year ended December 31, 2007 were $729,089 compared to $ 472,318 for the fiscal year ended December 31, 2006. The increase is to due the presence of Amanasu Water, formed on September 21, 2006. 

Interest income for the fiscal year ended December 31, 2007 was $55,280 compared to $61,634 for the same period in 2006. The decrease is due to redemption of certificates of deposit resulting in lower interest received and lower interest rates.

Miscellaneous Revenue for the fiscal year ended December 31, 2007 was $11,531,compared to $10,718 for the same period in 2006. The increase is due principally to the presence of Amanasu Holdings, formed on December 16, 2005, and Subsidiaries acquired during the fourth fiscal quarter ending December 31, 2005, and the first fiscal quarter ended March 31,2006. The Companies collects consulting income from all its subsidiaries.

Total expenses for the fiscal year ended December 31, 2007 was $1,037,330 compared to $1,510,675 for the same period of 2006. The decrease is due principally to impairment of investments, effectively reduces expenses.

Cost of goods sold for the fiscal year ended December 31, 2007 was $572,026 compared to $349,674 for the same period of 2006. The increase was due principally to the presence of Amanasu Holdings, formed on December 16, 2005, and Subsidiaries acquired during the fourth fiscal quarter ending December 31, 2005, and the first fiscal quarter ended March 31,2006.

During the year of 2005, the Company issued 1,000,000 shares of common stock, realizing cash proceeds of $3,500,000. These sales were exempt under Regulation S under the Securities Act of 1933, as amended, due to the foreign nationality of the relevant purchasers.

During the three months ended September 30, 2006 Soae, a Japanese electronics manufacturer, invested $426,014 into Amanasu Holdings in exchange for 4,000 shares of Amanasu Holdings.

7

#### Plan Of Operations

***Amanasu Environment.***The Company was organized February 22, 1999.                    Its operations to date have been limited to obtaining exclusive licensing rights                    for technologies, conducting preliminary marketing efforts, and conducting                    product testing.				

                    As of August 4th, 2005, Kogure's six proprietary rights (See "Patents" below)                    to the license of the technologies and parts in connection with constructing                    the rotary kiln and its title w	ere transferred to Amanasu Environment Corporation,                    and the amount of $290,000 that the Company previously funded to Kogure for                    marketing and promotion purposes replaced in as transfer fee.  As a result,                    the Company possesses the exclusive worldwide right to the product, and can                    receive royalties from the sales of the rotary kiln by other companies including MINMETAL.        		

The Company's current target is to enter into the NASDAQ Global Market within 2 years. The goal for the Company is to raise $30,000,000 in capital in order to meet its final pre-requisite to enter the Global market.

***Amanasu Holdings.*** As of December 16th, 2005, the Company established , Amanasu                    Holdings Corporation ("Amanasu Holdings"), located at 1-5 Suda-cho, Chiyoda-ku,                    Tokyo, as a subsidiary company of Amanasu Environment Corporation with                    100 % control. On September 21st 2006 an electronics manufacturer Soae invested 50,000,000 Yen ($500,000)                    into Amanasu holdings, thus holding 9% of Amanasu holdings. On the same day Amanasu Holdings                    Corporation has begun to implement plans to reorganize its subsidiary companies in                    an effort to concentrate the entire organization on environmental technologies/methodologies.                    As explained briefly above in the Company overview, Amanasu Holdings subsidiary companies                    will focus on four main markets within the environmental technology industry: Energy production,                    waste management, water purification, and drinking water. Amanasu Echo Frontier will continue its                    operations with its waste incineration technologies (Rotary Kiln, and Swing Melter). Amanasu Shinwa will also                    continue its operations in water purification plants for pools, and fitness clubs, as well                    as its sea water purification plants operations. Felice, originally running beauty salons under                    a membership system, will change its business plan to become Energy Development. Energy Development                    will be involved in the sale and marketing Sanyo HIT solar panels in Japan. Newly formed                    Amanasu Water will be involved in sales of Amanasu Hydrogen-ion water, a drinking water beginning its sales in Japan on November 2006 with future plans to expand into                    North America, and South East Asia. The remaining subsidiary companies BJSS, Petstyle,                    and Japan Amanasu Project Support were not able to be accommodated  within the newly organized                    plans, thus will be open for sale to any organization that have interest in its respective industry.

***Amanasu Shinwa.***Amanasu Holdings invested $84,228 (10,000,000 Yen) on December 16th, 2005 into Amanasu Shinwa for the follow items.						(i) The Production of a model water purification plant managed by Amanasu Shinwa.						(ii) 5 Water purification units for pools at sports clubs, which will be produced and						distributed in Japan for the next 12 months                

                    Amanasu Shinwa has also started developing a new plant using ozone sterilization technologies                    , and are expecting an increase of sales by the new development.                    The new plant will be used for swimming pools, public bathing houses, kitchens and the wide                    range of other market places are being prospected.  The expecting sales for 2008 will be 300,000,000 Yen.				

***Amanasu Water.***                    As of September 21st Amanasu Holdings invested 50,000,000 Yen ($500,000) establishing                    Amanasu Water, which will be involved in the sale and marketing of "Amanasu Sui-So-Sui" or Amanasu Hydrogen-ion water.                    Amanasu water will subcontract BMD Co's processing and packing facilities and will begin distribution                    of Amanasu Hydrogen-ion water through fitness clubs and professional sports arenas across Japan                    launching on November 2006. Amanasu Hydrogen-ion water will be sold in 300 ml pouches, and 15 yen from each sale will be transferred                    to Amanasu Holdings. From the 15 yen transferred 5 yen will be transferred to Amanasu Environment.				

