UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D. C. 20549





FORM
      10-QSB







T
            
            QUARTERLY REPORT PURSUANT TO SECTION
              13 OR
              15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For
                the period ended Sep 30, 2005*
            
            TRANSITION REPORT UNDER SECTION 13 OR
              15(d)
              OF THE SECURITIES EXCHANGE Act of 1934For
                the transition period from ___ to
                ___.





Commission
      file number: 000-32905





AMANASU
      ENVIRONMENT CORPORATION


(Exact
      name of small business issuer as specified in its charter)





Nevada
            
            98-0347883(State
                or other jurisdiction of organization)
            
            (IRS
                Employer Identification No.)





701
      Fifth Avenue, 42nd Floor, Seattle, WA 98104


(Address
      of principal executive offices)





206-262-8188


(Issuer's
      telephone number)





(Former
      name, former address and former fiscal year, if changed since last
      report)





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





APPLICABLE
      ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING
      FIVE YEARS





Check
      whether the registrant filed all documents and reports required to be filed
      by
      Section 12, 13, or 15(d) of the Exchange Act after the distribution of
      securities under a plan confirmed by a court.  Yes * No * N/A T





APPLICABLE
      ONLY TO CORPORATE ISSUERS





State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of the latest practicable date: 44,000,816 as of November10, 2005.
      Transitional Small Business Disclosure Format:   Yes * No T












AMANASU
      ENVIRONMENT CORPORATION


QUARTERLY
      REPORT ON FORM 10QSB


FOR
      THE
      THREE MONTHS ENDED JUNE 30, 2005


TABLE
      OF
      CONTENTS





**PART1-FINANCIAL
      INFORMATION**





Item
                1:     FINANCIAL
                STATEMENTS:Balance
                Sheets as of September 30, 2005 (unaudited)
                and December 31, 2004 (audited)
            4Statement
                of Operations and Deficit
                Accumulated for the nine months ended September 30, 2005 and 2004
                (unaudited)
            5Statement
                of Operations and Deficit Accumulated for the
                three months ended September 30, 2005 and 2004
                (unaudited)
            6Statement
                of Cash Flows for the nine months ended
                September 30, 2005 and 2004 (unaudited)
            7Notes
                to Financial Statements
                (unaudited)
            8Item
                2:     MANAGEMENT’S DISCUSSION
                AND OR PLAN OF OPERAITON
            10Item
                3:     EFFECTIVENESS OF THE
                REGISTRANT’S DICLOSURE CONTROLS AND PROCEDURES
            14**PART2-OTHER
                INFORMATION**Item
                1:     LEGAL
                PROCEEDINGS
            15Item
                2:     CHANGES IN
                SECURITEIS
            15Item
                3:     DEFAULTS UPON SENIOR
                SECURITES
            15Item
                4:     SUBMISSION OF MATTERS TO VOTE
                OF SECURITEY HODERS
            15Item
                5:     OTHER
                INFORMATION
            15Item
                6:     EXHIBITS AND REPORTS ON FORM
                8-K
            15SIGNATURES
            16





2
 *Table
            of
            Contents*





**PART1-FINANCIAL
      INFORMATION**





ITEM
                1.
            FINANCIAL
                STATEMENTS





GENERAL





The
      Company's unaudited financial statements for the nine months ended September
      30,
      2005 are included with this Form 10-QSB. The unaudited financial statements
      have
      been prepared in accordance with the instructions to Form 10-QSB and, therefore,
      do not include all information and footnotes necessary for a complete
      presentation of financial position, results of operations, and cash flows in
      conformity with generally accepted accounting principles. In the opinion of
      management, all adjustments considered necessary for a fair presentation of
      the
      results of operations and financial position have been included and all such
      adjustments are of a normal recurring nature. Operating results for the nine
      months ended September 30, 2005 are not necessarily indicative of the results
      that can be expected for the fiscal year ending December 31, 2005.





