UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

Amendment 1

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended March 31, 2010

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from __________ to __________

Commission File No. 000-27419

AMERICAN SECURITY RESOURCES CORPORATION

(Exact Name of Registrant in its Charter)

	Nevada		90-0179050
	(State or Other Jurisdiction of Incorporation)		(IRS Employer Identification No.)

19 Briar Hollow, Suite 125

Houston, TX 75027

(Address of Principal Executive Offices)(Zip Code)

(713) 465-1001

Registrant’s Telephone Number

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer		Accelerated filer	
Non-accelerated filer		Smaller reporting company	þ
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No þ

As of May 23, 2010, there were 9,590,933,120 shares outstanding of the registrant’s common stock.

EXPANATORY NOTE

This Amendment to the quarterly report on Form 10Q/A is being filed to amend our quarterly report on Form 10Q for the quarter ended March 31, 2010, which was originally reported on May 24, 2010. We are filing this Form 10Q/A to amend and correct the disclosure on the cover page of the number of shares of common stock outstanding as of May 23, 2010 to the actual number outstanding on that date. Our previous filing inadvertently reflected the actual number of shares outstanding as of March 31, 2010, but erroneously referred to May 23, 2010.

This Form 10-Q/A does not reflect events occurring after the filing of the Original Form 10-Q, and does not modify or update the condensed financial statements or disclosures therein in any way other than as required to reflect the adjustment described above.

INDEX

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	CONSOLIDATED BALANCE SHEETS	3

	CONSOLIDATED STATEMENTS OF OPERATIONS	4

	CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY	5

	CONSOILIDATED STATEMENTS OF CASH FLOWS	9

	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	10


Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15

Item 4.	Controls and Procedures	16

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	17

Item 1A.	Risk Factors	17

Item 3.	Defaults Upon Senior Securities	17

Item 4.	Submission of Matters to a Vote of Security Holders	17

Item 5.	Other Information	17

Item 6.	Exhibits	17

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

AMERICAN SECURITY RESOURCES CORPORATION

(A DEVELOPMENT STAGE ENTERPRISE)

CONSOLIDATED BALANCE SHEETS

	March 31, 2010 (unaudited)	December 31, 2009
ASSETS
Cash in bank	$ 13,160	$ 12,399
Prepaid expenses	3,928	3,890
Total Current Assets	17,088	16,289

Equipment, net of accumulated depreciation of $125,491 and $119,413 respectively	37,666	43,744
Other assets	16,775	18,962

TOTAL ASSETS	$ 71,529	$ 78,995

LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
CURRENT LIABILITIES
Accounts Payable	347,083	358,940
Other current liabilities	460,230	424,393
Convertible debentures (net of discount of $741,600 & $747,850 respectively	14,404	33,154
Accrued interest on convertible debentures	14,503	5,762
Derivative liability	880,507	971,270

Total Current Liabilities	1,716,727	1,793,519
Total Liabilities	1,716,727	1,793,519

SHAREHOLDERS' (DEFICIT)
Preferred Stock Series A - 1,000,000 shares authorized; $.001 par value; 1,000,000 shares issued and outstanding	1,000	1,000
Preferred Stock Series B - 1,000,000 shares authorized; $1 par value; 25,000 and -0- shares issued and outstanding respectively	-	-
Common stock – 9,999,999,999 shares authorized; $.001 par value; 7,202,574,475 & 502,704,604 shares issued and outstanding respectively	7,202,574	5,420,381
Additional paid in capital	47,290,772	48,485,093
Deficit accumulated during the development stage	(24,031,260)	(23,512,714)
Deficit accumulated from prior operations	(32,108,284)	(32,108,284)

Total Shareholder's (Deficit)	(1,645,198)	(1,714,524)

TOTAL LIABILITES AND SHAREHOLDERS' (DEFICIT)	$ 71,529	$ 78,995

- 3 -

AMERICAN SECURITY RESOURCES CORPORATION

(A DEVELOPMENT STAGE ENTERPRISE)

CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE

MONTHS ENDED MARCH 31, 2010 AND 2009 AND THE PERIOD FROM

OCTOBER 1, 2005 (RE-ENTERING DEVELOPMENT STAGE) THROUGH MARCH 31, 2010

	Three Months Ended March 31,		Re-Entering Development Stage to March 31,
	2010	2009	2010
General and administrative expenses	$ 302,576	$ 420,120	$ 17,287,704
Depreciation and amortization expense	6,078	8,706	153,765
Research and development expenses	134,505	161,911	5,003,506
Operating Loss	(443,159)	(590,737)	(22,444,975)

Other Income (Expenses):
Interest income			76,221
Gain / loss on derivative liability	90,763	(93,369)	(81,942)
Permanent impairment of investment			(225,000)
Loss on license fee			(482,071)
Penalty on debenture default			(297,375)
Interest expense	(166,150)	(75,425)	(576,118)
Net Loss	(518,546)	(759,531)	(24,031,260)

Other comprehensive loss:
Changes in unrealized loss on investment available for sale			(86,538)

	$ (518,546)	$ (759,531)	$ (24,117,798)

Loss per share - basic and fully diluted	$ (0.00)	$ (0.00)

Weighted average number of shares outstanding	5,977,978,125	795,438,507

- 4 -

AMERICAN SECURITY RESOURCES CORPORATION

(A DEVELOPMENT STAGE ENTERPRISE)

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND THE PERIOD FROM OCTOBER 1, 2005

(RE-ENTERING OF DEVELOPMENT STAGE) THROUGH MARCH 31, 2010

	No. of Shares	Paid-in Capital and Par Value	Accumulated Deficit		Comprehensive Loss	Total
	No. of Shares	Paid-in Capital and Par Value	Development Stage	Prior Operations	Comprehensive Loss	Total

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
warrant 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 issued for:
Cash	23,744,250	1,905,990				1,905,990
director services	6,698,000	690,885				690,885
consulting service	14,786,051	1,724,639				1,724,639
accrued liabilities	633,292	132,539				132,539
cashless exercise of warrants	1,129,935	-				-
employee and contractor bonuses	37,500	42,188				42,188

Warrants issued for cash		150,000				150,000
Warrants issued for services		2,405,847				2,405,847
Modification of Warrants		1,127,998				1,127,998

Net loss			(8,599,770)			(8,599,770)

Other equity items		(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

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

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AMERICAN SECURITY RESOURCES CORPORATION

(A DEVELOPMENT STAGE ENTERPRISE)

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

FOR THE YEARS THREE MONTHS ENDED MARCH 31, 2010 AND THE PERIOD FROM OCTOBER 1, 2005

(RE-ENTERING OF DEVELOPMENT STAGE) THROUGH MARCH 31, 2010

	No. of Shares	Paid-in Capital and Par Value	Accumulated Deficit		Comprehensive Loss	Total
	No. of Shares	Paid-in Capital and Par Value	Development Stage	Prior Operations	Comprehensive Loss	Total

Balance, 12/31/06	109,604,794	43,363,541	(11,528,434)	(32,108,284)	-	(273,177)
Shares issued for
Cash	46,850,000	1,479,518				1,479,518
O&D fees	2,931,818	126,435				126,435
Consulting service	8,031,407	1,068,028				1,068,028
accrued liabilities	11,289,917	510,151				510,151
cashless exercise of warrants	76,873	-				-
Technology License	2,000,000	82,000				82,000

Warrants issued for services		1,303,221				1,303,221
Technology License		70,150				70,150
Beneficial conversion feature related to convertible note		34,509				34,509

Net loss			(5,486,135)			(5,486,135)

Balance, 12/31/07	180,784,809	48,037,553	(17,014,569)	(32,108,284)	-	(1,085,300)

Less: par value of common stock ($0.01)		180,785
Additional paid-in capital		$47,015,484

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

- 6 -

AMERICAN SECURITY RESOURCES CORPORATION

(A DEVELOPMENT STAGE ENTERPRISE)

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

FOR THE YEARS THREE MONTHS ENDED MARCH 31, 2010 AND THE PERIOD FROM OCTOBER 1, 2005

(RE-ENTERING OF DEVELOPMENT STAGE) THROUGH MARCH 31, 2010

		No. of Shares	Paid-in Capital and Par Value	Accumulated Deficit		Comprehensive Loss	Total
		No. of Shares	Paid-in Capital and Par Value	Development Stage	Prior Operations	Comprehensive Loss	Total


