----

----

**FORM        10-KSB**

| x | ANNUAL                  REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE                  ACT OF                  1934 |
|---|-----------------------------------------------------------------------------------------------------------------------------------------|

| o | TRANSITION                  REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE                  ACT OF                  1934 |
|---|---------------------------------------------------------------------------------------------------------------------------------------------|

**AMERICAN        SECURITY RESOURCES CORPORATION**

| Nevada                                                                          | 90-0179050                                            |
|---------------------------------------------------------------------------------|-------------------------------------------------------|
| (State                  or other jurisdiction of incorporation or organization) | (I.R.S.                  Employer Identification No.) |

| 9601                  Katy Freeway, Suite 220 Houston,                  Texas |  77024                 |
|-------------------------------------------------------------------------------|-----------------------------|
| (Address                  of principal executive offices)                     | (Zip                  Code) |

----

----

----

**AMERICAN        SECURITY RESOURCES CORPORATION**

**INDEX        TO FORM 10-KSB**

**December        31, 2006**

|                            |                        |                                                                                                                                                  | **Page                    No.** |
|---------------------------------|-----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|
| **Part                    I**   | Item                    1.  | Description                    of Business                                                                                                            | 3                               |
|                            | Item                    2.  | Description                    of Property                                                                                                            | 4                               |
|                            | Item                    3.  | Legal                    Proceedings                                                                                                                  | 4                               |
|                            | Item                    4.  | Submission                    of Matters to a Vote of Security Holders                                                                                | 4                               |
|                            |                        |                                                                                                                                                  |                            |
| **Part                    II**  | Item                    5.  | Market                    for Common Equity and Related Stockholder Matters                                                                           | 5                               |
|                            | Item                    6.  | Management’s                    Discussion and Analysis and Results of Operations                    and Financial Condition                    | 7                               |
|                            | Item                    7.  | Financial                    Statements                                                                                                               | 11                              |
|                            | Item                    8.  | Changes                    in and Disagreements with Accountants on Accounting                    and Financial Disclosure                            |  27                        |
|                            | Item                    8A. | Controls                    and Procedures                                                                                                            | 27                              |
|                            |                        |                                                                                                                                                  |                            |
| **Part                    III** | Item                    9.  | Directors,                    Executive Officers, Promoters and Control Persons, Compliance                    with Section 16(a) of the Exchange Act |  28                        |
|                            | Item                    10. | Executive                    Compensation                                                                                                             | 29                              |
|                            | Item                    11. | Security                    Ownership of Certain Beneficial Owners and Management                                                                     | 30                              |
|                            | Item                    12. | Certain                    Relationships and Related Party Transactions                                                                               | 30                              |
|                            | Item                    13. | Principal                    Accountant Fees and Services                                                                                             | 31                              |
| **Part                    IV**  | Item                    14. | Exhibits                    and Reports on Form 8-K                                                                                                   | 32                              |

----

----

**PART          I**

**ITEM          1. DESCRIPTION OF BUSINESS**

**Overview**

**Organizational          History**

**The          Company’s Products and Services**

**Employees**

**RISK          FACTORS**

**Limited          History**

**No          Revenue and Limited Resources**

**Limited          Staff**

**Volatility          of Stock Market**

**ITEM          2. DESCRIPTION OF PROPERTY**

**ITEM          3. LEGAL PROCEEDINGS**

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

----

**PART          II**

**Item          5. Market for Common Equity and Related Stockholder Matters**

**Market          Information**

| Quarter                    ended:     | High                       | Low                        |
|---------------------------------------|----------------------------|----------------------------|
| December                    31, 2006  | $                    0.095 | $                    0.031 |
| September                    30, 2006 | $                    0.155 | $                    0.075 |
| June                    30, 2006      | $                    0.310 | $                    0.120 |
| March                    31, 2006     | $                    0.610 | $                    0.150 |
|                                  |                       |                       |
| December                    31, 2005  | $                    0.270 | $                    0.100 |
| September                    30, 2005 | $                    0.240 | $                    0.040 |
| June                    30, 2005      | $                    0.450 | $                    0.100 |
| March                    31, 2005     | $                    0.550 | $                    0.300 |

**Holders          **

**Dividends          **

**Recent          Sales of Unregistered Securities**

**Item          6. Management's Discussion and Analysis or Plan of          Operation**

**Overview**

**Plan          for Future Operations**

**Critical          Accounting Policies**

*Accounting          for Stock-Based Compensation*

**Off          Balance Sheet Arrangements**

**Recent          Accounting Pronouncements**

*The          Fair Value Option for Financial Assets and Financial          Liabilities*

**Results          of Operations**

|                                                                                                         | 2006       | 2005       |
|--------------------------------------------------------------------------------------------------------------|------------|------------|
| Fair                    value of warrants issued for services                                                | $2,405,847 | $1,105,897 |
| Stock                    issued for hiring bonus for design engineers of eGo Design,                    Inc. | -          | 2,040,000  |
| Stock                    issued for directors' services                                                      | 690,885    | 248,567    |
| Stock                    issued for outside consultants                                                      | 1,724,639  | 1,429,304  |
| Totals                                                                                                       | $4,821,371 | $4,823,768 |