3
 *Table
            of
            Contents*





**AMANASU
      ENVIRONMENT CORPORATION**


**(A
      Development Stage Company)**


**BALANCE
      SHEETS**


**(Unaudited)**





September
                30,
              2005
              (Unaudited)
            
            December
                31,
              2004
              (Audited)ASSETSCurrent
                Assets:Cash
            
            $
            175,266
            
            $
            9,459Miscellaneous
                receivables
            
            
            95,885
            
            
            1,885Total
                current assets
            
            
            271,151
            
            
            11,344Fixed
                Assets:Automotive
                equipment
            
            
            25,859
            
            
            25,859Operating
                equipment
            
            
            400,000
            
            
            -____Total
                equipment
            
            
            425,859
            
            
            25,859Less
                accumulated depreciation
            
            
            14,016
            
            
            12,685Net
                fixed assets
            
            
            411,843
            
            
            13,174Other
                Assets:Investment-Held
                to Maturity (certificate of deposit)
            
            
            2,000,000
            
            
            -Rent
                deposits
            
            
            143,595
            
            
            5,000Investments
                in joint ventures
            
            
            390,000
            
            
            -Licensing
                agreement, net of accumulated amortization of $59,756 and
                $44,470
            
            
            286,744
            
            
            302,030Total
                other assets
            
            
            2,820,339
            
            
            307,030Total
                Assets
            
            $
            3,503,333
            
            $
            331,548LIABILITIES
                AND STOCKHOLDERS’ EQUITYCurrent
                Liabilities:Accrued
                expenses
            
            $
            1,080
            
            $
            2,990Stockholder
                advance
            
            
            100
            
            
            100Deposit
                for capital stock
            
            
            -
            
            
            99,900Total
                current liabilities
            
            
            1,180
            
            
            102,990Stockholders’
                Equity:Common
                stock: authorized 100,000,000 shares of $.001 par value; issued and
                outstanding 44,000,816 and 43,000,816, respectively
            
            
            44,001
            
            
            43,001Additional
                paid-in capital
            
            
            4,257,039
            
            
            758,039Deficit
                accumulated during development stage
            
            
            (798,887
            )
            
            (572,482
            )Total
                stockholders’ equity
            
            
            3,502,153
            
            
            228,558Total
                Liabilities and Stockholders’ Equity
            
            $
            3,503,333
            
            $
            331,548





These
      statements should be read in conjunction with the year-end financial
      statements.





4
 *Table
            of
            Contents*





**AMANASU
      ENVIRONMENT
      CORPORATION**


**(A
      Development Stage Company)**


**STATEMENTS
      OF OPERATIONS AND DEFICIT**


**ACCUMULATED
      DURING DEVELOPMENT STAGE**


**(Unaudited)**




Nine
                    Month Periods Ended September 30,
                
                February
                    22, 1999
                  (Date
                    of Inception)
                  To
                    September 30, 20052005
                
                2004Expenses
                
                $
                258,550
                
                $
                87,148
                
                $
                834,500Operating
                    loss
                
                
                (258,550
                )
                
                (87,148
                )
                
                (834,500
                )Other
                    Income - interest
                
                
                32,145
                
                
                230
                
                
                35,613Loss
                    accumulated during development stage
                
                $
                (226,405
                )
                $
                (86,918
                )
                $
                (798,887
                )Loss
                    Per Share -Basic
                    and Diluted
                
                $
                (.01
                )
                $
                -Weighted
                    average number of sharesoutstanding
                
                
                43,916,567
                
                
                43,000,816
  These
          statements should be read in conjunction with the year-end financial
          statements.





5
 *Table
            of
            Contents*





**AMANASU
      ENVIRONMENT CORPORATION**


**(A
      Development Stage Company)**


**STATEMENTS
      OF OPERATIONS AND DEFICIT**


**ACCUMULATED
      DURING DEVELOPMENT STAGE**


**(Unaudited)**





Three
                Month Periods Ended September 30,
            
            February
                22, 1999
              (Date
                of Inception)
              To
                September 30, 20052005
            
            2004Expenses
            
            $
            89,402
            
            $
            29,082
            
            $
            834,500Operating
                loss
            
            
            (89,402
            )
            
            (29,082
            )
            
            (834,500
            )Other
                Income - interest
            
            
            18,071
            
            
            24
            
            
            35,613Loss
                accumulated during development stage
            
            $
            (71,331
            )
            $
            (29,058
            )
            $
            (798,887
            )Loss
                Per Share -Basic
                and Diluted
            
            $
            -
            
            $
            -Weighted
                average number of sharesoutstanding
            
            
            44,000,816
            
            
            43,000,816





These
      statements should be read in conjunction with the year-end financial
      statements.