Balance, 12/31/07		180,784,809	48,037,553	(17,014,569)	(32,108,284)	-	(1,085,300)
	Shares issued for
	Cash	13,250,000	178,000				178,000
	O&D fees	66,311,128	658,780				658,780
	Consulting service	54,373,998	510,746				510,746
	Accrued liabilities	47,984,818	983,945				983,945
	Cashless exercise of warrants	18,584,615	-				-
	Cashful Warrants	27,011,375	173,290				173,290
Compensation expense			27,000				27,000
Warrants issued for services			196,170				196,170

Beneficial conversion feature related to convertible note		94,403,861	457,800				457,800

Net loss				(3,818,868)			(3,818,868)

Balance, 12/31/08		502,704,604	51,223,284	(20,833,437)	(32,108,284)	-	(1,718,437)

Less: par value of common stock ($0.01)			502,705

Additional paid-in capital			$50,720,579
Plus 1,000,000 shares of Preferred Stock at .001 par value							1,000
Total stockholders’ equity							(1,717,437)

- 7 -


Balance 12/31/08	502,704,604	51,223,284	(20,833,437)	(32,108,284)	-	(1,718,437)
Shares issued for:
Cash	238,791,067	111,945				111,945
Officer & Director fees	189,336,735	87,550				87,550
Consulting services	2,116,514,414	1,488,450				1,488,450
Cashless exercise of warrants	28,036,255	-				-
Cashful Warrants	55,000,000	28,111				28,111
Conversion of Series B Preferred	75,000,000	25,000				25,000
Accrued officer compensation pursuant to wrap around agmt.	935,079,111
Beneficial conversion feature related to convertible note	1,279,919,424	734,685				734,685

Net loss			(2,676,277)			(2,679,277)

Balance 12/31/09	5,420,381,610	53,905,474	(23,512,714)	(32,108,284)	-	(1,715,524)

Less par value of common stock $.001		(5,420,381)

Additional paid-in-capital		$48,485,093

Plus 1,000,000 shares of Preferred Stock Series A at $.001 par value						1,000
Total Stockholders' Equity						(1,714 524)

Balance 12/31/09	5,420,381,610	53,905,474	(23,512,714)	(32,108,284)	-	(1,715,524)
Shares issued for:
Cash	137,561,459	38,953				38,953
Consulting services	777,964,740	248,919				248,919
Accrued officer compensation pursuant to wrap around agreement	166,666,666	25,000				25,000
Beneficial conversion feature related to convertible note	700,000,000	275,000				275,000

Net loss			(518,546)			(518,546)

Balance 3/31/10	7,202,574,475	54,493,346	(24,031,260)	(32,108,284)	-	(1,646,198)

Less par value of common stock $.001		7,202,574

Additional paid-in-capital		$47,290,772
Plus 1,000,000 shares of Preferred Stock Series A at $.001 par value						1,000
Total Stockholders' Equity						(1,645,198,)

- 8 -

American Security Resources Corporation

A Development Stage Enterprise

CONSOLIDATED STATEMENTS OF CASH FLOWS

For The Three Months Ended March 31, 2010 And 2009 And The Period From October 1, 2005 (Re-Entering Of Development Stage) Through March 31, 2010 (unaudited)

	Three Months Ended March 31,		Re-entering Development Stage to
CASH FLOWS FROM OPERATING ACTIVITIES	2010	2009	31-Mar-10
Net loss	$(518,546)	$(759,531)	$(24,031,260)

Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization	6,078	8,706	172,755
Amortization of debt discount and deferred financing cost	158,437	53,454	261,402
(Gain) loss on derivatives	(90,763)	93,369	81,942
Loss on license fee	-	-	482,071
Contingent penalty	-	-	297,375
Common stock issued for services	248,919	413,543	10,565,297
Preferred stock issued for services		-	28,000
Stock option and warrant expense	-	-	4,552,501
Permanent impairment of investment sale	-	-	225,000
Contingent liquidated damages expense	-	-	150,000
Change in operating assets and liabilities:
Prepaid expenses	(38)	34,614	(23,942)
Other receivables		(100)
Accrued interest receivable	-		4,968
Deferred finance costs		-	(26,252)
Cash in bank overdraft		4,258
Accounts payable	(11,857)	(67,260)	289,595
Accrued liabilities	60,837	109,804	1,703,766
Accrued interest	8,741	20,087	35,610
Net cash used in operating activities	(138,192)	(89,057)	(5,231,172)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment	-	-	(151,832)
License agreement	-	-	(308,501)
Net cash used in investing activities	-	(11,283)	(460,333)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the sale of common stock	38,953	25,000	2,300,818
Proceeds from convertible debentures	100,000	-	965,000
Paydown of shareholder loans	-	-	(1,659)
Paydown on note receivable		19,000	575,000
Net borrowings/(pay downs) on line of credit	-	-	45,490
Settlement of derivative liabilities			(101,934)
Proceeds from the exercise of warrants		20,236	1,830,920
Net cash provided from financing activities	138,953	64,236	5,613,635