**Liquidity          and Capital Resources**

----

**ITEM          7 - FINANCIAL STATEMENTS**

**AMERICAN          SECURITY RESOURCES CORPORATION**

**INDEX          TO FINANCIAL STATEMENTS**

|                                                                                                                                                                                                                                                                                           | Page     |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| **Report                      of Independent Registered Public Accounting Firm**                                                                                                                                                                                                               | 12       |
|                                                                                                                                                                                                                                                                                           |     |
| **Financial                      Statements**                                                                                                                                                                                                                                                  |     |
|                                                                                                                                                                                                                                                                                           |     |
| Consolidated                      Balance Sheets at December 31, 2006 and 2005                                                                                                                                                                                                                 | 13       |
|                                                                                                                                                                                                                                                                                           |     |
| Consolidated                      Statements of Operations for the years ended December 31, 2006                      and 2005                      and the period from October 1, 2005 (Re-entering of Development                      Stage)                      Through December 31, 2005 | 14       |
|                                                                                                                                                                                                                                                                                           |     |
| Consolidated                      Statement of Shareholders’ Equity for the years ended December 31, 2006                      and 2005 and the period from October 1, 2005 (Re-entering of                      Development                      Stage) through December 31, 2006       | 15       |
|                                                                                                                                                                                                                                                                                           |     |
| Consolidated                      Statements of Cash Flows for the years ended December 31, 2006                      and 2005                      and the period from October 1, 2005 (Re-entering of Development                      Stage)                      Through December 31, 2006 | 18       |
|                                                                                                                                                                                                                                                                                           |     |
| Notes                      to Consolidated Financial Statements                                                                                                                                                                                                                                | 20  |

----

----

**AMERICAN          SECURITY RESOURCES CORPORATION**

**(A          DEVELOPMENT STAGE ENTERPRISE)**

**CONSOLIDATED          BALANCE SHEET**

**December          31, 2006 and 2005**

|                                                                                                                                                                                                                                                                                     | **December                      31, 2006** |   | **December                      31, 2005** |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------|--------|--------------------------------------------|
| **ASSETS**                                                                                                                                                                                                                                                                               |                                       |   |                                       |
| Cash                      in bank                                                                                                                                                                                                                                                        | $                      6,575               |   | $                      11,585              |
| Prepaid                      expenses                                                                                                                                                                                                                                                    | 6,447                                      |   | 4,015                                      |
| Investment                      available for sale                                                                                                                                                                                                                                       | -                                          |   | 138,462                                    |
|                                                                                                                                                                                                                                                                                     |                                       |   |                                       |
| **Total                      Current Assets**                                                                                                                                                                                                                                            | 13,022                                     |   | 154,062                                    |
|                                                                                                                                                                                                                                                                                     |                                       |   |                                       |
| Equipment,                      net of accumulated depreciation of $26,467 and $4,130,                      respectively                                                                                                                                                                 | 133,121                                    |   | 15,455                                     |
|                                                                                                                                                                                                                                                                                     |                                       |   |                                       |
| **TOTAL                      ASSETS**                                                                                                                                                                                                                                                    | $                      146,143             |   | $                      169,517             |
|                                                                                                                                                                                                                                                                                     |                                       |   |                                       |
| **LIABILITIES                      AND SHAREHOLDERS' (DEFICIT) EQUITY**                                                                                                                                                                                                                  |                                       |   |                                       |
|                                                                                                                                                                                                                                                                                     |                                       |   |                                       |
| **CURRENT                      LIABILITIES**                                                                                                                                                                                                                                             |                                       |   |                                       |
| Accounts                      payable                                                                                                                                                                                                                                                    | 126,184                                    |   | 20,105                                     |
| Other                      current liabilities                                                                                                                                                                                                                                           | 119,729                                    |   | 5,373                                      |
| Accrued                      contingent liability and interest                                                                                                                                                                                                                           | 153,250                                    |   | -                                          |
| Notes                      payable and accrued interest - shareholders                                                                                                                                                                                                                   | 20,157                                     |   | -                                          |
| **Total                      Current Liabilities**                                                                                                                                                                                                                                       | $                      419,320             |   | $                      25,478              |
|                                                                                                                                                                                                                                                                                     |                                       |   |                                       |
| **SHAREHOLDERS'                      (DEFICIT)/EQUITY**                                                                                                                                                                                                                                  |                                       |   |                                       |
| Preferred                      stock - 1,000,000 shares authorized; $.001 par value; no shares                      issued or                      outstanding                                                                                                                           | -                                          |   | -                                          |
|                                                                                                                                                                                                                                                                                     |                                       |   |                                       |
| Common                      stock - 200,000,000 shares authorized; $.001 par value; 61,675,766                      and                      109,604,794 shares issued and outstanding at December 31,2005                      and December                      31, 2006, respectively | 109,604                                    |   | 61,676                                     |
|                                                                                                                                                                                                                                                                                     |                                       |   |                                       |
| Additional                      paid-in capital                                                                                                                                                                                                                                          | 43,253,937                                 |   | 35,205,849                                 |
| Deficit                      accumulated during the development stage                                                                                                                                                                                                                    | (11,528,434)                               |   | (2,928,664)                                |
| Deficit                      accumulated from prior operations                                                                                                                                                                                                                           | (32,108,284)                               |   | (32,108,284)                               |
| Accumulated                      other comprehensive loss                                                                                                                                                                                                                                | -                                          |   | (86,538)                                   |
|                                                                                                                                                                                                                                                                                     |                                       |   |                                       |
| **Total                      Shareholders' (Deficit)/Equity**                                                                                                                                                                                                                            | (273,177)                                  |   | 144,039                                    |
|                                                                                                                                                                                                                                                                                     |                                       |   |                                       |
| **TOTAL                      LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY**                                                                                                                                                                                                            | $                      146,143             |   | $                      169,517             |