6
 *Table
            of
            Contents*





**AMANASU
      ENVIRONMENT CORPORATION**


**(A
      Development Stage Company)**


**STATEMENTS
      OF CASH FLOWS**


**(Unaudited)**





Nine
                Month Periods
              Ended
                September 30,
            
            February
                22, 1999
              (Date
                of Inception)
              To
                September 30,2005
            
            2004
            
            2005**CASH
                FLOWS FROM OPERATIONS:**Net
                Loss
            
            $
            (226,405
            )
            $
            (86,918
            )
            $
            (798,887
            )Charges
                Not Requiring The Outlay Of Cash:Depreciation
                and amortization
            
            
            16,617
            
            
            16,578
            
            
            73,772Services
                provided for common stock
            
            
            **-**
            
            
            -
            
            
            70,000Changes
                in Assets and Liabilities:Increase
                (decrease) in accrued expenses
            
            
            (1,910
            )
            
            1,587
            
            
            1,080Increase
                in miscellaneous receivables
            
            
            (94,000
            )
            
            (400
            )
            
            (95,885
            )**Net
                Cash Consumed By****Operating
                Activities**
            
            
            (305,698
            )
            
            (69,153
            )
            
            (749,920
            )**CASH
                FLOWS FROM INVESTING ACTIVITIES:**Investment
                in certificate of deposit
            
            
            (2,000,000
            )
            
            -
            
            
            (2,000,000
            )Acquisition
                of licensing agreement
            
            
            -
            
            
            -
            
            
            (155,000
            )Investments
                in joint ventures
            
            
            (390,000
            )
            
            -
            
            
            (390,000
            )Purchase
                of automobile
            
            
            -
            
            
            **-**
            
            
            (25,859
            )Purchase
                of operation equipment
            
            
            (400,000
            )
            
            -
            
            
            (400,000
            )Rent
                deposits
            
            
            (138,595
            )
            
            -
            
            
            (143,595
            )**Net
                Cash Consumed By Investing Activities**
            
            
            (2,928,595
            )
            
            -
            
            
            (3,114,454
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES:**Sales
                of common stock
            
            
            3,500,000
            
            
            -
            
            
            4,039,540Advances
                received in anticipation ofcommon
                stock sales
            
            
            -
            
            
            -
            
            
            100,000Return
                of deposit for capital stock
            
            
            (99,900
            )
            
            -
            
            
            (99,900
            )**Net
                Cash Provided By****Financing
                Activities**
            
            
            3,400,100
            
            
            -
            
            
            4,039,640Net
                change in cash
            
            
            165,807
            
            
            (69,153
            )
            
            175,266Cash
                balance, beginning of period
            
            
            9,459
            
            
            92,055
            
            
            -Cash
                balance, end of period
            
            $
            175,266
            
            $
            22,902
            
            $
            175,266





These
      statements should be read in conjunction with the year-end financial
      statements.





7
 *Table
            of
            Contents*





**AMANASU
      ENVIRONMENT CORPORATION**


**(A
      Development Stage Company)**


**NOTES
      TO FINANCIAL STATEMENTS**


**September
      30, 2005**


**(Unaudited)**








**1.**
            **BASIS
                OF PRESENTATION**





The
      unaudited interim financial statements of Amanasu Environment Corporation (“the
      Company”) as of September 30, 2005 and for the three month, and nine month
      periods ended September 30, 2005 and 2004, have been prepared in accordance
      with
      accounting principles generally accepted in the United State of America. In
      the
      opinion of management, such information contains all adjustments, consisting
      only of normal recurring adjustments, necessary for a fair presentation of
      the
      results for such periods. The results of operations for the nine month period
      ended September 30, 2005 are not necessarily indicative of the results to be
      expected for the full fiscal year ending December 31, 2005.





Certain
      information and disclosures normally included in the notes to financial
      statements have been condensed or omitted as permitted by the rules and
      regulations of the Securities and Exchange Commission, although the Company
      believes the disclosure is adequate to make the information presented not
      misleading. The accompanying unaudited financial statements should be read
      in
      conjunction with the financial statements of the Company for the year ended
      December 31, 2004.