Currently Amanasu Water has finished its previous contract with Athlete Japan Corporation, and is working on establishing other distribution routes. Amanasu water is in pre-negotiation stages of distribution with convenience stores such as 7 & i Holdings (formerly 7-11 of Japan), and pachinko parlors through Japan.

                    1. Rotary kiln (Patent number 3564012, as of July 2nd 2005); 2. Rotary kiln-Taiwan (Patent number 131102, as of August                    21st, 2001); 3. Gas lark (petition number 2000-358861, patent pending);                    4. Ash melting furnace and incinerating system (petition number 2002-325560,                    patent pending); 5. The interior wall of the kiln (petition number                    2004-208198, patent pending); and 6. The method of cooling down the                    kiln (petition number 2004-208199, patent pending)                

                	During the fiscal 2007 and 2006 years, the Company spent $-0- and $-0- respectively on research and development.				

8

#### Liquidity And Capital Resources

                    In May 2001, the Company received $200,000 resulting from the exercising of                    20,000,000 stock purchase options by the Company's principal shareholder.                    During 2003, in connection with the acquisition of the Fire Bird boiler, the                    Company's President made a contribution of capital to the Company in the                    amount of $95,000. In addition during the 2003 period, the Company raised                    $100,000 from the sale of 20,000 shares of its common stock to one investor.                

                    Total assets as of December 31, 2007 were $1,712,822 representing an decrease of $782,561 from the total                    assets of $2,495,383 as of December 31, 2006.                

                    Other than the provision of alternating business planning costs discussed above, the Company estimates that                    its operating overhead, which includes general and administrative charges, will be approximately $120,000 for the                    next 12 months. This amount is comprised of the following estimated costs; $10,000 in annual salaries for office                    personnel and consultants, $50,000 for rent, $20,000 for professional fees and $20,000 for miscellaneous expenses.                    The Company does not anticipate paying salaries to any of its officers for the next 12 months. The Company has                    sufficient cash on hand to support its overhead for the next 12 months but no material commitments for capital                    at this time other than as described above.  The Company and/or Amanasu Holdings will need to issue and sell the                    shares to gain the capital of the operation.                

#### Forward Looking Statements

                    Certain statements contained in this Annual Report on Form 10-KSB include forward looking statements.                    All statements other than statements of historical facts included in this Form 10-KSB regarding the Company's                    financial position, business strategy, and plans and objectives of management for future operations and capital                    expenditures, and other matters, are forward looking statements. These forward looking statements are based                    upon management's expectations of future events.  Although the Company believes the expectations reflected                    in such forward looking statements are reasonable, there can be no assurances that such expectations will prove                    to be correct. Additional statements concerning important factors that could cause actual results to differ                    materially from the Company's expectations ("Cautionary Statements") are disclosed below in the Cautionary                    Statements section and elsewhere in this Form 10-KSB. All written and oral forward looking statements attributable                    to the Company or persons acting on behalf of the Company subsequent to the date of this Form 10-KSB are                    expressly qualified in their entirety by the Cautionary Statements.                

#### Cautionary Statements

                    Certain risks and uncertainties are inherent in the Company's business. In addition to                    other information contained in this Form 10-KSB, the following Cautionary                    Statements should be considered when evaluating the forward looking statements                    contained in this Form 10-KSB:                

#### Ability To Develop Commercial Product

                    The Company presently maintains rights to three different technologies. At this time, proto-type versions of products for each                    of the three technologies have been developed, however, none of the products are commercially ready for sale.  In order to                    reach a stage of commercial sales for the products, the Company prefers to put emphasis on joint venturing and funding a                    company who has advanced technological knowledge and progressed sales history of the same field for the purpose of cooperation.                    The Company can not predict that it will be successful in developing commercially ready products for any of the technologies                    in the near future or at any time.                

#### Rapid Technological Changes

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

#### Lack of Indications Of Product Acceptability

                    The success of the Company will be dependent upon its ability to develop commercially acceptable products and to sell such products                    in quantities sufficient to yield profitable results. To date, the Company has received no indications of the commercial acceptability                    of any of its proposed products. Accordingly, the Company can not predict whether its products can be marketed and sold in a commercial                    manner.                

#### Management

                    The ability of the Company to successfully conduct its business affairs will be dependent                    upon the capabilities and business acumen of current management including Mr. Atsushi Maki,                    the Company's President. Accordingly, shareholders must be willing to entrust all aspects                    of the business affairs of the Company to its current management. Further, the loss of any                    one of the Company's management team could have a material adverse impact on its continued operation.                

#### Control Exercised By Management

                    As of March 15, 2006, the existing officers and directors, and affiliates will control approximately 78.80% of the shareholder                    votes. Consequently, management will control the vote on all matters brought before shareholders, and holders of common                    stock may have no power in corporate decisions usually brought before shareholders.                

#### Conflicts of Interest

                    The officers of the Company are not full time employees. Presently, the Company does not have a formal                    conflicts of interest policy governing its officers and directors. In addition, the Company does not have written                    employment agreements with its officers. Its officers intend to devote sufficient business time and attention                    to the affairs of the Company to develop the Company's business in a prudent and business-like manner.                    However, the principal officer is engaged in other businesses related and unrelated to the business of the                    Company, and in the future, will engage in other business ventures. As a result, the principal officer and other                    officer of the Company may have a conflict of interest in allocating their respective time, services, and future                    resources, and in exercising independent business judgment with respect to their other businesses and that of the Company.                