----

**AMERICAN          SECURITY RESOURCES CORPORATION**

**(A          DEVELOPMENT STAGE ENTERPRISE)**

**CONSOLIDATED          STATEMENTS OF OPERATIONS**

**FOR          THE YEARS ENDED DECEMBER 31, 2006 AND 2005 AND THE PERIOD FROM OCTOBER          1, 2005          (RE-ENTERING OF DEVELOPMENT STAGE) THROUGH DECEMBER 31,          2006**

|                                                                              | **Year                        Ended****December                        31, 2006** |   | **Year                        Ended****December                        31, 2005** |   | **Re-entering                        Development Stage to 12/31/06** |
|-----------------------------------------------------------------------------------|-----------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|
|                                                                              |                                                                              |   |                                                                              |   |                                                                 |
| General                        and administrative expenses                        | $                        6,579,160                                                |   | $                        5,381,900                                                |   | 9,505,780                                                            |
| Depreciation                                                                      | 22,337                                                                            |   | 2,648                                                                             |   | 23,283                                                               |
| Research                        and development expenses                          | 1,767,084                                                                         |   | -                                                                                 |   | 1,768,183                                                            |
| Operating                        Loss                                             | (8,368,581)                                                                       |   | (5,384,548)                                                                       |   | (11,297,246)                                                         |
|                                                                              |                                                                              |   |                                                                              |   |                                                                 |
| Other                        Income (Expense):                                    |                                                                              |   |                                                                              |   |                                                                 |
| Permanent                        impairment of investment                         | (225,000)                                                                         |   | -                                                                                 |   | (225,000)                                                            |
| Interest                        expense                                           | (6,189)                                                                           |   | -                                                                                 |   | (6,188)                                                              |
| Net                        Loss                                                   | $                        (8,599,770)                                              |   | $                        (5,384,548)                                              |   | $                        (11,528,434)                                |
|                                                                              |                                                                              |   |                                                                              |   |                                                                 |
| Other                        Comprehensive Loss:                                  |                                                                              |   |                                                                              |   |                                                                 |
| Change                        in unrealized loss on investment available for sale | -                                                                                 |   | (86,538)                                                                          |   | (                        86,538)                                     |
|                                                                              |                                                                              |   |                                                                              |   |                                                                 |
| Comprehensive                        Loss                                         | $                        (8,599,770)                                              |   | $                        (5,471,086)                                              |   | $                        (11,614,976)                                |
|                                                                              |                                                                              |   |                                                                              |   |                                                                 |
| Loss                        per share - basic and fully diluted                   | $                        (0.11)                                                   |   | $                        (0.13)                                                   |   |                                                                 |
|                                                                              |                                                                              |   |                                                                              |   |                                                                 |
| Weighted                        average no. of shares outstanding                 | 80,723,597                                                                        |   | 42,053,103                                                                        |   |                                                                 |

----

**AMERICAN            SECURITY RESOURCES CORPORATION**

**(A            DEVELOPMENT STAGE ENTERPRISE)**

**CONSOLIDATED            STATEMENT OF SHAREHOLDERS’ EQUITY**

**FOR            THE YEARS ENDED DECEMBER 31, 2006 AND 2005 AND THE PERIOD FROM OCTOBER            1, 2005            (RE-ENTERING OF DEVELOPMENT STAGE) THROUGH DECEMBER 31,            2006**