**2.**
            **INVESTMENTS**





The
      Company made several investments during the 2005 period: One is a $2,000,000
      certificate of deposit; this certificate is due April 9, 2007 and bears interest
      at 3.48 %. A second investment is a $94,000 advance to a consultant who will
      provide marketing promotion of Company products; this advance bears interest
      at
      7% and is due December 31, 2005. A third investment is a $400,000 purchase
      of a
“Swing Melter”, a machine which dissolves ash, a by-product of many recycling
      plants; **** this
      machine will be used as a demonstration machine for marketing purposes; machines
      of this type are manufactured by Kogure Kabushikigaisha Corporation (Kogure),
      a
      firm in which the Company has made another investment, described
      below.





In
      addition to the investments noted above, the Company made two other investments
      during 2005. One of these is a $290,000 investment in Kogure, which originally
      was an equity investment. This investment has changed. The $290,000 has been
      applied to the acquisition from Kogure of licensing rights to the Swing Melter.
      Finally, $100,000 was used to form a joint venture with Shinwa Yosetsu, Ltd.
      This venture will manufacture in Japan, and sell, water purification and
      desalinization systems. This investment will be accounted for by the equity
      method under which the investment account will be adjusted at the end of each
      period to recognize the Company share of the results of operations of the joint
      venture.





8
 *Table
            of
            Contents*





**AMANASU
      ENVIRONMENT CORPORATION**


**(A
      Development Stage Company)**


**NOTES
      TO FINANCIAL STATEMENTS**


**September
      30, 2005**


**(Unaudited)**






**3.**
            **EXPENSES**





The
      principal items of expense included on the statement of operations and deficit
      are presented below:





Nine
                Month Periods EndedJune
                30, 2005
            
            June
                30, 2004Rent
            
            $
            157,634
            
            $
            27,747Depreciation
                and amortization
            
            
            16,617
            
            
            16,578Professional
                fees
            
            
            14,345
            
            
            14,931Salaries
            
            
            31,600
            
            
            15,321Travel
            
            
            12,578
            
            
            10,527Consulting
            
            
            20,000
            
            
            -Other
                expenses
            
            
            5,776
            
            
            2,044Total
                expenses
            
            $
            258,550
            
            $
            87,148





**4.**
            **SUPPLEMENTAL
                DISCLOSURES OF CASH FLOWS
                INFORMATION**





There
      was
      no cash paid for interest or income taxes during the periods being reported.








**5.**
            **RELATED
                PARTY TRANSACTIONS**





The
      wife
      of the president of the Company, who supervises most Company administrative
      activities, was paid a $20,000 consulting fee during the 2005
      period.





9
 *Table
            of
            Contents*




ITEM
                2:
            MANAGEMENT
                DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                OPERATIONS





Cautionary
      Statement





SAFE
      HARBOR





This
      Form
      10QSB contains "forward-looking statements" within the meaning of Section 27A
      of
      the Securities Act of 1933, as amended, and Section 21E the Securities Exchange
      Act of 1934, as amended and such forward-looking statements are made pursuant
      to
      the safe harbor provisions of the Private Securities Litigation Reform Act
      of
      1995. "Forward-looking statements" describe future expectations, plans, results,
      or strategies and are generally preceded by words such as "may," "future,"
      "plan" or "planned," "will" or "should," "expected," "anticipates," "draft,"
      "eventually" or "projected." You are cautioned that such statements are subject
      to a multitude of risks and uncertainties that could cause future circumstances,
      events, or results to differ materially from those projected in the
      forward-looking statements, including the risks that actual results may differ
      materially from those projected in the forward-looking statements as a result
      of
      various factors, and other risks identified in a companies’ annual report on
      Form 10-KSB and other filings made by such company with the United States
      Securities and Exchange Commission. You should consider these factors in
      evaluating the forward-looking statements included herein, and not place undue
      reliance on such statements.





The
      following discussion should be read in conjunction with the Company’s Financial
      Statements, including the Notes thereto, appearing elsewhere in this Quarterly
      Report and in the Annual Report for the year ended December 31,
      2004.








COMPANY
      OVERVIEW





The
      Company is a development stage company and significant risks exist with respect
      to its business. 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.