Net change in cash and cash equivalents	761	(24,821)	(77,870)
Cash and cash equivalents, beginning of period	12,399	25,121	91,030
Cash and cash equivalents, end of period	$13,160	$300	$13,160
Supplemental disclosure on non-cash financing activities:
Stock issued for accrued expenses	$32,743	$-	$369,015
Stock issued for conversion of debt	175,000	375,505	$-
Obligation to pay capital leases	$-	-	$800,000
Cash paid for interest and income taxes	$1,159	$4,071	$25,770

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NOTE 1 - BASIS OF PRESENTATION & CHANGES IN OR ADDITIONAL ACCOUNTING POLICIES

The accompanying consolidated financial statements of American Security Resources Corporation (“ASRC”, “the Company”, “we” or “us”) have been prepared by ASRC without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in conformity with generally accepted accounting principles have been omitted or condensed pursuant to such rules and regulations. These statements should be read in conjunction with ASRC’s audited consolidated financial statements and notes thereto included in ASRC’s Form 10-K for the year ended December 31, 2009. In management’s opinion, these interim consolidated financial statements reflect all adjustments (consisting of normal and recurring adjustments) necessary for a fair presentation of the consolidated financial position and results of operations for each of the periods presented. The accompanying unaudited interim financial statements as of and for the three-months ended March 31, 2010 are not necessarily indicative of the results which can be expected for the entire year.

The consolidated financial statements of ASRC include the accounts of ASRC and its wholly-owned subsidiaries, Hydra Fuel Cell, Inc., American Hydrogen Corporation and American Wind Power Corporation. All significant inter-company transactions have been eliminated.

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. Derivative financial instruments are initially measured at their fair value. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option-based derivative financial instruments, the Company uses the Black-Scholes model to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

NOTE 2 - GOING CONCERN

As shown in the accompanying consolidated financial statements, ASRC incurred recurring losses from continuing operations of $23,626,500 since re-entering the development stage through March 31, 2010. This condition creates an uncertainty as to ASRC’s ability to continue as a going concern. Management is trying to raise additional capital through sales of common stock either through private placements or public offerings, as well as seeking other sources of funding. There are no assurances that ASRC will be able to achieve a level of revenues adequate to generate sufficient cash flow from operations or obtain the additional financing through private placements or public offerings to support the investment in Hydra’s fuel cell technology. If these funds are not available ASRC may not continue its operations or execute its business plan. The conditions raise substantial doubt about ASRC’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should ASRC be unable to continue as a going concern.

NOTE 3 – CONVERTIBLE DEBENTURE

At March 31, 2010, the Company had convertible debentures outstanding as follows;

	Outstanding Balance of Convertible Debenture	Unamortized Discount

December 13, 2007 Debenture	$350,000	$350,000
February 28, 2008 Debenture	406,004	391,600
Total Convertible Debentures at March 31, 2010	$756,004	$741,600

- 10 -

Following is a description of each of the convertible debentures listed above:

December 13, 2007 Debenture

The Company entered into a Securities Purchase Agreement with an accredited investor on December 13, 2007 for the sale of $1,500,000 in a convertible debenture bearing interest at 7.25% per annum, payable on or before December 12, 2010.

In 2010, the Company and the investor reached a settlement agreement whereby both parties agreed to dismiss their respective claims against the other, and mutually agreed the outstanding principal due under the original convertible debenture to the investor of $350,000 would be paid though a stock conversion program, with interest of 7 ¼% from May 1, 2010 until the outstanding principal is fully converted. The settlement agreement provides for daily trading limits of the Company’s common stock by the investor, as well as penalties for violations of the trading restrictions.