|                                                                                                                                            |                                                                                                                                                                                      | No.                      ofShares      | Paid-inCapital                      and Par Value | Accumulated                      Deficit | OtherComprehensiveLoss          | Total                          |
|-------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------|---------------------------------------------------|------------------------------------------|---------------------------------|--------------------------------|
|                                                                                                                                            |                                                                                                                                                                                      | Development                      Stage | Prior                      Operations             |
|                                                                                                                                            |                                                                                                                                                                                      |
|                                                                                                                                            |                                                                                                                                                                                      |                                   |                                              |                                     |                            |                           |   |
| Balance                      at 12/31/04                                                                                                        | 35,319,977                                                                                                                                                                                | $                      29,741,757      | $                      (29,652,400)               | $                      -                 | $                      -        | $                      89,357  |
|                                                                                                                                            |                                                                                                                                                                                      |                                   |                                              |                                     |                            |                           |
| Shares                      issued for:                                                                                                         |                                                                                                                                                                                      |                                   |                                              |                                     |                            |                           |
| ---                      cash                                                                                                                   | 2,000,000                                                                                                                                                                                 | 77,000                                 |                                              |                                     |                            | 77,000                         |
| ---                      director services                                                                                                      | 2,624,501                                                                                                                                                                                 | 248,567                                |                                              |                                     |                            | 248,567                        |
| ---                      services                                                                                                               | 8,231,288                                                                                                                                                                                 | 1,429,304                              |                                              |                                     |                            | 1,429,304                      |
| ---                      warrnat expense                                                                                                        | -                                                                                                                                                                                         | 1,505,897                              |                                              |                                     |                            | 1,505,897                      |
| ---                      compensation                                                                                                           | 12,000,000                                                                                                                                                                                | 2,040,000                              |                                              |                                     |                            | 2,040,000                      |
| ---                      equity swap investment                                                                                                 | 1,500,000                                                                                                                                                                                 | 225,000                                |                                              |                                     |                            | 225,000                        |
| Net                      loss                                                                                                                   |                                                                                                                                                                                      |                                   | (5,384,548)                                       |                                     |                            | (5,384,548)                    |
| Other                      comprehensive loss                                                                                                   |                                                                                                                                                                                      |                                   |                                              |                                     | (86,538)                        | (86,538)                       |
|                                                                                                                                            |                                                                                                                                                                                      |                                   |                                              |                                     |                            |                           |
| Balance,                      12/31/05                                                                                                          | 61,675,766                                                                                                                                                                                | $                      35,267,525      | $                      (35,036,948)               | $                      -                 | $                      (86,538) | $                      144,039 |
|                                                                                                                                            |                                                                                                                                                                                      |                                   |                                              |                                     |                            |                           |   |
| Reclassification                      of accumulated deficit                                                                                    |                                                                                                                                                                                      | 32,108,284                             | (32,108,284)                                      |                                     |                            |
|                                                                                                                                            |                                                                                                                                                                                      |                                   |                                              |                                     |                            |                           |   |
| Shares                      of common stock issued for cash                                                                                     |                                                                                                                                                                                      |                                   |                                              |                                     |                            |
|                                                                                                                                            | January                                                                                                                                                                                   | 1,250,000                              | 111,963                                           |                                     |                            |                           | 111,963 |
|                                                                                                                                            | February                                                                                                                                                                                  | 1,608,000                              | 285,138                                           |                                     |                            |                           | 285,138 |
|                                                                                                                                            | March                                                                                                                                                                                     | 3,330,000                              | 428,344                                           |                                     |                            |                           | 428,344 |
|                                                                                                                                            | May                                                                                                                                                                                       | 1,000,000                              | 136,981                                           |                                     |                            |                           | 136,981 |
|                                                                                                                                            | June                                                                                                                                                                                      | 2,050,000                              | 195,000                                           |                                     |                            |                           | 195,000 |
|                                                                                                                                            | July                                                                                                                                                                                      | 1,250,000                              | 115,000                                           |                                     |                            |                           | 115,000 |
|                                                                                                                                            | August                                                                                                                                                                                    | 2,500,000                              | 179,750                                           |                                     |                            |                           | 179,750 |
|                                                                                                                                            | September                                                                                                                                                                                 | 1,500,000                              | 103,000                                           |                                     |                            |                           | 103,000 |
|                                                                                                                                            | October                                                                                                                                                                                   | 2,781,250                              | 182,500                                           |                                     |                            |                           | 182,500 |
|                                                                                                                                            | November                                                                                                                                                                                  | 500,000                                | 24,000                                            |                                     |                            |                           | 24,000 |
|                                                                                                                                            | December                                                                                                                                                                                  | 5,975,000                              | 144,315                                           |                                     |                            |                           | 144,315 |
|                                                                                                                                            | Total                                                                                                                                                                                     | 23,744,250                             | 1,905,990                                         |                                     |                            |                           | 1,905,990 |
|                                                                                                                                            |                                                                                                                                                                                      |                                   |                                              |                                     |                            |                           |   |
| Shares                      of common stock issued for Directors' services                                                                      |                                                                                                                                                                                      |                                   |                                              |                                     |
|                                                                                                                                            | March                                                                                                                                                                                     | 700,000                                | 175,175                                           |                                     |                            |                           | 175,175 |
|                                                                                                                                            | August                                                                                                                                                                                    | 4,298,000                              | 408,310                                           |                                     |                            |                           | 408,310 |
|                                                                                                                                            | October                                                                                                                                                                                   | 200,000                                | 17,400                                            |                                     |                            |                           | 17,400 |
|                                                                                                                                            | December                                                                                                                                                                                  | 1,500,000                              | 90,000                                            |                                     |                            |                           | 90,000 |
|                                                                                                                                            | Total                                                                                                                                                                                     | 6,698,000                              | 690,885                                           |                                     |                            |                           | 690,885 |
|                                                                                                                                            |                                                                                                                                                                                      |                                   |                                              |                                     |                            |                           |   |
| Shares                      of common stock issued for consulting services                                                                      |                                                                                                                                                                                      |                                   |                                              |                                     |
|                                                                                                                                            | January                                                                                                                                                                                   | -                                      | -                                                 |                                     |                            |                           | - |
|                                                                                                                                            | February                                                                                                                                                                                  | -                                      | -                                                 |                                     |                            |                           | - |
|                                                                                                                                            | March                                                                                                                                                                                     | 1,370,999                              | 452,078                                           |                                     |                            |                           | 452,078 |
|                                                                                                                                            | April                                                                                                                                                                                     | 700,000                                | 178,500                                           |                                     |                            |                           | 178,500 |
|                                                                                                                                            | June                                                                                                                                                                                      | 200,000                                | 27,000                                            |                                     |                            |                           | 27,000 |
|                                                                                                                                            | July                                                                                                                                                                                      | 1,100,000                              | 121,000                                           |                                     |                            |                           | 121,000 |