PRODUCTS





Amanasu
      Furnace


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





10
 *Table
            of
            Contents*





The
      Company believed that the prior pricing structure for its furnaces was not
      competitive, and it was seeking ways to lower its manufacturing costs. In an
      effort to lower manufacturing costs, the Company was attempting to locate
      alternate suppliers that were less costly than currently identified suppliers.
      It also would attempt to re-design certain components of the furnace so as
      to
      reduce the manufacturing cost per component. However, even though the Company
      has made a great effort to meet its goal, the Company has been confronted with
      several difficulties and has started reconsidering to alter the function of
      original furnace which manages daily wastes to a furnace which particularly
      manages specific waste such as industrial and medical waste, and simultaneously,
      the Company also seeks to potential manufacturers and/or organizations to sell
      right for them to utilize the Company’s licensed technologies and adopt the
      technologies to their own use and benefit. Additionally, the Company has entered
      into an agreement with a furnace producing company, Kogure Works Co, Ltd.,
      with
      34 years of successful business history, has more advanced technologies of
      furnaces in Japan, and its furnace is produced comparatively in less-cost.
      The
      pricing of the product is $100,000/t and eventually reducing the price to 20%
      less is ideal. A formal agreement has been entered into by Kogure Works Co.,
      Ltd. and the Company, and the Company has funded $290,000 to Kogure for the
      purpose of promotion of Kogure’s incinerator to State Environmental Protection
      Administration of China (MINMETALS) and to receive a purchase order from the
      organization, and the Company will receive 20% of allocation from the profit.
      The Company will cooperate with Kogure to succeed on this project and expand
      its
      market place in Asia. In order to open a market of incinerators for medical
      wastes in China, one of the projections of the Company is to form a company
      merging with MINMETALS, and ideally and expectedly to commence the active
      marketing promotion in China in 2005. The Company can not predict whether it
      will be successful in the alternation of structure and achieve its desired
      pricing.








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 technology provides for 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 technology for the
      dual purpose of 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 including hazardous waste. The Company projects
      that
      necessary refine time will be enormous to estimate, therefore the Company will
      see how things go thoroughly and determine the appropriate time to finance
      for
      the refinement. The Company might need to utilize Kogure’s manufacturing
      facility and equipment for the case of production. However the detailed
      projection has not been discussed yet at this present time.





The
      Company will have no relationship with its former manufacturing company,
      Ishimaki Seiki in Ishimaki-city, Japan. Alternatively, the Company may
      sub-contract the assembly and component manufacturing to firms located in
      proximity to its customer so as to eliminate excessive shipping charges.
      However, no such arrangements have been established by the Company at this
      time.








Ring-tube
      Desalinization Equipment


The
      Ring-Tube technology is used as a filter to purify seawater into drinking water
      and also treats sewage and wastewater, 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 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.





11
 *Table
            of
            Contents*





The
      Company believes that the existing capacity of the Ring-Tube Desalination
      equipment is commercially insufficient for its targeted markets because the
      equipment is a hand-made manufacturing and it leads high cost production. Also
      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 has entered into
      an
      agreement with Shinwa Yosetsu, a subcontract manufacturing company which can
      manage Sakagami’s technology under the instruction that may result in less-cost
      production. The Company joint and cooperate with Shinwa Yosetsu investing
      $100,000 to establish a new company for the joint venture project to progress
      complete manufacturing and sales plan. This technology has not been commercially
      produced yet. The Company is also expecting to expand its market place in China
      in connection with establishing a new company merging with MINMETALS in China.











PLAN
      OF
      OPERATION





The
      Company was aware of an option of business cooperation with a company in the
      same industry. The Company has entered into an agreement with a furnace
      producing company, Kogure Works Co, Ltd., with 34 years of successful business
      history and has more advanced technologies of furnace with less-cost production
      in Japan, and its consideration of cooperation with them investing the capital
      of $290,000.