#### Reliance upon Third Parties

                    The Company does not intend on maintaining a significant technical staff nor does it intend on manufacturing its products.                    Rather it will rely heavily on consultants, contractors, and manufacturers to design, develop and manufacture its products.                    Accordingly, there is no assurance that such third parties will be available when needed at affordable prices.                

9

#### Competition

                    Although management believes its products, if developed, will have significant                    competitive advantages to other products in their respective industries, with                    respect to such products, the Company will be competing in industries, such                    as the industrial waste industry, where enormous competition exists. Competitors                    in these industries have greater financial, engineering and other resources than                    the Company. No assurances can be given that any advances or developments                    made by such companies will not supersede the competitive advantages of the                    Company's products.                

#### Protection Of Intellectual Property

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

                    In the future, the Company may be required to protect or enforce its patents                    and patent rights through patent litigation against third parties, such as infringement                    suits or interference proceedings. These lawsuits could be expensive, take significant                    time, and could divert management's attention from other business concerns.                    These actions could put the Company's patents at risk of being invalidated or                    interpreted narrowly, and any patent applications at risk of not issuing. In defense of                    any such action, these third parties may assert claims against the Company. The                    Company cannot provide any assurance that it will have sufficient funds to vigorously                    prosecute any patent litigation, that it will prevail in any of these suits, or that the                    damages or other remedies awarded, if any, will be commercially valuable. During the                    course of these suits, there may be public announcements of the results of hearings,                    motions and other interim proceedings or developments in the litigation, which could                    result in the negative perception by investors, which could cause the price of the                    Company's common stock to decline dramatically.                

#### Indemnification of Officers and Directors for Securities Liabilities

                    The Company's By-Laws eliminates personal liability in accordance with the                    Nevada Revised Statutes (NRS).  Section 78.7502 of the NRS provides that a                    corporation may eliminate personal liability of an officer or director to the corporation                    or its stockholders for breach of fiduciary duty as an officer or director provided                    that such indemnification is limited if such party acted in good faith and in a                    manner which he reasonably believed to be in or not opposed to the best interest                    of the corporation. In  so  far  as indemnification for liability arising from the                    Securities Act of 1933 ("Act") may be permitted to directors, officers or persons                    controlling the Company, it  has  been  informed  that  in  the  opinion  of  the                    Securities and Exchange Commission such indemnification is against public policy                    as expressed in the Act and  is,  therefore,  unenforceable.                

#### Penny Stock Regulation

                    The Company's common stock may be deemed a "penny stock" under federal securities laws.                    The Securities and Exchange Commission has adopted regulations that define a "penny stock"                    generally to be any equity security that has a market price of less than $5.00 per share, subject to                    certain exceptions. These regulations impose additional sales practice requirements on any broker/dealer                    who sell such securities to other than established investors and accredited investors.                    For transactions covered by this rule, the broker/dealer must make certain suitability                    determinations and must receive the purchaser's written consent prior to purchase. Additionally,                    any transaction may require the delivery prior to sale of a disclosure schedule prescribed by the                    Commission. Disclosure also is required to be made of commissions payable to the broker/dealer                    and the registered representative, as well as current quotations for the securities. Finally,                    monthly statements are required to be sent disclosing recent price information for the penny                    stock held in the account of the customers and information on the limited market in penny stocks.                    These requirements generally are considered restrictive to the purchase of such stocks, and may                    limit the market liquidity for such securities.                

### Item 7. Financial Statements.

The Financial Statements that constitute Item 7 of this Annual Report on Form 10-KSB are included immediately following Item 14 below.

### Item 8. Changes In And Disagreements With Accountants On Accounting And Financial Disclosure.

None.

### Item 8A . Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) that are designed: (i) to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) to ensure that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.

Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report, and, based on that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) are ineffective (details are listed under Management's Annual Report on Internal Control over Financial Reporting).

#### Changes in Internal Control over Financial Reporting

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

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

Management of the Company is responsible for establishing and maintaining effective internal controls over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act, as amended. 

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the Company's financial statements. 

Management, with the participation of the Company's principal executive and principal financial officers, assessed the effectiveness of the Company's internal control over financial reporting as of  90 days prior to this report. This assessment was performed using the criteria established under the Internal Control-Integrated Framework established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 

Based on the assessment performed using the criteria established by COSO, management has concluded that the Company maintained ineffective internal control over financial reporting in the following areas:

Amanasu Holdings invested $84,228 (10,000,000 Yen) on December 16th, 2005 into Amanasu Shinwa Corporation. During the fiscal year ended December 31, 2007, The Company's management identified material weaknesses in Amanasu Shinwa's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)). On site cash stores used for smaller cash transactions ($50) not well documented. This material weakness is present within the Amanasu Shinwa due to lack of office staff.

As of September 21st , 2006 Amanasu Holdings invested 50,000,000 Yen ($500,000) establishing Amanasu Water Corporation. During the fiscal year ended December 31, 2007, The Company's management identified material weaknesses in Amanasu Water's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)). Approvals and authorization procedures for cash transactions lack distribution of responsibilities. This material weakness is due to the lack of office staff.