|                                                                                                                                            | August                                                                                                                                                                                    | 7,701,999                              | 707,690                                           |                                     |                            |                           | 707,690 |
|                                                                                                                                            | September                                                                                                                                                                                 | 213,053                                | 22,371                                            |                                     |                            |                           | 22,371 |
|                                                                                                                                            | October                                                                                                                                                                                   | 1,500,000                              | 126,000                                           |                                     |                            |                           | 126,000 |
|                                                                                                                                            | December                                                                                                                                                                                  | 2,000,000                              | 90,000                                            |                                     |                            |                           | 90,000 |
|                                                                                                                                            | Total                                                                                                                                                                                     | 14,786,051                             | 1,724,639                                         |                                     |                            |                           | 1,724,639 |
|                                                                                                                                            |                                                                                                                                                                                      |                                   |                                              |                                     |                            |                           |   |
| Shares                      of common stock issued for accrued liabilities                                                                      |                                                                                                                                                                                      |                                   |                                              |                                     |
|                                                                                                                                            | May                                                                                                                                                                                       | 455,448                                | 107,030                                           |                                     |                            |                           | 107,030 |
|                                                                                                                                            | June                                                                                                                                                                                      | 177,844                                | 25,509                                            |                                     |                            |                           | 25,509 |
|                                                                                                                                            | Total                                                                                                                                                                                     | 633,292                                | 132,539                                           |                                     |                            |                           | 132,539 |
|                                                                                                                                            |                                                                                                                                                                                      |                                   |                                              |                                     |                            |                           |   |
| Shares                      of common stock issued relating to the cashless exercise of                      warrants                           |                                                                                                                                                                                      |                                   |                                              |
|                                                                                                                                            | February                                                                                                                                                                                  | 1,129,935                              | -                                                 |                                     |                            |                           | - |
|                                                                                                                                            | Total                                                                                                                                                                                     | 1,129,935                              | -                                                 |                                     |                            |                           | - |
|                                                                                                                                            |                                                                                                                                                                                      |                                   |                                              |                                     |                            |                           |   |
| Fair                      value of warrants issued for services                                                                                 |                                                                                                                                                                                      |                                   |                                              |                                     |
|                                                                                                                                            | March                                                                                                                                                                                     | -                                      | 1,775,832                                         |                                     |                            |                           | 1,775,832 |
|                                                                                                                                            | April                                                                                                                                                                                     | -                                      | 111,000                                           |                                     |                            |                           | 111,000 |
|                                                                                                                                            | May                                                                                                                                                                                       | -                                      | 127,000                                           |                                     |                            |                           | 127,000 |
|                                                                                                                                            | June                                                                                                                                                                                      | -                                      | 85,000                                            |                                     |                            |                           | 85,000 |
|                                                                                                                                            | September                                                                                                                                                                                 | -                                      | 175,922                                           |                                     |                            |                           | 175,922 |
|                                                                                                                                            | October                                                                                                                                                                                   | -                                      | 80,314                                            |                                     |                            |                           | 80,314 |
|                                                                                                                                            | November                                                                                                                                                                                  | -                                      | 24,555                                            |                                     |                            |                           | 24,555 |
|                                                                                                                                            | December                                                                                                                                                                                  | -                                      | 26,224                                            |                                     |                            |                           | 26,224 |
|                                                                                                                                            | Total                                                                                                                                                                                     | -                                      | 2,405,847                                         |                                     |                            |                           | 2,405,847 |
|                                                                                                                                            |                                                                                                                                                                                      |                                   |                                              |                                     |                            |                           |   |
| Shares                      of common stock issued for employee and contractor incentives                      and                      bonuses |                                                                                                                                                                                      |                                   |
|                                                                                                                                            | December                                                                                                                                                                                  | 937,500                                | 42,188                                            |                                     |                            |                           | 42,188 |
|                                                                                                                                            | Total                                                                                                                                                                                     | 937,500                                | 42,188                                            |                                     |                            |                           | 42,188 |
|                                                                                                                                            |                                                                                                                                                                                      |                                   |                                              |                                     |                            |                           |   |
| Fair                      value of the modification of the warrants                                                                             |                                                                                                                                                                                      |                                   |                                              |                                     |
|                                                                                                                                            | July                                                                                                                                                                                      | -                                      | 1,127,998                                         |                                     |                            |                           | 1,127,998 |
|                                                                                                                                            |                                                                                                                                                                                      |                                   |                                              |                                     |                            |                           |   |
| Warrants                      issued for cash - July                                                                                            | 150,000                                                                                                                                                                                   |                                   |                                              |                                     | 150,000                         |
|                                                                                                                                            |                                                                                                                                                                                      |                                   |                                              |                                     |                            |                           |
| Net                      loss                                                                                                                   |                                                                                                                                                                                      |                                   | (8,599,770)                                       |                                     |                            | (8,599,770)                    |
|                                                                                                                                            |                                                                                                                                                                                      |                                   |                                              |                                     |                            |                           |   |
| Other                      equity items (1)                                                                                                     | (84,070)                                                                                                                                                                                  |                                   |                                              | 86,538                                   | 2,468                           |
|                                                                                                                                            |                                                                                                                                                                                      |                                   |                                              |                                     |                            |                           |   |
| Balance,                      12/31/06                                                                                                          | 109,604,794                                                                                                                                                                               | $43,363,541                            | $(11,528,434)                                     | $                      (32,108,284)      | -                               | $(273,177)                     |
|                                                                                                                                            |                                                                                                                                                                                      |                                   |                                              |                                     |                            |                           |   |
| Less:                      par value of common stock ($0.01)                                                                                    | 109,604                                                                                                                                                                                   |                                   |                                              |                                     |                            |
|                                                                                                                                            |                                                                                                                                                                                      |                                   |                                              |                                     |                            |                           |   |
|                                                                                                                                            |                                                                                                                                                                                      |                                   |                                              |                                     |                            |                           |   |
| Additional                      paid-in capital                                                                                                 | $                      43,253,937                                                                                                                                                         |                                   |                                              |                                     |                            |
|                                                                                                                                            |                                                                                                                                                                                      |                                   |                                              |                                     |                            |                           |   |
| (1)                      Other Equity Items:                                                                                                    |                                                                                                                                                                                      |                                   |                                              |                                     |                            |
|                                                                                                                                            | $84,070                      subtraction from Paid In Capital results from subscription                      receivable for                      cash received subsequent to 12/31/06     |
|                                                                                                                                            | $86,538                      addition to “Other Comprehensive Loss” results from the reclassification                      of loss on investment from temporary to permanent. |