As the settlement agreement resulted in a modification of the principal outstanding, payment terms and due dates, we evaluated this agreement pursuant to FASB Statement No. 133 and due to there being no minimum or fixed conversion price resulting in an indeterminate number of shares to be issued in the future, the Company determined an embedded derivative existed and FASB No. 133 applied. In accordance with the option allowed in SFAS 155, the Company has elected to value the derivative separately at the fair value on the issuance date using the Black-Scholes valuation model and bifurcate the instrument. The result of the valuation is a derivative liability in the amount of $433,199 and an offsetting loss on derivative of $83,199 and discount on debt of $350,000. We estimated the fair value of the derivative using the Black-Scholes valuation method with assumptions including: (1) term of 1 year; (2) a computed volatility rate from 372 % (3) a discount rate of 0.45% and (4) zero dividends. The discount is equal to the value of the note issued, as it can only be discounted up to the value of the note and is being amortized over the life of the note using the effective interest method.

The instrument was re-valued at period end, and the resulting change of $15,580 was included in the statement of operations as a reduction of the derivative liability.

February 28, 2008 Debenture

On February 28, 2008, the Company entered into a Securities Purchase Agreement with an accredited investor for the sale of an aggregate of $515,000 in a convertible debenture bearing interest at 7.25% per annum, payable on or before February 28, 2012. There was $35,000 in financing costs for this debt issuance. The financing costs were deferred and amortized using the effective interest method.

Pursuant to the convertible debenture the investor may convert the debenture into common stock of the Company at a conversion price equal to 80% of the volume weighted average price for three regular trading days selected by the debenture holder from twenty trading days ending on the trading day immediately before the conversion date.

Effective November 17, 2009, the Company and the Investor entered into a settlement agreement whereby the Investor agreed to a settlement amount of $431,004, including all unpaid principal, interest and penalties, to be paid in cash or common stock of the Company, subject to an ownership limitation, as defined in the settlement agreement. Interest on the settlement amount will accrue at 8.75% beginning November 6, 2009, and all unpaid principal and accrued interest is due on or before December 31, 2010.The Company is subject to certain covenants and reporting requirements. The Company recorded a penalty charge in the fourth quarter of $78,775 in connection with the settlement agreement.

- 11 -

As the settlement agreement resulted in a modification of the principal outstanding, payment terms and due dates, we evaluated this agreement pursuant to FASB Statement No. 133 and due to there being no minimum or fixed conversion price resulting in an indeterminate number of shares to be issued in the future, the Company determined an embedded derivative existed and FASB No. 133 applied. In accordance with the option allowed in SFAS 155, the Company has elected to value the derivative separately at the fair value on the issuance date using the Black-Scholes valuation model and bifurcate the instrument. The result of the valuation is a derivative liability in the amount of $534,067 and an offsetting loss on derivative of $103,063 and discount on debt of $431,004. We estimated the fair value of the derivative using the Black-Scholes valuation method with assumptions including: (1) term of 1 year; (2) a computed volatility rate from 372% (3) a discount rate of 0.45% and (4) zero dividends. The discount is equal to the value of the note issued, as it can only be discounted up to the value of the note and is being amortized over the life of the note using the effective interest method.

As part of the settlement agreement, the investor agreed to fund the Company $50,000 in January 2010, with subsequent monthly funding of $25,000 for the next 8 months, and the Company agreed to issue new convertible debentures (the “new debentures”) for each funding under the same terms and conditions of the original debentures, with each new debenture issued due on or before December 31, 2010. During the quarter ended March 31, 2010, the Company received proceeds of $100,000 from the investor for new debentures issued. We evaluated this agreement pursuant to FASB Statement No. 133 and due to there being no minimum or fixed conversion price resulting in an indeterminate number of shares to be issued in the future, the Company determined an embedded derivative existed and FASB No. 133 applied. In accordance with the option allowed in SFAS 155, the Company has elected to value the derivative separately at the fair value on the issuance date using the Black-Scholes valuation model and bifurcate the instrument. The result of the valuation is a derivative liability in the amount of $124,888 and an offsetting loss on derivative of $24,888 and discount on debt of $100,000. We estimated the fair value of the derivative using the Black-Scholes valuation method with assumptions including: (1) term of .75 to 1 year; (2) a computed volatility rate from 372% (3) a discount rate of 0.45% and (4) zero dividends. The discount is equal to the value of the note issued, as it can only be discounted up to the value of the note and is being amortized over the life of the note using the effective interest method.