As of December 16th, 2005, the Company established, Amanasu Holdings Corporation ("Amanasu Holdings").During the fiscal year ended December 31, 2007, The Company's management identified material weaknesses in Amanasu Holdings's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)). Approvals and authorization procedures for cash transactions lack distribution of responsibilities. This material weakness is due to the lack of office staff.

Management of the Company will take steps during the fiscal year ending December 31, 2008 to correct this material weakness.

10

## PART III

### Item 9. Directors, Executive Officers, Promoters And Control Persons

                    The directors and executive officers of the Company, their ages, and the positions                    they hold are set forth below. The directors of the Company hold office until                    the next annual meeting of stockholders of the Company and until their                    successors in office are elected and qualified. All officers serve at the                    discretion of the Board of Directors.                
| Name         | Age | Since | Position                         |
|--------------|-----|-------|----------------------------------|
| Atsushi Maki | 60  | 1999  | Chairman/Treasurer and President |
| Lina Lei     | 47  | 1999  | Secretary                        |

                    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, 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 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. During the past                    five years, Ms. Lei's work involvement has been limited to activities of the                    Company and that of Amanasu Technologies Corporation. Ms. Lei is the wife of                    Atsushi Maki, the Chairman and President of the Company.                

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

### Item 10. Executive Compensation.

        			The compensation for all directors and officers individually for services rendered					to the Company for the fiscal years ended December 31, 2005, 2004, 2003, and 2002, respectively:				
|                                             | Annual Compensation |
|--------------------------------------------------|---------------------|
||
| Atsushi Maki (Chairman, President and Treasurer) | 2007                | -0- | -0- | -0- |
|                                             | 2006                | -0- | -0- | -0- |
|                                             | 2005                | -0- | -0- | -0- |
|                                             | 2004                | -0- | -0- | -0- |
|                                             |                |   |   |   |
| Lina Lei (Secretary)                             | 2007                | -0- | -0- | -0- |
|                                             | 2006                | -0- | -0- | -0- |
|                                             | 2005                | -0- | -0- | 20,000 |
|                                             | 2004                | -0- | -0- | -0- |

                            (2). 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. Of the total amount                    of shares, 24,100 shares were allocated for fiscal 1999, with the balance allocated equally between                    2000 and 2001. In 2003, Ms. Lei received $10,000 in exchange for consulting services performed                    for the Company.        		

                    The officers of the Company are not full time employees. Presently, the Company does not have a formal conflicts                    of interest policy governing its officers and directors. In addition, the Company does not have written employment                    agreements with its officers. Its officers intend to devote sufficient business time and attention to the affairs of the                    Company to develop the Company's business in a prudent and business-like manner. However, the principal officer                    is engaged in other businesses related and unrelated to the business of the Company, and in the future, will engage                    in other business ventures. A future arrangement will be subject to the approval of the Company's board of directors.                    Except for the arrangement with Ms. Lei, the Company and its officers have agreed that the officers of the Company                    will not receive any other compensation until such time as the Company reaches profitability for a full fiscal quarter.                    The terms of any such employment 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 above fiscal years.        		

                    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.        		

### Item 11. Security Ownership Of Certain Beneficial Owners And Management.

                    The following table will identify, as of March 15, 2006,                    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 44,000,816 shares of common stock of the Company which                    are issued and outstanding as of March 15, 2006. The address for each individual below is 701  Fifth  Avenue,  42nd  Floor, Seattle,                    Washington 98104, the address of the Company.        		

11

| Title of Security | Name and Address of Beneficial Owner                                          | Amount and Nature Beneficial Ownership (1) | Percent of Class |
|-------------------|-------------------------------------------------------------------------------|--------------------------------------------|------------------|
| Common Stock      | Amanasu Corporation (2) #902 Ark Towers 1-3-40 Roppongi Minato-ku Tokyo Japan | 33,000,000                                 | 72.6%            |
| Common Stock      | Atsushi Maki (3) (4)                                                          | 35,858,500                                 | 78.80%           |
| Common Stock      | Lina Lei (4)                                                                  | 35,858,500                                 | 78.80%           |
| Common Stock      | Officers and Directors, as a group (2 persons)                                | 35,858,500                                 | 78.80%           |

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

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

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

                    (4).                    Includes 362,500 shares of common stock held individually by Ms. Lei, and                    35,490,000 shares of common stock beneficially owned by Ms. Lei's husband,                    Atsushi Maki. Ms. Lei disclaims beneficial ownership of the shares held by her                    husband.                

### Item 12. Certain Relationships And Related Transactions.

                    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.                

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

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

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

12

### Item 13(A). Exhibits.

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

                	31 Certification under Section 906 of the Sarbanes-Oxley Act.					32 Certification under Section 906 of the Sarbanes-Oxley Act.                

                	(b). Reports on Form 8-K.				

### Item 14. Principal Accountant Fees and Services.

        - Audit fees for 2007 were $22,000 and $22,000 for 2006.
        - Audit Related Fees for 2006 and 2005 were $0.
        - Tax Fees for 2006 were $625 and 2005 were $0.
        - All Other Fees were $0.
        - N/A.
        - Not greater than 50% for 2005 and 2004.