----

**AMERICAN          SECURITY RESOURCES CORPORATION **

**(A          DEVELOPMENT STAGE ENTERPRISE)**

**CONSOLIDATED          STATEMENTS OF CASH FLOWS**

**FOR          THE YEARS ENDED DECEMBER 31, 2006 AND 2005 AND THE PERIOD FROM OCTOBER          1, 2005          (RE-ENTERING OF DEVELOPMENT STAGE) THROUGH DECEMBER 31,          2006**

|                                                                                                                             | **Year                    Ended December 31, 2006** |   | **Year                    Ended December 31, 2005** |   | **Re-entering                    Development Stage to 12/31/06** |
|----------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|--------|-----------------------------------------------------|--------|------------------------------------------------------------------|
| **CASH                    FLOWS FROM OPERATING ACTIVITIES:**                                                                     |                                                |   |                                                |   |                                                             |
| Net                    loss                                                                                                      | $                    (8,599,770)                    |   | $                    (5,384,548)                    |   | $                    (11,528,434)                                |
|                                                                                                                             |                                                |   |                                                |   |                                                             |
| Adjustments                    to reconcile net loss to net cash from operating                    activities:                   |                                                |   |                                                |   |                                                             |
|                                                                                                                             |                                                |   |                                                |   |                                                             |
| Depreciation                    and amortization                                                                                 | 22,337                                              |   | 2,648                                               |   | 23,282                                                           |
| Common                    stock issued for services                                                                              | 2,457,712                                           |   | 5,223,768                                           |   | 6,437,814                                                        |
| Stock                    option and warrant expense                                                                              | 3,533,845                                           |   | -                                                   |   | 2,457,712                                                        |
| Permanent                    impairment of investment available for sale                                                         | 225,000                                             |   | -                                                   |   | 225,000                                                          |
| Contingent                    liquidated damages expense                                                                         | 150,000                                             |   | -                                                   |   | 150,000                                                          |
| Change                    in operating assets and liabilities:                                                                   |                                                |   |                                                |   |                                                             |
| Prepaid                    expenses                                                                                              | (2,432)                                             |   | (4,015)                                             |   | 1,583                                                            |
| Accounts                    receivable from employees                                                                            | -                                                   |   | -                                                   |   |                                                             |
| Accounts                    payable                                                                                              | 60,746                                              |   | 4,553                                               |   | 68,699                                                           |
| Accrued                    liabilities                                                                                           | 250,145                                             |   | (37,404)                                            |   | 190,748                                                          |
| Net                    cash used in operating activities                                                                         | $                    (1,902,417)                    |   | $                    (194,998)                      |   | $(1,973,596)                                                     |
|                                                                                                                             |                                                |   |                                                |   |                                                             |
| **CASH                    FLOWS FROM INVESTING ACTIVITIES:**                                                                     |                                                |   |                                                |   |                                                             |
| Note                    receivable                                                                                               | -                                                   |   | 100,000                                             |   | -                                                                |
| Purchases                    of property and equipment                                                                           | (140,003)                                           |   | (8,269)                                             |   | (148,272)                                                        |
|                                                                                                                             |                                                |   |                                                |   |                                                             |
| Net                    cash provided from (used in) investing activities                                                         | $                    (140,003)                      |   | $                    91,731                         |   | $(148,272)                                                       |
|                                                                                                                             |                                                |   |                                                |   |                                                             |
| **CASH                    FLOWS FROM FINANCING ACTIVITIES:**                                                                     |                                                |   |                                                |   |                                                             |
| Proceeds                    from the sale of common stock                                                                        | 1,821,920                                           |   | 77,000                                              |   | 1,821,920                                                        |
| Shareholders                    loans                                                                                            | 20,000                                              |   | -                                                   |   | 20,000                                                           |
| Borrowings                    under line of credit                                                                               | 45,490                                              |   | -                                                   |   | 45,490                                                           |
| Proceeds                    from issuance of warrants                                                                            | 150,000                                             |   | -                                                   |   | 150,000                                                          |
|                                                                                                                             |                                                |   |                                                |   |                                                             |
| Net                    cash provided from financing activities                                                                   | $2,037,410                                          |   | $77,000                                             |   | $2,037,410                                                       |
|                                                                                                                             |                                                |   |                                                |   |                                                             |
| Net                    change in cash and cash equivalents                                                                       | (5,010)                                             |   | (26,267)                                            |   | (84,458)                                                         |
| Cash                    and cash equivalents, beginning of period                                                                | 11,585                                              |   | 37,852                                              |   | 91,033                                                           |
| Cash                    and cash equivalents, end of period                                                                      | $                    6,575                          |   | $                    11,585                         |   | $                    6,575                                       |
|                                                                                                                             |                                                |   |                                                |   |                                                             |
| Supplemental                    disclosure of non-cash financing activities:Stock                    issued for accrued expenses |  $                    132,539                  |   |  $                    -                        |   |  $                    132,539                               |
| Cashless                    exercise of warrants                                                                                 | $                    1,130                          |   | $                    -                              |   | $                    1,130                                       |
| Cash                    paid for interest and income taxes                                                                       | $                    -                              |   | $                    -                              |   | $                    -                                           |

----

**AMERICAN          SECURITY RESOURCES CORPORATION **

**(A          DEVELOPMENT STAGE ENTERPRISE)**

**NOTES          TO FINANCIAL STATEMENTS**

**NOTE          1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING          POLICIES**

**Organization**

**Significant          Accounting Policies**

*The          Fair Value Option for Financial Assets and Financial          Liabilities*

**NOTE          2 - GOING CONCERN**

**NOTE          3 - PROPERTY AND EQUIPMENT**

| **Description**                                   | **Life**                             | **Amount**                   | **Accumulated                    Depreciation** | **Net                    Book Value** |
|---------------------------------------------------|--------------------------------------|------------------------------|-------------------------------------------------|---------------------------------------|
| Office                    furniture and equipment | Generally                    5 years | $                    36,957  | $                    10,629                     | $                    26,328           |
| Equipment                                         | From                    3 to 7 years | 122,631                      | 15,838                                          | 106,793                               |
| Totals                                            |                                 | $                    159,588 | $                    26,467                     | $                    133,121          |

| **Description**                                   | **Life**                             | **Amount**                  | **Accumulated                    Depreciation** | **Net                    Book Value** |
|---------------------------------------------------|--------------------------------------|-----------------------------|-------------------------------------------------|---------------------------------------|
| Office                    furniture and equipment | Generally                    5 years | $                    14,597 | $                    380                        | $                    14,217           |
| Equipment                                         | From                    3 to 7 years | $                    4,988  | $                    3,750                      | $                    1,238            |
| Totals                                            |                                 | $                    19,585 | $                    4,130                      | $                    15,455           |