For the three months ended March 31, 2010, $156,250 was amortized and is included in interest expense.

These instruments were re-valued at period end, and the resulting change of $75,069 was included in the statement of operations as a reduction of the derivative liability.

Derivative Liability

The Company evaluated all convertible debt and outstanding warrants to determine whether these instruments may be tainted from the aforementioned derivative. All warrants outstanding were considered tainted as a result of the derivative treatment. The Company valued these warrants using the Black-Scholes valuation model. The result of the valuation is a derivative liability in the amount of $25,491. We estimated the fair value of the derivative using the Black-Scholes valuation method with assumptions including: (1) term ranging from 1.71 to 2.75 years; (2) a computed volatility rate ranging from 129% to 190% (3) a discount rate ranging from 0.37% to 1.79% and (4) zero dividends. The valuation of these warrants was treated the same way as the liability associated with the debt. There were no other instruments found to be tainted by the derivative treatment.

	Derivative Liability 3/31/10	Gain (Loss) on Derivative-Period Ended 3/31/10
December 13, 2007 Debenture	$417,619	$15,580
February 28, 2008 Debenture	256,167	75,069,
Warrants Outstanding	3,890	114
Derivative Liability	$475,747	$90,763

NOTE 4 - COMMON STOCK

During the three months ended March 31, 2010, ASRC issued 750,312,954 common shares to external parties in exchange for consulting and legal services and recorded a total expense of $241,176. The expense is equal to the fair value of the shares based upon the closing price at the date that either a definitive agreement to issue the shares was reached with external parties or the date the Board authorized their issuance.

During the three months ended March 31, 2010, ASRC issued 137,561,459 shares of stock for $38,953 cash.

NOTE 5 – LEASES

ASRC leases office space and the terms provide for monthly rent of $2,365. Additionally, ASRC’s subsidiary, Hydra Fuel Cell Corporation leases approximately 2,625 square feet in Portland, Oregon for monthly rent of $4,930.

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NOTE 6 – COMMITMENTS AND CONTINGENCIES

In July 2006, ASRC issued warrants to purchase 50,000,000 shares to an investor for cash proceeds of $150,000 in contemplation of negotiating a further financing arrangement that ultimately did not occur. The warrants have a 3-year term and an exercise price of $0.01. ASRC estimated the fair market value of these warrants to be $4,113,000 using a Black-Scholes with key assumptions of (1) expected term of 3 years, (2) calculated volatility of 284.93%, (3) discount rate of 4.3% and (4) zero dividends. Included in the damages, was a potential to refund the $150,000 proceeds received. At the same time, a shareholder pledged 4,000,000 shares of his own stock in ASRC to the investor for collateral. ASRC evaluated these warrants for liability treatment under SFAS 133 and EITF 00-19 taking into consideration View A of EITF 05-04 and determined that it was more economical to settle in “unregistered shares”, thus these instruments were not considered to be liabilities under the authoritative literature. As of March 31, 2009, we are considered to be in default under this warrant agreement because no registration statement was filed. As a result, we have accrued a contingent liability of $218,600. The company will continue to evaluate further liquidated damages if necessary. The Company evaluated the liquidated damages to determine whether it qualified for derivative treatment. Based on FASB Staff Position No. EITF 00-19-2, it was determined that since the transfer of consideration under a registration payment arrangement becomes probable and can be reasonably estimated subsequent to the inception of the arrangement or if the measurement of a previously recognized contingent liability increases or decreases in a subsequent period, the initial recognition of the contingent liability or the change in the measurement of the previously recognized contingent liability shall be recognized in earnings. The entity would be required to deliver shares under a registration payment arrangement, (b) the transfer of that consideration is probable, and (c) the number of shares to be delivered can be reasonably estimated, the issuer’s share price at the reporting date shall be used to measure the contingent liability under Statement 5.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

Our Business

AMERICAN SECURITY RESOURCES CORPORATION (the “Company” or ARSC) is a holding company with three wholly owned subsidiaries. Hydra Fuel Cell Corporation has completed several development stages of the HydraStax® unit and testing for certification is currently underway. We have two additional subsidiaries. We formed American Security Capital Corporation that is to provide financing options for the sales of products created by Hydra Fuel Cell and American Hydrogen. American Hydrogen Corporation is developing technologies to formulate hydrogen that we hope will change the economics of producing hydrogen sufficiently to enable the hydrogen economy.