13

####             	AMANASU ENVIRONMENT CORPORATION and SUBSIDIARIES                CONSOLIDATED FINANCIAL STATEMENTS				DECEMBER 31, 2007

| Accountant's Audit Report                     | 1 |
|-----------------------------------------------|---|
| Balance Sheet                                 | 2 |
| Statements of Operations                      | 3 |
| Statements of Changes in Stockholder's Equity | 4 |
| Statements of Cash Flows                      | 5 |
| Notes to Financial Statements                 | 6 |

###             	ROBERT G. JEFFREY            

####             	CERTIFIED PUBLIC ACCOUNTANT                61 BERDAN AVENUE                WAYNE, NEW JERSEY 07470            

                    LICENSED TO PRACTICE                    IN NEW YORK AND NEW JERSEY                    MEMBER OF AICPA                    PRIVATE COMPANIES PRACTICE SECTION                    MEMBER CENTER FOR PUBLIC COMPANY AUDIT FIRMS                    REGISTERED PUBLIC ACCOUNTING FIRM WITH                    PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD

                    TEL: 973-628-0022                    FAX: 973-696-9002                    E-MAIL: rgjcpa@optonline.net

                    Board of Directors Amanasu Environment Corporation                

                    I have audited the accompanying consolidated balance sheet of Amanasu Environment Corporation and Subsidiaries as of December 31, 2007                    and the related consolidated statements of operations, changes in stockholders' equity, and cash flows for the years ended December 31, 2007,                    and 2006. 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 the standards of the Public Company Accounting Oversight Board (United States).                    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 consolidated financial position                     of Amanasu Environment Corporation and Subsidiaries as of December 31, 2007, and the results of its operations and its cash flows for                     the years ended December 31 , 2007 and 2006 in conformity with U.S. generally accepted accounting principles.                

                    /s/ Robert G. Jeffrey                    ROBERT G. JEFFREY                    April 14, 2007                    Wayne, New Jersey 				

1

####             	AMANASU ENVIRONMENT CORPORATION and SUBSIDIARIES				BALANCE SHEET				December 31, 2007            

| Current Assets                                                             |             |  |
|----------------------------------------------------------------------------|-------------|--|
| $                                                                          | 18,293      |
|                                                                            | 771,000     |
|                                                                            | 76,672      |
|                                                                            | 566         |
|                                                                            | 94,000      |
|                                                                            | 16,185      |
|                                                                            | 1,723,261   |
|                                                                            |             |
|                                                                            |             |
|                                                                            | 263,681     |
|                                                                            | 132,512     |
|                                                                            | 131,169     |
|                                                                            |             |
|                                                                            |             |
|                                                                            | 290,875     |
|                                                                            | 72,222      |
|                                                                            | 21,835      |
|                                                                            | 175,501     |
|                                                                            | 44,504      |
|                                                                            |             |
|                                                                            | 604,937     |
|                                                                            |             |
| $                                                                          | 1,712,822   |
|                                                                            |             |
|                                                                            |             |
|                                                                            |             |
|                                                                            |             |
| $                                                                          | 24,520      |
|                                                                            | 91,685      |
|                                                                            | 26,109      |
|                                                                            | 24,033      |
|                                                                            |             |
|                                                                            | 166,347     |
|                                                                            |             |
|                                                                            |             |
|                                                                            | 44,001      |
|                                                                            | 4,257,039   |
|                                                                            | (3,279,954) |
|                                                                            | 53,427      |
|                                                                            |        |
|                                                                            |             |
|                                                                            | 1,074,513   |
|                                                                            |             |
| $                                                                          | 1,712,822   |
| The accompanying notes are an integral part of these financial statements. |

2

####             	AMANASU ENVIRONMENT CORPORATION and SUBSIDIARIES				CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT				ACCUMULATED DURING DEVELOPMENT STAGE            

|                                                                       | Year 2007  |        | Year 2006 |
|----------------------------------------------------------------------------|------------|--------|-----------|
|                                                                       |       |   |      |   |
| $                                                                          | 729,089    |   | $         | 472,318 |
|                                                                       | 572,026    |   |      | 349,674 |
|                                                                       |            |   |      |  |
|                                                                       | 157,063    |   |      | 122,644 |
|                                                                       |            |   |      |  |
|                                                                       | 695,486    |   |      | 1,103,147 |
|                                                                       | -          |   |      | 144,000 |
|                                                                       | 121,844    |   |      | 263,528 |
|                                                                       | 220,000    |   |      | - |
|                                                                       | 1,037,330  |   |      | 1,510,675 |
|                                                                       | (880,267)  |   |      | (1,388,031) |
|                                                                       |            |   |      |  |
|                                                                       |       |   |      |   |
|                                                                       | 55,280     |   |      | 61,634 |
|                                                                       |       |   |      |   |
|                                                                       | 11,531     |   |      | 10,718 |
|                                                                       | (6,782)    |   |      | - |
|                                                                       | 60,029     |   |      | 72,352 |
|                                                                       |       |   |      |   |
|                                                                       | (802,238)  |   |      | (1,315,679) |
|                                                                       | 21,889     |   |      | 16,711 |
| $                                                                          | (798,349)  |   | $         | (1,298,968) |
|                                                                       |       |   |      |   |
|                                                                       |       |   |      |   |
|                                                                       | 37,938     |   |      | 10,494 |
| $                                                                          | 760,411    |   | $         | (1,388,474) |
|                                                                       |       |   |      |   |
| $                                                                          | (.02)      |   | $         | (.03) |
|                                                                       |       |   |      |   |
| $                                                                          | 44,001,816 |   | $         | 44,00,816 |
| The accompanying notes are an integral part of these financial statements. |