**NOTE          4- INVESTMENT, AVAILABLE FOR SALE**

**NOTE          5 - COMMON STOCK**

**NOTE          6 - OPTIONS**

**NOTE          7 -WARRANTS**

|                                                             | Weighted                      Avg. Exercise Price | Outstanding                      Beginning of Period | New                      Grants | Forfeitures                      and Cancellations | Exercises   | Outstanding                      End of Period |
|------------------------------------------------------------------|---------------------------------------------------|------------------------------------------------------|---------------------------------|----------------------------------------------------|-------------|------------------------------------------------|
|                                                             |                                              |                                                 |                            |                                               |        |                                           |
| Year                      ended December 31, 2004                | $0.58                                             | -                                                    | 19,500,000                      | -                                                  | -           | 19,500,000                                     |
| December                      31, 2004                           |                                              |                                                 | 19,500,000                      | -                                                  | -           | 19,500,000                                     |
|                                                             |                                              |                                                 |                            |                                               |        |                                           |
| 2005                      Activity:                              |                                              |                                                 |                            |                                               |        |                                           |
| 2005                      Grants                                 | $0.30                                             |                                                 | 1,000,000                       | -                                                  | -           | 1,000,000                                      |
| 2005                      Grants                                 | $0.30                                             |                                                 | 5,000,000                       | -                                                  | -           | 5,000,000                                      |
| Exercised                      for cash                          | $0.04                                             |                                                 | -                               | -                                                  | 2,000,000   | (2,000,000)                                    |
| Cancelled                                                        | $0.30                                             |                                                 | -                               | 4,000,000                                          | -           | (4,000,000)                                    |
|                                                             |                                              |                                                 |                            |                                               |        |                                           |
| December                      31, 2005                           | $                      0.60                       | 19,500,000                                           | 6,000,000                       | 4,000,000                                          | 2,000,000   | 19,500,000                                     |
|                                                             |                                              |                                                 |                            |                                               |        |                                           |
| 2006                      Activity:                              |                                              |                                                 |                            |                                               |        |                                           |
| Granted                      pursuant to consulting arrangements | $                      0.08                       |                                                 | 15,250,000                      | -                                                  | 15,250,000  | -                                              |
| Forfeitures                      aqnd cashless exercise          | $                      0.13                       |                                                 | -                               | 500,000                                            | 1,500,000   | (2,000,000)                                    |
| Options                      granted to directors                | $                      0.19                       |                                                 | 5,500,000                       | -                                                  | -           | 5,500,000                                      |
| Granted                      pursuant to private placements      | $                      0.41                       |                                                 | 1,119,250                       | -                                                  | -           | 1,119,250                                      |
| Granted                      pursuant to warrant agreement       | $                      0.01                       |                                                 | 50,000,000                      | -                                                  | -           | 50,000,000                                     |
|                                                             |                                              |                                                 |                            |                                               |        |                                           |
| December                      31, 2006                           | $                      0.13                       | 19,500,000                                           | 71,869,250                      | 500,000                                            | 16,,750,000 | 74,119,250                                     |

**NOTE          8 - INCOME TAXES**

**NOTE          8 - LEASES**

**NOTE          9 - LITIGATION**

**ITEM          8**

**Changes          In and Disagreements with Accountants on Accounting and Financial          Disclosure.**

**Item          8A. Controls and Procedures.**

**PART          III**

**ITEM          9 - Directors, Executives Officers, Promoters and Control Persons, Compliance          with Section 16(a) of the Exchange Act**

**Directors          and Executive Officers**

| Name                                |   | Positions                    Held |   | Date                    of Election or Designation |
|-------------------------------------|--------|-----------------------------------|--------|----------------------------------------------------|
|                                |   |                              |   |                                               |
| Robert                    C. Farr   |   | President/COO                     |   | 11/23/05                                           |
|                                |   | Director                          |   | 10/27/04                                           |
|                                |   |                              |   |                                               |
| Frank                    Neukomm    |   | Director                          |   | 02/25/04                                           |
|                                |   | Secretary                         |   | 11/08/04                                           |
|                                |   | Chairman/CEO                      |   | 11/21/05                                           |
|                                |   |                              |   |                                               |
| Robert                    J. Wilson |   | Director                          |   | 07/21/05                                           |
|                                |   |                              |   |                                               |
| Randall                    Newton   |   | CFO                               |   | 01/21/06                                           |
|                                |   |                              |   |                                               |
| Alvie                    T. Merril  |   | Director                          |   | 10/11/06                                           |
|                                |   |                              |   |                                               |
| James                    R. Twedt   |   | Director                          |   | 10/11/06                                           |