Hydra Fuel Cell Corporation completed the initial development stage and several advanced stages of the HydraStax® unit and testing for certification is currently underway. We believe that the HydraStax® unit's cost per kWh will be significantly below that of its competitors, giving them a competitive edge as a replacement for residential grid power. Thus, upon certification Hydra intends to aggressively market these units and the Company is actively pursuing financing to begin manufacturing and distribution.

Hydra successfully defended itself from claims of patent infringement brought by a third party in 2006. Hydra’s fuel cell is original and Hydra categorically denied that it infringed on any patents. The Federal Court in Portland, Oregon dismissed the plaintiff’s suit against Hydra in 2008. We estimate that our Hydra Fuel Cell subsidiary will require approximately $1 million to produce and sell HydraStax® units to cash flow self-sufficiency. There is no guarantee that management will be successful in obtaining these funds.

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American Hydrogen Corporation (AHC) was created to develop and commercialize technologies to formulate hydrogen that we believe will change the economics of producing hydrogen sufficiently to enable the hydrogen economy. The first hydrogen formulator that AHC will vend is expected to produce hydrogen from natural gas and propane and will be designed to provide hydrogen for Hydra’s fuel cells.

The Company continues to review acquisition opportunities that would enhance its fuel cell offerings and expand its offerings in alternative energy production.

The Company’s Internet address is http://www.americansecurityresources.com. Information contained on the Company’s web site is not a part of this report. The Company’s stock is traded on Pink Sheets under the symbol “ARSC.PK.”

Plan of Operations

Our Hydra Fuel Cell subsidiary completed several development stages of the HydraStax® unit and testing for certification is currently underway. We believe that the HydraStax® unit's cost per kWh will be significantly below that of its competitors, giving it a competitive edge as a replacement for residential grid power. Thus, upon certification, Hydra intends to aggressively market these units. The Company is actively pursuing financing to begin manufacturing and distribution. Hydra installed two of its HydraStax® fuel cells in residences, one in Texas in October 2007 and one in Florida in December 2007, as “Beta Test demonstration units”. These were milestones for Hydra and for the fuel cell industry.

American Hydrogen Corporation (AHC) was formed to develop and commercialize technologies to formulate hydrogen that we believe will change the economics of producing hydrogen sufficiently to enable the hydrogen economy.

The Company continues to review acquisition opportunities that would enhance its fuel cell offerings, expand its offerings in alternative energy production or represent opportunities in homeland security or national defense.

Results of Operation

Three Months Ended March 31, 2010 Compared to the Three Months Ended March 31, 2009

For the three months ended March 31, 2010, we had $0 in revenue. Expenses for the three months totaled $443,159 resulting in an operating loss of $443,159. Expenses for the three months consisted of legal and professional fees of $173,188; $134,505 research and development; and $129,388 of other general and administrative expenses.

For the three months ended March 31, 2009, we had $0 in revenue. Expenses for the three months totaled $590,737 resulting in a operating loss of $590,737. Expenses for the three months consisted of legal and professional fees of $250,000; $161,911 research and development; and $178,826 of other general and administrative expenses.

Capital Resources and Liquidity

As of March 31, 2010 we had $13,160 in cash.

We believe that we will need additional funding to satisfy our cash requirements for the next twelve months. Completion of our plan of operations is subject to attaining adequate revenue or financing. We cannot assure investors that we will generate the revenues needed or that additional financing will be available. In the absence of attaining adequate revenue or additional financing, we may be unable to proceed with our plan of operations.

We have had no revenue since beginning our Hydra subsidiary; although, we expect revenues from our HydraStax™ unit in the near future, we do expect cash flows from distribution of the unit to become self-funding sometime after we complete deliveries of our product. We estimate that our Hydra Fuel Cell subsidiary will require approximately $1 million to produce and sell HydraStax® units to cash flow self-sufficiency. There is no guarantee that management will be successful in obtaining these funds.