3

####             	AMANASU ENVIRONMENT CORPORATION and SUBSIDIARIES				CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY            

##### 				For the Years Ended December 31, 2007, and 2006			

|                                                                       | Common Stock |   | Additional |   | Retained |      | Other Comprehensive |   | Total       |
|----------------------------------------------------------------------------|--------------|--------|------------|--------|----------|-----------|---------------------|--------|-------------|
||
| 44,020,816                                                                 |         | $      | 44,001     |   | $        | 4,257,039 |                | $      | (1,182,637) |   | $ | 4,995 |   | $ | 3,123,398 |
|                                                                       |         |   |       |   |     |      |                |   |        |   |   |   |   |   |   |
| -                                                                          |         |   | -          |   |     | -         |                |   | (1,298,968) |   |   | - |   |   | (1,298,968) |
|                                                                       |         |   |       |   |     |      |                |   |        |   |   |   |   |   |   |
| -                                                                          |         |   | -          |   |     | -         |                |   | -           |   |   | 10,494 |   |   | 10,494 |
| 44,000,816                                                                 |         |   | 44,001     |   |     | 4,257,039 |                |   | (2,418,605) |   |   | 15,489 |   |   | 1,834,924 |
|                                                                       |         |   |       |   |     |      |                |   |        |   |   |   |   |   |   |
| -                                                                          |         |   | -          |   |     | -         |                |   | (798,349)   |   |   | - |   |   | (798,349) |
|                                                                       |         |   |       |   |     |      |                |   |        |   |   |   |   |   |   |
| -                                                                          |         |   | -          |   |     | -         |                |   | -           |   |   | 37,938 |   |   | 37,938 |
|                                                                       |         |   |       |   |     |      |                |   |        |   |   |   |   |   |   |
| 44,000,816                                                                 |         | $      | 44,001     |   | $        | 4,257,039 |                | $      | (3,279,954) |   | $ | 53,427 |   | $ | 1,074,513 |
| The accompanying notes are an integral part of these financial statements. |

4

####             	AMANASU ENVIRONMENT CORPOR	ATION and SUBSIDIARIES				CONSOLIDATED STATEMENTS OF CASH FLOWS                FOR THE YEAR ENDED DECEMBER 31, 2007            

|                                                                       | Year 2007 |   | Year 2006 |
|----------------------------------------------------------------------------|-----------|--------|-----------|
|                                                                       |      |   |      |   |
| $                                                                          | (798,349) |   | $         | (1,248,837) |
|                                                                       |      |   |      |   |
|                                                                       | 60,030    |   |      | 77,214 |
|                                                                       | -         |   |      | 10,000 |
|                                                                       | 72,000    |   |      | 144,000 |
|                                                                       | -         |   |      | 263,528 |
|                                                                       | 101,169   |   |      | 253,390 |
|                                                                       | (21,889)  |   |      | (66,842) |
|                                                                       |      |   |      |   |
|                                                                       |      |   |      |   |
|                                                                       | (9,935)   |   |      | (10,804) |
|                                                                       | 41,978    |   |      | (31,483) |
|                                                                       | 23,075    |   |      | (21,210) |
|                                                                       | (2,949)   |   |      | (13,236) |
|                                                                       | 4,226     |   |      | (76,448) |
|                                                                       | 2,807     |   |      | 15,813 |
|                                                                       | 2,161     |   |      | 2,934 |
|                                                                       | -         |   |      | 43,278 |
|                                                                       | 8,027     |   |      | 1,662 |
|                                                                       | 78,235    |   |      | 9,872 |
|                                                                       | (23,021)  |   |      | 9,539 |
|                                                                       | (453,435) |   |      | (901,949) |
|                                                                       |      |   |      |   |
|                                                                       |      |   |      |   |
|                                                                       | -         |   |      | (370) |
|                                                                       | -         |   |      | 269,749 |
|                                                                       | -         |   |      | (191,267) |
|                                                                       | -         |   |      | (150,000) |
|                                                                       | (371,000) |   |      | - |
|                                                                       |      |   |      |   |
|                                                                       | 371,000   |   |      | 45,074 |
|                                                                       |      |   |      |   |
|                                                                       |      |   |      |   |
|                                                                       | 84,548    |   |      | - |
|                                                                       | -         |   |      | (426,014) |
|                                                                       |      |   |      |   |
|                                                                       | 84,548    |   |      | 426,014 |
|                                                                       |      |   |      |   |
|                                                                       | 37,548    |   |      | 10,306 |
|                                                                       | (84,470)  |   |      | (420,555) |
|                                                                       | 102,763   |   |      | 523,318 |
|                                                                       |      |   |      |   |
| $                                                                          | 18,293    |   | $         | 102,763 |
| The accompanying notes are an integral part of these financial statements. |

5

####             	AMANASU ENVIRONMENT CORPORATION and SUBSIDIARIES				NOTES TO FINANCIAL STATEMENTS            

##### December 31, 2007

#### 1. ORGANISATION AND BUSINESS

##### Organisation 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

                    On October 19, 2004, the Company invested $100,000 for a 100% interest in a newly formed subsidiary, Amanasu Shinwa Corporation (Shinwa), which is located in Gunma, Japan. On December 16, 2005, a second 100% owned subsidiary was formed, Amanasu Holdings, Inc. (Holdings), which is located in Tokyo, Japan. Holdings made investments in five other Japanese companies during 2005, including an $84,288 investment in Shinwa. The investee companies are involved in a variety of businesses, described in Note 8. Shinwa performs fabricating services, principally welding, on stainless steel piping; it has also developed, and continues development of systems for cleaning the waters of rivers, streams and lakes. On September 21, 2006, Soae, a Japanese electronics manufacturer, invested $426,014 for a 9% interest in Amanasu Holdings. Also, on September 21, 2006, Amanasu Holdings formed a new subsidiary called Amanasu Water. Amanasu Water's plan of operation is to market a new type of water called "Hydrogen ion water". Hydrogen-ion water is a new product and is believed to have effective anti-oxidant properties.              