**Business          Experience**

**Compliance          with Section 16(a) of the Exchange Act**

**Item          10. Executive Compensation**

| **Name**                                                                                                                                                                                                                                                                            | **Position                        or Title**   | **Year** | **Salary**                       | **Bonus**                  | **Stock                        Awards** | **All                        Other** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------|----------|----------------------------------|----------------------------|-----------------------------------------|--------------------------------------|
| Robert                        Farr                                                                                                                                                                                                                                                  | Chief                        Operating Officer | 2006     | $                        144,000 | $                        - | $                        190,000        | $                        755,173     |
|                                                                                                                                                                                                                                                                                |                                           | 2005     | 10,200                           | -                          | -                                       | -                                    |
| Frank                        Neukomm                                                                                                                                                                                                                                                | Chief                        Executive Officer | 2006     | 144,000                          | 30,000                     | 190,000                                 | 188,793                              |
|                                                                                                                                                                                                                                                                                |                                           | 2005     | 35,000                           | -                          | -                                       | -                                    |
| Randall                        Newton                                                                                                                                                                                                                                               | Chief                        Financial Officer | 2006     | -                                | -                          | 135,200                                 | -                                    |
|                                                                                                                                                                                                                                                                                |                                           | 2005     | -                                | -                          | -                                       | -                                    |
|                                                                                                                                                                                                                                                                                |                                           |     |                             |                       |                                    |                                 |
| On                        May 1, 2006, Mr. Farr received 121,277 shares, and Mr. Neukomm                        received                        114,891 shares in settlement of unpaid salary accrued but                        not paid at                        March 31, 2006. |

**Compensation          of Directors **

**Item          11. Security Ownership of Certain Beneficial Owners and          Management**

**Security          Ownership of Certain Beneficial Owners**

| **Name                    and Address**                                                                               | **Type                    of Ownership** | **No.                    of Shares Beneficially Owned** | **Percent                    of Class** |
|-----------------------------------------------------------------------------------------------------------------------|------------------------------------------|---------------------------------------------------------|-----------------------------------------|
|                                                                                                                  |                                     |                                                    |                                    |
| Frank                    Neukomm9601                    Katy freeway, Suite 220Houston,                    TX 77024   | Personal                                 | 7,487,250                                               | 6.8%                                    |
| Edward                    L. Davis9601                    Katy freeway, Suite 220Houston,                    TX 77024 | Personal                                 | 7,921,312                                               | 7.2%                                    |

**Item          12. Certain Relationships and Related Transactions**

**Item          13. Principal Accountant Fees and Services**

----

**PART          IV**

**Item          14. Exhibits and Reports on Form 8-K.**

|   |                                                                                                                                                                                                                                                                                                                  |          | Incorporated                          by reference |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------|----------------------------------------------------|
| No.    | Name                          of Exhibit                                                                                                                                                                                                                                                                              | FiledHerewith | Form                                               | Period                          Ending | Exhibit | Filing                          Date |
| 3.1    | Initial                          Articles of Incorporation filed in the State of Utah.                                                                                                                                                                                                                           |          | 10-SB                                              |   | 3.1 | 09/22/99 |
| 3.2    | Initial                          Articles of Incorporation filed in the State of Nevada.                                                                                                                                                                                                                         |          | 10-SB                                              |   | 3.1 | 09/22/99 |
| 3.3    | Articles                          of Merger to change the Company's domicile filed in the                          State of Utah and                          Nevada and effecting a one for four reverse split of the                          outstanding                          securities of The Company.  |          | 10/SB/12GA                                         |   | 3.3 | 09/02/99 |
| 3.5    | By-Laws                                                                                                                                                                                                                                                                                                          |          | 10/SB/12GA                                         |   | 3.5 | 02/02/00 |
| 10.1   | Purchase                          agreement - eGO Design                                                                                                                                                                                                                                                         |          | 10-KSB/A                                           | 12/31/05 | 10.1 | 11/01/06 |
| 10.2   | 2.0                          Million Warrants issued                                                                                                                                                                                                                                                             |          | 10-KSB/A                                           | 12/31/05 | 10.1 | 11/01/06 |
| 10.3   | 2.5                          Million-Unit Warrants                                                                                                                                                                                                                                                               |          | 10-KSB/A                                           | 12/31/05 | 10.1 | 11/01/06 |
| 10.4   | Employment                          Agreement - Joe Grace                                                                                                                                                                                                                                                        |          | 10-KSB                                             | 12/31/04 | 14B | 03/31/05 |
| 10.5   | Form                          of Warrant Agreement                                                                                                                                                                                                                                                               |          | 10-KSB/A                                           | 12/31/05 | 10.1 | 11/01/06 |
| 21     | Subsidiaries                          of Registrant                                                                                                                                                                                                                                                              |          | 10-KSB/A                                           | 12/31/05 | 10.1 | 11/01/06 |
| 31.1   | Certification                          of Chief Executive Officer Pursuant to Section 302 of the                          Sarbanes-Oxley                          Act of 2002                                                                                                                                    | X             |                                               |   |   |   |
| 31.2   | Certification                          of Chief Financial Officer Pursuant to Section 302 of the                          Sarbanes-Oxley                          Act of 2002                                                                                                                                    | X             |                                               |   |   |   |
| 32.1   | Certification                          of Chief Executive Officer Pursuant to Section 906 of the                          Sarbanes-Oxley                          Act of 2002                                                                                                                                    | X             |                                               |   |   |   |
| 32.2   | Certification                          of Chief Financial Officer Pursuant to Section 906 of the                          Sarbanes-Oxley                          Act of 2002                                                                                                                                    | X             |                                               |   |   |   |
| 99.1   | Code                          of Business Conduct and Ethics                                                                                                                                                                                                                                                     |          | 10-KSB/A                                           | 12/31/05 | 10.1 | 11/01/06 |

----

**SIGNATURE**

| /s/                  Frank Neukomm                                                |
|-----------------------------------------------------------------------------------|
| Frank                  NeukommPresident,                  Chief Executive Officer |

| /s/                  Randall Newton                                     |
|-------------------------------------------------------------------------|
| Randall                  NewtonChief                  Financial Officer |