On
      April
      11, 2005, the Company purchased a model plant of furnace for ash disposal called
      “Swing Melter” from Kogure Works Co., LTD., and paid the amount of $400,000 for
      the model on April 19, 2005. “Swing Melter” is a system of furnace for ash
      disposal currently patent pending by Kogure. Ash created and discharged from
      incinerators contains dioxin and other toxic substances, and the treatment
      of
      the remaining ash, in present circumstances, is in reclamation of lands in
      Japan. The expense of conducting the reclamation is approximately 30,000-50,000
      yen / ton. The expense of the treatment of the ash using “Swing Melter” is
      around 15,000-20,000 yen / ton, and the by-product that remains after the
      process with the system is non-toxic and recyclable as construction material.
      In
      consideration of future environmental issues, the system is significant and
      a
      necessary equipment for the preservation of the earth. The Company will promote
      the product to various organizations and industries and will operate the model
      plant of “Swing Melter” to show the running system and operations to potential
      customers such as public cleaning/garbage management organizations (800
      facilities) and industrial waste treatment agencies (4,000
      facilities).




As
      of
      August 4 th ,
      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 were transferred to Amanasu Technologies 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. Kogure will continuously produce the rotary kiln as the manufacturer
      of the Company and the Company will focus on marketing the products. One
      provisional purchase order for one unit of rotary kiln valued at 1,650,000,000
      YEN has been made by a Japanese company, and the product will be completed
      and
      delivered within 4 months after the order is officially placed.





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One
      of
      the strategies for marketing Kogure’s product in prospective is to form a joint
      venture with MINMETAL in regard to expansion of its market place in Asia. The
      Company and MINMETAL have been in negotiations that include settling an
      agreement on the percentage of interests in the company that would take place
      during the joint business operations and expect to receive positive response
      by
      the end of 2005. In the event of successful formation with MINMETAL, a
      full-scale promotion and marketing of the rotary kiln will begin in Asian
      countries.




The
      Company is expecting to expand the distribution line over the country of Japan
      having a cooperation of Mitsui & Co., Ltd. ideally starting in April of
      2006. Additionally, the Company has been approved by Kyowa Kyokai. Kyowa
      Kyokai’s is an incorporated foundation whose recommendations are highly
      influential on public opinion, and economic phenomenon. Thus the Company has
      gratefully received the approval of Kyowa Kyokai on the product and hopes that
      will bolster and accelerate the marketing activities for the use of the products
      in the industries. The prospective cost of marketing activities for “Swing
      Melter” is estimated at $40,000.





At
      this
      time the Company prefers to focus on the business of Kogure’s products than on
      the Company’s Fire Bird Boiler. Therefore, there has not been any expense
      incurred by the Fire Bird Boiler during the quarter and no further budget is
      set
      out respecting the product. However, the Company is willing to provide the
      license of Fire Bird Boiler to any business organizations that could make use
      of
      the technologies for their benefit.





The
      Company has entered into an agreement for co-establishing a new company with
      Shinwa Yosetsu, a subcontract company of manufacturing Water desalination
      system. The Company financed approximately $100,000 for the co-establishing
      a
      new company, Amanasu Shinwa Corporation, as of March 14 th ,
      2005,
      in Japan. Amanasu Shinwa Corporation manufactures and distributes water
      purification systems and it had made a sale of approximately 30,000,000 YEN
      by
      the month of September 2005. The Company is considering an additional funding
      of
      $87,000 in capital to Amanasu Shinwa Corporation in the next 12
      months.





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 $272,000 for the next 12 months.
      This amount is comprised of the following estimated costs; $80,000 in annual
      salaries for office personnel and consultants, $160,000 for rent, $20,000 for
      professional fees and $12,000 for miscellaneous expenses. The Company does
      not
      anticipate paying salaries to any of its officers for the next 12 months. On
      April 8, 2005, the Company") entered into an agreement with Mr. Izuo Kato ("Mr.
      Kato”) to loan $94,000 to Kato for the purpose of marketing, researching,
      development, networking and other expenses regarding a marketing promotion
      of
      the Company’s products. Mr. Kato is the sole representative of the Company in
      the Japan area, and he strives for the Company to move on to a new stage where
      the Company could commence sales of its products and earn a profit. The Company
      loans him such amount to facilitate his project and assist in the success of
      the
      operation. Mr. Kato will pay back the amount on December 31, 2005. The Company
      will compensate him depending on the level of the achievement of his mission
      by
      the time of expiration date of this loan contract.


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.