                    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. On June 30, 2003, the Company acquired the worldwide rights to produce and market a patented process that purifies seawater, and removes hazardous pollutants from wastewater. These investments, which totaled $346,500, are for licensing rights to three products. During 2005 & 2006, the value of these rights was reviewed and impairment was found to have occurred (see Note 8).              

##### Risk and Uncertainties

Approximately 60% of the  sales of Shinwa are to one customer. Management does not view this  concentration as a significant risk..                

##### Basis of Consolidation

The consolidated financial  statements include the accounts of the Company and its wholly owned  subsidiaries, Holdings and Shinwa. All significant intercompany balances and  transactions have been eliminated in consolidation. 

#### 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

##### 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 equivalent                

##### Concentrations of Credit Risk

Financial instruments which  potentially subject the Company to concentrations of credit risk consist  primarily of cash and cash equivalents, miscellaneous receivables, and  miscellaneous payables. The Company does not believe that it is subject to  unusual credit risk beyond the normal credit risk associated with commercial  banking relationships.

##### Fixed Assets

                    Fixed assets are recorded at cost. Depreciation is computed using accelerated                    methods, with lives of five years for vehicles, and seven years for machinery                    and equipment, ten years for tools, and fifteen years for building improvements.                

##### 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, plus 650,000 shares of common stock.  The stock was valued at $.10 per share, bringing the total cost to $315,000.  The license for the seawater purification process was acquired for 1,050,000  shares of common stock which were valued at $31,500. Amortization of these  costs has been provided by the straight line method using lives of 17 years,  which is based on patent life. The latter two intangible assets were evaluated  during 2005 and 2006 and a write off was made for the entire portion of their  book values. (See Notes 1 and 8). 

##### 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.

##### Recognition Of Revenue

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

##### 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.

6

####             	AMANASU ENVIRONMENT CORPORATION and SUBSIDIARIES                NOTES TO FINANCIAL STATEMENTS            

##### December 31, 2007

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

##### Foreign Currency Translation

                    Substantial Company assets are located in Japan. These assets and related                    liabilities are recorded on the books of the Company in the currency of                    Japan (Yen). They are translated into US dollars as follows:                
        - Current assets, current liabilities and long term monetary assets and liabilities, at the rate of exchange in effect as at the balance sheet date;
        - Non-monetary assets and liabilities at the exchange rates prevailing at the time of the acquisition of the assets or assumptions of liabilities; and,
        - Revenues and expenses, at the average rate of exchange for the year.

##### Other Comprehensive Income

The  Company reports as other comprehensive income revenues, expenses, and gains and  losses that are not included in the determination of net income. No such  transactions occurred during the years 2005 or 2004.

##### Advertising Costs

The Company will expense  advertising costs when an advertisement occurs. Amounts expensed were $1,535  during 2007; and $146,351 in 2006. 

##### Segment Reporting

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

##### Fair Value of Financial Instruments

The carrying amounts of the  Company's financial instruments, which include cash, miscellaneous receivables,  and payroll taxes payable, approximate their fair values at December 31, 2007.

##### Net Loss Per Share

The  Company computes net income (loss) per common share in accordance with SFAS No.  128, "Earnings Per Share" and SEC Staff Accounting Bulletin No. 98  ("SAB 98"). Under the provisions of SFAS No. 128 and SAB 98, basic  and diluted net loss per common share are computed by dividing the net income  (loss) available to common shareholders for the period by the weighted average  number of shares of common stock outstanding during the period. Accordingly,  the number of weighted average shares outstanding as well as the amount of net  income (loss) per share are presented for basic and diluted per share  calculations for all periods reflected in the accompanying consolidated  financial statements.

##### Recent Accounting Pronouncements

                    The Company does not anticipate the adoption of recently issued accounting                    pronouncement to have a significant effect on the Company's results of operations,                    financial position or cash flows.              

#### 3. RELATED PARTY TRANSACTIONS

The president of Shinwa and two of his sons have received advances from the Company totaling $44,504.  These advances do not bear interest and are being repaid with monthly installments of $1,259.

#### 4. PROVISION FOR DOUBTFUL ACCOUNTS

The balance of notes and  accounts receivable has been reduced by a provision for doubtful accounts in  the amount of $1,449.

#### 5. INCOME TAXES

                The Company has experienced losses since inception. As a result, it has incurred no Federal income tax. The Japanese Tax Code allows net operating losses (NOL's) to be carried forward and applied against future profits for a period of seven years. The total of these NOL's at December 31, 2006 was $1,044,774. The potential benefit of the NOL has been recognized on the books of the Company, but it has been offset by a valuation allowance.            