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We anticipate that our operational, and general and administrative expenses for the next 12 months will be consistent with prior periods as we continue to develop, market, and deliver our products to our customers. We anticipate we will require to purchase and/or lease manufacturing facilities and equipment along with sufficient labor force for the completion and delivery of our products. The foregoing represents our best estimate of our cash needs based on current planning and business conditions. The exact allocation, purposes and timing of any monies raised in subsequent private financings may vary significantly depending upon the exact amount of funds raised and our progress with the execution of our business plan. We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern.

Critical Accounting Policies

The Company’s financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use if estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statement

Our significant accounting policies are summarized in Note 1 of our financial statements. While all of these significant accounting policies impact the Company’s financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on the Company and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our financial position or liquidity, results of operations or cash flows for the periods presented.

Off Balance Sheet Transactions

We have no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been significant fluctuations in the market price for the Company's common stock. Factors such as variations in the Company's revenues, earnings, if any, and cash flow and announcements of innovations or acquisitions by the Company or its competitors could cause the market price of the common stock to fluctuate substantially. In addition, the stock market has experienced price and volume fluctuations that have particularly affected companies in the alternative energy business resulting in changes in the market price of the stocks of many companies which may not have been directly related to the operating performance of those companies. Such broad market fluctuations may adversely affect the market price of the Company’s common stock.

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Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our Chief Executive and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were ineffective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) accumulated and communicated to our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. The failure to timely file this quarterly report leads to the conclusion that the disclosure controls and procedures were not effective. As of the date of this report, the Company has added the further step of fully discussing with its outside advisors whether they are aware of any new SEC rules and regulations affecting our disclosure requirements and whether each report being filed is compliant with current rules and regulations. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Our management is Our Chief Executive Officer, Chief Accounting Officer, and Chief Financial Officer who are responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. Furthermore, smaller reporting companies face additional limitations. Smaller reporting companies employ fewer individuals and find it difficult to properly segregate duties. Often, one or two individuals control every aspect of the Company's operation and are in a position to override any system of internal control. Additionally, smaller reporting companies tend to utilize general accounting software packages that lack a rigorous set of software controls.

Our Chief Executive Officer, and Chief Financial Officer evaluated the effectiveness of the Company's internal control over financial reporting as of March 31, 2010. In making this assessment, our Chief Executive Officer,and Chief Financial Officer used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework. Based on this evaluation, Our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2010, our internal control over financial reporting was effective.

(b) Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

LACK OF SEGREGATION OF DUTIES

Management is aware that there is a lack of segregation of duties at the Company due to the small number of employees dealing with general administrative and financial matters. However, at this time management has decided that considering the abilities of the employees now involved and the control procedures in place, the risks associated with such lack of segregation are low and the potential benefits of adding employees to clearly segregate duties do not justify the substantial expenses associated with such

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None

Item 1A. Risk Factors

Limited History

The Company is a startup with limited operating history and faces challenges typical of new businesses in highly competitive markets with many other providers of the same or essentially the same products and services.

No Revenue and Limited Resources

The Company is a start up business. There is no assurance that the Company will be able to finance its development, or that the Company will be able profitably to operate such business.

Limited Staff

The Company has two officers and five additional directors charged with the responsibility of executing the Company’s business strategy. Any death, injury or other incapacity of one or more of them could adversely affect the Company’s ability to complete its business strategy.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

There were no matters submitted for a vote of our security holders during the period ended March 31, 2009.

Item 5. Other Information

There is no other information required to be disclosed under this item which was not previously disclosed.

Item 6. Exhibits

Exhibit Number	Description of Document
31.1	Rule 13a-14(a)/ 15d-14(a) Certification of Frank Neukomm, Principal Executive Officer of the Company.

32.1	Certification Pursuant to 18 U.S.C. section 1350 of Frank Neukomm, Principal Executive Officer of the Company.

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SIGNATURES

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

	American Security Resources Corporation

Date: July 27, 2010	By:	/s/Frank Neukomm
		President and Chief Executive Officer, Principal Executive Officer

	By:	/s/ John A. Wilkinson
		Chief Financial Officer

	By:	/s/ Robert Farr
		Principal Accounting Officer

American Security Resources Corp. 10-Q/A