**“Patents”**


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)





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            Contents*





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





The
      Company did not generate any revenues for the three months ended September
      30,
      2005 or for the same period in 2004 except for interest earned in bank deposits
      in the amount of $18,071 and $24 respectively.





Total
      expenses for the nine months period ending September 30, 2005 was $258,550
      compared to $87,148 for the same period of 2004. The increase was due
      principally to higher rent, the result of opening a Tokyo office during the
      quarter.





Total
      expenses for the three months period ending September 30, 2005 was $ 89,402
      compared to $29,082 for the same period in 2004. The increase was due to an
      increase in management and marketing activities in Tokyo.





The
      Company sold 1,000,000 shares of its common stock at $3.50 per share to Hisako
      Kodaka and obtained proceeds of $3,500,000 during the first three months of
      2005. The Company believes that the amount of liquidity and capital resources
      will be sufficient for the operation of the Company for next 12
      months.








LIQUIDITY
      AND CAPITAL RESOURCES





In
      the
      nine months ended September 30, 2005 cash used in operating activities was
      $305,698 compared to $ 69,153 for the same period in 2004. The increase was
      due
      to increase in rent and expenses.





Total
      assets as of September 30, 2005 were $3,503,333 representing an increase of
      $3,171,785 from total assets of $331,548 as of December 31, 2004.











OFF-BALANCE
      SHEET ARRANGEMENTS





The
      Company has no off-balance sheet arrangements.






Item
                3:
            EFFECTIVENESS
                OF THE REGISTRANT’S DISCLOSURE CONTROLS AND
                PROCEDURES





EVALUATION
      OF DISCLOSURE CONTROLS AND PROCEDURES





The
      Company carried out an evaluation of the effectiveness of the Company’s
      disclosure controls and procedures (as defined by Rule 13a-15(e) under the
      Securities Exchange Act of 1934) under the supervision and with the
      participation of the Company’s Chief Executive Officer and Chief Financial
      Officer as of a date within 90 days of the filings date of Form 10QSB. Based
      on
      and as of the date of such evaluation, the aforementioned officers have
      concluded that the Company’s disclosure controls and procedures have functioned
      effectively so as to provide information necessary whether:





(i)
      this
      quarterly report on Form 10 QSB contains any untrue statement of a material
      fact
      or omits to state a material fact necessary to make the statements made, in
      light of the circumstances under which such statements were made, not misleading
      with respect to the period covered by this quarterly report on Form 10 QSB,
      and(ii) the financial statements, and other financial information included
      in
      this quarterly report on Form 10 QSB, fairly present in all material respects
      the financial condition, results of operations and cash flows of the Company
      as
      of, and for, the periods presented in this quarterly report on Form 10
      QSB.





14
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            Contents*





CHANGES
      IN INTERNAL CONTROLS





There
      have been no significant changes in the Company's internal controls or in other
      factors since the date of the Chief Executive Officer's, Chief Financial
      Officer's and Chief Accounting Officer’s evaluation that could significantly
      affect these internal controls, including any corrective actions with regards
      to
      significant deficiencies and material weaknesses.








**PART2-OTHER
      INFORMATION**


Item
                1.
            LEGAL
                PROCEEDINGS


None





Item
                2.
            CHANGES
                IN SECURITEIES


None





Item
                3.
            DEFAULTS
                UPON SENIOR SECURITEIS


None


Item
                  4.
              SUBMISSION
                  OF MATTERS TO A VOTE OF
                  SECURITYHOLDERS
  None





Item
                5.
            OTHER
                INFORMATION


None





Item
                6.
            ESHIBITS


(a).
            Furnish
                the Exhibits required by Item 601 of Regulation
                S-B.





Exhibit
      31 - Certification Pursuant To Section 302 Of The
      Sarbanes-Oxley Act Of 2002.





Exhibit
      32- Certification Pursuant To Section 906 Of The
      Sarbanes-Oxley Act Of 2002.





(b)
            Reports
                on Form 8-K.


None





15
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            Contents*





SIGNATURES





In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      report to be signed on its behalf by the undersigned, thereunto duly
      authorized.





AMANASU
      ENVIRONMENT CORPORATION





Date:
      November 10, 2005





/s/
                Atsushi MakiAtsushi
                MakiChief
                Executive OfficerChief
                Financial OfficerChief
                Accounting Officer




16