                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 presented below. These deferred tax assets increased during 2007 by $77,33, the results of adding the potential benefit of 2006 losses.			
| Deferred Tax Assets | $       | 313,432 |
|---------------------|---------|---------|
|                | 313,432 |
| $                   | -       |

7

####             	AMANASU ENVIRONMENT CORPORATION and SUBSIDIARIES                NOTES TO FINANCIAL STATEMENTS            

##### December 31, 2007

#### 6. INVESTMENTS

During December 2005 and  January 2006, Holdings made investments in the six operating companies which  are located in Japan.  The equity interest in each of these companies is not more than 50% and the  companies are not consolidated in these financial statements. They are  accounted for by the equity method of accounting. These investments are  summarized below, along with a brief description of each:
|   | Investment |   | Company Share of |
|--------|------------|--------|------------------|
||
| $      | -          |   | $                | - |   | $ | (3,143) |
|   | 81,833     |   |             | 31,013 |   |   | (62,048) |
|   | -          |   |             | - |   |   | (118,258) |
|   | 19,881     |   |             | - |   |   | (54,209) |
|   | -          |   |             | - |   |   | 53 |
|   | 50,537     |   |             | - |   |   | - |
|   | 152,301    |   |             | 31,013 |   |   |   |

BJSS, Inc.

This is a temporary employment agency with offices in Bangladesh and Japan.

Energy Development (formerly Felice, Inc.)

This company will operate in the solar panel industry in Japan

Echo Frontier Corp.

                	This company will manufacture products for which the Company holds patents.                	The Company expects to receive patent royalties on the sales of this company.                

Creative Ducks Corp.

This company will produce plants for sterilization systems, primarily to treat the ozone effect.

Petstyle

This company runs a pet modeling business in Japan.

#### 7. INVESTMENT IN SWING MELTER

In  March 2005, the Company made a $290,000 equity investment in Kogure Susakusho  Ltd., (Kogure), a Japanese company which held patents for an industrial  incinerator, called the Swing Melter. The original intention was that the  Company would receive 20% of the profits on sales of the incinerator. In April  2005, the Company purchased, for $400,000, a demonstration model of the Swing  Melter for use in attracting customers. Subsequently, Kogure ceased doing  business and the Company exchanged its investment for the Kogure patents. In October  2005, a new company, now named Echo Frontier Corp., was formed by former  employees of Kogure to produce the Swing Melter. On December 16, 2005, the  Company made a $143,187 investment in the new company. In addition to its  equity interest in the new company, the Company will receive patent royalties  on sales of the Swing Melter. During 2006 and 2007, the values of the  investment and the demonstration model were reviewed and impairment was found  to have occurred. (See note 9 and 10)

#### 8. IMPAIRMENT OF LICENSING RIGHTS

                The Company has investments, which totaled $346,500, in licensing rights to three products (see Note 1). During 2005, the value of these rights was reviewed and impairment was found to have occurred. As a result, the remaining unamortized cost of these rights was reduced to $10,000 through a $292,030 loss provision. The remaining $10,000 was written off in 2006.            

#### 9. IMPAIRMENT OF INVESTMENTS

                The Company has investments in BJSS, Inc. of $77,321 and Petstyle of $81,066 (see Note 6). During 2006, the value of these investments was reviewed and impairment was found to have occurred. As a result, the remaining value of these investments was reduced to $0 through a $158,387 loss provision.            

            	In addition, the Company has an investment, which totaled $290,000, for the Kogure Seisakusho patent.  During 2006 and 2007, the value of these rights was reviewed and impairment was found to have occurred.  As a result, the remaining unamortized cost of these rights was reduced to $49,844 through loss provisions of $105,298 and $72,000, respectively.            

#### 10. IMPAIRMENT OF MACHINERY

                In April 2005, the Company purchased, for $400,000, a demonstration model of the Swing Melter for use in attracting customers. In 2006 and 2007, the value of this demonstration model was reviewed and impairment was found to have occurred, As a result, the cost of this machinery was reduced to $184,000 through loss provisions of $184,000 and $72,000, respectively.            

#### 11. RENTALS UNDER OPERATING LEASES

                The Company conducts its operations from a leased office facility in Vancouver, British Columbia under a month to month arrangement. During 2007, the Company incurred rent expense of $40,214. In 2006, rent expense was $220,450.			

#### 12. SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION

                There was no cash paid for interest or income taxes during the years 2007 and 2006. There was no non-cash financing or investing activity during these years.            

8

####             	AMANASU ENVIRONMENT CORPORATION and SUBSIDIARIES				NOTES TO FINANCIAL STATEMENTS            

##### December 31, 2007

#### 13. SUBSEQUENT EVENTS

                On February 10, 2006, a law suit was commenced in which the Company, an affiliated company, and an officer of the Company were named as defendants. During the course of that law suit, $652,409 of Company funds was frozen by court order. The lawsuit was subsequently settled o n March 27, 2007. Under the terms of the settlement, the Company, its affiliate, and the officer are obligated to pay $260,000 in monthly installments of $10,000 each. The Company does not expect to incur any expense as a result of this settlement, because the officer involved in the suit has agreed to take personal responsibility for the settlement. Of the Company funds which had been frozen, all except $130,000 have been released. This remaining $130,000 amount will be released when the terms of the settlement have been satisfied.          

#### SIGNATURES

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

                Amanasu Environment Corporation

/s/ Atsushi Maki

              May 20, 2008                President And                Principal Accounting Officer        	

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

            	/s/ Atsushi Maki        	

       		  May 20, 2008                Director			

9